Evening star., 1946-09-25
Public |sMis|ed
On War Profits,
Shipbui|der5ays
Maritime Commission
Figures Challenged
At House Hearing
Rv A NII,nr
By J. A. O'Leory

agencies gave the American peo-
pie a misleading impression of
the wartime profits of shipbuild-
ers by omitting taxes and rene
gotlation cuts, was made before
the House Merchant Marine
Committee today by John A. Nc
Cone, president of the California
Shipbuilding Corp.
He made the charge after testify-
ing that in the case of his own COM
pany a table presented by the
Maritime Commission Monday esti-
mated the profits at s44,423,O14
when, according to Mr. McCone,
the amount after taxes. renegotia-
ton and non-reimbursable items,
was only $8,842, ,7O4.
Harry j. Kaiser. who managed a
number of Government shipyards
during the war, ended nearly three
days OF questioning earlier today,
telling the committee that if Con-
gress can devise plan under which
no one would make a dime" out of
any future war, he would be for it.
Incentive System Widespread.
He added, however, that no coun-
try has yet won a war without the
incentive profit system, and that
even Russia came to it.
After Mr. McCone had cited the
profit figures of his own company,
he told the committee, with some
feeling, that when any Govern
ment agency reports that shipbuild-
ers earned certain profits and does
not include all the deductions, the
reporting agencies deliberately mis-
lead the people of this country, and
l resent it,"
Mr. McCone added that if a
certified public accountant pre-
sented as many half truths in an
auditing report he would be vio-
lating a sacred trust and. the wit
ness thought, would be barred from
further practice in most States.
Over four-year war period, his
company averaged net profits of
81 1868, 800 per year, Mr.. McCone
testified, adding that during this
period the corporation continuously
provided up to s7,800,00O for the
conduct of the business. The net
profits, he said, amounted to less
than l per cent on the $4,000 900
value of the 407 ships produced. 1t
was only Is per cent of the costs
Of the yards, excluding the value of
materials furnished by any Govern
ment agency, he declared.
Pride in Record Voiced.
Those responsible for Calship
are proud of its record" said Mr..
McCone. Year after year, operating
three shifts per day, seven days a
week, we produced ships in un-
precedented numbers and at low
cost, and delivered them to the
armed services when they were
needed to carry the fight to the bat
tleflelds of the world. The skill
and ability of these men-and their
sincerity of purpose in serving the
countrys needs produced the ships
without which the war would have
heen lost"
Mr.. McCone said that, contrary
to Impressions sometimes gathered,
the Calship yard was not at any
time Kaiser-managed operation
Mr.. Kaiser and his companies never
owned more than 1876 per cent of
the stock of Calship, according to
Mr. McCone.
The table submitted by the Mari
time Commission of companies that
operated Government-built yards
had the California Co. earmarked as
one of the Kaiser group. Mr.. Kaiser
testified that his group no longer
had any connection with Califor-
mia.
Hearings End Friday.
Chairman Bland announced that
that the hearings would end Friday
afternoon to give committee men,
bers an opportunity to return home
for election campaigning. 1t may be
resumed, he said, after the Novem-
Der elections.
In favoring system to take the
profit out of war, Mr.. Kaiser said:
But if you can find a system of
soup kitchens to take care of all
of us in the next war, I'll be for it, >
said the industrialist, who is in his
third day of questioning on his war
contracts.
His comments on taking the
profit out of the next war were
prompted by questions of Repre-
sentative Weichel. Republican, of
Ohio, who had observed that men
had to go. into the armed forces
without making profits during the
war.
Mr.. Weichel also challenged Mr..
Kaiser's argument that his profits
could be figured as less than one
tenth of per cent of the dollar
volume of the work he performed
for the Government. The Ohio Rep
(See SHIPBUILDING. Page A-6J