The Waterbury Democrat., 1943-07-10

| it was cut to per cent, then 6 per
cent, but when War Department
and the old OMP officials protested
this curb would interfere with war
production, it was dropped. In it's
place there was passed the renego-
tiation low of April %, 1912, which
enabled government procurement
agencies to renegotiate war con-
tracts to reduce war costs and re-
cover excess profits.
1t semed a reasonable proposition,
in view of the fact that many con-
tracts had to be shoveled out in a
hurry after Pearl Harbor, on cost
plus basis in which costs were not
only often unknown but an incen-
tive for eXtravagant and Wasteful
operation
PROGRESS OF
RENEGOTIATION
Up to June %, when the last tab
ulation was made, some 14,300 of
the services more than two million
war contracts outstanding had been
assigned and cleared for renegotia-
tion-11, 900 by the Army, $500 by
the Navy, 400 by the Maritime Com
mission and War Shipping Admin
istration, 100 by the Treasury
Agreements had been reached in
about % per cent of the cases, Al
per cent were under renegotiation,
"a per cent are still being analysed.
Up to the end Of May, covering
about 10 months of operation under
the renegotiation act, covering
largely business done by war con-
tractors in 1912, price reductions of
over So billion had been negotiated
on some $40 billion worth of con-
tracts, representing saving of 10
per cent to the government. Of
the So billion savings, some $500
million was actual cash recovered
and paid into the treasury, accord
ing to Maurice H. Karker, chief of
the War Departments Price Adj
justment Board, who also declares
that in 81 per cent of the cases ex-
cessive profits had not been made.
Such is the case in favor of re-
negotiation.
During the last three weeks in
June, however, parade represent
ing over 100 war contractors came
to Washington and in personal ap-
pearances or signed statements sub
mitted to the House naval affairs
subcommittee h earrings, they pro-
tested forcibly and at length against
the provisions of the renegotiation
law. The typewriter transcript of
the hearings stands nearly foot
thick. 1t is doubtful if anyone will
ever read all those words.
EVERYBODY'S WRONG BUT US
Throughout the testimony runs
one recurrent strain: we are against |
excessive profits, but we must have
our future guaranteed and there
fore renegotiation should be applied |
to everyone but us, because we're |
different
1t is always difficult to get into
any discussion of motives but it be-
came apparent during the House !
naval affairs investigation that |
while the subcommittee was doubt
full about renegotiation in the be- /
ginning, the failure of the witnesses
to make their case swung the COM
mittee over to an almost opposite |
point of view.
Those who were protesting against |
were almost invariably |
in the profit class which made them
subject to renegotiation. Their at
titudes revealed a startling disre-
gard for the future of the free en- i
terprise economic system which had
enabled them to make those profits
and, if anything, rendered business
a disservice by placing it in an un-
favorable light for postwar devel-
opment.
This is the second time renegotia-
ton has been investigated. Senator
Carl Hatch of Clovis, N. Mex, made |
an earlier investigation and report
for the Truman committee, pro-
posing constructive administrative
changes in the way the services
were handling the renegotiation
job.
The real attitude of Congress,
however, is best shown by the pas
sage of an amendment to the War
Department bill which will make
contracts of RFC subsidiary COM
panies subject to renegotiation. It's
here to stay, apparently, for the
duration.