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Admiral DU BOSE. I should think it would, sir. The Navy Department is limited in its ability to make administrative promotions, however, by the provisions of the classification acts, where the average of the grade applies, you cannot have everybody in one grade getting the top pay. So there is a very decided check on what the Navy Department can do.

Mr. UMSTEAD. As the necessity arises to expand your classified employees in the Department and in the field, owing to ship-building demands, do the people you take on understand that their tenure of employment may be only temporary?

Admiral Du BOSE. I do not know why they should not understand it, but it is frequently an exceedingly difficult proposition for the Navy Department to get rid of a group IV (b) person. The idea of temporary employment as regards mechanics is pretty well established; but when we come to the white-collar employee, I think the converse holds.

Mr. UMSTEAD. Regardless of whether they think they ought to be kept or not, you do not keep them unless there is work for them to do, do you?

Admiral Du BOSE. No, sir; the rule is that we do not keep them. But in some cases we are soft-hearted and may think we can find work for some of these people later on. If they are charged to the job on which they are working, every incentive is to get them off the roll when there is no work for them; but as it is today there is no real incentive to get rid of them.

Mr. UMSTEAD. Admiral, what about two pay rolls in some bureaus— one paid from civil appropriations and the other from naval appropriations?

Admiral Du BOSE. There are two pay rolls now, one from the so-called Navy Department salaries pay-roll, and another pay roll covering those people who are taken on under the ship-building appropriations. Those are the only two pay rolls that I know of, sir. Mr. UMSTEAD. Is there any tendency to switch from one to the other, or is the regular Bureau force kept intact?

Admiral Du BOSE. The regular Bureau force is kept intact. The ability of the various bureaus of the Navy Department to take on additional people under Replacement of Naval Vessels is absolutely necessary; otherwise we could not build the ships. The salary roll is supposed to be the fixed number of people that you would require, whether you had much work or not.

Mr. UMSTEAD. Of course, you have taken on a relatively large number of additional employees in the Department here. Admiral Du BOSE. Under "Replacement of naval vessels." Mr. UMSTEAD. Under the urgency of the building program? Admiral Du BOSE. Yes, sir; in accordance with that specific provision of the law.

Mr. DITTER. Admiral, the change that you now request was not incorporated in the bill when it came from the Budget Bureau, was it? Admiral Du BOSE. The preliminary draft of the bill contained a fixed-sum limitation.

Mr. DITTER. That means, ipso facto, that the proposal was not in the bill as it came from the Budget?

Admiral Du BOSE. At one time it was not in the proposal as it came from the Budget, but at another time it was.

Mr. DITTER. That is it. Now, what factor has arisen, Admiral, which has necessitated such an arbitrary change?

Admiral Du BOSE. I would not say it was a matter of necessity, because we could, of course, continue to operate just as we have been operating for many years. But we do not today, under our past methods, obtain correct appropriation costs in so far as concerns group IV (b) people, and the ship-building appropriation, "Replacement of naval vessels," is very definitely not paying its way directly. The cost of our ships is now obtained in two ways-the appropriation cost and the statistical cost. This proposed change would transfer some of the statistical cost to the appropriation cost. The total cost would not be affected materially.

Mr. DITTER. Admiral, you predicate your request very largely upon the matter of an accounting principle, do you not?

Admiral DU BOSE. Yes, sir; because, as a matter of common sense and good accounting practice, and also based on statute law, the appropriation cost should include the direct and indirect expenses incident thereto. That latter phrase is taken from the 1910 law of Congress.

Mr. DITTER. The Secretary seems to predicate his request upon the matter of expedition in building. Which do you think is the real reason for this drastic change that you are presently requesting?

Admiral Du BOSE. The change to a percentage method is primarily in connection with expedition or to avoid interference with work by reason of an inadequate amount of money. The size of the percentage or the amount obtained under the percentage method, has the other purpose, namely, the permitting of charging them to the work. They are the two things involved in this proposal.

Mr. DITTER. This proposal would invite possible laxity in the supervision of the appropriations Committee of the House in connection with the appropriations made, would it not?

Admiral Du BOSE. I do not think so, sir; because we would, very definitely, submit to you in the future, just as we have in the past. our estimates of cost for accomplishing the various objects, included in which would be that of building ships.

Mr. DITTER. Would it not permit an increase in the size of the personnel to be employed?

Admiral Du BOSE. It might; but by definitely providing that all group IV (b) people be charged to the appropriation granted by Congress for any particular purpose, for example, building a ship, there would be a much more positive control, in my opinion, afforded to Congress than is the present indefinite or general limitation.

Mr. DITTER. Is it not your opinion that if this change were made, the establishment, if it saw fit, could employ more people in these classifications than it can now employ under the limitation as we presently have it?

Admiral Du BOSE. Yes, sir; but the Congress has not set any limit as to the number of mechanics that can be employed. We cannot build ships without preparing plans. The mechanics cannot do their part until the plans have been prepared. Why Congress, when they decide that they want a ship built at a certain cost, should see a necessity for limiting the Department as to the number of draftsmen or group IV (b) people that can be employed is not now clear to me. Mr. DITTER. Might it be based upon the fact that these employees are professional employees, and that the temptation might be for the

establishment to overreach itself in the employing of this professional. group?

Admiral Du BOSE. I do not think so, sir; because the management of a navy yard today will not, if they are handling their job properly, employ more mechanics than the work demands, and if the draftsmen and other group IV (b) employees are charged to the work, the management, if they are handling the work properly, will not employ more draftsmen or other people than the work demands.

Mr. DITTER. But this proposed language will not bring about that assurance unless the management at the yard sees fit to use such precaution?

Admiral Du BOSE. That may be true, sir; but the management today can take on a thousand machinists if they want to. Mr. DITTER. But not draftsmen or engineers?

Admiral Du BOSE. Not draftsmen or engineers. They cannot take on one $500 messenger today without getting permission from the Navy Department, whereas they can take on a thousand or any number of mechanics. They are the sole judges of what the work requires. The Navy Department has to check by the costs at the navy yards; Congress has a check on what we want by what we spend.

Mr. DITTER. Has there been any delay in the shipbuilding program growing out of the language as it presently exists?

Admiral Du BOSE. Not recently. There have been in the past considerably increased costs brought about by the limitation procedure. Mr. DITTER. But not recently?

Admiral Du BOSE. Not recently; no, sir.

Mr. UMSTEAD. Is there anything further, gentlemen? If not, we thank you very much, Mr. Secretary, and you, Admiral DU BOSE.

THURSDAY, JANUARY 6, 1938.

TORPEDO STATION, ALEXANDRIA, VA.

STATEMENT OF HON. CHARLES EDISON, ASSISTANT SECRETARY

OF THE NAVY

Mr. THOм. Mr. Secretary, there has been a lot of discussion of the advantages of Newport as against Alexandria. Someone has said here that it would be possible to blockade the Potomac River and thus shut off the supply of torpedoes turned out at Alexandria. Are torpedoes shipped by railroad, and could they not be so transported to the seacoast?

Assistant Secretary EDISON. Very simply, I think.

Mr. THOм. There would be no detriment in that respect?
Assistant Secretary EDISON. I should not think so.

Mr. CASEY. I was going to ask you about Newport. Somebody has said that there was no room for expansion of the torpedo station at Newport, and it was stated here by a witness yesterday that there is plenty of room on Goat Island, where the present torpedo station is located.

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Assistant Secretary EDISON. I imagine you could do some extending at Rhode Island, but the fundamental thing seems to me to be that you need two sources of supply-at least, a minimum of two sources of supply for anything that is so important as torpedoes. The torpedo is one of our principal weapons. A fire might break out, or there might be air raids, or sabotage, or anything might happen in one locality, and you spread the risk by having it in two localities rather than in one. That is the important thing.

Mr. CASEY. That is the determining factor?

Assistant Secretary EDISON. It is to me.

Mr. CASEY. IS Goat Island so situated that it is practically impreg nable from attack from the sea?

Assistant Secretary EDISON. I think not.

Mr. CASEY. You think it is susceptible to an attack from the sea? Assistant Secretary EDISON. I do not know what our land defenses are, but I do not imagine that they are impregnable by any means. Mr. THOм. What do you say about that, Admiral? Admiral KIMMEL. I do not think they are impregnable.

