The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1949-06-16
r investment every two years.
BY NATHAN ROBERTSON

Washington (LPA)-A case his
tory of facts and figures showing
how manufacturers have built
dimes into dollars during the boom
profit war-and postwar years has
been published by the Textile
Workers Union of America.
1t is a report on the profits of
the textile industry during the past
10 years compiled under the dir
ection of Solomon Barkin, the cap
able director of the unions re-
search department. The report
entitled "Profits Build a Financial
Fortress, shows how the textile
mill products industry has built "a
net worth of 21a billion dollars, on
which it earned seven percent in
1889, into a net worth of more than
6 billion dollars in 1948, on which
it earned more than 37R.
This financial empire-one of
the richest in America-was built
primarily out of war profits and
postwar profits during the lush
period of the past four years. By
1916 the industry had built up its
net work to 3H billion dollars,
chiefly out of war profits. During
the past three years it has earned
total of 107 percent of it's equity,
or more than doubled its capital
investment out of profits alone.
Thus, in addition to paying rich
dividends to the stockholders, the
industry has increased its net
worth, or capital investment, by
81, ,582 100000 during the past three
years. This was an increase of 73
percent, which was paid almost
entirely out of high profits, over
and above those required to pay
taxes and dividends. In 1948 the
industry made record breaking
profit of 1920, 900, ,000-more even
than the fabulous year of 1947
which earned for the industry the
reputation of being "the nations
most prosperous industry" Last
years profits were IL times the
figure for 1939-the last normal
prewar year.
Profit figures so far are profits
before taxes, which is the best
basis for measuring profits as re-
lated to prices and wages. Profits
after taxes have not risen quite so
sharply because of increased tax
rates during the war and postwar
period-but even here the industry
has a phenomenal record.
Bonanza After Taxes
Profits after taxes for the corp
orations in the textile industry
were 81 ,2S0, 100000 or about 10 per
cent above the record breaking pro-
fits for 1947; almost ten times the
1889 profit; and a figure which rep
resented almost % per cent on the
net worth, despite the way this net
worth has been inflated by the pro-
fits of recent years. On the basis
of net worth in 1889, this 1948 fig
ure for profits after taxes was close
to so per cent-which means doubl-
ing the original 1889 investment
every two years.
1t is worth noting that these
profits in the textile industry have
been made during a nine year per-
iod when there was little risk in
doing business-when profits were
assured by government demand
and pent-up postwar consumer de-
mand. A dime invested in the bus
mess in 1889 would now be worth
about 25 cents, and annual returns
would average about dime a year
before taxes, or five cents a year
after taxes. That is doing a little
better than the working guy who
puts 10 cents into a savings stamp
IN which he will be able to get a
quarter in a year or two, before
axes.
These tremendous 1948 profits
we're made by the textile industry
n the face of a softening of de- I
nand in the latter part of the year
md a drop in textile prices. They
we're made in the fact of an 11.5
,er cent loss in inventories as the
rice declined during the year. De- Il