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The October 31, 1937, estimate of the cost of the 397 planes in column I is $36,856,286, and the 1938 appropriation for 397 planes is $28,860,000, making a total shortage in the appropriation of $7,996. 286.
The 1938 appropriation for the 397 planes in column I is $28,860,000, and the estimated cost of 320 planes in column II as of date October 31, 1937, is $28,187,340, leaving a remainder, available for changes during manufacture, further cost increases, and other contingencies, of $672,660.
Mr. UMSTEAD. Admiral, I think it should be stated there that the failure of the appropriation to furnish the number of planes indicated was because of the increase in the cost of the planes, as you have stated heretofore, and that the appropriation for aviation for the current fiscal year represented all of the funds that were requested.
Admiral Cook. That is correct, sir.
Mr. UMSTEAD. All of the aviation funds requested of Congress br the Navy Department for the current fiscal year.
Admiral Cook. Yes, sir. Mr. UMSTEAD. I believe that the appropriation under your Bureau for this year is one of the few that was not cut in any manner at all.
Admiral Cook. Yes, sir; all of the funds requested for the construction of new aircraft were appropriated by Congress.
The foregoing shortage of $7,996,286, which represents the cost of 77 airplanes, based on October 31, 1937 cost estimates, eliminated from the 1938 procurement program, has been partially made up br including 26 of them in the 1939 estimates at a cost of $1,363,446 Due, however, to budgetary limitations, it has been impossible to include the remaining 51, costing $6,632,840, and consisting of 33 observation-scouting, 13 patrol-bombing, and 5 fleet-utility planes. Thr 1939 estimates, as submited by the Navy Department, are, therefore. $6,632,840 short of fulfilling the Navy's 1939 approved airplane requirements.
In connection with the subject of the increased cost of airplanes attention is invited to the fact that the Appropriations Committee of the House in reporting the War Department appropriation b:li. fiscal year 1938, included the following statement in its report :
Airplane and airplane-engine manufacturers have stated to Air Corps ofticisi that they are experiencing considerable difficulty in obtaining materials quired for Air Corps contracts as a result of existing conditions. These cond tions are caused by labor agitation for increased wages and additional fia . cial burdens imposed upon industry by the Social Security Act. The airplane and engine manufacturers are affected by these conditions in the same manner as other industries, as well as by the Walsh-Healey Act. Until the Secretar of Labor has completed necessary investigations and specified labor rates to be observed, it will not be possible to determine the extent to which the Walsh-Healey Act will affect 1938 prices.
Air Corps audits have shown large losses incurred by important airplan manufacturers on three recent Air Corps contracts. There is no doubt tha: contractors will endeavor to protect themselves against a repetition of the losses and that this protection will result in increased prices during 1838
Most of these changes have occurred since the formulation of the air program contained in this budget and have given the Air Corps considera concern. In view of the uncertainty of being able to execute the promise 1938 airplane procurement program as now drawn, a recent study was mad to determine the funds that would probably be required for this purpose This study indicates that an additional sum of $6,783,300 will be necessary if chat in the existing program are to be avoided.
The Army Budget estimates originally included $26,973,261 cash and contract authorization for airplanes. This was increased by the committee, as noted above, by $6,783,300, or 25 percent, making & total of $33,756,561. The Navy, whose cost estimates were made at about the same time as the Army's original estimates, did not receive any increase over the amount originally estimated, $28,860,000, and as a result the appropriation was short, as stated above, $7,996,286, or 28 percent of the amount required to procure the 397 planes carried in the act.
Had the Navy been given a similar increase over the original 1938 estimates, the present shortage of $6,632,840 in the 1939 estimates would not exist, and the total of the 1939 “Aviation, Navy" estimates, as now presented, would be ample for all requirements subject, howerer, to no further increases in costs.
COMPARISON OF 1938 AND 1939 AIRPLANE COST ESTIMATES
For the information of the committee, there is given below a table which compares the unit cost of planes carried in the 1938 Appropriation Act, computed as of July 1, 1936, and the unit cost of planes carried in the 1939 Budget estimates, computed as of July 1, 1937. In view of the fact that procurement of the planes carried in the 1939 estimates cannot start before 1 year, and in some cases nearly 2 years, after the date on which the cost estimates were prepared, there is every indication that the present upward trend of costs will again result in a shortage of funds necessary to carry out any 1939 plane procurement which may be approved by Congress and based on costs as of July 1, 1937. The unit costs given in both cases include the following: Airplane structure, engine, propeller, structural spare parts, spare engines, engine spare parts, spare propellers, propeller spare parts, radio equipment, radio spare parts, electrical equipment, instruments, instrument spare parts, and miscellaneous equipment.
Comparison of 1938 and 1939 airplane cost estimates
1939 Budget estimate
$50,284 (based on contract made June 10, 1937).
1936). $75,450 (based on 13 percent increase on contract let Oct. 2,
1936). $207,060 (based on contract let Aug. 2, 1937). $250.335 (average of 2 bids received in July 1937) $60,968 (based on contract let May 11, 1937). $110,000 (based on current market prices on July 1, 1937;
larger transport of more modern type).
The increased Naval Reserve airplane requirements for 1939 are due to the necessity for providing additional airplanes for continuing the training and maintaining the proficiency of the rapidly increasing number of Naval and Marine Corps Reserve aviators on inactive duty. This increase is due, in turn, to completion of active duty with the fleet and return to inactive status of large numbers of aviation cadets in accordance with the aviation cadet program. The first large group of these aviators will return to inactive duty in the
fiscal year 1940 and the additional reserve airplanes contained in the 1939 program will be required by that time. Without an adequate number of airplanes for maintaining the proficiency of this potentially very valuable emergency group, the Government's investment in their training will be jeopardized.
