Still another source of job contacts comes from more than a thousand vendors from whom the company now purchases supplies, tools, stock, and equipment. Virtually all were established before the war; most of them will have post-war personnel needs equal to, or greater than, their present requirements.

There are, of course, many other sources which will be contacted and circularized regularly so that our release of personnel can be made as orderly as possible, thus avoiding "dumping" employees into a glutted labor market to shift for themselves.

In many ways the Northrop organization is an ideal testing ground for this employee relocation plan. Prior to wartime expansion we had approximately 2,500 employees; today the figure is around 10,000. Men and women who have gone into military service, and others to whom the company feels an obligation, total about 2,000. It is expected that about half of them will want to return to the company, although the figure may reach as high as 90 percent. Assuming it will be the first figure, present personnel, lus returning service men and women, would total 11,000. If the company's hopes of going no lower than its prewar level are borne out, it will be able to employ approximately 2,500 people.

Simple subtraction then shows that excess personnel would total approximately 8,500. However, of that number some 3,000 are women, most of whom it is believed will want to return to their homes or former occupations. Another 250 are students, many of whom will go back to school. Still another 900 are men who came out of retirement and who will want or need a long rest or permanent retirement when the war is won. Another group of 2,500 is made up of men from selling and service occupations which did not offer full-time employment when the war started. Most of these men will probably return to their more lucrative former positions, bringing down to 6,650 the excess personnel for whom the company feels it will not be called on to provide peacetime employment.

Thus machinery must be set up to find employment for only 1,850 out of a wartime peak of some 11,000.

Like most other aircraft companies, the Northrop plants have required a wide variety of skills, since it has turned out experimental designs, mass-produced its own and other companies' planes, manufactured parts for others to assemble and worked in several metals, woods, and plastics. The ratio of skills involved will, it is believed, be paralleled in most other organizations.

First step in developing the Northrop plan, then, was the design of a tabulating machine form to which could be transferred all the data required on each employee. Special attention was paid to first and seconds skills—particularly with respect to peacetime employment-and geographic location of the workers' pre-war homes. One of the most significant features of this tabulating system is its speed, for the modern mechanical sorting devices can riffle through 10,000 cards and collate given skills and locations within an hour. For example, the names of all employees skilled in bricklaying regardless of their Northrop occupation can be picked out of the entire personnel list in some 25 minutes.

This matter of speedily getting prospective employer and employee together is important for unless jobs can be found quickly potential employers will not use the system. And unless the plan works fast enough to avert expensive delays employees will not depend on it and will be prone to leave their wartime jobs earlier than they might otherwise.

Under the plan office quarters will be furnished to representatives of concerns seeking employees and releasable Northrop employees will be granted opportunities to apply for jobs.

By listing skills it should not be inferred that the plan will in any way limit the employee's choice of a post-war occupation. Nor should it be inferred that the company plans to operace an employment agency. The plan does contemplate however giving every possible service in bringing job openings to those Northrop workers who will find it of value.

We hope the plan will help bridge the gap between wartime and peacetime employment for thousands who will want and need such assistance. By bridging that gap we hope we can remove uncertainty for our people and make it possible for them to continue building, right up to the last day of fighting, the planes our air forces must have to win the war.

Just how serious this problem of assuring war industry personnel of all possible help in a quick transition from war to peace time work is underscored by the growing number of totally unfounded rumors which have recently swept west coast aircraft and shipbuilding plants. Fanned by irresponsible elements seeking to capitalize on unrest, some rumors gained such circulation that it was necessary for management to recognize and deny them.

Cancelation of some contracts-largely of a minor nature and due to dwindling need for certain products being replaced by newer materials—have brought about some layoffs. These instances were such a reversal of usual wartime employment conditions that they "made news" and were widely publicized. Coming on the heels of the rumors, these stories provoked considerable uneasiness among war plant employees. More such announcements are bound to appear, and it is entirely possible they may precipitate new waves of job severances severances that may seriously impede aircraft production and disrupt long-planned military operations. This in turn could easily cause military upsets and prolong the war. It is to counteract such uncertainty that the Northrop plan has been developed, and it is presented here in the hope that other organizations-both in and out of aviation-may thus be influenced to develop similar programs aimed at achieving an orderly release of excess personnel to post-war employment.

