Evening star., 1942-01-21
Contract Prober,
Call for Checks on
Profits and Unions
Report Cites Returns Of
Up to 247 Pct. and Loss
Of Monpower by Strikes
Continued From First Page.9

relaxed-but that the cost-plus
fixed fee contract, where a clos
check is kept upon costs. may min
tnize the possibility of profiteerine
5. That the Navy Department Civ
more attention to the status, f1nan
cial responsibility and performanc,
of contractors before executing con
tracts.
6. The adoption Of a more stric
and standardized system Of cost
accounting.
7. The inclusion by the Navy De
partment in its contracts for leasl
and rental of plant equipment o
q provision to prevent excessive
outlay.
8. Measures to insure adequat,
plant protection both for Nav!
owned and operated plants ane
private plants engaged in naval de-
tense work.
Democrats Dissent in Part.
The report was signed by IA mem.
bers of the committee, four Demo.
Gratis and eight Republicans. Eight
Democratic members refused to sigr
the report because of its structures
on labor and strikes, although they
went along with the great bulk OF
the committees findings.
Those who signed the report were
Chairman Vinson of Georgia and
Representatives Drewry of Virginia
Schuetz of ILLINOIS and Rivers OF
South Carolina, Democrats, and
Representatives Mas of Minnesota,
Mott of Oregon, Cole Of New York
Bates OF Massachusetts,. Hess OF
Ohio, jerks OF New Hampshire,
Anderson of California, Blackney
of Michigan, Wheat Of Illinois and
johnson of California, Republicans.
Declining to sign the report and
submitting minority views were
Representatives Shannon Of Con-
necticut, Jacobsen of Iowa, Imhoff
Of Ohio, lac OF California, Flaherty
of Massachusetts, Heffernan of New
York, Bradley of Pennsylvania and
Easscer OF Maryland, all Democrats.
Cite Peace Pledge.
The minority members said that
since representatives of both man
agement and labor had pledged
themselves to settle future disputes
through mediation and arbitration,
after this country entered the war,
Congress should refrain from criti-
cism Of either or both for the
present.
Until there is conclusive evidence
Of either or both having failed
to keep faith with the Government
and the people in this respect, we
are Of the opinion that congress
sional committees should refrain
from criticism of either or both"
they said.
The committee In Its report
handled the contractors and labor
without gloves. It asserted that,
largely through the committees ef-
forts, "re-negotiation" Of Navy De-
partment contracts, under which ex-
cessive profits have been realized,
has resulted in saving the depart
ment the huge sum Of $27,436, ,101.
It declared that "of the 1928 con-
tractors reporting. $50, or SAB per
cent, realized average net profits
in excess Of 7 per cent. On indi-
vidual contracts reported, profits
ranged as high as 247 per cent;
many profits of so per cent or more
were reported. On total business
with the Navy Department, average
profits reported by contractors ran
as high as 544 per cent: many
average profits of IS per cent or
more were reported"
After denouncing the strikes by
labor as the greatest single cause
for delay of the defense program,
the committee said that the labor
organizations had made "tremen-
dous financial gains during the
period of the defense effort"
Sees Vast Funds.
1.-THE vast amount Of funds and
assets in their treasures" the report
continued. present an astounding
picture of concentration Of wealth, a
situation heretofore usually associ-
ated only with finance and industry.
These vast tax-exemplt funds repos-
ing in the treasures Of labor organi-
cations, many of which by strikes
and work stoppages have delayed
and in instances even obstructed the
defense program, present problem
which the committee feels should
we'll be considered by Congress.
The committee based its state
ments on answers to questionnaires
received from 1T of 162 national and
international unions, affiliated with
the A. F. L., the c. I. O.. and inde-
pendent unions, the unions replying
having a total membership Of
6,085 1892.
The net assets OF these unions on
October l, 1899, totaled ST. ,9l5, ,665,
and on March /, 1941, these assets
had grown to $82,594959.
The committee asserted this was
the first time any governmental
agency had undertaken to obtain
such financial information regard
ing organized labor.
Overall Effects "W0rthy".
Dealing with the naval defense
program as a whole, the committee
reported "the sum total of accom-
plishment is worthy" declaring that
mo gigantic program Of expansion
can be prosecuted at such high
speed without mistakes" 1t added
that whatever mistakes and inef-
ficiencies have been brought to light
are not solely the fault Of the Navy
Department or its personnel. but IN
large measure are attributable to
extraneous conditions and circum-
stances, which should be remedied by
law or by shift in policy.
Great progress has been made in
shipbuilding for the Navy, the re-
port asserted. From January l, 1910.
the Navy has placed orders for 379
combat ships, 79 auxiliary ships.
6l2 mine craft and patrol craft, 317
district craft and 4,404 special boats,
q total of 5.786 at a cost OF
$8,473.Ol2,269. All these vessels are
expected to be completed within
seven-tenths of the time allotted for
the much smaller naval expansion