COMMITTEE ON APPROPRIATIONS

EDWARD T. TAYLOR, Colorado, Chairman

MARCELLUS C. SHEILD, Clerk

SUBCOMMITTEE ON NAVY DEPARTMENT

MESSRS. UMSTEAD (chairman), THOM, SCRUGHAM, FERNANDEZ, CASEY, DITTER, and PLUMLEY

NAVY DEPARTMENT APPROPRIATION BILL FOR 1939

HEARINGS CONDUCTED BY THE SUBCOMMITTEE, MESSRS. WILLIAM B. UMSTEAD (CHAIRMAN), WILLIAM R. THOM, JAMES G. SCRUGHAM, JOACHIM O. FERNANDEZ, JOSEPH E. CASEY, J. WILLIAM DITTER, AND CHARLES A. PLUMLEY, OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, IN CHARGE OF THE NAVY DEPARTMENT APPROPRIATION BILL FOR THE FISCAL YEAR 1939, ON THE DAYS FOLLOWING, NAMELY:

WEDNESDAY, DECEMBER 8, 1937.

Mr. UMSTEAD. Gentlemen, we have met to conduct the hearings on the appropriation bill for the Navy Department and the naval service for the fiscal year 1939. We are delighted to have with us this morning Mr. Edison, the Assistant Secretary of the Navy.

Mr. Secretary, if you are ready to proceed, we shall be glad to hear from you at this time.

STATEMENT OF HON. CHARLES EDISON, ASSISTANT SECRETARY OF THE NAVY, ACCOMPANIED BY LEWIS COMPTON, SPECIAL ASSISTANT TO THE SECRETARY OF THE NAVY

Mr. EDISON. Mr. Chairman and members of the committee, the budget officer's statement gives an outline of what is contained in the 1939 estimates as submitted to your committee.

The Chief of Naval Operations will give you the Navy Department's estimate of the present world situation. To this estimate I heartily subscribe.

I wish to invite attention particularly to the necessity of continuing the orderly replacement of over-age combatant ships and auxiliaries. Additional authorization for building auxiliary vessels will be requested at the coming session of Congress. Detailed justifications of this replacement program will be presented by the Chief of Naval Operations.

CONDITION OF THE FLEET AND NAVAL SHORE ESTABLISHMENT

During the course of the year, I have had occasion to inspect the fleet and the shore stations of the Navy. The fleet is in a high state of efficiency as regards morale and training. The shipbuilding program is proceeding as rapidly as practicable. The increment of 22 vessels, including two battleships, requested for commencement in 1939 is amply justified by the present unsettled world conditions.

The start that has been made in the replacement of vessels of the auxiliary class should be continued, as there now exists a deficiency

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in numbers, and most of the auxiliaries are deficient in speed, obsolete in design, and are deteriorating due to age.

Every effort is being made to expedite the naval shipbuilding program. During the past year, steps have been taken to reduce the number of changes of design, to decentralize material procurement, to expedite the completion of ship plans, and to obtain clarification of the provisions of the Walsh-Healey and other acts in order to permit expeditious procurement and manufacture.

DECENTRALIZATION OF MATERIAL PROCUREMENT

Mr. UMSTEAD. Mr. Secretary, you state that steps have been taken during the past year to decentralize the procurement of material. I was under the impression that we had intentionally centralized procurement in the Navy, in the interest of efficiency and economy. Just what do you mean by the decentralization of the procurement of material?

Mr. EDISON. What I mean by that is that there are many special items that can be taken care of quickly at the yards and under the direction of the manager that do not have to be centralized through Admiral Peoples' office, and the Bureau of Supplies and Accounts, and that can much better be taken care of locally; we have been trying to segregate those items in order to expedite procurement.

Mr. UMSTEAD. Do you have any limit upon the amount which officers at outlying stations may expend without purchasing through the Procurement Division?

Mr. EDISON. So far we have made no changes in the existing regulations or rules. We have been making more studies as to what could be done in that direction. It has been more in the line of expediting the approvals in Washington rather than any change actually made, so that they can buy directly.

Mr. UMSTEAD. Then am I to understand that the effect of what you have done has been merely to speed up transactions, and that a real change in the system has not occurred?

Mr. EDISON. Not as yet. We are not prepared to make any radical change, because we have not studied the situation sufficiently. But there is too much delay in procuring small items and supplies of one sort and another, and more attention should be paid to the local managers' requests, so that when they reach Washington they go through more quickly.

I believe that eventually we will be in a position to recommend that certain standards or certain limits be set up which will give the local managers and commandants greater latitude in what they can purchase directly.

CLARIFICATION OF WALSH-HEALEY ACT

Mr. UMSTEAD. You also stated that you had endeavored to obtain clarification of the provisions of the Walsh-Healey Act. Just what clarification, and by whom, do you refer to there, Mr. Secretary?

Mr. EDISON. When I first arrived here, on January 15 of last year, the Walsh-Healey Act was a relatively new act. I mean the administration of it had not yet been perfected. There were a great many questions that came up as to what could or could not be done under