FLYING TRAINING FOR AVIATION RESERVE
Mr. UMSTEAD. Admiral, inactive cadets could be given a refresher course in the latter half of the calendar year 1939, which would be the fiscal year 1940, just as well, could they not, as during the first part of the calendar year 1939, which would be in the fiscal year 1939?
Admiral Cook. The question of the maintenance of proficiency in flying and a refresher course, Mr. Chairman, are two different things. Under the present rules of the Department, active Reserve aviators are required to do a certain amount of syllabus flying each month throughout the year, which maintains them in a position capable for use immediately should any emergency arise. Mr. UMSTEAD. What kind of flying? Admiral Cook. Syllabus flying
As to a refresher course, where a man does not fly for a number of months, say for 6 months, he is considered to have lost his facility in flying, and he is not permitted to fly until he goes to Pensacola and takes a refresher course, which, in the end, considering transportation and costs while there, is as great or a greater charge against the total appropriation than the cost of maintaining their proficiency, and would have this very great handicap, that if an emergency should arise prior to that time we would have a number of Reserve aviators who would not be proficient in flying.
Mr. UMSTEAD. You make the point that it is unwise to permit them to go 6 months without flying?
Admiral CooK. Yes, sir; 6 months is about the limit a man is permitted to go without flying without being taken off flying status and sent to Pensacola for a refresher course.
Mr. UMSTEAD. When the first unit of the aviation cadets pas from active status into the Naval Reserve, it will be the policr of the Navy to require them to fly at frequent intervals in order to keer them proficient in flying?
Admiral Cook. That is correct, Mr. Chairman. They are attached to a Naval Reserve base where they get a certain number of specife hours' flying each month.
Mr. UMSTEAD. And if that is done they will not need a refreshes course?
Admiral Cook. No, sir; and it is for that purpose that these planes are necessary.
Mr. UMSTEAD. Not for a refresher course at all!
Admiral Cook. No, sir; not for a refresher course at all. It is entirely for the maintenance of their proficiency, to be able to meed an emergency at any time it arises.
NUMBER AND LOCATION OF NAVAL RESERVE BASES
Mr. SCRUGHAM. How many Naval Reserve bases have you where they are given instruction in flying? Admiral Cook. Thirteen, sir. Mr. SCRUGHAM. Have you a list of them, Admiral ?
Admiral Cook. Yes, sir; I can tell you where they are. On the West coast there are Reserve bases at the following locations: Seatt le, Oakland, and Long Beach. On the East coast, at Squantum, New York City, Philadelphia, Washington, and Miami. The inland Reserve bases are located at Detroit, Kansas City, Mo., Chicago, Minneapolis, and St. Louis.
Mr. SCRUGHAM. Both St. Louis and Kansas City have Reserve bases?
Admiral Cook. Yes, sir.
NUMBER OF PROGRAM PLANES ON HAND ON OCTOBER 31, 1937, BY TYPES
The following data indicate the situation as of October 31, 1937, with respect to aircraft now on hand and the aircraft due under existing contracts:
TABLE A.-Number of program planes on hand on October 31, 1937, by types I'nder this classification are included all planes except those listed in the following subparagraph (b). They are planes that are still available for the performance and maneuvers for which they were built. They are neither obsolete nor experimental :
Regular Navy Scout-observation
259 Fighting -------------
117 Seont-bombing ------Torpedo-bombingPatrol bombingFleet utility ----Utility---------TransportTraining Total
1,002 Mr. UMSTEAD. Admiral, does that total given by you disregard or include the spare or reserve planes?
Admiral Cook. It includes the Regular Navy spare or reserve planes, Mr. Chairman, but not Naval Reserve planes or spares.
With the exception of "experimental” airplanes, all planes listed as unusable in the following table are so termed because they are obsolete and restricted in flight. They cannot with safety perform the maneuvers required by fleet missions, such as dive-bombing and other violent combat maneuvers. They can, however, be used for such duty as their flying restrictions permit in connection with student training and various utility purposes.
Mr. PUMLEY. Before they are used for student training, are they reconditioned and put in proper shape?
Admiral Cook. They are always very carefully checked, and very carefully examined, and, in most cases, given a major overhauling when they come from the fleet for student training. They are safe
planes, but not fitted for the character of use required of them the fleet.
Those planes listed as usable in the following table are only barely so, as far as fleet missions are concerned. They are almost all in a usable status only while awaiting deliveries of suitable replacement:
TABLE B.-Number of nonprogram planes on hand on Oct. 31, 1937, by type
divided between those usable and unusable in lieu of program planes
Being used in the fleet with certain flight restrictions until replacements are delivered. ? Being used for training and administrative purposes ashore until replacements are delivered. 3 Restricted to minor utility work in areas having sheltered water available for landing. • Experimental airplanes are unsuitable for scheduled operations because of their nonstandard empos and installations.
Of these the majority are due or overdue for delivery and will be delivered within the next few months. With increased complication of design, manufacturing difficulty and need for special materia. and parts, it has become very difficult to make accurate allowance for the time factor in building the more recent types of airplanes.
TABLE (C).-Number of program planes on order on Oct. 31, 1937, by types, and
the appropriation chargeable
On the list here showing 652 planes on order, it will be noted this some of them are as much as 17 months overdue.
Mr. UMSTEAD. What is that caused by, Admiral?
Admiral Cook. It was caused by particular difficulties in the acstruction, scarcity of materials, a strike, and a major change wh: