MATERIAL PURCHASED THROUGH NAVAL ACCOUNT SUPPLY FUND

Mr. UMSTEAD. To what extent, if any, Admiral, are materials purchased out of this appropriation bought out of the naval supply account fund, or held in the naval supply account until withdrawn on request from your Bureau?

Admiral FURLONG. The technical bureaus use the naval supply account to a large extent. In the fiscal year 1937 the Naval Gun Factory had a turn-over of approximately $10,554,000. In view of the fact that most of the work at the Naval Gun Factory is under the cognizance of the Bureau of Ordnance a major portion of this turn-over may be attributed to activities under the Bureau of Ordnance. The Bureaus of Construction and Repair and Engineering use the fund to a moderate extent only at the Naval Gun Factory, while at the industrial navy yards they use it to a wide extent.

Mr. UMSTEAD. You stated that you did $10,000,000 worth of business through the naval supply account fund last year?

Admiral FURLONG. Yes, sir.

Mr. UMSTEAD. What was your total amount of business last year? Admiral FURLONG. Ordnance activities had a total turn-over of $11,608,655.

Mr. UMSTEAD. A good deal of the material for your Bureau is of a nature not used by other bureaus and therefore can be purchased directly by you out of your appropriation without going through the naval supply account, can it not?

Admiral FURLONG. Some of it can; yes, sir. Yes; a great deal of it can, but a great deal is also obtained from the naval supply account, such as this $11,000,000 turn-over that I just spoke of above.

REOPENING OF ALEXANDRIA TORPEDO PLANT

Mr. DITTER. When did this matter of this extreme shortage become known to the Department?

Admiral FURLONG. The shortage, of course, became known to the Department as soon as Congress commenced to lay down new destroyers and new submarines.

Mr. DITTER. Has your Bureau made known to this committee in times past the need for reopening Alexandria?

Admiral FURLONG. I think possibly it has not.

Mr. DITTER. When did the contemplated reopening of Alexandria present itself?

Admiral FURLONG. It presented itself here of course, I have been here a short time, but it presented itself to my predecessor over a year ago at least. He has taken it up with the Department and they had considered what might be done about it, even so much as to seeing whether stations might be opened on the west coast.

Mr. DITTER. Admiral Stark never requested this committee to reopen Alexandria, did he?

Admiral FURLONG. I do not know, but he took steps to speed up production at Newport and did speed it up.

The need was not here until the new shipbuilding program began in 1934. The employees at Newport were increased every year until now they are in three shifts and no more can be worked.

Mr. DITTER. Why would Alexandria be a better place, in view of the conditions of concentration on the west coast, than a point on the west coast?

Admiral FURLONG. The only reason is that it has a building already built that would save a million and a half or $2,000,000, and then probably the purchase of land to erect a building on and the time that it would take to build it, which would put us back a couple of years more, to meet this need.

STATUS OF ALEXANDRIA PLANT AT THE PRESENT TIME

Mr. DITTER. Is Alexandria in an inactive status at the present time?

Admiral FURLONG. Twenty-six men, to be exact, are employed there right along.

Mr. DITTER. Is it in inactive status so far as production goes? Admiral FURLONG. Yes; so far as manufacturing and production are concerned it is in an inactive status.

PRODUCTION AT NEWPORT TORPEDO STATION

Mr. DITTER. Is your production at Newport keeping up to schedule?

Admiral FURLONG. Keeping up to the schedule of its capabilities. It has improved a little in the past 6 months. It will now produce at half the rate we need for the next 6 or 7 years.

Mr. DITTER. Has there been any diminution in production as a result of any labor difficulties?

Admiral FURLONG. Well, in general there has not.

Mr. DITTER. In general there has not?

Admiral FURLONG. Yes; but some.

Mr. DITTER. Have the rulings in times past of the Secretary of Labor with reference to the applicability of certain legislation slowed up production in torpedoes, such as it did in building construction? Admiral FURLONG. No, sir.

Mr. DITTER. It did not apply in the making of torpedoes at all? Admiral FURLONG. No, sir.

