Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-12-31

man and every 49, S. sgesssssss
company or corpO-
ration was sue # 81
cessful. Neither
did every line OF G---------'-'--''--'''--'''~
commerce an d R0YLE
trade show ade-
quate profits. But the great ma iority
of the concerns in operation showed
better earnings than at any time in
the last eight years. and many expert
enced the best year they have ever
had. The citizens Of this country in
general are better off today in cash, in
credit and in living standards than
any people ever have been in the his
tory of the world.
Not all the clouds disappeared from
the business horizon, but there were
fewer threadbare spots in the business
fabric than last year, and even the
industries which Jared worst had
some periods of prosperity, even If
these were brief. The food Of profits
had behind it the tremendous volume
of production. This in turn met the
tide of consumption, backed by huge
buying power, which prevented the
profits from receding.
Two Out of Three Did Better.
There is no room for doubt that ag-
gregate corporation profits this year
have been larger than in any previous
annual period. Two out Of every
three individual concerns did better
than in 1925. For example, a survey
OF chain stores and producers of chem
icals, coal. food products, machinery.
metals, oil. railroad equipment and
iron and steel showed increases of Is
TO IS per cent. More than 165 Indus
trial concerns had earnings at least 90
per cent higher than in the previous
year, while an equal number reported
gains Of 10 to Is per cent.
These profits were not piled up
under boom conditions. They were
made under the most severe COM
petition. There were no runaway
markets" There was no imitation
Of business, which almost invaria bly,
is followed by a business blow-up.
Profits in general resulted not from
advance in prices, but from decrea Sc
in costs. The results were produced
by following the American formula
providing for high production, high
wages and high worker and mana
gerial efficiency. combined with low
prices. To the end of the year there
was strong buyer resistance to price
advances.
Buying Power Unequaled.
The buying power OF the United
/ States developed during the year has
never been equaled. or even ap-
preached. Retail sales during the ~
months exceeded $40, 900 600, 900 In
addition, savings bank deposits in
creased, the amount safeguarded in
high grade investment securities grew
and the year closed with this invest
mont trend still undiminished This,
10
most universal employment at high
wages.
While production slowed down in
some lines. such as automobiles, tires
and building materials, as the year
closed, retail sales were maintained at
q level even higher than in 1925. In
most industrial lines, however, the
highest profits were piled up in the
first three quarters. The check in the
last quarter was due as much to eau
ton as to construction Of demand
p; Executives of industrial concerns
are almost unit in admitting that a
prime factor in profits this year has
been the marked increase in worker
= efficiency. This was especially notice
able in the steel industry. in metal
mining, In transportation and In
scores of other lines of endeavor
The five-day week put into operation
by Henry Ford was ha sed primarily
on worker efficiency, and operated sue
cessfully for this, manufacturer and
for some of Ford's nearest rivals It
created wide discussion, and although
X was along the lines advocated by
the American Federation of Labor
workers expressed themselves In many
instances as opposed to it. They
argued 1t was not suitable to all IN
dustries and was calculated to reduce
the total earnings Of the individual.
Farmers Not Satisfied.
Efficiency and more modern equip
ment, allowing a reduction of man
power, helped the farmer out in g. veal
which was not entirely satisfactory t.
the agriculturists. Crops were esti
mated as 2.9 per cent heavier than In
1925, but prices We're below the leve
of the latter year in most lines. Pur
chasing power OF the farmers un
dOubtedly was cut down, but the de
crease was rendered less heavy thar
might otherwise have been the case
because costs of production were
lower and the financial position of the
rural districts was excellent.
Wheat farmers got about 25 cents
b, bushel less for their grain than las
year, but the crop was so much large
that bigger output made up for tht
lower price. This was especially tru'
of the Winter wheat growers. Prices
all in all. were fairly steady and in
sured good profit TO the successful
grower.
The corn farmer was no worse of
than last year. The price was abou
the same, which means it was at O.
under cost OF production, but man,
growers piled up profits by feeding
live stock and taking advantage of IN
high prices for hogs. Although tn
margin on cattle and sheep was small
il Is estimated live stock growers RI
revived $50 ,000 600 more than last year
Huge Cotton Crop.
The cotton crop was the largest Il
history, and prices dropped shafpl
when this became evident. Lessene
returns had some effect on buyin
power in the South, but consumptio
was high and financing to enabl
growers 70 hold their cotton until
more favorable market developed wa
successful. It was tribute to tn
sound basis on which present pros
peIity is resting that this factor di
not have d greater effect on the Soutl
ern buying power and on trade in gel
eral. The jobbers in the South wer
The first 10 feel buyer curtailment.
The fruit growers as rule had a
Improbable year, due in no sma
measure to unco-Ordinated marketin
methods, by whic some bnarkets wei
glutted and others neglected. Produ
zion OF some fruits was enormous an
thousands Of bushels rotted unpicke'
All in all, however, the returns frol
the agricultural industries, includin
dairying, which had fine year, {
tailed close to S11 500, 000, 900.
After the authra cite coal strike VIZ