68 The Stock Market Crash—dAnd After
would, therefore, rise in price faster than the increase
 in rate of company earnings.
Since 1927, those gains have been continued. During
 the whole period since 1922, the wholesale scrapping
 of old equipment and installation of new machifery
 and inventions have been accomplished with the
increase of prosperity because corporations have become
 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 exceptions,
 and are limited to the broad industrial groups
with a view to furnishing a representative picture of
American business in its various divisions. The compilation
 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.