WAR UNPROFITABLE

Dominion, Volume 15, Issue 55, 28 November 1921, Page 9

WAR UNPROFITABLE

MUNITIONS COMPANY’S LOSSES PROFITS ABSORBED BY TAXATION "War does not pay.” No one is better fitted to pans on the subject of profit in war than the maker of munitions and Mr. Pierre S. du Pont, chairman of the E. I. du Pont de Nemours and Co., writing in the October issue of "The Nation’s Business,” declares that war does not pay. The history of Mr. du Pont '.company is coexistent with that of the Republic of the United States, and. the firm furnished a great part of the explosives used by the United States in all the wars in which it has bean engaged, according to tho “Christian Science Monitor.” As a result of this experience, Mr. du Pont says: "No munitions concern can live by war alone. During the 139 years of the existence of the United States as a nation there were four major conflicts before the world war. They lasted about 10 years in all, or about 7 per cent, of the time. How could any independent corporation keep itself alive for 139 years by turning out a: product that was only wanted 10 years of the time? The manufacturer of war material who was prepared to meet the emergencies of these years was not supported during the intervening time by preparations for the conflicts. Such manufacturers existed through th? ownership of factories occupied in making piece-time products In that way alone could they stabilise their businesses.

“Most people, business men included, probably think that war hns no dangers for the maker of munitions. The truth is that no one realises as clearly ns do wo makers of war necessities tho grave financial dangers of modern conflicts. Evon for a company as strong and firmly established; as our own, it is a gamble whether if. can successfully weather the storm. There is the need 1 for immediate and tremendous expansion; the steady even flow of peace-time business gives way to a feverish rush for materials and labour. This expansion must bo accomplished when there is a demand for money from a thousand sources. Yuo might assume that our factories can turn to tho making of war material without changing their equipment. As n matter of fact, our plants that made powder for commercial purposes could not turn out tho explosives used in modern warfare. New plants, then, must bo erectcdl, new organisations created when labour is hard to find and not over-conscientious.

"Wars stop suddenly. Tho munitions maker finds that his market has vanished over night. He is left with plants and organisations on his hands that are of little value during peace—and these difficulties aro enhanced by the depression that follows conflicts.

“Our company has attained its present position not because of, but in spite of, the wars it has helped to fight. Today we are «till busy unsnarling the tangles that resulted from our part in the world war. I could name half a 'dozen great concerns flhat turned their energies to war production that are having serious difficulty in pulling, through the after-war slump. I "Smokeless powder, tho chief product of the Du Pont Company during the war, was the only essential material whose price declined during that period. We bolievo that is a record. Now, what happened to eorae of the other necessities? The price i’f pottbn on f>> farm soared from 6 cents in October, 1914, to approximately 42 cents in July, 1920; the price of wheat on the farm went from 76J cents in Juno, 1914, to 2.583 dollars in June, 1920. Our price on smokeless powder was reduced from 63 cents to 44 cents during tho war period. “It tis probable that few munition makers gained much financially from their operations. In the case of the Du Ppnt company, taxes paid to the United IJbatcs Government during the recent war not only absorbed the entire profit of tho company on powder sold, to our Government, but', in addition, they wiped out all of the profit made on these powders during the preceding 20 years. “It Is fortunate, indeed, that the United States encouraged the development of munitions through private enterprise, in preference to Government control. The nuclei of manufacturing organisations available to the Government in the late war were undoubtedly a determining factor in the final result. Our European allies concede that they would have failed to withstand the preparedness of the German nation had it not been for the assistance of the munition makers of the United States. Without these same munition makers, our own Goy ; ernment would have been powerless; in fact, it would .never have had an opportunity to lend its. assistance to the Allies, who carried the burden in the early war year.” Mr. Du Pont concluded: “I hope that I have made it clear that we makers of munitions who survived the risks to life and capital are not among thoee anxious to repeat the experiment of war by preventing the establishment of_ permanent peace. I consider President Harding’s move in calling the Disarmament Conference a long step in direoti&n, as it will be held while people still have in mind the physical horrors of warfare, and while the nations still are suffering from eoonomio wounds. Sentiment against war has always been strong; added to this sentiment now is the crushing burden of taxation, and a disarrangement of all the orderly channels of domestic and international commerce. The "conference has an excellent chance to achieve the high aim for which it has been called.”