The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-11-02
SLUMP LOSSES
WILL PREVENT
requirements
Immediate Substitution of
Old Equipment Held
impossible.
By Times Special

By Times Special
NEW YORK, Nov. 2.-Immediate
Inauguration of gigantic program
for the replacement of obsolete in
dustrial equipment as means of
providing a new impetus to the lag
gard recovery movement was char
acterized today by numerous cor
poration officials as an impoSsibility
under present conditions.
Cited as factors lettering such
projects on a large scale were the
huge losses incurred by most cor
porations during the slump era, with
resultant diminution of their sur
plus and working capital positions
and the low rate of plant opera
tions prevailing in most trades.
Generally regretful, this response
came fro meXecutives to the quiet
campaign being waged by the Roose-
welt administration to induce the
nations big industries to dip into
their SURPRISES and bring obsoles-
cent plants and equipment to date,
a process calculated to put billions
of dollars to work. After s6resSing
their inability to undertake COM
plete renovation projects, most off,
Gals insisted they are cooperating
to as great an extent as possible by
keeping their plants in working con-
dition and by making such replace
ments as are necessary.
Already Invested in Plants
In most instances officials main
tanned that the general conception
hof the word surplus" is incorrect.
They pointed out that this balance
sheet item, except in isolated in
stances, already is represented in
large measure, in addition to capital
funds, by investments in plant and
equipment.
Moreover, it was explained, de-
preston losses, together with the
disbursement of dividends from sur
plus accounts, had depleted working
capital positions to the point that
available cash balances are vital to
operting exigencies.
Take our industry as an exam
ple," declared an executive of a large
steel company. 1--WE are operating
at less than 80 per cent of capacity,
with more than two-thirds of our
equipment idle. This capacity, ex-
cessive on the basis of current de-
mand, can be put in operation on
very short notice. because we have
kept it in good working condition.
Very few companies have operated
at a profit throughout the depres-
sion, and the losses of most units
have made quite a dent in surplus
accounts, which are down substan-
TALLY from the 1929 level.
Steel Capacity Expanded
1.-THE cash position of practically
every company in the industry have
been reduced considerably in the
last fiv years. What remains today
must be utilized almost exclusively
for operating purposes. But we
haven't been lax in all these years.
AS matter of fact, nearly every
company has dismantled some OBJ
solete equipment, and the capacity
of the trade as a whole actually has
increased by nearly two million tons
in the last five years. Some COM
panies, incidentally, are even now
making additions to existing plants
to help in the campaign"
Automobile company officials
pointed out that their plants always
are kept in good running order.
Every autumn, it was explained,
practically every unit in the indus
try undertakes retooling operations
which, in some instances, necessi-
tates large OUTLAWS. Foundries and
assembly lines, they said, must be
maintained to insure production on
an efficient and economical basis.
Plants and equipment, they insisted,
are in such good running order that
the Industry as whole could as
semble two million more cars than
will have been built in 1884 without
difficulty