Evening star., 1936-12-31
STEADY INCREASE
IN VOLUMES CITED
Attention Shifts to Means
for Avoiding Heavy Earn
inqs Taxes.
(By Cambridge Associates.)

Big names have joined the minus
to-plus parade in 1896. In year
when sales volume has shown little
esteem for seasonal influences, con-
tinuing to swell steadily, many COM
panies Of our industrial aristocracy
changed red figues to black for the
benefit of stockholders. Companies
whose major worries II months ago
were with declining surplus accounts
were called upon to consider means to
avoid huge taxes on undistributed
earnings before the close of the year.
Among the most important COM
panies returning to the plus side of
the ledger are. Bethlehem and United
States Steel, leaders of a leading in
dustry; large sector of the trans
portation business as represented by
such companies as American Car g.
Foundry, Pullman, Inc; Baltimore e.
Ohio, Southern Railway, United
Anlines and Atlantic, Gulf g. West
Indies Steamship Lines. Reconstruc-
tion and new enterprise share, with
Mack Trucks. Lehigh Portland Ce-
ment and National Supply in the fore
ground. And such unrelated, but by
no means unimportant, enterprises as
Electric Power & Light, Curtis Pub
fishing and Pacific Mills demonstrate
that the good news is spreading over
q wide area. These companies stand
forth the generally roseate back
ground of increasing profits, because
their depression record was more pro-
longed.
Huge Volumes Cited.
The accompanying chart shows total
gross sales and net profits for common
stockholders for group of IS selected
companies in 1886, compared with
1885. The average volume of sales
for each of the Is companies last year
was approximately s125,000,000. indi-
eating that they are among the coun-
trys largest, and each company is
expected to show a profit in 1885 to
compare with deficit in 1885. Ad-
mitedly not representative list Of
companies, this group nevertheless
handled an amount of business equal
in dollars to nearly per cent of our
national income. The typical COM
pany in this group, as can be de-
duced from the chart, showed an in
crease of sales of approximately rs
per cent in 1886 and reported net
profit Of 1sl cents per dollar Of sales,
against a loss Of 312 cents per dollar
Of sales in the preceding year.
Heavy Industries in Lead.
As might be expected, the greatest
gains were witnessed in the so-called
"heavy industries" where the depres-
sion cut deepest. Employment in this
division increased % per cent, accord
ing to the figures of the Department
Of Labor, while employment for COM
panies producing non-durable goods
climbed over per cent. The latter,
ss whole, are operating at levels close
to those of 1929, and further expan-
sion is defined by considerations of i'm
mediate capacity or limited potential
Use Of their products. The heavy in
dustries," or producers of capital goods,
are for the most part limited only
by the duration and extent of the up
ward phase of the business cycle.
Notable opportunities for further
progress in the coming year are en-
joyed by producers of electric generat-
ing equipment. rail equipment, heavy
machinery and the raw material pro-
ducing units serving the same.
Profitless prosperity prognosticators
Of only q short time ago will get little
vindication from annual reports soon
to be released. Despite increasing
taxes and higher wage and raw ma
terial costs, despite the threat of fur
ther rapid and perhaps indigestible
social change, despite claims Of senility
and lack Of opportunity in American
business, income accounts and bal
ance sheets will reveal a state of
health and heartiness too forceful to
be denied. Inded, it is likely that
even those industries, such as coal
mining and urban passenger trans
)portation, which have often been la
beled as under long-term pressure
from modern inventions and develop
ments will show more than a little
improvement in 1887.