ere made subsequent to 1926 until 1929. In 1929, the authorities at earl Harbor were authorized to use the $1.50 price in submitting ports on the reserve fuel oil. The average price of $1.115 at hich the oil is now carried is arrived at by using the $1.50 for the I originally placed in storage and averaging the price covered by ter contracts as above listed. The oil is carried in the "Naval petroleum reserve account." It may be depleted only upon specific authorization from the President. CLOTHING AND SMALL STORES FUND Mr. UMSTEAD. The next item is the "Clothing and small-stores and." Admiral CONARD. The clothing fund was established by the act f August 5, 1842, for the purchase and manufacture of uniforms or enlisted men of the Navy. The act of February 14, 1879, estab-hed a similar fund for the purchase of accessories such as brushes, eedles, thread, tobacco, soap, and so forth, which were usually ermed "small stores." The act of June 30, 1890, consolidated these wo funds, since which consolidation its title has been "The clothing nd small-stores fund." Issues from this fund, except outfits on irst enlistment, are charged against the personal accounts of the fficers or enlisted men receiving the clothing or small stores, and redited to this fund. Outfits on first enlistment are charged to the ppropriation "Pay, subsistence, and transportation" and credited o this fund. The outfits for nurses and naval reserves are issued ratuitously and are charged to this fund. As of June 30, 1937 ASSETS ash: Unexpended balance under "Clothing and small-stores Value of clothing and small stores fund, July 1, 1936_______ $13, 668, 522. 81 Value of clothing and small stores fund, June 30, 1937. Stores on hand not paid for. 53, 739. 42 13, 614, 783. 39 126, 374. 11 Credit. 13, 741, 157. 50 Clothing and small-stores account, July 1, 1936, to June 30, 1937 Reimbursable expenditures and to manufacturing_-_-_-_ 8,871.08 15, 757, 485. 03 7, 554. 275. 19 350,526.21 112.473.92 7, 740, 209. 71 15,757, 485, 03 CLOTHING ISSUED TO NAVAL RESERVE Mr. UMSTEAD. Admiral, I believe last year the estimates requested that the committee allow an increase of $250,000 in the Naval Reserve appropriation for the purchase instead of the free issue of clothing. because, as it was stated to the committee, it was your opinion that the capital of the Clothing and Small Stores Fund had been reduced as far as it should be. Out of this fund, clothing and small stores are issued, without reimbursement as you just stated, to the Naval Reserve. What has been the depletion of the capital during the year-the last year of which you have a record? Admiral CONARD. It decreased $51.000. Mr. UMSTEAD. Which is not at all dangerous? Admiral CONARD. No, sir. Mr. UMSTEAD. What was the value of the supplies issued out of this fund to the Reserve during the year when the fund was depleted by $51,000? Commander CARTER. A little over $377,000. Mr. UMSTEAD. How was the difference accounted for? Admiral KIMMEL. The difference came from the prices charged for the clothing issued from this fund to the enlisted men of the Navy. Mr. UMSTEAD. Admiral, this fund is charged with the issues to men entering the Naval Reserve of the necessary uniforms and quipment? Admiral CONARD. It is. Mr. UMSTEAD. Then, in my judgment, it is a mistake to charge the cost of that clothing in the price of which the clothing for enlisted nen is sold to them. The issues made to the Naval Reserve should e reflected as a depletion of your capital assets in this fund. Admiral CONARD. That is quite correct, and that is the way that we are now lining it up. In other words, we are reducing the issue prices of clothing to come more nearly in accord with the cost of production. Mr. UMSTEAD. Of course, the amount charged to the enlisted personnel should very properly, should it not, Admiral, include over and above the cost a sufficient sum to take care of the cost of handling? Admiral CONARD. The overhead; yes, sir. Mr. UMSTEAD. The overhead expense of handling the stores and supplies? Admiral CONARD. Yes, sir. Mr. UMSTEAD. But certainly it should not include any more than -hould be properly charged to them as their part of the administrative cost of handling these supplies. They should not be charged with the cost of issue to the Reserve. Admiral CONARD. That is true. I might say that there are some expenses involved in connection with that Mr. UMSTEAD. Necessarily. Admiral CONARD. I mean some expenses that are not paid for by this fund. So we do not try to pare too close to the actual cost charged to the fund. NAVAL WORKING FUND Mr. UMSTEAD. Next we have the naval working fund. Admiral CONARD. The naval working fund was established by the Naval Act of May 28, 1924, to finance all transactions that did not involve charges to a naval appropriation. This provides better control over expenditures of naval funds and furnishes an account in which are recorded transactions concerning condemned and surplus sales, work for special depositors, and also work for other departments of the Government, State governments, or foreign governments. The condition of the fund is shown by the following statement of operations during the fiscal year 1937. Naval working fund, operations (July 1, 1936, to June 30, 1937) Balance June 30, 1936 Recepits: Other Government departments.. Foreign powers Special depositors__ Condemned material sales (guarantees and payments for material. $1,236,473 4 6,257, 127 25,617 811,61 1,751, 351 & 4.04. 