The record. (Greenville, Ky.) 1899-1???, 1917-01-25

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 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
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 a cost of $4,500,O0O, a
plant fitted to build siXteen-inch guns.
Under no conceivable circumstances
can orders which we may receive for
this plant pay even 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-inch shells for the navy.
1 am unable to state the basis upon
which the English bid was made. 1t
| oh INa hopo1 hnwnunr thot
this bid was for a specific shell, sam
Piles of which are being sent over for
tesla test not yet made.
Two years ago we took an order for
2400 fourteen-inch armor- piercing shells
at a contract price of $7GS,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 a 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 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 projectilemak-
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 $7GS,OO0, we have put into
actual operating expense SAT- ISL, and
have been penaliZed for nOn-delivery
S495, IA, a total, Of $043,6 with nc
receipts whatever.
Such was 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 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 thai
there will be any. There is no certain
ty that it would be possible for us t.
deliver a shell to meet the test.
For officers in the Navy to assume
that any bid made under such condi
lions is "eXorbitant" is utterly unfair.
| III Il J1n hot a nTS
sums which Navy department experts
after examination of our books, found
would yield profit of less than tel
per cent. We agreed to assume risk!
for increased costs of materials and la
Dor, that made it possible that thes
> contracts might yield no profit what
ever.
The costs run beyond the amount up
propriated by Congress on the basis o
the cost estimates made a year ago.
And because shipbuilders could no
alter the memorable cost facts and re
duce bids TO early estimates of til
Navy Department, the prices are Gale
: "exorbitant."
1T would be a real advantage 10
relieved of this naval construction. Th
profit from it cannot possibly amour
to much, and the responsibility is enol
nous.
We have determined to make thi
offer to the American Government
IF you will build two of the battle
s cruisers in Government navy yard!
we will build the other two at the a!
certained cost of building the ships
I the Government yards, without add
S tional expense or commissions of an
kind. We will also contract to hav
our ships ready for service ahead {
the Government ships"
Mr.. Hammer McCracken,
Central City, is now with TT