Clinch Valley news. [volume] (Jeffersonville, Va.) 18??-2019, 1917-01-26

'Gi III qNGiG 0G!ll.
bllSnHf6 INCH NAVY SHELLS
No Chance For Profit In Thorn Under
Present Tests, Grace Says-Posaible
Explanation of the Prices Madc 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;
LII peculiar sense Bethlehem Steel
serves the American people.
For e'-rmplc. though we have been
able to obtain in Europe almost any
price, we have adhered, in our chnrgcs
to the United States Government, to
the basis OF prices established before
the war began.
We agreed if the Government would
abandon lis plans for Il Federal plant
to make armor for our Navy al ann
price ne Government HscU might con-
slider fair.
Our ordnance plants arc ut the dis
posal Of the nation ut II FUR operating
cost. plus small margin, thus saving
the Government Investment und de-
probation
Ono an Ia, nj ,Ie ,.f
navy is siXtccn-inch guns-guns sixty
feet long aud capable of hurtling u
1000 pound shell with such power and
accuracy as tn hit n 30 foot square tar
get fifteen miles away.
We have undertaken voluntarily to
construct. al Il cost of Sl.5O0OO0, n
plant fitted To build sixteen inch guns.
Under no conceivable circumstances
can orders which we may receive FOR
this plant pay even Il fair return OH
the Investment.
Considerable comment has been made
upon the fact that II British manufnc.
turcr recently bid less than American
manufacturers for sixteen aud four
teeninch shells for the navy.
am unable To state the basis upon
which the English bid was made. 1t
should lie remembered, however, that
this bid was for specific she'll sam.
pies of which urc hcing sent over for
tesla test not yet made
Two years ago we took an order for
2i0O fourteen inch armor-p piercing shells
at contract price of $7GS,O00, to be
delivered within certain time or we
had to pay Il large penalty.
The only specifications for making
these shells are that they shall be
of certain size and must pierce
armor-platc ut II certain velocity on Inn
pact. II Is impossible To foretell the
exHct conditions of the tests.
We had mndc large quantities OF shells
In the past which had been accepted.
But in placing this particular order the
Department altered the angle nj which
the tested shells must pierce nrmor.
plate The result, however, hns been
absolute inability on our part to pro-
ducc IN any quantity, shells which will
meet these novel tests. In fact, we
know of no process OF proJcctilc-mal.
ing through which 1t 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 $TGS,0G0, we hnve put into
actual operating expense SII7,SS1., and
have been pcnallZed for non.delvery
S495.7ll., a total OF $0i3.025., with no
receipts whatever.
Such was the experience i'm the light
of which we were called upon recent
ly to bid for siXtecnnch shells.
We bid on these shells ut approx
matcly the same rate per pound as
that of n 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 he any. There is no certain.
ty that it would be possible for us to
deliver n shell to meet the test
For officers in the Navy to assume
that any bid made under such condi
tons is "cXorbitant" is utterly unfair.
We bid on the new attle-cruisers
Gums 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 10 profit what
ever.
The costs run beyond the amount ap
proprlatcd by Congress on the basis OF
the cost estimates made year ago
And because shipbuilders could not
alter the memorable cost facts ana re
duce bids to early estimates Of the
Navy Department, the prices are called
"eXOrbitant."
1t would be 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.