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Bob Dalbeck
Where do you get the extra $100,000?
Some critics of business still maintain that profits are too high.
"I wonder if they have any idea of how much more it costs to do business today than it used to? Union Oil is a typical example.
"In 1927, the company bought an 80,000 barrel storage tank for $25,000. Under Federal Income Tax laws, we were permitted to recover our investment over 30 years, the life of the tank.
"By 1957, when it's time to replace the tank, the company has set aside $25,000. But what has happened? Due mainly to inflation, higher wages and material costs, the tank now costs $125,000.
"Where do you get the extra $100,000? Union Oil gets it out of profits, and by increasing indebtedness from time to time. Out of profit? The fact is, we have to sell $1,250,000 worth of products to earn $100,000 after taxes.
"Put another way, the company's entire profit for one day, the total earnings that day on $400,000,000 invested by share owners, and the efforts of over
BOB DALBECK: "WITHOUT PBOFITS, YOU AND I WOULDN'T HAVE A JOB
8,000 people — all went to replace one 80,000 barrel tank, of. which we now have over 150.
"Without profits, Union Oil couldn't afford to replace that tank. And without the new tanks and other equipment we
have to replace to stay in business, there'd be no jobs for any of us!" # # *
Bob Dalbeck is something of an authority on profits. He is an Assistant Comptroller for the company.
He estimates that only about 19 minutes in the average company's 8hour working day go to earn a profit. The rest is spent paying for the cost of doing business.
And less than half of those 19 minutes result in dividends to share holders. The other 9l/> minutes are reinvested in the business to keep it up to date and competitive.
YOUR COMMENTS ARE INVITED. Write:
The Chairman of the Board, Union Oil Co., Union Oil Bldg., Los Angeles 77, Calif.
Union Oil Company
OF CALIFORNIA.
MANUFACTURERS OF ROYAL TRITON, THE AMAZING PURPLE MOTOR OIL
Broadcasting
October 14, 1957 • Page 123