PROFITS

How Much Is Fair?

Despite loud yawps from mavericks like Jack & Heintz (see col. 3), the great majority of U.S. businessmen appear to favor renegotiation of war profits. Patriotism aside, they have grown politically sensitive in the past decade and have no wish to be accused of profiteering. Last week in St. Louis' Coronado Hotel, the world's No. 1 producer of bomber turrets publicly embraced the theory that the best wartime safeguard of free enterprise is low profits. Said Emerson Electric Manufacturing Co.'s President and Board Chairman William Stuart Symington Ill, at a labor-management banquet:

"People talk about 'a fair profit on sales.' Well, what is a fair profit? Before the war Emerson made 5%. Now it makes just over 1%; and on its $30,000,000 more business in 1943 as against 1942 it made $200,000 net, considerably less than 1%. Is that proper? Of course it is proper." His explanation: war business involves only one sure-pay customer, the U.S. taxpayer, who in the end pays not only for the goods but for most of the plants and machinery that produce them.

Young (42), handsome "Stu" Symington is no airy altruist. The $898,700 net income his company reported last fortnight (for the year ended Sept. 30) was a picayune residue of the company's swollen gross sales of $83,207,000--but it was much more than Emerson had ever made in any of its 53 years (Symington took over its management in 1938). And Manufacturer Symington was still being sturdily realistic when he declared: "To us one of the great dangers to our system ... is the picture of some people trying to build their companies from scratch to an impregnable working capital position out of war profits . . . which had attached to them no normal business risk."

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