The herald-advance. (Milbank, S.D.) 1890-1922, 1917-01-26
To BUILD SHIPS
At COST PRICE
CethIehom Steel viii Make o.
fer TO Uncle Sam.
BIDS on 10 INCH HAvY SHELLS

No Chance For Profit In Them Under
Present Tests. Grace Says-Possible
Explanation Of the Prices Made by an
English Firm Which Bids Under All
American Manufacturers.
Speaking recently before the Terra.
pin Club OF Philadelphia, Eugene G.
Grace, President Of the Bethlehem
Steel Company. said in part:
In Z peculiar sense Bethlehem Steel
serves the American people.
For example, though we have been
able to obtain In Europe almost any
price, we have adhered. in our cha rges
to the United States Government, to
the basis Of prices established before
the war began.
We agreed-if the Government would
abandon It's plans for a Federal plant
to make armor for our Navy at any
price the Government itself might con
slider fair.
Our ordnance plants are at the dis
pOsal OF the nation at a fair operating
cost. plus q small margin. thus saving
thC Wv AIC AZ NC
probation.
One OF the special needs Of the new
navy is s~ixteen-inch guns-guns sixty
feet long and capable OF hurting a
1000 pound shell with such power and
accuracy as to hit a so foot square tar
get fifteen miles away.
Wa hnvn nnIarfoEn, vnlrpfor{lv fO
construct, 1t q cost OF $4.5OO,OOO, q
plant fitted to build sixteen-inch guns.
Under no conceivable circumstances
can orders which We may receive for
this plant pay even = fair return on
the Investment.
Considers BILE comment has been made
upon the fact that q British manufac-
turer recently bid less than American
manufacturers for sixteen and four
teen-inch shells for the navy.
am unable to state the basis upon
which the English hid vas made. It
should he remembered. however. that
this bid was for q specific shell. sam
pies Of which are being sent over for
test-A test not yet made.
Two years ago We took an order for
24OO fonrteen-inch armor-piercing shells
at a contract price Of S76S. 200. to be
delivered within a certain time y We
had to pay . large penalty.
The only specifications for making
these shells arc that they shall be
Of Z certain size and must pierce
armor plate at . certain velocity on i'm
pact. 1t In impossible to forctell the
IA conditions OF the tests.
We had made large quantities OF shells
In tho past which had been accepted
But in placing this particular order the
Department altered the angle at which
the tested shells must pierce armor
plate. The result. however. has been
absolute inability on our part to pro
duce In any quantity. shells which will
meet these novel tests. In fact, we
know Of no process OF projcctile-mak
ing through which 1t Il possible to pro
Auce in quantities shells which will
conform to the requirements.
Tie result Is that up to now on that
contract Of &76S. 900. ne have put into
actual operating expense SAT- .SSl.. and
have been penalized for non-delivery
s49J. IA. a total Of $o43 .625.. with no
receipts whatever.
Such was the experience in the light
Of Which we were called upon recent.
" to bid for sixteen-inch shells.
We bid on these shells at approx
mately the same rate per pound as
that OF a fourteen inch shell contract
or one year ago upon which the Gov
eminent awarded contracts.
We have no the slightest idea what
profit there will be in the making Of
these shells. We do not know that
there will be any. There II no certain
ty that It would b. possible for % to
deliver . shell TO meet the test.
For o0cers In the Navy to assume