MESSRS. SWAGAR SHERLEY (CHAIRMAN), WILLIAM SCHLEY HOWARD, AND FRANK W. MONDELL IN CHARGE OF SUNDRY CIVIL APPROPRIATION BILL FOR 1920 SIXTY-FIFTH CONGRESS PART III UNITED STATES SHIPPING BOARD WASHINGTON 1919 TUESDAY, FEBRUARY 4, 1919. UNITED STATES SHIPPING BOARD. STATEMENTS OF MR. CHARLES PIEZ, VICE PRESIDENT EMERGENCY FLEET CORPORATION; MR. D. H. BENDER, GENERAL AUDITOR; MR. CHARLES R. PAGE, COMMISSIONER. STATUS OF BUILDING PROGRAM. The CHAIRMAN. Mr. Piez, last year, on May 9, when the Shipping Board was before the committee in connection with the estimates for the fiscal year 1919, it was testified by yourself that the program as of April 30 comprised 1,592 ships, of which 363 were wood hulls, with a total of 1,280,650 dead-weight tons; 88 wood, complete, with a tonnage of 331,400; 48 composite ships, with a total of 172,000 deadweight tons; 1,016 steel ships, with a total of 7,202,580 dead-weight tons; 9 concrete ships, of 59,500 dead-weight tons; 2 steel barges, of 15,000 dead-weight tons; 44 steel tugs and 22 wood tugs, making a total of 1,592, with a total of 9,061,130 dead-weight tons. This was your construction program as of that date? Mr. PIEZ. Yes. The CHAIRMAN. To what extent has that program of construction been entered upon and the Government obligated, without now dealing in money but in character of ships? Mr. PIEZ. You want to know what part of that has been completed? The CHAIRMAN. No; I want to know what part of it has been so entered upon as to obligate the Government. Mr. PIEZ. We have carried out that original program and committed ourselves absolutely and were committed at that time, and we made no changes or substitutions in that part of the program. The CHAIRMAN. Do I understand, then, that as of April 30 you had a program, which may or may not have been a complete one, though I had the impression that, excluding requisitioned ships, it was your complete program as of that date, that involved 1,592 ships of a total tonnage of 9,061,130, and that, you say, has been gone forward with? Mr. PIEZ. Yes, sir; that is what was under contract at that time. The CHAIRMAN. And it did not represent your total program? Mr. PIEZ. No, sir; it did not. The CHAIRMAN. There appears on page 2306 of the hearings a program to December 31, 1918, in which it appears there were 2,174 steel ships with a dead-weight tonnage of 13,441,698. P 3 Mr. PIEZ. Yes, sir. The CHAIRMAN. And 1,242 wooden ships of a dead-weight tonnage of 4,799,250 and 9 concrete ships with a dead-weight tonnage of 59,500, or a total of 3,425 ships with a dead-weight tonnage of 18,300,448. Mr. PIEZ. Yes. The CHAIRMAN. At an estimated cost of $3,423,713,218. MODIFICATIONS OF PROGRAM-CANCELLATIONS. The CHAIRMAN. To what extent is that an existing program and to what extent has it been modified and what is your program now, for which you want additional moneys to carry it through? Mr. PIEZ. The total commitments before our recent cancellationsI will give you the gross and then the net-were for 1,990 steel vessels as against 2,174 in this program as submitted; 917 wooden vessels in the place of 1,292. Mr. GILLETT. Of what date is this? Mr. PiEz. These were the commitments in force December 31; and 22 concrete vessels instead of 9, making a total of 2,929 vessels instead of 3,425 included in the program submitted. The CHAIRMAN. With a tonnage of how much? Mr. PIEZ. With a tonnage of 16,196,761. The CHAIRMAN. And at a cost of how much? Mr. PIEZ. At an estimated cost of $3,370,763,087. That is the estimated completed cost, including all the labor advances and freight advances. We have canceled The CHAIRMAN (interposing). First, while you had a program such as you have outlined to December 31, you did not have an authorization or cash to anything like that total cost. You had been given a maximum amount for the construction of ships of $2.884,000,000. Mr. PIEZ. This includes requisitions, too. The CHAIRMAN. I was just going to say that the statement we have been dealing with includes requisitions. Mr. PIEZ. Yes, sir. The CHAIRMAN. How much of it represented requisitions? Mr. PIEZ. In number of vessels it represented 