The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1894-03-27
THE FRAUD AT CARNEGlE'S.
Secretary Herbert's Account of the Affair
andits Settlement.


Washington, D. o., March 26.-Secre-
tary Herbert today sent to Speaker
Crisp full statement of the discov-
cries which led to the imposition of a
fine on the Carnegie Steel company for
imperfect armor furnished for use on
the naval vessels under contract. In the
letter the secretary says:
Sometime in September last I re-
ceiyed information from an attorney of
Pittsburg, Pa, who represented GER
tain persons then in the employ of the
Carnegie Steel company, that these
employees had in their possession infor-
nation which would be valuable to the
government, relating to frauds then
being perpetrated, as it was alleged. by
certain employees of the company, and
that they would give this information 60
the government for 20 per cent of such
sum as might be recovered by the
government
1.-The allegations, were that the COM
pany's 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 government inspectors and
| had retreated, secretly, at night, with
out the knowledge of the inspectors,
| plates which have been selected for
| ballistic test SO as to make these plates
| better and tougher than the group of
plates represented by them"
The secretary says d thorough investi-
| cation was made and while it was not
| possible to verify each specific allegation
| that had been made, it was an easy mat
ter to ascertain by examination, whether
| the charges as to plugging OF blow
holes were true and it was also easy to
discover whether the plates had been
| treated after they had been selected by
| the inspector at Pittsburg and prior to
| their being sent to Indian Head for test.
The pieces of one of these plates were
subjected to tests which seemed toaShow
| beyond doubt that the plates hadA been
| subject to re>treatment as alleged, and
| blow holes were found plugged in other
| plates examined.
"In conversation with the informants, "
| the secretary adds, Il had carefully in
| quired whether the chief officers of the
| company, Mr.. Frick and Mr.. Hunsicker,
| had any knowledge or information OF
| the fraud which had been committed. l
was informed that these irregularities
| had occurred chiefly at night, and
always when the government inspectors
| were absent, and that Messrs. Prick and
Hunsicker did not visit the works at
night. | could find nothing whateversln
Uut beSbiHiony VI bJo lllOEi 10 W iHol-
cate that either of these gentlemen knew
anything whatever of these IRREGULAR
| ties. "
The letter then gees on to recount
various conferences between the depart-
melt and Messrs. Carnegie, Prick, Hum
seeker and others interested. the result
of which was that the company's request
to be allowed to appeal to the President
against thes Is per cent assessment was
granted. A conference with the Presi-
dent occurred December 20, After care
fully considering the facts the President
decided that damages ought not to, be-
gin until the third day of November,
1892, at which time the proofssof irregu-
larities began, and that they ought not
to be assessed upon arrnor manufactured