Evening star., 1943-03-25
Prober Charges
Shocking Fees
For War Brokers
House Group Opens
New Study of Means
To Curb Profits
b. the Associated Press.


Robert E. Kline, counsel for
the House Naval Affairs Commit
tee, said today that in spite OF
all the fanfare, there still
flourished In Washington and
throughout the country many
sales agents who are receiving
amounts so excessive that they
will shock the conscience, not
only Of this committee, but of
Congress and the American
public"
AS the committee opened a new
inquiry into methods for curbing
profits of commission agents who
negotiate war contracts, Mr.. Kline
presented as his first witness w.
Lester Baker and his wife Catherine.
Mr.. Kline sal dthey operated as a
partnership on a commission fee
basis an dthat their gross. earnings
amounted to s26l 947 in 1912
Outlining the evidence he said he
would develop during the hearings,
the committee counsel asserted:
Perhaps there would be no need
for legislation If the numerous
Washington representatives had
taken fair warning from the pre-
vious hearings before this COM
mittee Unfortunately, the contrary
is true.
The appalling thing is-and this
demonstrates the need for the leg
iSlation-so few of them have seen
the handwriting on the wall. They
have done little or nothing Of their
own volition to adjust the situa-
ton"
The war has given them heyday
and they are making the most of
it. Even when they have gone over
to some form of fixed compensation,
the resulting income in most in
stances still has been entirely dis
proportionate to the actual value of
their services. particularly when it Is
considered that one agent can and
does represent more than one manu-
facturer-some times as many as
80 or 40. The aggregate compensa-
ton is unconscionable."
In calling Mr.. Baker and his wife
to testify, Mr.. Kline read TO the
committee these figures which he
said represented their gross earnings
from the period 1882 through 1912:
1882, $4,000; 1898, $40 1000: 1894,
500 900; 1885, $4,000; 1896, sze 900;
1887, $4,000; 1888. $4,000; 1899, s2s,-
900: 1910. 82,298; 194l, s186,776;
1912, s266,276.
Mr.. Kline said the Bakers 1912
taxes would amount to s151 1853,
drawing from Representative Brad
! ley, Democrat, CT Pennsylvania, the
observation:
Then they would be able to keep
that amount if the Ruml plan Is
accepted" The counsel's reply was
ordered stricken from the record.
Opening with an explanation Of
how his business operates. Mr.. Baker
said the firm always had functioned
on a commission basis. that all OF
its clients did business with the
Government in peace time and that
it had not attempted to build up a
war business.
He told the committee that many
companies either were too small or
did too little business with the Gov
eminent to enable them to maintain
Washington offices. He said that
his wife handled the firms Office
work and accounting. He related his
business experience as a salesman
before entering the Army in 1917,
then Mrs. Baker, her hair silver
gray, took up the story.
When he (Mr Baker, came home
from the Army he had nothing but
the clothes on his back. a $500 debt
and a $50 Army bonus" she said
She testified that when they de-
clded to start the commission busi-
ness, she continued her WORK In
another office to pay the expenses
OF her husbands business for two or
three years.
Mr.. Kline told the committee of
the work of the War and Navy De-
partments in attempting to prevent
what he termed "unconscionable"
commissions on Government con-
tracts and added 1t is felt that a
more sweeping congressional sane
ton should be given them to be
exercised in addition to the powers
they already have"
Submitting a chart showing the
earnings Of 100 commission brokers
~ -, i
to more than s14,00000 he said:
(See BROKERS, Page A-18)