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Admiral COXARD. Yes; deferred from 1938 to keep within the allotions made for that year, and we are now asking for this amount order that it can be performed in 1939. Mr. UMSTEAD. Again it appears the leave law has a bearing upon is proposition? Admiral Conard. It is very closely associated with the leave law. se leave law affects every item involving pay for personal services.

TRANSFER OF APPROPRIATIONS

Mr. l'MSTEAD. As I understand it, Admiral, the Navy Department is a right, within the limits of an appropriation, to make certain ansfers from one activity within a bureau to another within that ureau? Admiral CONARD. We have the right to transfer from one subhead

another within the same appropriation, when an item of expendiire is not specifically limited.

Mr. UMSTEAD. Rather than permit a deficit to occur, as you have ist indicated, why did you not handle it by a transfer of funds from me other project ? Admiral CONARD. As far as possible, we did that very thing, but e had an inadequate appropriation to draw on to expand or carry at these activities.

Mr. UMSTEAD. You say in your justification this increase is necesary, in part, to hire labor to perform work deferred because of the uck of sufficient funds during 1937 and 1938. Is that work still to be one? Admiral CON ARD. A large part of it is still to be done. Mr. UMSTEAD. What kind of work is there in your Bureau which, f deferred for 2 years, must then be done? Admiral (Oxard. The preservation of stores which need attention keep them up in proper shape, such as boiler tubes. Mr. l'MSTEAD. How long, ordinarily, do you keep boiler tubes in tock without turn-over?

(aptain Watrous. That is very spasmodic. Boiler tubes are one item that may be maintained in stock for years. They cannot be procured commercially in the market. They must be right at hand when a tube is necessary. It is dependent, to a great extent, on the 14-11alties to boilers.

Admiral CONARD. The allocation of the stock and shifting of the wtork around to make better storage is deferred because we have not the money to carry it out, and there is a great variety of work which, wizon we have not the funds, we simply let rest.

Captain WATROUS. There are inventories that should be taken, and labor is involved in assembling and packing material that is due for hipment, and it is necessary to defer a great many shipments on arount of that.

Mr. Plt HLEY. When you say "defer shipments," what do you mean ly that?

Captain Watrous. Defer them until the following fiscal year when lew money becomes available to make the shipment.

Admiral Conard. Toward the end of the fiscal year when we find the money is absolutely used up, we simply delay as far as we can any shipments until the beginning of the next fiscal year, and then they can go out.

Mr. Thom. What kind of shipments?

Admiral COWARD. Stores for ships and household effects and things of that sort.

Mr. Thom. You cannot very well delay shipping an officer's house hold effects.

Captain WATROUS. We do it.
Admiral COXARD. We have to do it.

Commander HULLFISH. We do it as little as we can, because we have taken money from other things for that purpose.

Captain WATROUS. The stocks of supplies for the west coast largely come from east-coast distributing points, and those are held up.

Mr. PLUMLEY. If Mare Island, for instance, makes a request for material and you have not the money to ship it out, you do not send it?

Captain WATROUS. We would send them enough to keep them going. and defer the bulk of it in a case of that sort.

MATERIALS AND SERVICES AT SHORE STATIONS

Admiral CONARD. Project 3. The increases in this item fall under seven heads, as follows: 1. Initial outfit of consumable supplies for naval air station, Alameda,

Calif. (p. M-41),
2. Additional requirements of yards and stations to perform increased

work on account of increased size of ships and numbers of aircraft
(p. M-41)--

10, 112 3. Increased cost of food inspection by Department of Agriculture.

Appropriation for 1938 was $83,640; actual expenditures in 1937
were $87,533.09; rounded off to $87,000, the increase required for
1939 is (p. M-49).

3, 3 4. Increased cost of material to pack and crate household effects in 1939

based on 34,332 persons entitled to shipment in 1939 instead of 32,860
in 1938 (p. M-50)--

11, 4011 5. Increased cost of contract stevedoring for 1939 shipments (p. M-50). 14, 677 6. Additional office and storehouse equipment necessary because of

growth of shore activities to meet the needs of the growing fleet
and to permit an adequate program of replacement (pp. M-52 and
M-53)

20, XX 7. Increase necessary to bring replacement of office and storehouse

eqnipment up to date so as to keep future annual replacements
within the limits of an orderly program (p. M-54).

