reduction of 1 clerk in the clerical force employed in handling allotments. Ten clerks are now performing the duties which formerly required the services of 18.

The centralizing of payments of and accounting for allotments results not only in the avoidance of confusion and consequent loss of money incident to the old distribution of these payments among the Navy pay offices, but also in the saving of the salaries of part of the clerical force of the allotment section in the Office of the Auditor for the Navy Department.

COAL AND FUEL OIL.

An unusually high standard of steaming coal has been furnished the fleet. Reports of analyses obtained from samples from each loading of coal for the fleet have indicated an increase in the heat value of coal received in the last year of about 200 British thermal units in the pound of coal, the average determination now being about 14,000 British thermal units per pound of coal as received. A reduction of twenty cents per ton has been secured for coal to be supplied during the coming fiscal year; this reduction will result in a saving of approximately $140,000. Several naval vessels on the Pacific coast have been designated for the duty of determining the efficiency of western and British Columbia coals, and the results of these tests, together with other tests performed under the supervision of the Bureau of Steam Engineering, will determine the efficiency of western coal, as compared with that purchased at the present time.

During the fiscal year 1911, 744,423 tons of coal were consumed by the fleet, at a cost of $3,170,214.98. The following table shows comparative percentages of total consumptiom aboard naval vessels for various purposes during each of the fiscal years 1906 to 1911, inclusive:

The total quantity of domestic coal purchased was 853,450.87 tons, 183,067.58 tons of which were transported to navy yards, naval stations, and naval coal depots by means of chartered carriers, both foreign and American, at a total cost of $916,604.59, or at an average cost for transportation of $5.006 per ton. The balance of the domestic coal purchased, being 670,383.29 tons, was delivered to navy yards, naval stations, naval coal depots, and to vessels of the different fleets by means of naval colliers, together with that delivered free alongside navy yards by contractors.

The total cost of the coal alone of all the domestic coal purchased, viz, 853,450.87 tons, is $2,393,222.03, or an average of $2.804 per ton, and whereas it is shown above that the average cost of all the coal transported-183,067.58 tons-is $5.006 per ton, it will be

noted in the table showing the quantity, cost, etc., of domestic coal purchased that the average cost of all coal purchased, including the transportation thereof, is only $3.878 per ton.

A large amount of fuel oil consumed by the fleet has been supplied with little or no difficulty. Contracts for supplying oil in almost any quantities on short notice have been made for deliveries at Portsmouth, Boston, Provincetown, Newport, Bradford, New York, Philadelphia, Annapolis, Washington, Norfolk, Charleston, Key West, New Orleans, Guantanamo, and Port Arthur. Navy standard fuel oil is prepared especially to meet Navy standard specifications, and the quantities maintained for issue by the contractors were more than sufficient to meet the demands of the fleet. The fuel-oil tanks at Bradford, Norfolk, Charleston, and Key West have been furnished with an adequate supply of oil fuel of satisfactory grade immediately upon the notice that such tanks were ready to receive deliveries. It is believed that the installation of similar tanks at other naval bases will be a means of providing a sufficient quantity of standard fuels to meet any of the present needs of oil-burning ships and against the possibility of any unexpected curtailment of supply.

The transportation of coal to the Pacific coast has, without exception, been obtained under active competition by blank proposals sent to about 125 of the largest steamship and coal-transportation companies of the United States. The bureau has been able to secure rates which are considered reasonable when comparison is made with the rates charged private concerns, and has favored American bottoms in all cases where it has not been considered detrimental to the interests of the Government.

ALASKAN COALS.

From information received, the bureau is convinced that the coal in the Matanuska and Bering River fields is available for working, and it is suggested that the Congress be urged to provide for the opening and operation by the Government of these fields at the earliest practicable date, and that the opening of mines in these fields by private enterprise be encouraged, in the hope of making the coal supply on the Pacific Coast a certainty.

The reports of coal analyses from the Matanuska or Bering River fields, made from samples obtained by the Director of the Bureau of Mines while in Alaska, show that these coals are exceptionally low in ash and sulphur and exceedingly high in heating value, the British thermal units in some cases running as high as 15,400 as received, while the best eastern coals average a little under 14,800.

The vital importance of securing proper coal for the maintenance of the Pacific fleet is so great that, with the opportunity of securing high grade fuel as now presented, the bureau believes that every effort should be made to secure suitable legislation and appropriations for mining and operating these fields in order that the efficiency and safety of the fleet in the Pacific may be assured.

EQUIPMENT (SUPPLIES AND ACCOUNTS).

