82 THE AMERICAN JOURNAL OF SOCIOLOGY
At 5 per cent, the amount of interest paid represents an average amount of borrowed capital of $8 1 ,969,870, equal to two-thirds of the reported live capital. As interest on this amount is included in expenses it cannot be properly included in the amount of capital on which to compute the margin of profit. Such a computation gives rise to the ungracious suspicion of a purpose on the part of census officials to mislead the public as to the profits of capital. Possibly, however, this is only a blunder illustrating their incom- petence. Deducting the borrowed capital on which interest had been paid from the reported capital, and dividing the profits shown by the remainder, we have as the quotient representing the margin of profit 7.61 per cent, instead of 5.83 per cent.
It may be noticed that the capital reported seems out of proportion to the value of the product. Cotton goods are staple and sold largely on orders and for cash and seldom on long time. The writer is informed by one acquainted with the busi- ness that in ordinary times, such as was the census year, the live assets should be turned over at least five times during the year. According to these statistics it required $123,027,026 to handle $267,981,724 of product, over 20 millions of which was profits in large part available for handling the product. To what extent the capital reported as invested in the plant may be an exag- geration we have no means of computing, but it seems quite evident that the live assets are reported at more than double the actual live capital. Moreover as there is specifically included in expenses all material consumed in manufacturing produc- tion, together with rent, interest, and ordinary repairs, and besides wages of operatives the salaries of those who con- duct the business, it seems difficult to conceive what can be the expenses amounting to $4, 238, 652 which we find included as "sundries not elsewhere reported."
The depreciation of plant, for which allowance is also made, has been largely if not entirely offset by the increase of site values, which increase has become part of the capital on which the margin of profit is computed.
A comparison of the manufacturing statistics of the tenth
