The Washington times., 1934-12-14
EXCESS PROFIT.
IN CONTRACT
CHARGED
Huge Return on "0Id Hickory"
Project Refused, Arms Firm
WrangIed 3 Months
BY WILLIAM X. HUTCHINSON
International News Service

Industries Board and officials OF
E. /. du Pont de Nemours and
Company delayed for three
months, during one of the most
critical periods of the war, the
construction of a giant explosives
plant at Old Hickory. Tenn, it
was shown today at the Senate
munitions inquiry.
The company negotiated one
contract with the Army Ord
nance Department in October,
1917, to build the plant with a
capacity of 100000 pounds of
explosives month. Secretary OF
War Newton D. Baker cancelled
this contract on protest from
the War Industries Board against
the profits accruing to the du
Points.
Then the board and the du Points
wrangled for three months before
agreeing on the company's profits,
while the Germans were threat
ening to win the war. The Old
Hickory plant later turned out
35,900,000 pounds of explosives
before the war ended. The du
Points built it for 81 and netted
$274,O00 from operating it.
Original Contract
The company's original contract
with War Department officials
was cancelled in 1917 by the then
Secretary of War, Newton D.
Baker, on protests from the War
Industries Board. The company
finally built and operated the
plant under a new contract which
gave it a 81 fee on the construc-
ton, and a net profit of only
$274,000 on its operation.
The company. however, would
have netted $43 100000 in one
year under the first contract. ac-
cording to a charge by Robert
S. Brooking. then a member of
the War Industries Board.
Irenee du Pont, head of the
company, charged Mr.. Brooking
with being prejudiced against the
du Points. He added the COM
pany had done zone of the most
magnificent things" of the war
in building Old Hickory. He said:
81 remember this man said
he would rather pay 81 pound
for powder, if there were no
profit in it, than to pay so
cents a pound, if the du Points
would get a 1O-cent profit. Mr..
BrOOking was a wOOdenware
manufacturer from st. Louis.
feared war on the Eastern
coast. He didn't. probably be-
cause he lived far enough in
land.
This has all been investi.
gated time and again. The
Governments auditors took
eight years to check every one
of our expenditures. We are
held up to ridicule and worse.
when we did one of the most
magnificent things done in the
war;"
Gould any other company
have done it?"
II can't conceive of any,"
The original du Pont contract
for Old Hickory was approved by
War Department officials. In a
protest to Secretary Baker, Mr..
Brooking charged it could have
been negotiated by the War In
dustries Board at one-half the
War Department figure. He added
the du Points would clear $13,-
100000 in constructing the plant
and $30,000,000 year by operat-
ing it.
Generosity" Claimed
Mr.. Brooking. however. conceded
War Department officials thought
the du Points we're generous" in
their treatment of the Govern.
ment. He wrote Secretary Baker:
General CrOzier. Colonel
HOffer and Mr.. McROberts WAR
Department OfficialS) had recon-
mended in the most unqualified
way this original contract. In
our interview with General
CrOzier and Colonel HOffer no
amount of argument made any
impression upon them, as they
still insisted that the contract
not only was a reasonable one
but one which evidenced the
greatest generosity upon the part
of the du Points"
Pierre du Pont then pointed out
the company finally accepted a
new contract which netted it a fee
of 81 for constructing the plant.
It also gave the du Points exclusive
right 10 operate the plant at a
profit Of cents pound.
Mr.. du Pont said:
"The Government tried another
reputable firm of contractors in
building a powder plant at
Nitro, w. Va. If we had spent
at Old Hickory at the same
rate this reputable firm did at
Nitro. it would have cost the
Government $2O.OOO.OOO more.
MADE BAD GUESS"
81 feel the Secretary of War
who took the Nitro plant from
us made a bad guess at Nitro.
He paid more for it than if he
had taken the original contract
with u.s."
Pierre du Pont told of an in
tereSting conversation with Secre-
tary Baker during negotiation OF
the second contract. He said
Secretary Baker plainly indicated