The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-25
GOVERNMENT AS
SILK PROFITEER
KEEPS SPRICES UP
War Department Makes
Neat Sum on 100000
Yards Left Over
NO BARGAINS OFFERED
Two Corporations, With No
Investment, Get Half
of Net Proceeds.
MODELS ON U. S. PAYROLL
Expenses of Girls Who Dis
play Finery Are Borne by
Taxpayers Indirectly.
NO BARGAINS OFFERED
MODELS ON U. S. PAYROLL

While the War Department OF the
United States has been throwing away
huge sums of money in the disposition
Of many kinds of army supplies, 1t also
has been playing the role Of a silk
profteer at the expense of the general
public
When the War Department, through
overpurchasing OF silk, found itself
stranded last year with $4,000, 900 yards
for which it had no use. it entered into
an agreement with two large corpora
tons by which 1t permitted them to
take II, 000, 900 yards on credit. and to
dispose OF them at prices far above the
original cost.
It not only allowed these two cor
poratlons which invested no money in
the transaction. to keep one-half OF all
profits on the sales, but 1t allowed them
to deduct from the profits certain large
commissions paid 10 their own repre-
sentatives, and gave them ninety days
in which to turn over to the Govern
ment its share of the proceeds of the
sales. This last named phase of the
agreement permitted the corporations
10 hold hundreds of thousands of dol
lars OF government money for three
months before paying 1t over and with
out yielding any interest upon IT,
why SILK Didn't Drop Faster.
This action of the War Department,
which is being denounced as an ex-
ample of favoritism and unfairness To
other dealers as well as TO the public
at large, is said TO have been one OF
the reasons that silk prices dfd not drop
faster than they did.
The stock owned by the Government in
September. 1919, was particularly adapt
able for use in clothing. sport goods,
upholsterlng and draperies. II was the
kind for which the women of the
country were clamoring, and which
they were hoping would drop In price.
There can be no doubt that had the
Government released this stock 20 the
people OF the United States at dollar
a yard, which would have more than
covered cost OF purchase and all ex'
penses, II would have been able 10
dispose OF all OF ii and 70 have earned
a fair profit
The effect of the Governments action
was 70 maintain artificial prices; to per
nit two favored corporations to reap
huge profits without investment. and t.
put the Government In the same cate
CORY as the profiteers. which tho De-
partment of Justice processes TO be
prosecuting.
In general the sale price of this silk
has been several times the original cost
plus expenses OF fitting Il for CONNER
cial purposes, so that the percentage OF
profit Is far in excess of what the De-
partment of Justice has held to be rea-
sonable in proceedings instituted against
many private dealers. This silk cost
was. according TO grade. from 81 cents
a yard to s1.13, and the price that 1t has
brought, and that Is still being asked
for II at public sale. ranges from $3.50
to 81 yard.
Wages Deducted From Profits.
The corporations with which the War
Department has allied itself In this
.partnership arrangement also have em-
ployed large forces of women models
and other persons. all of whose wages
are deducted from the profits and there
fore partly borne by the Government.
why the war Department ever or
dered such an enormous quantity OF silk
is q mystery TO many persons. Within
the last few days persons connected with
the handling OF army supplies have ex-
pressed considerable astonishment at the
announcement that $4,000 new pairs Of
shoes are 70 be delivered from n factory
in Long Island City TO tho army supply
base in Brooklyn. although IL must be-
apparent through casual observation OF
army sale displays that the Government
Is Kidding itself OF shoes of all types and
sizes in enormous numbers. The Asso-
ciated Retail shoe Dealers Of Brooklyn
have made public announcement OF
sale OF army shoes 10 be held In their
borough next week. which they cay VIII
be OF even larger Noportions than the
sale held last year by the Meade Shoe
Company under the supervision OF the
Department OF Justice.