Senator MURRAY. Mr. Callery.

STATEMENT OF FRANCIS A. CALLERY, VICE PRESIDENT IN CHARGE OF FINANCE, CONSOLIDATED VULTEE AIRCRAFT CORPORATION

Mr. CALLERY. Senator Murray, I have a statement that I would like to submit for the record, on behalf of the Aeronautical Chamber of Commerce of America, in connection with aircraft profits which we think have been erroneously stated on various occasions.

Senator MURRAY. Do you wish to supplement your statement by any observations?

Mr. CALLERY. Only that in Mr. Frankensteen's statement this morning he said aircraft stockholders had got back in 1943 about half of their investment. We do not think that accurately tells the story by any means.

Senator MURRAY. Briefly, what is the truth of the matter in regard to the profits made by the airplane industry?

Mr. CALLERY. We look at profits in aircraft as illusions up until the time of the final settlement of the war.

Senator MURRAY. When you come to the final settlement of the war, you are at the end of your string.

Mr. CALLERY. That is right.

Senator MURRAY. If you don't make profits during the few years that you are in operation, you are going to be in a very serious situation.

Mr. CALLERY. That is correct; yes, sir.

Senator MURRAY. Do you wish to make a complete statement on that, or do you wish to submit some statement for the record on it at some time in the future?

If you do, you may send it to us and it will be incorporated in the record.

Mr. CALLERY. Thank you very much. I appreciate it.
(The statement submitted by Mr. Callery is as follows:)

Figures on the aircraft industry which show profits in relation to invested capital give an erroneous impression. A much more equitable way is to show profits in relation to sales or volume of business done. Risks are commensurate with volume. The higher the volume the greater the risk, particularly if capital does not increase proportionately.

The aircraft industry has been expanded to fantastic levels in relation to capital. For one of the largest and strongest air-frame manufacturers, a loss of 4 percent on its 1943 business would have wiped out working capital.

The rate of net profits on sales volume in aircraft is the lowest of any industry engaged in war production. In 1943, the percentage of net income to sales for 24 major aircraft and parts manufacturers was 1.8 percent, according to a survey by the National City Bank of New York. Other industries, such as nonferrous

metals earned 9 percent; petroleum products 6.8 percent; automobiles 3.2 percent; and iron and steel 2.8 percent.

The profits of the aircraft manufacturers during the war period are to a large extent bookkeeping figures. The ultimate profits, if any, can only be determined when all final settlements have been made.

A very substantial part of the bookkeeping profits are still in the business, largely in the form of inventories and other properties which will be subject to drastic shrinkage in values.

Only a small part has been paid out in dividends. In spite of this conservative practice, working capital is meager in relation to the obligations of the business. It is safe to say that the entire net current assets of the industry would not equal 1 month's operating costs at present production rates.

Figures introduced by the Congress of Industrial Organizations on aircraft profits are arranged to make it appear that stockholders and management have been vastly overpaid in relation to the wages paid to aircraft employees. While their approach is an interesting one, it is merely a curiosity, when viewed in perspective. The purpose apparently is to show that management and the stockholders are getting something which belongs to the workers.

As an illustration, using the figures of one of the largest companies in the industry, if all of the salaries paid to all officers and directors during 1943 should be paid to the workers instead, the result would be that each payment of $10 to workers would be increased by 1 cent to $10.01. If all of the net profits to stockholders were to be similarly paid over to the workers, each payment of $10 would be increased by 35 cents to $10.35.

The total payments to all of the officers and directors of this company in the entire year of 1943 amounted to only $2.71 for each employee. In perspective, it is clear that stockholders are not benefiting at the expense of the workers.

Aircraft stockholders have not profited from the war. In fact, they are not as well off now as they were a year or so before Pearl Harbor. There are only two known ways for stockholders to benefit: by increased market value of their stock or by dividends. Aircraft stockholders are no better off today than they were in 1940.

The stockholders of 6 of the largest airframe manufacturers have lost 26 percent in market value from the lowest point reached in 1940. Their dividends have increased 13 percent since 1940. The net result is that the average stockholder lost $6.62 in market value and gained 54 cents in dividends in 4 years. Average weekly wages of aircraft workers, using the figures in the Congress of Industrial Organizations report, increased 47 percent from 1940 to 1942.

