Jahco Finds a Way

Bill Jack loves to grab the public address microphone in his Cleveland plant and bellow important news to his "associates" (employes). Last week the president of Barnumesque Jack & Heintz (Jahco), who contends that the War Department is renegotiating him into the red, told them something that hit home to each & every one. His news was a plan to 1) partially circumvent renegotiation, 2) build up a reserve for postwar expansion.

The plan: let associates subscribe some $15,000,000 immediately for capital, another $35,000,000 for a postwar fund. Bill Jack reasoned that this will enable Jahco to make bigger profits on war orders "because the Price Adjustment Board said we would earn more on our total business if we had more capital."

Associates would invest by 1) cashing in their war bonds, 2) letting Jahco keep their present payroll deductions for bonds, as well as their double-time pay and famed bonuses. In return, associates would get non-voting preferred stock (Jack owns 75% of the voting stock, Vice President Ralph Heintz the rest), bearing 2% interest, and a half-interest in company profits.

With the cash, Jahco will buy war bonds and put them into a trust fund plainly marked "Capital." Bill Jack estimates that the entire deal will take about 60 days. That will not be soon enough to affect renegotiation for 1943, now going on. Nor may it have much weight with the board in assessing current profits.

In many a decision, the board has made plain that for profit computation it considers as capital only such money as is actually in use or available to a company. The board may turn a cold eye on capital in a trust fund. But Bill Jack is going ahead. He proudly announced that his associates have already offered to pledge $17,000,000, invest another $13,000,000 through weekly pay deductions by Dec. 30.

Quipped one Cleveland industrialist: "My God, Bill Jack is going to renegotiate his employes."

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