until March 1937, when I was appointed chief constructor and Chief of the Bureau of Construction and Repair, which position I held until September 16, 1939. At that time I was detailed to the David W. Taylor Model Basin as director. In July 1940, I was given additional duty in the National Defense Advisory Commission under Admiral Land, who in turn was under Mr. Knudsen. Land and I were in the Shipbuilding Division under Mr. Knudsen.

I was relieved of my duty as director of the Model Basin in August 1940, and continued my duty with the National Defense Advisory Commission and had received orders from the Navy Department to remain on duty after reaching the statutory retiring age, but subsequent to the receipt of those orders I requested that I be placed on the retired list, inactive, which was done by the Navy Department.

Mr. TOLAND. Can you tell us what reasons, if any, caused you to request your retirement?

Admiral DU BOSE. I did not request retirement. I was retired automatically for age. I requested not to be continued on active duty after reaching the retiring age. That request was made to accept the position with the Cramp Shipbuilding Co.

Mr. TOLAND. To accept the present position you hold?

Admiral DUBOSE. To acept a position as director of the Cramp Shipbuilding Co. and chairman of the executive committee.

Mr. TOLAND. When was the first time that you were consulted, Admiral, about the Cramp Shipbuilding Co.?

Admiral DuBOSE. I was never consulted about the Cramp Shipbuilding Co., if by that you mean anything connected with the formation of the company.

Mr. TOLAND. Your present position or employment with the company.

Admiral DUBOSE. The first time that anything at all had been said to me was some time in August 1940, at which time it was suggested that possibly I might be interested in going with the Cramp Shipbuilding Co. in some capacity. The suggestion was made, as I recall. by Admiral Land, and subsequently by Admiral Robinson. Mr. TOLAND. That was in August?

Admiral DuBOSE. That was in August 1940.

Mr. TOLAND. When was the first time Mr. Ripley or Mr. Reed consulted you about the Cramp Shipbuilding Co.?

Admiral DuBOSE. I don't remember exactly when Mr. Reed first consulted me. Mr. Reed had come on from the west coast to Washington to confer about his joining the Cramp Shipbuilding Co. He saw me the afternoon of the day that he was here and asked if I would be interested in becoming vice president of the Cramp Shipbuilding Co.

Mr. TOLAND. That was Mr. Reed?

Admiral DuBOSE. That was Mr. Reed.

Mr. TOLAND. Do you remember when that was?

Admiral DUBOSE. I do not remember exactly. It was probably in August also. I said that Mr. Reed had come on from the west coast and was here for the purpose of looking into his own association with the Cramp Shipbuilding Co.

At the time of his visit to me I did not know that he had definitely closed with the Cramp Shipbuilding Co. and I am not sure now that

he had definitely closed at that time. However, his conversation with me was, "How would you like to come with the Cramp Shipbuilding Co. as vice president?"

My answer was, "Under whom as president?" and his answer was, "Me."

I said, “I hadn't heard that you had been definitely selected for president."

I believe he answered, in substance, something like this: "Well, I haven't been selected yet, but it is more or less up to me. If I want it I can have it."

My answer to his query was that I was not interested in being vice president of the Cramp Shipbuilding Co. under him or anybody else, that I had no objection to him personally but I did not want the job as vice president of Cramp Shipbuilding Co.

Then he said, "How would you like to come in a consulting capacity, after you retire?"

I said, "That appeals to me more, although I don't think very much of that."

That was the end of that conservation.

Mr. TOLAND. Who was it, Admiral, that suggested that you continue on with the National Advisory Council after you had reached your retirement age?

Admiral DuBose. I don't know that anybody suggested it. We were making preparations for possible war, and many officers who were going on the retired list were retained on active duty. If anybody suggested it, it would have been Admiral Land, because I was serving under him, but I think it was more or less an automatic procedure.

Mr. TOLAND. Of the Department?

Admiral DuBOSE. Of the Navy Department.

Mr. TOLAND. If you had not made the request to be retired――

The ACTING CHAIRMAN (interposing). Not to be retired.

Mr. TOLAND. To be relieved from active duty, would you have undoubtedly then continued on?

Admiral DuBOSE. I had orders so to do.

Mr. TOLAND. So that in August you had orders to continue on after your retirement period had arrived?

Admiral DUBOSE. That is correct.

Mr. TOLAND. On active duty with the National Advisory Council? Admiral DUBOSE. That is correct.

Mr. TOLAND. And because of the possibility of employment with the Cramp Shipbuilding Co. you asked to be relieved from active duty? Admiral DUBOSE. I did, after consultation with the Acting Secretary of the Navy and obtaining his permission so to do.

