Detroit evening times. (Detroit, Mich) 1921-1958, 1942-04-10
s Per. Profit
Limit Plan
Hot Potato
Administration W. nj S
Place 10 Toss Issue \
BY PAUL MALLON

AI
6 per cent war-proiits limi-
tation legislation dropped out
of the skies into the lap of the
administration some days back,
and since then Mr.. Roosevelt'S
congressional leaders have been
passing IL around like an incen-
diary bomb, looking for a
politically suitable place to
throw IT,
Not that this administration
wants any one TO make more
than 6 per cent, but every enc
knows the initially proposed
method was not just or work.
able. The administration wants
10 get at excess profits in an
other, more effective way,
through taxes.
The proposed s per cent tImi-
tation, for one thing, would fall
before taxes were paid by bust
ness and hence would leave
manufacturers considerably less
than s per cent. For another
thing IT would apply on each
contract, so manufacturer
handling swiftly-produced arti-
eles. could make 6 per cent three
or four times in a year, while
a manufactures working on
more slowly proceSsed article of
the same value, could make only
one 6 per cent in the same
length of time.
The idea came out of the sky
one Saturday afternoon in the
House about $50, when no one
was looking. Most of the men,
bers had gone home for the day
The proposition was offered
by Rep. Francis Case (R) of the
western half of South Dakota,
where there are no war indus
tries of great Importance. He
suggested it as an amendment
TO the S19,000.000.000 war de-
partment appropriations bill.
THE vote was officially an
i nounced as 20 10 8 in favor
Of the amendment, but whoever
was in the chair did some lib
eral counting. Only so to so of
The total house membership of
ABS could be counted by others.
There was no debate about
the idea. 1t sounded good, po-
litically, to those who were
present and they let it get into
the big appropriation bill. think
ing the Senate would kill it, if
It was not right.
The Senate, however. is lust
as sensitive, politically. as the
House, even though only one
third OF its membership is up for
reelection this year. Senators
did not relish the idea of voting
against a profits limitation. even
an unavoidable one. 1t would
take lot of explaining 10 con-
clusion jumping constituents.
and they might not understand
that the tax bill would do the
same job better.
Senator Mcclellan of Tennes-
see set TO work. trying to devise
something which would meet
the situation. He consulted
Donald Nelson, General Somer-.
veil in the war department, some
one in the navy, and worked out
something which sounded good
and meant little.
His substitute for the unwork-
able House provision would give
the army and navy power to re-
negotiate contracts on which
excess profits were developing.
a power which legaliSts consider
the government probably has
now.
But then Senator Thomas Of
Oklahoma stepped in with a
proposal for sliding scale. al
lowing 10 per cent profits on
contracts up TO 100000, and
varying amounts down TO . per
cent over $100,OO0,C00.
NETTLED, Floor Leader Bark
~ ley finally came clean in
speech on the floor. claiming the
whole idea of legiSlating against
profits in this way was bad
business. that il had been forced
on the Senate by the House. that
m" administration preferred to
lcl-ptsiheSS men AT least think
they were making money out of
defense. and he wanted TO take
II away from them later in
take instead of telling them
straight out in the beginning
that they would not make
-muea--1f anything after facing
profits limitation plus confisca-
Tory taxes.
Under the rules. the Thomas
amendment would have limited
The final form of the bill to some
GnNorkable arithmCtical limita-
Ton, and nc urged that the Nc
hollar way OF escape be taken
by all from ane embarrassing
political predicamcnt
Barley thus rallied enough
Senate NllpfeFt- st+tr.-titr- thy
the senatorial skins and the
treasury tax plans.
But this still left the final out
come Of the matter i'm conflict