The Wilmington morning star., 1946-01-31
Fair Enough
BY WEsTBROOK PEGLER

i H. c. Wendt, of Dayton, O., was one Of
the men who dealt with Wallace O. Heinze,
then Of the Smaller War Plants corporation.
later and now general manager of the Inter.
national Latex but could not bring any argu.
demanding manufacturing orders for his flu.
ture employer at price which the Army
deemed excessive. The item involved, was a
life raft for Army flyers.
| Mr. Wendt reports that representative Of
Army Intelligence called on him last fall to
get his version of the deal with international
Latex whose president is Abraham N. Spaniel,
strong admirer of Henry Wallace and
new deal, left-wing propa gandist by means OF
lavish expenditure for newspaper space. 1t
may be stated also that at least one other
intelligence operative went to Dayton, where
Wright field is situated and where much OF
this kind of purchasing was handled, to in
vestigate the deal. This man reports that an
officer at Wright field told him the case would
be pigeon-holed because it was "too hot to
handle and because some OF the persons IN
volved were "too big"
AS hitherto stated, Col. Phillips W. Smith,
now on duty at the War Department stated
recently in Washington that Major Matthew
]. Fox a reserve officer, formerly with Small
er War Plants, told him in Europe that there
was 'White House pressure" behind Spanef s
successful efforts to get contracts at prices
which, in the end were reduced, but never
theless were still the maximum paid for THIS
device.
Mr.. Wendt says the Army Intelligence IN
vestigator who interviewed him was especial
ly interested in report that, in insisting on
price of $125 each for the life RATS to
the Spaniel firm, as against final price OF
$72, Heinze said, by phone from Washington:
'"This comes directly from the White House
Harry Hopkins
''This statement was supposed to have been
made via long distance from Washington to
me by Heinze during the last meeting we
(Army purchasing agents) had in Dayton re-
garding the. latex contract,"t Mr.. Wendt
writes. ''This meeting was attended by Colonel
Salzman, It. Col Foy Fred Foy, now Of
j. Walter Thompson Company, of New York;
Major Kintz, Underwood and myself recall
perfectly, that Heinze demanded that I must
secure the contract for latex for 5000 life
RATS at $125 EACH This was a must. No ex-
cuses However, 1 do not recall that Heinze
said, this comes directly from the White
House-Harry Hopkins Another man, who
was on an extension part of the time has
tried to recall this to my memory. But
just do not remember it. Latex never did get
$125 for life RATS SWPC took prime con-
tract for 5000 RATS at $85 and subcontracted
the entire order to latex. Other bidders were
tossed out at about the same price. as witness
my files"
A memorandum in the War Department
files reports a meeting Of General then
Colonel, Albert J. Browning until recently di-
rector of purchases for the Army Air Force,
Colonel Foy, and two other officers, with Fox
and Heinze, both of Smaller War Plants, War
Production Board.
Col. Foy said International Latex had an
extraordinarily large overhead which drove
up the price Colonel Foy said that If the
Army accepted SWPC's recommendation of
price of SOL as against $63 or $64 bid by
others on the ground that International had
to absorb unusually large overhead the Army
would have to do the same for other firms.
Further on, the memorandum says: "Mr.
Fox stated that this company had not been
operating for almost year and if it weren't
for the fact that it did a fairly substantial
peace-tinne business they would not be in ex-
istence today; that it is a question whether,
if they don't get this they will remain in
business they have 4o-odd key people with
whom they have been pleading to stay. They
have been using these people to develop vari-
GUS things for the quartermaster corps, engi-
neers and marines"
Heinze said Colonel Foy had mentioned the
company's expenditure for political advertls-
ing and stated that not penny Of this cost
was included in overhead figures Colonel
Browning replied that the assumption was
that If International hadn't spent the money
on pOItlcdl propaganda tuc LII SouiA nave
used it to take care of the overhead.
In a memorandum to Robert Patterson, then
undersecretary, now Secretary Of war, on
April 10, 1914, Browning, then promoted to
brigadier, said: "In addition to high charges
for labor and manufa cturing overhead, ad-
ministrative overhead (of International Latex)
was out of line. On 10 March 1943, half
page advertisement of the International Latex
corporation appeared in the Washington Post
and presumably in other papers. Note:
Many large political propaganda ads were run
in many papers) since international Latex
had stated that they had no going contracts
or other business, the question arose whether
the cost of this advertising and similar ex-
penses had not been included in the costs
estimated for the life raft contract"
General Browning told Patterson the adver-
Using campaign suggested to him and his
colleagues either that the company had ample
funds for indirect advertising or that its man.
agement was using unsound judgment.
"On Is March 1943 Mr.. Helnze and MI
Fox of WPB continued to plead for Inter-
national Latex corporation, when Heinze was
ments to bear that overcame the excessively
high price"
STAR Dust