Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1894-03-27

Secretary Herbert Reports the Matter in
Detail TO Congress.

WASHINGTON, d. c., March 26.-Sec-
rotary Herbert to-day sent TO the House
an answer TO the Cummings resolution
calling for statement Of details Of the
recent alleged violation OF Carnegie,
Phipps & Co. Of the contracts with the
United States for the manufacture OF
armor plates for the navy, The secre-
tary's answer is very interesting.
Sometime last September the recre-
tary received notice that Homestead
employees had information relating to
frauds by certain employees Of the COM
pany which they would give for con-
sideration. The secretary agreed to re-
numerate the lnf0rmeTs. Three Of the
employees. examined by the secretary,
satlffed him that a thorough investiga-
ton was needed A contract was made,
agreeing TO give them % per cent. on
the money recovered, in consideration
that they would be discharged aud
blacklisted. These men submitted in
formation in great detail. TIE allege-
tons were that the company employees
had failed to temper armsr evenly and
proper had plugged ana concealed blow
holes Inspectors at the works
select one plate from each group, which
is thoroughly tested, and upon the re-
suit depends the acceptance Of the
group. Some OF these plates, after they
were selected, had been secretly re-
treated at night; reannealed and retem-
pered so as TO make them better and
tougher than the group OF plates of
which they were supposed to DO the
least resisting.
Under direction Of SuperintendentS
Schwab, CORR aud Cline the statements
furnished TO the government inspector
were false Captain Sampson, Chief OF
the Bureau of Ordnance, proceeded TO
make a thorough investigation. This
investigation sustained the charges and
assessed damages at 10 per cent upon
the amount of armor delivered and upon
all premiums received.
The Secretary says: In conversation
with the informantS / had carefully in
CURED whether the chief officers Of the
company, Mr.. Frick and Mr. Hunsicker,
had any knowledge of the fraud.
could find nothing TO indicate that
either knew anything of the Irregular
ties.
The department teleEraphed to Mr..
Fl. c. Fcck TO come to Washington,
suggesting that he bring Hunsicker,
who was more directly in charge of the
manufacture Of armor plates. eX-
planned fully the transaction, who the
infOrmants were, and the nature Of the
information.
I demanded satifaction for these ir-
Irregularities and informed them that
they would only be allowed TO proceed
with the contract on condition Of max
ing full reparatiOn. AIeSsrs. FriCk and
Hunscker both seemed greatly aston
ished. Mr.. ETiCk not only disc.aimed
as did Mr.. HunSiCker, any knowledge
of the transactions, but mentioned the
fact that he had been in some manner
put ON guard as TO irregularities that
were being committed by the employees
on the armOr, and that he had there
upon written letter to Mr. Schwab, who
superintendent the heating and temper
ing, cautIouing him 10 the utmost care
and diligence in faithfully fulfilling the
contracts. A COPY OF this letter APP
pears in the cores pOndence. MesSrs.
FricK and HunSicker promised TO return
in a few days, bringing with them writ
ten statements made by Mr. Frick.
Mr.. HunSicker and $ }arintendent
Schwab. Mr.. Carnegie returned with
them. and they were also accompanied
by Mr.. Knox, attorney for the company,
Mr.. Carnegie was also heard at some
length. A few days afterward Messrs.
FriCk and Hunscker again returned,
and were informed that the department
intended to approve the report of Capt. |
Sampson, assessing penalties at the rate
of - per cent. upon the armOr that |
they had manufactured for the govern
ment, and premiums. Mr. Fric6 in
Quired il they had the right to appeal |
TO the President, and was Informed that |
they had, and that the department !
would be glad in a matter of so much !
moment TO have the President revise its !
decision.
The question, as to the exact amount !
of damages the department would as
sess had not been decided upon when
the appeal was taken 10 the president.
Ga December 90, 1898. Nessrs. Car |
negie. Frick, Hunsicker, Knox, attOr- /
ney of the company, and the Secretary |
of the Navy, appeared before the Presi- /
dent. Mr.. Carnegie and Mr. Knox ar /
Cued the questions involved at length. |
The President took the matter under |
advisement. considered the questions at |
great length and upon o careful cOnsid- /
Grafton of all tho facts decided that all |
the damages ought not to begin until |
the third of November, 1899, az which |
dav our proofs of Irregularities began, /
81 ID
arm0r manufactured after the 10th day |
OF September, 1893, the date upon |
which Mr.. Frick had cautioned the SUI |
superintendent to extra care. When /
the ultimate decision came TO be made, |
J called 10 mind and stated 20 the pres /
ideut that our own proof tended 10 !
show that the irregularities at the |
works ceased about the time Air. Frick /
had writtea his letter 60 Mr.. Schwab.
The President having himself first eX- /
amlned the question with great care, |
after long conference with the Secre- /
tarv Of the Navy, made the following |
decision:
II have examined with care the re-
port OF the alleged Irregularities at the |
Carnegie steel mills aud their assessment |
Of the damages on account of defcien-
cies in the armOr. l am satisfied that
a large portion Of the arm0r supplied J
was not of the quality which would /
have been produced II all possible care
and skill had been exercised in its con-
struction. am OF the opinion that un-
der the terms of the contract between
the government and the company this
entitled the government TO damages.
1t is, however, an exceedingly difficult /
matter 70 extract from the facts deyel-
0ped a satisfactory basis for the assess
ment of such damages; and lnasmuCh /