Profits Again

Profits of four leading aircraft manufacturers (Curtiss-Wright, Douglas, Consolidated and Lockheed) stood over 900% higher in 1941 than in the base period of 1936-39, and profits of New York Shipbuilding stood 2,420% higher.

These startling statistics were headlined last week by the newspaper PM, which stated that it backed them with a study made by OPA. Run with a cartoon showing a stout gentleman in a frock coat with an American flag in one hand and a bag of money in the other, the figures purported to be a damning indictment of the U.S. business profiteer.

Only trouble with the phony use of these statistics was that they could be manipulated to prove anything. All aircraft companies except Douglas had shown net deficits during the early '30s; New York Ship ran a $1,300,000 deficit in 1937. Had PM taken these deficit years as a base and compared 1941 profits to them, it could then have proved that profits were up not by a few thousand per cent but by infinity.

In plain fact the relation of net profits to gross business told quite a different story. Thus New York Ship, which in 1939 earned a net profit of about 3.6% on a $25,000,000 business, in 1941 earned only 3.2% on $95,000,000. On the basis of OPA figures, the relation of net to gross for 100 prime contractors in 1941 was 7.9% In 1942 the net profits of most corporations will show a substantial decline.

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