People's voice., 1894-03-30
THE ARMOR PLATE SCANDAL.
Secretary Herbert Gives the Details of the
Exposure,

Secretary Herbert Gives the Details of the
Exposure.
WASHINGTON, March 27.-Secretarv
Herbert to-day sent to the house a
long reply to the Cummings resoiu-
tion calling for details of the recent
violation by Carnegie, Phipps & Co. of
the contracts with the United States
for the manufacture of armOr plate
for the navy, which involved $40, 4S9.
The answer gives in detail the history
of the progress and discovery of one
of the most gigantic frauds known in
the naval administration.
Last September the secretary re-
ceived from James Smith of Pitts
burg, attorney for certain persons in
the employ of the Carnegie Steel
company, limited, of Plttsburg, notice
that these employees had information
which wou'd be valuable to the gov
ernment, r. ting to frauds then being
perpetrated by employees of the com
pany, which they would give to the
government for a sufficient consider
alton The secretary agreed, if the
information should lead to the re-
covery of money, to remunerate the
infOrmers from the sum recovered.
but not to pay any expenses. Three
OF the empl ryes, none of them for
mer strikers, and the attorney
were carefully examined by the
secretary who was satisfied that
their statements were not with
out foundation and determined
upon thorough investigation.
The attorney general held that the
department laight contract with these
men and act w"S made agree
ing to give tuem 25 per cent of the
money recovered in consideration of
the fact that they would, of course.
be discharged and blacklisted
and that other employees from
whom they would procure in
formation would lose their places.
The statement continues:
These men had been gathering in
formation for long time. This they
submitted to the department in 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 probably have caused
rejection of plates by the government
inspectors and had retreated, without
knowledge of the inspectors, plates
which had been selected for test so as
to make the plates better and tougher
than the group of plates represented
by them.
ArPEALED BY THE COMPANY.
The matter was referred to the chief
Of ordnance and his associates. These
officials found that plates selected for
tests were re-treated at night and
that there had been dOctoring of
statements as to heating and anneal-
ing and reported that the government
had been damaged fifteen per cent on
all the contracts The fraudulent
work was done almost entirely at
night.
Mr. Herbert sent for General Man.
ager Frick and Superintendent Hun
slcker of the Carnegie company, laid
the facts before them and demanded
satisfaction for the damages from the
Irregularities Both seemed COM
pletely astounded and asked for time
to consider what was a complete sur
prise to them. A few days later they
returned with Mr.. Carnegie and
Attorney Knox and Mr.. Carnegie
was heard at length. On third visit,
Frick and Hunsicker were told that
the department had determined to ap-
prove of the report assessing fifteen
per cent penalties. Mr.. Frick ex-
pressed desire to appeal to the pres
ident and was told by Mr.. Herbert that
he was at perfect liberty to do so.
December 20 last, MesSrs. Carnegie,
Frick, Hunsicker and Knox and Sec
retary Herbert appeared before the
president and presented the case at
length. The president after careful
consideration of all the facts, decided
that damages should not begin until
November ., 1892, when proofs of ir-
regularities began and should be as
sesSed after September 16 last when
the superintendent began to exercise
greater care under orders from the
general manager and when it seemed
from expert reports the irregularities
ceased.
Mr.. Frick was notified and came
again to Washington and settlement
was affected according to the terms
of the agreement The Carnegie
Steel company, limited, paid into the
bank of Pittsburg, Pa, to the credit
of the informants, SS5, and it
credited vouchers for armor furnished
to the government with SlO5, 800. which
vouchers are now on file in the de-
partment. No money Whatever passed
through the hands of the department.