Boston yard. The provision was, "toward 150-ton floating crane (cost not to exceed $325,000), $150,000." The appropriation we made last year of $150,000 or $175,000 completed the appropriation. Admiral STANFORD. That was my impression.

Mr. ROBERTS. But we have only appropriated $150,000.

The CHAIRMAN. They stated to us in the hearings that the work was not costing as much as they had expected, and that they would save something. It was to be completed last year with that appropriation of $150,000.

Mr. ROBERTS. Was $150,000 appropriated last year?

The CHAIRMAN. The statement was made that they could save $25,000, I think, of the amount estimated, so we have provided $300,000 for the work.

Mr. LEE. Admiral, will you state what paving costs at the League Island yard?

Admiral STANFORD. Brick paving at the League Island yard has cost usually from $2.25 to $2.50 per square yard. Within the last three years additional brick paving has been placed which was laid at a much lower cost, due to the fact that the paved areas were convenient to the railroad track, and it was possible to utilize locomotive cranes and concrete mixers to good advantage, with the result that costs were reduced to $1.75 and $1.53 per square yard. However, these figures are very low and were made possible because of the favorable conditions that permitted the use of mechanical equipment in doing the construction work. That work well illustrates the desirability of using yard forces and yard facilities for many different works of construction.

Mr. ROBERTS. Was that contract work?

Admiral STANFORD. It was done under my direction with yard forces. It was work in which I took special personal interest and which received a good deal of my attention.

Mr. ROBERTS. Was the paving you speak of at the Boston yard done by contract?

Admiral STANFORD. I think it was contract paving.

The CHAIRMAN. Could you do the work at the Boston yard with the yard forces and with the yard appliances?

Admiral STANFORD. Yes, sir; it could be done with the yard forces and yard appliances.

The CHAIRMAN. Could it be done with the yard forces and appliances at a saving?

Admiral STANFORD. That question involves very largely the temperament and interest of the officer who would have the work in charge. Some officers do not take kindly to the details of actual work of construction. They are more inclined to stay in the office and look after design work and office work rather than field work. Again, the cost would depend upon the use of mechanical facilities, such as cranes, locomotives, and cars, which might not be available at the time the work was done. It has always been my practice to arrange that work of that kind shall be performed at such times that the equipment is not necessary at the particular time for general yard operation and is therefore available for construction work.

Mr. ROBERTS. Where did you get concrete mixers at League Island?

Admiral STANFORD. A concrete mixer is part of the yard plant.

Mr. ROBERTS. You have no such machines at the Boston yard, have you?

Admiral STANFORD. I do not know whether they have or not. If they have not, they should have.

The CHAIRMAN. Could you so arrange the work at the Boston yard with reference to time, occasion, etc., that you could use the yard. force, railroad facilities, etc., so as to economize in the work to that extent that is, to the extent of the difference between $1.53 and $1.75 at the League Island yard and $3.25 and $3.50 at the Boston yard? The difference in cost at the two yards is very striking to me. Mr. ROBERTS. Yes; you would get two and one-half times as much surface paved with the same amount of money.

Mr. LEE. Is it not a fact that the presence of sand and gravel at the League Island yard helped to reduce the cost of the paving there? Admiral STANFORD. I should have stated that in giving the cost at Philadelphia. The deposits on the western end of the yard, which have resulted from hydraulic dredging operations, provide quantities of sand and gravel which are well suited for making concrete. By extending a track out to these deposits, cranes, cars, and locomotives could be used in handling the material from these deposits to the place where the work was being done. At Boston there are no such deposits, which would require that sand and gravel be purchased, which would increase the cost of paving about 25 cents per square yard as compared with costs at Philadelphia.

The CHAIRMAN. As I understand it, the paving cost at Philadelphia is about 25 cents per square yard less than the cost at Boston on account of this available supply of sand and gravel?

Admiral STANFORD. Approximately that amount.

