tivity in itself, I would like to emphasize here that this is not the sole measure of its benefit to our efforts, for construction has been the tool, the art, or the skill that has greatly facilitated our entry into the mining and the land development phases of our business. Dredging Operations The last and the newest of our major activities is hydraulic dredging, and here the record is not altogether pleasant reading. We have under our control two of the largest, newest, and most efficient dredges in the world today, and they have only one real disadvantage they haven't made us any money. They do well enough when they are working, but they have enjoyed a considerable leisure, a luxury we can ill afford because the carrying cost of idle new dredges is very heavy indeed. The dredging industry in the United States has substantially more plant capacity than there is work available, and there has been a particular dearth of work of the type where the large dredges that we own would enjoy a competitive advantage. Competition has been keen, and much of the work has gone at low prices and been performed by older dredges fully depreciated in their owners' hands. Profit History So much for a general review of our company and what it is doing. Let us turn now to the profit picture which is, after all, the scorecard which measures the effectiveness of your efforts. Our profits have increased rather consistently during the last 10 years and the 1960 rate was over twice that of 4 years earlier. In trying to surpass the earnings of 1960, we started 1961 under a handicap. In 1960 our uranium earnings were higher than we had any right to expect under our A.E.C. contract because the custom ore that we were obligated to take from others failed to materialize and we were given the 8 privilege of substituting our own ore in its place, thereby earning an additional profit which has been unavailable to us during the current year. Also the first half of our 1961 fiscal year was a time of general business recession which had its impact on various aspects of our business as well. Despite these difficulties, I am pleased to be able to report to you that our earnings this year are running slightly ahead of those of last year and should continue to do so for the balance of the year. Here again we see the advantages of diversification, for this year it is our construction activities which are the source of improved earnings that have more than offset the decline in the results from our uranium activities. The sharp improvement in construction is the result of a combination of a contract portfolio relatively free from unprofitable work, a high rate of construction operations with our equipment efficiently utilized, and greater comparative benefits from claims and price adjustments on work performed in prior periods. With the benefit of certain price adjustments this year our dredging operations may show a small profit in contrast to the loss suffered in 1960. Earnings from iron ore and ocean shipping will not be substantially changed between the two years, land development profits will show a modest improvement, and Pima's earnings will be somewhat lower. Outlook and Plans for the Future Gentlemen, so much for the past and the present. Now let's look to the future. What are we doing or planning to do to cause our company to continue to grow and to prosper? A company like ours cannot stand still or it will consume its substance. In the daily operation of our business we eat away at the assets that we have acquired in the past. The Construction Division completes a portion of the contracts on hand and subjects its equipment to 9