Pogue declared this was fortunate because. "a year ago we faced the prospects of a tight, if not short, oil supply." "Today our tanks of oil are full and supply is beginning to run ahead of demand. If this trend continues, the need for capital formation will become less insist- ent and the mechanism of the Dec. 10,1948 market will reduce profit margins and bring a lower level of 'profits. In this cycle, we have an almost FINANC perfect example of the function of profits' in converting an economy of oil scarcity into one approach- ing abundance." SAYS 'HIGH' PROFIT Like other economists who testi- fied before the committee, Mr. Pogue said it was a mistake to BEAT OIL SHORTAG compare "profits" in a time of in- flation with profits in other years, because they are different kinds of dollars involved. Economist Tells Congres Using the records of thirty oil Committee Industry Is companies, he said that in 1947 this group generated $2,160,000,000 'Strapped' for Cash cash out of operations. This sum was segregated by conventional accounting procedure into $1,219,- By JOSEPH A. LOFTUS 000,000 of net income and $941,- Special to THE NEW YORK TIMES. 000,000 of depreciation, depletion, WASHINGTON, Dec. 9-Oil in- etc. In addition, the group ob- dustry profits which some persons tained $743,000,000 of outside regard as excessive were the funds. Thus the group generated means of overcoming the country's and obtained $2,903,000,000 in 1947. oil shortage, an expert told a Joint Congressional Economic Commit- Seventy-one per cent of that to- tee today. tal, or $2,076,000,000, went into Joseph E. Pogue, an economist capital expenditures, $175,000,000 who made'a study of the oil indus- went to working capital, $197,000,- 000 to the retirement and refund- try in his capacity as a vice presi- dent of the Chase National Bank, ing of debt, and $455,000,000 to told the committee of the large stockholders and minority inter- proportion of available funds which ests. the industry poured into replace- Cash dividends for the group of ment and expansion. Dividends thirty oil companies amounted to were lower in 1948 than in 1947, $331,000,000 in 1946 and $425,000,- considering the magnitude of the 000 in 1947, an increase of $94,- business, and this indicated the in- 000,000, or 28 per cont. "These div- dustry was "strapped" for cash, he idends," he added, "however, were said. in shrinking dollars. Correcting for income taxes and the chang- ing value of the dollar, we find that the adjusted dividends retained were $186,000,000 in 1946 and $208,- 000,000 in 1947, an increase of 12 per cent. The 1947 adjusted fig- ures are less than either the actual or similarly adjusted levels in 1936 and 1937. The dividends, therefore, did not keep pace with the rise in the cost of living." &