Dec. 1948 CIAL 45 L FOURTH ROUND HELD Pront Goal 6 Per Cem Federal fiscal and tax policies in 1949, he contended, "will go far to TO MEAN PRICE RISE determine whether industry can He Criticizes "Experts" ontinue to grow and expand or whether it will be forced to re- rench and curtail its operations." another 10,000,000 tons, or even "When you talk about adding Mr. Ballantyne said his com- 5,000,000, I can't see it, because of Will Fight Wage Increase_ the limitation of materials avail- pany's goal was a profit margin of able," he remarked. Last Ditch, Steel Official per cent on sales after taxes. This, he said, compares with a price increases, Mr. Batcheller On the question of prospective Tells Profit Inquiry rate of 4.6 per cent in the first nine months of this year, 4.25 last criticized "various experts who do year and 4.3 in 1940. Dollar earn- not have to meet a payroll and ings after taxes amounted to $6,- who labor under the delusion that 600,000 in the first nine months of there is some mysterious way by ASSAILS 'VARIOUS EXPERTS' this year against $9,600,000 in which business can continually ab- 1947 and $2,200,000 in 1940, sorb cost-sincreases while prices continue unchanged." Robert H. Montgomery, giving the subcommittee information on Presenting profit figures of his Senate-House Group Hears profits and policies of the Amer- company, he argued that if they were adjusted for decreased pur- Excess Gains Levy Would can Woolen Company, of which he is secretary, said the firm would chasing power of the dóllar they Cut Business Growth pay $8 per share of common stock ever." would show "no increase whatso- this year compared with $10 last year and $12 in 1946. John Ballantyne, board chairman Defending a profit of $13,500,000 of the Philco Corporation, told the By JOHN D. MORRIS in the first nine months of this subcommittee that an excess prof- Special to THE NEW YORK TIMES. its tax levied against earnings in WASHINGTON, Dec. 16-H. G. year (8.8 per C on sales and 16.3 excess of a company's 1936-39 Batcheller, president of the Alle- per cent on net worth), compared with $3,000,000 in 1940 (4.1 per average, as twice proposed by gheny Ludlum Steel Corporation, cent on sales and 3.99 per cent on President Truman, would severely predicted today that a fourth net worth), Mr. Montgomery said: penalize many expanding firms round of wage increases would like his own and fall "with even force another round of price rises. "In our company we are sure But We will fight that to the that our problem is to maintain a greater severity" on some of their smaller competitors. last ditch, as we did the last time," high level of profits if we are :0 he told a Senate-House subcom- survive. If dépression comes, we He contended also that such a mittee investigating profits. shall need the cushion of a surplus; tax would tend to restrict further Even without increased cost, business growth. if inflation continues, we shall need which he said would not be ab- new equity capital." Noting that Philco was planning sorbed by his company, the indus- Dwight B. Billings, controller of a $5,000,000 expansion program for try will be able to make "little if Pacific Mills, testified that the tex- 1949 and also intended to enter the any profit" when the normal oper- tile industry, as a speculative en- electric range business, both to in- ating level of 75 to 80 per cent of terprise, was entitled to a high crease its business volume sub- capacity is resumed, he asserted. stantially, he asserted: return on investment. Despite "The industry just cannot con- "good profits" in the last seven "It is a serious question whether tinue to operate at 100 per cent of years (11.8 pe. cent on sales in the we would be justified in assuming theoretical capacity, as is now the first nine months of this year), these business risks if we are con- case, for any extended period be- Mr. Billings said losses in the pre- fronted with an obligation to pay cause, if demand continues, com- vious twelve yea held its average greatly increased taxes on this ad- petition will force the construction ditional business." of that additional capacity which profits on investment to 4.91 per cent after taxes over the last nine- will permit reasonably prompt ful- fillment of an order," he said. teen years. Consequently it will "inevitably" return the 75-80 per cent operat- ing level, he contended. Under questioning by the sub- committee chairman, Senator Ralph E. Flanders, Republican, of Vermont, Mr. Batcheller suggest- ed, however, that present shortage of materials for steel production made expansion of capacity doubt-