Mr. MARCANTONIO. Was that the Navy Department was not ready at that time to deal with that question?

Captain DuBose. I do not think he said that; but he intimated that he did not want it. We have our own legal division and

Mr. MARCANTONIO. Has the legal division of the Navy Department offered any such brief-prepared any such brief?

Captain DUBOSE. I do not know; I cannot answer that question. Mr. MARCANTONIO. Would the Secretary of the Navy know? Captain DuBOSE. Yes.

Mr. LESINSKI. Captain, since the purpose of these funds appropriated for relief purposes is to relieve unemployment, do you not think that the Government should be one of the first institutions to prohibit the speed-up and the incentive systems, because those systems do not relieve unemployment? They simply give one man a chance to earn more money and relieve many men of their employment.

Captain DUBOSE. That is a controversy in this pending strike. I am, however, not prepared to argue the pros and cons of an incentive system for doing work. It is a very, very important subject and can be intelligently discussed at great length.

Mr. LESINSKI. Does not your Department or Bureau which handles the contracts insist that that type of contract be awarded?

Captain DUBOSE. There is nothing said in a contract as to whether a contractor shall or shall not use the incentive system.

Mr. LESINSKI. How are we to effect the employment of more workers in spending this public money if the contractors are going to be allowed to use the incentive system?

Captain DUBOSE. I will answer that by saying that we have a piecework of incentive system for structural workers and with a reduced number of structural workers, we accomplish more work under the piece-work system, but at the same time we make it possible later to employ more men of other trades. That is a hypothetical situation. It may be true, or it may not be true.

Mr. LESINSKI. The speed-up system does not provide more work in any case, but lessens the amount of work.

Captain DuBOSE. One can argue on both sides of that question. Mr. MARCANTONIO. The speed-up system is all right to effect more work, but the Navy Department does not seem to be interested in speedy and timely completion of the contract in the case in question. Captain DuBOSE. It is very much interested in completion of a contract on time.

Mr. MARCANTONIO. But the Navy Department does not take steps to ascertain whether or not this strike is due to the fault of negligence of the contractor.

Captain DuBOSE. Hours of work are very important. Under the code 32 hours a week only were permitted to be worked. The code was modified to provide for 36 hours' work a week when codes were voided. The Navy Department took an active part in getting the code authorities to increase the number of hours of work a week. The navy yards are working 40 hours a week. There is no doubt that if the private shipyards were working 40 hours a week we would get our vessels quicker than we will get them with the shipyards working only 36 hours a week. Employment would not be so plentiful, but we would get the ships quicker.

Mr. MARCANTONIO. When two parties agree to respect a code that code is valid and legal.

Captain DuBOSE. Yes.

Mr. MARCANTONIO. So that the decision of the Supreme Court in the case of the National Industrial Recovery Act does not affect the contract where the contractor agreed with the Navy Department to respect the N. I. R. A.

Captain DUBOSE. Probably not. the contractor is required under the union only.

The matter hinges on whether particular act to deal with the

Mr. MARCANTONIO. Does not this strike boil down to the matter of collective bargaining?

Captain DuBOSE. I do not know.

Mr. GRISWOLD. Do you know anything about the rates paid in navy yards at the present time?

Captain DuBOSE. Yes.

Mr. GRISWOLD. Could you tell us whether or not they are above or below the rates paid in the Camden shipyard?

Captain DUBOSE. I have not got those figures.

Mr. GRISWOLD. It has been testified here that the rates paid in the navy yards are from 20 to 30 percent higher than the rates paid in the Camden yard.

Captain DuBOSE. I have not made any direct comparison of the schedules of wages in the Philadelphia Navy Yard and the New York Shipbuilding plant. That [indicating] document contains the schedule of wages in effect at the Philadelphia Navy Yard. Hours of work in navy yards are limited to 40 a week, with the proviso that the total weekly pay shall not be less than the workers were getting for 48 hours a week. The navy-yard workmen today work 40 hours a week, but their basic hourly wage is increased 20 percent. Those are the facts regarding navy-yard work.