Senator MURRAY. I also ask to have incorporated in the record at this time the report of the National Housing Agency on the project at Brewster at Johnsville, Pa.

(The statement referred to is as follows:)

STATEMENT FURNISHED BY THE NATIONAL HOUSING AGENCY TO THE WAR CONTRACTS SUBCOMMITTEE OF THE SENATE COMMITTEE ON MILITARY AFFAIRS CONCERNING PUBLICLY FINANCED WAR HOUSING AT JOHNSVILLE, PA.

1. War housing originally programed. This plant was constructed in 1941' at Johnsville, Pa., a small rural community located about 12 miles north of the Philadelphia city line. The need for housing for workers to be brought into the community to work in the new plant soon became evident and in May 1941 a publicly financed war-housing project of 300 permanent units (PA-36251) was approved. About a year later when aircraft production at the Johnsville plant commenced, a publicly financed war-housing project of 200 temporary family units (PA-36258) was approved.

2. Navy requests for additional permanent housing. The subcommittee is undoubtedly familiar with the production difficulties of the Brewster Corporation. Shortly after the management of the corporation was assumed by Mr. Kaiser, it was determined to expand operations at the Johnsville plant. In the spring of 1943, Mr. Kaiser and Mr. Frederick Riebel, Jr., president of the corporation, indicated that the proposed expansion would require a minimum of 3,600 additional employees within the next 6 months and that additional housing was required for these workers. The Navy assigned Lt. John W. Kendall, of the senior naval advisor's office in Philadelphia, to work with the Brewster Corporation, National Housing Agency, the War Manpower Commission, and other interested Federal agencies in connection with the problems of housing, transportation, and community facilities required in connection with the operations

scheduled for the Johnsville plant. On April 29, 1943, Lieutenant Kendall met with representatives of the National Housing Agency and the War Manpower Commission to discuss the manpower and housing requirements for the Johnsville plant and requested that 2,000 family dwelling units be provided.

Shortly after this meeting, it was indicated Navy orders would require the Brewster Corporation to produce one-sixth of the Navy's total requirements of certain types of planes. The operations of the Brewster Corporation at its Long Island City (New York) plant were distributed through a group of plants originally designed to manufacture coaches and automobiles. The Long Island City plant was overtaxed at the then level of operations. On the other hand, the Johnsville plant was not then operating at capacity.

In order to meet the production schedules for the Navy, plans were developed by the Brewster Corporation to utilize the full capacity of the Johnsville plant by inducing substantially all of the trained personnel at the Long Island City plant to transfer to the Johnsville plant. At the same time certain types of operations were, according to our understanding, to be transferred from the Long Island City plant to the Johnsville plant. Representations were made to the effect that this shift in operations and personnel from the Long Island City plant to the Johnsville plant was vitally necessary to meet the production schedules of the Navy for planes; that the shift of personnel would have to be accomplished as a large-scale, simultaneous transfer of all personnel involved; and that the shift would have to be effected by September 30, 1943. Brewster and Navy officials were insistent that housing must be provided in time to meet the proposed transfer; that the standard type of temporary construction would not be sufficiently attractive to induce necessary executive personnel, supervi ors, foremen, and skilled workers with average annual incomes in the neighborhood of $4,220 to move from metropolitan New York to Johnsville, Pa. These representations were formalized in a letter dated May 24, 1943, from Rear Admiral Ralph Davidson, Acting Chief of the Bureau of Aeronautics, to Charles E. Wilson, Executive Vice Chairman of the War Production Board, and in the letter, dated June 1, 1943, Admiral Davidson sent to the Federal Public Housing Authority. Copies of these letters are attached. Following the receipt of these letters, representatives of the Bureau of Aeronautics, the Federal Public Housing Authority, and the War Production Board met in order to determine the type of construction to be employed. At the request of the Navy, the dwellings were designed for permanent construction, with the understanding that the War Production Board requirements would not be exceeded.

On May 18 the War Manpower Commission certified that there would be an in-migration of 1,600 workers by September 30, 1943, as a result of the proposed transfer of employees from the Long Island City plant to the Johnsville plant. On the following day, the National Housing Agency was advised by Mr. Riebel and by Lt. D. B. Gillies, of the Bureau of Aeronautics, that the Brewster production schedule might be revised to require doubling the number of in-migrant workers and that this should be considered in the programing of additional housing facilities.

