Evening star., 1943-03-28

COTp., issued 1nurSQdy, SHOWS Jnat IL re-
ceived 81 1865 ,951 ,692 from the sale of it's
products and services in 1912 Of this
sum, employment costs were $782 ,661 FOL,
or Is per cent higher than the previous
year, and taxes were $203, 755 ,157, or 21
per cent higher. Dividends to stock
holders remained the same.
The Southwestern Bell Telephone Co.
reports that its 1912 earnings were lower,
compared with the amount of money in
vested in telephone plants, than in the
worst years of the depression. The rate
OF return on the company's plant was "A
per cent in 1912, compared with 1876 per
cent in 194l and 5.58 per cent in 1910.
Federal taxes increased 40 per cent from
1941 to 1912 Net income fell S1,143,O12
short of covering the dividend paid.
The Du Pont Co. had an overall 4 per
cent increase in sales and other operat-
ing revenues in 1912 as compared with
1941, and % per cent decrease in prof.
its. The company reports that it's net
profit on products manufactured for
the Government at Government owned
plants has netted it l per cent of the
cost of these products. For erecting
plants for the Government, it has re-
ceived fees netting it Is -hundredths
of l per cent of the cost of the construc-
ton. It's an interesting point that be-
tween the two World Wars the Du Pont
Co. cut down its military production to
figure that represented less than 2
per cent of its total sales
Rails in Special Glass.
The railroads, with mounting profits,
are in special category. Their operat-
ing revenues (revenues before payment
of fixed charges) rose from $683 ,0O0 900
in 1910 to 81 ,481 100000 in 1942-an all
time high record. But only a third of
the 1876 class roads paid dividends on
preferred or common stock in 1941, and
the number of dividend payers in 1912
was still less than half.
In preparation for the lean days after
the war the railroads are using their
present profits, in large measure, to
buy up their bonds and provide funds
for new equipment. About one-fourth
of the class I roads, representing 27 per
cent of all railroad mileage, are still
in receivership or trusteeship.
To repeat: There won't be new crop
of millionaires after this war. The coun-
try has gone long, long way toward
taking the profit out of war-a goal
which, as the President has pointed out,
is in accord with the Solemn pledges"
of both the Republican party and the
Democratic party in their platforms.
The conclusion with respect to profits
applies to industry generally, and not
alone to that part of it which is doing
war work
Primarily, the job is being done
through taxes. The corporation rates
tell their own story. And apart from
the corporation taxes there are the 1912
rates on individual incomes, the highest
in history, ranging up to 88 per cent
(82 per cent surtax plus per cent nor
maD when income hits the level of
100000. In addition 80 of the States
impose income taxes.
Can any individual get rich out of
war profits? The writer put the ques-
tion to private tax experts, congressional
and Treasury tax experts. The answers
ranged from most unlikely" to "im-
possible, except through fraud" And
the contract adjustment boards and the
regular agencies of the Government
charged with fraud prevention-to say
nothing of such useful watchdogs as
the Truman Committee-are keeping a
sharp eye out for shady practices. 1t
would be a miracle if none were at
tempted in connection with a produce
tion program which, at $24O,OOO 900 900,
is more than 10 times that of the last
year.
There are some who think that it would
have been better to rely on high taxes
alone to prevent exorbitant profits on
war contracts. Congress as whole dis
agreed, and passed the Renegotiation
Act, making it applicable not only to
new contracts but to existing contracts
on which the final payment had not been
made
This act is valuable, says Chairman
Karker, quite apart from the direct saw
ing it has enabled the Government to
make on war contracts. 1t is, he says,
helping industry to keep itself lean and
efficient and low-cost in its production"
and thus helping industry to get itself
into fighting trim for the competitive
struggle after the war. Further, the act
tends to safeguard contracting companies
against criticism by Congress and re-
taliation by the people after the war.
There will be much less meat for q
congressional investigation" Karker
says, IF excessive profits haven't been
realized than would be the case had
they been realized. even though they
were completely taken by taxation"
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