The next item is high explosives, $2,000,000; for ordnance material for the Marine Corps, which amounts approximately to $2,595,480. Improvements at the naval proving ground and powder factory. That is our big Government source of powder supply and also used for the proving of guns and the proving of shells, mounts, fuses, detonators, and, in fact, everything of an explosive or purely ordnance nature. It is proved down there before being issued to the service. We estimate $214,000 for that. The total under ordnance and ordnance stores, the first subdivision of our appropriation, is $12,446,480. The CHAIRMAN. Now you have available for this year $24,000,000. Is this money needed at this particular time? Commander KEARNEY. In order to place contracts and to actually go ahead, yes, sir; we actually need this money. Under ordnance and ordnance stores we had $16,905,366. We have actually obligated $2.497,432.60, exclusive of current monthly allotments to navy yards. The CHAIRMAN (interposing). You also had $8,488,333. Commander KEARNEY. That was in the regular bill. This is in what we call our No. 2 emergency bill. We have actually expended by contract to date $16,905,366. We have actually obligatedThe CHAIRMAN (interposing). You also had $8,488,333. Commander KEARNEY. That was in the regular bill. This is in what we call our No. 2 emergency bill. We have actually expended by contract to date $2,497,000 out of this $16,000,000. Mr. GILLETT. Have you spent all of your original $7,000,000? Commander KEARNEY. No, sir; we must retain in this appropriation our current working fund; in other words, we allot monthly to each of the navy yards and stations Mr. GILLETT (interposing). I understand that. Commander KEARNEY. So far having obligated practically $3.000,000 of our $16,000,000, I have left just $13,000,000 to cover the yard expenditures, repairs to ships, ordnance work, payment of labor, ordnance material for Marine Corps, and all of the items which come up regularly every month, and based on that, this indicates a probable deficiency of approximately $13,000,000. The CHAIRMAN. Has there been any allotment to this fund from the emergency appropriation? Commander KEARNEY. You refer now to the $115,000,000 appropriation? The CHAIRMAN. Yes. Commander KEARNEY. Yes, sir; we got approximately $22,000,000 out of that and that has been obligated. That was obligated, in major part, for the ordnance features of the 110-foot chasers, the new type of boat; ammunition; machine guns; and armament and ammunition for destroyers. The CHAIRMAN. Out of the $115,000,000 you got $22,000,000? Commander KEARNEY. We got $22,000,000, as I recall. We become now one of thte active bureaus so far as expenditures go; that is, every act of war is an expenditure of ordnance material. Mr. GILLETT. Why did you not know your need for this money when you came in with your $16,000,000 deficiency estimate? Commander KEARNEY. Frankly, you can not tell your needs from day to day. AMMUNITION FOR VESSELS. The CHAIRMAN. For ammunition for vessels you are asking $25,000,000, and you have had so far $85,000,000. Commander KEARNEY. Not only are we providing ammunition for these sectional patrol vessels, but we are also providing for every American merchant ship engaged in trans-Atlantic trade. We are providing also for the vessels being constructed or to be constructed by the Shipping Board. Our estimate under this subhead for procuring, purchasing, preserving, and handling ammunition for vessels is $25,000,000. The CHAIRMAN. But that will not all be spent this year. Commander KEARNEY. We hope to contract for practically all of it. The CHAIRMAN. If this money is available until the 1st of July of 1918, you think you can expend it all? Commander KEARNEY. Yes, sir; every cent of it. As I prefaced my remarks, I would not be surprised if we were back here in a few months for more. BATTERIES AND OUTFITS FOR VESSELS. The CHAIRMAN. The next item is "Batteries and outfits for vessels: For batteries and outfits for naval vessels, auxiliaries, patrols, aircraft, naval stations, and merchantmen, $22,000,000, to be available until expended." We gave you $22,333,000. Commander KEARNEY. We have already obligated under that $18,499,000; that is on requisitions and contracts placed, and we have a balance out of that original appropriation of less than $3,000,000. The CHAIRMAN. Will this all be required this year? Commander KEARNEY. Every bit of it, sir. Our first sum up under that is $103,000,000. RESERVE AND MISCELLANEOUS ORDNANCE SUPPLIES. The CHAIRMAN. The next item is "Reserve and miscellaneous ordnance supplies: For reserve and miscellaneous ordnance sup plies, $30,000,000, to