The Nonpartisan Leader Newspaper, May 6, 1918, Page 4

LTI SEED. CEEEEE— T e B S e e Y e, '\—‘.a_t.‘.‘a-....—---v.--‘l&-.llll.lllllllllllIll.lll'lllll.lllllllllllllllllllllIlll'. 1 ' of raising prices. . prices enough to cover the taxes and " take advantage of sudden demand to __big business corporations and many 1 219,664 for profits, or $200,722,796 Looting the Nation a ‘ oes On Financial Reports of the Great Corporations Show Unparalleled Prqfits—‘Price ' ~ Fixing of Manufactued Products the People’s Hope of Relief BY A. B. GILBERT OW much profiteering was there during our first year of par- ticipation in the war? Most of the people realized during this year that many prices had been pushed up beyond what any increasing cost of produc- tion would justify. President Wilson with his unusual sources of information declared on December 4, 1917, that “While we have elimipated profiteering in several v-anches of industry, it still runs impudently ram- pant in others.” But not until the 1917 reports of the big corporations began to come cut in the first quarter of 1918 did we have the figures to show how “impudent” the profiteering had been. Throughout 1917 there were few or none who A candidate for governor in Kansas was telling his troubles to a newspaper editor. “The farmers are restless,” he said. “They think that because the gov- ernment fixed the price of wheat, it ought to go ahead and fix a fair price on farm machinery and other things they have to buy.” On this page is a fact story of the excessive profits that are making our millionaires more and more greedy. President Wilson early in the war called attention to the dan- ger of this impudent profiteering. The Nonpartisan league stands back of him on that platform, too. The Island Creek Coal company earned within $130,000 as much profit in the first six months of 1917 as it made in the entire year of 1916. In the same six months the Pond Creek Coal company earned $729,625 as against $326,734 for all of 1916. The Wall Street Journal recently declared that the companies mining anthracite coal also were mak- ing unusual profits in 1917 and would probably continue to do so. FIGURES ON OIL AND PACKING The price of crude oil, over which Rockefeller is king, advanced from $1.35 a barrel in 1915 to $4 in December, 1917. Most of the advance took place in '1917. The Standard Oil Company of Cali- fornia, a typical branch of the combination, re- ports the following profits after paying all taxes: defended profiteering, in public at least. One i } : 4 business association after another declared that all = igig ' g $lg'ggg§02 its members desired was a reasonable profit and ) 1917 . haa : 18,649’830 urged all to sacrifice. The publicity agents of big 39.17 per cent available for dividends on its com- = _ = @ "*cecccceeeeccces e it s business had much to say about service to the country while it was at war and the very heavy burden of income and war profits taxes which big business was bearing cheerfully as its part of the mon stock. In the three years its sales had in- creased 217 per cent and its profits 854 per ‘cent. Except for war profits taxes the profit increase would have been 1,855 per cent. There is reason for be- It thus escaped the burden of war profits taxes with $1,044,526 to spare. The packing trust, made up of the big five, Ar- mour, Swift, Morris, Wilson, Cudahy, had the fol- sacrifice. So intense and widespread was this lieving that the actual amount of iron and steel 10Wing combined experience: propaganda that many were led to believe the vig- turned out in 1917 was less than in 1916 and prob- 1915 ........ ceectressaenss..$30,596,308 orous protest against it by the Nonpartisan league ably much less than double the output for 1914. 1916 ...veieennnnrnnnreeasss B2,TILTTT and others, including the president, who had the The total pig iron output of the country in the last 1917 .......... B 69,947,966 interest of the country at heart, was not well founded. The Hessian press in fact said practically nothing about the president’s protest on December 4 that it might with better grace declare that the protests came from oily-mouthed agitators. UNPARALLELED PROFITS IN 1917 Yet the 1917 reports of almost every large corpo- ration that has reported so far show profits not approximately those of the pre-war years but greater than even the war years 1915 and 1916. Our own participation in the struggle was made the occasion of greater profiteering than had been known hitherto. Hayden, Stone & Co., prominent stock brokers of New York and Boston, recently summed up the situation for its clients in the following words: “It is a trite remark that never be- fore has this country witnessed any such earnings, either actual or in pro- portion to the