(b) Continued economies have been effected by the utilization of excess or obsolescent ordnance equipment for target practice. Specific examples of this policy are:

Use of discontinued calibers of service powders.

Use of excess or inferior armor-piercing projectiles instead of new target projectiles.

Use of 5-inch A. A. common projectiles in lieu of new target-practice projectiles.

The Navy purchased 507,164 pounds of excess 10-inch powder from the Army for blending and use in target practices for 8-inch guns, thus saving approximately 50 percent of the cost of new powder.

(c) The policy of reworking old powder and reissuing for service was continued.

(d) Black powder reclaimed from ignition ends of broken-down bag charges has been utilized in saluting charges.

(e) Reclamation of mines at the Naval Mine Depot resulted in a saving of handling and transportation charges.

(f) Conversion of submarine torpedoes for aircraft use has effected a saving over the manufacture of new torpedoes. These torpedoes are of a size which cannot be used by submarines now on the Navy list.

(g) Continued efforts to improve torpedo-recovery devices and thus reduce target-practice losses have been made.

(h) Facilities of the Army Chemical Warfare Service have been utilized, thus avoiding the cost of dual facilities.

(i) The facilities of Army Ordnance plants have been utilized for the acquisition of material common to both services and also for strictly Navy material.

(j) The following metals were reclaimed from obsolete powder tanks and made available for use at the Naval Gun Factory at a time when procurement was difficult: 714,708 pounds copper sheet, 195,211 pounds solder copper strip, and 1,468,870 pounds bronze.

BUREAU OF SUPPLIES AND ACCOUNTS

Continual emphasis is placed upon economy in the daily work of the Bureau. Much of the resultant economy is of a routine character and cannot be estimated, such as that resulting from scutiny of requisitions, transfer of excess stocks from one station to another, utilization of used material wherever possible, etc.

In addition, the general inspectors of the Supply Corps study conditions at each yard or station inspected, with a view to consolidating or eliminating duties in supply, accounting, and disbursing departments to the fullest extent.

To keep within the limits of the appropriation "Maintenance, Supplies, and Accounts," measures were taken in 1937, and continued in 1938, to:

Defer reporting dates of new civil employees wherever possible. Use Government transportation for freight to the limit of vessels available.

Make no unnecessary shipments, and restrict all shipments to the cheapest means of transportation which will answer the requirements of the service. Direct officers and enlisted men to survey their household effects with a view to shipment to new stations of only so much as is essential to their needs at such stations.

Dispose of obsolescent material, by sale or otherwise, wherever it is located, rather than ship it elsewhere for disposition.

Extend loading time of Navy cargo carriers, when possible, to avoid extra costs for overtime or Sunday work.

Instruct officers submitting requests for allotments of funds under this appropriation to restrict such requests to absolute necessities.

A survey is being made of activities to locate any personnel or equipment which may be in excess of current needs, with a view to transfer to some other station which is inadequately manned or equipped.

Due to increase in the price of fuel oil, it was necessary, both in 1937 and 1938, to make every possible economy in water, electric current, steam, etc., used by ships and chargeable to the appropriation "Fuel and transportation," to make as much money as possible available for purchase of fuel oil. Similarly, it has been directed that every practicable economy for fuel expenditures consistent with scheduled operations be exercised.

In connection with "Pay, subsistence, and transportation," market and crop conditions are closely followed in procuring items of provisions of a seasonal nature, an entire year's supply being purchased at the appropriate time. Every precautionary method is followed to prevent losses of provisions.

In the Bureau itself the Purchase Division has been reorganized to obtain greater flexibility, the list of bidders is being overhauled, and a standard outline of forms for requisitions is in progress, all of which will result in economy of effort and a direct saving in office supplies.

The study undertaken of the accounting practices in the Naval Establishment with a view toward obtaining a better alinement of current appropriation expenditures with budgetary projects has been productive of an improved procedure made effective July 1, 1937, relative to the accounting for expenditures on naval vessels under construction.

