INDUSTRY IN 1929

Sun (Auckland), Volume IV, Issue 993, 9 June 1930, Page 11

INDUSTRY IN 1929

AMERICA’S HAPPY POSITION The monthly review of the National City Bank of New York recently published a study of business profits in America in 1923. The calculation covers 1,520 companies engaged in many diffei'ent forms of manufacture and trade. They earned a total net profit in 1929 equivalent to £840,000,000, compared with £710,000,000 in 1925; thus there was a gain of 17 per cent. The profits are struck after deducting all expenses, reserves for depreciation and depletion, interest on borrowed money, and provision for taxes, with the exception of a limited number of reports which only show the earnings before certain charges, the preferred and common stocks of these companies, together with the surplus accounts and undivided profits, amounted to £6,400,000, so that the frofit represented a return of 12.8 per cent. This figure compares with a. return of 11.7 per cent, in 1928. Of the 1,520 companies 125 had sustained losses aggregating £14,000,000, and these are deducted from the net profits in arriving at the above total. In the tyre industry there were no fewer than eight deficits, amounting to £ 3,000,000, this being the result of the decline in crude rubber prices. The figure of 12.8 per cent, is a very satisfactory return, but 1929 was an unusually prosperous year, beating the previous record year, which was 1928. In the current year the results are bound to be less satisfactory. For British trade and industry profits were slightly less in 1929 according to calculations made by the Economist. These show that 1832 companies whose reports were published in the twelve months ended March 31, last earned net profits of £ 196,539,000, against £196,833,000 in 1928, the profits being equal to about 10 per cent, on preferred and ordinary capital* excluding reserves.