Mr. TOLAND. Now, is it a fact that even before you went with the Cramp Shipbuilding Co. Admiral Land wanted you to go with him at the Maritime Commission?

Admiral DuBOSE. Admiral Land, in 1939, shortly after I left the Bureau of Construction and Repair, had talked to me about going with him at the Maritime Commission.

Mr. TOLAND. Wasn't there some concern on the part of Mr. Reed or Mr. Ripley that during the period between the time that they first talked with you and October 2 they believed that Admiral Land was trying to get you to go with the Maritime Commission?

Admiral DUBOSE. I can't answer what Mr. Reed or Mr. Ripley were concerned about in that connection, but, so far as as I know there was no reason for their being concerned about that, because Admiral Land had made no proposition to me at that time to go to the Maritime Commission. It had been a year before.

Mr. TOLAND. What was your compensation in September 1940? Admiral DuBose. In September 1940 I was a rear admiral on the active list of the Navy. My pay and allowances totaled $9,700 a year. Mr. TOLAND. $9,700? What compensation did you receive with the Cramp Shipbuilding Co. and receive now?

Admiral DuBOSE. I have received ever since I have been with the Cramp Shipbuilding Co., first as chairman of the executive committee and now by virtue of being president, a salary of $36,000 a year. Mr. TOLAND. Thirty-six thousand?

Admiral DuBose. Thirty-six thousand a year, of which twenty-five thousand is charged to overhead operating expense, the other eleven thousand being charged to the company's corporate expense.

The ACTING CHAIRMAN. Do you know, Admiral, how that compares with salaries of presidents of other shipbuilding corporations?

Admiral DuBOSE. I have seen returns obtained from the Securities and Exchange Commission indicating that salaries of shipbuilding executives in the other shipyards are in many instances materially in excess of that.

Mr. TOLAND. Admiral, you also draw retired pay, do you? 'Admiral DUBOSE. I do.

Mr. TOLAND. In what amount do you draw retired pay annually? Admiral DUBOSE. The amount is six thousand.

Mr. TOLAND. So that the total compensation you receive is thirty-six thousand from the Cramp Shipbuilding Co. and six thousand from the Navy Department, or the Government of the United States?

Admiral DUBOSE. So far as the salaries or compensation from those two sources, that is correct.

Mr. TOLAND. I requested you in a telegram, Admiral, to be prepared to submit a list of all the ex-naval officers employed by Cramp, their compensation and the amount of retired pay.

Admiral DUBOSE. I have here a tabulation giving that information. Mr. TOLAND. I would like to offer it in evidence.

(The tabulation dated May 20, 1942, was received in evidence and marked "Exhibit No. 300.")

Admiral DuBOSE. Do you wish me to read it?
Mr. TOLAND. I will read it, Admiral, for you.

Retired naval officers:

CRAMP SHIPBUILDING CO.,

May 20, 1942.

W. G. DuBose, president; $36,000 salary, $6,000 retired pay. Rank, rear admiral.

R. D. Weyerbacher, vice president and general manager; salary, $25,000; retired pay, $4,350. Rank, commander.

G. Fulton, chief engineer; $15,000 salary, $4,500 retired pay. Rank, captain. H. V. Baugh, supervisor-personnel; Cramp salary, $5,700; retired pay, $3,015. Rank, lieutenant commander.

H. R. Brannon, stores control supervisor; salary, $4,800; retired pay, $1,740. Rank, lieutenant.

D. H. Kane, supervisor-plant protection; Cramp salary, $4,800; retired pay, $3,150. Rank, lieutenant.

William H. Healey, maintenance foreman; Cramp salary, $4,600; retired pay, $3,150. Rank, lieutenant.

D. G. Burt, planning assistant; Cramp salary, $4,600; retired pay, $2,040. Rank, lieutenant.

An asterisk for D. G. Burt shows "Hourly basis, $1.49 per hour, basis 48-hour week."

Former naval officers (resigned):

E. D. L. Roach, superintendent of turret shop; Cramp salary, $6,800. Receives no retired pay.

H. B. Bobo, engineer, $4,800; no retired pay.

C. Shugg, production manager, $12,500. Inactive. Lieutenant commander in Naval Reserve.

E. Hoag, traffic manager, $6,000 with no retired pay.

H. P. Bush, Jr., repairs assistant, $5,200. Resigned, graduate midshipman. C. S. Padgett, chief inspector, $6,000; no retired pay.

There is an asterisk for W. G. DuBose

of the Cramp Shipbuilding Co. salary, only $25,000 is charged to the cost of work being done through the medium of overhead. Balance is charged to corporate expense.

