The Nonpartisan Leader Newspaper, January 10, 1921, Page 7

nothing at all. If it makes 12 per cent profits it pays only $200, or 136 per cent of its total profits. If it makes 15 per cent profits it pays only $800, or 534 per cent of its total profits, and if it makes 20 . per cent profits it pays only $1,800, or only 9 per cent of its total profits, less than 2 per cent of its capitalization. -After paying its excess profits tax this 20 per cent corporation would still have left $18,200 prof- its, or better than 18 per cent. After going above 20 per cent the excess' profits taxes are somewhat higher. If the $100,000 corpo- ration taken as an example made profits of $25,000 in a year it would pay a 40 per cent tax on the last $5,000, or $2,000. This would make its total tax $3,800. It would still have left profits of $21,200, or 21.2 per cent. If it made $50,000 profits in a year its total tax would be $13,800, and it would still have profits of $36,200, or 36 per cent, to distribute to its share- . holders. The corporations are making a great wail before congress about having to pay “20 to 40 per cent ex- cess profits taxes.” From the way the subject has been discussed in the daily newspapers the impres- sion has been given to many people that such cor- porations are compelled to pay from 20 to 40 per cent of their profits. If corporations making:around 20 to 30 per cent profit (the average yearly profits of northwestern millers) were actually compelled to pay 20 to 40 per cent of it to the government it would be difficult for a good many farmers to find a (Continued on page 16) ‘A Water Haul for Northwest Wheat Plans Being Worked Out for Billion-Dollar Improvements That Will Bring the Ocean to the Door of the Farmer EARLY a year ago the Leader pointed out the immense advantages that would be gained for northwestern wheat growers by the- opening of an all-water route, without transfer of - cargoes, between Duluth Great Lake points and Europe. ' At present northwestern grain destined for Europe moves to a large extent by the expensive rail routes to New York, where it is loaded onto ships for Liverpool. The price that the groweir gets for his’ wheat . naturally has the expensive rail freights deducted. > Since the railroads have been returned to private ownership and radical advances have been allowed in all freight rates there is more reason than ever for the northwestern farmer to be anxious for the opening of the all-water route. For years the completion of this route has been held up by the objections of the railroads and New York exporters. - The railroads objected because it would decrease their revenues; the New York ex- porters because they believed it would interfere with their business, which now comes by railroad. New York interests now have accepted the belief that the proposed improvement is inevitable and they are laying their plans to retain a share of the business when the all-water route is opened. They will do this by building two great state-owned and operated grain elevators, one at Oswego, on Lake Ontario, the other at Brooklyn. Between these points canal barges will take the grain from the Great Lakes through the Erie canal and Hudson river to the ocean. Hugh L. Cooper, a New York hydraulic engineer, is now working upon plans for the improvement of the St. Lawrence river, the last link of the water . - highway from Lake Superior to the Atlantic ocean. It is estimated that the cost of building dams and locks that will eliminate rapids in the St. Lawrence will be $1,300,000,000. These dams will, however, make possible the development of electrical power to the extent of 5,000,000 horsepower. Mr. Cooper is the engineer who had charge of the . damming of the Mississippi river at Keokuk, Iowa. Besides opening the all-water route for the benefit of farmers and the Northwest generally, Mr. Cooper believes that the St. Lawrence river improvements will work an immense advantage to the East, on account of the cheap power which will be supplied. and other The opening of the St. Lawrence river will make available immense supplies of waterpower. That is the main rea- son why eastern commercial interests, which have heretofore blocked the im- provement, are now swinging .around to favor it. Why should these natural resources, belonging to the govern- ment, be developed and then turned over to private exploiters ? Why should the government not develop this power and give industrial and private con- sumers the benefit of this undertaking without padded profits? The looters are making their plans for another grab of natural resources. Let’s stop it. Mr. Cooper takes the stand that except in times of financial stringency, like the present, there is likely to be a shortage of labor for some years. He says, in an interview in the New York Times: IMPROVEMENT OF RIVER WILL SAVE LABOR AND COAL “The farmer, the manufacturer and the general public all need labor and are therefore vitally inter- ested in everything that will increase this supply. Our modern civilization requires, normally, one horsepower for every five of its people. Every 25 hydro-electric' horsepower saves for one year the "labor of one man engaged in producing steam horsepower—when we come to figure all the ex- penditures from the mine to the ash heap. To produce any given quantity of electrical energy, using steam as a prime mover, requires 70 times as much man power as is required where hydro- electric power is the prime mover. Every hydro- electric horsepower saves, on the average, 10 tons of coal per annum. “This is to show how the public is dependent'lipory" and interested in the most efficient development of all undeveloped waterpower resources. “Before this time development has been blocked in the St. Lawrence by the laws of the United States. Also, in 1840, the ordinary water wheel had - installation on the St. Lawrence. an efficiency of 50 per cent. Today it is 90 per cent. In 1890 transmissions of power 10 miles were con- sidered marvelous. Today transmission of 350 miles is quite feasible. This great transmission reach brings into consideration a market that will justify the vast expenditure required for the initial In my opinion the application of present-day standard engineering practice to the St. Lawrence will result in the gen- eration of power on the St. Lawrence at a price less than it can now be produced at Niagara Falls. “Another thing—this project ‘will relieve the coal situation. It is greatly in the interest of the United States to see that Canada is relieved from her pres- ent necessity of purchasing coal in the United States. The development of 6,500,000 horsepower will substitute 65,000,000 tons of coal per annum in the zone easily within transmission distance. The saving of this coal in the United States and Canada will reduce the price of coal to the household con- sumer and to remaining steam-power consumers. “Many honest friends of the Erie canal are afraid that the improvement.of the St. Lawrence will re- duce the amount of freight handled by the canal. The ‘great trouble with the Erie canal today, with- out the St. Lawrence improvement, is that it has no justifying tonnage through it. If you can make available for industry all along the 356 miles of the length of the Erie canal cheap electrical power (and by cheap I mean as cheap as it can be had from Niagara Falls), then you will have in such a facil- ity, together with cheap navigation in a country thirsty for industrial expansion, an amount of new business in actual tonnage of raw-materials-in and manufactured-material-out that will make the whole canal zone a great big industrial success in- stead of the apology that it now is.” Mr. Cooper’s statement shows some of the rea- sons why eastern .business interests, which have been blocking the St. Lawrence river improvement, now are boosting for it. It helps explain, too, why the s of New York adopted the plan of state- owned and operated grain elevators to keep its share of export grain business. X The St. Lawrence river improvement plans are now being considered by an international commis- sion, consisting of three members from the United States and three from Canada. This commission recently concluded a series of hearings and within a short time will make its report. One of the dams proposed for the St. Lawrence river improvem;itt, shbwing the locks at the right which wheat ships would enter going down the river with North- west wheat. It is estimated that a dam like this would cost $200,000,000 and the total cost of the river improvement is put at $1,300,- 000,000, an immense sum but much less than PAGE SEVEN A 5 B A A T A T P B e A O W T G D O A7 S RN the peace time cost of our army and navy for one year.