Admiral HorwOOD. That is the meaning of that phraseology, "transportation in kind.”

Senator SALTONSTALL. Then, the language is clear?

Admiral HopwOOD. Yes, sir; it is clear for "transportation in kind." Examples of the difference in commercial cost basis versus 4 cents per mile follow: For travel between Washington, D. C., and San Diego, Calif., the commercial cost is $118.56, at a rate of 4 cents per mile the reimbursement is $114.72; Seattle, Wash, to Denver, Colo., the commercial cost is $61.88, 4 cents per mile $62,64; Dallas, Tex., to Cleveland, Ohio, the commercial cost is $50.02, 4 cents per mile $49. Commercial cost is based on first-class fare plus lower berth. This relative comparison would hold true for any points within the United States. The variation between 4 cents a mile and commercial cost is relatively small and it is estimated that the difference would never exceed 3 percent one way or the other.

Provision is made to adjudicate claims on this 4-cent-per-mile basis for travel heretofore performed and where payment has not yet been made.

Section 3. By the provisions of the Pay Readjustment Act transportation to or from stations beyond the continental limits of the United States shall not be by other than Government transportation, if such transportation is available as may be determined by the head of the department concerned. The Comptroller General has stated that since the provisions of the Pay Readjustment Act did not authorize the Secretary to delegate the authority to determine whether or not Government transportation was available, such determination must be made by the Secretary. As a practical example, under present interpretation the Secretary in Washington must pass on all claims where Government transportation was not available in San Diego, Calif., or Seattle, Wash. This section will authorize the Secretary of the Navy to delegate authority to determine the availability of Government transportation for dependents of naval personnel under any provision of law.

The CHAIRMAN. That completes section 3?

Admiral HorwOOD. Section 3; yes, sir. In other words, the Secretary, under the provisions of this section, could delegate to the commandant, for example, of the Eleventh Naval District at San Diego, the authority to say that there is no Government transportation available on the spot, he being the closest individual to the scene.

The CHAIRMAN. How does that change the present law?

Admiral HopwOOD. Under the present law, the Secretary in Washington must determine.

The CHAIRMAN. In other words, the Secretary delegates authority to the commanding officer at the point of departure?

Admiral HopwOOD. The Secretary will have the authority to delegate his authority to any of those individuals.

Of course, it will be very restrictive; it will be just a question of speeding up the procedure.

The CHAIRMAN. And not letting people hang around the town.
Admiral HopWOOD. That is right.

Section 4: This section authorizes the Secretary of the Navy to prescribe regulations for carrying out the provisions of this act and further provides that determinations of dependency, distances, and

the places between which transportation or travel is authorized shall be conclusive for accounting purposes.

I would like to recommend to the committee that section 4 be divided into two sections. Section 4 would take in only the first sentence:

This section authorizes the Secretary of the Navy to prescribe regulations for carrying out the provisions of this Act.

Then, we would make a new section 5, running as follows:

Determinations of dependency, distances and the places between which transportation or travel is authorized shall be conclusive for accounting purposes. Then, we would add a new section, section 6, which will state: The provisions of section 5 of this act shall terminate September 1, 1948.

The purpose of that is that during this demobilization period, there is so much travel concerned, during the transition period, that if we could pay these claims on a 4-cent-a-mile basis and have it conclusive, we consider that the administrative procedures will be speedier and more easily concluded.

The CHAIRMAN. You say "1948." How about 1947?

Admiral HopwOOD. We have no objection to 1947, Senator, although we have 1948 here. We just picked 2 years after our demobilization date, September 1, 1946.

Except for the payment of transportation in kind for personnel discharged under conditions other than honorable, no additional cost would accrue as a result of the enactment of this bill.

The cost of providing transportation in kind for personnel discharged under conditions other than honorable would vary according to the number released under these conditions. In the past this figure has run about one-half of 1 percent of the enlisted strength. Assuming a postwar strength of 500,000 men for the Navy, 100,000 men for the Marine Corps and 30,000 for the Coast Guard, approximately 3,150 men would be released each year under conditions other than honorable.

Since this bill does not affect the procedure for shipment of household effects and inasmuch as the payment on the 4- and 2-cents-permile basis applies to settlement of claims for all transportation, it is recommended that the title of the bill be amended to read as follows:

To provide for payment of travel allowances and transportation and for trans'portation of dependents of members of the naval forces, and for other purposes. The CHAIRMAN. Are you through, Admiral? Admiral HopWOOD. Yes, sir.

