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Project
10. ('ompressed air..
11. Steam.--
12. Pumping charges.
13. Miscellaneous.-

Total.

10.** 2. Similar statement for fiscal year 1938 follows.

3. The estimate for 1939 is based on the fleet-employment plan submitte. the Chief of Naval Operations. This plan provides for a fleet problem in fiscal year. This plan calls for a total of 6,062,250 miles.

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Mr. UMSTEAD. Now, Admiral, take up the first project, which covers fuel oil for vessels of the Navy.

Admiral CONARD. This project covers fuel oil for vessels of the Navy. The quantity is based on the estimated requirements to carry out the fleet-employment plan: Estimate, 1939..

$8 (2190 Committee allocation, 1938_

6, 752 30 Difference.

1.2737 Bureau allocation, 1938.

6,127 Expenditures, 1937

6. 372. 59 Expenditures, 1936_

5, 8932

JI'STIFICATION OF ESTIMATE

1938 appropriation, 8,000,000 barrels, at $0.844. 1938 allocation, 6,733,149 barrels, at $0.971.

16. 37. Difference (decrease)---

214.8 1 It is not to be understood that 6.733.149 barrels is sufficient to meet requireme**, during 1938. It merely means that, due to increased cost available funds will purch. only this quantity at $0.971 per barrel.

38 allocation, 6,733,149 barrels, at $0.971

$6,537, 888 139 base, 6,733,149 barrels, at $0.971.

6,537, 888 Increases requested:

Increase in quantity (fleet-employment plan), 1,298,616 bar.
rels, at $0.9746_---

1, 265, 631
Increase in quantity (unforeseen contingencies), 205,655 bar-
rels, at $0.9746.--

200, 431 Increase in cost, 6,733,149 barrels, at $0.0036.

24, 240

1, 490, 302 939 estimate, 8,237,420 barrels, at $0.9746..

8, 028, 190 Admiral CON ARD. It will be noted that the committee allocation for 1938 was $6,752,391. The Navy Department had estimated that .898.107 barrels of fuel oil would be required during 1938, but this he committee reduced to 8,000,000 barrels to cost $6,752,391. This igures out to an average price of $0.844 per barrel. Since the hearngs of last year, however, there has been a steady increase in the price of fuel oil, with the result that when the current fiscal year commenced on July 1, 1937, the average price had reached $0.971 per barrel, an increase of $0.127 over the $0.844 used in the estimate. The result of this is that if the Navy, during the fiscal year 1938, has to pay an average of $0.971 per barrel for its oil, the committee allocation of $6,752,391 would purchase only some 6,954,000 barrels.

It will also be noted that the Bureau allocation for 1938 was $6,537,888, or $214,503 under the committee allocation. This is explained by the fact that the cost of other projects has shown an indirated net increase of this amount, which has made it necessary to provide for these increases from the amount available for fuel oil. When we reach projects 4 and 5 and 7 to 12, inclusive, it will become more apparent why deficiencies in other projects must be made up principally from the amount available for fuel oil under project 1. From what has been stated it will be apparent that, due primarily to the advance in prices of fuel oil, funds available will not be sufficient to carry out the current fleet employment plan.

Coming now to the estimate under project 1, of $8,028,190 for fuel oil for 1939—in keeping with the desire of the committee as expressed in last year's hearings that the margin of difference between estimated and actual consumption be narrowed--the estimate for fuel-oil requirements has been arrived at after careful analysis of all factors entering into the situation, in an effort not to overestimate actual barrelage requirements. It will be noted that a total requirement of 237,4:20 barrels has been arrived at, of which 8,031,765 barrels are for normal consumption, and 205,655 barrels are for strictly unforespeable contingencies. This represents an increase of 237,420 barrels over the 8,000,000 barrels estimated by the committee as required for 1938, but is a decrease of 660,687 barrels from the Navy Depart. ment's original estimate of 8,898,107 barrels for 1938.

