No matter how you look at it, var is good bupinesa for ceritealiete. ‘1th initial reporta in on earnings for most American corporations in 1966, it ie evident that profits in the war nduatries outpaced profits in the rest of the economy by almost three times. Ami this is true despite the fect that profita for the economy ag a rhole reached new highs in 1966. According to the February 4th 'Susiness Vieek', corparate profits for 1940 were roushly 8.1% higher than corporate profits for 1965, in America as a whole, During the same period, wages for workera in sanufscturing unfustries ineressed only 4.1 %3 and if you tare into consideration rising prices and higher taxes, the purchasing power of many workers actuselly declined lsct year, The scoompanyiny table shows the profit intreages and wolwna of war produétion for 20 of the 30 prime.var contractors s& ran ed by fuginess _ ‘sek’, December 3rd. These fisures are tesead on preliminary reports whieh may be "pevined hefore these corporationa issue final 1966 fisures lester thia aprio>,(I did nc: have comparsble figures for the other 10 top war contractors in "Business Sec) '+3 listing. Froftit figures for instance, were available for “aiser Induetries, rented 13, and Uartheon Co., ranked 16; but I waa unable to estimate the volume of =ar contraete in these tro companies. Raytheon marked a 67° profit jump last year, and “siser Inductriee a fantastic 900%,)
“ven eo, the picture emerring from these 20 corsorations ia significant. The average profit increase was hither than 70%, compared sith the 5.1% for the economy ap a whole. And ~ith two exceptions, the rule was, the more the contracts, the higher the profit rate. The exceptions vere teo aircraft corporationa, United and Foeing. Both of these gianta actually recorded sales increases in 1966, but their profita ‘eclined, largely because they invested Larse sume in new plants and machinery. The other three corporsationa in the table which showed declinins profits were mainly hit by recessich of sales of ccnsumer iteme which began lnte lest year. Toth General “otors and ord aold fever cars in 1966 than ir 1965, And both corporations would have done 4 good deal worse if it hadn't been for their substantial government ocntracte. If you nerrow it down to cotporations which do over 50% of their total busines: with the governnent, marked by "A" in the diapram, the profit story waa even sore spectacular. For theee ten corporations, profit increases averaged 32% in 1966 !
Why do war industries de so well. ? ‘The -enever ie simple: they hare 4 fusrenteed mariet and guarantesd high prices, last year's sales wera ayurred to new highe ty the escalation of the wary and prices were spurreé to ney highs by profit hungry gorporations., In ane undustry after another the story vee the pemer "Hartin Marietta Corporation reslised a 21,1 increase in profits last year", the "New York “imes'reported, "on a sal@ increase of ll. 1." Of course, factual details on the concrete prices of weapons and quantities sold are nearly impostible to get sinee they are classified by the Tentarzon. In the coming year, it is apparent that “sashington is plenning a large increase in ite budget for aircraft. fut it ia another matter to determine how cuch cf thie reflects an eacalation of the war and how much reflects an escalation of pricas. Senator Richard fuasell, chairman of the ‘rmed Services Comnittee, stated in a Senate debate on Mebruary 2éth: “The value of sireraft lost in fiscal year 1966(ending last June) is estinated to be 9OO million dollars. The eatimated value of aircraft lost in fiscal year 1967, some of which, of co ree, lies ahead, is estimated to be 1,6 billioh dollars." Cont'd on page 16