The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1950-01-26
By DONALD WOODS

Washington (LPA)-One Of the
most revealing profit reports ever
published has been issued by the
Federal Trade Commission. 1t dis
closes that since the war Big Busi-
ness has been making around ~
per cent profit on its invested cap
ital, compared with about half that
before the war. And that 20 per
cent is after taxes.
The figures give the direct lie to
the shrieks of Big Business that
the New Deal and the Fair Deal
have ruined them and have cut so
heavily into profits that there is
no incentive to expand. The figures
also show that the profit is highest
for the biggest companies in each
field, and that the more concen-
trated the control of an industry,
the higher the profit rate. Which
confirms the charges that mono
poles or near-monopolies mean
higher and higher prices for the
consumer.
That 20 per cent is very interest
ing in view of what Alfred r.
Sloan, Jr., board head of General
Motors, told 500 business leaders
in New York on Jan. Is, in reveal
ing that his company earned $780,
0O,000 profits in 1949-more than
any other company ever made In
similar period. Despite that, Sloan
wept: "In recent years economic
incentive has been weakened by the
ever-increasing take of govern
ment. | fear the effect is beginning
to be felt on the economy. No mat
ter how great his achievement, the
individual today cannot hope to
earn much more than enough to
provide for his current needs and
for a pension on retirement"
Despite these crocodile tears, the
ETC report shows that the motor
vehicle industry led the entire pro-
cession in 1948, with profit of 70
per cent, after taxes, whereas the
return in 1910 was 17.3 per cent.
And 1949 was the greatest year for
the auto industry in production,
sales, and profits.
The FTC study covered 52S iden-
tical corporations in 25 selected in
dustries, and showed rates of re-
turn (after taxes) on stockholders
in 1910, 1947 and 1948
adjusted to exclude reported ac-
CELEBRATED depreciation on postwar
facilities.
The Commission reported that
in both 1947 and 1948 there was "a
of rates of return around
the figure of 20 per cent for about
half of the industries studied. =
The factual report failed to draw
the odious comparison with 194O-'
but analysis of the figures showed
that in 1910 only two out of the 20
were in the % per cent
class, and 16 of them were "clust-
cred" around 10 per cent. Highest
was around II per cent.
In other words, the report shows
clearly that most of Big Business,
which was satisfied to make about
10 per cent profit on its invested
capital before the war, is now de-
20 per cent profit on its
capital structure.
The Commission reported the in
lustries showing the greatest in
.reases in their profit rates be-
,ween 1910 and 1948 were: i
Rayon-up from SO to 20.3 per
,ent.
Petroleum refining-from 6.7 to
9.4 per cent.
Bread-up from 7.6 to 1913 per
ent. (Note to Senator Gillette %,
Oval, who has been investigating
he increasing spread in food
,rices: here's your answer.)
Office and store machines and
evices-up from 1872 to 23.9 per
ent.
Paper and allied products-up
rom 9.6 to 1872 per cent. (Note to
,ep. Celler Cd, N.Y.: here is one
f the big reasons for the death of
many smaller newspapers.)
Wool carpets and rugs-up from
g to 17.3 per cent.
Biscuits and crackers-up from
g to II per cent. II