delivered the opinion of the court;
Plaintiff brings this action to recover damages allegedly sustained by reason of the defendant’s breach of a contractual obligation to remove Government-owned machinery and equipment from plaintiff’s manufacturing plant in West Orange,-New Jersey, within a 90-day period commencing September 10, 1946. The recovery sought is $2,350,000, or alternatively $2,735,809.97.
*814The Government has filed a counterclaim based ’in part upon an allegation that its machinery and equipment located in plaintiff’s plant was damaged due to the plaintiff’s failure to use ordinary care for the protection and preservation of such property, and in part upon an allegation that the plaintiff, without authority, used some of the defendant’s machinery and equipment for a period of approximately two years. The total amount asserted in the counterclaim is $96,018.17.
The plaintiff was incorporated in 1928 under New Jersey law. Its principal place of business is West Orange, New Jersey. Bearing his name, the corporation was founded by Henry L. Crowley, a pioneer in specialized phases of the radio industry, e. g., the development, improvement, and manufacture of ceramic insulators and magnetic iron cores. Under Mr. Crowley’s direction the plaintiff has been engaged continuously in the production of ceramics, iron cores, and related materials for use in the radio industry. Though plaintiff has supplied ceramics for spark plugs and other products used in the automotive industry, its principal customers prior to World War II were leading radio manufacturers : Zenith Eadio Corporation, Philco, General Electric, and others.
From its inception until the outbreak of World War II, the plaintiff experienced a steady and profitable growth. For the period 1936-1940 the plaintiff’s net sales aggregated $1,188,224.06 and its adjusted profit totaled $162,232.05— 13.65 percent of the total net sales for the 5-year period. The plaintiff’s net operating profit ratio for this period was 13.03 percent (finding 4).
In early 1940 the plaintiff was approached by the Signal Corps of the United States Army with the request that plaintiff’s plant facilities be converted exclusively to war production. To this the plaintiff agreed. The demands of war production thereafter indicated that substantial expansion of the plaintiff’s manufacturing facilities would be justified. Accordingly, the plaintiff and the defendant’s Defense Plant Corporation (DPC), a subsidiary of the Deconstruction Finance Corporation, entered into a written “Agreement of Lease” on July 2, 1941.
*815Essentially, it.was there provided that the plaintiff would convey to the DPC, at a mutually acceptable price, a tract of land adjacent to its manufacturing plant; that the plaintiff would sell certain of its machinery to the DPC; that an additional manufacturing plant would be constructed on the land to be conveyed, at the expense of the DPC; that the plaintiff, also at the expense of the DPC, would rehabilitate the machinery to be sold under the agreement and would purchase such additional machinery and equipment as might be required in the new plant or to supplement the machinery and equipment in the plaintiff’s existing plant, and would install the rehabilitated machinery and the newly purchased machinery and equipment in either plant, depending on where it might be needed. The lease further provided that the land, the plant, and the machinery and equipment were to be leased to the plaintiff for a term ending July 1, 1946, unless terminated sooner.
Rental for the property so leased was to be based on a prescribed percentage of the plaintiff’s aggregate net sales during each year of the lease (Finding 6 (b)).
The sixth paragraph of the lease provided in part as follows:
* * * iji0 extent practicable, each item of Machinery shall be marked or stamped by Lessee [plaintiff] in a way satisfactory to Defense Corporation so as to indicate Defense Corporation’s ownership therein.
In the 18th paragraph of the lease the following provision was set forth:
Lessee [plaintiff] shall use reasonable care in the use and operation of the site, buildings and the Machinery to be provided hereunder and shall keep the same in good state of repair (ordinary wear and tear excepted), and upon the expiration, termination or cancellation [sic] of this lease * * * Lessee shall forthwith yield, and place Defense Corporation in peaceful possession of the site and buildings and of all the Machinery to be provided hereunder free and clear of any liens and claims other than those resulting from claims against Defense Corporation; and if any of the Machinery shall be then located elsewhere than in the additional plant to be provided hereunder, Defense Corporation shall, in addition, have the right to remove, *816and upon the written request of Lessee, shall promptly remove, at its own expense, such Machinery, and if such removal shall not take place within sixty (60) days after such request, Lessee may remove the Machinery and place it in storage for the account and at the expense of Defense Corporation * * *.
On January 27, 1942, sale of the land and machinery to the DPC in accordance with the terms of the lease was made. Thereafter, construction of the new plant was begun. Following its completion, the new plant and the original plant owned by the plaintiff were operated by the plaintiff as a single unit, which the parties referred to as Plancor 157.
Generally, the machinery and equipment purchased by plaintiff on behalf of the DPC and installed in Plancor 157 was comprised of small, inexpensive lathes and drills of short life expectancies — considering the type of work for which they were to be used. However, some heavy types of equipment were acquired and installed in the plant. Of that nature were large presses that were sunk in foundations and kilns that were imbedded in concrete to a depth of from 8 to 10 feet. Also, in the new plant, water pipes, electrical wiring, and a dust-collecting system that included a large network of overhead pipes were installed.
To meet its obligation to account for the various machinery and equipment purchased under the lease, the plaintiff ■entered invoices in a volume entitled the Asset Property Record.
The plaintiff became the primary source of supply of iron ■cores and radio-grade ceramics for military needs following ■execution of a contract with the Signal Corps of the United .States Army calling for military consumption of the entire production of Plancor 157. The plaintiff’s production thereafter increased. By 1944 its gross production amounted to approximately $4,000,000 per year.
At the war’s end in 1945, the plaintiff began .converting its manufacturing operations to peacetime production. Large scale manufacture of radio and television materials was contemplated. With this purpose in mind, the plaintiff began negotiations with the defendant for acquisition of the Government-owned plant and some of the Government’s machinery and equipment at Plancor 157.
*817Following termination of lease on November 3, 1945, and while negotiations with the Government proceeded, the plaintiff continued in its operations at Plancor 157 under an interim agreement with the defendant (finding 10).
Negotiations continued until on or about July 1, 1946. Finally, on September 10, 1946, the parties signed a purchase agreement. The agreement called for the sale and conveyance to plaintiff of the Government-owned plant, including the land on which it was situated, and a large quantity of the machinery and equipment at Plancor 157. The purchase price was $455,941.71. Of the total purchase price, $80,000 was payable in cash and the balance of $375,941.71 was payable, with interest at the rate of 4 percent per annum in quarterly installments of $9,500 for a period of 10 years, when the remaining balance was to become payable. The indebtedness of $375,941.71 was to be covered by plaintiff’s promissory note and secured by a purchase-money first mortgage on the realty and personalty included in the purchase agreement.
All of the Government-owned machinery and equipment at Plancor 157 was not included in the purchase agreement of September 10, 1946. With respect to that property, sub-paragraph (e) of paragraph 6 of the purchase agreement provided as follows:
That the Seller [defendant] shall have a reasonable time, but not in excess of ninety (90) days from the closing of title and delivery of the deed., to remove from the premises, at Seller’s expense, all items of personal property, machinery and equipment owned by the Seller and located in the premises and not included in this sale.
On the same day the purchase agreement was signed, September 10, 1946, the defendant executed and delivered to the plaintiff a bill of sale for the personalty and a quitclaim deed for the realty which were subject to the purchase agreement. Also, the plaintiff in compliance with the agreement gave its promissory note, secured by a mortgage, to cover the remainder of the purchase price. The required cash payment of $80,000 was made by the plaintiff prior to September 10,1946.
