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is a two-way bargain. The Government is purchasing a service which the country needs. This need has been determined by lengthy "due process" procedures. If the need does not exist, the obvious remedy is to reduce the service; but the tendency among the uninformed, because of the antipathy to the word "subsidy," is to focus on reducing the payment for the service without giving fair consideration to the reasons why the service was found to be necessary. 
In the majority of instances, where the Government has expended large sums of money to accomplish objectives generally deemed to be in the public interest, the word "subsidy" has been avoided. 
An especially interesting comparison is that between the air transportation and the aircraft manufacturing industries. Both are industries that must be maintained in the public interest. Both are regarded as of vital importance to our national defense. Both are supported to a major extent with federal funds (the air transport industry to a lesser degree). The profits of both are regulated by the Federal Government. 
The public funds that flow into the aircraft manufacturing industries. Both are industries that must be maintained in the public interest. Both are regarded as of vital inportance to our national defense. Both are supported to a major extent with federal funds (the air transport industry to a lesser degree). The profits of both are regulated by the Federal Government. 
The public funds that flow into the aircraft manufacturing industry are never called subsidy. The federal funds required to maintain certain portions of the air transport industry which cannot operate on commercial revenues are always labeled with this odious word. 
The aircraft manufacturers are compensated with profit promptly for the services which they perform, and are assisted in their financing with progress payments and guaranteed loans. At a subsequent date, contracts are renegotiated and excessive profits, if any, are recaptured. A prime advantage of this procedure is that the manufacturer does not have to report red figres pending final settlement, as is the case with so many air transportation companies uner the regulatory procedures with which they have to contend. 
There is no fixed limitation on executive salaries, as in the case of air transportation. The manufacturing companies can hire the best people they can affort, using normal business judgement. 
In the manufacturing industry, profit margins are held to a fairly low percentage of sales, declining as sales increase in volume, but there is no fixed relationship be-