The CHAIRMAN. But that still leaves a wide margin of difference. Admiral STANFORD. In making my inspections and in performing the work of the bureau, earnest effort is made to arouse the interest of the public works officers in the construction of yard improvements with the yard forces when such method is advantageous. Large savings can frequently be made by using yard facilities, but such method is sometimes handicapped and made difficult by the system which is followed in fixing overhead expenses against such operations. The regulations do not permit the public works department to employ men under certain trade ratings; for instance, that department can not employ a house plumber, carpenter, pipe fitter, or tinner, but must go to the central shop for such help; these employees are all selected because of their qualifications for ship work, and ship work differs greatly in its character from house work. To employ these men on house work not only means utilizing men who are not necessarily proficient in house work but also the payment of from 30 to 80 per cent indirect costs, which apply to their shops, instead of about 20 per cent, which is the indirect charge for "public works" employees. These conditions require that much work shall be done by contract at real loss to the Government, but necessary to avoid the above difficulties.

The CHAIRMAN. I understood you to say that at Philadelphia, where, I presume, all these conditions exist the same as at the Boston yard, you did use the yard forces to very great advantage?

Admiral STANFORD. Yes, sir. We also had the indirect expense which was charged against the work, but the work was done with

employees who were on the Yards and Docks roll, indirect expense upon which runs from 15 to 20 per cent, which is about fair and proper. The CHAIRMAN. Do you not have these employees on the rolls at Boston, that is, your Yards and Docks force?

Admiral STANFORD. Yes, sir; for rating of laborers and certain other trades but not for all kinds of work.

Mr. ROBERTS. Have you not a house plumber there?
Admiral STANFORD. No, sir.

Mr. ROBERTS. There are two in the yard.

Admiral STANFORD. They are carried on the hulls roll and the yard regulations do not provide for the rating of house plumbers.

Mr. ROBERTS. My impression is that there are two house plumbers there, and I understood that the reason you did not have any more was because there was no more work for them in that yard.

Admiral STANFORD. The regulations do not permit the employment of house plumbers.

Mr. ROBERTS. They are there in the yard anyway on somebody's roll. I had occasion to ascertain that very recently, because I wanted to find out if they needed any apprentice house plumbers, and they said that no additional house plumbers were required. There are two house plumbers there.

Admiral STANFORD. Were they not ship plumbers doing houseplumbing work?

Mr. ROBERTS. No, sir; they are rated as house plumbers.

Admiral STANFORD. I know that at Philadelphia you can not get a house plumber.

Mr. HOBSON. I think it was a little singular that the indirect cost of plumbing under a central plumbing system should be 75 per cent of the actual wage. Is that usual at the yards?

Admiral STANFORD. The indirect expense depends largely upon the number of employees. If there are many employees, the indirect expense is apt to be low; but if there are only a few, then the cost will run higher. If you have foremen and leadingmen for a small number of employees, the overhead expense will increase very rapidly.

Mr. HOBSON. But if you have a central plumbing system you would have a larger number of employees in each organization, and the indirect cost ought to be less.

Admiral STANFORD. It is due to the fact, as I have said, that the nonproductive labor, such as foremen and leadingmen, make it run up very fast.

Mr. HOBSON. You say they charged you $7 per day for a $4 per day plumber?

Admiral STANFORD. That was based on a 75 per cent indirect expense; indirect expense in plumbing runs anywhere from 30 to 75 per cent.

Mr. HOBSON. Is that true throughout the yards, that the indirect cost is nearly double the amount of the wage?

Admiral STANFORD. Yes, sir; for certain ratings.

Mr. HOBSON. But that was the blacksmith work alone?

Admiral STANFORD. Indirect expense in some cases is as low as 15 or 20 per cent in certain ratings. It is particularly low in yards and docks ratings, because there are not master mechanics, foremen, and leadingmen to the same number relatively that they have in the other departments.

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Mr. HOBSON. Do you know what the indirect cost in private yards is for plumbing?

Admiral STANFORD. No, sir.

Mr. HOBSON. I wish you would secure that information for the record. I would like to see a comparison between the indirect cost in the navy yards and in private yards in this particular item we are referring to.

Admiral STANFORD. In a private yard there would be a certain element added for property depreciation, and there is no such item added in the case of the navy yards.

Mr. HOBSON. But I would like for you to include that in the comparison.

Admiral STANFORD. I will see if I can get that information.

Mr. HOBSON. I do not see how the indirect charges can mount so high with a simple method of accounting unless some other expenses are brought in.

