846 



GENERAL FARM PROGRAM 



stockholders) there was 5.1 million dollars net profit left over in 1948 which was 

 plowed back in the company. Previously, corporations financed new plants 

 and machinery by issuing stock or borrowing money. Now they consider it a 

 matter of course to finance it out of plowed-back profits. Thus, instead of new 

 plants paid for by stockholders or banks, they are today paid for by workers and 

 farmers who — -without being consulted — are forced to forego higher wages and 

 lower prices to provide the huge profits that are reinvested. 



The Oliver Corp. boasts that capital expenditures during fiscal year 1948 "were 



6.8 million dollars, bringing the total spent from November 1, 1944, to October 31, 

 1948, to 19.7 million dollars." That .$20,000,000 in 4 years came directly from the 

 pockets of Oliver employees and customers. And the new facilities are in turn 

 a guaranty of more high profits to come. 



As can be expected, Oliver profit rate — measured by any standard — is consider- 

 able. For example, profit per dollar of sales has risen from 4.0 cents in 1945 to 

 5.5 cents in 1946 to 7.7 cents in 1948. 



But even more significant is net profit as a return on invested capital. The 



7.9 million dollars 1948 net profit amounts to a fat profit rate of 30.87 percent 

 on invested capital. Stated another way, on every $100 of capital investment, 

 Oliver earned a clear $30.87 in 1948 alone. Thus in only 1 year it earned profits 

 almost one-third as large as its total invested capital. This is a truly astronomical 

 profit rate and is bedrock proof of the extremely profitable nature of the company's 

 business. 



Further evidence of growth and wealth is seen from the sharp rise in total assets 

 and plowed-back profits since the reorganization of the corporation in 1935. At 

 that time the firm had assets of 21.8 million dollars. At the close of 1948, total 

 assets had risen by more than 235 percent to $73,000,000. 



From 1935 to 1948, 17.5 million dollars of the profits have been retained in the 

 business as "surplus." To this should be added 2.7 million dollars in "reserves," 

 bringing the grand total to more than $20,000,000 hoarded profit. 



The outlook for this corporation continues to be good. Said the company in 

 its 1948 report to stockholders: 



"Demand for the company's major items of farm and industrial equipment, 

 such as wheel and track-type tractors, combuies and corn pickers, continues to 

 exceed the company's ability to produce. It is expected that the demand for 

 farm equipment will continue to be high well into 1949 because of the large income 

 realized by farmers during 1948." 



The company also predicted that "unit production of the Oliver Corp. for 

 1949 is expected to equal the company's performance in 1948," and made the fur- 

 ther statement that "net sales for 1949 might somewhat exceed sales of the past 

 year because of higher prices now in effect." (Wall Street Journal, December 30, 

 1948.) This was confirmed by a report in the Chicago Daily News (March 22, 

 1949) that sales for the first 4 months of 1949 fiscal year (November, December, 

 1948; January, February, 1949) were up ll^^ percent. Company spokesmen 

 claimed profits were down some, but admitted this was due chiefly to the necessity 

 of buying "premium" steel, which will end "in the near future." 



The truth is that with higher sales levels and higher prices, Oliver Corp. profits 

 will be above even the high levels of 1948. 



Periodically, Oliver tries to pin the blame for high prices on the backs of its 

 workers. In its 1948 report, there is a publicity blurb that "higher costs of labor 

 and materials have required substantial increases in the prices of Oliver's products 

 since 1939. * * *" Not "higher costs" but unbridled greed for profit has been 

 responsible for higher prices. Even just since 1945 Oliver has taken 93 percent 

 more profit on every sales dollar. There lies the blame for higher prices. Un- 

 questionably Oliver could have lowered prices on their machines to farmers and 

 paid increased wages to workers — and still have chalked up substantial profits. 



Year 



Sales 



Profits before 

 taxes 



Profits after 

 taxes 



Prewar average (1936-39).. 

 Wartime average (1941-44) 



1945 



1946 



1947 



1948 



$20, 726, 000 

 31, 452, 000 

 54, 554, 000 

 50, 840, 000 

 73, 783, 000 



103, 310, 000 



$1, 180, 000 

 3, 032, 000 

 3, 105, 000 

 3, 590, 000 

 7, 655, 000 



13,381,000 



$957, 000 

 1,699,000 

 1,676,000 

 2, 000, 000 

 4, 072, 000 

 7, 906, 000 