be available until expended." You have had $33,900,000? Commander KEARNEY. That embodies the procurement of nets, depth charges, mines, and other fittings. The CHAIRMAN. How much have you already expended? Commander KEARNEY. We had $29,000,000, and we have obligated $23,000,000 already. As I said, Admiral Earle, who is the chief of the bureau, was suddenly taken to the hospital yesterday, and I did not have a chance to see the Secretary; if I had seen the Secretary, I would have urged him to increase the amount under this item, but not having taken it up with him, I will not mention it. Mr. GILLETT. Is there any particular reason for inserting these words, "to be available until expended"? Commander KEARNEY. It is quite desirable. The CHAIRMAN. You expect to spend the money this year, do you not? Commander KEARNEY. This is how that feature of it comes in. If we obligate money on outside or civil contracts, the money carries through, but if we attempt fabrication in a Government plant, the available funds cease on July 1. There are three of our plants that are concerned in ordnance appropriations-the gun factory, the torpedo station Mr. GILLETT (interposing). You mean the gun factory at Washington? Commander KEARNEY. Yes; the torpedo station; the powder factory at Indianhead. On the 1st of July, in a Government plant, the funds stop, whereas if the same contract had been placed on the outside the funds will continue over. WASHINGTON NAVAL GUN FACTORY. TOOLS AND MACHINERY PLANT. The CHAIRMAN. For the Washington naval gun factory you are asking $2,500,000? Commander KEARNEY. Yes, sir. That is our main dependence in ordnance manufacture, capable of fabricating our biggest guns, our largest mounts, and is entirely under Government control. It gives us initially, the one positive means of getting comparative prices; in other words, we manufacture a gun there and it costs us so much, and we can compare that with prices outside. The CHAIRMAN. That is in connection with the item of $5,000,000? Commander KEARNEY. Under public works, yes, which Admiral Harris will bring before the committee. Briefly, it has reference to the equipment of the pattern shop, the woodworking shop, the machine shop, the brass foundry, the boiler-making shop, and the optical shop. I might explain that our situation with reference to optical work has not been wholly satisfactory; that is, there have been but one or two firms in this country, up to the present time, which have made most of our instruments. One is Bausch & Lomb and the other is Keuffel and Esser. In optical work the first manufacture is that of the glass and then the grinding of the lenses, and those two firms have enjoyed a practical monopoly of the manufacture of telescopes, periscopes, and all of our optical instruments. The forge shop is another item that is of major importance because, as you know, the steel capacity of the country is practically booked to its limit. Then locomotive house equipment and mine shop equipment. It runs to a total of $2,500,000. The CHAIRMAN. That is for equipment alone? Commander KEARNEY. Yes; for work under the Bureau of Ordnance, which is equipment. The CHAIRMAN. How long will it take to construct the buildings and get your equipment so as to have it available? Commander KEARNEY. Admiral Harris can tell you best about that: however, in placing contracts for machinery we find that unless we book ahead there is almost an indefinite date of delivery. 4400-17-16 For instance, the machinery required at the yard is of an extremely large and massive type, and we must get our orders in to get any preferment at all from the manufacturers. Some of it takes a very long time; for example, a lathe capable of handling a 16-inch gun will take, in the process of manufacture, approximately two years; that is, on that one lathe alone. So if we were to wait until the buildings are finished, with the idea of buying the equipment then, there would still be the necessary time required to manufacture the machinery, and that would mean an untold delay. The machine manufacturing facilities of the country are overtaxed and there is constant reference now to the question of priority. Not only our own Government requirements but the requirements of the allies with regard to lathes, grinding machines, and boring mills are such that manufacturers are working to full capacity. The CHAIRMAN. Is this the most feasible place to develop and expand? Commander KEARNEY. I should say yes. I have been on duty at the gun factory for two years. I have had considerable experience at other navy yards and stations, and its location is, I should say, eminently satisfactory. The proving ground is