Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-08-23
Plane Makers Claim
Materials Shut Off by
ProfitLimitAct
Industry Outbid by
Other Defense Plants in
Face Of Uncertainty
8y JOSEPH S. EDGFRTON.

BY JOSEPH S. EDGFRTON.
Although many of the major air.
plane manufacturers are going
ahead with plant-expansion pro-
grams, some of them financed by
Reconstruction Finance Corp. loans,
the actual production of warplanes
for national defense still is being
held up while Congress considers
the excess profits tax law, with its
vital amendments which would clear
the way for sorely needed aircraft
production.
The decision week ago of air.
craft manufacturers to 60 ahead
with plant-expansion programs, in
anticipation of congressional action
lifting profit limitations which are
throttling the industry and per-
hitting a flve-year amortization OF
plant expenditures, was hailed as
breaking of the bottleneck which
for seven weeks had been holding
up warplane production.
Actually, it has since developed,
the bottleneck remains unbroken,
because uncertainties due to con-
eressional delays are preventing the
plants from obtaining necessary raw
materials and tools to build the air
planes needed for American security.
Eight weeks have gone by since
S4o0 900 900 of appropriations for
emergency production of fighting
planes became available So far
contracts for only Sc of these planes
have been awarded.
Outbid on Raw Material.
This, it was revealed today by
Representatives of the airplane man
ufacturers, is due to the fact that
under terms of the Vinson-Tram-
nell Act, limiting profits of airplane
and shipbuilding plants, the aircraft
industry cannot compete with other
ornaments producers in the fight
for raw materials and parts which
must be obtained by sub-contract.
The result is that the manufac-
turers of tanks, armor plate, shells
and other munitions and other de-
Tense items, none of them subject
to the profits limitations of the Vim
-Trammell Act, can outbid the
aircraft industry for raw materials
and are choking off the market for
necessary materials, parts and tools,
1t was pointed out.
IF the present European and
Asiatic wars have demonstrated any
thing. they have demonstrated that
airpoWer is the first line of defense
today" a representative of one of
the largest American airplane manu-
facturers said. NO one denies that
airplanes are the most vital defense
need of this country today. Nothing
should be permitted to stand in the
way of warplane production.
Yet. under the Vinson-Trammel
Act. this one industry upon which
our safety depends is throttled to the
point of complete production
while other industries 60 ahead
without interference. We in the
aviation industry are not looking for
profits, we don't want to make a
killing at the expense Of a national
emergency. We are just as patriotic
and willing to do our part as other
American citizens, maybe more so
because we are in a position to know
how important this aviation sit
uation is today.
Can't Estimate Costs.
But what can we do? We can't
borrow money from the banks. be-
cause of the uncertainty as to profits
and amortization. We can't work
out manufacturing costs so that we
can bid or negotiate for Govern
ment airplane contracts, because we
can't estimate costs And we can't
compete with other un'aXed defense
industries for the tools and mate
rails we need to get going"
In letters to Senator Tydings of
Maryland, Chairman Walsh of the
Senate Naval Affairs Committee and
Chairman Vinson of the House
Naval Affairs Committee, Glenn l..
Martin, president of the big Balti-
more airplane factory bearing his
name, declared that the aircraft
industry is not seeking special con-
sideration and wants nothing more
than position of equality with all
other industries responsible Tor
American rearmament.'
Mr. Martin has urged outright
repeal of the Vinson-Trammeil Act
rather than mere suspension OF pro-
visions act as provided in the pend
ing excess profits tax bill.
LAS long as mere suspension (of
the Vinson- Trammell Act is In
effect" he said. "a sword will hang
over our industry and, when the
excess profits tax is terminated, will
descend upon u.s."
Preference Given Others.
The effect, he pointed out, is that
suppliers of raw materials and sub
contractors upon which the aircraft
industry must depend prefer to deal
with other munitions makers. none
Of whom are subject to the Vinson-
Trammell Act, and the public is
Withholding support from aircraft
concerns in favor of other concerns
which are free from limitations.
The aircraft industry cannot per-
form its full share of national re-
armament when subjected to special
restrictions applicable only to It,"
Mr.. Martin said. The aircraft in
dustry is less interested in profit
than in projecting its existing in
vestment and guarding against sub
etantial losses incurred in producing
the aircraft now required under
emergency conditions. Rearmament
production will reach into every in
dustrial activity in America. For
instance, automobile manufacturers
are building tanks-and constructing
new factories for them-without
hmltatcn on profits. We buy our
supplies from the same sources OF
raw materials and services. The
aircraft industry wants nothing
more than a position of equality
with all other industry responsible
for American rearmament."