The Dickinson press., 1917-01-27

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 a 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
1000 pound shell with such power and
accuracy as to hit a so foot square tar.
get fifteen miles away.
We have undertaken voluntarily to
construct, at a cost Of $4,5O0,OO0, q
plant fitted to build s~ixteen-inch guns.
Under no conceivable circumstances
car 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 fer the navy.
I am unable to state the basis upon
which the English bid was made. It
should be remembered, however, that
this bid was for a specific shell, sam
pies Of which are being sent over for
tesla test not yet made. '
Two years ago we took an order for
24NC f~ourteen-inch armor-piercing shells
at a contract price of $76S,OO0, to be
delivered within a certain time or we
had to pay a 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 u 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 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 $447, $751;, and
have been penalized for n~on-delivery
$495, 744., a total Of S948,eD., with no
receipts whatever.
Such was the experience In the light
Of which we were called upon recent
~ to bid for s~ixteen-inch shells.
We bid on these shells at approx
mafely the same rate per pound as
that Of a f~ourteen-inch shell contract
Of n 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 M certain
ty that it would be possible for us to
deliver a she'll to meet the test.
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 a 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 profit what
ever.
The costs run beyond the amount ap-
propriated by Congress on the basis of
the cost estimates made a 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."
It would be a real advantage to be
relieved of this naval construction. The
profit from it cannot possibly amount
to much, and the responsibility is enor.
nous. ~ @
We have determined to make this
offer to the American Government.
IF you will build two Of the battle
cruisers in Government navy yards
we Will build the other two at the as
certained cost Of building the ships n
the Government yards, without add,
| tional expense or commissions Of any
Kind. We VIII also contract to have
our ships ready for service ahead Of
| the Government ships."