THATCHER ROY D. THATCHER LE ROY B. YOUNG PAUL & FIRST THATCHER BUILDING OGDEN,UTAH October S. Jay Patent Colt's Teller, Eseuire Attorney Patent Firearms Hartford, Connecticut Re: Dear YOUNG LAWYERS SECURITY BANK 26, 1939 Manufacturing Proposed Company modified royalties agreement. Tellers iir. I have just come from a conference with the Brownings and with their accountant, Mr. Baxter, in which we discusse the proposed contract for change in royalties and where I was directed to take up the matter directly with you, in an effort to make sure that we all have in mind the same things. Let me attempt to state some of the possibilities as to the facts. f think we are all agreed that there may properly enter into the cost of guns sold under any contract or contracts the cost of certain special engineering or special develonment work or special equipment for manufacturing the guns, and that such cost might well be apportioned or amortized over the guns made under one or more contracts. As I get it, the thought which these we seek special which shall your company receives for the guns and that the royalties be computed at a stated rate upon the remainder. to express in the contract is that the costs shall be deducted from the total ly first "special® of these of familiarity with problem items. of has to do with the proper definitions Perhaps the trouble lies in my lack the manufacture me that an attempt should you care to undertake it? be iL am too, wondering, amount amount made a character that they normally cost of materials, wages, rent costs of production. I do not if of to firearms, define these but it the terms. special items stand out and other know. seems to Would are of such from such expenses as items which enter into May I ask also how you treat such items when you receive payment for arms sold to the United States? You might, in preparing your bid for a stated number of guns, add into the price you intend to charge the total amount of these special the that items, so proper proportion States might matters would or price these might not which are it. You end net of included. and which costs. know the They Brownings, will you receive In such a case, details as to a lump would pay however, Would the include the United these special be sum and that interested,