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(No. 1.)

THE COMMITTEE ON NAVAL AFFAIRS,

Friday, December 6, 1912. The committee this day met, Hon. Lemuel P. Padgett (chairman), presiding.

STATEMENT OF REAR ADMIRAL T. J. COWIE, CHIEF, BUREAU

OF SUPPLIES AND ACCOUNTS. The CHAIRMAN. Gentlemen, we have with us this morning the Paymaster General. We will turn to page 10 of the first draft of the bill.

Admiral, I notice that the language is the same until you get about midway on page 11, where there is new language inserted, "including the rental of offices in the District of Columbia.” Please explain that fully

Admiral COWIE. This change in language is desired so as to have specific authority for the rental of offices for the Navy pay, disbursing, and allotment offices, which are now being paid from this appropriation under the general clause "rent of buildings and offices not in navy yards,” in view of the provisions of the act of March 3, 1877 (19 Stat. L., 370), as follows:

Hereafter no contract shall be made for the rent of any building, or part of any building, to be used for the purposes of the Government in the District of Columbia, until an appropriation therefor shall have been made in terms by Congress, and that this clause be regarded as notice to all contractors or lessors of any such building or any part of building.

The amount now being expended for this purpose is $3,996 per annum, and this was simply to cover that.

The CHAIRMAN. The offices are already occupied and have been ?

Admiral CoWIE. Yes, sir; for some years, but I want to cover that in the law.

Mr. TRIBBLE. Admiral, the question of traveling expenses was discussed in the House yesterday in regard to the Army and Navy, the mileage of officers while traveling under orders. Will you please give us a little enlightenment on that question? What do they get per mile ?

Admiral CoWIE. Eight cents." In case the travel is performed a number of times between the same points the Secretary has authority to make it actual traveling expenses, but where it is just one order from one place to another, which usually involves a change of station and duty, it is 8 cents.

Mr. TRIBBLE. What is that supposed to cover? Why should it be 8 cents ?

Admiral COWIE. That is the law. You have made this allowance to officers of the Navy in lieu of "traveling expenses and all allowances whatsoever connected therewith, including transportation of baggage," for travel performed from point to point within the United States under orders. The expenses connected with, incidental to, or

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incurred because of orders are ordinarily such as cost of transportation of the officer; cost of transportation of his family; cost of packing, boxes, crates, handling, transfer, storage; and cost of transportation for baggage and household effects. In the long run it just about covers these expenses which are caused by the necessary transfer of officers.

Mr. TRIBBLE. I understand, but why should the law provide for 8 cents instead of 3 cents ?

Admiral CowIE. Three cents would not halfway cover the necessary expenses incurred. Eight cents, I think, as a rule just about covers the actual expense of transferring baggage, hotel bills, meals, etc., in moving from one place to another. In the Army it is 7 cents, but they are allowed the packing of their furniture and have a baggage allowance and everything of that kind in changing from station to station.

Mr. TRIBBLE. An officer traveling alone, just with a hand bag, what would he get?

Admiral COWIE. Eight cents, if it is just one trip. If he made more than one trip, which is indicated by his traveling with only a hand bag, he would get actual expenses. An officer traveling as you suggest would be either on inspection, recruiting, or some other duty not requiring a change of station. The law provides that officers performing repeated travel between two or more places are entitled to actual and necessary expenses. This provision was put into the law to cover just such cases as you mention. The rate of 8 cents is given not only to cover traveling expenses but also to cover expenses incurred while performing the temporary duty, such as hotel bills, etc.

Mr. TRIBBLE. If you undertake just to pay the expenses, there ought not to be a distinction made?

Admiral COWIE. That question has been talked over a number of times as to whether 8 cents really covers more than actual expenses, and in the long run it was concluded that it did not. If the law had not made this provision for actual expenses it would have been possible for an officer performing repeated travel, making short trips such as you mention, to receive more than his actual expenses. That is the reason for the provision that actual expenses should be allowed in such cases, i. e., where the 8 cents per mile would probably exceed the cost to the traveler, because the nature of the duty does not require him to take his family or household effects. A great many of the naval officers feel that the Army officers with 7 cents per mile and having their furniture packed and things of that kind are really better off than the Navy at 8 cents.

