The people's voice. [volume] (Helena, Mont.) 1939-1969, 1944-01-21
IN. A. M. Official
(Continued from Page one)

raw materials on hand, for goods par
TALLY completed and even for a profit
on these unfinished goods when the
war is terminated In case of loss,
the contractor is given two years dur
ing which he can write losses off
against future profits and reduce his
taxes, and thus the government pays
again. War plants can be "amortized"
or written off tax bills under terms
which are excessively unfair to the
public.
The record of factual testimony
thus shows the government has been
very solicitous already to protect the
! financial condition of war contractors.
But Shreve did not mention that.
Shreve then argued that the re-
negotiation procedure took much valu-
able time of the managers of industry
and the delays caused an unsettled
condition Then he emphasized that
''the determination of profits is func-
ton of taxation" and he added en-
phasis to his statement that the ex-
cess profits tax maximum was now
80 per cent Hence renegotiation was
unnecessary. Shreve did not say that
the 900 rate applied on only a top
bracket of income. Shreve should
have stated the whole truth, that be-
cause corporation pays only small
rate, say 10 per cent on it's lower
brackets of income, no corporation
pays 80 per cent. The testimony from
the National City Bank that the max
imum tax rate was not 80 per cent,
but approximately 70 per cent. Not
withstanding how obviously mislead-
ing was his testimony, Shreve and
other industry witnesses continued to
talk about $50 per cent excess profits
tax
Incidentally, Shreye should have
been smart enough to have read the
testimony presented just before he ap-
peared. In that testimony, Randolph
e. Paul, general counsel for the Treas
ury department, showed that the total
profits of corporations after they had
paid taxes-not before taxes but after
was as follows: 1886, $3,9O3, 100000
1887, $3,S72,O 100000; 1888, $1,4SO,OG0,-
600; 1889 (war lend-lease year, $4,-
040, 100000; 1910, $4,655, 100000; 1871,
$6,941 10000 1912 (estimated), 49,
1O0,OOO,OOO; 1943 (estimated) $780,
100000.
Despite these figures, Shreve and
his companions criticised the rene
gotiation of contracts because a 80
per cent excess profits tax would take
profits. Despite the tax
rate, the profits in 1912 still were 100
per cent more than the good-business
ore-war years of 1886 and 1897
Shreve is talking again. 81 think
)ne thing that has been really over
ooked in the consideration of this
whole picture, to very large degree,
IS the pressure and Importance of
public opinion. No company is going
% throw away it's reputation that it
las cost millions of dollars to build
Up, and lot of effort, in order to
ret away with inordinate profits I'M
Ter present conditions" I ask you
'atient reader how you would account
or mental gyrations of man who
alks like that in the face of 100 per
ent increase in profits out of war.
Shreve promised to supply the COM
nittee with a detailed statement of
he profits of General Electric but 1
o not find it printed in the record.
t was overlooked, apparently, and
Turn now to Mr. Blackett. There
) only one sound measuring stick
Dr. the determination of whether prof
s are fair, good, or unconscionable
nd that is by relating the profits to
ne money invested in the business.
or some reason, and the reasons are
bvious, Shreve and Blackett and all
he other manufacturers avoided the
resentation of any fact on that point
"The increase (of profits) in terms
percentage earned on the total
olume of business for manufacturing
as So per cent for 1940,' said Black
It, "and 40 per cent for 1941 and
7 per cent in 1912" Notice Blackett
liked about profits on volume of
lsiness" and not on capital invested
That kind Of testimony discloses
othing as to the measure of profits.
two per cent profit on the volume
sales may mean a 10 per cent profit
/ the money invested in one bust
sss and may mean 1000 per cent
oft on the money invested in an
her business In other words, that
nd of testimony means nothing. It's
re the Mother Hubbard" brief of
e INSCRIPTIONS lawyer. For the
nefit of my younger readers,
dother Hubbard" was a very loose
ting house dress women used to
ear. The Mother Hubbard BRIEF
rs one that covered everything and
sclosed nothing, was in other words
If truths and no truths.
Space here will not permit me to
ntinue with Shreve and the COM
ttee of N. A. M. In my time in
ashington, the United States Cham
r of Commerce has become more
d more intelligent and, with lapses,
S disclosed a sense of honor in
ndling it's public affairs. There has
been the slightest change in N.
M. 1t is still the same old NJ A. M
if were grade labelled it would be
loddy or worse" But manufactur-
! still belong to that kind of an
,anization
vi CENSORSHIP frightened
Vary of espionage and the inno-