100, ON Total

160, 014

INITIAL OUTFIT OF CONSUMABLE SUPPLIES FOR NAVAL AIR STATION, ALAMEDA, CALIH.

Mr. UMSTEAD. How many of the 10 employees you are requesting for Alameda will be needed to handle $500 worth of supplies?

Admiral Coxard. The sum of $500 is for supplies to be used in the doing of the work at Alameda. It is not stores that are handled, but the supplies to carry on the clerical work and to pack, ship, and 34 forth, during that year.

The increases in this project are materials which closely parallel the increases for labor described in the previous project, except for the third item.

CONSUMABLE SUPPLIES An increase of $10,112 for consumable supplies is based on requests from yards and stations and is considered reasonable, being but 2.34 percent, whereas the volume of business will be increased by more than 5 percent. The $500 increase we have already explained.

FOOD-INSPECTION SERVICE BY DEPARTMENT OF AGRICULTURE This subhead covers miscellaneous charges at yards and stations for laterial and supplies to do such work as repairs to equipment in ore, supplies issued to ships under construction, and services outde of yards, such as rentals of buildings, removal of garbage by ontractors from ships where other garbage-removal service is not vailable, and food-inspection service by the Department of Agriulture.

Increases. The only item for which an increase has been requested i inspection service by the Department of Agriculture. It is estinated that the amount necessary will be $87,000 in 1939. The mount available in the 1938 appropriation is $83,640, but the actual harges made by the Department of Agriculture for the service in 937 were $87.533.09. Rounding off this figure to $87,000, this will over merely the same service as is now being rendered by the Departnent of Agriculture. The increased personnel of the Navy will pauire at least this service. The increase over the base is $3,360.

Jr. C'Mistead. Admiral, I believe it is the policy of the Navy Department, wherever it is reasonably possible to do so, to have the Department of Agriculture, through its regular Inspection Division, in-pect foods and supplies purchased by the Navy Department?

Admiral CONARD. 'That is correct.

Mr. UMSTEAD. For that service you pay them, and this is the appropriation which provides for that payment to the Department of Agriculture?

Admiral COXARD. That is exactly correct.

Mr. U'MSTEAD. I believe that the record discloses that they list that receipt in their presentation for the inspection agency of that Department when they request their annual appropriation?

Admiral Coxard. They do.

Mr. l'MSTEAD. That results in better supplies and safer purchases and is a really helpful service to the Navy Department?

Admiral Coxard. We have found it very satisfactory, and we would not consider anything else.

Mr. UMSTEAD. It saves you a great deal of money?
Admiral CONARD. Yes, sir.

MATERIAL TO PACK AND ('RATE HOUSEHOLD EFFECTS

This covers material expended at navy yards and stations in packing crating, and handling household effects of personnel entitled to

vih service. It is the material applied to the same jobs of packing 14'llssed under the heading of “Labor, skilled and unskilled."

In 1937, with 29,370 persons entitled to the service, 4,849 lots were packed by yards, material costs being $53,421, an average of $11.01 plus per lot.

Based on these averages, in 1939 the 5,668 lots to be packed for the 34.332 persons entitled to the service will require material estimated at $62,100. This is an increase of $11,400 over the 1938 allocation of

Mr. UMSTEAD. That is a companion item to the one for additional employees requested for packing and crating household effects ?

Admiral Coxard. That is it. They go hand in hand.

$1,000

INCREASED COST OF CONTRACT STEVEDORING

The next is increased cost of contract stevedoring for 1939 shipments.

Mr. PLUMLEY. I would like to have a statement of the reason for that additional cost.

Admiral CONARD. This covers the cost of stevedoring service furnished by contractors at places where yard and station labor is not available. It also covers postage for parcel-post shipments.

There was expended for this purpose in 1937 the sum of $101.003. The labor situation on both coasts increased the costs in 1937 materially over 1936, and contracts in force for 1938 show a still further increase. The following table illustrates these increases for class A cargo:

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Applying the increased costs to the 1939 situation, it is estimated that there will be required for that year an increase over the 1935 allocation of $87,733 amounting to $14,677.

