Going, Going . . .

Second-quarter earnings nosedived to the lowest level since pre-war days. Combined after-tax profits of 200 big-time corporations tabulated by the National City Bank fell to $230,000,000, 16% below the first three months and 39% under the final quarter of 1941. While farm income and wages reached for the sky, corporation profits plunged for the pavement (see chart).

Main reason is the new Federal revenue bill. This spring U.S. business set aside $3 for the tax collector for every $1 left for the stockholder. In 1929 taxes took $1 for every $9 left over; in 1940 the ratio was $1 to $2.25.

> Most steel mills are stuck in the high excess-profits tax brackets, and profits plopped accordingly. First sizable steelmaker to report was Wheeling Steel, which estimated net at only $750,000 v. $2,700,000 last year. Continental's profits were down 28% to $234,000. Wall Street dopesters expect giant U.S. Steel to report only $6,500,000, barely enough to cover preferred dividends and far below last year's $24,815,000.

> Trademarked food companies did more business than ever, but on slimmer profit margins than usual. Standard Brands earned only $1,374,000--lowest in the company's history. General Foods showed $2,930,000 v. $3,016,000 last year.

> No. 1 electrical equipment maker General Electric cleared $10,352,000 in the June quarter, down 29% despite a 30% increase in net sales.

> Railroads are the big exception to the profits drop. Long the most overtaxed U.S. business, railroaders are now protected from the excess-profits levies by the very rail & ballast that has kept their profits down for years. Atchison, Topeka & Santa Fe--longest U.S. railroad--earned $16,775,000 in the five months ended last May, more than three times a year ago; Atlantic Coast Line netted $8,938,000 in the same five months, almost double 1941; Union Pacific boosted profits from $3,369,000 to $9,616.000.

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