The Birmingham age-herald., 1918-11-01

the allies.
 Is calculated at ss6o,oo0 It has been loaned s2,000,o0 by the government.
 The Packard company's profits on 5000 Liberty motors, to be completed by next January, probably will be s645o.- 900, earned in 17 months, said the re- port. Other profits on minor orders may raise this to sS, 900. 900. it was said. The investment reported is calculated at s11, ,S0S,000.
 The Lincoln Motor company's profits on 5000 motors is calculated at $6.450.- 900, with additional profits on other contracts of s1,500,000, according to the report. Investment is reported at S,150,00o, of which $3,460.o00 represents items on which the government pays 40 per cent depreciation. Paidin cap ital is $S5O 0O0.
 GREGORY COMMENTS
 Attorney General Gregory's comment on these showings was as follows;
 "1t has been charged that the ex- orbitant profits to contractors have been allowed. On their face they ap- pear to be unusually liberal, but when it is remembered that 60 per cent or more of them must be paid to the gov ernment as income and excess profits taxes, and that most of the net profits will be invested in buildings and fla cilities which may or may not be capa- ble of profitable use for an indefinite period after the termination of the con- tract, my conclusion is that no such profits have been allowed as to justify charge of bad faith.''
 FINANCIAL STATUS
 Of the s691, ,G0O0O0 originally appropriat- ed for aircraft production, disbursements reported down to June 90, 1918, includ- ing advances for building of plants and outlays of the sales department, similar expenses, amounted to s43000O,0OO and s276, 000,O00 of the appropriation remained unexpended at the end of the year. Of the s1550O0,O00 spent for airplanes anu engines, s25, 100000 was for overseas man ufacture, 100000 in advances to con- tractors, and $1,697, 600 for experimental and development work This left only S106 100000 spent for actual production in the United States. Of the latter amount $57 000 was paid under fixed price contracts and s49,OO0,0o0 under cost-plus contracts.
 Official estimates place at s24, 4,o00 900 the loss of the government on account of the condemnation of two types of planes the Bristol fighting machine and the s. J. l training plane. including about $6, ,50O, 900 on the Bristol and $17,500,000 on the s. J. 1.
 Taking up the question of faulty or ganization of the signal corps soon after the declaration of war, MT. Hughes de- clared Maj. Gen. George o. Squier had neither training nor experience for such large industrial enterprise'
 CITES DEEDS TESTIMONY
 Referring to Colonel Deeds. Mir Hughes cited Colonel Deeds own testimony that he was a stockholder and officer In 8 number of Dayton. Ohio, concerns which either directly or indirectly were con- cerned in the alrplane production activi- ties about that city. He was an organ izer, but not stockholder in the Day. ton Wright Airplane company, and 1t was to H. E. Talbot, an officer in this company, the report says, that Colonei Deeds sent information on ruling of the judge advocate general relating to the appraisal of the contracts, after he had been commissioned in the army. Other confidential communications to Talbott and other business associates In Dayton are quoted, but these had been sent while Deeds was acting in advisory capacity to officers in charge of con- tracts For communicating with Tal- bolt after he became an officer. the in- vestigation by court-martial was rec commended.
 MT. Hughes also disputed parts of Col Deeds assertion in a letter to the aircraft production board that on being commis- stoned he had severed his official con- nections with, and transferred his stock in these concerns The United Motors Company of New York, the Day ton Engineering Laboratories company Dayton Metal Products company and the Domestic Building company of Dayton He transferred stock in the United Mo tors corporation to his life, the report says it was shown, and book accounts showing the time of the transfer o1 other stock in some cases, says the re port were dated back to August 2S. wher Deeds was appointed a colonel, although not actually made until later
 NO CRIMINAL CHARGE Since it is not proven, however tha Colonel Deeds transacted any business with those firms before he transferred his stock, no criminal charges are mad' against him.
 Col. Sidney D. Walden, assistant te Col. Deeds, when he was chief of thu equipment division of the signal corps was shown the report says, to hav' been a stockholder in the Packard com pany, but it does not appear that h' took part in any proceedings involving government dealings with the concern Col Robert l.. Montgomery also helC stock in companies holding contracts TO manufacturer of airplanes or parts, bu he did not deal with them in his capacit, as an officer,
 l Lieutenant Colonel Vincent, for whom | criminal prosecution is recommended, was shown, the report says. to hav l authorized payment of sums to tn | Packard company while he was stock | holder in the Curtss Aeroplane ant Motor corporation, it Is charged. ha, l charge of inspectors in that company plant Maj. Howard C. Marmon sig nal corps officer also Is cited for hi connections with the Nordyke and Mar mon company of Indianapolis, whicf held a contract for Liberty motors, bu l cinca ha had tran nsferred his stock tn hi