Evening star., 1946-09-27
ShipbuiIding Profits
Hearings Recessed
Until November
By J. A. 'OLeory

The House Merchant Marine
Committee has called a halt to its
hearings on wartime shipbuilding
profits until after the November
elections, without waiting to hear
the Maritime Commission answer
shipbuilders' complaints against
some of the commission figures.
Chairman Bland and his COL
leagues decided Unexpectedly to re-
cess the hearings late yesterday
after earlier indications that Mari
time Commission officials would take
the stand today Mr.. Bland an
nounced the recess was starting a
day ahead of time for the conven-
fence of committee members, and
also to give them time to study the
testimony taken this week from
shipyard operators.
Highlights of yesterdays final
session was a sharp colloquy be-
tween an official of the St. Johns
River Shipbuilding Co. of Jackson
vile, Fla, and Committee Counsel
Marvin Coles over whether the COM
pany's capital investment was only
5000 or s600,600.
Smaller Figure Challenged.
Using the $500 original invest
ment figure. Ralph E. Casey, a Gen
eral Accounting Office attorney,
testified Monday that the company's
fees for building Maritime Commits
sion ships amounted to 5000 900,
which, Mr.. Casey said, was 346 ,666
per cent on the capital invested.
When A. H. AinsloW, treasurer of
the st. Johns River company, went
before the committee yesterday he
contended the invested capital fig
ure was $500, 800, and took Mr.. Casey
to task for having used the smaller
figure.
Under questioning by committee
counsel, Mr.. Ainslow admitted that
only $500 of capital stock was issued
when the company was formed in
l942, to construct ships in a Gov
ernment-equipped yard. He con-
tended, however, that in addition
to the stock, 100000 of debentures
were put up by the holders of one
third of the stock. Mr.. Ainslow also
insisted that the records of an ear
ller investigation by the House COM
mlttee showed the capital should
be regarded as S600,600, and that the
Maritime Commissions contract
with the st. Johns company re-
quired it to have capital of $500 900
and 81 100000 of credit.
The st. Johns River concern. like
all of the other companies heard this
week, was building ships for the
Maritime Commission on a fee basis
IN yards financed by the Govern
ment.
Funds Left in Business.
Mr.. Coles brought out that $780,
Oo0 OF debentures were paid off by
October, 1943, but Mr.. Ainslow said
the funds were left in the busi-
ness.
The committee counsel drew from
the witness an admission that the
profits, after taxes, would be dis
trlbuted Oh the basis of the $500 OF
pald-in capital.
Mrs. Ainslow said the gross fees
OF the st. Johns company for the
ships it built for the Maritime Com
mission amount to $2,362, 900. which
becomes $350,000 after taxes and
before renegotiation.
The final witness YESTERDAY was
A. B. Homer, president of Bethle-
hem-Fairfax Shipyards, Inc, which
was formed by the Bethlehem Steel
Corp. to help build vessels in Bal
tlmore for the Maritime Commits
sion.
Like Henry J. Kaiser and other
shipbuilders heard earlier, Mr..
Homer contended the company's
profit should be based on the per-
centage which the net fees bear to
the delivered cost of the ships, and
not on the nominal capital invest
ment that was put up by new COM
panles formed for the particular
purpose of building wartime ships
for the Government.
Built sos Vessels.
When Bethlehem Fairfield was set
up. the nominal capital investment
was $1,000 1000. The fees it received