The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1897-01-07
HE REVIEWS THE ARMOR PLATE
SITUATION AND CRITICISES
THE COMPANIES.
BETHLEHEM, CARNEGIE COMPANIES
Wish to Sell Their Armor Plate Plants to
the Government-The Cost of
Manufacture of Armor Plate
According to Herbert


INTO the armor plate furnished the govern
ment and report to congress before Janu-
airy l, 1897, and to make no contracts for
armor plates provided for by that law
until after he had reported to congress.
The matter was brought about by the
ing too much for armor plates The re-
port is vo.uminous. and in many points a
sensational document. The present price
Of plates is 1888 ton. Mr.. Herberts
conclusion is that the cost of material and
.abor is $19S, and, allowing for the cost of
maintaining the plant and the nickel fur
nished by the government, and allowing
30 per cent profit, the net cost to the gov
eminent would be $500 per ton. The
Carnegie and Bethlehem pants have both
expressed desire to sell out to the gov
eminent.
Secretary Herbert explains the investi-
CATION he pursued and the difficulties that
beset him. Both the Carnegie and
Bethlehem companies declined last sum-
mer to give the information desired, on
the ground that they were not obliged to
publish their trade secrets, contention
to which the secretary took exception on
the ground that the government had
bound itself not to buy abroad, and was
entitled to lower prices, if within reason.
November 1S, 1896, however, the Beth
.ehem company sent to the department
statement Of the cost. The cost, per ton,
of labor and material they put at $25001;
plant, $3.50; working capital, $3355;
maintaining stock and loss by deteriora-
ment concluded with the sensational
words:
when, at the instance Of the United
States government, we undertook this
difficult and veXatious business, it was
obvious that this could not be prudentially
done with the order the government then
desired to place. The obstacles and de-
lays that always beset the pioneer had,
however, been overcome when the gov
eminent gave n private contract, on the
same terms as ours, to a rival concern,
which, guided by sacrifice, prepared an
outlay Of more than $1,00O,OOO and
urged the government to set up n plant
of its own. Under the circumstances, we
now confirm the statements made to your
self and now state that we desire to with
draw from this troubling business by sell
ing to the government, below cost, our
entire armor plant, which we believe to be
the best in the world"
The letter is signed by Mr.. Linderman,
the president of the company. Secretary
Herbert criticises Mr.. Linderman's
methods of calculation, calling attention
to the fact that the Bethlehem company
claim 10 per cent for depreciation,
whereas the Carnegie company claim but
5 per cent, and he entirely dissents from
the charge of maintenance. He also
criticises the working capital charge.
The Carnegie company also sent let
ter about this time, declining to give a
full statement of cost, but giving the ele-
ments entering into the cost, exclusive of
shop: Interest ON plant, per ton of
armor, $S1.53; maintenance of plant, per
ton of armor, $61.94; loss by abandon
ment of plant, when navy shall have
been completed, per ton of armor,
$50. 40 total, $224.96. To this the Car
negie company also ori adds 81. per ton for
then also animadverted in the fact that
the work of making armor had been
undertaken at the request of the govern
ment, and said it would, if the govern
ment desired to manufacture its own
armor, be ''only too happy to sell its
plant at COST" the company, in case the
plant was purchased, agreeing to furnish
steel in the ingot at price fixed by three
arbiters.
The Carnegie company's statement is
also severely criticised by the secretary,
who concludes that he needs no as
sistance in arriving at a correct con-
clusion, unless it is that the cost of the
Bethlehem plant $4,000,000, and the
Carnegie plant, $3,000,000 is insisted
upon. Mr.. Herbert says that the gov
eminent experts do not sustain these esti-
mates. He also calls attention to the
fact that the companies made no state
ment until he had returned from Europe,
where he had obtained two estimates
abroad.
can inspection of the prices paid by
the American companies" Mr.. Herbert
said, would indicate that they agreed
upon the price with each other. They
divided the contracts among themselves,
each taking one-half of the armor."
He speaks of the furnishing of armor
to Russia at $500 per ton and later at
$50 per ton. He concludes:
'From a comparison of prices it is evil
dent that there is an understanding
among the manufacturers of the world to
maintain prices at as near a standard as
possible"
In summing up, he says:
"Tnese two contractors have already
been repaid the cost of their plants, to-
gether with fair profit. The govern
mpnt is under no obligation to pay them
more than their original investment, but
II Al