It will be noted that the unit price per barrel used in the allocation for 1938 was $0.971. This is based on contracts in effect at many delivery points with varying prices during the first quarter, 1938. It will also be noted that the unit price used in the 1939 estimate is $0.9746 per barrel. This also is based on the contract prices in effect during the first quarter, 1938. The fractional difference is due to the fact that the quantities estimated to be taken at each delivery point

36929—38

during 1938 are not the same as for 1939. The representative of the Chief of Naval Operations will furnish any additional data required by the committee as to the determination of the quantity requirements.

MANEUVERS PLANNED FOR THE YEAR 1939

Mr. UMSTEAD. Admiral, are there any unusual maneuvers planned for the year 1939?

Admiral CONARD. Not to my knowledge. Mr. UMSTEAD. I believe that the Chief of Naval Operations stated when he appeared before the committee several days ago that there were no unusual maneuvers planned for the fiscal year 1939.

Admiral Conard. That is my understanding.

Mr. UMSTEAD. Do you know whether or not there are planned any fleet maneuvers in the Atlantic for that year?

Commander KıRKPATRICK. May I interject there, please?
Mr. UMSTEAD. Yes.

Commander KIRKPATRICK. The primary plan for the operation of the fleet for 1939 calls for the annual feet problem to be held in the Caribbean in the spring, followed by a visit to east coast ports, including a visit to New York, during the exposition. The fleet to return to a normal west-coast bases in the fiscal year 1940.

Mr. UMSTEAD. Well, that would entail the use of a rather large quantity of oil to carry the fleet from the Caribbean area to New York, would it not!

Commander KIRKPATRICK. Yes, sir; but it is my observation based upon the study of the oil consumption over the past years, and the varying fleet problems, that the time consumed by the problem is a nearer guide to the consumption of oil than is the locality; in that, naturally, the more days of steaming that are performed, the more fuel consumed.

And assuming an approximate set amount of time devoted to the fleet problem, whether it be held in the Canal Zone area, the Hawaiian area, or the Caribbean area, it is my belief that the fuel consumption will approximate the same.

Mr. UMSTEAD. Commander, what phase of maneuvers would neces. sitate or even indicate the desirability of taking the fleet from the Caribbean area to New York in the fiscal year 1939?

Commander KIRKPATRICK. No phase of the maneuvers, as suggested, sir, would require a trip to New York.

Mr. U'MSTEAD. Is the only inducement the New York exposition !

Commander KIRKPATRICK. As to that, I am unable to say. I merely know what the general plan is.

Mr. UMSTEAD. Do you know of any other reason for taking the fleet from the Caribbean area to New York, other than the presence there of the World's Fair, or the World's Exposition?

Commander KIRKPATRICK. No, sir: presumably the same reasons that dictated the fleet's visit to the east coast here in 1934, when the fleet visited many east coast ports. You are acquainted with that, sir

Mr. UMSTEAD. Not fully.

Commander KIRKPATRICK. In 1934 the fleet spent a good part of the time from the late spring up to the fall of 1934 on the east coast.

TIMATE OF FU'EL-OIL REQUIREMENTS AND AMOUNTS USED, FISCAL YEARS

1932 TO 1937 Mr. l'MSTEAD. Well, if the fleet remained in the Pacific, and assumg that no emergency arises, upon what basis would there be any call r more fuel oil than was provided in this year's appropriation bill? Commander KIRKPATRICK. May I read a prepared statement here i that, sir? Mr. UMSTEAD. Yes, sir. Commander KIRKPATRICK. A review of the hearings before the comittee for the past several years indicates the strong desire of the mmittee that the Department's estimate of fuel-oil requirements ore closely agree with the actual expenditures than has been usually le case.

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It will be noted that for the 6 full years shown the table indicates very consistent error of about 17 percent, which we do not consider xcessive in view of the many variables which enter into the compuations.

If we knew exactly how many miles each and every vessel would ruise at each separate speed throughout the year, then we could give

you an estimate of fuel requirements that would be correct to within bout 2 percent, but obviously it is impossible to even approximate asic data of such accuracy.