The CHAIRMAN. We have Mr. E. M. Mahoney of the General Accounting Office and Mr. Frank H. Weitzel from the Office of the Comptroller General, as witnesses on this bill.

STATEMENTS OF FRANK H. WEITZEL, ASSISTANT TO THE COMPTROLLER GENERAL; AND E. M. MAHONEY, ASSISTANT GENERAL COUNSEL, GENERAL ACCOUNTING OFFICE

Mr. WEITZEL. Mr. Chairman, my name is Frank H. Weitzel. I am Assistant to the Comptroller General. My companion here is Mr. Mahoney from the General Accounting Office. We appreciate the opportunity to appear here this morning, Senator. The position of

the Comptroller General's Office has been set out in a letter dated February 5, 1946, to the committee. I would like to place a copy of that in the record.

The CHAIRMAN. Do you want to read it or discuss it?
Mr. WEITZEL. I will discuss it as I go along.
(The letter referred to is as follows:)

GENERAL ACCOUNTING OFFICE, Washington 25, February 5, 1946.

Hon. DAVID I. WALSH,

Chairman, Committee on Naval Affairs,

United States Senate.

MY DEAR MR. CHAIRMAN: There has come to my attention the following provision contained in section 4 of the bills S. 1658 and S. 1740, now pending before your committee, and, likewise, in section 4 of the similar bill H. R. 4896, passed by the House of Representatives February 4, 1946, namely:

* * Determinations of dependency, distances, and the places between which transportation or travel is authorized, made by the Secretary of the Navy, or such persons as he may designate, shall be conclusive for accounting purposes.' A like provision is also contained in section 9 of the similar bills S. 1529 and H. R. 4450. If enacted, such provision would be permanent legislation. While temporary provisions of that character, having the effect of relaxing accounting responsibility, found justification in wartime necessities, I believe you will appreciate that this office is unalterably opposed to their permanent extension into peacetime activities. Not only do they encroach on the basic principles of sound Government embodied in the Budget and Accounting Act but, in the final analysis, by making the spending agencies the final judges of the validity and propriety of their own expenditures of public funds, such provisions cannot help but dissipate the fundamental power of the Congress over the purse.

It may be noted, also, that section 2 of the said bills S. 1658, S. 1740, and H. R. 4896, and, likewise, section 7 of S. 1529 and H. R. 4450, would be permanent legislation authorizing payment "in advance or otherwise" of the commuted cost of transportation of dependents of naval personnel. It is the view of this office that the commutation of such costs, as proposed, would save much administrative and accounting work and expense and would be beneficial both for the Government and the personnel involved. However, authority to pay such commuted costs "in advance" would invite and be subject to grave abuse. As an accounting matter, no method is perceived for subsequently determining whether or not the dependents actually may have performed any or all of the travel for which the advance payment had been made and in those cases where it could be determined that such travel had not been performed, recoupment of the advance payment might prove difficult, costly, or impossible. While such provision for advance payments presumably is to take care of those occasional cases where the officers or enlisted man or dependents do not have sufficient funds to pay the cost of transportation subject to reimbursement after the travel is performed, it is to be considered that payment of the commuted cost would be in lieu of transportation in kind authorized by law for such dependents, so that in any case where funds were lacking the dependents could be furnished transportation in kind, that is, the necessary railroad and Pullman tickets, etc., in which event there would be no necessity for making advance payments in cash without assurance that the travel necessarily would be performed and with no feasible accounting method for subsequently determining whether such travel actually had been performed.

For such reasons, it is the view of this office that if any of the said bills are to be enacted the two sections involved should be amended in the interest of sound governmental accounting and fiscal principles by deleting the words "in advance or otherwise" in section 2 (or 7) of the said bills and eliminating the second sentence of section 4 (or 9).

I shall be glad to designate a qualified representative to appear before your Committee, or to call upon you, to furnish any further details or information which may be desired with regard to these matters.

Sincerely yours,

FRANK L. YATES,

Acting Comptroller General of the United States.

Mr. WEITZEL. The Comptroller General's position always has been that it is important for Congress to retain its fiscal control over expenditures. At the present time, it is the Comptroller General's position that Congress should increase its fiscal control.

I am going to limit my remarks to these two sections, section 2 and section 4. As has already been indicated, there has been some question between the Comptroller General and the Navy Department with regard to those sections.

