Evening star., 1935-02-25
Salary $4,000 Annually in
Period, Senate Com.
mittee Hears.
PROFIT elimination
IN WAR IS OPPOSED
Government Operation of Indus
try Would Be inefficient,
Steel Head Believes.
BY the Associated Press.

Corp. were disclosed today before the
Senate Munitions Committee to have
amounted to sl2,282, 900 from 1917
to 1881, in addition to a salary of
$4,000 a year for most Of the period.
Just previously, he expressed opposi-
ton to elimination Of all profit in
the event of a future war involving
the United States.
The bonus testimony was in con-
nection with committee questioning
whether Grace would approve having
his plant commandeered by the Gov
ernment in time OF war and his own
salary cut to that Of a general. about
SIC, 900 a year"
Inefiiciency Is Seen.
IT can't conceive of the Government
taking over an institution and telling
the man at the head to go on and run
it," he replied. That Is not govern
ment."
He contended Government operation
Ol 1IluuclIy HOulA NC AAASAANAShS.
Records supplied the committee said
his salary climbed to sl0l 900 in 1881,
the last year bonuses were paid to the
officials, and for 1882, 1888 and 1884
his salary was s180.0o0 a year and no
bonuses.
Grace defended the bonus system
as a proper incentive" for increased
production on the part of officials and
men.
Did the corporation or the Govern
ment get additional service hom you
because of that bonus that it would
not have received otherwise?" Chair
man Nye, Republican, Of North Da-
kota asked.
Certainly not" Grace replied.
Difference In Draft Cited.
The noted shipbuilder and steel
maker declared there was differ
ence" between drafting manpower
and capital.
do you see why skilled mechanic
should be drafted and capital left to
operate at a profit" Senator Clark,
Democrat of Missouri. asked. What
is the difference between capital and
manpower?"
There is q difference" Grace
responded.
Would you favor or oppose . 100
per cent tax on profits in war timer"
asked Chairman Nye.
LET me answer in the reverse"
Grace answered, leaning comfortably
back in his chair.
Would Oppose Tax.
II would be pleased if We no longer
made any kind of war equipment. l
would like to see the relations among
nations such that no nation would
spend dollar in preparation for war.
I think, however. We should be fairly
compensated for use Of invested pri-
vate capital
you would oppose 100 per cent
profits tax them" Nye pressed.
YES" Grace said. II would"
you would consider it excessive?"
"Yes."
Would 1t bankrupt the COM
pany?" Nye continued.
"The company couldn't operate. 1t
would ruin it," Grace replied.
wouldn't it ruin man to be called
from his job to work for SIPS day
and perhaps lose his life?" Clark
asked.
Again the shipbuilder reiterated
there was difference"
why should there be difference
in dealing with life and with
property?"
The Shipbuilder did not answer.
settling back in his chair while he
twiddled a paper clip in his fingers.
Grace answered questions calmly
as the committee sought to gain in
formation for preparation of a tax
program to curb profits In time OF
war.
Before beginning the questioning,
Chairman Nye said the committee
sought not only means Of trimming
war profits, but also during the period
before war, while building Is going
on in preparation for war"
Grace said he had very great
doubt" that Government operation of
industry would be efficient.
Suppose an officer walked into
your plant and told you you were
drafted" Senator Clark asked. "and
he told you the trains were still
running out to Leavenworth (peni-
tentiary) what would you do?"
II would do the very best I could"
Grace replied.
He said he could "see no reason"
for scaling down salaries of industry
to Army levels, unless it was part
of a great national policy"
II can see no reason for changing
the relation of rates of compensa-
tion," he said, "just because we 60
from one industry to another"
He described making war" as an
industry.
S. w. Wakeman, vice president Of
the company, introduced mass Of
cost reports.
Last Big Executive.
As head of the Bethlehem Ship
building Co., Grace was the last ex-
ecutive of any of the big three"
shipyards to face questioning by the
committee.
Grace Is So years old. His rise
in the steel industry was meteoric.
Fresh from Lehigh University, he
went to the Bethlehem Steel Co. as
an operator Of an electric crane in
1899. In Q little over two years he
was superintendent of yards and
transportation.
1t was about 1905 when he was
noticed by Charles M. Schwab.
Schwab, one of Andrew Carnegie's
aides, soon took Grace under his
wing. The young engineer went for