The Clay City times. [volume] (Clay City, Ky.) 1901-current, 1917-02-15
TO BUILD SHIPS
At COST PRICE
Bethlehem Steel VIII Make o.
Tor 10 Uncle Sam.
BIDS ON IS Inch NAVY SHELLS

explanation OF the Frlces Mace ny 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 peculiar sense Bethlehem steel
serves the American people.
For example. though we have been
able 10 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 il the Government would
abandon IT, plans for \ Federal plant
to make armOt for our Navy al dHB
price the Government itself might CON
eide, fuD.
Our ordnance plants are at the dis
pOSal OF the nation at a feir OPERATING
cost. plus small margin. thus saving
the Government investment and de
probation
One OF the special needs OF the new
navy is siXtcen-i u guns guns sixty
feet long aud capable of hurting
2Cuu pound shell with such power and
accuracy as to hi n 80 foot square tar
&c fifteen mip. away
We have undertaken voluntarily to
construct at cost OF $4.JJu.0OO. u
pl Do, " igd To- hui'l sixteen IN guns
Under no conceivable circumstances
can orders which we may receive for
this plant pay even IA fair return on
the investment
Considerable comment has been made
upon the tact that a British dlanutar
turcr 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 Il
should he remembered. however. that
this bid was for 4 'peciic hell. sam
pies OF which are leing sent over for
tesla test not yet made
Two years ago we took an order for
24OO fourteen-inch armOr-picrcng shells
at a contract price Of $7GS.0O0, 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 |
armorplate at a certain velocity on i'm /
pact. II 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 1t is possible TO pro /
duce in quantities shells which viii |
conform 20 the requirements.
The result is that up to now on that |
contract Of $7GS.0 900. we have put into /
actual operating expense S4i7 ssh. aud /
have been penallzed for non-ielivery |
s495.744., a total Of $943G2o., with nc /
receipts whatever.
Such was the experience In the Hight !
OF which we were called upon recent
" TO bid for sixteen-inch shells
We bid on these shells AT approx
mate.y TIE same rate per pound as
that OF tourteen-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 be any. There Is no certain
~ that II would be possible for us to
deliver a shell TO meet the test.
For officers IN the Navy TO assume
that any bid made under such cOudi
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 n profit OF less than ten
per cent We agreed to assume risks
for increased costs of materials and Ia
Dor, that made Il possible that these
contracts might yield no profit what
ever.
The costs run beyond the amount ap
propriated by Congress on the basis ~
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