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and also a material increase in airplane fuel consumption and other maintenance and operating expenditures, as compared with the fiscal year 1938. The number of operating airplanes will increase from 1,303 in 1938 to 1,415 in 1939. This is an increase of 8.6 percent. The cost of all aviation material and supplies has increased about 13 percent, which could not have been foreseen at the time the Budget estimates for 1938 were prepared. The result is that in order to fill the current 1938 requisitions for spare parts, materials, and so forth, for the overhaul of aircraft, this Bureau has found it necessary to reduce drastically all requisitions for overhaul and stock materials and has been able to provide only those items necessary to fill immediate requirements. The natural result of this condition is a hand-to-mouth existence, with seriously depleted stocks of material, so that at times it is necessary to interrupt the overhaul of an airplane in order to procure the material necessary to complete the work.

Mr. UMSTEAD. I take it from the statement you just made that your stocks are not carried in the naval-supply account.

Admiral Cook. No, sir; they are not, Mr. Chairman. The navalsupply account carries stocks which are more or less common to all of the other branches of the Navy. Our stocks are highly specialized; even our nuts and bolts are not standard with the rest of the Navy. You have put your finger right on the difficulty, Mr. Chairman. That is, if we could use the naval-supply account fund for our specialized stocks, or if we could have a similar fund within the Bureau of Aeronautics, similar to the naval-supply account, we would not be in this condition as to supplies which I have outlined.

Mr. UMSTEAD. Admiral, would it be practical to do so in view of the rapid changes which are brought about in materials and equipment that go into the construction of aircraft!

Admiral Cook. That is an objection to putting it in the navalsupply account fund, due to the rapid obsolescence and changes in the material, but, in the end, it would not cost any more, Mr. Chairman, to have a supply fund which we could use for that purpose. Obsolesecence comes whether we buy piecemeal or whether we buy in some other way. I think the ultimate results in the reduction of time required for overhauling and construction justify it. The increased size and complexity of new airplanes as compared with our older prototypes has materially increased the cost of overhaul and maintenance. Similarly, the large new engines required for increasingly high performance, so essential in military airplanes, are using much more fuel as horsepowers increase.

The existing shortage of materials in 1938 will be carried over into 1939. The maintenance estimates herein contained have been reduced to the very minimum compatible with safe and efficient operation and overhaul, and no allowance has been made for deficiencies occurring in 1938, nor for any increase in costs over those existing in July 1937 when these estimates were prepared.

The figures given below are indicative of the reduced amounts available, per plane, for operations and overhaul in the 1939 estimates as compared with the 1932 appropriation. This condition has been aggravated by the increased costs of materials, increased cost of overhauls due to the greater complexity and size of airplane struc

tures, and the increased fuel and oil consumption due to the greatly increased horsepower of the modern engines.

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In the fiscal year 1932 the number of planes operated was 523, the funds available for fleet operations were $2,453,055, and the amount available per plane for fleet operations, of fleet aircraft, which has nothing to do with shore aircraft, was $4,690 per plane. In the 1939 estimates there are 1,048 fleet operating planes, the total amount requested is $4,140,000, and the amount available per plane is $3,950, or a reduction of $740 per plane. The horsepower of these planes in use at the present time, as compared with those in use in 1932, is double, so that twice the amount of gasoline is used. I merely bring this point out to show you that there has been a very material reduction in the cost of operation despite the fact that we are using larger and more powerful planes.

Overhaul of aircraft

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In 1932 the total number of planes operated afloat and ashore was 725, for which there was available for overhaul $4.225,775, making the amount of $5,829 available per plane. In 1939 there are 1,413 planes to be operated afloat and ashore, for which there is available $7,422,000, or an average of $5,245, making a reduction of $584 per plane.

Mr. UMSTEAD. With reference to the cost of operation and the en of overhauls, cannot savings be effected on planes which you expect to be in service in 1939 as compared with those in service in 1932, o reason of improvements in design, machinery, and mechanical oper ation ?

Admiral Cook. There is no over-all saving, Mr. Chairman, in the costs of operation and overhaul. While a saving is made in overhaul. due to the increased intervals between overhauls of the modern plane as compared with the older one, the overhaul, when it does occur, is very much more expensive. That is due to the fact that these older planes were of much simpler construction, being made largely with wooden wings and fabric covering, whereas the modern planes are made with metal wings and metal fuselages. The operations of the modern planes are more costly than those of the older ones, due to greatly increased horsepower of the modern engines, with the consequent increase of fuel consumption.

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The following tabulation shows the number of airplanes operated o the naval aeronautic organization during the fiscal years 1936 to 939, inclusive:

Operating aircraft

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One of the greatest increases in cost, and one which is of serious concern to the Bureau, is that of aviation gasoline. In 1936 the contract price of aviation gasoline at San Diego, which is the principal point of consumption for the Navy, was $0.0809 per gallon. On January 1, 1937, a sudden and unexpected rise in price took place, and the contract price for delivery at San Diego for the 6 months beginning on that date rose to $0.1375 per gallon. On July 1, 1937, the price again rose to $0.1475 per gallon. This is an increase, in one year, of 82 percent in the fuel cost of airplanes operating on the west coast, where most of the naval airplanes are operated. Prices at other points on the west coast rose proportionately. Fortunately, there has been so far no material increase in contract prices of aviation gasoline on the east coast, but the quantity required on the east coast is less than that required on the west coast. With this great increase in the cost of aviation gasoline, it would have been impossible to carry out all scheduled fleet aircraft operations this year had it not been for the unexpected delay in the commissioning of the aircraft carriers Yorktown and Enterprise and their accompanying aircraft squadrons.

