The House Naval Affairs Committee, chairmanned by Georgia's dumpy, turtle-faced Carl Vinson, had set itself a tedious task: to investigate progress of the Navy building program, discover the profiteers and blast them.
Congress and the nation remembered that in World War I many corporations had made staggering profits out of ships and munitions.* For weeks Washington had been on the alert for the Vinson report, nerved itself this week to hear the report go off, dynamiting the profiteers of World War II.
The exposition was far from shocking:
The period chiefly studied for corporations was from Jan. 1, 1940 to November 1941. Of questionnaires sent to 5,198 Navy contractors, only 2,300 responses have been received thus far. The 1,228 most important contractors (over $10,000) made 19,086 contracts with the Navy. Total value reported, $3,889,168,760; total profits reported, $287,859,448.* The over-all profit average, for all firms doing business with the U.S. Navy, was 7.99%.
Losses were incurred in some cases: chiefly naval defense housing, where the profit average was lowest (3.89%); and naval aviation contracts, where expensive specification changes caused 30.78% of all contracts to suffer losses, and the profit average was 4.59%. Highest individual profit on a contract was 247%-which may have been on a dinky contract. The committee found no cause to regard the high returns as shocking.
Labor's Profits. The Vinson committee also collected the first official figures on the financial status of labor unions in the U.S. The committee questioned 162 unions—A.F. of L., C.I.O. and the large independents—got 117 answers.
The union treasuries were mostly well filled. On Oct. 1, 1939, the net assets of the 117 unions were $71,915,665; as of March 31, 1941 they had grown to $82,594,959—a gain of 14.85%!
The important figures for the 18-month period ending March 31, 1941 for the 117 unions reporting:
A.F. of L. C.I.O. Independents
Membership 3,276,566 2,444,235 365,030
Assets $56,507,015 $9,188,449 $29,003,373
Liabilities $9,145,854 $2,215,360 $742,664
Net Assets $47,361,161 $6,973,089 $28,260,709
Net Gain $6,085,734 $2,862,204 $1,731,356
% Gain 14.74% 69.63% 6.5%
At its October convention, A.F. of L. claimed total paid membership of 4,569,056. At the same time, C.I.O. claimed a total membership of almost 5,000,000. Further, the report was eight months old —and since April 1941 union membership has increased notably. And one other big factor was not considered: some of the biggest and fattest of all unions did not report—A.F. of L.'s teamsters, carpenters, electrical workers and garment workers, C.I.O.'s United Automobile Workers.
But the committee cried: "The tremendous financial gains made by labor organizations during the period of the defense effort and the vast amount of funds and assets in their treasuries present an astounding picture of concentration of wealth, a situation heretofore usually associated only with industry and finance. These vast tax-exempt funds reposing in the treasuries of labor organizations, many of whom by strikes and work stoppage have delayed and . . . even obstructed the defense program, present a problem which . . . should well be considered by the Congress. ..."