St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1894-03-27
DEFECTIVE ARMOR PLATE
FURNISHED BIZ the CARNEGIE iR0R
WORKS.
SERIOUS FRAUD Is ALLEGED.

Uneveniy Tempered. Holes
Plugged Up and Memoranda
Faisified as to Length Of Time
Plates Were Heated. ~
WASHINGTON, March 26.-Seerelary
Herbert today sent to the house an an
Swer TO the Cummings resolution CALI
ing for statement of the details of the
recent alleged violation by Carnegie.
Phipps q Co. of the contracts with the
United States for the manufacture of
armor plate for the navy. The secre- =
tary's answer is long and very interest,"
ing. giving in detail the history of the
progress and discovery of one of the
most gigantic frauds known in our
naval administration. A sketch of the
most interesting portions of the secre-
tary's communication is here given:
Some time last September the secre-
tary received from James Smith, at
Pittsburg, attorney representing certain
persons i'll the employ of the Carnegie
Steel Company (limIted) of Pittsburg,
notice that these employees had IN their
possession information which would be
valuable to the government relating to
frauds then being perpetrated by GER
tain employees of the company, which
they would give to the government for a
sufficient consideration. Fhe secretary
agreed, if the information should lead
TO the recovery of moneys from the
company, to remunerate the informers
from the sum recovered, but not to pay
any expenses. Three of the employees
and the attorney were examined by the
secretary, who was satisfied that their
ton, and determined upon thorough
investigation. They discovered no feel
ing of hostility towards the company:
had not been engaged in the strike. and
seemed to be Influenced only by desire
to realize money. The attorney gen.
eral found that the department might
contract with these men, and a contract
was maze agreeing to give 25 per cent
of the money recovered i'll consideration
of the fact that they would, of course,
be discharged, be biaeklisted, and that
other employees from whom they would
procure information would also
LOSE THEIR PLACES.
The secretary says at this point:
''These men had been gathering in
formation for a long time. This they
submitted to the department i'll great
detail. The allegations were that the
company employees had failed to temper
armor evenly and properly; had
plugged and concealed blow holes.
which would have probably caused a
rejection of plates by the government
inspectors, and had re-treated, without
the knowledge of the inspectors, plates
which had been selected for test, SO as
to make these plates better and tougher
than the group of plates represented by
them.
The secretary tells how the naval in
sDectors at the works select one
plate from each group, which is
thoroughly tested, and upon the
result of this test depends the ac-
ceptance OF the entire group. The
plates. after they were accepted by the
inspectors at the works. had been Sc
cretly, and without the knowledge of
the government inspector, reiterated at
nlght-that is, reanneaied and retem.
pered, so as to make them better and
tougher than the group of plates of
which they were supposed to be the
least resisting. The president, having
himself first examined the question with
great care, after long conference with
the secretary of the navy, made
THE FOLLOWING DECISION:
Executive Mansion, Washington. d.
G., Jan. 10, 1S94-TO Hon. II. A. Her
bert, Secretary of the Navy-Dear Sir:
L have examined with care the report of
the board appointed by you to investi-
gate the alleged Irregularities in the
construction or steel armor at the Car
negie Steel and Iron mills. and their as
SeSSment or the damage sustained by
the government on account of de-
licences Ill the quality of the armor
which was affected by such Irregular
tiles. L have also examined the evi.
dence and the documents which form
the basis OF the governments claim for
damage. | am satisfied that large Dor
ton OF the armor supplied was not OF
the quality which would have been pro-
duced it all possible care and skill had
been exercised IN its construction. |
am of the opinion that under the terms
OF the contract between tie government
and the company this constituted de-
fault emitting the government to dam
ages. 1t is, however, an exceedingly
difficult matter to extract from the facts
developed a satisfactory basis for the
assessment or such damages. and in
asmuch as my decision of the matter
is final. l am naturally anxious to do
justice 10 the company, and to avoid
presumption against it hot fully war
rauted. The award of the board, al.
though exhibiting an honest desire to
meet the case fairly, does not satisfy
my inclination to give the company all
reasonable benefit Of the indefiniteness
OF the proofs obtained. 1t appears that
the first irregularity of construction
was discovered about the Sd day of
November, 1892. On the 10Th day of
September, 1898, some intImation of
such irregularities reached the man
ayers OF the company, and letter is
produced whereby one of the superin-
tendentS enJoins greater care in the
preparation of the armor. l am willing
To assume that the faulty construction
began on the Sd day OF November. 1892.
aud was concluded on the 10th day of
September. 1893. On all aTmor manu-
featured for the government between
these dates l think 10 per cent from the
price should be deducted.
Inc amount so manufactured is re-
ported To be 2,647, 1897 tons. and its value
81, 404.S $40. Ten per cent of this value
is $40, 1880. and this amount, in nv
opinion. should he forfeited to The gov
ernment. GROVER CLEVELAND,
Mr.. Frick was notified, and came
to Washington, and a settlement was
effected. According to the terms of the
agreement. the Carnegie Steel COM
pany, limited, paid into the Bank of
Plttsburg, Pa. 10 the credit OF the in
fOrmantS. S35, 12l, and Ii credited vouch-
erS for armor furnished to the govern
ment with sl05,360. which vouchers are
now on file in the department. No
money whatever passed through the
hands OF the department. Throughout
this whole transaction it will be seen
that every step was taken with care aud
deliberation, and the department was
very much gratitied 10 find that it was
the opinion OF the officers engaged. in
making these investigations that al