Vilas County news. [volume] (Eagle River, Vilas County, Wis.) 1896-1927, 1906-12-10

duct that the secretary of the navy
awarded it only 1000 tons of the
quantity then required. dividing the
remainder between the Carnegie and
the Bethlehem companies at the fig
ures of their common bids.
This year each company submitted
an independent bid, those of the Car
negie and Bethlehem companies
being both considerably less than
any offer either company had ever
previously made, but the NMidvale
company underbid both of them, so
as to make it's offer for the bulk OF
the contract $345 per ton, a lower
price than has ever been paid by this
government for armor plate and ac-
cording to the information of the de-
partment, considerably less than is
paid by any foreign government. The
secretary says he determined to give
the Midvale company half the con-
tract and to give on-fourth to each of
the other two, provided they would
reduce their bids to the figures fixed
by the Midvale company. II either
of them refused to do this, the Mid
vale company was to get the share OF
the one so refusing, as we'll as its
own. In reaching this conclusion, he
was influenced partly by the fact that
the Midvale company was behind in
its deliveries under previous con-
tracts; but, mainly, by the probable
ity that if no work were given to the
old companies-since the govern
ment was their only customer, and
they would soon complete their de-
liveries under contracts already given
out-they would transform their
plants for the production of armor
plate and devote them to other pro
ducts for which there is a CONNER
cial demand; thus reducing the fac1l-
tiles for the production of an article
essential to the national defense and
leaving the government no source OF
supply except the Midvale company
The conditions of the department
were accepted by all three companies,
and the contract was thus divided,
the transaction being, on the whole,
the most favorable one of this char
acter ever made by the government.
The criticism to which this action
of the department was subjected
seemed to rest upon theory that II
was the duty of the department to
injure and, if possible, break up the
business of the two older companies
as a punishment for their refusal to
compete against each other and al
legged combination to keep up the
prices of their product in the past.
No discussion of the merits OF sucn
criticism seems to me needful or APP
propriate; but the incident may well
serve to call attention to the necessity
for furnishing the department with
some effective means of defense
against such combinations among pro
ducers. When there are only two or
three of the latter in the whole
country and the government is the
only purchaser for their product, it
is obvious that combinations are al
most inevitable and inc department
ought evidently to be given a weapon
to use under such circumstances.
There are only two woys in which
it is practicable to control such sit
uatiOn: either the government must
be authorized to manufacture its own
armor plate or it must be permitted
to buy this abroad The secretary
recommends that both privileges be
accorded to the department. The
first mentioned of them would be,
however, probably Intellectual since
not only would the cost of establish
ing a government plant greatly ex-
coed any difference in the price OF
the product which could be obtained
in a single year, but the delay attend
ant upon the establishment of such
mandatory would be very objection
able, and might involve expensive
complications with the contractors
building the ships on which the ar
NOR would be used; and, finally, ex-
perience has shown that there are
serious drawbacks to the permanent
operation of a plant of this character
by the government.
If, however, the secretary of the
navy were authorized to buy armor
plate abroad whenever, in the judg-
ment of the president, the price at
which he could obtain such armor
plate in the United States was exor-
bitant or unreasonable, there is good
reason to believe that the manufac-
turers would either not form a COM
bination at all or agree upon rea-
sonable and moderate price. The Sec
rotary would extend the like autho-
rity to the purchase of torpedoes, am
munition, projectiles, and, in fact, all