Mr. GRISWOLD. I am interested, because something put out by the Cord interests has just been handed to me. It shows that 3,700 men are employed at an average wage of $49.60 a week. According to the testimony we have, the highest-paid men, skilled workers, are drawing only 88 cents an hour; and I cannot understand how, with 40 hours a week, and at one time they had only 32 hours a week, they could possibly average $49.60 a week. That is all the higher-class men are drawing. Many of the lower-grade workers, unskilled workers, are drawing only 35 cents an hour.

Captain DUBOSE. I can obtain information as to the wages paid by the New York Shipbuilding Co. I know that they are not permitted to work more than 36 hours a week under the code.

Mr. GRISWOLD. It would not be possible to make $49.60 a week while working 36 hours a week.

Captain DUBOSE. If a worker is employed 36 hours a week at $1 an hour, simple arithmetic indicates that he would get $36 a week. Mr. GRISWOLD. But working 30 hours a week and getting 35 cents an hour could not possible bring $49.60 a week.

Captain DuBOSE. No.

Mr. GRISWOLD. Have you a record of the scale of wages being paid in the Camden shipyard?

Captain DUBOSE. No. I do not think the company has submitted anything of that kind; but it has made a statement of that in the.

public press. It has not given the Navy Department that information.

Mr. GRISWOLD. We have a list that has been submitted to us. You have, however, a statement of the wages paid in navy yards, have you not?

Captain DUBOSE. Yes; it is that [indicating] pamphlet.

Mr. GRISWOLD. It appears in our testimony that late in 1934 work was not progressing rapidly in the Camden shipyard and tha' the shipyard claimed it was due to the failure of the Navy Depart ment in Washington to approve plans and holding up plans. Is there any truth in that statement that the plans had been held up by the Navy Departmet here from 6 weeks to 2 months?

Captain DuBose. I do not think that was exactly the claim made. Mr. GRISWOLD. That is the claim made in the record before this committee

Captain DUBOSE. I do not think that was the claim made to the Navy Department. I do not know what claim was made before your committee. Representations were made to the Navy Department in writing and orally by a committee composed of officials of the American Federation of Labor. Two representatives of the American Federation of Labor had a written statement in which there were allegations of delays in the preparation of plans and slowness with which plans were being produced. That was in early 1934.

Mr. GRISWOLD. Was there a delay of from 6 weeks to 2 months, or any appreciable delay, due to the failure of the Navy Department to approve plans and specifications in the latter part of 1934?

Captain DuBOSE. To understand that situation you must get a picture of the situation as it existed in 1933, when these contracts were awarded.

Mr. GRISWOLD. I am talking about 1934.

Captain DUBOSE. But we have to go back to August 1933, when the contracts were awarded. When the Navy Department was given this money to construct ships under the National Industrial Recovery Act program there were seven different designs involved. There were seven different classes of ships.

The normal procedure under which the Navy Department operates is to prepare complete detailed contract plans, as they are called, together with detailed specifications showing exactly what is wanted from the contractor. We did not have time to do that to the extent that we normally do it. We had done it for the destroyers and the submarines. There were two classes of destroyers. We did not do it for the gunboats or aircraft carrier or the cruisers. We advertised for bids for all various classes of vessels. It was clear from the advertisement that the information the Navy Department would furnish prospective bidders was not to be as complete or as detailed as had been done in the past or as was the case for the destroyers and the submarines in the case of the cruisers and the aircraft carrier. In other words, the bidders had to bid more or less with incomplete information in hand. They had detailed specification and they could get all the information from the Navy Department, but they did not have contract plans. Contracts were awarded by the Navy Department to the Newport News plant for the aircraft carrier and with the New York Shipbuilding Co. for the cruiser. Those two companies, after receiving their contracts, were required to prepare

contract plans from such detailed information as the Navy Department had given them.

Mr. GRISWOLD. Was there not an extra payment made for the preparation of those plans?

