earned 7.5 per cent, while the rate of profit increased with each size group to 12.6 per cent for the next to the largest companies, and then declined to 11.6 per cent for the largest production group.

Section 12. Rate of return on investment, by companies.

The rate of return by companies, ranged from low to high for each of the four years, is shown in Appendix Table 3.

The range for the year 1919 was from a loss of 11.1 per cent to a profit of 50.5 per cent. Only two companies out of the 101 presented showed a loss, and but two showed a profit of 50 per cent or over. A profit of less than 10 per cent was shown by 25 companies, while 74 companies showed a profit of over 10 per cent. The average was 13.9 per cent.

The range for the year 1920 was from a loss of 51.4 per cent to a profit of 49.2 per cent. Twenty companies showed a loss. A profit of less than 10 per cent was shown by 26 companies, while 59 companies showed a profit of 10 per cent or over. The latter companies, however, were large enough to not only offset the losses and low profits of the first group, but to raise the profits of the whole group to a slightly higher figure than in 1919, namely, 14.9 per cent. The range in the rate of return on investment in 1921 was from a loss of 72.6 per cent to a profit of 44.1 per cent. A profit of less than 10 per cent was shown by 32 of the companies, while only 18 companies showed a profit of 10 per cent or over. The profit shown by the 50 companies which made a profit was barely sufficient to offset the losses made by the 57 other companies, the profit for the group averaging 1.6 per cent.

The range in the rate of return in 1922 varied from a loss of 32.4 per cent to a profit of 47.3 per cent. A profit of less than 10 per cent was shown by 47 companies, while only 37 companies showed a higher rate of return. Seventeen companies showed a loss. The average rate was 10.9 per cent.

Section 13. Graphic presentation of profits.

The rate of return on the milling investment for individual companies covering their four years' business for the period 1919-1922 is shown graphically in Chart 1, opposite. The data upon which this chart is based are given in Appendix Table 4, page 108. The total quantity of flour produced by these companies for the period was 197,530,441 barrels, the aggregate earnings $72,182,906, and the weighted or true average rate of return 10.6 per cent.

The companies were placed in the following five groups, depending on the size of their average investment for the period: Group 1, companies having an average investment of under $250,000; Group 2, companies with an investment of from $250,000 to $500,000; Group 3, companies with an average investment of from $500,000 to $1,000,000; Group 4, companies with an average investment ranging from $1,000,000 to $2,000,000; and Group 5, companies having an average investment of $2,000,000 and over. The group in which each company is placed is indicated by the width of the column showing the average rate of return upon investment, Group 1 having the narrowest column and Group 5 the widest. The companies were arranged consecutively from the greatest loss to the highest rate of return. The range for the four years' business was from a loss of 10.6 to a profit of 40 per cent.

Most of the companies showing a loss or a very large profit were small ones. Eleven of the 14 companies showing a loss and 6 of the 8 earning 20 per cent or over had an average investment of less than $500,000. On the other hand, 13 of the 17 companies having an average investment of $2,000,000 and over earned from 5 to 15 per cent for the four years. The following statement shows the number of companies in each profit group:

The above tabulation and the chart show that while many of the smallest companies earned less than 5 per cent or sustained a loss on their four years' business, certain small companies had large earnings. The companies of intermediate size were quite evenly distributed throughout the entire range of profits.

The companies showing a loss had 2.5 per cent of the investment and 2.5 per cent of the production for the four-year period. Those earning less than 5 per cent had 9.8 per cent of the investment and 7.7 per cent of the production. The companies earning from 5 to 10 per cent had 31.7 per cent of the investment and 29.8 per cent of the production. Companies earning from 10 to 15 per cent had 41.6 per cent of the investment and 42.1 per cent of the production. Companies earning from 15 to 20 per cent had 12.9 per cent of the investment and 15.6 per cent of the production, while those earning in excess of 20 per cent had only 1.5 per cent of the investment and 2.3 per cent of the production. Companies having 30 per cent of the total investment earned 8.1 per cent or under or had a loss for the four years, companies owning two-thirds of the investment earned 13 per cent or under; the average rate of profit on 92 per cent of the investment was 16.2 per cent or under, while companies having 1 per cent of the investment earned in excess of 25 per cent.

Section 14. Company investment, net income, and rate of return, by districts.

The milling investment and return thereon has already been discussed. The company investment differs from the milling investment in that it is based upon the money put into the business by the stockholders collectively as a company, or earnings accruing to them and left in the business. Borrowed funds are not, of course, a part of this investment. The return upon the company investment was higher than upon the milling investment in every year except in 1921. This was partly due to interest paid not being deducted from income in the case of return on milling investment, whereas, in the case of company investment, it is a deduction from income. It was also partly due to the difference in the amount of the investment. (See sec. 5.)

The following table shows the company investment, net income, and rate of return, by districts, for the same companies which have already been discussed in the case of milling investment and return thereon:

TABLE 15.-Company investment, net income, and rate of return for companies reporting, by districts, 1919-1922

The above table shows an average rate of return on company investment for the four-year period of 12.7 per cent, as against a return of 10.6 per cent on the milling investment for the same companies. The return varied from a loss of one-tenth of 1 per cent in 1921 to a profit of 20.9 per cent in 1920. The northwestern district showed the highest average rate of return for the whole period, 15.4 per cent, although it had the highest rate in only one year, the poor year of 1921. The southwestern district had the second highest average rate of return for the period, although it was highest in 1919 only. In fact the highest rate of return was shown by a different district in each of the four years. Although the southeastern district had the highest rate of return in 1922, for the whole period it showed the lowest return of any of the districts, 8 per

cent.