Evening star., 1951-04-06
Wilson Orders Care
In Financial Aid
To Industrial Plants

asb buuh1Oa 49,
To Industrial Plants
Mobilization Director Charles
e. Wilson has laid down a pro-
gram calling for careful scrutiny
of applications for loans and tax
benefits to expand industrial pro-
duction, it was learned today.
He warned against "bailing out"
shaky companies with financial
assistance.
His instructions to agencies un-
der him which handle the loans.
tax benefits and similar programs
were given month and a half
ago, but were not made public.
Meanwhile, an official of the
National Production Authority
told Congress yesterday that,
without waiting to investigate,
NPA approved certificates Of me-
cessity" for 48 steel companies
wanting to build new plants at a
cost of $469,266,643.
Testifying at House Hearing.
The official was II. B. Mccoy,
assistant administrator of NPA.
That agency's own technical. in
vestigators turned in adverse re-
ports after the applications for
certificates had been approved.
Mr.. Mccoy testified before the
House Expenditures Subcommit-
tee. His statements prompted one
member. Representative Bender.
to call the action on the steel
companies "the worst kind of
stupidity"
II can understand why business
people are distressed" he said.
when you have such kinds Of
internal conflict as has been
demonstrated by this agency"
Certificates of necessity enable
the builders of a plant to write of
the percentage of the cost stated
in the certificate over a period Of
five years instead Of a normal
depreciation period which may be
20 years. The result is lower taxes
in the current period Of high tax
rates.
Wilson Concerned.
Mr.. Wilson was reported to have
been concerned when he took Of
flee with the accelerated amorti-
zation" program and other pro-
grams for fostering increased pro-
duction. Originally the top agency
giving approval to these benefits
was the National Security Re-
sources Board, but this response
bility was redelegated to Mr.. VIII
son. He, in turn, assigned the
duty of giving final approval Of
applications to the Defense Pro-
duction Administration.
Tax benefits for expanding the
aluminium industry were reported
to have been set initially at 100
per cent-meaning that the entire
cost could be written off in five
years. 1t is understood that these
were renegotiated and finally set
at 80 per cent.
Applications are first screened
by the operating agencies con-
Icerned-NPA, Defense Transport
Administration and the defense
Organizations in Interior and Ag-
|riculture-and then passed on by
IDPA.
Wilson Urges Caution.
In his directions regarding the
program Mr.. Wilson gave these
cautions:
h Expansion or development Of
marginal producers should he
avoided, especially in those in
dustrieS which already have ade-
,quate capacity or production.
Direct loans should be held to
Ia minimum and should be given
only where the borrower is un-
able to obtain financial aid else
where.
The expansion Of facilities is
not to be approved indiscrimin-
ately or on a. first-come- first
served basis. particularly If other
companies have the needed ca
|pacity.
Industry is not to be permitted
to integrate at the expense of ex-
isting capacity or in excess Of
available materials. This would
apply to a steel company. for in
stance, which might wish to add
mills to make steel forms to its
basic production of steel.
Guaranteed loans are to be re-
stricted to capital loans,