Douglas daily dispatch., 1927-09-11
is
STRIKING HARD
AT Big PROFIT

CThis is the second of series
of weekly statements Dy leaders of
business and industry released ex-
cIusivey for publication in Sunday
morning papers,.
(By The Associated Press
(By MAGNUS w. ALEXANDER)
President of the National Conference
BOard)
NEW YORK, Sept. 10 tP)-Competi-
ton is making itself felt in American
industry today to such degree that,
while activity has been reaching stead
lily higher levels, many branches of in
dustry are complaining that theirs is
profitless prosperity. Since the end
of 1925, especially, the competitive
struggle has been increasing and at
present the insolvency record is at the
high level it reached as the result of
the 1920-21 depression Despite our
steadily increasing volume of business,
it is fact that in recent years about
| two out of every five manufacturing
corporations have either made no
profit or have operated at loss.
It is a matter of general observation
| in trade circles that in the fight for
volume for greater and greater sales,
much business is taken at low profit
and that often sales are made below
cost. This raises the highly import
ant question whether it is economically
sound and socially desirable that goods
be sold over periods of time either
without profit or at loss simply tC
maintain or increase sales volume.
| - S~0,H erf11 11rr7xY 1Z0o
competitive struggle is reflected in ar
analysis of the income tax returns ol
the federal government, which shows
that during the period from 1920 tt
1925, an average of 41.5 per cent o.
manufacturing corporations operated
without profit or at loss. The aver
age net income of more than SO pei
cent of them, that is, all those witt
net income of less than 100000 {
year in 1925, which was considered {
"banner" year, was nearly II per cen
smaller than in 1928, the last previous
good" year.
During the war the word "profiteer
was coined. 1t described and held VI
to Scorn the man or organization that
taking advantage of conditions, solt
goods at prices unfairly above wha
they were worth, thereby making al
exorbitant profit Perhaps the tim
has come when likewise we SHOULD
hold up TO scorn the "deficiteer," tn
man or organization that, to swel
sales to greater and greater totals TO
a consecutive period of time, sells good
at a price below what the commodlt
is fairly worth, or even below pro
duction cost.
Thoughtful business men themselve
are coming to see, and many OF ther
are urging, the wisdom of restraint S
as to assure a period of suStaine
prosperity in preference to brief an
hectic periods of boom" proSperit
with their inevitably following grie1
While competition is the life of trad
and our entire business structure
based on the competitive principle,
: should be an economically sound com
petition. it should not be tainted b
the leprosy of either profiteer or de
ficiteer.
Economically unsound practice, sue
as is likely to result in trade dlsor
ganization, can hold no good for eithe
the competitions, investors or the pub
lie. Business stability on the othe
. hand, such as we have enjoyed in in
creasing degree since 1921, is and al
, ways will be the soundest kind, an
should be the paramount objective Q
business management.