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SO
TV tower
MOSCOW—Moscow’s modern
television transmission tower
rises above a group of Soviet
citizens, foreground at sunset.
(AP)
Business
Inflation
distorts
figures
By JOHN CUNNIFF
AP Business Analyst
NEW YORK (AP) - Manu
facturing companies kept as
profit less than a nickel of every
sales dollar in 1957. In 1967 the
return was an even nickel, and
the first half of this year it was
close to 5% cents.
Measured another way, as a
percentage of shareholder mon
ey invested, these companies
earned after-tax profits of 10.9
per cent, 11.7 per cent and 14 per
cent, respectively, for the same
periods.
While profit rates are now
settling down again, American
corporations earned at the rate
of more than SIOO billion a year,
after taxes, through much of the
current year.
Why then do we hear about
the erosion of profits?
Because of the distortion of
numbers that do not tell of in
flation’s devastation, says Ar
thur Bums. When companies
seek to replace their inventories
and rebuild their plants, the
truth will become obvious, he
suggests.
Harold Williams, chairman of
the Securities and Exchange
Commission, also believes the
big profits now being reported
are deceptive. They are “dan
gerously low” he has been re
ported as saying.
And Jack Carlson, vice presi
dent and economist of the
Chamber of Commerce of the
United States, agreeing with
Bums and Williams, observes
that corporations have been
unable to replace their worn
physical assets.
The illusion, as Bums, chair-,
man of the Federal Reserve
calls it, is that we decline to
recognize the vast changes in
flation has produced in costs.
He maintains plants cannot be
replaced at the prices we list for
such expenses.
As an example of that, Bums
told an audience in Spokane,
Wash., last week that the re
placement of plants and in
ventories for last year alone
came to SSO billion more than
corporations were able to claim
for tax purposes.
Some $36 billion of that, he
said, was the amount by which
depreciation charges fell short
of replacement costs. The rest
came from shortfalls in our es
timates of what it took to re
place depleted inventories.
A situation such as that, busi
ness leaders point out, is akin to
an individual living off the
stored fat of the body. Unless
the body is corpulent — and the
industrial body is not, they say
— the body’s machinery will
slow to a halt.
Fish wheel aids couple in salmon business
NENANA, Alaska (AP) -
Ponderously and monotonously,
Charlie Stevens’ fish wheel
screens the muddy waters of the
Tanana River for migrating
salmon.
Occasionally, the dull rhythm
is broken by the sounds of a
thrashing salmon scooped from
the river by the huge wire bas
kets of the wheel.
It slides down a wooden
trough into a holding box, its
long spawning run from the Pa
cific Ocean brought to an end
after an 840-mile journey up the
Yukon and Tanana rivers.
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The fish wheel has done its
job. For Charlie Stevens and his
pretty wife, Gayle, the work has
just begun.
They must remove the catch
from the holding box — up to
four times a day during the
height of the run — and process
the fish.
They operate their two fish
wheels for profit and for per
sonal use of the catch.
The commercial salmon sea
son was short this year. It took
only 5% days for the fish wheels
on the Tanana to scoop up the
15,000 salmon set as a quota for
the Nenana area.
Stevens hesitates to say how
many salmon he caught for the
commercial market. He does
admit to an income of about
SB,OOO during the season, how
ever, including cash for his own
catch and profit from a fish
buying venture with a partner
Terry Clark.
The most profitable part of
the commercial catch is the
salmon eggs, used to make red
caviar. The plump eggs sell for
about $2.50 a pound to brokers in
Seattle. At the retail level, red
caviar brings about $32 a pound.
The chum salmon which
make up the bulk of the com-,
mercial catch are sold for about
$1.50 to $1.75 apiece. They
average about nine pounds
before they are dressed.
Each female carries some 3,-
000 eggs, weighing about one
pound.
After the commercial season,
Stevens and his wife set about
catching salmon for their own
use. There are no quotas, but
under the rules for subsistence
fishing he cannot sell or give
away the fish he catches.
A fisherman in summer, a
Page 9
sled dog racer in winter and a
heavy construction equipment
operator in the spring, Stevens
put away about 100 salmon this
year for his family, including
the two small Stevens children,
and two student boarders who
live with them.
He also froze about 2,500
salmon which will feed his 43
sled dogs during the winter
months.
Mrs. Stevens and her hus
band, an Athabascan Indian
from the village of Fort Yukon,
met seven years ago at a
Christmas potlatch in this com-
— Griffin Dally News Wednesday, November 2,1977
munity 45 miles southwest of
Fairbanks.
She had come north from Los
Angeles to visit friends as Gayle
Ramey. Stevens convinced her
to say on as his wife.
“It’s quite a change from
L.A.,” she says. “My parents
and friends all said I was crazy,
that I couldn’t stand to be away
from the big city.”
But she says she has no desire
to return to California — “too
many people.”
In appearance, the fish wheel
looks like something Rube
Goldberg could have designed
on an off day.
Supported by seven or eight
raft logs, it is anchored in the
river near shore. It has long
wooden arms which are at
tached to an axle. Appended to
the arms at each end are bas
kets fashioned from wood and
chicken wire.
The baskets sweep with an
endless rotating motion through
the water, propelled by the cur
rent.
As one basket sweeps through
the water downstream, the oth
er sweeps overhead.