The major purpose of the Comptroller General is control of the budget. The Joint Committee on the Organization of the Congress created the Comptroller General by the Budgeting Act of 1921, whereby Congress provided for effectuating its control over expenditures. It set up the Comptroller General as the agent of Congress. There are provisions in the Reorganization Act of 1945 which make it clear that the General Accounting Office and the Office of the Comptroller General are legislative branches of the Government. The Comptroller General is an arm of Congress and it tries to enforce its purposes and policies.

We have had wartime statutes which granted emergency authority, unusual authority to emergency appointees over expenditures. These have been noted in the various annual reports of the Comptroller General since 1941. In each case the Comptroller General has pointed out the necessity for reexamining these large grants of authority upon the cessation of hostilities or the termination of the war. Upon the termination of the actual fighting, the Comptroller General feels that that these grants should be inquired into, these grants for the duration of the war.

The CHAIRMAN. You feel, your office, that these emergency statutes ought to be repealed now, since the fighting is terminated, and that we ought not wait 6 months after the declaration of the peace?

Mr. WEITZEL. Exactly, Mr. Chairman. The Comptroller General feels, that, while there are still some elements of uncertainty, some things that should be cleared up, now that the actual fighting has ceased, you have no longer the combat conditions necessitating those grants. I will not try to specify those statutes; they can be found in the annual reports.

One or two provisions of this bill would make permanent authority in the Secretary of the Navy to make a determination which would be permanent and conclusive. I have reference to the language— determinations of dependency, distances, and the places between which transportation or travel is authorized.

I am glad to see that the attitude of the Navy is that it is willing to terminate this authority on September 1, 1948, or even 1947, if agreeable to the committee. That, of course, would be much better, in the opinion of the Comptroller General, than a permanent authority.

However, I would like to direct a few remarks now to even extending that authority to that date. We might take up this provision in the bill, section 4, first, since that is perhaps the most serious of those provisions.

"Determinations of dependency, distances, and the places between which transportation or travel is authorized"-that would practically make it impossible for the Comptroller General to raise any question

as to payments made for travel of dependents, whether heretofore performed, or travel accomplished hereafter, until after the termination date of the authority granted by the bill.

The CHAIRMAN. Let me see if I understand that. The Comptroller General will have no authority to go into the question of dependents' travel.

Mr. WEITZEL. Exactly. It would be up to the Secretary of the Navy. The Secretary of the Navy has had limited authority under certain wartime statutes, such as the Missing Persons Act.

As far as I know, however, there is no general authority of the sort that is supposed to be granted by this bill, certainly not the broad authority. I think the Navy will agree to that.

Admiral HOPWOOD. That is correct.

Mr. WEITZEL. And we do not see the necessity, now that the actual fighting is over, for having the Secretary of the Navy's determination final and conclusive. I realize, of course, that their request is bound up with the authority in section 2, to make payments on a commuted basis for the travel of dependents.

The Comptroller General is in favor of the commutation provisions, although not in favor of the advance provisions.

We have gotten along fine with the Navy during the war, and we feel that there is no particular reason why the Navy should be completely out from under the Comptroller General, now that the fighting is over.

While we admit that the Navy, of course, will attempt to be careful and conservative in the administration of this provision, the mere fact that they had the authority would lead to abuses of that authority on that particular, by those who wanted the payments made. There is a natural tendency towards that, we feel, if they have the knowledge that they have the authority to make those payments.

That, in brief, is the position of the Comptroller General on this provision.

The CHAIRMAN. What do you want to do with it?

Mr. WEITZEL. We would like to have that section 4 amended by deleting the second sentence. That would leave the Secretary of the Navy full authority to make regulations to carry out the act. That is perfectly right and proper. We would remove the provision making the determination final as to dependency, distances, and the places between which transportation or travel is authorized.

The CHAIRMAN. In other words, he can have regulations determining that, subject to review by the Comptroller General's office. Mr. WEITZEL. Yes, sir.

The CHAIRMAN. Anything else?

Mr. WEITZEL. Now, on section 2, we have a comment on the provision for payment "in advance or otherwise," appearing on line 6 of H. R. 4896.

The present authority of the Secretary of the Navy has been pointed out by the Navy representative; it includes transportation in kind, giving a ticket, which also includes now under permanent law and under wartime special act the authority to make reimbursement on a commuted commercial basis. That is to say, the authority to pay the cost of transportation by rail, even though the family travels by automobile.