DEFENSE PROFITS will be bigger under a new Pentagon directive affecting about $3 billion worth of contracts annually, mostly for aircraft Instead of limiting profits to a flat 5/o of costs, the Pentagon will give suppliers "progress payments" as goods are delivered, include not only costs of labor, materials and plant overhead but also an interim profit ranging from 6% to 11%. Profits will be subject to renegotiation later but estimates are that they will average about 10%.

JET-TRANSPORT ORDERS are still climbing. The latest: Eastern Air Lines for 26 Douglas DC-8s (six with Pratt & Whitney J57 engines the rest with bigger J75s) worth $165 million, for delivery starting in May 1959; Japan Air Lines for four L>C-8s worth $27 million, for delivery m 1960; Continental Air Lines for four Boeing 707s worth $21.3 million, for delivery in May 1959. Orders and options to date: 99 Douglas DC-8s, 60 Boeing 707 jetliners.

CHRISTMAS-CARD BOOM will break all records this year, says the National Association of Greeting Card Publishers, who predict a gross of $175 million on 2 billion cards.

Biggest sellers: religious cards, which have climbed from 5% of the market in 1940 to nearly 25% this year; Santa Claus, who was No 3 last year, has tumbled down the chimney to No. 8 spot in 1955.

FARM-SUBSIDY CEILING is getting strong support in President Eisenhower's Cabinet. Treasury Secretary Humphrey is privately urging Agriculture Secretary Benson to adopt the idea (once part of the controversial Brannan Plan), possibly put a $25,000 limit on the price support any one farmer can collect.

RAILROAD DEAL between the St Louis-San Francisco Railroad and the Central of Georgia is finally in the works after about two years of effort by Frisco President Clark Hungerford. For more than $15 milhon Frisco has bought 239,709 shares of Central stock (47% of the total), is filing application with the ICC for permission to buy control of Central making a new system stretching 7,000 miles from the Midwest to the Atlantic Coast. The two roads will be operated as separate divisions under their current managements, have a combined value of nearly $500 million.

COFFEE PRICES, already slipping, will drop lower next year. U.S. Agriculture Department forecasts that coffee crops in Latin America next year will hit 46.5 million bags, 1,500,000 more bags than earlier estimate and 5,000,000 bags more than this year's crop.

CLINTON FOODS, which last year sold its Snow Crop frozen-food division to Minute Maid for $22.5 million (TIME, Dec. 13, 1954), has sold off the rest of its production facilities. For $58 million, Clinton sold its corn-processing (syrup, starch, animal feeds) and partition (food cases) business to Standard Brands.

ATOMIC POWER PLANT for Nebraska will be backed by the U.S Government. To help make the power competitive with other sources the AEC will contribute 30% of the estimated $25 million cost of a reactor with a 75,000-kw. capacity (enough for 300,000 homes) for the state-owned Consumers Public Power District. The reactor will reduce the cost of electricity from 11 mills per kw-h to 8 mills per kwh. North American Aviation will build the reactor, start work next year and have it finished by 1959.

COTTON SALES ABROAD will increase if Agriculture Secretary Benson has his way. With the glut now at 11 million bales and pushing out wheat as the No. 1 surplus headache, Benson feels that the current 1,000,000-bale limit for sale abroad is too low, wants to sell at least double that amount at prices under world levels.

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