Evening star., 1894-03-26
On the Armor Plate Frauds at the
Carnegie Works.
THE RESULT OF THE INVESTIGATION
How the Information Was First
Obtained.
THE PRESIDENTS DECISION

Secretary Herbert today sent to the House
an answer to the Cummings resolution call
Ing for a statement of the details Of the re-
cent alleged violation by Carnegie Phipps
* Co. of the contracts with the United
States for the manufacture of armor plate
for the navy. The Secretarys answer is
long and very interesting giving in detail
the history of the progress and discovery of
the frauds sketch Of the most
interesting portions of the Secretarys COM
munication is here given.
Some time last September Secretary Her
bert received from James H. Smith of Pitts
burg, an attorney representing certain per-
sons in the employ of the Carnegie Steel
Company limited, of Pittsburg, notice that
these employees had in their possession in
formation which would be valuable to the
government. relating to frauds then being
perpetrated by certain employees of he COM
pany, which they would give to the govern
ment for a sufficient consideration. The
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 ex-
penses. Three of the employees and the at
torney were carefully examined by the Sec
retary, who was satisfied that their state
ments were not without foundation, and de-
termined upon a thorough inves:iS lton
Ihey discovered no feeling of hostility to-
ward the company; had not been engaged
IN the strike, and seemed to be influenced
only by desire to realize money. The At
torney General found that the department
might contract with these men, and con-
tract was made agreeing TO give them %
per cent of the money recovered, in consii-
Grafton of the fact that they would, Of
course, be discharged, be blacklistei and
that other employees from whom they would
procure information would also lose their
places.
The Secretary says at this point:
Some Allegations Made.
These men had been gathering informa-
ton for long time. and this they submit
ted to the department in great detail. The
allegations were that the company's en-
ployes 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 govern
ment inspectors, and had retreated without
the knowledge of the inspectors plates
which had been selected for ballistic test so
as 20 make these plates better and tougher
than the group Of plates represented by
them
/ The informants stated that some of these
plates, after they were selected by the in
spector a the works. had been secretly and
without the knowledge of the government
inspector, retreated al night-that is, re-
annealei and retempered, so as to make
them better and tougher than the group of
plates of which thy were supposed to be
the least resisting. 1t was the duty of the
Carnegie Steel Company also 10 submit to
the inspectors at the works, to be for
warded to the department statements show
ing the length of time each plate had been
SUBJECTED to the heating and annealing FRO
cesses. 1t was the custom of the heaters at
the Carnegie works to hand in statements
showing that upon little slips OF paper
marked in pencil. These statements were
Z subsequently, npnia1 nd IL, ;,,-,
tor to be forwarded The informants
stated that under the direction of Superin-
tendents Schwab, Corey and Cline the
statements furnished to the government in
spector were in many cases false, and they
submitted many original memoranda,
handed in by the heaters which showed on
their face in pencil marks that they had
been altered. 1t was from these altered and
false statements, the informants said, that
the statements were made up that ere
sent to the inspector. These original MEM
oranda were supposed to have been de-
strcyed, but they had been preserva I'd, and
were sent to the department. Capt. Samp-
son, chief of the bureau of ordnance was
acquainted with the facts developed, and,
calling to his aid Prof. Alger and Lieut..
Ackerman of the ordnance bureau, pro-
ceeded to make thorough investigation.
What an Investigation Disclosed.
This investigation showed that the test
plates had been plugged and retreated, and
sustained the charges of the informants.
In a report to the Secretary the chief of
ordnance and his associates assessed dam
ages sustained by the government at 10 per
cent upon the amount OF armor delivered to
the government and upon all premiums re-
ceived. The remainder OF the Secretary's an
swer here follows in full:
'AS soon as the report of Captain Samp-
son, assessing penalties. had been received,
the department telegraphed fo- Mr.. H. c.
Frick. chairman of the Carnegie Steel
Company. limited, to come to Washington
to see the secretary on important business.
suggesting that he bring with him MIR.
Hunsiber, who more directly than Mr..
Frick in charge of the manufacture of
armor plates The interview with Messrs.
Frick and Hunsiker was in the presence of
Assistant Secretary McAdoo and Captain
Sampson. l explained to them fully the
whole transaction, stating who the in
formants were, the nature of the informa-
ton acted on by the department and placed
in their hands the report made by the chief
of the bureau of ordnance, assessing the
damages, well certain written state
.mentS by the informants. They were also
Informed that Lieutenant Ackerman, who
had for a short time been on special duty
a the works, while this investigation was
going on, had reported that his suspicious
were aroused by certain evidences which he
observed, tending to show that the opera
tiVes were concealing facts from the OBJ
servation of the inspectors, and that Lieu
tenant Ackerman's observations were
made without any knowledge of the in
formation received by the department from
the employees, as heretofore stated.
After fully acquainting Messrs. Frick
and Hunsiker with the facts, l demanded
satisfaction for the damages resulting from
these Irregularities, and informed them
that they would only be allowed to proceed
with the contract on condition of making
full reparation.
Messrs. Frick and Hunsiker's Dis
claimer.
Messrs. Frick and Hunsiker both seemed
greatly astonished at the statements made
to them, and Mr.. Frck thanked me for the
care and fairness with which the investiga-
ton had been conducted, and asked time
himself to investigate and consider Mr.
trick not only earnestly disclaimed as did
Mr.. Hunsiker, any knowledge of the trans
actions but mentioned the fact that he had
been in some manner upon his guard as to
Irregularities that were being committed by
the men employed on the armor and that
he had thereupon written letter TO Mr.
Schwab, who superintended the heating and
tempering, cautiOning him to the utmost
care and diligence in faithfully fulfilling
the contracts. "a copy of this letter sp-
pears in the correspondence) Messrs Frick
and Hunsiker promised, after looking into
the matter of these charges. to return as
they did a few DAYS afterward, bringing