Plowed-Back Earnings 
No rules have thus far been devised to prevent 
this concealment of net returns in salaries. Gov- 
ernments cannot fix salaries. In one prosperous con- 
cern it was found that the President, holding control, 
regularly voted himself two-thirds of the net earnings 
as salary. Stockholders protested, but did not carry 
their protest to the courts, and finally acquiesced. 
The inference from income reports, therefore, 
that an average of 40 per cent of concerns make no 
profit ignores this factor of officers’ salaries, and is 
hardly borne out by the average of failures of only 
one per cent a year to the total of business concerns. 
At any rate, in a large proportion of 40 per cent 
reporting no profits for tax purposes, there seems 
little danger of bankruptcy. 
Mr. Snyder concludes that a truer picture might 
be drawn of net incomes for all corporations by 
figures that include interest, cash dividends, and 
officers’ salaries. 
Moreover, he deducts the reported deficits by add- 
ing the reserved part of the real earnings, thus 
arriving at a figure double the reported net earnings. 
The compensation of officers for 1924, the year 
last reported, was $2,600,000,000. Itis to be hoped 
that the custom of reporting this item separately will 
be resumed in future revenue reports. 
77 
Net Corporate Incomes, as Revised 
Mr. Snyder's method of picturing net income finds 
the $9,673,402,089 net income reported for tax pur- 
Poses for 1926 expanded to a true or revised net