The Grenada sentinel. [volume] (Grenada, Miss.) 1868-1955, 1917-09-28
WHY PROFIrEERs KNOCK
SECRETARY DANIELS

against "prOfteerlng and MS re1us-
al to pay e~xhorbitant prices for fuel,
steel and other materials and sup
plies for the navy has resulted in
the saving of millions of dollars. Be
fore war was actually declared the
navy department got in touch with
producers of steel and copper and
on April 6 what is known as the
"patriotic agreement" was made by
which the steel makers agreed to
furnish $4,000 tons of steel to the
government for S5S a ton for plates
and $50 a ton for bars and shapes.
At that time the prevailing market
price was $25 to $40 a ton higher
than these figures. This meant a
saving of more than $500, 600
from market prcies.
When it was seen later that the
governments requirements would
far exceed the amount provided for,
the situation was discussed at con-
~ferences between the secretary of
the navy, the secretary of war and
the steel manufacturers, resulting
in an agreement that government
orders would be given precedence
over any private contracts OF orders
and that the price be fixed by the
government on the basis of the cost
of production plus a reasonable prof
it.
When the coal operators rendered
a price for coal for the navy which
he regarded as exhorbitant, Secre-
tary Daniels, early in June, ordered
coal to be delivered at a tentative
price of $2.35 a ton at the mines,
the price finally paid to be fixed,
after investigation by the federal
trade commission, on the basis of
cost of production plus a reasonable
profit. Thine lowest price the opera
tors had offered was $2.95. As the
President has fixed the price at So
and the amount needed for the navy
is approximately 100000 tons.
this means a saving of nearly SO,
100000 from the lowest price offer
ed by the operators and about S3,-
100000 from the market price of
coal at that time, about $3.50 a ton. |
The same policy was pursued in
regard to oil, of which the navy uses !
about 100000 in a three months |
period. The tentative prices Secre-
tary Daniels fixed, S1.26 at Port Ar
thur and $1.0s at San Francisco, re-
presented in the former case a diff |
ference of AZ cents a barrel and in |
the latter FL cents from the yowest
prices offered. Thus the saving in |
three months requirements was
about $3.50, 900.
Great difficulty was found in Sc !
additional ship tonnage to
prswide for the transportation Of the
oil needed. The rates demanded
were very high, SIS for ocean cargo
charter and s12 for "bare Ship ton |
mage, when the rates prior to the
war were about $3.50 per ton for
the former and 60 to 80 cents for
bare ship" chartering. To relieve
situation the government exer-
its authority and requisitioned
six tank steamships of an aggregate
1929 tons, allowing an advance
payment of $1.75 per ton per month
On "bare ship" basis. 1t is estimated
hat this will result in a saving of
s5s6,94 a month from the prevail |
Ing prices of tonnage, or $780,
1877 a year.
The policy the government has
of fixing prices for basic
materials on the cost of production
'lus a reasonable profit is fair to the
producer and at the same time in
'ures to the government an ample
of materials needed at prices
below those which previously
prevailed in the market.
In the purchasing of the vast
mount of supplies, clothing, etc.,
'or the navy, there has been the
competition and every effort
been made to secure the lowest
prices possible. The constant aim
been to secure the full worth
# every dollar of the immense ex-
,enditures necessitated by the war
equirements.
The policy of payment on the
'asis of cost of construction plus a
liked percentage of profit has been K
instituted in the immense shipbuild-
ng program now under way for the
Iavy, and is working very satisfac-
orily. New records have been
made in construction; the builders
ave been assured of an ample sup,
'ly of materials at minimum prices,
md the government is securing
hips at the lowest cost possible con-
iStent with Sneedv nroduct;op ,rJo.