In addition to machine tools needed at the navy yards the following are needed elsewhere:

For replacement of all machine tools afloat which are badly worn, beyond economical repair and whose retiring age would be over Tools afloat and at bases receive much harder usage

than at yards...

15 years. Same for submarine and destroyer bases__

$596, 120

292, 312

Same for naval torpedo station_

Same for ammunition depots including rolling stock.

For new ordnance shop equipment at Puget Sound for overhauling directors___

For replacement of obsolete, worn out equipment at naval gun factory

For replacement of equipment which is obsolete and provide much needed new equipment for air bases

The practice of sending old and wornout machine tools, when found to be of no further use to the Navy, to various schools and colleges for training purposes has been continued.

Due to increased demand, the total cost of power in the fiscal year 1934 was $22,568 higher than the 1933 cost. However, in the fiscal year 1934, the unit costs of steam generated and electricity and air distributed were lower than the 1933 costs. Careful analyses of monthly power plant reports have indicated very satisfactory operation of central plants throughout the last fiscal year.

The practice of making an annual purchase of motor trucks covering requirements at all stations in lieu of individual purchases was continued in the fiscal year 1934 with the resulting economy.

Safety engineering in the shore establishments of the Navy has continued to show progress. While the working forces have increased, accidents have been reduced. The number of days lost by accidental injury, for which compensation is paid, has been reduced about 70 percent since 1926, and the actual compensation payments reduced from over $400,000 per annum to about $130,000 during the same period. The yards won third and fourth places in the third annual safety competition, shipbuilding industry.

Preparation of special and routine cost analyses has resulted in increased efficiency and economy at industrial navy yards. Included under this are: Compilation of statistical reports for showing comparative data; study, check, illustration and explanation of accounting procedure; suggestions and recommendations for modification of accounting instructions and accounting forms; supervision and control of rates of indeterminate expense, over and under absorbed expense, and charges to depreciation reserve.

(f) Shore establishments.

(f) (1) Closing or skeletonizing.

The stations reported last year as closed or skeletonized remain in status as then reported except that the naval training station, naval operating base, Norfolk, Va., has resumed operation on regular basis.

(f) (2) Civil employments.-(Supply statement in form of statement on pages 35 and 36 of 1935 hearings for December 31, 1933, and October 31, 1934.)

A break-down of the above for December 31, 1933, and September 30, 1934, is set down below. The date September 30, 1934, instead of October 31, is used because the detailed reports from field offices to the Navy Department are made quarterly.

120906-35

During the fiscal year 1934 the Bureau of Aeronautics undertook the procurement of airplanes and engines for the United States Coast Guard, and also the overhaul of Coast Guard aircraft and engines in naval aeronautic plants. This has saved the Government the cost of duplicating personnel and equipment. The amount saved cannot be estimated. The procedure will be continued.

The drastic cut made in available funds by the imposition of a cash withdrawal limitation on expenditures from 1934 appropriations imposed the most careful economy upon administrative officers in the naval air force to continue in effect the operation of aircraft in accordance with the prescribed aeronautical operating plan. Fortunately, the subject of overhaul costs at our air stations had been under scrutiny for some time, and critical studies had been made of the overhaul methods in both our own plants and those of private contractors. The studies resulted in improvement in efficiency that saved $834,035. Without this saving it would not have been possible for the Navy to have held its overhaul schedules up to the requirements of the fleet. This subject of improvements in overhaul methods is still being vigorously studied.

BUREAU OF CONSTRUCTION AND REPAIR

The Bureau considers that general economy has resulted thus far in the administration of the limited funds available to this Bureau through its close supervision of matters affecting both the fleet and the shore establishments.

BUREAU OF ENGINEERING

Facilities of fleet repair ships and tenders, and services of ships' forces, are being utilized to the utmost extent in order to maintain machinery installations of vessels at the maximum possible efficiency and reduce the cost of navy-yard overhauls. All requests for repair work and alterations are being thoroughly scanned and only the most essential items approved.

