CONTROL OF PROFITS FROM ARMS

Hawke's Bay Herald-Tribune, Issue 50, 15 March 1937, Page 7

CONTROL OF PROFITS FROM ARMS

(Britiih Official Wireless.)

Not Less Than Five Per Cent. From Aircraft BASED ON COST

(Received 15, 12.85 p.m.) RUGBY, March 14. The control of aircraft prices in connection with the Royal Air Force expansion programme was dealt with by Sir Gilbert Upcott, Comptroller and Auditor-General, in a report on the air services appropriation account for the year ended March 31 last. The report says; The Air Ministry has now agreed with firms on the procedure for fixing the final prices, particularly in the cas© of new types of aeroplanes, under which earlier deliveries of contracts will be paid for at the actual cost plus an agreed rate of profit, not less than 5 per cent. If sufficient information then has been obtained as to the trend of manufacturing costs, a fixed price will be agreed upon for the remainder of the contract. Where this is nojj possible the prjce will be based on actual cost in a mafiner designed to control t^© rate of profit and also an incentive to economy. The agreements provides that the Air Ministry shall have full access to firms' books and cost records. The Minister for the Oo-ordination of Defence, Sir Thomas Inskip, in a speech at Cambridge, referred to the market price of metals which would be required for armaments, and said he was delighted to see that there had been a f&U in the price of tin. It had beeai suggested that the rise in prices was the result of speculators who were grasping the opportunity which the Government' s rearmament programme gave them. It was nothing of the sort. The copper required by the Government' s rearmament programme was only ten per cent of the copper required in this country. The fact that there was a world shortage and. the law of supply and demand was bejng worked out once more before their eyes, resniting in the rise in value.