The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-01-06
,R. HERBERT's REPORT.
Letters Received from the Carnegie
and Bethlehem COMPANIES.

WASHINGTON, Jan. 5.-Secretary Herb
ert to-day transmitted To Congress his re-
ply to a provision I'm the last naval appro-
priation bill directing him TO examine into
the actual cost of armor plate and report
To Congress before Jan. /. 1897 and to make
no contracts for the armor plates
for the vessels authorized by
that act until after the report was made
to Congress. This provision OF the bill
grew out of a heated debate i'm the House
and Senate, i'm which the main contention
was that the government was paying too
much for armor plates. The report is very
important and i'm many respects a sensa-
tional document. The present cost of armor
is $3.50 per ton. Mr.. Herbert's conclusion is
that the cost Of material and labor is
sl9S. 20, and, allowing for the cost OF main-
tanning the plant and the nickel now fur
nished by the government and 80 per cent.
profit to the companies the net cost TO the
government would be i'm round numbers
500 per ton. The Carnegie and Bethlehem
companies have both expressed desire to
sell out their plants TO the government.
Secretary Herbert i'm his reply TO Con-
gress explains the methods Of investiga-
ton he pursued and the difficulties which
beset him. Both the Carnegie and Bethle-
hem companies declined last spring to give
to the public the secrets of their business.
a position to which Mr.. Herbert took ex-
ception. on the ground that the government
had bound itself not to buy armor plate
abroad and therefore was entitled TO know
whether the prices charged were reasonble.
The government inspectors at the works
were examined. In November. 1896. how
ever, the Bethlehem Iron Company sent TO
the department a statement Of the cost OF
armor plate. The estimated cost OF labor
and material they fixed at $3.50 interest
on cost Of plant, S1S.2y; maintenance and
depreciation, sl32.I2 working capital. $685..
making total OF s4s4.56. This statement
concluded i'm these sensational words:
when, at the instance OF the United
States government, we undertook this diff
ficult and veXatious business. IL WN-o@-
vious that this could not be prudently done
for the order which the government then
desired to place. but we were given to ex-
pect such further orders as the govern
mSnt might have 10 give. The obstacles
and delays that always beset the pioneer
had. however. been overcome when the
government gave private contract on the
same terms as ours to a rival concern
which, guided by other sacrifices. was
which, guided by our sacrifices, was
dollars. And now the government is urged
To set up another operated by itself. Under
the circumstances We now confirm the In
formal suggestions made TO yourself and
others and state that we desire 10 with
draw from this troublesome business by
selling to the government below cost. our
entire armOT-plate plant. which We believe
10 be the best I'm the world.
The letter Is signed by .ar. Iinderfnan,
the president of the company. Secretary
Herbert severely criticises Mr.. Lindermans
methods OF calculation, calling attention TO
the fact that the Bethlehem Company
claims 10 per cent. for depreciation. where
the Carnegie Company claims but per
cent. and he entirely dissents from the
charge for maintenance. He also criticfses
the working capital charge.
CARNEGIE'S STATEMENT.
The Carnegie Company also sent letter
about this time declining 90 give a full
statement of cost, but giving the elements
entering into the cost exclusive OF the shop
cost: Interest on plant per ton of armor.
$Sl. SO: maintenance OF plant per ton of ar
NOR. $67.9i; loss by abandonment OF plant
when navy shall have been completed per
ton of armor. $75.49. making a total OF
$22496. To this the Carnegie Company also
adds S25 per ton for working capital The
Carnegie Company then also animadverted
on the fact that the work OF making arm0r
had been undertaken at the request of the
government and said it would. II the gov
ernment desired 10 manufacture its own
armor. be only too happy 20 sell its plant
az cost" The company. in case the plant
purchased. agreed To furnish steel In
the ingot at the price fixed by three arbi-
ters. The Carnegie company statement Is
also severely criticised by the secretary.
who concludes that he needs no assistance
in arriving at "A correct conclusion. unless
fl Is that the cost of the Bethlehem plant
600. and the Carnegie $500. CO., Is in
sisted upon.
Mr. Herbert SAYS the government experts
do not sustain the estimates OF the Carnegie
Company. The Bethlehem. he says. cost
much more without doubt. the Rohr board
estimating IL at SL0Si.o0o. Mr.. Herbert eAlAs