Mr. Gordon M. Page 2 - Jan. outcome of sideration Baxter, 4, 1944 this question should not in any way affect of the question of profits for 19435. con- If the Government insisted upon some the requirement to buy Colt!s capacity, this, would have to be taken up with Colt's, and it that it might be possible for Colt's to agree adjustment of of course, seems to me to relinquish this requirement $15.00 each gun Colt'!s, plus thereon. at if bought the Government elsewhere $10.00 to the present time could paid the be Unguestionably as the to paid which Colt!s have Brownings Government what been the has Colt!s as a for made by royalty very capacity good idea is, and I think that a figure coukid be agreed on as representing Colt's capacity. With this figure established, Colt's could supply as many guns as the Government desired to order, but it would be obliged to pay $15.00 to Colt'ts plus $10.00 the Brownings for each gun that was not ordered from up to the agreed figure representing Colt's capacity as it had such guns made elsewhere on sub-license. as stating ly I have suggested you will that net profit on We justified, $15.00 because $15.00 his per gun. the are amount recall to Mr. Teller retained by guns came to approximate- therefore, in taking that machine be for Colt!s so long wrote Colt'ts us Mr. Teller at his word, and under such an agreement Colt'ts would receive the same money as profit that they would have received had they made their full capacity, and the Brownings would receive their regular royalty the same as if no change had been made. The Government, on the other hand, would be free to have the guns made by other manufacturers, with the result that it could save anywhere from per gun at an extra cost of only $25.00 effect an tween $75.00 probably that the all of overall and saving to the $100. 00 for each $100.00 to $125.00 per gun. This would Government gun of somewhere be- so made. This may not be at all feasible because Coltts will object very strenuously and, besides, it might be Government needs Colt's capacity in addition to the other manufacturers. However, this looks like logical proposal to be discussed first among ourselves and possibly later on with Coltts if the oecasion should arise. Any such agreement should be made between Colt'ts and the Government, with the consent of the have to contain the stipulation that is not subject tO renegotiation. Brownings, the and it would agreement so made a