Mr. TRIBBLE. But that does not answer the question. Regardless of what the Army gets, why should a naval officer who has a hand satchel in his hand receive 8 cents a mile traveling from New York to San Francisco, for instance, instead of 3 cents ?

Admiral CoWIE. Cases of that kind are very rare. Duty requiring travel from New York to San Francisco would in nearly every case involve a change of station and duty, the continuation of which would almost surely be for not less than three years. Many expenses other than the cost of his ticket would be involved. If allowed 3 cents per mile, the officer would be considerably out of pocket for his own actual necessary personal expenses, besides being compelled to leave his family,

whom Congress has taken into account in providing quarters, or bear these expenses, which are prohibitive for officers who have no private income.

Mr. TRIBBLE. That is what I want to find out.

Admiral COWIE. In the long run it has been thought that 8 cents a mile does not amount to more than actual expenses made necessary because of orders involving travel.

Mr. TRIBBLE. There is not any contention, is there, that it costs 8 cents a mile for an officer just alone to travel ?

Admiral COWIE. Not for a short trip; in fact, I know it does not; that is the reason, as I said before, that the law provides for actual expenses in cases of short and repeated trips.

Mr. TRIBBLE. What would be a reasonable expense for an officer traveling alone; it certainly would not go over 4 cents.

Admiral CoWIE. That I am not prepared to say. I would suggest, if you are thinking of anything of that kind, to make it actual expenses which they have to certify to. The law now provides reimbursement for actual necessary expenses for most travel not involving a change of station and duty. It would be exceedingly difficult to prescribe a just mileage rate for such cases as those to which you refer. The expenses involved depend upon the nature of the duty rather than the number of miles traveled. For example, an officer on inspection duty performed repeated travel between Boston, Mass., and New London, Conn., incurring expenses for which he was reimbursed $9.30 for each round trip. This would be at a rate of about 41 cents per mile. Another officer performing repeated travel between Newport, R. I., and Washington, D. C., incurred expenses for which he was reimbursed in amounts varying from $34.20 to $47.15. These would be at a rate per mile varying from about 4 cents to 6 cents. Numerous other cases inquired into show that actual necessary expenses of officers traveling alone on various kinds of duty not involving a change of station or duty varies so greatly that I believe it would be impossible to prescribe any rate per mile in lieu of expenses which would be just and equitable.

Mr. BUTLER. Is it contemplated that the naval service will need additional quarters?

Admiral CoWIE. We have those quarters now, and this is just to cover them.

Mr. BUTLER. This provision is to enable you to pay for them?
Admiral CoWIE. Yes, sir.
Mr. BUTLER. You are not in need of any additional quarters ?

Admiral Cowie. Not for those purposes; no, sir. We are very cramped for quarters in the Navy Department, especially in the Bureau of Supplies and Accounts, where there are some 32"clerks in one room in the accounting section in the basement, immediately over the elevator engines, which is a very bad place for them.

Mr. BUTLER. I know that.

Admiral CoWIE. For that reason we should have additional space at some place, but I am not prepared to bring that up at this time.

The CHAIRMAN. The language continues the same. I see you are asking for $1,000,000, the same as last year?

Admiral COWIE. Yes, sir.

The CHAIRMAN. Can you state whether or not you have any unexpended balance ?

Admiral Cowie. During the last year we overobligated by $111,263.45. This was caused by exchange, which jumped from $21,627.07 to $164,215.59, due to the excessive rates charged in China and Japan during the recent trouble there. In some cases they had to pay as high as 18 per cent for the money. Where the exchange the year before only cost $21,627.07, it cost us last year $164,215.59, but the last report of sales of bills of exchange received from China shows a loss of approximately 5 per cent, indicating that conditions have become practically normal. Five per cent is a reasonable rate for the Mexican dollar.

Mr. BUTLER. What are the expenses that we have to meet?
Admiral COWIE. This is simply loss on bills of exchange.
Mr. BUTLER. I understand; but what was the occasion ?
Admiral CowIE. To keep up the fleet.
Mr. BUTLER. That is the only purpose ?
Admiral COWIE. Yes, sir.
Mr. BUTLER. The pay roll for the fleet lying in Chinese waters?
Admiral Cowie. Yes, sir; pay rolls and purchases.

Comparative statement of "Pay, miscellaneous," for 1910, 1911, and 1912.

