Montana labor news., 1935-01-17
Employers Rake-Off Is
Heavy Tax On Industry,
Profit System Shows

WASHINGTON. - (FP) - Many
facts about the huge rake-off which
the rich got from the labors of the poor
are revealed in the study Industrial
Profits in the United States by Ralph
C. Epstein National Bureau of Eco
nomic Research, 1919 Broadway, New
York So. Average yearly profits Of
BIO per cent were squeezed out Of their
workers by some manufacturing groups
during the whole ten-year period, 1915
to 1923, with profits OF individual cor
porations running above 200 per cent
in prosperous years.
Profits of over IS per cent on in
vested capital were reaped by one
fourth OF $1,000 manufacturing cor
porations in prosperous years. Oh
these, $500 corporations recorded prof
its of 40 per cent; 5000, over 80 per
cent; 1900, over IS per cent, and d..
900, over 10 per cent. In 1923 profits
Of more than rs per cent upon invested
capital were made by go m%anufactur-
ing corporations as we'll as BY 28C
trading corporations with incomes over
$1,000.
Here are some Of the high yearly
averages for the 19l9-l928 period
Motor-vehicle industry which is
desperately resisting unionization-
1917 per cent.
Boot and shoe industry-which is in
search OF locations where it can get
cheap unorganized labor-17.3 per cent
Newspaper industry, ESQ per cent
printing and publishing, 22.9 per cent
toilet preparations, 3l.6 per cent
planning mills, IT. per cent; confec-
tionary, 1873 per cent.
The biggest bulk OF these profits
went to a small group of million-dollar
corporations, although, according to
the samples in this study, by far the
highest rate Of profit is earned by cor
porations with capitals ranging from
$25O,000 to 100000.
For manufacturing as a whole" the
author states, "the 81 corporations in
our sample with capitals over 50 mil
lion each in 1928 possessed a combined
capital of about 10 billion. In number
these 80 corporations constitute only
OIL per cent of all manufacturing cor
porations in the country, but theii
capital equals 81 per cent and theii
total profit amounts to 80 per cent O
the aggregate figure for the country.
The hight degree to which industry
is concentrated in big business hand!
is seen in industry after industry.
In food manufacturing, OIL per cen
of the corporations owned 20 per cen
of the capital in 1928 and received 81
per cent of the total profits.
In chemicals, IS corporations, rep
res%entation only or per cent Of the
corporations in this field, controlled
AZ per cent of the capital and earned
"A per cent of the total income.
Among the corporations with the
highest rates of profit are three chem
ical companies which reaped profits Of
over 200 per cent in 1923, and six com
panies with profits over 90 per cent il
the same year. Chemical corporations
with capitals less than 100000 showed
profits Of AL per cent in 1924 and
68.4 per cent in 1923. Those with
larger capitals earned a considerably
lower rate.
Consumers goods industries showed
on the whole, higher and steadier prof
its than producers goods industries
High prices to consumers and low
wages to workers brought food cor
porations with capitals under a mil
lion) profits Of q per cent in 1924
and 1913 per cent in 1923.
Average profits of large corporations
during the good and bad years of 1919
1928 were 10.5 per cent.
Social waste through continued ex-
pansion Of industries which show a de-
creasing rate of sales, is also indicated
in the study. A falling rate Of profit
does not operate to check investment
according to the author, either as rap
idly or as generally as is sometimes as
sumed. Corporations continue to ex-
pand even when sales and profits in a
given industry are falling, each hoping
to grab the lions share of the market
The author urges more detailed anC
extensive publication Of facts pertain.
ing 10 investments, sales and profits
He considers these necessary to guide
money-owners TO more profitable in.
vestments, and indispensable to any
plan which envisages specialization o.
industry.