Captain DuBOSE. No. The Navy Department organized what we called a traveling design party composed of some naval officers and skilled draftsmen and the party went from the Navy Department to the Newport News and the New York Shipbuilding plants and spent considerable time at each place. So that the contract plans, which are normally prepared in the Navy Department and given to the contractors, were prepared by the contractors' themselves under the direct supervision of representatives of the Navy Department. After the plans were prepared to the satisfaction of the Navy Department, they were signed by the Secretary of the Navy and became the contract plans. Until those contract plans had been so prepared and approved and signed, there was some delay in being able to start the work. On the other hand, the shipbuilder who had received a contract with complete contract plans was at liberty to immediately start work or ordering his material. Therefore, he got the jump, so to speak, on contractors who were not furnished complete contract plans. The shipbuilders could have taken a chance and ordered their materials, but that was not a safe procedure for them to follow before the contract plans had been prepared. Notwithstanding that delay these two contractors, the Newport News Co. and the New York Shipbuilding Co., agreed to complete the vessels within a certain definite time, which was the time specified by the Navy Department, and there would not have been any change in that time whether we had supplied the contract plans or not. It did seem to certain persons, especially the representatives of the American Federation of Labor, that there was a delay in getting started on the plans at the New York Shipbuilding Co. The delay at Newport News did not make any difference, because that yard was the only one building an aircraft carrier. The delay in getting plans from the New York Shipbuilding Co. was reflected in the navy yards at New York and Philadelphia.

The complaint of the American Federation of Labor was against the slowness with which work was started in the navy yards by reason of alleged delay by the New York Shipbuilding Co. The delay in getting the plans to the navy yards at New York and Philadelphia was not the fault of anybody. It was unavoidable. Whether or not there has been delay in the presentation of the plans since the contract plans were prepared and everything went along normally and orderly is another question.

Mr. GRISWOLD. As I understand, this letting was originally in August 1933?

Captain DUBOSE. Yes.

Mr. GRISWOLD. In October 1934, had the Navy Department in the course of that year or more than a year fully completed and approved those plans?

Captain DUBOSE. The contract plans had been completed long since and they were practically up to their schedule of plans which they had prepared.

Mr. GRISWOLD. Was there any delay of 6 weeks or 2 months or any other appreciable time after October 1934, due to the failure of the Navy Department to approve plans of the New York Shipbuilding Co.?

Captain DUBOSE. Absolutely no.

Mr. GRISWOLD. So that if there was any delay it was not due to that. I mean delay in proceeding with construction.

Captain DUBOSE. Since October 1934, there has not been any delay of any consequence in the preparation of plans.

Mr. GRISWOLD. I understand that you have some kind of office at Camden wherein a naval officer can handle any minor changes, approve any minor change without referring the matter to Washington.

Captain DuBOSE. The two bureaus of the Navy Department that are responsible for constructing ships are the Bureau of Construction and Repair, to which I am attached, and the Bureau of Engineering. Each of those two bureaus has an officer with officer assistants and a considerable force of technical personnel who are at shipyards to see that the terms of the contract plans and specifications are properly complied with. The contract or specifications require certain plans to be prepared by the contractor and submitted to the Navy Department for approval. In order to expedite action the two bureaus of the Navy Department have delegated to the inspectors on the spot certain authority, which obviates the necessity of taking the matters up with the bureaus in Washington.

Mr. GRISWOLD. Have you ever had called to your attention, Captain, a letter by Mr. Bardo addressed to the board of directors of the New York Shipbuilding Co. on October 27, 1934, covering the operations of that company from 1927 to October 27, 1934?

Captain DUBOSE. So far as I know, that letter has not been brought to the attention of the Navy Department, except, possibly, by members of the union negotiating committee. The Navy Department has seen the letter, because it was published in the public press. I am not sure whether Mr. Green in interviews with the Navy Department officials presented that letter; but I know that the Navy Department is acquainted with it.

Mr. GRISWOLD. I want to call your attention to one statement in that letter in which he explains his stewardship. [Reading:]

For example, the actual cost of labor and material on the three cruisers constructed during that period was $3,620,000 below the estimate, or a saving of 15 percent.

Captain DUBOSE. The Nye investigating committee has brought out some alleged excessive profits, of which this, possibly, is an example.

Mr. GRISWOLD. In view of our testimony, I think there may be some question about what they offered to do in that final settlement. Testimony by the Department of Labor conciliator and the union people is that they did offer to put back into effect, before the men decided to strike, the old contract which did not contain the preferential clause.

Captain DuBOSE. Yes.

Mr. GRISWOLD. And I note in regard to that old contract a letter, photostatic copy of which has been placed in the files of the committee, in which the management states in relation to that old contract "that this adjustment still leaves us with a reasonable margin in our labor estimates covering existing navy-yard contracts." That is a statement of May 14, 1934, by Mr. Bardo.