Alma record. (Alma, Mich.) 1878-1928, 1917-02-01
TO BUILD SHIPS
At COST PRICE
Bethlehem Steel viii Make o.
for 10 Uncle Sam.
BIDS ON IS INCH NAVY SHELLS

No Chance Fer Prsmt In Thorn Under
Present Tssts. Grace says-Psssibls
Explanation 81 the Prices Made BY IN
English Firm Which Dids Under All
American Manufacturers.
Speaking recently before the Terra
pin Club Of Philadelphia. Eugene q.
Grace. President Of the Bethlehem
Steel Company. said in part:
In q 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 cur charges
to the United States Government, 10
the basis OF prices established before
the war began.
We agreed-if the Government would
aba ndon its plans for . Federal plant
to make armor for our Navy as any
price the Government uselt ni6ht con-
stder fatr.
Our ordnance plants are AZ the dis
posal Of the nation at q fair operating
cost, plus q small margin, thus saviny
the Government investment and de-
preciation.
one OF the special needs Of the new
navy is siIteen-inch guns-guns sixty
feet long and capable Of hurtling g
1000 pound shell with such power and
accuracy as to hit a so foot square tar
get fifteen miles away.
We have undertaken voluntarily 10
construct, at a cost OF S4,oOOoOo, q
plant lirted TO build slxteen-inch guns.
Under no conceivable circumstances
can orders which we may receive for
this plant pay even a fair return on
the investment.
Consldera BILE comment has been made
upon the fact that q British mnnufac-
turer recently bid less than American
manufacturers for sixteen and four
teen-in shells for the navy
am unable TO state the basis upon
which the English bid was made II
should be remembered however, that
this bid was for a specific shell, sam
Piles OF which are being sent over for
tesla test not yet made.
Two years ago we took all order for
24oo fourteen-inch armor-piercing shells
at a contract price Of S76S,OOO, to be
delivered within certain time or we
had to pay large penalty.
The only specifications for making
these shells are that they shall he
Of certain size and must pierce
srmor. plate at a certain velocity on i'm
pact. II IL impossible to foretell the
exact conditions Of the tests.
We had made large quantities OF shells
in tho 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 eur 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 II Is possible TO pro
duce in quantities shells which will
conform to the requirements.
The result is that up 10 now on that
contract OF sTSs 600. we have put into
actual operating expense s447 ISL. and
have been penalized for non-delivery
S495, IA, a total OF s943 625., with no
receipts whatever.
such was the experience ia the light
Of which we were called upon recent
IL TO bid for sixteen-inch shells.
We bid on these shells at approx
mately the same rate per pound a.
that OF 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 be any. There is no certain
ty that 1t would be possible for us 10
deliver a shell TO meet the test.
For officers in the Navy 10 assume
that any bid made under such condi-
tons Is "exOrbitant'' Is utterly unfair
We bid Oh the new Dattle-cruisers
sums which Navy department experts.
after examination OF our books. found
would yield n profit OF less than ten
per cent. We agreed 10 assume risks
for increased costs OF materials and la
Dor. that made It possible that these
contracts might yield no profit what
ever
The costs run beyond the amount APP