The Pageland journal. [volume] (Pageland, S.C.) 1911-1978, 1917-02-07
TO BUILD SHIPS
At COST PRICE
Bethlehem Steel VIII Make Of.
for to Uncle Sam,
BIDS ON IS INCH NAVY SHELLS

BIDS ON 16 INCH NAVY SHELLS
No Chance For Profit In Them Under
Present Tests, Grace says-Possibls
Explanation Of the Price, 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 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 charge
to tie United States Government, to
the basis Of prices esta blished before
the war began.
We agreed-if the Government would
abandon Its plans for 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 q fair operating
cost, plus a small margin, thus saving
the Government investment aud de-
probation.
navy is siXteen-inch guns-guns sixty
feet long and capable Of hurtling 4
1000 pound shell with such power and
accuracy as to hit q so foot square tar
get fifteen miles away.
We have undertaken voluntarily to
construct. at q cost Of S4,5OO.O00, q
plant fitted to build si1teen-inch guns.
Under no conceivable circumstances
can orders which We may receive for
this plant pay even fair return on
the investment.
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 bid was made. 1t
should be remembered. however. that
this bid was for 4 specific shell. sam.
Piles Of which are being sent over for
test-a test not yet made.
Two years ago we took an order for
240O fourteen-inch armor-piercing shells
at contract price Of $76S. 900, to be
delivered within q certain time or We
had to pay a large penalty.
The only specifications for making
these shells are that they shall be
<Gt certain size and must pierce
armor-plate at a certain velocity on i'm
pact. 1t is impossible to fOretell the
exact conditions Of the tests
We had made large quantities Of shells
in the past which had been accepted
But in placing this particular order the
Department. altered the angle Mt which
the tested shells must pierce armor.
plate. The result. 40 .vever, has been
absolute inability un our part to pro-
duce in any quantity. shells which will
meet these novel tests. In fact we
know of no process Of projectile- max
ing through which it is possible to pro
duce in quantities shells which will
conform to the requirements.
The result iS that up to now on that
contract of $It;S.0rO. we have put into
actual operating expense Si4I.SSl. and
have been penaliZed for non-,lelivery
S495.T44.. total OF S943.625.. with no
receipts whatever.
Snch WAS the experience In the light
Of which we were called upon recent
ly 10 bid fnI siXteen-inch shells
We bid on these shells at approx
matcly the same rate per pound as
that OF a fourteen-inch shell contract
Of one year ago upon which the Gov
ernment awarded contracts.
We have not the slightest idea what
profit there will be in the making Of
these shells We do not know that
there will he any. There is no certain.
ty that it would he possible for us to
deliver shell to meet the test.
For officers in the Navy to assume
that any bid made under such condi.
tons is ''exorbitant" Is utterly unfair
We bid or the new battle cruisers
sums which Navy department experts
after examination OF our books, found
would yield n profit OF less han ten
per cent. We agreed to assume risks
for increased "osts OF materials and In.
Dor. that made IT possible that these
contracts might yield no profit what.
ever.
The costs run beyond the amount ap
propriatcd by Congress on the basis Of
the cost estimates made n year ago.
And because shipbuilders could not
alter the incSorable cost facts and re
ducc bids to early estimates Of the
Navy Department. the prices are called
"eXorbitant."
IL would be 4 real advantage to be
rnliarnd Of thio nnual nnnatrnntIAp nnI-