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Amount appropriated..
Deficiency appropriation..
Gain on bills of exchange and interest on daily balances..

Total.....
(a) Commission and interest..
(b) Transportation of funds.
(c) Exchange..
(d) Mileage and traveling expenses of officers..

Traveling expenses of civilian employees.
Traveling expenses of female nurses.
Rent of buildings and offices not in navy yards.
Expenses, court-martial, prisoners and prisons, courts of

inquiry, etc...
(i) Expenses of purchasing pay officers.
(1) Newspapers and advertising.
(k) Care of library..
(1) Relief of vessels in distress.
(m) Quarantine expenses..
(n) Reports and professional investigation..
(0) Cost of special instruction...
(p) Maintenance naval attaches and information from abroad.

Ice for Navy Department and its bureaus.
Postage, telephone rentals, telegrams, and cablegrams.

Necessary incidental expenses..
(0) Labor.
(u) Material drawn from naval supply fund or naval supply

account. (v) Miscellaneous transfers; clothing for court-martial pris

oners, etc. Obligations not divided by subheads.

Total..

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Balance, 1910..

$313.80 Balance, 1911.

Exhausted. Indicated over obligation, 1912.

111, 263. 45 The CHAIRMAN. The next item is on page 46, "Coal and transportation.” I notice that the appropriation last year was $4,000,000, and this year you are asking for $5,000,000 ?

Admiral CoWIE. Yes, sir.
The CHAIRMAN. Why is that?

Admiral Cowie. The appropriation for 1912, which is the same as that for 1913—$4,000,000-has an indicated 'deficiency of approxi

mately $150,000, and increases under the various objects of expenditure are expected as follows: Coal purchased at home, $200,000; freight, $200,000; fuel oil, $500,000; handling coal, etc., $35,000, and coal purchased abroad, $15,000. The total estimated increase for 1914 over 1912 is $950,000.

Coal was purchased at excessively low prices during the fiscal year 1912, the present contract prices being 20 cents per ton higher than the average 1912 price, which was $2.50. This year it is $2.70. The bureau is of the opinion that much of the coal purchased during 1912 was without profit to the contractors. This I know to be a fact.

During 1912 it was possible to send coal to west-coast points for between $4.89 and $5.8 per ton in foreign bottoms, but due to increased commercial demands the offers for foreign bottoms are now only slightly lower than for American vessels, and the increase of 20 per cent estimated under this item is considered very conservative.

Fuel-oil prices at the present time have increased approximately 60 per cent over the prices paid in 1912, and a further increase in price is to be expected, due to increased demands. The increase of $500,000 is based on expected increased price, as well as increase in quantity, although owing to the larger number of oil-burning vessels, which are expected to be in commission during the fiscal year 1914, it is possible that there will be an increase in expenditures for fuel oil, with a corresponding decrease in expenditures for coal. The increase of 10 per cent in the cost of handling coal is intended to cover increases in wages or other expenses, much of the work being done by private contractors.

The cost of Cardiff coal in foreign ports has been advanced, and this, in conjunction with increased freight charges, makes the estimated increase of 10 per cent in the cost of coal purchased abroad very reasonable.

I have been rather conservative in this estimate of $1,000,000, which I have asked for, because I believe the price of fuel oil and the increased cost of coal will allow us very little additional fuel in the next year.

The CHAIRMAN. How much additional coal do you estimate for above 1913 ?

Admiral COWIE. I estimate for $200,000.
The CHAIRMAN. Not the price, but the amount of coal ?

Admiral COWIE. That would be practically the same—that is, the consumption.

The CHAIRMAN (interposing). Does the $200,000 cover the additional cost or the additional amount?

Admiral COWIE. A small additional amount.

The CHAIRMAN. And you are not estimating for the additional price?

Admiral CowIE. Yes, sir, I am; the $200,000 is to cover that also.

The CHAIRMAN. How much additional fuel oil are you estimating for?

Admiral Cowie. Five-probably six million gallons over 1913.

The CHAIRMAN. You spoke about the great increase in the price, but I did not know whether you were estimating for an additional amount?

Admiral Cowie. In 1911 we only used 5,778,657 gallons of fuel oil, whereas in 1912 we used 14,146,714 gallons, which shows an increase of nearly three times as much as used in 1911.

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