War Contracts and Profit Limitation

November 6, 1942

Report Outline
Congress and Profits of War Contractors
Cost-Plus Contracts in First World War
Government Contracts in World War II

Congress and Profits of War Contractors

Clarifying amendments to an act of April 28, 1942, providing for renegotiation of war contracts which allow excessive profits, were included by Congress in the recently approved Revenue Act of 1942. While the amendments were requested by the affected government departments and were believed to be acceptable to war contractors, their adoption was not regarded as constituting final disposition of the question of contract renegotiation or the general question of limitation of profits of war contractors.

Senator Walsh (D., Mass.), chairman of the Senate Finance subcommittee that considered the amendments, told the Senate, October 10, that the Finance Committee, not desiring to delay passage of the tax bill, was recommending acceptance of the perfecting amendments without going into the controversial question of whether or not the contract renegotiation law should be repealed or modified, or whether a substitute should be enacted to impose a specific percentage limitation on profits from war contracts.

Senator George (D., Ga.), chairman of the Finance Committee, said in explaining the conference report on the tax: bill, October 20, that “it was stressed in conference that the whole subject matter of contract renegotiations was before the Ways and Means Committee of the House at this time in connection with a bill introduced, and that the committee would go into the question at a convenient date.” The bill to which George referred, introduced by Rep. Vinson (D., Ga.), October 7, 1941, would limit profits on war contracts to 7 per cent of the cost of performing the contracts.

ISSUE TRACKER for Related Reports
United States During World War II
Mar. 13, 1945  The Nation's Health
Aug. 14, 1943  Quality Labeling
Aug. 06, 1943  Voting in 1944
Jul. 27, 1943  Civilian Production in a War Economy
Mar. 08, 1943  Labor Turnover and Absenteeism
Nov. 06, 1942  War Contracts and Profit Limitation
Oct. 10, 1942  Control of Manpower
Aug. 14, 1942  Soldiers and Politics
Jul. 16, 1942  Reduction of Non-War Government Spending
Jul. 08, 1942  Education for War Needs
Jun. 20, 1942  Roll Calls in 1942 Campaign
Jun. 12, 1942  War Shipping and Shipbuilding
Apr. 30, 1942  Forced Evacuations
Apr. 21, 1942  Politics in Wartime
Apr. 14, 1942  Agricultural Import Shortages
Feb. 10, 1942  Disease in Wartime
Jan. 12, 1942  Wartime Rationing
Jun. 19, 1941  Sabotage
Dec. 13, 1940  Shipping and the War
Oct. 24, 1940  Price Control in Wartime
Jul. 20, 1940  Labor in Wartime
Oct. 05, 1937  Alien Political Agitation in the United States
Defense Industry
U.S. at War: World War II
War and Conflict
World War I
World War II