Admiral STANFORD. The point I want to bring out is that certain kinds of work can be advantageously performed with yard labor without being adversely affected by the indirect expense arrangement, whereas certain other kinds of work can not be advantageously done in that way because of the methods that obtain. The reason that such conditions exist is that it is believed for the entire yard there is general saving as the result of consolidation which is more than sufficient to offset occasional losses.

Mr. HOBSON. Would not that on the whole reduce the indirect cost? Would you not expect the expense to be lowered under a proper consolidation of the work?

Admiral STANFORD. Generally speaking, yes, sir.

Mr. HOBSON. Yet it is where this consolidation of work has been made that you have this very high percentage?

Admiral STANFORD. Yards and Docks suffers in some of its operations unquestionably, but this is suffered for the general welfare.

Mr. HOBSON. Yet when you do work for them you pay for it yourself; but when they do work for you, they charge you double for some work, like that of horseshoeing and plumbing.

Mr. ROBERTS. Let me ask you something about pipe fitters in the Boston yard. In recent years you have employed quite a number of pipe fitters in that yard, have you not?

Admiral STANFORD. Not recently, because pipe fitters are now in Steam Engineering. They are in the machinery division.

Mr. ROBERTS. I am not speaking of where they are placed now, but you have put in quite a number of pipe fitters there, have you not? Admiral STANFORD. Yes, sir.

Mr. ROBERTS. Did you carry them originally on your roll?
Admiral STANFORD. No, sir; we got them by transfer.

Mr. ROBERTS. Do. you have to pay an overhead expense on their account?

Admiral STANFORD. Yes, sir; the indirect expense.

Mr. ROBERTS. Is it as much as 75 per cent?

Admiral STANFORD. Not necessarily, but it may be that much at certain yards.

Mr. ROBERTS. But you never had them under your direct controlthat is to say, you borrowed them?

Admiral STANFORD. We have to get them from the machinery division.

The CHAIRMAN. Instead of borrowing them, as I understand it, you hire them?

Admiral STANFORD. Yes, sir.

Mr. HOBSON. Yet, they do not credit him when he supplies inspection and drafting for their construction work.

Mr. ROBERTS. You have in the Boston yard a number of pipe fitters temporarily, or for a few months, and you have a certain number that you use permanently?

Admiral STANFORD. Yes, sir.

Mr. ROBERTS. But they are not under your immediate control? Admiral STANFORD. The Public Works Department can not employ a pipe fitter, nor a plumber, nor a tinner.

Mr. ROBERTS. Why not?

Admiral STANFORD. Because the shops from which those employees are obtained are under other departments.

Mr. ROBERTS. Have you been drawn into this controversy between pipe fitters and steam fitters?

Admiral STANFORD. No, sir.

Mr. ROBERTS. Do you know that there is a controversy going on between them?

Admiral STANFORD. Yes, sir.

Mr. HOBSON. Have you not the data at hand by which you could compare the indirect charges prevailing before the consolidation you refer to took place and the very high percentages prevailing now? Admiral STANFORD. Those records were not kept in previous years. Mr. HOBSON. I assume that it is believed that the charges are less now than they were?

Admiral STANFORD. I believe that is the general opinion.

Mr. HOBSON. Yet under the consolidation the indirect expense of plumbing is 75 per cent.

Admiral STANFORD. It should not be stated that it is 75 per cent in all cases. The rate varies in different yards, and my statement was that the indirect expense ranged from 30 to 75 per cent; the plumbing shop happens to be in that class.

Mr. Foss. Does that indirect expense include all the things that would be charged in the indirect expense in private yards?

Admiral STANFORD. No, sir.

Mr. Foss. Will you state the things that would be charged as indirect expense in a private establishment? Suppose you state that in the hearings.

Admiral STANFORD. Yes, sir; that would include the capital invested, the depreciation of the structures, and accessories, insurance, and taxes.

The CHAIRMAN. Does that embrace the salaries of the officers stationed at the yard?

Admiral STANFORD. No, sir.

The CHAIRMAN. Coming back to the other question, I fail to comprehend why there should be such a great difference in the cost of paving at Boston and Philadelphia. Can't you put in the hearings a statement showing the items that go to make up that difference, and will you not also give some attention to the question of whether or not you can do that work at Boston in the same way you did it at Philadelphia and accomplish the same or similar results?