of said section, nor any contract or subcontract embodying the requirements of said section, shall apply to, nor be enforced with respect to, any contract or subcontract heretofore made for the construction or manufacture of complete naval aircraft, or any portion thereof, which contract or subcontract was not completed prior to the first day of January, 1938. SEC. 13. All Acts, or parts of Acts, contrary to the provisions of this Act, or inconsistent therewith, are hereby repealed. If any section or provision of this Act is held to be invalid all other sections and provisions of this Act not expressly held to be invalid shall continue to be in full force and effect. SEC. 14. Whenever the President shall consider the existing facilities of any established domestic aircraft manufacturer to be inadequate for the production of aircraft required and proposed to be procured from such manufacturer under the provisions of this Act by either the War or Navy Departments, he may direct the Secretaries of War and Navy jointly to contract with such firm to extend its facilities on an actual cost without profit basis. Coincidently, or from time to time thereafter as circumstances may warrant, either or both of the Secretaries may contract with such firm to operate such Government-owned facilities and to train personnel as aircraft mechanics therein for such time as the manufacturer may require for the performance of contracts made with such manufacturer under the provisions of this Act. When such facilities are no longer required for production of aircraft for either Department under contracts in accordance with the provisions of this Act, the Secretaries shall jointly contract on a no-profit basis with such manufacturer for removal of the facilities, or for their maintenance and protection in readiness for further use on such contracts at any time, or such Secretaries may jointly sell or lease, at reasonable price or rental, the facilities or any part thereof to the manufacturer. VINCENT BENDIX, ESQUIRE, EXHIBIT No. 178 BENDIX AVIATION CORPORATION, OFFICE OF THE GENERAL COUNSEL, 209 South La Salle Street, Chicago, January 4, 1989. Bendix Aviation Corporation, Room 4822, 30 Rockefeller Placa, New York City, New York. DEAR MR. BENDIX: I have looked over the enclosed draft of a bill to provide for supplying aircraft requirements to the War and Navy Departments. I have not attempted to make a critical examination of the wording of the draft. There are some things, however, which occur to me as worthy of mention: 1. As a matter of draftsmanship there should be a section 1. You will note that the first numbered section is 2. Section 2 should be section 3, and so on. 2. The definition given in this draft in section 7 ought to be at or near the beginning of the Act, and should probably be numbered section 2. The definition is good as far as it goes, but I am wondering if the term "aircraft" as used in the Act should not specifically include radio apparatus installed on an airplane, and it seems to me probably the term should include instruments and apparatus on the ground necessary for air navigation. It may be that the word "accessories" is sufficient to cover radio apparatus installed on a plane. That is more or less of a technical question. I feel quite sure, however, that the definition is not broad enough to include instruments and apparatus on the ground. 3. In section 3 as the draft is now drawn, it is provided that all designs disclosed and offered to the War and Navy Departments shall be recognized and protected as "proprietary." I do not quite like the use of the word "proprietary." It has meanings other than simply the recognition of a design as private property. Might it not be better to add "that is to say; the property of the person or corporation who discloses and submits such a design"? 4. Section 4 of the draft as now drawn provides for the fixing of valuation by a special arbitration board where a design is to be acquired by the Government. However, the value fixed by this arbitration board is not binding. It would seem to be advisory only. Perhaps that is the way it was intended. If it is desired to have this valuation of the arbitration board bind the parties, then there might be a carefully drawn provision to the effect that the valuation may be determined by arbitration (if agreed by the parties) under the terms of the National Arbitration Act. In this section there is also a provision for the fixing of valuation by the Court of Claims. Another provision is that the valuation placed upon the design by the Court of Claims "shall be based upon" certain considerations, etc. It would be better to say that in proving value the owner of a design shall have the right to show the general usefulness of his design, the degree of advancement indicated over the general state of the Act, and the restrictions proposed by the Secretary of War or the Secretary of the Navy respecting foreign or domestic sale or use of the design, and as well the actual cost to the owner of the development and perfection of the design. 5. At the end of section 10, I think it might be well to add the words "in appropriate cases.' I doubt whether this provision for court review is of much significance. 6. In section 14, would it not be well to make it clear that in cases where the Secretaries of War and the Navy jointly contract with a firm to extend its facilities, that the Government shall pay the cost. I think such payment is inferred quite clearly; but some question may be raised about it. I am enclosing the draft which you handed me some time ago. EDWIN H. CASSELS. EXHIBIT No. 179 BENDIX AVIATION CORPORATION, LTD., Mr. VINCENT BENDIX, 30 Rockefeller Plaza, New York City. DEAR MR. BENDIX: Attached hereto is copy of letter recently received from Mr. H. H. Wetzel, of Douglas Aircraft Company, with reference to the Scott Amendment to the Vinson Act. While we have not made a careful study of this Amendment, we here are generally in accord with it and, if it is agreeable to you, we propose to write our Congressmen as suggested in Mr. Wetzel's communication. We are, of course, hesitant to do this without your approval as it would appear that the reaction or comments of the various