He was a big brute with beetling black eyebrows and a sullen mouth, yet as he caught up with me the hard look melted away before a big grin and he stuck out a grimy fist.
“Mister,” he said, gripping my hand in his big paw, “I’d go to hell for a company that won’t profiteer. And, mister,” he added, “that goes for a lot of other guys in this shop, too.”
Despite the fact that the Air Corps Act of 1926 had made provision for this type of profit control, Congress had passed an amendment to the Vinson-Trammel Act in 1934, imposing a further statutory limit on profits under contracts for shipbuilding and aircraft production. The wartime Excess Profits Tax purported to further regulate profits but of course only created waste. The manufacturer had to add the tax to the price of his product anyway. The act encouraged management to take decisions which, though unsound economically, looked smart taxwise. Expense accounts chargeable to cost of product soared to heights undreamed of in competitive business. Political in character, uneconomic in principle, the Excess Profits Tax swelled the costs of war while giving a false impression of profit limitation.
The Price Adjustment Act, commonly called “renegotiation,” was the really effective means of profit control. Under it, competent price adjustment boards set up the ground rules and administered them with justice to those concerned. Yet this legislation, despite the fact that it was fundamentally in the interest of private industry, was passed with such a flavor of punitive action against business that even the wisest industrialists were tricked into fighting it as just another attack on the profit motive. Too many of us, unfortunately, were so busy hating Roosevelt that we forgot how to use our brains.
Under wise leadership the whole thing could have been turned around into a constructive effort. Had the administration called in representatives from the many industries and put the problem squarely before them along with an appeal to their patriotism, there would have been no problem. Voluntary, industry-wide action would have been forthcoming to keep industry on a sound financial basis, and the example thus set must certainly have brought wage rates within bounds. Had a routine been set up under which the government agreed to utilize privately owned facilities on terms that would compensate owners for their use and restore them as nearly as possible to their original status, details could have been handled by price adjustment boards in a cooperative manner. Punitive laws could have been reserved for culprits, and industry would have helped police the economy.
My own convictions as to the efficacy of voluntary processes stem out of experiences in two wars. In World War I, Herbert Hoover, relying upon good leadership to prevent shortages, gave a convincing demonstration of what the American people can do voluntarily in such an emergency. In World War II, at the very moment when my company was being frustrated at every turn by arbitrary controls on men, money, machines, and materials, I acted as chairman of the Connecticut State War Finance Committee and saw the people rally to the brilliant leadership of two able young men in the Treasury Department, Ted Gamble and Bob Coyne, who raised billions of dollars that would never have been forthcoming under any compulsion.
CHAPTER TWENTY-EIGHT
Off the Beam
The German attack on Russia immediately converted a lot of former pacifists into bloodthirsty warmongers. With that everybody began trying to get into the act. We, who had once been crucified for warmongering, now found ourselves charged with “too little and too late.” The war cry now became “unconditional surrender,” a phrase that had a hollow ring to men who had watched Woodrow Wilson end World War I with his “Fourteen Points” by dividing the German people and the German Kaiser.
In this country everybody became overnight an expert on war production and a critic of the professionals. The professionals, unfortunately, must always bear the responsibility for their actions, while their critics can and do speak with the advantage of irresponsibility. The newspapers now began to ballyhoo the “Reuther plan” as the answer to everything and news commentators belabored the ether with a cacophony of approval. From his office in the War Production Board, Bill Knudsen called us on the telephone.
“You know this fellow Reuther?” he inquired, pronouncing the name as if it spelled Rooter.