Investigation of U.S. Steel Plate Test Fraud

The Investigation of U.S. Steel Plate Test Fraud brought wartime steel production under scrutiny after a newly launched tanker, the SS Schenectady, broke in two. Investigators for the Truman Committee found that Carnegie-Illinois Steel had altered test results and passed off steel that failed Navy specifications as compliant. At the hearing, Harry S. Truman challenged both the falsification and the company’s response; the inquiry made the deception concrete, but never established how far knowledge or responsibility reached above the mill’s chief metallurgist.

From complaints to a critical inquiry

The first warnings came in letters from employees who believed it their patriotic duty to report what was happening. The committee received so many complaints from around the country that it could not follow every lead. Some were plainly crank mail, and a large volume of reports made it difficult to separate significant allegations from noise. The collapse of the SS Schenectady in Portland, Oregon, in January 1943 changed the stakes: the question of the quality of steel plate used for ships could no longer be set aside.

In March, roughly two months after the tanker broke apart, three committee investigators went to the Irvin Works, the Carnegie-Illinois rolling mill at West Mifflin, Pennsylvania. At the corporation’s Pittsburgh headquarters, its president, J. Lester Perry, said they could speak to no employee without a company lawyer present. They also could not enter the mill until Perry had called Harry S. Truman to find out what the investigators wanted. Truman was angered by the demand and immediately suspected that Perry was trying to conceal something.

The investigators’ arrival at Irvin brought further delay. They were kept waiting for half an hour and invited to lunch in the company cafeteria, though they had asked to see the mill’s record book. After another hour, the book was finally produced at two in the afternoon. It had been taken apart the night before and distributed among several people doing work for the company attorney; it took two hours to reassemble. The investigators could not tell how much had been removed or changed. The handling of the book thus became part of the case: the evidence they sought had itself been placed beyond their ability to verify.

The scale and method of the fraud

At Irvin Works, investigators found that at least 5 percent of production—about 3,000 tons of steel a month—failed to meet Navy specifications, yet was labeled and delivered as though it did. Mill tests included chemical analyses measuring carbon and other elements, as well as tests of tensile strength. The results were altered to match what the customer was expected to receive. When the chemical composition of a batch, or “heat,” was unknown, an analysis could simply be invented for the record book.

The hearing on March 23, 1943, exposed how ordinary recordkeeping had been turned into a means of disguising false results. Murray Stewart, the chief specifications examiner, testified that invented analyses were entered in pencil while other entries were written in ink. A prefix letter was commonly added to the penciled entries. Under questioning by Hugh Fulton, Stewart acknowledged that the letter stood for “Fake,” despite having earlier told an investigator that it meant “phone.” He explained that he had been pressed for an answer when speaking with the investigator. The exchange made the deception legible in a single mark in a ledger, while also showing how a witness’s account shifted under oath.

David B. Ireland, Jr., an assistant metallurgist, offered testimony that did little to reassure the committee. He said he had learned to fake tests at the Edgar Thomson Works, another large Carnegie-Illinois mill near Pittsburgh, and could fool a Navy inspector when one was present. Only one tester, he said, had been caught cheating by a Navy inspector, because that tester had cheated more than he was supposed to. The explanation turned the supposed rarity of detection into evidence of how the practice could evade inspection.

Perry’s defense and Truman’s challenge

After Stewart, Ireland, and McGarrity had testified, Perry took the witness table. Harry S. Truman objected to the company’s lack of cooperation and asked why it had not acted at once to clean up the mill and determine how the procedure had been followed. Perry said he did not intend to be controversial. Truman replied that controversy was his privilege, then pressed him on what had been done: whether anyone had been fired and what corrections had been made. Perry first tried to evade the questions, then admitted that nothing had yet been done. He said he needed time to understand the fullest implications. Truman considered that inadequate: the company, he argued, had received the same information as the committee’s investigators and could already have begun finding out what had happened.

Perry’s prepared statement and testimony drew a distinction between falsified procedures and the usefulness of the product. He said that higher management had not participated in the practices, which he described as the work of a few individuals who had grown lax under pressure from heavy production. He rejected the word “cheat” in favor of “misrepresentation” and maintained that the substandard plates were still suitable for their intended use. He also disputed a direct connection between Irvin Works steel and the SS Schenectady’s breakup: in his account, the failure of steel plate had not caused the ship to break, and the plate at the point where the break began had not come from Irvin Works.

The committee challenged the implication that a company could decide for itself what the government ought to accept. Perry acknowledged that supplying material under false representations would be wrong if it had occurred, but continued to argue that the steel was not inferior for its eventual use. He accepted that the government’s specifications should be followed and said they would be. Truman’s response made clear that a claim of practical adequacy did not answer the charge: the issue was why the company had failed to meet the specifications it had been given.

Accountability and what the hearing left unresolved

The hearing lasted five hours. When the company’s attorney said he needed to master the technicalities of the steel business before justifying the situation, Truman asked what technical knowledge had to do with removing cheaters from positions of responsibility. He said he did not know the steel business and did not expect to, but could recognize tampered books and crookedness. His point shifted the confrontation away from specialized metallurgy: the committee did not need to resolve every technical question to identify falsified records and demand action.

Yet the hearing did not determine who, beyond the chief metallurgist, had known about or authorized the falsification. No one higher in the company admitted knowledge of rigged tests or altered records. The committee also uncovered no substantial personal motive for the deception: those involved in the mill had little to gain and everything to lose if caught. The most plausible explanation offered was that falsification served an effort to set an impressive production record. That possibility suggested pressure to make output look successful, but it did not settle who imposed or tolerated the practice.

Management promised to put matters right. In the final hour, Benjamin F. Fairless, president of U.S. Steel, told Harry S. Truman that whoever was responsible would “walk the plank.” The pledge supplied a forceful ending to the hearing, not a final accounting of responsibility. Senator Owen Brewster emphasized how incredible it seemed that subordinates would risk their futures without hope of reward; Fairless, asked whether Carnegie-Illinois was an example of good management, answered that it was not. The investigation therefore established both the scale of the falsification and the failure of oversight, while leaving the chain of knowledge above the mill unresolved.