To better explain the problem permit me to point out a few of the bajor difficulties:

Our initial type mileages are obtained from the annual Proposed leet Employment Plan-a document which sets forth for each

type of naval craft the number of weeks of each quarter that will be deroted to ordinary cruising, to gunnery, to tactics, and at anchor. Since each underway task requires a different speed range, with corespondingly different fuel-oîl consumption, any appreciable change n the proposed plan introduces errors in our estimates for the force yr forces concerned.

We employ certain formulas to determine speeds required for different tasks. While these formulas are reasonably accurate for averigre conditions, quite frequently the unusual occurs, with the result that the oil calculations for the unit or force concerned are in error.

The effect of different speeds on oil consumption is enormous. For pxample, a destroyer steaming at 10 knots can cover a certain distance on 500 barrels of oil, but that same destroyer will require 880 barrels of oil to cover the same distance if steaming at 20 knots. Or a certain rruiser requires 1,620 barrels to cover a given distance at 15 knots, but will require 5,520 barrels to cover that same distance at 30 knots. From this you can see how difficult it is to arrive at an accurate prediction of requirements when the varying character of problems situations, or emergencies may require an entirely unexpected speed

On fleet problems, for example, when approximately 120 naval vessels of all classes are engaged in war maneuvers over a wide ser area the distances to be steamed, speeds to be used, and consequent fuel-oil consumption present a problem that cannot be solved with accuracy.

Again, we must be prepared for the unexpected. Each year wholly unanticipated requirements arise which often mean large expenditure of fuel. For example, the dispatch of the Quincy to Spanish duty required 18,718 barrels; the Oklahoma to Spanish duty, 11,276 barrels the New York to the British coronation ceremonies, 24,452 barrels and so forth. In fact, the unexpected requirements for 1936 totale 108,275 barrels; for 1937, 172,024 barrels; and for 1938 has alread reached 200,000 barrels.

Sizable errors frequently result from changed dates in the com missioning of new construction or from delays which occur in th actual reporting dates of new construction vessels for duty wit| the operating forces. Since these calculations are made a year o more in advance of actual use of the oil, errors in connection wit new construction allowances are inevitable. Notwithstanding th difficulties mentioned, every effort has been made to arrive at esti mated requirements for 1939 that will more nearly agree with actus consumption figures. As evidence of this, it will be noted that ou estimate for 1939 is 660,687 barrels less than our estimate for 1931 notwithstanding the fact that the Proposed Operating Force Pla for 1939 calls for the operation of 10 more ships than did the pro posed plan for 1938; a total tonnage approximately 4 percent greate for 1939 than for 1938, and a total horsepower approximately 900.00 (or 10 percent) greater for 1939 than for 1938.

Mr. UMSTEAD. Your statement is both comprehensive and illum nating but the fact remains that we have appropriated a large sui of money here for a number of years with the result that a consi erable portion reverted to the Treasury at the end of the appropri tion year for the reason that consumption had been quite appr ciably overestimated.

Commander KIRKPATRICK. Yes, sir.

Mr. UMSTEAD. Certainly it should be possible to arrive more near at the needs of the Navy than has heretofore been done.

Commander KIRKPATRICK. Yes, sir, we agree and these estimat represent a very honest effort to arrive at a reasonably accurate fi ure. I do not believe it would be safe to reduce the barrela , requested.

Mr. Thom. Is there going to be any deficiency this year?

Commander KIRKPATRICK. Yes, sir. That is because of prio rather than the quantities.

Admiral CONARD. The fact that quantities of oil required in pr vious years were overestimated resulted in returning to the Treasu unexpended balances only during the periods when prices were lo During the years 1935, 1936. and 1937 when actual prices had a vanced above the estimate, the fact that there was an overestima in quantity resulted in requesting smaller deficiency appropriatia during 1935 and 1936 than would otherwise have been required. On

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