Evening star., 1943-03-29
Fact and Fable

FuCt and F0bIe
In his appearance before the Tru-
man Committee last week John l..
Lewis dwelt at some length on the
familiar accusation that industry,
having large Government contracts,
is getting rich out of this war. The
Government, he said, is "superinduc-
ing imitation by excessive awards to
industry" in the form of profits while
telling 50,000,O00 American workers
that their wages are frozen. Because
of the frequency with which this
complaint is voiced by labor leaders,
certain politicians and others, it is
peculiarly interesting to take a
look at the financial report of the
United States Steel Corporation, Mr..
Lewis preferred target.
This report, Just released for publi-
cation, compares the corporations
earnings for 1912, the first full year
of war, with those of l941.
During 1912 the United States Steel
production of steel ingots was nearly
80 per cent over the best year of the
last war, to a total of more than
10000 900 tons. This was an all-time
record. The total of receipts for
products and services sold was about
$1,866, ,00O,O ,OO0-some $244, 900, 900 more
than receipts for 1941. But the in
come of the corporation and its sub
sidiarieS for 1912 was less than
$72,000,00o, compared with 194l in
come of about $116,00O,000. Nor
is it difficult to comprehend the ex-
planation of this seeming paradox.
In 1941 the corporation paid its
workers 628 million dollars; in 1912,
1888 million. This an increase OF Is
per cent. In 1941 the Government
took 1859 million dollars in taxes; in
1912 it took 204 million, an increase
of 81 per cent. The owners of pre-
ferred and common stock received
the same amount each year-70 mil
lion dollars. And the amount carried
forward for future needs, Sc million
in 1941; was only II million in 1912,
a decrease of 70 per cent.
This, then, is the essence of the
financial story of one corporation
which is supposed to be getting rich
out of the war. The payments to
the proprietors of the business, plus
the sum set aside for future needs,
amounted in 1912 to 4.48 per cent
of the corporations net asset value.
For every dollar paid to common
stockholders, $22 went to the workers
and Sc to the Government. Thus,
earnings per dollar of sales actually
dropped in 1912, while the amounts
received by the Government and the
workers showed a substantial in
crease. Yet Mr.. Lewis says the cor
poration is getting rich from its war
time operations at the expense OF
generous Government.
1t is of more than passing interest
that the death of James A. Farrell,
president of United States Steel for
twenty-one years until his retire
ment in 1882, should have come in
the midst of this controversy. Who
was James A. Farrell, and how did
he come to be president of the largest
industrial unit In the world?
Mr.. Farrell went to work as wire
puller In a steel mill at the age of
sixteen. His salary was $4.65 a week.
Working twelve hours day and
studying at night, he gradually ad-
vanced. At twenty he was me-
chanic, at twenty-six salesman
and, finally, at forty eight he became
head of the corporation. Under his
direction United States Steel grew
from a few scattered mills to an
organization which employed nearly
a quarter million men and did busi-
ness throughout the world.
There Is no doubt that Mr.. Farrell's
career brought him personal wealth,
but it also brought improved work.
Ing conditions, pensions, ETC., to his
employees, and he was consistent
advocate Of these things. Those
whose principal purpose seems to be
to tear down "big business" through
a persistent policy of misrepresenta-
ton would do well to reflect upon the
career of this man and what his &C
complishments have meant to this
country.