BUREAU OF YARDS AND DOCKS

All of the steps listed on page 27 of the hearings before the House subcommittee on the naval appropriation bill for 1938 are being con tinued.

HEADQUARTERS UNITED STATES MARINE CORPS

The Marine Corps follows the practice of making consolidated annual purchases of supplies required for its needs insofar as practicable, thereby securing to the Government the advantage of quantity purchases. Purchases are made with due regard to market conditions and seasonable production.

Contractors' vouchers and dealers' bills are paid promptly, thereby deriving the benefits of trade discounts. Trade discounts taken by disbursing officers of the Quartermaster's Department for prompt payment of public bills has resulted in a saving during 1937 of $23.042.

A material saving is effected to the Government by the salvage and sale of materials and property no longer suited for Government use. The salvage and sale of clippings, waste paper, and condemned property at the Depot of Supplies, Philadelphia, during the fiscal year 1937 has brought in a return to the Government in the amount of approximately $21,061. The classification and sale of condemned material at the Marine Barracks, Quantico, during the fiscal year 1937 has returned to the Government approximately $23.487.

The practice is observed of utilizing all available space on Army and Navy transports for Marine Corps personnel, dependents, household effects, and Marine Corps property.

Insofar as practicable, in the movement of Marine Corps personnel all rail schedules are adjusted with a view to saving Pullman charges together with resultant reductions in railroad fares.

WEDNESDAY, DECEMBER 8, 1937.

NAVAL OPERATIONS

STATEMENT OF ADMIRAL WILLIAM D. LEAHY, CHIEF OF NAVAL OPERATIONS

GENERAL STATEMENT AS TO EXISTING PERSONNEL, MATERIAL, SITUATIONS, AND PROSPECTIVE CHANGES THEREIN

NAVAL POLICY

Mr. UMSTEAD. We shall now hear from Admiral Leahy, Chief of Naval Operations.

Admiral LEAHY. The fundamental United States naval policy, as approved by the Secretary of the Navy on May 10, 1933, is restated as follows:

To maintain the Navy in sufficient strength to support the national policies and commerce and to guard the continental and overseas possessions of the United States.

To support this policy the operations of the naval fos ཝཱ ཝཱ planned with a view to accomplishing the following purposes:

(a) To exercise and train the units of the fleet to the highest state of efficiency:

(b) To organize the Navy for operations in either or both oceans so that expansion only will be necessary in the event of national

emergency;

(c) To protect American lives and interests in disturbed areas; (d) To cooperate fully with other departments of the Government;

(e) To cultivate friendly international relations; and

(f) To encourage civil industries and activities useful in war.

THE OPERATING FORCE PLAN

As stated by the budget officer of the Navy Department, the estimates of this Department, conforming to the usual procedure, were prepared after a detailed study of the Navy's responsibility for national defense and its present means of meeting that responsibility. The conclusions reached as a result of the study and as approved by the Secretary of the Navy were presented to the various bureaus and offices of the Department to be used as a basis for their detailed plans and budget estimates.

The operating-force plan, together with the assignment of vessels in the organization of seagoing forces of the United States and the fleet-employment plan, are derived from this study and prepared by the Chief of Naval Operations. The operating-force plan sets forth the vessels and aircraft to be kept in commission and operated during the year, and the organization of the fleet marine force, as required, to fulfill the mission imposed by the current approved policies.

All items in the current estimates which have to do with operating the forces afloat and providing them with personnel are based directly upon the requirements of the operating-force plan and are essential to the accomplishment of the plan. Any reduction in the funds allowed for these items would therefore result in curtailment of the plan and of the forces afloat.

Funds requested in the present estimates for shore facilities which exist for the support and maintenance of the forces afloat are directly related to the requirements of the projected operating-force plan, and of future plans, so far as they can be foreseen.

