Sunday, November 25, 2012

War is a racket - war profits

The normal profits of a business concern in the United States are six, eight, ten, and
sometimes twelve percent. But war-time profits -- ah! that is another matter -- twenty, sixty,
one hundred, three hundred, and even eighteen hundred per cent -- the sky is the limit. All
that traffic will bear. Uncle Sam has the money. Let’s get it.

Of course, it isn’t put that crudely in war time. It is dressed into speeches about patriotism,
love of country, and "we must all put our shoulders to the wheel," but the profits jump and
leap and skyrocket -- and are safely pocketed. Let’s just take a few examples:

Take our friends the du Ponts, the powder people -- didn’t one of them testify before a
Senate committee recently that their powder won the war? Or saved the world for
democracy? Or something? How did they do in the war? They were a patriotic corporation.
Well, the average earnings of the du Ponts for the period 1910 to 1914 were $6,000,000 a
year. It wasn’t much, but the du Ponts managed to get along on it. Now let’s look at their
average yearly profit during the war years, 1914 to 1918. Fifty-eight million dollars a year
profit we find! Nearly ten times that of normal times, and the profits of normal times were
pretty good. An increase in profits of more than 950 per cent.

Take one of our little steel companies that patriotically shunted aside the making of rails and
girders and bridges to manufacture war materials. Well, their 1910-1914 yearly earnings
averaged $6,000,000. Then came the war. And, like loyal citizens, Bethlehem Steel promptly
turned to munitions making. Did their profits jump -- or did they let Uncle Sam in for a
bargain? Well, their 1914-1918 average was $49,000,000 a year!

Or, let’s take United States Steel. The normal earnings during the five-year period prior to
the war were $105,000,000 a year. Not bad. Then along came the war and up went the
profits. The average yearly profit for the period 1914-1918 was $240,000,000. Not bad.
There you have some of the steel and powder earnings. Let’s look at something else. A little
copper, perhaps. That always does well in war times.

Anaconda, for instance. Average yearly earnings during the pre-war years 1910-1914 of
$10,000,000. During the war years 1914-1918 profits leaped to $34,000,000 per year.
Or Utah Copper. Average of $5,000,000 per year during the 1910-1914 period. Jumped to an
average of $21,000,000 yearly profits for the war period.

Let’s group these five, with three smaller companies. The total yearly average profits of the
pre-war period 1910-1914 were $137,480,000. Then along came the war. The average yearly
profits for this group skyrocketed to $408,300,000.
A little increase in profits of approximately 200 per cent.

Does war pay? It paid them. But they aren’t the only ones. There are still others. Let’s take

For the three-year period before the war the total profits of Central Leather Company were
$3,500,000. That was approximately $1,167,000 a year. Well, in 1916 Central Leather
returned a profit of $15,000,000, a small increase of 1,100 per cent. That’s all. The General
Chemical Company averaged a profit for the three years before the war of a little over
$800,000 a year. Came the war, and the profits jumped to $12,000,000. a leap of 1,400 per

International Nickel Company -- and you can’t have a war without nickel -- showed an
increase in profits from a mere average of $4,000,000 a year to $73,000,000 yearly. Not bad?
An increase of more than 1,700 per cent.
American Sugar Refining Company averaged $2,000,000 a year for the three years before
the war. In 1916 a profit of $6,000,000 was recorded.

No comments: