Manufacturers to Woodshed?

U. S. airlines were still smarting from the governmental spanking they had received week before (see p. 26), when last week it looked as if the next trip to the Federal woodshed might be taken by air manufacturers with military contracts. The House Military Affairs Committee was investigating makers of Army planes, while the House Naval Affairs Committee was probing Navy plane builders. Military secrecy confined important testimony to closed session, but what came out at public hearings indicated the course of the investigations.

Army. The House Committee had already learned that Consolidated Aircraft Corp. of Buffalo had profited so greatly on an order of Army ships that the Army had asked for and received 50 additional planes delivered for $1 each. Star witness last week was James V. Martin, eccentric inventor of Garden City, L. I. Mr. Martin charged that "this nation for 17 years has been the victim of a gigantic, insidious conspiracy by a small group of banking brokers" who robbed the Government of 75-c- of every dollar spent on military aviation. The trust, said he, was composed of Curtiss-Wright, Pratt & Whitney, General Aviation and Boeing, and "the departments are honeycombed with agents and employes of this trust.''

Navy. Less hysterical testimony was brought out by the Naval Affairs Committee. President Lawrence Grumman of Grumman Aviation Co., a small independent, said that he had not found that an "air trust" had a monopoly on government contracts, that he had made 18% profit on the planes he built for the Navy last year. But when the Committee heard that 10% of his manufacturing cost went to Aluminum Co. of America and that only from that concern could he get the necessary aluminum, it grew suspicious, "invited" Aluminum Co. representatives to appear.

More famed Martin, Glenn L. of Baltimore, was another Navy witness. Manufacturer of the celebrated Martin bomber, which goes 200 m. p. h. and won the Collier Trophy last year, Mr. Martin testified that he had been awarded Navy contracts for 14 years, had done $20,000,000 worth of business with the Government. His average profit was 6%, although in 1927 he had made 19% on a $3,000,000 order. A string of manufacturers followed Mr. Martin to the stand and stated the case that every aviation manufacturer and Army and Navy procurement officer knows. Experimental costs in military work are so high that a firm in that line of business must make a killing from time to time to keep its head above water. Thus Berliner-Joyce, having sunk $112,000 on a job which paid only $87,000 felt justified in making $25,000 on a $211,000 order.

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