Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1917-01-15
GRACE WARNS OF
SHOCK THAT WILL
COME WITH PEACE
Bethlehem Steel Company
/ Head Declares United States
Must Prepare

Philadelphia, Jan. 5. - Prominent
men from all parts of the State attend
ed the testimonial dinner in the Manu-
facturers' Club on Saturday night to
| Eugene G. Grace, president of the
Bethlehem Steel Company
Several addresses were made fol-
lowing the banquet. among the most
or these was one by Mr.. Grace in
which he said in part:
American manufacturers are face
to face with problems both of war
and peace. Aside from other domes-
TIC questions arising directly out of
the conflict in Europe, the necessity
ior American preparedness is some
thing none of us can disregard.
1T would be inappropriate for me
to discuss the general commercial re-
lationships of the Bethlehem Steel
company, but do feel that, with en-
tire properiety, l may bring to your
attention certain aspects of the busi-
ness, namely, it's relation with our
National Government, for some of
these considerations, to my mind, af-
tect every manufacturer.
Serves the People
In peculiar sense Bethlehem Steel
serves the American people. We pro-
vide large quantity of ordnance ma
terials for the use of the army and
navy and our facilities are of high
potential Importance for building
men-of-war.
ut is because of our peculiar rela-
tionship to the government that we
have felt a special responsibility-a
patriotic responsibility-for all our
policies in dealing with the Govern
ment.
For example, though we have been
able, since the war began, to obtain
in Europe almost any prices we
chose to ask for our products, we have
adhered, i'll our charges to the United
States government to the basis of
prices established before the war be-
gan.
There was agitation last year for
the building of a government armor
plant Certain of our statesmen as
Washington declared that we had been
'robbing' the government, although
the figures showed that our navy had,
Tor twenty years past, paid less for
armor than the navy of any of the
other great powers.
What Was Offered
We did not concede that our prices
for armor were too high, but we did
agree-if the government would aban-
don its plans for q federal plant-to
make armor for our navy at any prices
the government itself might consider
fair.
Does anybody imagine for n mo-
ment that we would have made such
an offer if it would show that our pre-
vious prices had been exorbitant?,
I'm the development of our navy
now being pushed forward, larger
ships are to be built and greater guns
are called for than ever before.
"One of the special needs is sixteen
inch guns-gunS sixty feet long and
capable of hurtling a 2,000-pound
shell with such power Ind accuracy
as to hit a fifty-foot square target fif-
teen miles away. Such guns call for
highest Of
the gunmakers' art. Upon such guns
may depend, indeed, the safety of the
nation
President Grace then explained that
the Bethlehem Company has under
taken to construct a big plant fitted to
build siXteen-inch guns. He favored
a government policy encouraging the
establishment of the maximum private
ordnance manufacturing capacity and
in speaking of the plan said: The
prices charged the Government should
of course be reasonable, and the gov
ernment has ample ways of satisfying
itself that prices are reasonable. The
fact, however, that a price is high
does not indicate that it is unreason-
able. Nor does the fact that q fair
profit is asked indicate greed on the
part of the manufacturer"
Too Many Naval Shells
Referring to the fact that a British
American manufacturers for sixteen
and fourteen-inch shells for the navy
he said: ''It is entirely conceivable
that there is a considerable surplus of
naval shells on hand which the Brit
ish government might be willing, even
in time of war, to have its munition
makers dump" on our market and
turn the proceeds into shells for use
on the battlefield"
Speaking of the attitude of the Navy
department toward private enterprise,
the speaker said: IF, however, the
navy department will make it's tests
within the known capacity of the pro-
jectile-making art, and if these tests
shall be standardized, we will under
take to manufacture shells under con-
ditions both as to price and as to time
which will equal to, if not be better,
than, those of any other manufacturer
in the world.
1.-The policy of the Navy department
seems to embody an effort to discour-
age private enterprise and to divert all
work for national defense into gov
ernfent plants. The situation with
reference to battle cruisers is an ex-
ample in point.
The Bid For Battle Cruisers
1.-THE Bethlehem Steel Corporation
controls shipbuilding companies which
build perhaps 40 per cent. of the ton
mage of the United States. Knowing
the purpose of the government to en-
large its navy we deliberately reserved
large part of our facilities-at the
sacrifice of merchant contracts carry
ing with them very large profits-that
it might be available to aid in carry
ing out the naval program.
I'VE bid on the new battle cruisers
sums which Navy department experts,
after examination of our books and
records, found would yield a profit of
less than 10 per cent. Indeed we
agreed to assume risks for increased
costs of materials and labor that made
it possible that these contracts might
yield no profit whatever.
THE price for these vessels is in