On the basis of these certifications and the representations of the Navy and of Brewster officials as to the character of the housing required to meet the special circumstances involved at the Brewster plants, a war-housing program of 1,200 family units was approved by the National Housing Agency early in June 1943. Of these 1,200 units, 500 units were scheduled to be privately financed with insurance provided under title VI of the National Housing Act, as amended, and the remaining 700 units were scheduled to be publicly financed. Subsequently, it was determined to be inadvisable to insure any additional privately financed units in Johnsville, but that it might be feasible to insure approximately 250 privately financed units at Willow Grove, a community located about 6 miles from the Johnsville plant. Lieutenant Kendall advised that the Bureau of Aeronautics, and Mr. Riebel of the Brewster Corporation had indicated, that they would not regard the provision of housing at Willow Grove as satisfactory for meeting the needs of Johnsville plant. As a result, the 500 units scheduled to be privately financed with mortgage insurance provided under title VI of the National Housing Act, as amended, were rescheduled for construction with public funds, thus making the program for Johnsville 1,200 publicly financed family units.

3. Construction-Size and cost.-The 1,200 family units thus programmed consisted of two projects-PA-36434 of 700 units and PA-36435 of 500 unitsconstructed on contiguous sites and served by common utility systems and community facilities. Both projects included one- and two-story structures at an average ratio of 23 percent two-story and 77 percent one-story. The 700-unit

project has exterior walls of masonry construction, wood floors, and pitched roofs. The 500-unit project is similar except for exterior walls of frame construction and asbestos siding.

Construction was undertaken in two stages. PA-36434 (700 units) was started on July 5 under a 90-day completion schedule and PA-36435 was started on August 30 also under a 90-day completion schedule.

Since the two projects are on contiguous sites and are served by common utility systems and nondwelling and other community facilities, it is felt that composite unit costs are more informative than the individual project costs. However, the individual project costs for dwellings is also noted because of the masonry versus frame exterior wall construction which accounts for the difference of approximately $250 per dwelling unit, with the cheaper figure representing the frame construction:

4. Rents. All but 300 of the 1,200 units have been placed in stand-by status. Of the 300 units now in active status, the following rent schedule has been established: One-bedroom units, $34 per month; two-bedroom units, $37 per month; and three-bedroom units, $40 per month.

5. Occupancy.-Initial occupancy began on March 11, 1944. On May 29, 1944, there were 1,174 of the 1,200 un its available for occupancy. Of the 300 units now in active status, 159 were occupied as of May 30, 1944. Only 53 of these 159 occupied units were tenanted by employees of the Brewster Corporation. 6. Cut-backs.—On October 7, 1943, the Navy recalled Mr. Frederick Riebel, Jr. as president of the Brewster Aeron autical Corporation. It was announced that Mr. Henry Kaiser himself was stepping into active direction of the company; specifically Mr. Henry Kaiser, Jr., to be in charge of the Brewster operations at Long Island City and Johnsville.

Several attempts were made by officials of this Agency to find out what changes in programming would result from the change in management but informal inquiries suggested that the terrific labor relations problems that the new management faced so preoccupied them that they could not be expected to have any firm statement to make about housing.

On November 12, 1943, our field representative for eastern Pennsylvania being in the office of our regional representative in New York joined in a telephone conversation with Mr. Henry Kaiser, Jr. Mr. Kaiser assured them that his father and he valued the warm cooperation that they had always received from the National Housing Agency and were eager to be as cooperative with us. He recognized how important it was for us to know as promptly as possible any change in plans that would affect the necessity of going forward with the housing project then under construction.

Mr. Kaiser indicated that they were frankly abandoning the plan to move 400 to 500 administrative personnel from Long Island City, and stated that he and his father were developing a general over-all plan for the future of the plant, which he hoped would be approved by the Navy within a week or two. At the time, 86 percent of the assembly work on Corsair planes was being done in Long Island City, and only 14 percent in Johnsville. He hoped to move all the assembly work to Johnsville. He said that a manpower study was then under way to determine just what the change meant in personnel. He conceded that the contract for planes for the British and the Navy bombers was being canceled, but said they had in consideration an increased program for fighter planes that would more than