The Waterbury Democrat., 1944-04-05

OdyS dSO - Oc14-
ators Robert A. Taft of Cincinnati
and Albert w. Hawkes. of Mont
clair, N. j., objecting to OPA'S pres
ent policies on profit.
Business representatives who
have personally checked into this
Vinson directive and its application
have given it their blessing. But it
is still misunderstood by most bus
, mess men who fear it is some slick
New Deal trick to control all war
profits and which will be carried
over into the postwar period to
limit profits on all civilian business.
In brief, this directive establishes
profit principles under which essen
tial civilian goods shall be manu-
featured on WPB orders. The rule
of thumb is that where a manufac-
turer is compelled by WPB to make
a product the manufacturer does
not want to make, but which il
needed to maintai civilian economy
say blue denim for overallS-pro-
fit shall be limited to per cent il
the firms total profits on all its
manufacture are less than double
the firms 1868 average profits;
while If total profits are more than
double the 1869 average, the blue
denim must be made at cost.
THEY FEAR CONTROL
WILL EXPAND
What some manufacturers fear IS
that some such principle as this is
about to be applied to all kinds OF
h1ICinnCS Aud fhnIy cfi1I
If war contractors are still allowed
profits of 10 per cent or more on
munitions, the manufacturers of
civilian goods should be held down
to bare cost or at most 2 per cent.
The Office of Economic Stabilize.
ton boys say that there are several
miSapprehensions and misunder-
standings in this line of reasoning,
that such fears about the future are
groundlesS.
In the first place. the OES boys
say this isn't profit limitation or
der, but profit guarantee, or a
guarantee that essential civilian
goods can be manufactured at cost
and not at a loss, which has been
the common peacetime experience
OF many firms making these
cheaper materials. These low-cost
items were then made as price
leaders" or to use idle time on
looms.
Mr.. Brownlee declared in his tes.
timony that he had never been with
any business firm that made profit
on all the items it manufactured.
But this directive assures manufac..
turerS that they will not have to
lose money on anything they make
on government order.
HORSE COLLARS GOT IT
IN THE NECK
A second point made by OES Is
that the Vinson directive now ap-
plies principally to textiles, and will
probably apply to only half a dozen
items in that field. It will not ap-
ply to the profits made on any tex
tiles which are not directed to be
made by WPB for essential civilian
use. Textiles made on Army or
N,.vy order for general civilian
trade will be subject to no profit
limitations other than the profit
margins possible under price con-
troll.
Thus far, the Vinson directive has
been applied to only one non-textile
product. That was horse collars.
Here OPA allowed the manufacture
ers up to a per cent profit.
The Vinson directive will have no
application on the two million cleo
trio irons which are to be manufac-
tured this year, because in this and
similar cases, no firms are being
directed to make irons whether they
want to or not. Instead, all manu-
facturers want to get in this bus
mess. an dthe problem is one of al
lowing certain manufacturers to re-
sumo production where it will not
interfere with war production. The
same principle would apply to
stoves. vacuum cleaners, washing
machines.
In short, total control of profits
does not seem to be on the books
now, nor IS 1t in prospect.