Plowed-Back Earnings 
day” or plowed-back into business for larger future 
corporate returns, has likewise risen. 
Prosperity Rooted in War Earnings 
The roots of the prosperity that attended the long 
bull market were partly in the thrifty corporate 
handling of profits during the War. As prices rose 
rapidly in the execution of war contracts, larger and 
larger proportions of profits were plowed-back into 
renewals and extensions. of plant. 
In individual hands these profits might easily have 
been squandered. But with corporate management 
—especially with the practice of war-time economy 
and the wish of the larger stockholders to avoid 
surtaxes—dividends were quite generally kept at 
Per cent on par value while earnings kept up to 10 
per cent, in some cases, and, even to 25 per cent a 
year. 
79 
Such abnormal profits were due primarily to the 
rising price level, or lessened purchasing power of the 
dollar, which helped the stockholder at the expense 
of the bondholder. The withholding of profits, thus 
effected, increased enormously the reserve produc- 
tive power of the nation. It fertilized, so to speak, 
the topsoil of business production and stirred its 
subsoil. The result was a deeper-rooted growth of 
business, of which the increased cash returns were 
the thrifty fruitage from stocks representing ade- 
quately the entire market. 
During this period of war and post-war prosperity 
the mounting billions of deposits placed in savings