Mr. PLUMLEY. That is $14,677 additional cost for handling the necessary additional material for packing and crating by reason of an increase of 1,500 people?

Commander HULLFISH. No, sir; it is due entirely to increased steve doring rates at the various points where we have commercial contracts

Mr. PLUMLEY. Incident to increase in wages?
Commander HULLFISH. Yes, sir.
Mr. PLUMLEY. Or pay to the employees and the stevedores?

Admiral CONARD. Yes; it is what we pay the stevedores, and their reason for raising the rates is increased wages and expenses.

Mr. Thom. You pay the contractors or the stevedores?
Admiral CONARD. The contractors.

Mr. Thom. And they, in turn, claim that the increase is due to the increase in wages?

Commander HULLFISH. These are based on contracts actually in effect for the present fiscal year, which indicates a total increase on the same basis of tonnage of $13,194, if we handle no more than we did last year. We estimated a balance of $1.500 more to cover the increas parcel-post shipments to take up any slack there might be there, and that is why we ask for $14,667.

Mr. PLUMLEY. Does the matter of strikes ever increase the cost to the Navy!

Commander HULLFISH. Yes, sir. At San Pedro the Nary had a contract for steredoring which went from $1.55 a ton for the fiscal year 1937 to $2.10 a ton for the fiscal year 1938.

Captain W'ATROUS. Those are actual contract prices.

Admiral CONARD. These are contracts that we make with the teie dores after competitive bidding. It is the best price that we can ge:

ADDITIONAL IMPROVEMENTS, SHORE STATIONS

I will take 6 and 7 together.

JUSTIFICATION

The purchase value of the equipment in use in supply, accounting, disbursing, and other activities ashore required to be replaced from this appropriation as of July 1937 was as follows: Office equipment: Typewriters.

$180, 511. 00 Adding machines, calculators, etc--

474, 917.50 Other office devices, multigraphs, time clocks, check writers, etc.---

129, 033, 15 Safes, cabinets, files, etc..

489, 668. 92

1, 274, 130, 57

Total, office equipment--
Storehouse equipment : Scales, trucks, saws, shelving, stacking

machines, box-making machines, skid platforms, etc..

1, 502, 807. 39

Total

2, 502, 807. 39 The life of the office equipment averages about 10 years. The life of storehouse equipment is greater, about 20 years. It is estimated that a proper replacement program would involve a minimum annual expenditure of approximately $200,000 for this purpose at the present size and number of shore stations.

The increase requested is $120,000, of which $20,000 is required as a recurring item to bring the amount allowed for annual replacements and additions into line with the requirement of $200,000. That is a little involved. We have spent in the 1938 appropriation $179.000, or we have available at least $179,000, and we are asking for $20,000 to bring next year's estimate up to $200,000 as being the proper annual replacement charge for all of this equipment, and ben we want $100,000 to bring back into shape the equipment which has been neglected in late years.

TRANSPORTATION OF HOUSEHOLD EFFECTS Two factors influence the requirements under this item, the increased cost due to the increase of the number of persons entitled to the shipment from 32,860 in 1938 to 34,332 in 1939, and the delay in shipments due to lack of funds in 1938. 1. Based on the 34,3332 entitled to shipment in 1939, there will be 11,113

shipments involving 14,214 tons to be shipped commercially. Cost
of such transportation plus contract packing at the 1937 average
of $71.86 per shipment per ton will be $798,585, an increase over
the 1938 base of $142,095 (p. 24, 25).

$112, 095 ? Due to lack of funds, it is estimated that it will be necessary to

defer from 1938 to 1939, 192 shipments of 246 tons, at a cost of
$13.855 (p. M-26, 27)--

13. 855

Total..

155, 950 Mr. L'USTEAD. Admiral, considering both items together, do you, as far as possible, use naval transports to transport the household effects of officers and enlisted men when they change station under orders of the Department?

Admiral CONARD. We do.
Captain WATROUS. And also Army transports.

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