The present moment is not one when the United States can safely reduce its means for national defense without jeopardizing our national security. The political conditions in the world, both in Europe and in the Far East, are more threatening than at any time since 1918, and are distinctly worse than a year ago. In China a major conflict is in progress involving grave danger to American citizens. The civil war in Spain continues unabated and the possibility of a general European conflict is ever present. We must continue to maintain our existing national defense establishments at their highest efficiency, complete as soon as possible and practicable the projects now under way to improve or augment the existing establishments, and provide those features which are still lacking and which are vital to the efficiency of the national defense at sea. In considering estimates for the Navy, conditions in the world on all sides of us and the strength of our Navy as compared with the strength of the navies of other great powers must be considered.

The preliminary estimate figures submitted by the various agencies of the Navy Department have already been pruned to the minimum consistent with what the Department considers the needs for reasonable national security. I can, therefore, state that it would, in my opinion, be jeopardizing that security to reduce our present number of vessels and aircraft organizations in full commission, to delay or reduce our shipbuilding or aircraft programs, or to fail to build up our shore establishments and reserve stocks in support of the fleet.

The existing naval personnel and material are correctly measured by the degree to which they satisfy the requirements of the current operating force plan, and by the degree in which they are adapted to adjust themselves to cover future similar plans. It is in this light that the present situation will be reviewed briefly and it is with the related necessities in mind that the present estimates have been prepared.

The employment of forces contemplated by the operating force plan for the fiscal year 1939 is outlined in section E of this statement. Section D contains data on employment of vessels this year at variance with the fiscal year of 1937 program. More complete information regarding operating force plans for any year will be made available to the committee as desired.

READINESS OF THE FLEET

PERSONNEL SITUATION

These estimates include an increase of 5,570 men in naval enlisted personnel and 1,000 in marine enlisted personnel. Present indications are that 3 light cruisers, 18 destroyers, and 2 submarines wil be placed in commission, thus increasing the numerical strength of the fleet. These vessels are larger and more powerful units than the old types they replace, and consequently they need larger complements to man them effectively.

It is also proposed to recommission one ammunition ship and two mine sweepers. These vessels are urgently needed because of a large increase in the number of vessels in the fleet, particularly aircraft carriers, heavy and light cruisers, without any increase over a period of years in base force facilities which provide all manner of services to the operating fleet of combatant ships.

The fleet will fall far short of the required efficiency if the neces sary personnel is not provided to man the vessels in active service and to provide for the necessary reserves and aviation cadets. estimates do not provide full war complements for all vessels in commission, but those that are not provided with full complements cannot be prepared to meet an enemy attack with a less number of men than that indicated in these estimates. Capable operating personnel is developed only by months of training. It cannot be improvised. Mr. UMSTEAD. Admiral, I understand the peacetime complement is 85 percent?

Admiral LEAHY. The peacetime complement is 85 percent, except that some ships do carry full complements, such as submarines, vessels on the Asiatic station, and some tenders and repair ships.

Mr. UMSTEAD. During the present fiscal year, with the enlisted personnel provided for in the current appropriation act, are you experi encing any difficulty in supplying peacetime complements?

Admiral LEAHY. The vessels in full commission at the present time have their full peacetime complements, 85 percent of their crew or

more.

The fleet marine force is an important unit of the fleet in providing a force immediately available to occupy and defend remote outlying points in our own territory that may have to be used by the fleet, or to seize and hold advance bases needed by the fleet. The strength of the fleet marine force should be built up gradually and its essential material equipment should be provided.

An adequate reserve of naval and Marine Corps personnel is essential for war operations. The number of aviation cadets provided in these estimates is urgently needed for existing aviation units in the fleet, and they ultimately will form a part of naval aviation reserve personnel.

MATERIAL SITUATION

There are now building or appropriated for 72 vessels whose construction has been provided for in part by previous appropriations under "Replacement of naval vessels," or by allocations from emer geney funds. Construction funds asked for in these estimates are for the purpose of completing or continuing construction upon such of