Savings are realized through the application of results of experimentation and development by laboratories of commercial manufacturers to the Navy's requirements for such items as radio and underwater sound apparatus, Diesel engines, and storage batteries.

BUREAU OF MEDICINE AND SURGERY

The Bureau has continued its practice of exercising close supervision over expenditures and the limiting of allotments to actual needs for proper care of the sick.

Operating costs at hospitals and the larger shore stations are reviewed each month. The cost-accounting returns from the hospitals are received quarterly. These reports are compared and the differences analyzed. If costs deviate from the standard set up for any hospital, a report is referred to that hospital for justification.

The usable material at closed stations is being transferred to other activities. Purchase of dental prosthetic standard equipment and supplies has been taken from the field and consolidated into a supply depot contract.

BUREAU OF NAVIGATION

Expenditures for subsistence, transportation of enlisted men and their dependents, and travel allowance at time of discharge continue to be reduced by the use of Government quarters and messing facilities whenever they can be utilized without undue inconvenience to men concerned and by taking full advantage of Government transportation for enlisted men under orders and their dependents when such transportation does not cause undue loss of man power of men while in transit. The Bureau of Navigation has increased the tours of shore duty for certain enlisted ratings from 2 to 3 years for those who reported ashore on or after March 1, 1934, which will result in a further saving in transportation for this group of men and their dependents after March 1, 1936. Further economies have been effected by reducing the turnover of enlisted personnel by limiting special-order discharges to cases involving urgent financial dependency or other meritorious circumstances; supervising the time spent in hospitals in order to promptly separate from the service men of doubtful physical fitness; and transferring men to the coast nearest place of acceptance for enlistment, for transfer to the Fleet Naval Reserve, unless they waive claim to transportation and travel allowance.

A special agreement was made with the railroads at a meeting in Chicago October 10-13, 1934, which will result in substantial economies. Approximately $10,000 per year in the cost of transportation in the Navy as a whole will be saved. Railroads recently have been putting in lower fares for travel in coaches, slightly higher fares for travel in tourist sleeping cars, and the highest fare for riding in standard sleeping cars. Arrangements were made by the Navy Department with the railroads to give the Service the benefit of combinations of these different classes of travel generally over the United States. It is understood such combinations are not generally available over the United States to the public. Mr. CARY. I call your attention to the figures in the table just presented. I believe they apply to some of the things that Mr. McLeod has just been interrogating you about. Under "Total, Field Service, Executive Department, Headquarters, United States Marine Corps", the total figure as of September 30, 1934, was 55,870; is that correct?

Admiral RICHARDSON. Yes, sir.

MONDAY, FEBRUARY 25, 1935.

NAVAL OPERATIONS

STATEMENT OF ADMIRAL WILLIAM H. STANDLEY, CHIEF OF OFFICE OF NAVAL OPERATIONS

Mr. CARY. We will turn now to the consideration of matters that we have asked the Chief of Naval Operations to discuss with us. Admiral Standley, we shall be glad to hear from you at this time. Admiral STANDLEY. In accordance with the United States naval policy, as stated by the Secretary of the Navy in his annual report to the President-namely

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

The operations of our naval forces are carried out, as thoroughly as funds permit, in such a way as

(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 will be necessary only in case of national emergency;

(c) To protect American lives and interests in disturbed areas;

(d) To cooperate fully with other departments of the Government and with the States;

(e) To cultivate friendly international relations; and

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

Mr. SCRUGHAM. We recognize that as a major purpose of the Navy, then.

Admiral STANDLEY. Yes; we recognize that in our naval policy. Toward the accomplishment of these purposes, the Chief of Naval Operations prepares annually an "Operating force plan", listing the numbers and types of vessels and aircraft the maintenance in commission of which is considered essential and showing how they are to be assigned and employed during the year. Provision is made for incorporating in the operating forces new vessels and aircraft as they are completed, and for eliminating from the operating forces such vessels and aircraft as have reached the limit of their current usefulness or their availability under the treaties to which the United States is a party, and omitting such other vessels and aircraft as cannot be adequately manned and operated with the funds allotted to the Navy Department by the President or by the Congress.