immediately under its lee and the department is right here at hand. You have already got a plant there I would have to guess at its value, but I should say-I might be entirely extravagant or short of the mark-it was worth $50,000,000; the present value of buildings alone is $5,500,000; you have an organized personnel that you could not build up in another community in five years, and you have a working force there which will admit of expansion. The CHAIRMAN. Has there been any estimate made as to when you will be able to install his equipment and start the operation of this machinery? Commander KEARNEY. I will take the pattern shop as a concrete example, and I should say that we could possibly get that building up in three months. Let me take another one. We are already digging, to the westward of the present gun-factory buildings, the gun pit for the new gun shop the instant that becomes available— which, as I say, is already in the process of rapid construction-it will release a certain number of other buildings; those buildings will take this new equipment referred to herein to a certain degree. That is just one possible line of using it. The matter has been very carefully gone into, not only by the chief of the bureau, but by the superintendent of the gun factory, and the Bureau of Yards and Docks. It has been under active consideration, to my knowledge, for a period of six months. In other words, this is not a hasty estimate. ADVANCE PAYMENTS TO CONTRACTORS. The CHAIRMAN. What is this item you have about advance pay ments? Commander KEARNEY. Under date of June 5 we wrote the Secretary of the Navy, and I think at a subsequent date he wrote to Congress, recommending that one of two things be done. First, that inasmuch as the Secretary of the Treasury has authority to deposit Government funds with various banking institutions at a normal rate of interest and that these same institutions make a practice of loaning money on approved security, the idea was to ascertain whether the Treasury could possibly permit the loaning of money at a nominal rate of interest, using the contracts as a security. This was found to be illegal, so that drooped of its own accord. The other suggestion was that Congress be asked to pass a resolution similar to the following: Resolved, That during the period of the present war the executive departments of the Government be, and are hereby, authorized to make an advance payment to contractors for supplies, as may be necessary, in an amount not to exceed 30 per centum of the contract price of the articles, in order that the contractor may prepare promptly and without distress for the wrok, provided that such contractor will give an acceptable surety to the Government for the money so advanced. We have either actually made or are negotiating contracts with a number of new firms; that is, firms that have never before undertaken Government ordnance work for the Navy. Mr. GILLETT. When you say new firms, you mean new as to Government work? Commander KEARNEY. Yes. Mr. GILLETT. But they are all old firms? Commander KEARNEY. Yes. Mr. GILLETT. They are not new firms organized to go into the business of manufacturing for the Government? Commander KEARNEY. No; they are old firms who are about to take on a new activity. These firms, while they could go out and borrow the money, would have to figure in their estimate to us, for a manufacturing price, the cost of that interest, otherwise they would lose; and we felt that if we could obtain an authorization from Congress to advance approximately 30 per cent with approved surety these concerns could go ahead with the work, and we have their assurances that this could be done. Mr. GILLETT. If you want authority to do that for one concern, you would have to do it as to all? Commander KEARNEY. Yes, sir; and that is the reason why it vides for contracts already placed; all would be placed in the same position of receiving an advance of 30 per cent. Mr. SHERLEY. You would have to pay it to all concerns that were not previously equipped for Government work? Commander KEARNEY. Yes. Mr. SHERLEY. But you would not make advance payments to concerns that have going plants capable of doing Government work? Commander KEARNEY. No; the advancements would be made only after a thorough investigation of the demands of the company, verified by our own inspectors and our own officers-our accounting officers. RICE GUN. The CHAIRMAN. Do you know anything about the Rice gun? The CHAIRMAN. A bill was introduced appropriating $50,000 to develop it? Commander KEARNEY. Yes, sir. As I recall it, the Rice gun was first tried out at Mare Island, Cal., about six, eight, or nine months |