*818The 90-day period during which the defendant was allowed to remove its remaining machinery and equipment from Plancor 157, as provided in subparagraph (e) of paragraph 6 of the purchase agreement of September 10, 1946, expired on December 9, 1946. However, none of the defendant’s machinery or equipment was removed from Plancor 157 prior to the expiration of that period. Though written and oral requests were made by the plaintiff for action, the defendant did not begin actual removal of such machinery and equipment until July 1947, and removal operations were not completed until some time in late November or early December of 1947.
Approximately 40 percent of the machinery and equipment that the defendant was obligated to remove had been taken from the plant by the plaintiff and stored in a warehouse located some distance from the plant. These particular items of machinery and equipment were later removed from the warehouse by the defendant in July 1947.
Until their removal by defendant, the machinery and equipment remaining in Plancor 157 were intermingled with machinery and equipment belonging to the plaintiff. Almost 16,000 square feet of plant production space, or somewhat less than half of the production space in Plancor 157, was occupied by the Government-owned machinery and equipment. To a substantial extent, they consisted of kilns, heavy presses, and other large items that were firmly affixed to the structure. However, there were many smaller items in the plant that could have been removed by plaintiff without undue difficulty and stored elsewhere.
Because of the presence in Plancor 157 of a large quantity of idle machinery and equipment belonging to the defendant for many months after December 9, 1946, the plaintiff was prevented from carrying out a rearrangement of its own machinery and equipment which it thought would accomplish greater efficiency in production.
Following the removal of the Government-owned machinery and equipment from Plancor 157, the plaintiff in late December, 1947 began to rearrange its own machinery and, equipment in the plant, an undertaking which extended *819through 1948. Upon its completion there was an improvement in the quality of the plaintiff’s products.
. On or about June 9, 1947, the plaintiff had begun negotiations with the defendant for modification of the promissory note and mortgage which had been executed pursuant to the purchase agreement of September 10,1946. Oh September 8,1947, negotiations were also opened concerning the purchase of a substantial amount of the defendant’s machinery that was scheduled to be removed from Plancor 157. These two series of negotiations were merged about November 1947, and continued for more than a year thereafter.
During the course of the combined negotiations there was some general discussion between the parties of a claim by plaintiff based on the defendant’s failure to.remove its machinery and equipment within the 90-day period provided under the purchase agreement of September. 10,1946. However, there was no specific discussion of a settlement of the claim or of its waiver by the plaintiff, except as the claim related to the machinery and equipment that the plaintiff was seeking to purchase.
On December 29, 1948, the negotiations culminated in an agreement for the purchase of additional machinery and equipment from the defendant, and an agreement modifying the promissory note and mortgage. Paragraph 10 of the latter agreement provided as follows:
The Mortgagor hereby covenants and agrees that it is now the owner of the premises upon which the aforesaid Mortgage is a valid first lien to secure payment of the indebtedness of the Mortgagor to the Mortgagee above set forth; and that there are no defenses, offsets or counterclaims to said Promissory Note or Mortgage, :and that the Mortgagor is fully authorized to execute these presents as such.
For purposes of this suit, the above modification agreement was the final contractual arrangement executed between the parties.
The present claim was filed on November 3, 1952. In its amended petition, the plaintiff alleges the following instances of damage sustained because of the asserted breach of the agreement of September 10, 1946, by the defendant: (1) failure to realize the net operating profit ratio of 13.03 *820percent, which the plaintiff had maintained during the period 1936-1940, on its net sales for the years 1947 and 1948; (2) failure to meet the demonstrated plant capacity of its facilities, conservatively estimated at $2,750,000 net sales per year, for the years 1947 and 1948, and the resultant loss of its normal profit for those years; and (3) loss of the favorable position which it had attained prior to the war as a supplier of major companies in the electronics field. The plaintiff does not, however, assert a claim based upon the value of the plant space occupied by the defendant’s machinery and equipment after December 9, 1946 (finding 28).
In opposing the plaintiff’s claim, the defendant denies any obligation under the agreement of September 10, 1946, to remove any of the Government-owned machinery and equipment from Plancor 157. Defendant contends that, even if the contract required the removal by the defendant of its machinery and equipment, it is not liable for breach of the contract because (1) it was not solely responsible for the delay in removing the machinery and equipment; (2) the plaintiff failed to mitigate damages; (3) any claim the plaintiff may have had against the Goverment was released and waived; and, (4) the plaintiff has not established its claim-for loss of profits. As indicated above, the defendant has also asserted a counterclaim in the amount of $96,018.17. In its counterclaim the defendant in part alleges that its machinery and equipment in Plancor 157 was damaged to the extent of $50,000 because of the plaintiff’s failure to exercise ordinary care for the protection and preservation of such property, and also alleges that the plaintiff, without authority, used some of the Government’s machinery and equipment for approximately two years. The reasonable value of the use of such property is alleged by the defendant to be $46,018.17.
Rather than pass upon the several issues raised by the Government in opposition to the plaintiff’s claim, it would seem desirable to examine at once the final question advanced by the Government, i. e., whether the plaintiff has established, in any event, that the breach of the contract by the Government occasioned a loss of profits to the plaintiff’s *821business for which the plaintiff is entitled to recover. We feel that the plaintiff has clearly failed in this regard.
As this court stated in its decision in Chain Belt Co. v. United States, 127 C. Cls. 38, 58 (1953), the recovery of lost profits as damages for breach of contract depends upon the initial showing that such loss is the immediate and proximate result of the breach. This is basic. Whether the loss of profits was within the contemplation of the parties, and, if so, whether there has been established a sufficient basis for estimating the amount of profits lost with reasonable certainty, are questions reached only where the plaintiff has established that its loss of profits is attributable to the defendant’s breach.
In an attempt to meet this fundamental requirement, the plaintiff introduced evidence of its net sales and adjusted profits for the base years 1936 through 1940. After determining the percentage of adjusted profits to net sales for each of the five years, the plaintiff arrived at a net operating profit ratio for the base period of 13.03 percent. The plaintiff then proceeded to apply this ratio to its net sales for the year 1947 (a year marked by sales approximately 3i/2 times greater than the plaintiff’s best prewar year) and 1948. Had the 1936-1940 ratio been realized in 1947 the plaintiff would have shown a profit of $144,980.45, rather than the loss of $74,916.34 which it actually sustained during that year. The difference between the loss sustained and the profit which the plaintiff claims could have been expected but for the presence in Plancor 157 of the Government’s machinery and equipment, or $219,896.79, is presented by the plaintiff as the measure of the defendant’s liability for the year 1947. The same .manner of computation was applied by the plaintiff to the profit of $99,492.45 realized in 1948 in arriving at the figure of $179,554.54, which the plaintiff asserts it would have earned but for the aftereffects of the defendant’s failure to remove its property from the plant until the latter part of 1947. The difference between these two amounts, that is, $80,062.09, determines the Government’s liability for the year 1948, according to the plaintiff.
The explanation offered by the plaintiff for its failure to realize approximately the same profit ratio following the *822war that it had experienced during the period 1986 through 1940 is that the Government’s delay in removing its machinery and equipment prevented the plaintiff from rearranging its production lines in a manner calculated to achieve economies in production (finding 16). This occurred at a time,' continues the plaintiff, which was critical to the electronics industry, a time during which the radio-television industry was expanding rapidly to meet postwar consumer demands. The experience and reputation gained by the plaintiff prior to the war gave every indication of continued success following the termination of hostilities. However, it is argued that the Government’s delay in removing its machinery from Plancor 157 destroyed the plaintiff’s anticipated profit percentage for the years 1947 and 1948.
