The Beloved Profiteer

Tall, white-haired James Finney Lincoln of Cleveland is a hard man to his foes--and a gold mine to his employes. His obsession on incentive pay has led him into one head-on collision after another with the U.S. Treasury, the U.S. Navy, and even the U.S. Congress (TIME, June 8, 1942). But it has also been responsible, he unshakably believes, for making his Lincoln Electric Co. the world's biggest, lowest-cost producer of electric welding equipment.

Last week James Lincoln backed his pet economic theory with a smacking $3,000,000 annual bonus that will give every Lincoln employe, on the average, about as much as he has already drawn for the year (average per worker: $2,250). This will also add up to $50,000 on the paychecks of a few key men. In so doing, James Lincoln told both the Navy and the Treasury to go to hell, in those exact one-syllable words.

Thus James Lincoln subjected himself to a very considerable financial risk. Item: he is now in the courts defying the Navy to renegotiate him out of $3,250,000 of 1942 "excess profits" (this is the first fullblown test yet of the renegotiation law). Item: he has also gone to court to contest a Treasury ruling that he overpaid his men $1,600,000 in 1941.

Those two sums, combined, are probably far bigger than his 1943 profits will be. Last year his gross business was only about $500,000 under this year's estimated $34,000,000; his net income was $2,563,000.

Lincoln claims that all this Government attention is rank ingratitude; that his unorthodox ways of encouraging full production have so cut costs that he estimates the total Government saving on his kind of goods at $100,000,000. (This includes the fact that his competitors' prices have been forced down to meet his.) Trouble is that Lincoln makes too much money himself in the course of rewarding his employes: he takes no bonus, but he and his brother own 75% of the company's stock.

In this embarrassingly special situation, James Lincoln gloats that his "profiteering" is unassailable. He just says, "Let the chips fall where they may"--and calls in his lawyers. And he knows that, if the chips fall against him, 1,400 Lincoln employes will raise more Cain than he can.

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