The record-union. [volume] (Sacramento, Calif.) 1891-1903, 1897-02-06
ARMOR PLATE INVESTIGATION.
TESTIMONY BEFORE THE COM
nfTTEE nADE PUBLIC.
Carnegie Would Like to Dispose of
His Plant to the Govern
ment.

| WASHINGTON, Feb. 1.-The testi-
mony taken before the Senate Commit
! tee on Naval Affairs in regard to the
report on armor plate was made public
| to-day The report shows that General
Manager H. C. Prick of the Carnegie
Company submitted a written PROPOSE
ton agreeing to leave some of the differ
ences between the company and the
| United States to arbitration, and that
General Superintendent Schwab went
even further than Manager Prick
| Prick, in a letter dated New York
February LIST, said among other things:
1.-TWO items we ask to be left to arbitra-
ton, the Government appointing one
and we another these two a third, and
the decision of the majority to be final"
! The items specified We're: First-The
annual dividend Of 6 per cent on the cap
! ital stock for which he contended as
just.
! SecOnd-He complained that the sink
/ ing fund allowed to cover depreciation
! is only about 4 per cent. of the cost of
the plant, which he thinks too low
| Schwab's statement of the position of
| the company on the subject of arbitra-
ton was brought out by question from
Senator Mcmillan. The colIoquy was as
/ follows:
| McMillan-Is it true the profits paid by
the Government practically paid for all
! this plant?
| SchWab-NO. sir. 1t is not true, be-
cause the profits have been calculated on
a false basis We cannot show you that
| without showing you our books. We
| have refused to show them for a good
many reasons. In no branch of our bust
ness do we consider our money as poorly
| invested as in the armor plate. There is
no branch of the business that has given
US so much trouble and so much worry,
and in which we think we have such a
poor outlook, as we have in armor. There
| is nothing which would please US better.
We are thoroughly in earnest when we
say we would like the Government to
| take our plant. We have undoubtedly
| the best plant in the world.
| Senator Smith-At what cost do you
propose?
| Mr.. Schwab-We will fix the value by
! arbitration, the value of the plant and
| processes and everything. They are all
! subjects for arbitration and valuation
| Senator Smith-Let me ask whether
your plant is SO separated from your
other works that it could be sold to the
| Government?
| Mr.. Schwab-It could be. IT is so di-
vided; it is so situated.
| Mr.. Schwab said that the Navy De-
partment estimate was about 221h per
cent too low in original material The
cost of fuel, forging, bending and har-
veyizing was. estimated at only about
/ so per cent. of the actual cost and the
cost of labor about 40 per cent
| Mr.. Frick in his letter said the original
cost of the Carnegie armor plant was
over S4000,0OO, and he advanced the
idea that the Government could not dup
| licate it for less than $4,000
President Linderman of the Bethle-
| hem Works took exception to Secretary
Herberts estimate of the profits Of the
company. He declared that their armor
plant instead of costing So. 500 900, as
estimated by the Department, had not
cost less than S6,5J1 900 He said that
! for the period from 1889 to 1896, both
inclusive. the gross receipts of the COM
pany We're S460O0,000, of which only
St, 10000 was from armor, and added
that the dividends of the company never
exceeded - per cent.
Secretary Herbert's report was sharp
ly attacked by both Mr.. Sharp and Mr.
! Linderman, and the Secretary was given
an opportunity to reply. He said the
method of estimates adopted was his
own. He cmplained that both compan-
les had refused to exhibit their books
| The Secretary said that in his opinion
/ the Government could duplicate either
| the Bethlehem or the Carnegie armor
plant for 100000. and he recon-
mended that Congress appropriate the
tamount to be set aside and used in case
the companies refused to make reason
able terms.