Evening star., 1940-07-23

~ CUA4 AoA
investment in
plants that may $i !le''':$. e
become obsolete
overnight If -
peace comes or David Lawrence.
defense plans change.
This question has been kicking
around the offices of the Govern
ment now for several weeks, in
fact, ever since total war" began
on May 10, but it has not been set
tied. Yet 1t contains the key to
the rate at which industrial produc-
ton of war weapons sadly needed
for our defenSes will be begun.
The blame for the delay is not
Justly placed at the doorstep OF
anybody either in Government or
in industry. 1t is simply the con-
sequence of democracy's way of side
tracking things that are vital until
some one asserts leadership and
jams them through.
Just before Congress began its
fecesses for the conventions, the
President was ready to propose that
a joint resolution be put through
both houses dealing with the vex-
atious question of depreciation al
lowances on new plants needed IN
defense. But 1t was reported back
that the item would cause discus
sion, so it was postponed because
there was an agreement not to inject
controversial legislation until after
the conventions.
Change Prolongs Delay.
Now the situation has changed
somewhat. The administration has
taken the position that the de-
probation problem must be tied to
the excess profits plan, which means
more delay. Billions of dollars IN
contracts are being allotted and
businessmen are taking it for grant,
ed that the depreciation question
will be handled satisfactorily, but
when it comes to raising the money,
business will be asking pertinent
questions about depreciation before
It can accelerate production on the
contracts assigned.
There are some here in the Gov
ernment who have contended that
no new law is needed and that the
whole depreciation question can be
handled by regulations Of the In
ternal Revenue Bureau. But Secre-
tary Morgenthau is insisting that
the matter be defined by legislation
and he is doubtless right about it
because, otherwise, some future ad-
ministration might decide to re-
open cases in which depreciation
had been allowed but in which
plants were continuing in use for
other than war purposes.
It Is rapidly growing apparent
that while business and industry are
responding to the call Of Govern
ment to accept war orders, many Of
the largest businesses are hesitating
and would prefer not to accept any
Government contracts. This is par
ticularly true of those manufac-
turers who have satisfactory labor
situation in their normal business
and who do not want to be sub
jected to new unioniaztion cam
paigns and other headaches just
to take care of an item relatively
small in their gross volume of busi-
ness.
Suggest U. S. Build Plants.
More and more businesses are
saying to the Government, "You
build the plant and you can own
1t when the defense needs are salts
fed. Just hire us as managing
operators and pay us a fixed fee.
Well supply the knowledge Of the
business and you take the capital
risk"
The other day a $4,000, 900 con-
tract was allotted to the Dupont Co.
for the making Of powder. This
proposed plant is to be owned by the
Government and is to be operated
by the Du Points at a fixed fee. Not
long ago they did the same thing
for the French Government and the
plant has since been taken over
by the British.
The outcry against war profiteer-
ing and the charge that munitions
makers provoke wars has resulted
in a policy on the part Of chemical
companies Of letting the Govern
ment make its own powder either
through its own plants or plants
built for private companies to ope-
rate during limited periods.
The other day a large manufac-
turer who is capable of making
mechanical weapons needed in ma
tional defense told this correspond
ent that he knew of few business
men who cared to undertake the
burdens of Government work nova
days unless the element of depreci-
alton on new plants could be settled
or the Government would refrain
from imposing requirements on
working conditions that applied to
normal as well as abnormal busi-
ness orders.
More and more talk is heard
about the restrictions which come