Evening star. [volume] (Washington, D.C.) 1854-1972, 1942-07-31

Standpoint to- David Lawrence.
day. The original concept was that
over and above normal profits there
might be some companies which
would earn profits In excess of nor
NAL due to war contracts.
The evidence, however, shows not
only have such excess profits failed
to materialize this year, but even
normal profits have been substan-
TALLY reduced Thus the statistical
bureau of the National City Bank
of New York, which is famed for its
accurate reference material on eco
nomic affairs, has just issued a
statement to the effect that the half
year reports Of 100 manufacturing
companies show, in the majority Of
cases, q substantial decline in net
income after taxes as compared with
last year.
May Drop to 50 Per Cent.
This group of companies" says
the National City statement, rep
resented for the most part of the
larger manufacturing organizations,
and employing an aggregate capital
and surplus of approximately So
965 900, 900 at the beginning of this
year, had net income in the first
half OF 1912 of 1851 5000 after
taxes, which was 81 per cent below
the earnings in the first half of
l941.
The available quarterly figures
indicate that net income after taxes
in the first quarter Of 1912 was 80
per cent below that Of last year,
while the second quarter of 1912 was
q per cent below last year"
The decline, of course, is caused
by the necessity Of setting aside
taxes to pay according to the rates
in the bill just passed by the House,
which the administration is asking
the Senate to revise still further so
that the ultimate decline for the
year may be as much as so per cent
below last year.
1t is Interesting to note that Fed
eral taxes is absorbing II cents out
OF every dollar of net income before
taxes this year as compared with So
cents out Of every dollar of net in
come in 194l and AZ cents in 1910.
THE portion OF industrial cor
poration income taken by Federal
taxes says the National City letter,
sis now fa- above that ever reached
In the past. During the last war,
Federal taxes absorbed % per cent
Of the national income of all manu.
featuring operations in 1917, and As
per cent in 1918, and rs per cent In
1872
Other features, of course, besides
taxes are causing the drop in net
income such as the narrowing of
profit margins due to price ceiling
limitations, and rising labor costs.
Rationing and restrictions on civil
Ian output have played vital part.
too.
Deception Charged.
But, on the whole, 1t is disconcert-
Ing to read that the labor politicians
are still deceiving their members and
trying to deceive the public gen.
orally by arguing that the tax bills
are not high enough and that II
they were made higher the expenses
OF the war could be met without
either sales tax or further taxa
ton OF the persons in the moderate
or lower income group.
The corporation returns mean
moreover, that dividends will be GU
TO hundreds Of thousands of person,
who have invested in American in.
dustries. In the face of thes,
facts. we'll known to the Treasur,
and informed persons, the War La.
Dor Board has the temerity to insis
that wages must be Stabilized
upward so as to compensate for in
creases in the cost Of living as com
pared with normal, peacetime stand
ards.
At time when hourly earning.
and weekly earnings are the highes
In industrial history, a pay increas,
Is ordered by the administration TO
minority Of its citizens while thu
vast majority suffer either a pay
roll cut In the form OF declinin,
dividends or interest rates or a Gu
IN real wages due to increases in tn,
cost OF living for which the Gov
eminent does not compensate them
This unequal treatment of tn
49,