Negotiations for the purchase of arms and ammunition manufactories in this country have been under way for some little time, it is asserted, but so quietly have they been conducted that no hint of them became public until yesterday. Yet, coincident with their disclosure, came yesterday, also, announcement of a contract for the manufacture for the Allies of shrapnel and high explosive shells on the greatest scale yet undertaken by an American corporation, which revealed as could nothing else how carefully these supposedly secret dealings had been discovered, watched, and checkmated by the Allies.
This contract, all but the smallest details of which are said to be settled, is to be taken by the General Electric Company, directors of which admitted that the total involved would be at least $100,000,000 and might run far in excess of this figure. In fact, the order was spoken of as limited more by the capacity of the General Electric's plants than by any restricting order of the Allies.
The significance of this contract does not lie wholly, or even chiefly, in its size, for the American Locomotive Company recently closed a $65,000,000 contract with the Allies for shells. What is considered of especial note is that less than a week ago an official of the General Electric stated emphatically that his company had not taken any orders and was not negotiating for any despite the fact that for some time a proposal to specialize in war orders had been under consideration. Less than a week ago the company had reached a negative decision and less than a week ago there was no reason to suppose that it would rescind this decision.
J.P. Morgan & Co., fiscal agents for Great Britain and France in the matter of war supplies, then entered the field. Charles Steele, a partner in the banking house, is a Director of the General Electric Company and negotiations went forward rapidly. These were conducted with a secrecy which exceeded that even of the German interests with the other arms and ammunition companies, but there are several factors which, it is known, were of prime importance in effecting the General Electric's change of policy.
In the past much valuable time has been lost in the distribution of orders among a score or so of concerns which have had facilities for making shells, ordnance, and so forth. Competitive bidding for parts of contracts has held back the finished product and successful bidders have frequently been handicapped by inability to obtain necessary machinery.
Now plans for accelerating manufacture in all war lines have been launched by David Lloyd George, the new British Minister of Munitions, and in the shadow of his influence J.P. Morgan & Co. have practically brought to a conclusion plans to centre future war orders in a few great companies, with the General Electric Company as the dominant unit.
The extent to which the banking house used its tremendous influence is problematical, but it is history that Mr. Lloyd George has been bringing all pressure to bear to increase England's supplies, and with them the supplies of the remaining allies, since British purchasing agents are, to a large extent, looking after the interests of France and Russia, and it may be inferred that the Morgan firm has been as active as possible in carrying out the wishes of the European nations.
Persons in touch with the progress being made in war orders state that the British authorities have become greatly concerned over their supplies of ammunition at hand and in process of manufacture. While orders aggregating many hundreds of millions of dollars have been placed in this country and Canada, deliveries have been disappointing. Canadian plants got to work early in the war, but the delay in ordering supplies in the United States and other neutral countries has seriously affected the efficiency of the allied armies in France and Poland, it is said.
The experience of the American Locomotive Company is typical of the situation. After negotiations which covered several weeks, the company procured a contract which is said to amount to approximately $65,000,000 for shells. During the discussion of terms, and even before, the Locomotive officials were busy buying the necessary lathes and other machinery, but installation of equipment and the training of men could not be done in a few days. The contract was definitely closed six weeks ago, but the company has only begun to turn out the shells at its Richmond plant, and it was said in authoritative quarters that several weeks more would pass before anything like a substantial output would be possible.
The centring of manufacture in a single, or a few, great plants carries the additional and chief advantage to Great Britain and the Allies, that no efforts of Germany can now cut off their ammunition supply. The stoppage of this supply has been one of Germany's chief concerns since the war began, and by embargo propaganda here and by the attempt to create sentiment she has tried to cut down the supplies reaching the Allies from this country.