Ashland tidings. [volume] (Ashland, Or.) 1876-1919, 1917-02-05
TO BUILD SHIPS
At COST PRICE
Bethlehem Steel Will Make o.
for 10 Uncle Sam.
BIDS ON 16 INCH NAVY SHELLS

blUS UN 10 lMGn NAVl SnELlS
No Chance For Profit In Them Under
Present Tests, Grace says-Possibls
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 g.
Grace, President of the Bethlehem
Steel Company, said in part
In a 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 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 arm0r 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 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
2OOO 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 $4,5OO,OOO, a
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
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 specific shell, sam
ples OF which are being sent over for
test-a test not yet made.
Two years ago we took all order Tor
24OO fourteen-inch armOr-piercing shells
at a contract price Of $76S00O to be
delivered within 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 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 OH 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
duce In quantities shells which VIII
conform to the requirements.
The result is that up to now on that
contract of S76S,0O0 we have put into
actual operating expense S447,sSl., and
have been penalized for non-delivery
S495, IA, total Of $o43,625,, with nc
receipts whatever.
Such was the experience in the light
of which we were called upon recent
ly 10 bid for sixteen-nch shells.
l. We bid on these shells at approx
mately the same rate per pound az
that of 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 thai
there will be any. There is no certain
ty that 1t would be possible for us tt
deliver shell to meet the test.
For officers In the Navy to assume
that any hid made under such condi
! tions 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 ter
per cent We agreed to assume risks
for increased costs OF materials and la
Dor, that made 1t possible that thest
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 year ago.
And because shipbuilders could no
alter the inexOrable cost facts and re
duce bids to early estimates Of tn,
Navy Department, the prices are callet
''exorbitant."
It would be a real advantage to b.
relieved Of this naval construction. Th,
profit from II cannot possibly amount
to much, and the responsibility il enor