The success of the Harvey process on the nickel steel was universally acknowledged; other countries abandoned their previous style of armor, and the United States set out to build a number of new ships that should be protected with this invulnerable armor.
It was soon found that the Bethlehem Company was not able to furnish all the armor needed, and so the Government persuaded the Carnegie Company to go into the armor-plate business. The Carnegie people were promised an equal share of the work, and the same prices as the Bethlehem Company.
Matters went on peacefully until July 10th of last year, when Congress directed the Secretary of the Navy to inquire into the cost of making armor-plate, and to give an idea of the price he thought the Government ought to pay for it. The result of his inquiries was to be made known on January 1st of this year.
The Secretary did make the inquiries, and found that the actual cost of making a ton of armor-plate was $197.78.
After an elaborate calculation of profit and loss, and the cost of the machinery used in making the armor, he decided that the armor could be made for $250 a ton. He suggested that the Government ought then to allow the companies a liberal sum per ton for profit on their enterprise, and suggested that a fair price to pay would be $400 per ton.
Had Congress accepted this suggestion there would have been an actual saving of $180 a ton over the price made on the original contracts.
Congress was not, however, satisfied with this. If the Company could make the iron and come out clear at $250 a ton, it was thought that a profit of $150 a ton was too much to allow, and therefore Congress voted that the Government price for armor-plate in future should be $300 per ton.
They offered at this price to make a contract for twenty new battleships, which would keep the armor works busy for the next ten years.
The Carnegie and Bethlehem companies were indignant at this offer, and refused it absolutely.