The L'Anse sentinel. (L'Anse, L.S., Mich.) 18??-current, 1917-01-27
TO BUILD SHIPS
At COST PRICE
Bethlehem Steel viii Make o.
for TO Uncle Sam.

BIDS ON IS INCH Navy SHELLS
No Chance For Profit In Them Under
Present Tests, Grace says-PossibIe
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 q.
Grace, President of the Bethlehem
Steel Company, said in part:
In n peculiar sense Bethlehem Stee!
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 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 fair operating
cost, plus 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 hurting q
1000 pound shell with such power and
accuracy as to hit so foot square tar
get fifteen miles away.
We have undertaken voluntarily to
construct, at cost Of $4,500OOO, 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.
Considerable comment has been made
upon the fact that British manufac-
turer recently bid less than American
manufacturers for sixteen and four
am unable to state the basis upon
which the English bid was made. II
should be remembered, however, that
this bid was for specific shell, sam
Piles of which are being sent over for
tesla test not yet made.
Two years ago we took an order for
240O fourteen-inch armor-piercing shells
ut contract price Of $76S,OOO, to be
delivered within a certain time or we
had to pay large penalty.
The only specifications for making
these shells are that they shall be
Of certain size and must pierce
armor-plate at a certain velocity on Inn
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 at which
the tested shells must pierce armorI
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 it is possible to pro-
ducc In quantities shells which will
conform to the requirements.
The result is that up to now on that
contract Of $76S 900. we have put into
actual operating expense SAT, $751;. and
have been pepalized for non-delivery
$495, 744., total Of $685. 25., 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
mateiy the same rate per pound as
that of a fourteen-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
denver Shell W Iutct TIC tSot
For officers in the Navy to assume
that any bid made under such condi-
lions 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 profit OF less than ten
per cent We agreed to assume risks
for increased costs of materials and Ia.
Dor, that made It possible that these
contracts might yield no pront what.
ever.
The costs run beyond the amount ap-
propriated by Congress- on the basis OF
the cost estimates made 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."
Il wosM be a real advantage to be
relieved Of this naval construction. The
profit from II cannot possibly amount
to much, and the responsibility is eDor.