Mr. UMSTEAD. Admiral, what is the cause of the rather unusual and constant increase in the price of gasoline ?

Admiral Cook. Mr. Chairman, I am sorry I cannot give you any information on that. I understand that the Bureau of Supplies and Accounts, which is definitely concerned with it, has made or is making an investigation, but I do not know the results.

PRICES OF GASOLINE DELIVERED ON EAST COAST AS COMPARED WITH WEST

COAST

Mr. UMSTEAD. What is the delivered price of aviation gasoline at Norfolk and Pensacola?

Captain COBEY. Nine and three-fourth cents per gallon at Pensacola, and 10 cents at Norfolk.

Mr. UMSTEAD. Then it is delivered at a lower price on the east coast than it is on the west coast?

Admiral Cook. Yes, sir.

EXPERIMENTS AND DEVELOPMENT

There are included under the heading of “Experiments and development" all funds required for the various experimental aeronautical projects undertaken by the Navy. These are very important and are essential to the efficient and economical development of naval aviation. There is a very definite saving of expense in the thorough and orderly accomplishment of these experimental projects as a preliminary step to the placing of orders for quantity production of airplanes, engines, and general aeronautical material. In this work the Bureau of Aeronautics calls upon the Bureau of Standards, the De partment of Commerce, the Naval Research Laboratory, the Navy Esperiment Station, the Air Corps of the Army, and other Government agencies to assist in various experimental projects as far as practicable. Also, full advantage is taken of development work carried on by the National Advisory Committee for Aeronautics. This prevents duplication of effort and expense.

The estimate for 1939 covers the usual experimental headings and contains various detailed increases and decreases. The several increases carried in the estimates under this project, over amounts appropriated for 1938, are more than offset by decreases, notably the nonrecurrence of the item covering a prototype patrol airplane.

NEW CONSTRUCTION OF AIRCRAFT

The estimates under this heading provide for the replacement of 284 airplanes of the Regular Navy and Naval Reserve, and for 35 airplanes for increase of the Regular Navy and the Naval Reserre. making a total of 319 airplanes. Replacement airplanes replace those which become obsolete in service, or are lost in crashes. "Increase of the Navy” airplanes are for the expansion of the Naval Aeronautic Organization to the authorized numbers in the various types of airplanes.

The total estimate for new airplanes, both replacement and increase, is based upon unit costs as of July 1, 1937. These costs were obtained from contracts entered into during the last quarter of the fiscal year 1937 and from bids on hand early in the summer in tim Bureau of Aeronautics. In general, these figures for unit 07average 23 percent higher for production airplanes and 76 percent higher for experimental airplanes than those of July 1, 1936, and ar due almost entirely to the increased complexity of the airplanes themselves and to a general rise of prices in the aircraft industry due to labor and material cost increases. A portion of the increased unit cost is due, however, to increasing the estimate for radio equipment to provide for more powerful transmitters to insure that the radi.. range will be commensurate with the radius of the new aircraft beinse developed, and to provide for additional frequency coverage requiri in the equipment for new airplanes for communication with all type of naval vessels, the Coast Guard, the Army, and the Department of Commerce radio system.

The Naval Appropriation Act for 1938 authorized the procurement fa total of 397 airplanes and carried a total of $28,860,000, consisting f cash and contract authorization for that purpose.

PLANES PROVIDED IN 1938 APPROPRIATION

Mr. UMSTEAD. Admiral, the 397 planes provided for in the 1938 ppropriation bill consisted of 251 so-called replacement planes ?

Admiral Cook. Two hundred and fifty-one replacement planes, and 04 new. Mr. UMSTEAD. One hundred and four program planes ? Admiral Cook. Yes, sir; and 42 reserve planes. Mr. UMSTEAD. Forty-two Naval Reserve planes ? Admiral Cook. Yes, sir.

The estimate of $28,860,000 as the cost for 397 airplanes was made by the Bureau of Aeronautics in July 1936 when the 1938 estimates were prepared. Although it was realized that, owing to certain recent labor legislation as well as normal increases in cost of labor and material, the cost of airplanes purchased a year to 18 months later would be greatly increased, there was no available yardstick on which to base an estimate as to what the increase would be.

In actual procurement undertaken subsequent to July 1, 1937, bids received and other cost data have indicated that the actual total cost of the 397 airplanes would be about $36,856,286, an increase of $7.996.286, or 28 percent over the amount appropriated. Faced with this situation, the Bureau of Aeronautics has modified and reduced its 1938 airplane procurement program, as follows:

[Column I indicates the planes by types and numbers as carried in the 1938 Appropriation Act, and Column

II indicates the modified procurement plan!

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The 397 planes were appropriated for, and the money is sufficient to buy 320 planes, as indicated in column II.

Mr. UMSTEAD. That statement, Admiral, indicates the insufficiency of the money carried in the 1938 appropriation bill to procure the number of planes which the money was intended to buy?

Admiral Cook. That is correct, sir.

Mr. UMSTEAD. And you are giving there the number of planes and the types that the money was intended to purchase, and you are also giving the number and types of planes that the money actually will purchase? Admiral Cook. Yes, sir.

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