Earnings

In 1917 the flood of war floated the Ark of U. S. Steel Corp. high up on a figurative Mount Ararat where in three months time Steel breathed $97,000,000 worth of the pure air of profit. Never since has Steel reached any such altitude but the flood of 1929 boosted it to a lesser peak, a Mount Sinai of nearly $55,000,000. The far side of that mountain fell away, steeply, right down to the Red Sea. In two years Steel got to sea level, in three years to the bottom of the sea-- $16,000,000 deep by the first quarter of

1933.

That was a long way down. So last week when Steel issued its second quarter report, the important point was not that it was still under water (net loss $8,627,000) but that its rise had been at a very rapid rate. Whereas three months ago it had a loss from operations of $3,795,000, and twelve months ago a loss from the same source of $3,362,000, in the last three months it had an operating profit of $4,881,000.

That was, of course, wiped out by depreciation, bond interest etc., etc. but the turnabout was decisive. Moreover it was achieved on operations averaging only 27.5% of capacity. For July Steel's operations were estimated by Chairman Myron C. Taylor at 53% of capacity--a rate which if maintained ought to bring U. S. Steel quickly into a land of milk & honey.* That these figures represented not only the fortunes of U. S. Steel but of a big part of the steel industry was shown two days later when Bethlehem Steel reported its deficit cut from $5,769,000 to $3,312,000 in the last three months.

While the steel business has climbed towards sea level the motor business has made an equally steep climb from sea level up. General Motors which earned 11-c- a share ($6,870,000) in the first quarter, and 7-c- a share ($5,326,000) in the second quarter a year ago, last week reported three-month earnings of 90-c- a share ($41,198,169). Well might President Alfred P. Sloan rub his hands over these figures*#151;and very opportune were they, for General Motors still has $13,000,000 tied up in closed banks, much of which may prove a loss. Chrysler Corp. topped a first-quarter loss of $3,038,000 by a second-quarter profit of $7,785,000 --bigger than any quarter's profit since 1929. Chrysler sales for the first half were 217,000 cars compared to 222,000 for the whole of 1932. Walter P. Chrysler did not rub his hands --he declared a 50-c- dividend to stockholders.

Other companies which last week reported did not all tell such good news:

Second First Second Quarter Quarter Quarter 1932 (000 omitted) Standard Brands $3,567 $3,180 $4,025 Commercial Solvents.. 412 224 295 Continental Oil 2,135d 2,$25d 1.616 Childs 5d 9 2 International Silver... 50d 362d 401d National Dairy Products 5,153/- ; U. S. Industrial Alcohol 299/- 32/- National Cash Register 37d Air Reduction $720 $379 $588 Hendix Aviation 816 267d 78d

International Business

Machines 1,399 1,502 1,648

Atlas Powder 137 8d 75d

Consolidated Gas 12,298 19,147 13,584

Westinghouse 2,0786 3,491d 1,881d

Coca-Cola 3,354 1,805 3,805

d=deficit

*Last week U. S. Steel's subsidiary, Pittsburgh Steamship Co., gave orders to recondition 40 freighters to carry ore down the lakes from Duluth. In 1932 less than 4,000 tons of ore were shipped on the lakes. At the present rate 20,000,000 tons of ore will be shipped in 1933. /-First Half.

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