Evening star., 1940-12-09
Admiral Criticizes
Wa|sh-Hea|y Act as
Drag on Defense
Supplies Bureau Chief
Says Wage Provision
Cuts Down Bidding

criticized as "a disturbing factor"
In the procurement of Government
supplies by Rear Admiral Ray
Spear, chief of the Bureau of Sup
plies and Accounts, in his annual
report, released today.
1T appears that manufacturers
are experiencing difficulty or are
loath to undertake plant expansion
to meet the growing needs. i is
apparent that there is much hesi-
fancy in the expansion of plant and
tions on the employment of surplus
capital and plant expansion in the
form of a limitation on the profit
and the excess profit taxes he re-
ported to the Secretary of Navy.
"The effect of existing legislation
or of new legislation on the eXpan-
sion of plant and plant facilities for
the production of military needs
of the United States. should be given
the most careful consideration" he
declared.
Minimum Wage Problems.
The report charged that though
many of the early difficulties have
been removed "the PRONUNCIATION of
minimum wages has created new
problems which seem to be difficult
to overcome"
Many manufacturers will not bid
under provisions of the act. Others
would accept the act except for the
minimum wage determination, he
charged.
The naval officer said the bidding,
(which declined rapidly after the
enactment of the Walsh -Healy Pub
lie Contract Act, continued to drop
below that Of the preceding year"
The low point was reached in Sep
tember, 1899, when only three bids
per lot were received as against
an average of TAG bids per lot prior
to the enactment of the legislation,
Admiral Spear declared.
Four Months Delay.
He cited one instance where bids
were called for 1000 aviation clocks
and the bureau received but one re-
Spouse and that took exception to
the act. After consultation with
the Labor Department another bid
der was found, but this one proposed
to use foreign-made materials. After
four months delay a contract was
negotiated under an open market
provision of the act thereby exempt
ing the contract from the wage and
hour provisions of the law.
The report stated there was "a
noticeable strain on the plant and
plant facilities for the production of
materials and equipment for the
promotion of the Navy's shipbuild-
ing and aircraft construction pro-
gram"
He noted that comparatively few
industries had been subjected to
minimum wage determinations up
to the time of his report. He added
minimum wages in the iron and
steel industry until suspended in
court practically eliminated compe-
tition in this industry"
No Large Contracts.
There have been no large con-
tracts made for steel since minimum
wages were restored, so it has not
been possible to determine the effect
of the minimum wages since they
were restored" he asserted.
Purchases totaling S243, ,108.904
were made by the bureau during
the fiscal year, representing an in
crease of so per cent over the previ-
Gus year.
In December, 1899. the value of
purchases exceeded the entire
amount for 1888. This business re-
ouired the execution of 1917 con-
tracts, an increase of Is per cent.
Hits Profits Tax.
Admiral Spear also charged there
was no need for the excess profits
tax, according to an analysis of re-
ports submitted by prime contrac-
tors.
OF 589 reports received, only SO
contracts valued at S33,577 ,l65,
showed excess profits amounting to
s3,7O4,22O. he declared. Reports on
1873 contracts valued at $20,344, 135
showed losses of $2,660,475, he said.
while there is difference OF
about 81 100000 between these two
figures. there are no means OF de-
termining how much of the excess
profit, If any, is offset by losses"
he reported.
Much condemned and obsolete
material was sold during the year,
but no strategic or critically valu-
able material was released. Scrap
metal sales were limited to citizens
and were limited to accumulations in
excess of maximum storage capac-
tiles. Certificates were received that
the purchaser would not export the
material.
a "A