Evening star., 1942-03-24
Contractor Defends
Huge Bonuses Paid
From War Profits
Motor Ports Maker
Contends System
Really Cuts Costs
N the Associated Press.

By the Associated Press.
Congress was amazed today at the
disclosure OF war orders so lucra-
tive the woman secretary of a man.
ufacturer has been drawing salary
and extras at the rate of $18,2e5 for
the first 10 weeks of 1912.
The manufacturer. w. S. Jack,
president of Jack & Heintz, Inc, of
Bedford, Ohio, contended in state
ment that the bonus system under
which the secretary was paid &C
tually decreased costs He told the
House Naval Affairs Committee yes
terday that the firm, which makes
airplane motor starters, had given
out $500 900 in bonuses last year.
And the money all came from
the Government" said Chairman
Vinson of the committee.
The secretary. plump Miss Ade-
laide Bowman, said of her employer,
Hes generous and is the most won-
derful man in the world"
Tax Avoidance Charged.
She acknowledged that she had
received $39, 1856 last year and SIS, 1895
for the first 10 weeks this year-an
annual rate of $95, ,108 for 1912. Her
1910 income was 4,448.
Edmund Toland, counsel for the
committee, charged that the COM
pany paid the huge bonuses to en-
ployes and officials to decrease
profits and thereby avoid excess
profits levies.
Chairman Vinson brought out
that Miss Bowman received s13 900
bonus in March and asked her what
she did to justify it.
Il guess I took some worries on
Mr.. Jacks mind" she said.
Company officials testified that
Mr.. Jacks salary had risen from
$4,000 in 1940 to salary and bonus
of s145,8 in 1941, that "a melon
was cut for all earning over $4,000
q year" to help them pay income
taxes and that all workers got
$500 Christmas bonus.
Claims Decrease in Costs.
I'VE believe that with our bonus
system we have a morale in our Or
eanization that any manufacturer
can be proud Of, as our associates in
business (employes) have 100 per
cent confidence in the management
and are giving their all from the
standpoint of skill and production,
and we believe that, with our bonus
system in force, instead of increasing
costs of our product our bonus sys-
tenn decreases the COST" Mr.. Jack
said in his prepared statement.
LAS evidence, we have voluntarily
reduced the price to the Army Air
Corps, to whom we have sold 80 per
cent Of our product, by approx
inately % per cent on our last con-
tract dated January 10, 1912.
The reason for the Navy paying
approximately II per cent more on
past contracts than the Army was
caused by small quantities pur-
chased.
"On the other hand, the first
production contract received from
the Army on automatic pilots was
approximately 10 per cent less than
our competitors even though they
had been engaged in the manufac-
ture of automatic pilots for more
than IS years, and we hope to fur
ther reduce this approximately 10
per cent saving to the Air Corps on
automatic pilots before we finish
our first production contract.
Firm Spent Large Sums.
I'VE are sure we will be able to
make a refund to the Army on top
of the % per cent reduction already
given the Air Corps before we finish
their contracts now in operation, if
we can secure machinery now on
order which greatly reduces our ma
Ginning time"
Mr.. Toland, in his opening state
ment to the committee, said the
finn paid "exorbitant salaries" and
that one Navy order had brought a
profit of 100 per cent. Three Off
cials were paid a total of $l45,000
in salaries alone last year, he said,
adding that the firm spent large
sums on bonuses, gifts to employees.
entertainments, free lunches and
banquets for workers.
After Mr.. Jack. a short. gray
haired former working mechanic,
had finished his testimony, Mr.. To-
land suggested to Chairman Vinson
that representatives of the Armv
and Navy be sent to the Bedford
plan to protect Government
funds"