The operating force plan for the current fiscal year is available, if the committee cares to examine it. Explanation of how vessels and aircraft have been employed at variance with the program made in 1934 is contained in section E of this statement. The operating force plan for the fiscal year 1936, as provided for under the Budget now being considered, is outlined in section F.

READINESS OF THE FLEET

PERSONNEL SITUATION

Appropriations for the current fiscal year permit the maintenance of an average of only 81,500 enlisted men, with the result that at the end of the year the number of enlisted men on the various ships will average but 80 percent of their complements. This is insufficient to meet an immediate emergency. Eighty-five percent is the minimum below which this percentage should not be allowed to fall.

To reach this minimum the Budget now being presented aims to permit the number of enlisted men to be raised from 82,500 at the end of the fiscal year 1935 to 93,500 by the end of the fiscal year 1936-maintaining an average of 88,000 during the year. The providing of this number of enlisted men I consider the most important item for the efficiency of the Fleet in this year's Budget.

As to officer personnel, the situation is not so acute at present, but will become so in a very few years, unless immediate steps are taken to deal with it.

While the line officer strength is somewhat in excess of the normal 5,499 due to the authorization by Congress to commission all Naval Academy graduates, the normal attrition will reduce the total below this number by the end of the calendar year 1936. As we gradually

build up to treaty strength the number of line officers required should gradually increase to over 7,000. This is such an important matter with reference to the efficient operation of the fleet it is recommended that steps now be taken by appropriate legislation to provide for this necessary increase in officer personnel.

The whole personnel situation which confronts the Navy will be presented to the Committee in detail by the Chief of the Bureau of Navigation.

MATERIAL SITUATION-EXISTING AND PROSPECTIVE

As to the material situation, existing and prospective, I invite attention to the estimate for new construction and for maintenance, as presented by the various material bureaus-"Aeronautics, Construction and Repair, Engineering, Ordnance, and Yards and Docks." Under authorizations enacted by the Congress in 1916 and 1929, and by means of funds appropriated by Congress directly or through allocations by the President, there are now 70 vessels under construction. Funds are asked in these estimates to continue work on these vessels and to lay down 24 more replacement vessels, and also to procure 273 additional airplanes under authority of the act approved March 27, 1934, known as the Vinson-Trammell Act.

Mr. THOм. It is curious to me that any of this should be under an authorization made by Congress in 1916. Was that some general plan?

Admiral STANDLEY. Yes; it was known as the 1916 building program. That was a program under which we had battleships scrapped as a result of the Washington Treaty. It provided also for some destroyers, which were never undertaken. Under this act some of those vessels were undertaken.

Even all these will not bring the under-age vessel strength of the Navy up to that permitted by the treaties nor provide it with commensurate aircraft as authorized by the act above mentioned, by a matter of some 38 destroyers, 15 submarines, and several hundred airplanes, but it does provide for as rapid a building program as is believed to be prudent at the present time. It is not in my opinion, advantageous to try to make up the neglect of many years all at once, by replacing the entire 150,000 tons of destroyers allowed by the treaties by the end of the fiscal year 1936. In general, therefore, the provision for new construction can be said to be satisfactory.

In the matter of maintenance of existing ships, however, the present and prospective situation is not good. The modernization of capital ships prior to and including the Mississippi, New Mexico, and Idaho, has been completed. No other complete modernization has been recommended, mainly because of the uncertain prospects for treaty restrictions on battleship construction after December 31, 1936, the date on which the present treaties will expire. But there are many alterations that should be made, particularly on the older battleships-such as protection against poison gas, increasing the compartmentation as a defense against torpedoes, increasing turret-gun elevations, replacing obsolete antiaircraft batteries and main propelling machinery-which should be done on certain of the older battleships-and modern fire-control should be installed on the California and Tennessee if they are to be rendered capable of their best performance in battle.