391, with a deadweight tonnage of 2,725,481, at an estimated value of $505,395,246. The CHAIRMAN. You mean your program as of December 31? Mr. PIEZ. Yes, sir. The CHAIRMAN. Your requisition limit of cost was $515,000,000? Mr. PIEZ. Yes. The CHAIRMAN. So that, added to your limit of cost for the construction of ships, gave you a total of $3,399,000,000? Mr. PIEZ. There were transfers made there because both the authorizations and the appropriations included some authorizations for plant account. The authorizations, for instance, were for $2,884,000,000, but the latter amount was reduced, and included an item of $80,000,000 for construction of shipyard plants and other plants and $34,662,500 for dry docks and marine railways, if you will remember; and in our treatment of that we have always deducted, therefore, $114,662,500, making the net amount of the authorization $2,769,337,500 and the net available to us $3,284,337,500. The CHAIRMAN. You are talking about that as construction as contradistinguished from requisitioning? Mr. PIEZ. No, sir; that latter figure includes the $515,000,000 and includes the amount for ship construction, but eliminating plant and property, dry docks, and the marine railways. The CHAIRMAN. You had, as of December 31, overobligated, or you had a program which would have overobligated the Government by several hundred million dollars? Mr. PIEZ. No, sir; by substantially $86,000,000. However, if you will remember, we appeared in an endeavor to get an urgent deficiency appropriation, and, failing in that, we immediately entered upon some cancellations. We canceled to December 31, 132 wood ships, and we canceled steel ship construction at the Alameda yard amounting to something like $20,000,000. Mr. GILLETT. Where is that yard? Mr. PIEZ. At San Francisco Bay. So that our next amount, after the deduction for salvage cancellations, was sufficient to pay for our program at that time. Please bear in mind that these figures that I am submitting now include also increased cost of materials and wage advances that were made in October by the board. These figures have been brought up to date. The CHAIRMAN. Suppose you tell us just exactly what your program now is, because I take it that there have been cancellations made since January 1? Mr. PIEZ. Yes, sir; and we are still making them. The net value of the cancellations made before December 31 amounted to $104,464,870, which put us well within the limit, therefore, or our appropriations and authorizations at that time. Those cancellations involve 132 wood ships, 2 wood barges, 64 wood tugs, 8 concrete ships, and 56 steel ocean-going tugs. I will prepare for the record, Mr. Chairman, a statement in parallel columns giving the total number of ships. Our total reduction in the number of vessels through cancellations prior to December 31 is 262, and since December 31 we have canceled 135 steel vessels, amounting to 1,045,300 deadweight tons. I have not the net value of that, because we have not yet figured out what it will cost us to cancel them. We are pretty well up on the cost on the cancellations made prior to December 31. I should say that the salvage in that account would run to about $90,000,000. Therefore, we would have available, in addition to the sum there set forth, about $90,000,000 when those orders to suspend work have finally been translated into positive cancellations. We are going very carefully over our entire program and suspending work on all vessels for which the keels would not be laid on July 1, 1919. The CHAIRMAN. Can you put in the record a table arranged similar to the one that is on page 2306 of the hearings of last May, showing your program as it became modified up to December 31, 1918? (Table 2.) Then from that would come the cancellations that were made prior to that date and which, in turn, modified the program, and the cancellations that have taken place since that date, so that you will be able, after setting them out to give a statement similar in form as to your existing program, which represents the shipbuilding contract for and the commitments which it is now the desire of the |