Mr. DITTER. Does the League Island Yard at Philadelphia offer any possible facilities for this torpedo work?

Assistant Secretary Edison. There again you have a crowded river for your proving, but you could make a plant there.

Mr. DITTER. It has no greater obstacles to overcome than Alexandria, has it?

Assistant Secretary EDISON. I was told so; yes.

Mr. DITTER. You say that it has greater obstacles to overcome? Assistant Secretary EDISON. Yes.

Mr. DITTER. Have we any operations at Alexandria at the present time of a naval character?

Assistant Secretary EDISON. No. The plant is closed, but it is partly equipped to manufacture torpedoes. It was built for that purpose, and it would be the most economical location, by far, in which to start up.

TORPEDO STATION AT NEW ORLEANS

Mr. DITTER. Mr. Secretary, in view of the prominence that has been given to west-coast operations, has there been any thought directed to the possibility of New Orleans being a site for torpedo construction, because of it being midway between the East and the West?

Assistant Secretary EDISON. You must have the proper kind of water in order to test the torpedoes. In other words, if you test torpedoes in water that is of a different specific gravity than would be in the ocean you will get different results. For example, Salt Lake, Utah, would not be a good place to do it because they would not work the same.

Mr. DITTER. Well, would New Orleans offer the proper facilities? Assistant Secretary EDISON. I was told by Admiral Stark that a great number of locations had been looked into, all the way from Puget Sound, and all the way around the Gulf, and back up to Maine, and that, all things considered, this site at Alexandria was considered to be the best one. In fact, there were very few other places where it could be done.

Now, I do not know specifically about New Orleans, but New Orleans, of course, is on the river, and it is a long way up the river,

and it is on fresh water. Again you would have to ship them down. into the Gulf to prove them.

Mr. DITTER. They might be manufactured at New Orleans and tested immediately below, might they not?

Assistant Secretary EDISON. I think that could be done; yes.

Mr. DITTER. And the matter of probably cheaper construction cost might be a factor that would work in favor of a New Orleans plant as compared to a plant in the North, might it not?

Assistant Secretary EDISON. There might be some slight difference in cost, but I think it would be so slight it would take a long time to overcome the additional cost of constructing such a plant when we already have one here on the river.

Mr. DITTER. But that is inactive at the present time.

Assistant Secretary EDISON. It is inactive; yes. We need additional tools, because since it went out of business the art has improved, and we are asking for money largely for tools.

Mr. DITTER. By the way, how long has that been in an inactive

status?

Admiral DEFREES. Since 1923 for production, but there are 26 men employed there for upkeep of torpedoes stored there.

Mr. DITTER. While it was in an inactive status, what production was carried on there, Mr. Secretary, do you know?

Assistant Secretary EDISON. It produced no torpedoes, but made alterations to torpedoes stored there.

Mr. DITTER. Very little was done in the way of production there, is that no so?

Assistant Secretary EDISON. It was built and equipped and got into production, and then shortly thereafter it was closed up.

Mr. DITTER. It might compare favorably, for instance, with the Charleston Ordnance Plant in West Virginia?

Assistant Secretary EDISON. Yes; except I think this is in a much more usable condition.

Mr. UMSTEAD. This plant here is now being used for overhaul, is it not, Mr. Secretary, for overhaul purposes?

Assistant Secretary EDISON. If it is, there is a very small amount of work being done there. They have 26 men there.

Mr. UMSTEAD. On the question of the difference between this plant and the plant at Charleston, W. Va., as I understand it, the plant there does no work at all. It is closed, and is just simply being maintained, policed, guarded, and protected, whereas this plant over here does do certain overhaul work.

Assistant Secretary EDISON. They have taken care of a certain number of torpedoes down there, but the plant itself is closed.

AVAILABILITY OF SKILLED LABOR FOR TORPEDO PLANT AT
ALEXANDRIA, VA.

Mr. UMSTEAD. Is there any other location where a torpedo plant, in the opinion of the Navy, can be as quickly set in motion, or as cheaply, as at Alexandria?

Assistant Secretary EDISON. No.

Mr. UMSTEAD. Were those the two considerations which entered into the decision of the Department primarily?

Assistant Secretary EDISON. That is my understanding.

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