This evidence concerning the plaintiff’s net sales, adjusted profits, and computed profit ratio for the years referred to, coupled with the testimony of its witnesses seeking generally to establish the connection between the Government’s breach and the plaintiff’s loss of profits, constitutes the entirety of the plaintiff’s case on the issue of lost profits.
Whether this evidence, standing alone, would have been sufficient to establish that the Government’s delay in removing its property from Plancor 157 was the proximate and immediate cause of the plaintiff’s loss of profits, we need not here decide, inasmuch as certain admissions contained'in a letter prepared by the plaintiff’s president on June 9,1947,' throw serious doubt upon the validity of plaintiff’s claim (finding 20). Because statements found in this document have, in material respects, gone unexplained and were not challenged by the plaintiff through other evidence, we feel that the probability they suggest, i. e., that factors other-than the Government’s breach were the cause of the plaintiff’s loss of profits, destroys the plaintiff’s basic assertion. That letter, looking to an extension of the plaintiff’s mortgage payments, informed the defendant, in part, as follows:
Due to the recession in the Radio and Electrical Appliance fields, we find it imperative to effect substantial reductions in our overhead expenses without delay. This. business is operating at prices approximating 1939 levels, but with labor rates equivalent to twice the prewar level. Material costs are likewise higher. However, with the *823present recession and its effect on- value, our cash position has been seriously curtailed. Efforts to maintain employment at a good level must be foregone, if we continue to adversely affect our cash position. We have taken steps to adjust our expenses, and in the case of our payroll, we found it necessary to lay off 67 people, or 20% of the total employees. [Emphasis supplied.]
*****
Counsel for the plaintiff would weaken the force of the letter by emphasizing the purpose for which it. was written. It is argued that the letter sought a concession from the Government; i. e., the reduction of mortgage payments which the Crowley company had agreed to make under the purchase agreement of September 10, 1946. It was thought that a “polite” letter would serve this purpose best. For that reason the plaintiff did not specifically attribute its financial difficulties to the presence of the defendant’s machinery and equipment. As a matter of fact, the plaintiff’s explanation that the electronics industry was experiencing a postwar boom of major proportions is contrary to the statement contained in the letter.
But this explanation does not go far enough. While we are inclined to take judicial notice of the year 1947 as marking a resurgence of the radio and television industry, rather than a recession, we have no basis for questioning or disbelieving the underscored portion of the letter relative to low prices and high labor cost. On that point, the plaintiff is silent.
Accepting as true the statements found in the letter concerning the plaintiff’s postwar price structure, and the increased costs of labor and materials, the plaintiff’s failure to retain its prewar profit ratio is understandable. For to recapture a prior profit ratio — in the face of increased labor and material costs — with a static price level is a sheer impossibility. Moreover, this condition presumably accounts for the plaintiff’s failure to realize any profits in 1947. The plaintiff does not suggest that the Government is responsible for the continuation of its 1939 price level into the immediate postwar period. Nor does it blame the Government for the general postwar increase in the cost of labor and materials.
Though the plaintiff does not directly attempt to answer *824the serious questions raised in this letter, it does contend generally that because of its inability to rearrange its production lines in accordance with postwar production plans it incurred additional costs by reason of the presence of Government machinery and equipment in Plancor 157 beyond the expiration of the 90-day removal period. (Finding 16 (a)). To the extent that this condition brought about increaséd material costs through impairment of the manufacturing process, thereby increasing product rejections, and might have added to the cost of labor by requiring additional handling of products, then it could be said that the breach by the Government deprived the plaintiff of profits it would otherwise have earned.1 But the plaintiff did not, and possibly could not, introduce evidence showing that added costs were not due to a general, industry-wide increase in wage rates and in cost of raw materials used in its manufacturing process, but rather to the condition created in the plant by the Government. Nor did the plaintiff show that the price level set for its products, was sufficiently high to insure a profit, assuming, as the letter of Mr. Crowley would indicate,- the presence of added costs of operation not induced by the Government. We also have no way of knowing whether the situation described in the letter of June 9,1947, extended through the year 1948. Conceivably it did. For these reasons the plaintiff has failed in its burden of proof.
See Prejean v. Delaware-Louisiana Fur-Trapping Co., Inc., 13 F. 2d 71, 73 (1926); Burks v. Sinclair Refining Co., 183 F. 2d 239 (1950); Western Union Tel. Co. v. R. J. Jones & Sons, 211 F. 2d 479 (1954). The record before us thus leaves the issue of proximate cause in the realm of speculation. Story Parchment Company v. Paterson Parchment Paper Company, et al., 282 U. S. 555, 562 (1931).2
*825The plaintiff also asserts, that its total production for the years 1947 and 1948 would have surpassed its actual production for those years to the extent of products worth $8,009,324.69. On this amount a profit of 13.03 percent, or $392,115.01, would have been realized, argues the plaintiff. Once again, however, the plaintiff’s proof is inadequate. The plaintiff estimated, based on the demonstrated wartime productive capacity of Plancor 157, an annual net sales volume of $2,750,000 for the years 1947 and 1948. Whether this estimated capacity would have been met depends, of course, upon the number and scope of orders or contracts placed with the plaintiff. See Chain-Belt Co. v. United States, supra; Guido v. Hudson Transit Lines, 178 F. 2d 740 (1950). However, evidence of this nature was not introduced. We therefore cannot say what the plaintiff’s production would have been in 1947 and 1948 if the Government had removed its machinery and equipment from the plant prior to December 9,1946 (finding 27 (c) (2)) .3 Even if it were otherwise, our dissatisfaction with the plaintiffs’ proof regarding loss of profits would compel us to reject this basis of recovery.4
*826Finally,'the plaintiff urges that the difficulties imposed by the presence of Government-owned .machinery and equipment in Plancor 157 beyond the date of December 9, 1946., caused it to lose the favorable position it had enjoyed in the electronics industry prior to World War II. As a consequence, the plaintiff claims it was damaged to the extent of $2,000,000.
That the plaintiff’s position in the industry was less favorable during the years 1946-1948 than it had been prior to World War II is unquestioned. The record generally indicates the emergence of competition to the plaintiff’s business following the war. Specifically, experienced employees left the Crowley Company and organized their own companies in competition with the plaintiff. Companies which had not competed with the plaintiff prior to the war began manufacturing operations in the product field of the plaintiff, and companies which had formerly purchased electronics parts from the plaintiff began the manufacture of these parts themselves. The plaintiff attributes these postwar developments to the situation created by the Government’s delay in removing its property from Plancor 157. Whether this is an accurate explanation of the Crowley Company’s pre*827dicament, we cannot say on the basis of the record before us. Many factors, both political and economic, generally contribute to the development of competition within a particular line of industry. Presumably companies other than the plaintiff planned to exploit to the maximum the postwar seller’s market. Enterprising individuals who had acquired their skills at the Crowley Company likewise may have been sufficiently encouraged by peacetime economic prospects to organize their own companies in competition with the plaintiff. In other words, these developments may have had their roots in the situation created by the Government in 1946 and 1947,; they may have been entirely unaffected by that situation; or they might well have occurred in its absence. Whatever the cause, the plaintiff has not succeeded in establishing that it was due to the Government’s delay in vacating the plant (finding 27 (d) (2) ).
In regard to the defendant’s counterclaim it does not appeár that the poor condition in which the Government’s machinery and equipment were found following their removal from Plancor 157 was due to failure upon the part of the plaintiff to exercise reasonable care in their use. This condition was probably a consequence of the type of use to which the machinery and equipment were put in order to meet the Government’s wartime production requirements. Additionally, the evidence is insufficient to show the reasonable value of those items of machinery and equipment used by the plaintiff after September 10, 1946, but not thereafter purchased by it (findings 29 and 80).
For the above reasons, the plaintiff’s petition and the defendant’s counterclaim will be dismissed.
It is so ordered.
Reed, Justice (Bet.), sitting by designation; Madden, Judge/ and Jones, Chief Judge, concur. Whitakee, Judge, took no part in the consideration and decision of this case.FINDINGS OF FACT
The court, having considered the evidence, the report of Trial Commissioner Mastín G. White, and the briefs and argument of counsel, makes the following findings of fact:
*8281. (a) The plaintiff seeks a judgment in the total amount of $2,850,000, or alternatively in the total amount of $2,735,-809.97, to cover damages allegedly sustained because of the defendant’s failure to comply with a contractual obligation to remove from the plaintiff’s manufacturing plant in West Orange, New Jersey, within a period of 90 days from September 10,1946, a quantity of machinery and equipment belonging to the defendant.
(b) The defendant has asserted a counterclaim in the total amount of $96,018.17. This counterclaim is based in part upon an allegation that the defendant’s machinery and equipment in the plaintiff’s plant was damaged to' the extent of $50,000 because of the plaintiff’s failure to exercise ordinary care for the protection and preservation of such machinery and equipment, and in part upon an allegation that the plaintiff, without authority, used some of the defendant’s machinery and equipment for a period of approximately two years, the reasonable value of the use of such material allegedly being $46,018.17.
FINDINGS RELATIVE TO PLAINTIFF’S CLAIM
2. (a) The plaintiff is a corporation organized under the laws of the State of New Jersey. It has its principal place of business in West Orange, New Jersey.
(b) The plaintiff was organized in 1928. Its founder was Henry- L. Crowley, a pioneer in certain phases of the radio industry, such as the development, improvement, and manufacture of ceramic insulators and magnetic iron cores. The plaintiff’s business was thereafter conducted under the control of Mr. Crowley.
3. Since its organization, the plaintiff has been engaged continuously in the production of ceramics, iron cores, and related materials for úse in the radio industry. The principal customers of the plaintiff in the years prior to World War II were Zenith Radio Corporation, Philco, General Electric, and other leading manufacturers of finished radio sets. The plaintiff has also manufactured ceramics for spark plugs and other products related to the automotive industry.
4. (a) From 1928' until the start of World War II, the plaintiff had a satisfactory and steady growth. During the *8295-year period, 1936-1940, the plaintiff’s net sales aggregated $1,188,224.06 and the plaintiff’s adjusted.profit amounted to $162,232.05. The latter amount was 13.65 percent of the total net sales during the 5-year period. The banner year of the five from the standpoint of volume of sales and amount of profit was 1939, when the net sales totaled $329,-546.31 and the adjusted profit was $53,960.02.
(b) The plaintiff’s adjusted profit in 1936 was 4.04 percent of the net salés for that year; the adjusted profit in 1937 was 8.83 percent of the net sales; the adjusted profit in 1938 was 20 percent of the net sales; the adjusted profit in 1939 was 16.37 percent of the net sales; and the adjusted profit, in 1940 was 12.81 percent of the net sales. The average of these several percentages of adjusted profit for the 5 years was 12.41 percent.
(c) The plaintiff’s net operating profit ratio for the 5-year period, 1936-1940, was 13.03 percent.
5. In the early part of 1940, the plaintiff was requested by the Signal Corps of the United States Army, acting on behalf of the defendant, to convert its plant entirely to war production, and the plaintiff did so. Thereafter, it became apparent that the requirements of the defendant for war materiel, would justify a substantial expansion of the plaintiff’s manufacturing facilities. Accordingly, on July 2, 1941, the plaintiff and the defendant, acting through the Defense Plant Corporation (a subsidiary of the Reconstruction Finance Corporation), entered into a written contract that was denominated an “Agreement of Lease” (hereinafter usually referred to as “the lease”).
6. (a) The lease provided (among other things) that the plaintiff would convey to the Defense Plant Corporation, at a mutually agreeable price, a tract of land that the plaintiff owned adjacent to its existing manufacturing plant: that the plaintiff would also sell to the Defense Plant Corporation certain machinery then owned by the plaintiff; that thereafter an additional manufacturing plant would be constructed at the expense of the Defense Plant Corporation upon the land previously mentioned; that the plaintiff, at the expense of the Defense Plant Corporation, would rehabilitate the machinery acquired by the Defense Plant Cor*830poration from the plaintiff and would purchase such additional machinery and equipment as might be required for the new plant or to supplement the machinery and equipment in the plaintiff’s existing plant, and would install the rehabilitated machinery and the newly purchased machinery and equipment in the new plant or in the plaintiff’s existing plant, depending upon where it might be needed; and that the land, the newly constructed plant, and the machinery and equipment acquired by or on behalf of the Defense Plant Corporation would be under lease to the plaintiff from the Defense Plant Corporation for a term ending July 1, 1946, unless terminated sooner.
(b) As rental for the land, the new plant, and the machinery and equipment leased to the plaintiff, the latter agreed to pay the Defense Plant Corporation a prescribed percentage of the plaintiff’s aggregate net sales during each year of the lease period, irrespective of whether the materials sold by the plaintiff were produced “through the use of the plant and facilities herein provided for or through the use of any other plant or facilities now owned or hereafter acquired by Lessee [plaintiff] Originally, the rental was to be calculated on the basis of 1 percent of the first $500,000 of annual net sales, or part thereof, and 2 percent on any annual net sales in excess of $500,000. This provision was later amended on three different occasions, but those changes were without any special significance from the standpoint of the present litigation.
(c) The sixth paragraph of the lease provided in part as follows:
* * * To the extent practicable, each item of Machinery shall be marked or stamped by Lessee [plaintiff] in a way satisfactory to Defense Corporation so as to indicate Defense Corporation’s ownership therein.
(d) The 18th paragraph of the lease provided in part as follows:
Lessee [plaintiff] shall use reasonable care in the use and operation of the site, buildings and the Machinery to be provided hereunder and shall keep the same in good state of repair (ordinary wear and tear excepted), and upon the expiration, termination or cancelation [sic] of this lease * * *, Lessee shall forthwith yield, and *831place Defense Corporation in peaceful possession of the site and buildings and of all the Machinery to be provided hereunder free and clear of any liens and claims other than those resulting from claims against Defense Corporation; and if any of the Machinery shall be then located elsewhere than in the additional plant to be provided hereunder, Defense Corporation shall, in addition, have the right to remove, and upon the written request of Lessee, shall promptly remove, at its own expense, such Machinery, and if such removal shall not take place within sixty (60) days after such request, Lessee may remove the Machinery and place it in storage for the account and at the expense of Defense Corporation * * *
7. (a) The sale of land and machinery by the plaintiff to the Defense Plant Corporation, in accordance with the provisions of the lease, was effected on January 27, 1942. Thereafter, the various other steps provided for in the lease with respect to constructing and equipping the new plant and augmenting the machinery and equipment in the plaintiff’s existing plant were taken. The total cost of the program to the defendant amounted to approximately a million dollars. The new plant owned by the Defense Plant Corporation and the plant owned by the plaintiff were subsequently operated by the plaintiff as a single manufacturing unit, which was generally referred to by the parties as Plancor 157 (and this terminology will frequently be used in the present findings).
(b) The machinery and equipment purchased by the plaintiff at the expense of the Defense Plant Corporation and installed in Plancor 157 consisted principally of small, inexpensive lathes and drills that had short life expectancies in the light of the types of work for which they were acquired. However, there were some heavy types of equipment, such as big presses that were sunk in foundations and kilns that were imbedded in concrete to a depth of from 8 to 10 feet. Also, in the new plant, there were water pipes, electrical wiring, and a dust-collecting system that included a great mass of overhead pipes.
(c) In order to fulfill its obligation to account for the machinery and equipment purchased for Plancor 157, all invoices evidencing such purchases were entered by the plain*832tiff in a volume designated as tbe Asset Property Record. The Asset Property Record consisted of more than 600 .pages, on which were déscribed the several hundred items of machinery and equipment that were purchased under the lease.
8. (a) The entire production of Plancor 157 was contracted for by the Signal Corps of the United States Army, and the plaintiff became the principal supplier of the defendant’s armed forces in so far as iron cores and radio-grade ceramics were concerned. The plaintiff’s production gradually increased, and by 1944 the plaintiff’s gross production amounted tó approximately $4,000,000 per year.
(b) The plaintiff’s prices for the materials produced by it during the wártime period were fixed at levels that resulted in profits which, in relation to sales, were less than the plaintiff’s net operating profit ratio of 13.03 percent during the 1936-1940 period.
9. Upon the cessation of hostilities in 1945, the plaintiff commenced to carry out plans which it had made for the conversion of its manufacturing operations to the peacetime production on a large scale of materials for the radio industry and also for the television industry, which the plaintiff expected to develop into a substantial business in the immediate postwar years. In this connection, the plaintiff inaugurated with personnel of the defendant negotiations looking toward the purchase of the Government-owned plant and some of the Government-owned machinery and equipment at Plancor 157;
10. The lease was terminated on November 3, 1945. It was replaced by an interim agreement, under which ;the plaintiff was permitted to continue to occupy the Government-owned plant and to use the Government-owned machinery and equipment at Plancor 157 on a month-to-month basis during the progress of the negotiations mentioned in finding 9. During this interim period, the plaintiff agreed to pay the defendant an' annual rental computed on-the basis of 8 percent of the value of the Government-owned land and buildings and 12 percent of the value off the Government-owned machinery and equipment. ,!
11. (a) The negotiations referred to in finding 9 continued until on or about July 1, 1946, and it was not unti] *833September 10,1946 that the parties finally signed a purchase agreement. Under the agreement, the defendant contracted to sell and convey to the plaintiff, and the plaintiff contracted to purchase, the Government-owned plant, including the land on- which the plant was situated, and a large quantity of the Government-owned machinery and equipment at Plancor 157. The total purchase price was $455,941.71, of which total the sum of $150,000 was allocated as the purchase price of the realty and the sum of $305,941.71 was allocated as the purchase price of the personalty. Of the total purchase price, the sum of $80,000 was payable in- cash and the remainder of $375,941;7l was payable, with interest at the rate of 4 percent per annum, in quarterly installments of $9,500 each for a period of 10 years, when the balance then remaining unpaid was to become payable. The plaintiff’s indebtedness of $375,941.71 was to be covered by a promissory note and secured by a purchase-money first mortgage on the realty and personalty referred to in the purchase agreement.
(b) The purchase agreement of September 10, 1946 did not provide for the purchase by the plaintiff of all the Government-owned machinery and equipment at Plancor 157. With respect to the Government-owned machinery, and equipment not included in the agreement, subparagraph (e) of paragraph 6 of the purchase agreement provided as follows:
That the Seller [defendant] shall have a reasonable time,.but not in excess of ninety (90] days from the closing of title and delivery of the deed, to remove from the premises, at Seller’s expense, all items of personal property, machinery and equipment owned by the Seller and located in the premises and not included in this sale.
12. On September 10, 1946 (i. e., the same date on which the purchase agreement mentioned in finding 11 was signed), the defendant executed and delivered to the plaintiff a bill of sale for the personalty and a quitclaim deed for the realty included in the purchase agreement. At the same time, the plaintiff executed and delivered to the defendant a promissory note and mortgage to secure the payment of the remainder of $375,941.71 that-was to be paid by the plaintiff subsequently for such personalty and realty. The cash pay*834ment of $80,000 required by the purchase agreement had been made by the plaintiff to the defendant prior to September 10, 1946.
13. The 90-day period allowed the defendant for the removal of its remaining machinery and equipment from Plan-cor 157 Under subparagraph (e) of paragraph 6 of the purchase agreement dated September 10, 1946 expired on December 9,1946. However, none of the defendant’s machinery or equipment was removed by the defendant from Plancor 157 prior to the expiration of the 90-day period. In fact, despite written and oral requests from the plaintiff for action, the actual removal of such machinery and equipment was not begun by the defendant until July 1947, and the removal was not completed until sometime in late November or early December of 1947.1
14. (a) The major share of the responsibility for the delay mentioned in finding 13 was attributable to the defendant. However, such delay was due in part to:
(1) the failure of the plaintiff to stamp or mark properly some of the defendant’s machinery and equipment in accordance with the sixth paragraph of the lease (see paragraph (c) of finding 6), which caused difficulty to the defendant in locating items of machinery and equipment that were to be removed from Plancor 157;
(2) the failure of the plaintiff, as partially worn-out machines belonging to the defendant were “cannibalized” during the manufacturing operations,2 to enter appropriate notations on the Asset Property Eecord, which later made it difficult in many instances for the defendant to identify machines that were to be removed;
(3) the failure of the plaintiff to make available to the defendant with reasonable promptness, after being requested *835to do so, space in Plancor 157 that was needed by the defendant for the removal operations; and
(4) the action of the plaintiff on September 8, 1947 in opening negotiations looking toward the purchase from the ■defendant of a substantial amount of the machinery that was scheduled to be removed from Plancor 157, which negotiations continued throughout the remainder of the period of the removal operations and caused uncertainty as to whether particular items of machinery should or should not he removed.
(b) The evidence does not permit a precisely accurate allocation, as between the defendant and the plaintiff, of the responsibility for the delay of approximately one year beyond December 9,1946 in removing the defendant’s machinery and equipment from Plancor 157. However, rough justice would be done by allocating five-sixths of the responsibility to the defendant and one-sixth to the plaintiff, thus attributing approximately 10 months of the delay to the defendant and approximately 2 months of the delay to the plaintiff.
15. (a) Approximately 40 percent of the machinery and equipment that the defendant was obligated to remove from Plancor 157 under the agreement of September 10,1946 was taken from the plant proper by the plaintiff (at a time not disclosed by the evidence) and stored in a warehouse located some distance away from the plant, the warehouse having been rented by the plaintiff for storage purposes.3 The items of machinery and equipment thus stored by the plaintiff were later removed from the warehouse by the defendant in July 1947.
(b) The remainder of the defendant’s machinery and equipment continued to be housed in Plancor 157 until it was removed by the defendant.4 These items of machinery and equipment were intermingled throughout Plancor 157 with *836machinery and equipment belonging to the plaintiff. They occupied approximately 16,000 square feet of plant production space, which was somewhat less than half of the production space in Plancor 157. They consisted to a substantial extent of kilns, heavy presses, and other large items that were firmly affixed to the structure, but there were also many smaller items that could have been taken from the plant proper by the plaintiff without undue difficulty and stored elsewhere. '
16. (a) The presence in Plancor 157 for many months after December 9,1946 of a large quantity of idle machinery and equipment belonging to the defendant prevented the rearrangement of the plaintiff’s own machinery and equipment in accordance with plans which the plaintiff desired to carry out and which the plaintiff thought would achieve greater efficiency in production. The plaintiff desired to effect such a rearrangement primarily for two reasons:
(1) in order to reduce the extent to which it was necessary to handle products during the manufacturing process, hoping thereby to speed up production, to reduce labor costs, and to reduce the incidence of chipping, cracking, scraping, and breakage; and
(2) in order to segregate to a greater extent the manufacture of iron cores from the manufacture of ceramics, hoping thereby to reduce the incidence of contamination of products during the manufacturing process, especially the contamination of ceramics because of the presence of iron dust in the air.
(b) The original arrangement of the production lines in Plancor 157, including the arrangement whereby ceramics and iron cores were manufactured in adjacent areas of the plant, had been made by the plaintiff. The defendant was not responsible in any way for such arrangement.
(c) To the extent that the rearrangement which the plaintiff desired to make of its machinery and equipment was prevented by the presence in Plancor 157 of the defendant’s smaller items, the plaintiff could have improved the situation at any time by taking such items from the plant proper and storing them elsewhere. (See finding 15.)
17. (a) After the removal by the defendant of its machinery and equipment from Plancor 157, the plaintiff in the *837latter part of December 1947 began tbe rearrangement of its own machinery and equipment in tbe plant. This process continued through 1948. After it had been completed, there was an improvement in the quality of the plaintiff’s products and fewer rejections because of contamination or other defects.
(b) The evidence does not show to what extent the rearrangement of machinery and equipment referred, to in paragraph (a) of this finding resulted in an improvement of the plaintiff’s rate of production, or of its volume of business, or of its profits. Hence, the evidence is insufficient to permit an evaluation in monetary terms of the effect that the continued presence of the defendant’s machinery and equipment in Blancor 157 for approximately one year after December 9, 1946 had upon the plaintiff’s operations.
18. (a) Under the date of August 26, 1947, a firm of attorneys submitted to the defendant a letter setting out a claim for $569,810.51 (or more) because of the defendant’s failure to remove its machinery and equipment from Plan-cor 157 within the 90-day period prescribed for that purpose in subparagraph (e) of paragraph 6 of the agreement dated September 10,1946.
(b) It was stated in the'letter of August 26,1947 that the defendant’s machinery and equipment had occupied 37,000 square feet5 of space in the plaintiff’s plant; that the rate charged by warehouses in that vicinity for similar storage was 20 cents per month per square foot; that a fair figure for the storage of the defendant’s machinery and equipment in Plan-cor 157 would be $59,200 from December 10, 1946 to August 10, 1947; and that an additional charge would accrue up to the time of the removal of such machinery and equipment from the plant.
(c) The letter of August 26, 1947 also requested compensation in the amount of $490,610.51 for “An additional loss by reason of the exclusion of our client from the use of its property”. It was indicated that such amount was computed upon the basis of a figure of $313,476.70 representing the estimated loss by the plaintiff on its operations from *838V-J Day to December 31,1945, a figure of $181,192.50 representing the plaintiff’s actual loss during the year 1946, and a figure of $131,474.74 representing an estimated loss by the plaintiff for the first six months of 1947. These separate figures aggregated $626,143.94, and there was deducted from this total the sum of $135,533.43 representing “tax carryback credit on 1946 loss”.
19. In a communication to the defendant dated September 8,1947 and signed by the plaintiff’s president, there was a reference to the letter mentioned in finding 18, and the •communication then stated:
* * * I wish you would return the letter to me and disregard it for the time being as I wish to review it, and I will take the matter up with you at the earliest possible moment.
20. The withdrawal by the plaintiff of the claim mentioned in finding 18 was apparently due to the fact that the plaintiff was then negotiating with the defendant for the modification of the promissory note and mortgage which the plaintiff had executed in accordance with the purchase agreement of September 10,1946 (see findings 11 and 12). Such negotiations were inaugurated by the plaintiff on or about June 9, 1947, and they continued intermittently for more than 18 months. The plaintiff’s president indicated in these negotiations that such a modification was needed because of financial difficulties that the plaintiff had encountered. Such financial difficulties were not attributed by the plaintiff’s president to the continued presence of the defendant’s machinery and equipment in Plancor 157 after December 9, 1946. In his letter of June 9, 1947 to the defendant, such difficulties were not attributed by the plaintiff’s president to the continued presence of the defendant’s machinery and equipment in Plancor 157 after December 9, 1946. That letter stated in material respects:
# * * * *
Due to the recession in business in the Padio and Electrical Appliance fields, we find it imperative to effect substantial reductions in our overhead expenses without delay. This business is operating at prices approximating 1939 levels, but with labor rates equivalent to twice the prewar level. Material costs are likewise *839higher. However, with the present recession and its effect on volume, our cash position has been seriously curtailed. Efforts to maintain employment at a good level must be foregone, if we continue to adversely affect our cash position. We have taken steps to adjust our expenses, and in the case of our payroll, we found it necessary to lay off 67 people, or 20% of the total employees.
A comparison of May sales with January shows a decrease of 31%, and thus far June sales are lower. Orders on hand from customers show a similar trend, being 55% less than at the first of the year.
In view of the foregoing, we wish to petition for a reduction by one-half of the amount paid quarterly to the W. A. A. [War Assets Administration] for amortizing the mortgage on the plant. The amount due June 10th is for $13,069.42, or $9,500.00 for the reduction of principal and the balance of $3,569.42 being interest at 4%.
We would greatly appreciate your approving this reduction beginning with the June 10th payment as it is of vital importance to us, under present conditions. Of course, at such time as general business conditions permit, we would resume payments on the original basis and, whenever possible, absorb some of the back reductions.
* * * * Hi
21. The negotiations referred to in finding 20 with respect to the modification of the promissory note and mortgage were merged about November 1947 with the negotiations referred to in finding 14(a) (4) respecting the purchase by the plaintiff of additional machinery and equipment from the defendant. The combined negotiations continued for more than a year thereafter.
22. In a letter dated February 26, 1948, a law firm (other than the firm mentioned in finding 18) submitted a claim to the defendant on behalf of the plaintiff. The claim was said to be in the nature of “a storage charge for machinery left in Plancor 157 by the government from September 10, 1946 down to the present date and is. based on a storage charge of approximately 20$ per square foot per month”. It was stated that “As of December 10,1947 this claim amounted to approximately $88,800”. It was indicated in the letter that the claim was based on the 18th paragraph of the lease (see *840paragraph (d) of finding 6) and upon subparagraph (e) of paragraph 6 of the agreement dated September 10,1946 (see paragraph (b) of finding 11).
23. A further letter dated April 6, 1948 from the same law firm mentioned in finding 22 indicated that the plaintiff was making additional claims (in unspecified amounts) “for loss of sales due to decreased production”, “for increased costs of production”, and “for cost of relocating properly machinery and equipment purchased since acquiring the plant from D. P. C.”.
24. During the course of the negotiations mentioned in findings 20 and 21, there was some general discussion between the parties of the plaintiff’s claim based upon the failure of the defendant to remove its machinery and equipment from Plancor 157 within the 90-day period prescribed for that purpose by subparagraph (e) of paragraph 6 of the purchase agreement dated September 10, 1946. However, there was no specific discussion of a settlement of the claim or of a waiver of the claim by the plaintiff, except in so far as the claim related to the portion of the machinery and equipment that the plaintiff was seeking to purchase from the defendant.
25. After the negotiations mentioned in findings 20, 21, and 24 had reached a final phase, the plaintiff’s Board of Directors adopted the following resolutions on December 10,1948:
Resolved that the president be and he hereby is authorized and directed to sign on behalf of the company an agreement with War Assets Administration acting for and on behalf of Keconstruction Finance Corp., modifying the terms of payment of the promissory note secured by the company’s mortgage dated September 10, 1946, and a three-cornered agreement between Henry L. Crowley & Co., Inc., Henry L. Crowley an individual, and War assets [sic] Administration acting for and on behalf of Reconstruction Finance Corporation, the terms of which agreements are by reference hereto made a part of this resolution, and be it further
Resolved that the president be and he hereby is authorized and directed to sign on behalf of the company a conditional bill of sale calling for the purchase of addi*841tional machinery and equipment from War Assets Administration, acting for and on behalf of Reconstruction Finance Corporation, in the amount of $12,617.00 plus interest in the amount of $1,556.10, with a down payment of $4,173.10, the balance to be paid at the rate of $100.00 per month plus interest @ 4% p. a. on unpaid balance for the first two years, the balance over the following 36 months in equal monthly installments plus interest on unpaid balance @ 4% p. a. until the entire balance shall have been paid, and be it further
Resolved that the president be and he hereby is authorized and directed to sign on behalf of the company a release for any claim against War Assets Administration, acting on behalf of Reconstruction Finance Corporation, for storage of the specific additional equipment hereby to be purchased and referred to in the preceding resolution which the company has or may have * * *.
26. On December 29,1948, the plaintiff and the defendant entered into an agreement for the purchase by the plaintiff from the defendant of the machinery and equipment about which they had been negotiating since September 1947, and into an agreement modifying the terms of the promissory note and mortgage in several respects favorable to the plaintiff. Paragraph 10 of the latter agreement provided as follows:
The Mortgagor hereby covenants and agrees that it is now the owner of the premises upon which the aforesaid Mortgage is a valid first lien to secure payment of the indebtedness of the Mortgagor to the Mortgagee above set forth; and that there are no defenses, offsets or counterclaims to said Promissory Note or Mortgage, and that the Mortgagor is fully authorized to execute these presents as such.
27. The elements of damages claimed by the plaintiff in the present litigation are outlined below:
(a) (1) The plaintiff’s net sales in 1947 amounted to $1,112,-666.56, or approximately 3% times as much as the plaintiff’s sales during the best prewar year (see finding 4). If the net operating profit ratio of 13.03 percent that the plaintiff maintained during the period 1936-1940 (see finding 4) had been realized by the plaintiff on its net sales in 1947, the *842profit for that year would have amounted to $144,980.45. Instead, the plaintiff actually suffered a loss of $74,916.34 on its operations in 1947.6 The plaintiff contends that its failure to earn a profit of $144,980.45 on its production in 1947 was due to the failure of the defendant to remove its machinery and equipment from Plancor 157 prior to the beginning of 1947 in accordance with the requirement of sub-paragraph (e) of paragraph 6 of the agreement dated September 10, 1946. Accordingly, under the plaintiff’s theory, the defendant is liable to the plaintiff for the difference of $219,896.797 between the loss that the plaintiff actually sustained in 1947 and the profit that the plaintiff (according to its contention) would have made on its production in 1947 but for the presence in Plancor 157 of the defendant’s machinery and equipment.
(2) The evidence is insufficient to show what the plaintiff’s profit or loss in 1947 would have been if the defendant’s machinery and equipment had been removed from Plancor 157 not later than December 9, 1946; and, hence, the evidence does not establish that the presence of the defendant’s machinery and equipment in Plancor 157 during the greater part of 1947 was the cause of the plaintiff’s failure to earn a profit of $144,980.45 on its production during that year.
(b) (1) The plaintiff’s net sales in 1948 amounted to $1,378,008.75. If the net operating profit ratio of 13.03 percent that the plaintiff maintained during the period 1936-1940 had been realized in 1948, the plaintiff would have made a profit of $179,554.54 on its production during that year. Instead, the plaintiff’s profit for 1948 amounted to only $99,492.45. The plaintiff asserts that its failure to earn a profit of $179,554.54 on its production in 1948 was due to the aftereffects of the defendant’s failure to complete the removal of its machinery and equipment from Plancor 157 until late in November or early in December of 1947. Under the plaintiff’s theory, the defendant is liable to the plaintiff for the difference of $80,062.09 between the profit of $99,492.45 *843that the plaintiff actually made in 1948 and the profit of $179,554.54 that the plaintiff (according to its contention) would have made on its production in 1948 if the defendant’s machinery and equipment had been removed from Plancor 157 not later than December 9, 1946 in accordance with the requirement of subparagraph (e) of paragraph 6 of the agreement dated September 10,1946.
(2) The evidence is insufficient to show what the plaintiff’s profit in 1948 would have been if the defendant’s machinery and equipment had been removed from Plancor 157 not later than December 9,1946'; and, therefore, the evidence does not establish that the plaintiff’s failure to earn a profit of $179,-554.54 on its production in 1948 was due to the presence in Plancor 157 until November or December 1947 of machinery and equipment belonging to the defendant which the latter was obligated to remove under subparagraph (e) of paragraph 6 of the agreement dated September 10,1946.
(c) (1) The plaintiff asserts that if the defendant had complied with its contractual obligation for the removal of its machinery and equipment from Plancor 157 not later than December 9,1946, the plaintiff’s total production of products during the years 1947 and 1948 would have exceeded its actual production during those years to the extent of products worth $3,009,324.69, and that it would have realized a profit of 13.03 percent, or $392,115.01, on such extra production. Accordingly, it is the plaintiff’s contention that the defendant is liable to the plaintiff for the latter’s failure to realize a profit of $392,115.01 which (according to the plaintiff’s contention) it would have realized from the manufacture and sale of commodities that would have been produced during 1947 and 1948 but for the presence of the defendant’s machinery and equipment in Plancor 157 during the greater part of 1947.
(2) The evidence is insufficient to show what the plaintiff’s production in 1947 and 1948 would have been if the defendant had removed its machinery and equipment from Plancor 157 not later than December 9, 1946 in accordance with the requirement of subparagraph (e) of paragraph 6 of *844the agreement dated September 10, 1946, or what the plaintiff’s profit would have been on such production.
