The following schedule shows the apportionment of petitioner's gross profits on sales between sales to the railroad industry and to others than members of the railroad industry: The average for total sales for various periods is as follows: Period 1922-1935-. 1922-1939_ 1936-1939_. Average total sales $1,208, 662 1, 260, 180 1,440, 495 The petitioner's average gross profit on sales to the railroad industry and sales to non-railroad industry for various periods was as follows: The total annual tonnage for all products, including the ingots to Japan in 1937, sold by petitioner during the period 1939, inclusive, was as follows: sale of 1922 to The average of tons sold for various periods was as follows: Total tons sold 21, 196 16, 557 22, 324 24, 886 25, 213 33, 935 48, 749 17, 010 31, 570 The petitioner's average sales price, gross profit, and net profit per ton, including sales of ingots to Japan in 1937, for various periods were as follows: If the sales of ingots to Japan in 1937 be excluded the difference in result would be as follows: The following table shows petitioner's capital stock, surplus, and net worth for each of the years 1922 to 1939, inclusive: 330500-56-40 The petitioner's ratio of gross profit and net profit for various periods was as follows: In 1937 petitioner made sales of steel ingots to Japan totaling $428,179.45 at a cost of $321,472.63, resulting in a gross profit of $106,706.82. Petitioner made no other sales of this description. By 1926 railway locomotives and freight train cars in service began a steady decline from 66,847 locomotives and 2,403,967 freight train cars in that year to base period averages of 46,820 locomotives and 1,744,521 freight train cars. By 1926 railway revenue freight ton-miles per capita declined from 3,811 in that year to an average of 2,573 in the base period. By 1926 railway operating revenues of class I, II, and III railroads declined from $6.51 billion in that year to an average of $4 billion in the base period. By 1921 the ratio of railway operating revenues of class I, II, and III railroads to national income had begun a decline from 10.89 per cent in that year to 5.72 per cent in 1939. By 1921 the ratio of railway operating revenues of class I, II, and III railroads to gross national product declined from 8.43 per cent in that year to 4.57 per cent in 1939. The following is a comparison of percentage change in railway revenue freight ton-miles and in the Federal Reserve Board index of industrial production at turning points in business cycles, 1919–1938: Source: Data for turning points and revenue ton-miles taken from tables 5 and 6, American Transporta- In the various contractions of business from 1920 to 1938, as shown by the Federal Reserve Index of Industrial Production, railroad revenue ton-miles declined in about the same ratio as the Federal Reserve Index, but in the various expansions of business in the same period, except the 1919-1920 period, the increases in revenue ton-miles fell behind the ratio of increases in the Federal Reserve Index. Total registration of passenger cars in the United States increased from 10,863,000 in 1922 to 26,201,000 in 1939. The registration of motor trucks increased from 1,376,000 in 1922 to 4,414,000 in 1939. The total domestic passengers carried by air transportation increased from 5,782 in 1926 to 1,876,051 in 1939. The total pounds of express carried by air increased from 3,555 in 1926 to 9,514,229 in 1939. The total cargo tonnage of domestic waterborne commerce in the United States increased from 384,454 in 1924 to 657,058 short tons in 1939. The continuous and rapid growth of competing media of transportation largely accounts for the steady decline in railroad traffic and revenue. The depressed condition of the railroads in the base period was neither temporary nor unusual. The following schedule compares total equipment miles with total expenditures for maintenance for all railroads for the years 1922 to 1939, inclusive: |