The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1917-02-01
BlDS on 10 INCH NAVY SHELLS
Nc Chance For Profit In Them Under
Present Tests, Grace Says-Possihl.
Explanation of the Prices Made by an
English Firm Which Bids Under Al.
American Manufacturer.

TOT fInpIe though we nave neeu
able to obtain In Europe almost any
price. we have adhered. In our charges
to b 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 dag
price the Government Itself might COZ.
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 and de.
probation.
One of the special needs of the new
navy Is si%xteen-inch guns-guns sixty
feet long and capable of hurtling "A
1000 pound shell with such power and
accuracy as to hit a so foot square tar.
get fifteen miles away.
We have undertaken voluntarily to
construct. at a cost OF S4,500,0O0, u
plant fitted TO build sixteen-inch guns.
Under no conceivable circumstances
can orders which we may receive for
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 inch shells for the navy.
uVa .4nnhIo fn cfata thu hact0 tfnnn
which the English bid was made. II
should be remembered, however. that
this bid was for a specific shell, sam
piles OF which are being SEM over for
tesla test not yet made.
240o fourteen inch armor-piercing shells
at a contract price Of S76S.00O. 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
armor plate at a certain velocity on i'm
pact. IL 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 I'm 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 projectile-mak.
ing through which 1t Is possible to pro
duce IN quantities shells which will
conform to the requirements.
The result IL that up to now on that
contract of $76S 900. we have put into
actual operating expense SAT- ,SS1., and
have been penalized for non-delivery
s405, 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 s~ixteen-inch shells.
We bid on these shells at approx
mately the same rate per pound as
that OF a f~ourteen-inch shell contract
Of one year ago upon which the Gov
eminent 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 1t would be possible for US to
deliver a shell to meet the test.
For officers In the Navy to assume
that any bid 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 books, found
would yield a profit OF less than ten
per cent. We agreed to assume risks
for increased costs Of materials and la
Dor. that made II 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 not
alter the memorable cost facts and re
duce bids to early estimates Of the
Navy Department, the prices are called
'exorbitant."
1t 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
nous.
We have determined to make this
offer to the American Government.
III you will build two Of the battle
.ruisers In Government navy yards
we will build the other two at the as
certained cost Of building the ships In
The Government yards. without add
tional expense OF commissions OF any
kind. We will also contract to have
our ships ready for service ahead Of
hs Government ships"