Business: Pegged Profits

As a "deliberate policy," the No. 2 U.S. aircraft maker announced last week that it is holding its profits down to their "pre-emergency level" in dollars, regardless of the tremendous emergency boom in its business. Explained United Aircraft in its annual report: "It is not in the public interest to allow the greatly increased volume of business resulting from the war effort to increase aggregate profits."

To "stabilize" its profits, humming United used two main devices: 1) by reducing its prices to the U.S. Navy (despite fixed-price contracts), it gave up some $10,000,000; 2) by setting up a $5,000,000 charge against earnings,...

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