prices of stocks, as are now being recorded for 1917.” By earnings they mean the net profits left after setting aside enough to cover the war profits taxes; they mean the money which can be distrib- uted as dividends or added to surplus. Not setting prices on all commodities comparable to the price set on wheat, as the organized farmers demanded last September, congress, as the above statement shows, allowed the great corporations who have a monop- oly of their products, to avoid war profits taxes by the simple expedient They raised the to give themselves more actual profits than they obtained in that wonderful profit year 1916. WAR HAS BUILT NEW MONOPOLIES Before the war began, 6 to 10 per cent earnings on capital invested was considered a fair or reasonable return. But the war gave an opportunity to such an extent that 30 to 50 per cent profits are now about the standard for of them run up to 100 per cent.. Where a close monopoly existed before the war the profits have been greatest, that is in coal, iron, oil, copper, wool- en goods, food necessaries. And war conditions have built up several new and powerful monopolies. After paying federal taxes to the amount of $223,465,435, the United States Steel corporation had $224,- year was 450,000 tons under that of 1916. The Republic Iron & Steel company made 53 per cent in- 1917 as opposed to 48 per cent in 1916. The Lackawanna Steel company has $45.89 per share of common stock clear as opposed to $34.81. The Bethlehem Steel corporation earned $43.80 per share in 1916. The Pittsburg Coal company and its subsidia- ries, one of the big coal companies of the United States, has had the following profits in the last three war years: 1915 ... ciiieniineneneness.$ 5,567,314 1916 c.vvveciinenerineenaces. 6,958,458 1917 .iieviiiieeeeniennenas.. 18,469,549 l PUT THEM BETWEEN THE MILLSTONES I : ‘—Drawn especially for the Leader by W. C. Morris Shameless profiteering has gone on for years. The war, with its opportunity for greater profits, found the monopolies entirely without conscience. Today they have the producers of the farm and city between their millstones. It is only by organization and combined action that the honest people turn the tables The great increase of $17,236,189 in 1917 in spite of war profits taxes over the combined profits of 1916, explains, in part at least, why leather was high, meat products were high and at the same time few feeders of livestock actually made ends meet. Even 1915 was a year of unusual prof- its for the packers. The American Woolen company net profits for 1917 more than doubled those of 1916. The United States Industrial Alcohol company cleared between $70 and $80 a share. The Corn Products Refining company made $2,507,948 more in nine months of 1917 than in all of 1916, and its experience is typical of that of other food products corporations. : The Quaker Oats company, for in- stance, reports 52.66 per cent profit. The Du Pont Powder company, a great munition firm, made $77.49 per share. The list could be extended almost in- definitely but enough has been said to show the general situation. PAD EXPENSES TO LESSEN EARNINGS These . profit figures, however, are probably understated because big busi- ness has special reasons for conceal- ing the full extent of its profiteering. Expenses have been loaded by adding to salaries. Government investigators, for instance, recently discovered that flour milling companies had added at least $500,000 to the salaries of their officers as a means of beating the regulation of mill profits. There has been a general tendency to charge off more for depreciation than conditions warrant. Another method is to un- derstate the inventory of goods on hand at the close of the year. The big copper companies, for example, inventoried their stocks of copper at 14 cents when the price set is 23% cents. The percentagé of return on capital stock is often misleading be- cause of the immense amount of wa- ter that has been forced into the stock issues as a means of hiding the real profit of the investment. ENDANGERS' THE FATE OF THE WAR Rampant profiteering is endanger- ing our war efficiency. In his speech ° on July-11, 1917, the president set forth clearly as a fundamental prin- .-ciple ‘hat “prices mean the efficiency or the inefficiency of the nation, whether it is the government which pays them or not. They mean vic- . tory or defeat. The president has appealed in the strongest possible terms to congress to give him power and pat the gamblers in the necessaries of life under pressure. Remember, the fight is between!'those who J}ive by Earning and those whe Live by Owning, PAGE FOUR to regulate prices as the wheat price more than its net profit for 1914 and is regulated but up to the present.that