Detroit evening times. (Detroit, Mich) 1921-1958, 1943-08-10
The Nub Of the Issue

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4 MEXICAN industrial companies, which have donned
y khaki for the duration performing vastly more
for substantially less pecunary reward than before
Fcar Harbor.
This record should rcassurc those who fearful
lest the war prove for widespread profteerng
The composite figures for corporate earnings recently
compiled 10y The National City Bank of New York while
showing decline in earnings compared with the cor
responding period of 1911 tend to cXaggerate current
business profits which still subject to downward
revision
THE compilation based the reports of large and
successful corporations which are always the first to
put out their statements Accordingly showing,
instead Of beng representatives is f2Orable than
the condition of all corporations.
Furthermore the reported 1913 profits are tentative
and likely be further pruned down by contract
renegotiaon boards.
Moreover they are subject to still further reduction
by decisions Of the Internal Revenue Bureau
Yet the basis of these selected and uprepre-
sentative figures is apparent that 20 per of all
earnings before taxes being shuned from corpo
rate treasures TO the government in the form of taxes
Thus where the United States government is the sole
customer of many wartime industries it in the position
of participating in a virtual consumers cooperative,
which rebates to the buyer 20 per cent of all profits
earned
THE National City study indicates that the govern
1 ment and employees benefited from the improved
efficiency of the industries than the sockhod
ers and other owners
"Saes increased considerably more than did net in
after taxes" the bank reveals indicating lower
margins of average net earnings per dollar of sales.
Profit margins narrowed despite the lowering of
costs through improved efficiency and greater pro-
ducon of goods to which most of the large corpora
tiOns are now devoted in part or entirety"
The expansion in volume and the heightening of
efficiency make the profit showing better than in the first
half of 1912 when companies still in the process Of
converting from peace production to production.
THUS statements for the first half year issued by $40
industrial companies show a combined net income
after and other of $61 100000 increase
of IA per cent the combined earnings of the same
companies in the first half of 1912, but decline of %
per cent compared with the first half of 1941
Thus, the figures indicate that proiteering is not
issue
more sober question is whether retained earnings
in the form Of against postwar contingencies will
be adequate to the unhampered continuance after
the of American facilities for producing and exchang
ing goods.
This question affects not merely select group of
stockholders and bondhoders but every person subject
to ganful employment and every consumer.
DEMAGOGY aside no postwar planning is other than
IL mudde headed which does not permit business enter
prise TO accumulate sufficient reserves to meet the con-
tngencies of cancellation of contracts and other
incidents which will with the transition from war
economy to peace economy after the Axis has been
whipped
In the circumstances congressman and senator's,
labor leaders and business executives should think pene-
tratngy about this crucial subject and should strive to
develop an enlightened public opinion favor of con-
tnued sovency for the enterprises which the people
rely for jobs as well as for goods and services