Rensselaer Republican, Volume 26, Number 32, Rensselaer, Jasper County, 5 April 1894 — CARNEGIE’S CONTRACT! [ARTICLE]

CARNEGIE’S CONTRACT!

Government Collects Over #IOO,OOO Indinanity for Violations. Secretary Herbert, Monday, sent to the House a communication, in answer to the resolution calling for the same, giving details of the violation of contracts by Carnegie, Phipps & Co., of Pittsburg, in the manufacture of armor plates forthe navy. The Secretary details the manner in which the frauds were discovered. James Smith, an attorney, of Pittsburg, last September notified the Navy Department that certain employes of Carnegie, Phipps & Co. had in their possession evidence that the Government was being defrauded, which they would produce if sufficient inducements were offered. The Attorney-Gen-eral found that the department might contract with these men, and a contract was entered into agreeing to give them 25 consideration of the fact that they would, of course, be discharged, be blacklisted, and that other employes from whom they could procure information would also lose their places. Particulars are then given showing that naval inspectors were dishonestly dealt with, and details of all the proceedings by the department which led up to the appointment of a board to investigate the irregularities. The matter was brought to the attention of the President, who carefully reviewed the evidence and decided that the company should refund $149,489. Mr. Frick was notified and came to Washington. A settlement was effected by the Carnegie company paying into the Bank of Pittsburg the sum of $35,121 to the credit of the employes whose testimony led to the discovery of the frauds, and by giving credit vouchers upon existing contracts with the government to the amount of $105,360. No money whatever passed through the hands of the Navy Department. The Secretary states that throughout the whole of this transaction nothing occurred to show that any officer of the navy had beenjjuilty of conniving at any of these irregularities. Neither is there anything whatever to show that any director of the company had any knowledge of the transactions herein set forth. The de part men t hasredoubled its vigilance at all points, and wherever night work is being done for the Government inspectors are required to be on duty night and day.