DELAY IN SHIPBUILDING PROGRAM'S EFFECT ON NEED OF TORPEDOES

Mr. DITTER. Is this estimate you have given us predicated upon completion of the program presently outlined by the Department so far as ships are concerned?

Admiral FURLONG. Yes.

Mr. DITTER. That program has been slowed up considerably, has it not, the construction program?

Admiral FURLONG. I have not any idea about what Congress is going to do about that, sir.

Mr. DITTER. No; I mean the matter of actually having the buildingconstruction program up to the schedule which was originally outlined as to new ships. We are behind time on that, are we not? Admiral FURLONG. I could not say how much that has been slowed up. It is altogether a matter of how many ships Congress will lay down each year.

Mr. DITTER. You mean to say, Admiral, that you do not know that our new building program is not up to schedule so far as new ships are concerned? That is a matter of rather common knowledge, is it not?

Admiral FURLONG. Well, each ship takes a certain length of time to build.

Mr. DITTER. Would you say that is responsive to my inquiry, Admiral?

Admiral FURLONG. I was trying to think, as well as I can, to

answer.

Mr. DITTER. Excuse me, sir.

Admiral FURLONG. Say it takes 4 years to build a battleship. Now, if certain things come along which render you unable to get your materials or you have labor troubles, strikes, something like that might spread the program over many years, and that battleship, in that sense, could not be up to schedule. Things like that might drag it along. That is the only way I see to keep it from being up to schedule.

Mr. DITTER. Then, to make it responsive, would you say that we are not up to schedule so far as building is concerned at the present time? Admiral FURLONG. Well, we have a table here of the Bureau of Construction and Repair that gives the dates of their anticipated completion of contracts on many of those ships, and they are behind, as

you say.

Mr. DITTER. Yes; that is it. Now, if there were future delays in building, then there would also be delay in the need for these torpedoes, would there not? In other words, basing it on the completion of a program in 1944, if it took to 1948 to do that job, then we could stretch the torpedo construction out over 4 more years, could we not!

Admiral FURLONG. Well, I am the fellow that has to get these torpedoes ready to go into these ships, and I want to see that they are ready.

Mr. DITTER. But if the ships are not ready for them, then there will be no need for these torpedoes, will there?

Admiral FURLONG. You could not use them in those ships; no, sir. Mr. DITTER. No, sir.

Admiral FURLONG. And whatever would slow down the building of ships might slow us down.

PERCENTAGE OF ORDNANCE WORK DONE IN GOVERNMENT-OWNED

ESTABLISHMETS

Mr. DITTER. What percentage of the work of your Bureau, Admiral, is done at Government-owned establishments, as compared with the percenage that is done at privately owned establishments?

Admiral FURLONG. Fifty-three percent is done in Navy plants, 712 percent in War Department plants, and 39%1⁄2 percent is done in private plants.

PRODUCTION OF TORPEDOES BY PRIVATE INDUSTRY

Mr. DITTER. Would there be any warranty, before asking the Government to make this investment, for seeking possible production in private industry of these torpedoes?

Admiral FURLONG. Well, I would do my best to seek private produetion in civil industry, in everything except torpedoes; for guns and shells, but not torpedoes.

Mr. DITTER. In other words, you are opposed to private plants making torpedoes, is that it?

Admiral FURLONG. I am not opposed to their making them; no. I would be very glad to have them make them, but there are certain hings that operate against a private plant making them for us. have tried having them made by private industry.

Mr. DITTER. What are those factors?

We

Admiral FURLONG. Well, a private plant gets itself into the production of torpedoes, and it gets its plant tooled up for this production, and it likes to turn them out just like it is tooled up for, and is machined for. Now, the Government comes along and invents a new thing that they think should go into a torpedo. We want to improve it, and it causes a considerable change in the torpedo. As soon as we do that the private plant objects. This applies chiefly to making torpedoes, not other materials so much. We had that experience with a private plant. We could not get them to improve or change their design when we had new things or new ideas to put into torpedoes. ideas which would improve them.

