Business: Profitless Prosperity

Last week, as 1940 corporation earnings reports came out, Wall Street's judgment proved correct on one score: Profits were not keeping pace with production. To steelmakers and railroads, whose heavy capitalizations give them an advantage under the excess-profits tax, 1940 was a banner year (TIME, Feb. 10). But many a consumer industry found it a year of record sales, record costs, record taxes, and only moderate profits:

F. W. Woolworth Co., with its highest sales volume on record ($335,474,820), reported its lowest net income ($24,104,815) since dismal 1932. Besides a $2,400,000 tax increase, the company suffered a $3,317,900 decline in earnings from...

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