Under the division of the duties of the Bureau of Equipment, this bureau has for the past year supplied all articles of mess outfits, typewriters, stationery, athletic outfits, and musical instruments for

the naval service. Through careful scrutiny of requisitions, it has been possible to furnish these important and necessary items in a satisfactory manner from a comparatively small allotment, thus contributing to the saving effected by the Secretary's Order No. 70, dated June 30, 1910, distributing the duties of the former Bureau of Equipment among the various bureaus. With an increased Navy and greatly increased demands for supplies, the several bureaus, under the direction of the Secretary to exercise the strictest economy in expenditures, have met the manifold needs of the service without incurring a deficit in the appropriation. At the present time the books of this bureau indicate a small balance under the Equipment appropriations. As all supplies used during the fiscal year 1911 were paid for from the appropriations of that year, the results of a comparison of those used by Equipment appropriations with the value of equipment stores used during the fiscal year 1910 indicates an economy in favor of 1911 of approximately $500,000, which is about the value of the equipment stores used in 1910 purchased from appropriations of former years.

SCRAP METAL.

An expert on the classification of scrap metals has been employed by the department, and is now on duty at the navy yard, New York, N. Y.

This bureau believes that in the past, on account of the lack of expert knowledge on the part of the Government employees as to the proper classification of this material, a great quantity of scrap has been sold which could have been used to advantage in the navy yard foundries; also, that scrap has been sold at less than the market value, on account of the fact that it was not properly segregated.

CONSOLIDATION OF APPROPRIATIONS.

One of the greatest economies along all lines would result from the consolidation of appropriations as pointed out in my annual report of last year, a statement in regard to which was as follows:

The recognized practice for many years, by which money appropriated for the naval service has, by the Congress, been divided so as to segregate the totals under the different bureaus and subheads thereof, has resulted in the development of a complicated system of accounting, which might be greatly simplified should all money be appropriated in a lump sum for each bureau. Attention in this connection is invited to the heterogeneous, not to say unnecessary, arrangement of naval appropriations.

At the present time the moneys for the Naval Establishment are divided into 180 current appropriations, and taking into consideration that each annual appropriation remains open for at least two fiscal years, there are carried on the bureau's books approximately 450 appropriation accounts. It is evident, even to the most casual observer, that the expenditure of some $150,000,000 through the media of from 200 to 500 appropriations must present so many difficulties that an entirely satisfactory method of accounting for such expenditures can not be devised.

Under the act of Congress approved June 25, 1910, authority was granted the Secretary of the Navy to make all purchases of stores for stock under one account, i. e., general account of advances, and to make the necessary charges against the appropriations concerned whenever such stores should be issued for the use of the bureau having cognizance thereof. While this arrangement somewhat simplified the store problem and made possible, as stated elsewhere in this report, a cost-of-work accounting system, yet it only altered slightly for the better the very great complexity of the general accounting, because the great number of appropriations against which charges must be eventually lodged has not been reduced.

Particular attention is invited to this item, as it is confidently believed that economies would result not alone in the Navy Department, its bureaus and offices, but also in the Treasury Department and every office having to handle papers in connection with naval appropriations, etc.

Congress should be requested to arrange future annual appropriations in consolidated form wherever the homogeneity of the organizations and of the nature of the expenditures of the Navy will permit.

A distinct advantage to the Government would be gained by the removal of the limit on payment under gross appropriations for clerical, drafting, and messenger sevice, the amounts to be paid for such services to be left to the discretion of the Secretary. The payment for all personal services, other than those which enter into the cost of work, from the appropriation, would undoubtedly prove economical, as at present when the services of draftsmen and others are needed in excess of the number for which payment has been provided by law they can not be employed. For this reason a considerable loss inures to the Government through delays in obtaining drawings, specifications, and other necessary data.

The naval appropriations at the present time are very complex and many of them carry identical clauses. Their consolidation would simplify all business transactions connected with purchases, permit more accurate cost accounting, facilitate the reporting of expenditures, and result in an economical distribution of funds by administrative authority, at the time the necessity for each allotment becomes evident.

CLERICAL FORCES IN STOREHOUSES.

The work at all navy yards has been increasing steadily for years, while such has not been the case with the number of clerks allowed in the offices of the various general storekeepers, with the result that all employees are required to work many hours longer than is compatible with the best interests of the service; notwithstanding this fact the routine work in all navy yards is much behind and in spite of all efforts it is found quite impossible to bring it up to date. This state of affairs is most undesirable and by all means should be remedied. The character of work performed by employees who are forced to work many hours of overtime is bound to deteriorate, annoying and costly errors are more and more frequently made, the employees themselves grow discontented, and the important duty of supplying stores and materials to the fleet and manufacturing departments of yards is rapidly becoming more and more difficult.

ADMINISTRATIVE EXAMINATION.

Attention is invited to that section in the last report of the Paymaster General, on the subject of administrative examination, and to the fact that the Navy Department is the only department of the Government which is prohibited by law from giving such examination to the accounts of all its disbursing officers.

T. J. COWIE,

Paymaster General, United States Navy.

The SECRETARY OF THE NAVY.