(d) (1) The plaintiff asserts that the difficulties that it encountered because of the presence in PlancorT57 of the defendant’s machinery and equipment for a period of approximately one year beyond December 9, 1946 caused it to lose the favorable position that it had achieved and maintained prior to World War II as a supplier of major companies in the electronics field, and that the defendant’s breach of its contractual obligation for the removal of such machinery and equipment damaged the plaintiff in this respect to the extent of $2,000,000.
(2) The plaintiff’s relative position as a supplier of parts in the electronics business was less favorable during the years 1946-1948 than it had been during the period prior to the beginning of World War II. After World War II, some persons who, as employees of the plaintiff, had gained knowledge and proficiency in the plaintiff’s manufacturing procedures and techniques left the employ of the plaintiff and organized their own companies in competition with the plaintiff ; other companies that had not competed with the plaintiff before World War II began the manufacture of products in competition with the plaintiff; and certain major companies in the electronics field began the manufacture of parts which they had previously purchased from the plaintiff. It is the plaintiff’s theory that these developments occurred because of the plaintiff’s difficulties that grew out of the failure of the defendant to remove its machinery and equipment from Plancor 157 not later than December 9, 1946. However, the evidence is insufficient to establish the causal connection asserted by the plaintiff, or to permit an evaluation in monetary terms of the extent to which the presence in Plan-cor 157 of the defendant’s machinery and equipment for approximately one year after December 9, 1946 contributed to the plaintiff’s loss of relative standing as a supplier of parts to major companies in the electronics field.
28. The plaintiff does not renew in this litigation the claim that it previously asserted against the defendant (see findings 18 and 22) upon the basis of the value of the space in *845Plancor 157 that was occupied by the defendant’s machinery and equipment after December 9, 1946.
FINDINGS RELATIVE TO DEFENDANT’S COUNTERCLAIM
29. (a) The defendant’s machinery and equipment were found to be in poor condition at the time of their removal from Plancor 157. All items were dirty and dusty, many of them could only be salvaged for scrap, and such as were usable required rehabilitation.
(h) The evidence is insufficient to show that the poor condition of the defendant’s machinery and equipment was due to a failure upon the part of the plaintiff to exercise reasonable care in the use of such machinery and equipment, as required by the 18th paragraph of the lease (see paragraph (d) of finding 6). On the contrary, it appears that such condition was a consequence of the type of use to which the machinery and equipment had properly been devoted in order to meet the defendant’s wartime requirements for materiel.
30. (a) Some items of machinery and equipment belonging to the defendant were used by the plaintiff while they were in Plancor 157 after September 10,1946. Most of these items were ultimately purchased by the plaintiff from the defendant in December 1948, but others were not purchased by the plaintiff.
(b) The evidence is insufficient to show the reasonable value of the use of the machinery and equipment referred to in paragraph (a) of this finding.
CONCLUSION OF LAW
Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that plaintiff is not entitled to recover and its petition is dismissed. The court further concludes that defendant is not entitled to recover on its counterclaim and its counterclaim is dismissed.
This argument of the plaintiff suggests that the defendant -was responsible for arrangement of the production lines -within Plancor 157. However, this is not the ease. The original arrangement of the production lines in the plant, including the arrangement whereby ceramics and iron cores were manufactured in adjacent areas of the plant, thereby increasing the incidence of contamination of ceramics due to the presence of iron dust in the air, had been made by the plaintiff (finding 16(b)).
In Story Parchment Company v. Paterson Parchment Paper Company, et al. 282 U. S. 555, (1931), where the issue was whether the plaintiff sustained a loss of profits as a result of respondents’ price-cutting combination, the Court at 562 said
*825* * * The rule which precludes the recovery of uncertain damages applies to such as are not the certain result of the wrong, not to those damages which are definitely attributable to the wrong and only uncertain in respect of their amount. Taylor v. Bradley, 4 Abb. Ct. App. (N. Y.) 363, 366-367”
“It is sometimes said that speculative damages cannot be recovered, because the amount is uncertain; but such remarks will generally be found applicable to such damages as it is uncertain whether sustained at all from the breach. Sometimes the claim is rejected as being too remote. This is another mode of saying that it is uncertain whether such damages resulted necessarily and immediately from the breach complained of.
“The general rule is, that all damages resulting necessarily and immediately and directly from the breach are recoverable, and not those that are contingent and uncertain. The latter description embraces, as I think, such only as are not the certain result of the breach, and does not embrace such as are the certain result, but uncertain in amount.”
*****
While the plaintiff’s rearrangement of production lines in Plancor 157 was completed in 1948, followed by an improvement in quality of the plaintiff’s products, the record does not show to what extent this rearrangement brought about an improvement of the plaintiff’s rate of production, its volume of business, or its profits (finding 17(b)).
In Chain Belt Co. v. United States, 127 C. Cls., 38 (1953), where we allowed the plaintiff lost profits under circumstances quite similar to the instant case, the method of proof is to be distinguished from that employed here.' While the plaintiff in Chain Beit offered evidence of a profit ratio of *826approximately 21 percent for the years 1936 through 1945, Its allowed recovery was based upon a showing that Its total business earnings during the period of delayed plant clearance operations, i. e., from December 10, 1946 to February 15, 1947, approximated a net profit of $0.0118 per square foot of manufacturing floor space each calendar day. It had been previously established that the nature of the plaintiff’s manufacturing operations was such that its earning capacity bore a substantial relationship to its available manufacturing floor space. Also established was the fact that for the. year ending October 1946, the plaintiff’s backlog of orders for its chain belt and transmission division, the expansion of- such division being delayed by the Government’s breach, had increased approximately 72 percent to . over $6,000,000. Finally it was shown that because of inability to met delivery schedules for chain belt orders, the plaintiff’s new orders were restricted and some cancellations resulted. In view of this evidence, the net profit computation of $0.0118 per square foot a calendar day was applied to the floor area occupied by Government machinery and equipment, less that floor area occupied by the plaintiff in its continued operation of the old chain belt plant, and then multiplied by 67, the number of days (beyond the authorized removal date) consumed by the Government’s clearance operations, in arriving at a loss in profits of $91,761.78.
The plaintiff in Chain Belt, unlike the plaintiff here, was therefore able to establish a loss of profits resulting from the Government’s breach of contract by the additional showing of profitable postwar manufacturing operations, a relationship between earning capacity and available manufacturing floor space, and an accumulation of orders for its products.
Some of the machinery and equipment belonging to the defendant was left in Plancor 157 when the removal operations ended in late November or early December of 1947. However, all these items were later purchased by the plaintiff from the defendant (see findings 14 (a) (4), 21, and 26). They were substantial in number, but constituted only a small percentage of the total amount of machinery and equipment that the defendant was originally obligated to remove from Plancor 157 under the agreement of September 10, 1946.
This was necessary in order to maintain production at a high level under wartime conditions.
The costs incurred by the plaintiff in transporting such machinery and equipment from the plant proper to the warehouse and storing it in the warehouse were apparently involved in a suit which the plaintiff later instituted against the Reconstruction Finance Corporation in the united States District Court for the District of New Jersey. That suit was settled by the parties, but the details of the settlement are not disclosed by the evidence in the present case.
See footnote 1.
The correct figure was approximately 16,000 square feet. (See paragraph (b) of finding 15.)
The plaintiff asserts that its loss in 1947 amounted to $118,652.42, but this figure is erroneous because of excessive depreciation on machinery and equipment to the extent of $43,736.08 claimed by the plaintiff for 1947.
The plaintiff asserts that the difference is $263,632.87, but see footnote 6*