68 The Stock Market Crash—dAnd After 
would, therefore, rise in price faster than the in- 
crease in rate of company earnings. 
Since 1927, those gains have been continued. Dur- 
ing the whole period since 1922, the wholesale scrap- 
ping of old equipment and installation of new machif- 
ery and inventions have been accomplished with the 
increase of prosperity because corporations have be- 
come more and more hungry for money to exploit 
the future. All these new inventions required added 
capital, and the stockholder has had to forego a 
large part of his dividends in consequence, while the 
rate of plowing-back has increased since 1927. 
The November, 1929, bulletin of the National 
City Bank of New York includes a summary of net 
profits in published corporation reports covering the 
third quarter and first nine months of 1929, with 
comparative figures for the corresponding periods of 
1928. The net profits are calculated after all 
charges but before any dividends, with few excep- 
tions, and are limited to the broad industrial groups 
with a view to furnishing a representative picture of 
American business in its various divisions. The com- 
pilation excludes financial organizations such as 
banks, insurance companies. investment trusts and 
SO On. 
Swift Rise in Net Profits 
The combined net profits of approximately 600 
companies in this compilation amounted, for the third 
quarter of 1929, to $1,142,302,000 as compared 
with $1,001,244,000 in the third quarter of 1928.