Evening star., 1942-04-05
War Profit Curb
Plan Faces Hot
Senate Debate
Committee Agrees
On Formula Fixing
Contract Yields
By J. A. O'LEARY.

iting profits on war contracts,
written into a $19,212,773,260 war
supply bill by the Senate APP
propriations Committee yester-
day, appears likely to touch off
a wide range of Senate debate
this week over the advisability
of changing the basic Price Con-
troll Law enacted in January.
The scale, ranging from 10 per
cent on the first 100000 of contract
price to 2 per cent on $50 900 900 or
more, was adopted by the commit
tee as a substitute for the fiat 6 per
cent ceiling approved by the House
a week ago.
1t was opposed, however. by the
War, Navy and other procurement
officials. who favored the alternative
proposal of Senators Oyerton, Demo-
crat, of Louisiana. and OMahoney,
Democrat, of wyoming, to enable
the Departments to hold profits
within reasonable bounds by rene
gotiating contracts on the basis of
actual experience.
Total In Bill Increased.
The war supply bill was increased
from the House total of SIS, 300 .0OO, 900
chiefly to give the Bureau of Yards
and Docks 5000 100000. The fund
will be used to buy 81 ,070 more Army
planes; for the Navy expansion, and
to maintain an Army of 100000.
Passage of the bill will bring the
United States war program to $780,
600 900 900.
A lastminute effort to eliminate
the sliding scale failed by tie vote
of 8 to 8. The committee then
voted almost unanimously to report
out an amendment combining the
sliding scale, sponsored by Senator
Thomas, Democrat, of Oklahoma,
with the general power to enable
department heads to renegotiate
contracts. over 100000, as advo-
Gated by Senators Overton and
OMahoney
Senator OMahoney, however, re-
served the right to reopen the issue
on the floor and said last night he
probably will do so, because he
regards the committee amendment
as a mere 'stop-gap," being con-
sidered at a time when several
legislative committees of both the
House and Senate are attempting
to work out a more thorough So
luton.
1t generally was conceded last
night that, if Congress is going to
lay down percentage limits, the
Senate amendment is an improve
ment over the fiat 6-per-cent ceiling
In the House bill, which was re-
garded as unavoidable.
Senators Comment on Plan.
Senator McKellar, Democrat, of
Tennessee, in charge of the bill,
said he thought some profit pro-
vision should be included and that
its final form would have to be
worked out in conference with the
House.
Minority Leader McNary said he
Is for the general philosophy of
recapturing profits, up to the point
where it will still leave an incentive"
Senator ,OMahoney said he prob
ably would seek to have the Senate
conf1ne action at this time to the
general authority to renegotiate
contracts because he views the
problem as too serious and diff
cult to be solved by a rider on an
appropriation bill.
MY feeling was that the primary
purpose of this bill is to produce
supplies for the war" said Senator
O'Mahoney, "and everything else
should be secondary. If we turn
the Army, Navy and Maritime
Commission into a vast army of
auditors for so per cent of the in
dustries of the country, it cannot
avoid impeding production"
Since March 8, the Wyoming
Senator said, the War Department
has had board at work renegotiat-
ing contracts, and already has
brought about reductions amounting
to $85,000,00o by that process. He
(See WAR PROFITS, Page A-4D