Retired: H. E. Rossell, consulting naval architect, $2,500 for 3 days per month, retired pay $4,350. Rank, commander.

Now, Admiral, I also requested you in a telegram to bring with you and be prepared to testify with regard to all the facilities contracts Cramp Shipbuilding Co. has with the Government, either actually executed or evidenced by letters of intent, the amount of each, and the payment made by the Government under each contract or letter of intent.

Admiral DUBOSE. Cramp Shipbuilding Co. has three facility contracts, one NOd-1550, another NOBS-98, and a third, NOBS-100. The amounts of those contracts, respectively, are estimated $12,000,000, $5,479,000, and $2,483,000; total for the three, $19,962,000.

We have been reimbursed under only one of those contracts for expenditures so far made. That is the first, known as the emergency plant facilities contract, under which the plant is being rehabilitated. We have been reimbursed for expenditures that we have made against our bank loans to the extent, up to April 30, of $10,772,182.25.

Mr. TOLAND. And the total amount-that is NOd-1550, is it?
Admiral DUBOSE. Yes.

Mr. TOLAND. And the total amount of that loan on the part of the Government is 12 million?

Admiral DUBOSE. It is not a loan on the part of the Government. It is a loan which has been negotiated by the Cramp Shipbuilding Co. Mr. TOLAND. We won't quibble about words, Admiral.

The ACTING CHAIRMAN. With the banks?

Admiral DUBOSE. Through the group of banks in Philadelphia. Mr. TOLAND. Did you participate in that loan?

Admiral DuBOSE. I had nothing to do with negotiating the loan. I was present on some occasions with Mr. Riply when the matter was being discussed with the bankers, but I had nothing to do with the negotiations.

Mr. TOLAND. Did you have anything to do with the negotiations with the Government?

Admiral DuBOSE. I had nothing to do with it whatsoever until after I had joined the Cramp Shipbuilding Co.

Mr. TOLAND. The fact of the matter is that instead of the company getting the money from the Government directly through the R. F. Č.

the company went out and borrowed the money from the banks, Isn't that a fact?

Admiral DuBOSE. My understanding is, that is correct, but Mr. Riply can give you more specific information on that than I can.

Mr. TOLAND. You said it was a bank loan. The fact of the matter is that the Government guaranteed the cost of the rehabilitation of this plant, and instead of the money being advanced through the R. F. C. this money was borrowed from banks, on which the Navy paid part of the interest on the loan. Isn't that right?

Admiral DUBOSE. The Navy will pay part of the interest on the loan.

Mr. TOLAND. They paid you already-how much did you borrow on NOD-1550?

Admiral DUBOSE. The total amount of money that we can be reimbursed under that contract is $12,000,000.

Mr. TOLAND. Did you borrow the 12 million from the banks?

Admiral DuBOSE. We didn't actually borrow it. In effect it is a loan, because we have credit to the banks to that amount, and they will reimburse us under our loan agreement for expenditures that we make. Mr. TOLAND. On this $12,000,000 loan, how much of the $12,000,000 that was to your credit has been used by the company? Has the whole $12,000,000 been drawn?

Admiral DuBOSE. No; I just stated that the amount for which we had been reimbursed up to the 30th day of April was $10,772,000. Mr. TOLAND. That is being reimbursed by the Navy Department or by the Government?

Admiral DuBOSE. No; it is not.

Mr. TOLAND. It is being reimbursed by whom?
Admiral DuBOSE. By the banks.

Mr. TOLAND. You have been advanced that much?

Admiral DuBOSE. We have been reimbursed for our expenditures to the extent of that sum by the banks.

Mr. TOLAND. Now that practically is completed, is it not—the work under the rehabilitation contract?

Admiral DuBOSE. The total work under the contract to date is something over 98 percent completed.

Mr. TOLAND. Now, what is the plan of the company? What do you propose to do with regard to NOd 1550? Do you propose, or does the company propose, to call upon the Navy Department and the Government to pay the banks the $12,000,000 or to pay to the Cramp Shipbuilding Co. the $12,000,000 under that loan so that you, in turn, can repay to the banks the money that you have borrowed?

Admiral DuBose. We propose to carry out the provisions of our contract with the Navy and our bank-loan agreement.

Mr. TOLAND. What are those provisions?

Admiral DUBOSE. I can give you some information on that question by referring to the contract and agreement, but Mr. Ripley can give you very much better information that I.

Mr. TOLAND. You are the president; he is a representative of Harriman, Ripley, and the Harriman interest.

Admiral DUBOSE. I will answer your question, Mr. Toland.

Mr. TOLAND. What does the company propose to do-under this loan agreement it has certain options. Now, do you propose, and has there