Memory of Black Friday

On "Black Friday" in October 1929, U.S. Steel Corp. declared a $1 extra dividend. That was Big Steel's last extra dividend until last week--18 years, less a day, from the market crash--U.S. Steel again declared an extra dividend, of 75-c- a share, out of its fat third-quarter earnings. It could well afford it.

Chairman Irving S. Olds reported that in the first nine months of this year U.S. Steel had netted $97,306,461 after taxes, a rise of 69% over the same period last year. (Besides the extra, its directors also increased the regular common stock quarterly dividend by 25-c- to $1.25 a share, thus putting the stock on an annual $5-a-share basis.) Olds also said that Big Steel "has not given any consideration to a price rise at this time."

Compared to General Motors Corp.'s report last week, Big Steel's rise was small. G.M.'s net for the nine months was $213,217,476, up 1,300% over 1946, when strikes shut G.M. down much of the time. Both companies actually did better than the net profit showed. They charged off record amounts for depreciation on the theory that "normal" depreciation write-offs are too small in the face of rising prices. Such write-offs, which for tax purposes are considered as profit, would have boosted Big Steel's net by $19.6 million more, G.M.'s by $17.4 million more.

In a somewhat apologetic explanation of the high profits, Steelman Olds emphasized that the full impact of this year's cost and wage increases had yet to be felt. G.M.'s Chairman Alfred P. Sloan pointed out that in comparison to the last prewar year, G.M.'s profits showed a much smaller percentage increase (32%) than either sales (48%) or payrolls (70%).

No such touchiness about this year's unprecedented profits was shown by Union Oil Co. of California, which reported profits of $13,749,940 for the first nine months (compared with $6,624,352 in the same period last year). Union's president since 1938, Reese Taylor, 48, an ex-WPBer as blunt as he is big, gained respect on the West Coast for pulling California's Consolidated Steel Corp. out of the red in the mid-'30s. He thinks business need not be apologetic about profits. Said he: "If the company is to provide an incentive to shareholders to continue their investment and at the same time pay the tremendously increased costs necessary to stay in business, it is obvious today's profits are, if anything, not sufficiently high."

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