The Tacoma times. [volume] (Tacoma, Wash.) 1903-1949, 1942-09-26

FLIGHT
Treasury Decision TO
Restrict Contract Profits
Salary Limit Of SIS. 900
Included in Regulations
Chance OF War Profits
To Be Slim Affair Indeed
ny RAY TUCKER

ny RAY TUCKER
WAsH1NGTON-Treasurv Deci.
SION 5000 il presumed to regulat.
and restrict the profits Of wal
contractors. But this seemingly
innocuous document packs mort
New Deal dynamite than better.
advertised Roosevelt reforms.
According to its provisions. no
official OF a corporation dealing
with the government may include
sAlaries above $4,000 a year in
his estimates Of costs. Numerous
executives in firms devoted exclu.
sively TO turning out weapons re-
ceive 500. 900 or more and their
records prove they deserve such
rewards. But in figuring on a fed
eral job concerns must eliminate
from their computations any sal
airy above the maximum fixed by
the president as q mans worth in
industry.
There In an even more drastic
prohibition in the same unpubli-
cized decree. Roosevelts inspec-
tors can walk into plants working
for Uncle Sam-and most Of them
eventually will be = examine She
books and decide that an individu-
ais remuneration must be reduced
arbitrarily. II matters not wheth-
or the owners think their employee
should be paid more. Final judy
ment on that little matter rests
with the agents from Washington.
FDR has tried for years TO per-
euade congress TO set a statutory
ceiling Of $25. 900. or one-third of
his own pay. His last demand APP
pesred in his message naming
October LIST a. q deadline for the
anti-inflation bill. legislators re-
peatedly have spiked this move.
But now he IL gaining his ends by
tndirection.
Ordinarily conservative army
navy officers are hard-boiled in
enforcing the fiat Of their COM
mander-in-chief. When a manu-
facturer protests and intimates
that he might decline orders
framed on this hasis. they retort:
"oh. yeah Well. suppose we deny
YOU priorities and cut off your
material for the duration ?"
Because of this decision and
ether technical rulings which have
escaped general attention, profits
melt to nothing. Here is the de-
tailed story Of q contract now
under controversial discussion be-
tween the navy department and a
firm.
The agreed price for the work
amounted to s2ao.ooo. On the
basis OF q 10 per cent maximum
gross gain the businessman makes
$4,000. But the minimum corpor-
ate tax under consideration by
house-senate trainers Of the pend
ing revenue bill In 80 per cent.
ut may 70 as high as eo) Under
the lower levy the contractor will
wind up with a net Of only $4,000.
And, as he told government Off
Gals. q single unframed apprentice
can waste or spoil $1,000 worth of
material In q few months. That
loss. incidentally, is not deductible.
But that isn't the worst Of H.
BY means Of a proviso slipped into
IN appropriation bill when nobody
was looking. federal agencies have
the right to "renegotiate" or
'redetermine" contracts until three
years after the end Of hostilities.
Not until then will many indus
trialists know whether they have
made or dropped money In those
wartime transactions. Uncle Sans
representatives may disallow many
items Of cost which seemed legiti-
mate TO the bidder when he SUBJ
mitted his offer years earlier. OBJ
jectors assert this conflict will
produce more beggars than prof.
teers.
Add the National War Service
act 10 the list Of essential meas
ures which will not be pressed by
the White House or passed by con-
eress until after the votes have
been counted on Nov. 3. II has
taken it's place on the shelf along
with ne revenue bill, the proposal
TO draft youths in their teens,
prospective requisitioning Of tires,
rstioning Of food and nationwide
restrictions on gasoline.
Executive session testimony be-
fore the Tolsn subcommittee has
shown the extreme need for man
power legislation. Every conpe-
tent witness. including Brig Gen.
Hershey. Federal Security Admin
istrator McNutt and Production
Boss Nelson, has admitted that a
more exact selective process must
be, established in order TO obtain
men for the armed forces and
industry. A proper and uniform
system of deferment must be ere
ated, in their opinion.
But the committee members
have decided that no new law is
required. The explanation is that
they do not care 10 assume respon-
sibility for freezing a man to his
present job and preventing him
from lettering himself. Therefore
they prefer 10 permit the admin
istration to initiate action Presi-
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