Evening star. [volume] (Washington, D.C.) 1854-1972, 1938-05-22
Vitality of American
Business
BY FREDERIC J. HASKIN.

United States is the picture OF American
business residence. There have been
some two dozen recessions in business
activity in this country since it has been
an independent Nation, and always
there has come recovery. The very en-
phasis of the downs can be cited as
herald of the ups.
Figures now are in hand showing what
business did during the first quarter OF
1888. The showing was not good, but
that very fact should be an earnest OF
better times, because. above all else, 1t
shows movement 1t has become an
axiom of American economic experience
that what goes down must come up.
Perhaps there is some WEAKNESS with
experts, but people cannot be engaged in
business, generation after generation,
without learning something in the hard
school of experience. That learning now
dictates that there will come a substan-
tial upturn which will carry the country
to new peaks of prosperity.
The very fact that the pendulum can
move in such wide amplitude suggests
that there is great deal of liveliness and
assertiveness in the American business
structure. 1t is not like that Of some
older countries, where things 60 on about
the same without the quick turns known
here.
Reports now are in for $50 leading
corporations engaged in manufacturing
They are not especially happy reports,
for they show that the net profits for
he 0f 1a
wear were but $100000000. Yet that is
a considerable sum and indicates that
there is a great amount OF life in the
country today. To be sure, the figure
must be compared with the 5000 900 900
in profits made by the same $50 concerns
during the first three months of 1897.
The decline indicates a slackness in pur-
chasing but it also can be analyzed to
show that American corporations can
bend to a storm and remain going con-
Germs even though the trickle OF earn
ings to their Golfers has been slowed.
Some of the returns are of compelling
interest. There is the amusement indus
try. for example, ard in these days that
means more especially the movies. Dur
ing the first quarter of 1887 the anuse-
ment business made net profits of SILL
089 900. while in the same period of this
year they sank to s7990,000 Still there
was net profit. 1t is an interesting
fact about depreSsions, in the United
States at least. that amusement earnings
hold up we'll during depressed years. In
spite of unemployment, reduced pay en-
velopes and ~the like, people will insist
upon their entertainment. and so. If the
pay check is fat or lean, the amusements
are patronized.
That drop in movie or general enter
tainment receipts amounted to 279 per
cent. but compare it with the drop in net
profits for the automobile companies.
For the first quarter of 1887 figure Of
s44.8l4O00 net profits was shown. while
for the same period this year only s8.234.-
900 was made This was recession OF
no less than BIG per cent and still it
showed as net profit. People, 1t
appears, will buy automobiles, but they
will not buy quite so many fancy gadgets
to decorate their cars The automoblle
accessory industry showed. instead OF
the net profits for the first quarter OF
1887 of So 55l 900, an actual deficit OF
1851 ,OOO In other words, more than 100
per cent of profits was swept away. But.
further to emphasize American business
residence, total capital stock OF the
companies discussed here showed an in
crease over the corresponding period OF
1887. This means that sufficient conf
dence was felt in the future for more
stock to be subscribed and paid for.
Taking Is leading industries OF the
country. it is found that only eight OF
them showed deficits for the first quar-
ter of 1888 as compared with the first
quarter of 1887. This means, OF course.
that there were some companies in each
industry group which actually showed
profits, but that the figure for the entire
group was dragged down by those less
fortunate.
What is of special importance IS the
manner in which these companies, build
ing on the future rather than on the in
dications of the present, have added to
their capital structure and to their
plants For the comparative periods it
is shown that the net worth of these
companies with s1O,257 ,555.000 in the first
quarter of 1887 and Sl07l1 $4,000 In
the same quarter of the current year.
Here was a gain of "A per cent in the
fundamental value of the business prop
critics. It is true that the annual return
for the two periods dropped from IL per
cent for the first quarter of 1887 to 81
per cent for the first quarter OF 1898. but
still there was a greater worth back OF
the composite business.
Il
Life goes on and there could be no
better way to show it than by the returns
of the baking industry. Bread is the
traditional staff of life, and it is shown
that while the net profits of the baking
industry in the first quarter of 1887
amounted to So, 1874 ,000 in the same quar-
ter of 1898 they had risen to 81, 294 ,000
1t had been hoped that the construc-
ton industry would bring big lift to
the broad economic situation, but num-
Der of factors. in spite of Government
aid. forestalled this. The profits OF the
building material industry dropped from
S8O18000 in the first quarter OF 1887 to
only $4,000 in the first quarter OF this
year. Still. the first quarter OF any year
is poor period by which to Judge con-
struction activity. It is not until spring
sets in that building really goes forward
with a rush and 1t is expected that before
the year is out there will be substantial
gains in that field especially If the labor
unions can resolve some of their juris-
dictional disputes.
y r
In any kind of times people must eat
and, as in any depressed period, the
miscellaneous food industry shows con-
tinuing prosperity, although at lesser