Pity the Poor Capitalist
The Economist newspaper’s index of profits, based upon the accounts of 1,932 concerns, shows that the net profit, after payment of debenture interest, etc., was practically the same in 1929 and 1930, the respective totals being £198,800,000 and £197,500,000. The decline is only 0.6 per cent. (See Supplement, Feb. 14th,’ 1931.
The rate of dividend on preference capital was slightly higher than in 1929 (5.7 per cent., as against 5.5 per cent.), while the average dividend on ordinary capital was lower (9.5 per cent., as against 10.5 per cent.).
The rates for the past ten years, and for five years before the war, are given below :
| 1909 | 4.3 | 6.3 | |
| 1910 | 4.5 | 7.0 | |
| 1911 | 4.9 | 8.5 | |
| 1912 | 5.2 | 8.5 | |
| 1913 | 5.1 | 10.2 | |
| 1920 | 5.0 | 12.6 | |
| 1921 | 5.2 | 10.2 | |
| 1922 | 5.2 | 8.4 | |
| 1923 | 5.3 | 9.3 | |
| 1924 | 5.4 | 9.8 | |
| 1925 | 5.5 | 10.3 | |
| 1926 | 5.4 | 11.1 | |
| 1927 | 5.3 | 10.8 | |
| 1928<.td> | 5.4 | 10.6 | |
| 1929 | 5.5 | 10.5 | |
| 1930 | 5.7 | 9.5 |
The Manchester Guardian (January 6th) published a list of profits of about 240 “important public companies.” More than half of them made higher profits in 1930 than in 1929, and the total profits in 1930 of all the companies (after deducting losses) amounted to over £8 million more than in 1929.
The Times published a summary of the profits of 176 British industrial concerns, “showing the broad tendency of profits in British industry as a whole.”
The average dividends in 1930 represented 8.4 per cent, of the paid-up capital, as compared with 8.2 per cent, in 1929. (See The Times Annual Financial Review, February 10th, 1931.)
The Banker’s Magazine Index of the market values of 365 securities shows that in December, 1930, the average value, while about 5 per cent. less than in December, 1929, was still 16.8 per cent, above the level of December, 1921. (See Economist monthly supplement, January 24th, 1931.)