The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1917-02-02
Bethlehem Steel VIII Make o.
fer TO Uncle Sam.
BlDS ON is INCH NAVY SHELLS
No Chance For Profit In Them Under
Present Tests, Grace Says-Possipls
Explanation OF the Prices Made by an
English Firm Which Bids Under Al.
American Manufacturers.

serves the American people.
For Example, though we have been
able to obtain in Europe almost any
price, we have adhered, in our charges
to the United States Government, to
the basis Of prices established before
the war began.
We agreed-if the Government would
abandon its plans for a Federal plant
to make armor for our Navy al any
price the Government itself might cor.
slider fair.
Our ordnance plants are at the dis
posal of the nation at a fair operating
cost. plus a small margin. thus saving
the Government Investment and de.
probation.
One OF the special needs of the new
navy is sixteen-inch ~guns-guns sixty
feet long and capable Of hurtling a
1000 pound shell with such power aud
accuracy as to hit q 80 foot square tar
get fifteen miles away.
We have undertaken voluntarily TO
construct, at a cost OF S4.a0o,0O0. a
plant fitted TO build sixteen inch guns
Under no conceivable circumstances
can orders which we may receive for
this plant pay eve a fair return on
the Investment.
Considerable comment has been made
upon the fact that a British manufac
turer recently bid less than American
manufacturers for sixteen and four
teen-ineh shells for the navy
| am unable to state the basis upon
which the English bid was made. II
should be remembered, however. thar
this bid was for a specific she'll. sam
pies OF which are being sent over for
tesla test not yet made.
Two years ago we took an order for
2400 f~ourteen-ineh armor-piercing shells
at a contract price of $T6S,0oO. to be
delivered within a certain time or we
had to pay a large penalty.
The only specifications for making
these shells are that they shall be
of a certain size and must pierce
armor plate at a certain velocity on I'm
pact. II 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 at which
the tested shells must pierce armor
plate. The result. however. has been
absolute inability on our part TO pro
duee In any quantity. shells which will
meet these novel tests. In fact, we
know Of no process of projectile-mak
ing through which 1t is possible to pro
duce IA quantities shells which will
eonforLl to the requirements.
The result is that up to now on that
contract OF $T6s.O00. we have put into
actual operating expense SAT- ISL, and
have been penalized for non-deliyery
s495. 744.. a total of S943 .625., with no
receipts whatever.
such vas the experience In the light
OF which we were called upon recent
ly to bid for ~sixteen-inch shells.
We bid on these shells at approx
mately the same rate per pound as
that Of n 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 be any. There is no certain
ty that II would be possible for us TO
deliver a shell to meet the test.
For officers In the Navy to assume
that any hid made under such condi
ions Is ''exorbitant' Is utterly unfair
We bid on the new battle-cruisers
sums which Navy department experts,
after examination OF our books. found
would yield a profit OF less than ten
per cent We agreed to assume risks
for increased costs Of materials and la
bor. that made it possible that these
contracts might yield no profit what
ever.
The costs run beyond the amount ap
propriated by Congress on the basis Of
the cost estimates made a year ago.
And because shipbuilders could moi
alter the inexorable cost facts and re
duce bids to early estimates Of the
Navy Department. the prices are called
'exorbitant."
Ii would be a real advantage to be
relieved of this naval construction The
profit from 1t cannot possibly amount
to much. and the responsibility Is enor
mous.
We have determined to make this
,ffer to the American Government.
IF you will build two Of the battle
ruisers In Government navy yards
we will build the other two at the as
-ertained cost of building the ships In
he Government yards, without eddi
tional expense or commissions of any
kind. We will also contract to have
our ships ready for service ahead Of
! he Government ships."