The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-03-22
Big SHIPBUILDING
PRICE CUT PLANNED
u. s. Basic Rates Of $3.50 a
Ton May Be Result Of
Piez's Conferences.
COMPETITION TO BE MET
Government to Abandon Risk
on Material and Labor
in Future.

WASHINGTON, March Fl. - Readjust-
ment Of shipbuilding costs to peace time
production Is expected by experts Of the
shipping Board to establish basic price
In the neighborhood OF $3.50 a ton for
future contracts let to American yards
Recent conferences here among Cen
eral Manager Piez OF the Emergency
Fleet Corporation and representatives of
Pacific coast builders were said to have
developed virtual unanimity Of opinion
that high cost methods of production
which prevailed at a time when the ma
tional emergency demanded speed in
production above everything else, should
be eliminated as quickly as possible to
obtain a return to sound business prac-
tice. Prospects of keen competition in
world trade routes, the Western men
were told. made It necessary to hold con-
struction costs to a figure which would
permit the payment of dividends from
competitive rates which would have to
be established in order TO get business.
Price Basis Fixed.
The Pacific coast representatives, II
was said, agreed that reduction in
cost was necessary, and while no at
tempt was made to obtain an approval
of any definite price for future con-
tracts, the suggestion was made that
$3.50 a ton, which is about the same as
the average British price OF $50, would
be an average rate, with increases &C.
cording to the situation of the various
yards.
Cancellation OF orders which had been
placed for many thousands OF tons OF
shipping was discussed at length. Ii
was explained that the end of hostili-
ties made necessary the cancellations as
a matter of economy. While the wal
continued costs were kept to mini
mum, but were of less consideration
than construction of bottoms, whereas
now the imperative need has passed the
Fleet Corporation desires to place con-
tracts at as favorable a figure as pos
sfble. 1t was said there was no in
tention OF permitting any steel ways tc
remain idle, however, especially so long
as the prohibition against acceptance Of
contracts for foreign Governments re-
mains.
The cancelled contracts will be re-
placed with new orders when the ways
are empty, but the prices are expected
to be considerably below those prevail
ing during the war. which sometimei
ran as high as $3.50 a ton.
Policy Concerning Costs.
Government assumption of labor and
material hazards also will be abandoned
in the future, During the period OF hos
tilities the Shipping Board adopted a
policy Of absorbing increased costs. In
creases in wages and overtime pay alone
amounted to S300,000,000. Hereafter
shipyard operators will assume the risk
of a rise In the price Of material or OF
demands for more pay from their work
men, the Government withdrawing its
supervision over such questions and
treating the industry like any other
with which Government orders are
placed.
REIMBURSEMENT of production costs IL
expected to be facilitated by new prices
for steel. though the reductions scarcely
will affect that part Of the shipbuild!ns
programme now under construction
Most Of the steel ships now being bull
were contracted for at lump sum, bu
the Fleet Corporation Is expected e
benefit in the remaining contracts. basec
on the cost plus system.
an most instances the yards have
purchased their steel and the new prices
will have little effect upon Them" Il
was said by d. II. Cox, manager OF the
steel ship section. "All future contract!
will be ruled by the new rate"
1t was said the Shipping Board re
garded the cut in prices as likely tC
encourage more shipbuilding.