The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-01-06
PRICE PAID by THE GOVERNMENT
TOO HIGH, SAYS SECRETARY
HERBERT.
HIS REPORT SENSATIONAL.
SAVING OF HALF A MiLLdON ON
EACH BATTLE SHIP POSI-
BILE.
work DIVIDED BY COMPANIES
Under an Agreement by Which Each
Firm Was Allowed Half at
High Rate.

WASHINGTON, Jan. 5.-Secretary
Herbert today transmitted to congress
his reply to a provision in the Iast
naval appropriation BILL directing him
to examine into the actual cost CT ar-
NOR plate and report to congress be-
fore Jan. !, 1897, and to make no con-
tract for armor plate for the vessels
authorized by the act Until after the
report was made. The provision of the
bill grew out of a heated debate in the
house and senate, In which the main
contention was that the government
was paying too much for armor plates.
The report is a very important and
in many respects a sensational dCcu-
ment. The present cost of armor is $3.50
per ton. Mr. Herbert's conclusion is
that the cost Of material and labor is
$198.70, and allowing for the cost of
maintaining the plant and the nickel
now furnished by the government, and
so per cent profit to the companies, the
net cost to the government would be
in round numbers $400 per ton. The
Carnegies and Bethlehem companies
have both expressed desire 10 sell out
their plants to the government.
"An inspection of the prices paid the
says, will indicate that they agreed
with each other as to prices They
divided the contracts of this govern
ment between themselves, each bidding
lower on one-half Of the armor required
by the government" In summing up,
the secretary asks what will be price
sufficient to justify manufacturers in
maintaining armor plants, and says:
These two contractors have already been
repaid the cost of their plants, together with
fair profits. The government is under no
obligation to pay them more than the cost
of their original investment, but should pay
them enough to maintain the plants.
Mr.. Herbert says it is not desira BILE
that the government should manufac-
ture arnor, and, for this reason, very
liberal profits should be offered to the
present contractors to induce them 10
continue their plants in operation, and
he recommends, as a fair profit, so per
cent on the cost of manufacture, which
would be 1915 per ton. The secretary
further advises that the contractors
hereafter furnish the nickel, which now
costs the government about $40 per ton,
making the cost 1895 per ton, or, IN
round numbers, $500. This figure, he
believes a fair and equitable price to
pay for the armOr for the Wisconsin,
Alabama and Illinois, the three new
battleships last authorized. The re-
port continues that this sum may seem
| very large profit, but that some con-
sideration must be given to the risk
| taken, and the government de :
mands the best armor The secretary
! says that in fixing price, he has per-
| formed a very delicate duty, and sug-
! gests that congress keep in view all
the considerations favoring liberal
treatment to the Bethlehem and Car
| negie companies. "
| The government is now paying $5G3
| petr ton for the armor, and, with the
! nickel added, $3.50. At the prices sug-
| gested by Mr.. Herbert, 100000 would
be saved on each battleship. In con-
Guiding his report, Secretary Herbert
says that it is possible his conclusions
| are erroneous, and therefore suggests
| that, if his methods for securing infor-
nation are not correct, the facts can
| be ascertained by an exhibition to
congress Of the books of the compa-
| MES.
If congress fixes the prices, he rec
ommends that provision be made for a
course to be pursued in case the COM
| panies refuse to make contracts at
! the prices determined upon. Unless
| the present law is changed the secre-
| tary could not obtain armor for the
battleships already under contract, if
| the companies refuse to bid within the
| limit congress might fix. To eliminate
| this difficulty, Mr.. Herbert recon-
mends that, upon fixing a price for ar
| NOR, congress also authorize the sec
! rotary to erect or buy or lease an ar
| NOR plant or a gun plant, if neces-
| sary. If this is done, better results, he
| belleVes, could be obtained.