10,086,224 $61, 775. 53 Surplus-material sales (guarantees and payments for material). Expenditures: Other Government departments: Refunds Expenditures Foreign powers: Expenditures. Special depositors: Refunds Expenditures Refunds to bidders and expenses of sales: Condemned sales: Refunds to bidders_ Expenses of sales_ Surplus sales: Expenses of sales__ Transfers to appropriations and miscellaneous receipts: Miscellaneous receipts (special deposits). Miscellaneous receipts (surplus sales) --- Balance June 30, 1937 Analysis of balances: Appropriation made by Congress. Balance due special depositors.. 5, 969, 044. 43 12. 596. 28 53, 085, 61 650.874.98 261, 593. 77 26, 123.65 903, 209. 58 44, 050. 26 107.79 Cash received from bidders (condemned material_. Less work done for other Government departments and foreign powers not yet paid for by credit to the naval working fund__ Balance June 30, 1937. Balance June 30, 1936 8,578, 36 1.507.24 100,000 163,909 665, 621 1.43 611.299 13.37 1,555, 6416 47,812 7 1,507,829 4 Receipts. Expended during 1937. Balance June 30, 1937. $5,094, 248, 27 460, 528. 68 DESCRIPTION OF THE ADMINISTRATION OF THE NAVAL WORKING FUND RECEIPTS In addition to the amount of $100,000 appropriated in the Naval Act, May 28, 1924, the "Naval working fund" is credited with reeipts from the following sources : Special deposits.-Deposits by private parties to cover the cost of work to be lone by the various navy yards and stations. Condemned sales.-Deposits by bidders on sales of condemned material. Payments by successful bidders for material sold to them. Surplus sales.-Deposits by bidders on sales of surplus material. Payments by successful bidders for material sold to them. Other Government departments.-Funds received for small jobs of work not overed by an advance payment when collected are credited to the fund. Advance payments for large jobs when advances are made in cash. EXPENDITURES The fund is debited with the following items: Special deposits.-With all labor and material expended in accomplishing the work required, with refund of the unused balance of the deposit, and with any profit made by the transaction when the profit is turned into the Treasury as a credit to "Miscellaneous receipts." Condemned sales.-With the amount of all refunds of the deposits of unsuccessful bidders, with the cost of preparing the material for sale, with the cost of packing and shipping material sold, and with the net proceeds of the sale when turned into the Treasury. Expenditures under the "Naval working fund" are controlled by allotments authorized as follows: ALLOTMENTS Special deposits.-All deposits by private parties for work to be done by the Navy Department are automatically allotted to the naval station receiving the finds. These allotments are available until expended. Condemned sales.-Refunds to unsuccessful bidders are made by automatic allotments. Expenses of sales must be covered in advance by an allotment to the station making the charge. These allotments are available only for 1 month. The net proceeds of the sale are transferred to the surplus fund of the Treasury, the naval-supply account fund, or the clothing- and small-stores fund, as may be appropriate, by the action of the Bureau of Supplies and Accounts. Surplus sales.-Refunds to unsuccessful bidders are made under automatic allotments. Expenses of sales must be covered by allotments made in advance of the expenditure to the station making the charge. The net proceeds of sales are transferred to the surplus fund of the Treasury by action of the Bureau of Supplies and Accounts. Other Government departments.-Allotments are made on a monthly basis to the various navy yards and stations to cover expenditures under small jobs of work for other Government departments where no advance is received prior to the completion of the work. For all jobs in excess of $1.000 an advance must be received prior to beginning the work. These advances received are anotted to the various yards and stations and are available until expended. EMPLOYEES REGULARLY PAID FROM NAVAL WORKING FUND IN CONNECTION WITH SALES WORK Under authority of the act of August 5, 1882 (22 Stat. 296), and June 8, 1896 (29 Stat. 268), governing the sale and disposition of naval property, and the act of May 28, 1924 (43 Stat. 195), creating the naval working fund, the expenses incurred at navy yards in con |