subsidiaries should be uniform in this matter. We will, therefore, withhold any action until we have the pleasure of hearing from you. Yours very truly, BENDIX AVIATION, LIMITED, PN/es encl BENDIX AVIATION CORPORATION, LTD. Union Air Terminal, Burbank, California. (Attention: Mr. Palmer Nicholls.) GENTLEMEN: As a supplier of aircraft materials your firm will be vitally concerned in the Scott Bill, H. R. 7777, 75th Congress, 1st Session, which proposes to eliminate aircraft from the Vinson Bill. At the present time it is necessary for the aircraft manufacturers and subcontractors to report to the Navy Accounting Department the manufacturing costs and profits derived from Navy contracts in excess of $10,000.00. Due to the nature of aircraft manufacture which involves a large amount of engineering and research, profit limitation under the Vinson Act retards experimental and development work for the Navy, due to the fact that experimental costs cannot be charged to a production contract. This act affects you as a material supplier, due to the necessity of maintaining separate accounting records for Vinson Act Contracts. The Scott Bill has the support of the Navy personnel and all military aircraft manufacturers. Due to the immediate importance of the Scott Amendment as it affects national defence we would recommend writing your Congressman at once approving the Scott Amendment to the Vinson Act. Please give this your immediate attention, and advise us of the action taken. DOUGLAS AIRCRAFT COMPANY, INC., EXHIBIT No. 180 Memo: H. R. 3791-76th Congress. Amendment to the Vinson Act. BENDIX AVIATION CORPORATION, March 31, 1939. The Conference Report on this bill is worded as follows: "Sec. 14. All the provisions of Section 3 of the Act of March 27, 1934, as amended (48 Stat. 505; 49 Stat. 1926) and as amended by this Section shall be applicable with respect to contracts for aircraft or any portion thereof for the Army to the same extent and in the same manner that such provisions are applicable with respect to contracts for aircraft, or any portion thereof for the Navy: Provided, That the Secretary of War shall exercise all functions under such section with respect to aircraft for the Army which are exercised by the Secretary of the Navy with respect to aircraft for the Navy: Provided, Further, That Section 3 b of the Act of March 27, 1934 (48 Stat. 505) as amended (49 Stat. 1926; 34 U. S. C. Supp. IV 496) is hereby further amended by inserting in the first sentence after the words "in excess of 10 per centum of the total contract prices" the word "for the construction and/or manufacture of any complete naval vessel or portion thereof, and in excess of 12 per centum of the total contract prices for the construction and/or manufacture of any complete aircraft or portion thereof"; by inserting in the first proviso after the words "That if there is a net loss on all such contracts or subcontracts" the words "for the construction and/or manufacture of any complete naval vessel or portion thereof"; and by inserting at the end of the first proviso after the words "income taxable year" a comma and the words "and that if there is a net loss, or a net profit less than 12 per centum, as aforesaid on all such contracts or subcontracts for the construction and/or manufacture of any complete aircraft or portion thereof completed by the particular contractor or subcontractor within any income taxable year, such net loss or deficiency in profit shall be allowed as a credit in determining the excess profit, if any, during the next succeeding four income taxable years, and that the method of ascertaining the amount of excess profit, initially fixed upon shall be determined on or before June 30, 1939": Provided further, that when aircraft are procured by the Secretary of War as a result of competitive bids requiring the submission of sample aircraft with bid, the Secretary is authorized, in his discretion, to purchase sample aircraft of competitors to whom an award is not made, not more than one each from not more than three such competitors, in order to merit, at prices not exceeding 75, 60, and 50 percent, respectively, of the cost applicable in the opinion of the Secretary of the development and manufacture of such sample aircraft." J. HAMILTON LEWIS, Managers on the part of the Senate. A. J. MAY, EWING THOMASON, Dow W. HARTER, W. G. ANDREWS, Managers on the part of the House. Exceptions to the 12% limit must be made for each circular proposal by the Secretary of War at the time the circular is issued for bids; the procedure being the same as followed by the Navy under the Vincent Act. The Secretary of War must keep a list of the exceptions made and report them to Congress at the end of the fiscal year. Some of the Air Corps executives had hoped that the exceptions to the 12% could be listed and automatically applied to any purchase of such items. I am advised that the legal minds of the Air Corps have ruled that this can not be done and the procedure used by the Navy under the Vincent Act must be followed. It is my personal opinion that the Aeronautical Chamber has been lax in not broadening the basic formula to include any apparatus involving extensive research or development work. ROY T. HURLEY. EXHIBIT No. 181 Tabulation of Consolidated-Vultee Transaction, December 19, 1941 Reuben H. Fleet. Do... Dorothy Mitchell Fleet. Cash Payable tax 12/19/41 6/30/42 327, 622 $8, 149, 597. 25 $6,909,845.83 $1,239,751.42 $196. 62 $104,243.36 $18,614.89 6, 363.64 1, 136. 36 16, 872. 73 17, 252. 36 As trustee for Barbara As trustee for Edward F. Total. 440, 000 10, 945, 000. 00 9, 280, 000. 00/1, 665, 000.00 264. 12 140, 000. 00 25,000.00 Total expense $22,561.25 $145,616.12 $127,001.23 $18,614.89 $6,782,844.60 $1,221,136.53 $8, 003, 981. 13 1,377. 27 8, 889.27 55.09 355. 57 363. 62 4, 861. 77 31, 379. 13 488, 610.73 19.544.43 19.984. 13. 1,724, 795. 87 7,752.91 1, 136. 36) 310. 12 414, 065. 26 16, 562.61 317. 14 46.48 16, 935. 22 27, 367. 77.4, 011. 36 1, 461, 650. 41 74,545. 47 45.45 2.981. 82 263, 145. 46 247.91 1,600.07 1, 395. 52 1, 395. 52 204. 55 74, 531. 75 13, 418. 18 87,949.93 30, 300.00 195, 564. 12 170, 564. 12 25, 000. 00 9, 109, 435. 88 1, 640,000.00 10, 749, 435. 88 |