Another thing, we have 50 people who are employed in research, designing, and invention of new things that go into torpedoes, that we believe are better than anything else. When the private people were making them, they told us that they had the patents and that the Government could not make a single torpedo, because they owned the patents. Torpedoes are intricate and complicated mechanisms. I should welcome private manufacture if we could get it and I sincerely hope we can get private plants to make guns when we are building new ships. I hope we can get them made in private plants as well as in Government plants. There is nobody that can make them. They do not want to tool up for them. We cannot go outside and do as much as we would like, because the laws prevent us from going outside to have them made, as long as we have facilities in Government plants, but I would like to place some orders in private plants and get private plants started on the making of guns gunmounts, gun slides and so forth, so that when need comes to expand, they can expand along with these Government plants. I would like to do that with guns, shells, fire-control equipment, but not with torpedoes.

ADDITIONAL MAINTENANCE COST OF ALEXANDRIA PLANT

Mr. DITTER. In addition to the capital investment that this Alexandria project of yours would entail, what would be the increase in maintenance yearly, what maintenance cost?

Admiral FURLONG. The increase in yearly maintenance will be $10.921 after the shop is in operation. The present yearly maintenance is $30,600.

Mr. DITTER. That was for the year 1939?

Admiral FURLONG. Yes, sir.
Mr. DITTER. For 1939?

Admiral FURLONG. Yes, sir.

Mr. DITTER. What would it be after you got into production? The maintenance costs would increase, would they not?

Admiral FURLONG. Maintenance costs would increase over the present figure $30,600 to $41,521.

Mr. DITTER. And as your tool item and other capital investment items in equipment would increase, you would have a larger personnel, and, therefore, a larger maintenance cost?

Admiral FURLONG. The increase in maintenance cost is estimated to be $10,921 for such additional personnel as are employed for maintenance purposes only. The personnel we are going to have is fixed on account of the size of the plant and the number will approximate 1,000 people, a major portion of whose wages go with the cost of production and not toward maintenance.

Mr. DITTER. Civilian emplyees?

Admiral FURLONG. Yes, sir; civilian employees; and that is practically all of the employees we will have.

Mr. DITTER. I am talking about administrative costs as far as officers are concerned. Would not your administrative costs increase as your production increased?

Admiral FURLONG. This plant is to be opened to produce a small amount, and we cannot increase it. It is going to be fixed. We are not going to try to increase the Alexandrie plant above that small capacity needed to augment Newport.

Mr. DITTER. What are your administrative costs for 1940? For instance, how much of an increase over the figure you have just given me?

Admiral FURLONG. There is no reason why that administrative cost should be any more than the cost given, unless we increase the size of the plant. It is just a shop to be operated under the Washington Yard, where the administrative overhead is down there at the yard. That is another argument for not setting it up in another place as a separate establishment.

Mr. THOм. As a matter of fact, you would just detail regular naval officers to go to the torpedo plant for administrative purposes, so you would have no increase in cost so far as the Navy as a whole is concerned.

Admiral FURLONG. Yes, sir, that is right; and, also, it will cost less than if you built a new building and set it up out in a new location; you would have more overhead for the officials. Now, you do not have that in this place, because they operate the shops and all of the accounting and paying is done by the Washington Navy Yard officers and clerks.

Mr. DITTER. Do I understand, Admiral, that you would not need any more officers at Alexandria when the shop is in operation than you require there now without it being in operation; that you would not ask to have any more officers of the United States Navy assigned there?

Admiral FURLONG. I did not say that.

Mr. DITTER. That is what my friend, Mr. Thom, suggested. Now, I am asking with reference to this plant whether we could not do with less officer personnel with the plant in an inactive status than we could with it in an active status?

Admiral FURLONG. When you shut a plant down you cannot use nearly as many people as you can when you have somebody in it and it is operating.

Mr. DITTER. Therefore, to that extent, it would cost the Naval Establishment more money?

Admiral FURLONG. Naturally, but it is not going to be an increase of officer personnel nearly as much as if we established a new plant somewhere.