ment for the new buildings has been provided in prior budgets. No funds for this purpose are requested in fiscal year 1955.

Senator THYE. Going back to that statement of the $30,000 for the moving from the one building to the other, which is at the bottom of page 11, moving personnel and equipment to the new buildings, you are taking the old equipment out?

General HAISLIP. No, sir; we are not. Our old equipment was really old.

Senator THYE. Why do you say moving equipment and personnel! That would mean that you would have to move their clothing and things like that?

General HAISLIP. Also, that was to cover the cost of receiving the new furniture and equipment, placing it in the rooms and so forth, which is a major job.

In addition, moving all of the personal effects of all the members from the old buildings into the new.

Either one of the jobs was too big for our small maintenance force. So this is a one-shot affair. When it is done the building will be furnished and equipped and we won't need any more money.

FURNITURE PROCUREMENT

Senator THYE. This $30,000 does not involve any furniture. This is only placing and locating the furniture in the rooms once it is delivered to you?

General HAISLIP. It is delivered to the door on the main floor and has to be placed throughout this large building and uncrated and set up, put in place. That is quite a big job.

Senator ELLENDER. Is that done by contract?

General HAISLIP. Yes, sir.

Senator HAYDEN. I want to ask a question as to the amount of money in the trust fund now.

TOTAL TRUST FUND

General HAISLIP. Our last balancing of the books of the Treasury on November 30, 1953, showed a balance of $49,014,344.82.

Senator HAYDEN. That is invested in United States bonds?

General HAISLIP. No, sir; in accordance with law it is deposited in the Treasury of the United States. We are paid 3 percent interest on the balance of the fund.

Senator HAYDEN. I knew it was income bearing, but I did not know how you received it.

General HAISLIP. We are required by law to deposit it in the Treasury of the United States.

Senator HAYDEN. And they pay you 3 percent interest on it?
General HAISLIP. Yes, sir.

Senator HAYDEN. That gets away from having to buy bonds and sell the bonds when they mature?

General HAISLIP. Yes, sir.

Senator ELLENDER. May I ask a question?
Senator THYE. Yes, surely.

Senator ELLENDER. You say that it is contemplated you will complete this new building this year and to move in it?

General HAISLIP. Yes, sir; we hope to move in on March 1.

COST OF NEW BUILDING

Senator ELLENDER. Now, has the cost been within the estimates? General HAISLIP. No, sir.

Senator ELLENDER. How much more? I won't say less, but how much more has it cost than the estimates?

General HAISLIP. Roughly $1,400,000.

Senator ELLENDER. What has been the cause of that increase?
General HAISLIP. There have been a number of causes.

Senator ELLENDER. Any changes in plans and specifications? General HAISLIP. Yes, sir; as we started to build the building we found it was necessary to make certain changes in design to improve the buildings. There were additional costs due to the increasing cost of material.

What finally happened when we actually came to the balancing of the books was that we had spent practically all our money on these two buildings and we had not any funds left to build a nurses' home or modernize the existing hospital buildings or modernize the hospital messhall.

So we have come in now for the first time with a very carefully determined plan of what we want to do and with the cost determined. I think that this time we can say that the funds we are requesting will finish the job.

Senator ELLENDER. I understand that, but what I wanted to have in the record was any additional cost from the original estimates and why the additional cost.

To what extent were your costs increased because of those restrictions that you complained of a little while ago? Or does the contractor lose that?

General HAISLIP. The contractor lost the increase in wages.

But we found, for example, when we got into this building, we were building a messhall to accommodate 2,500 members and we found that in certain aspects of our kitchen that the capacity was even less. than the kitchen we have now which supplies a messhall of 1,000 men. So we had to get experts together and consulting engineers and study the thing over again.

Senator ELLENDER. That was an error on the part of the planners? General HAISLIP. Yes, sir; it was.

Senator THYE. Who were the planners?

General HAISLIP. They had the best consultants they could employ. Senator ELLENDER. Did not the Corps of Engineers prepare those plans?

General HAISLIP. They had architect engineers who in turn had the best specialists working with them. It was under the supervision of the Engineers.

Senator ELLENDER. Who paid for those plans?

General HAISLIP. That was included in part of the cost, sir.

Senator ELLENDER. But the Corps of Engineers I understand superrised all of this?

General HAISLIP. Yes, sir.

Senator ELLENDER. And they hired these experts to give them advice?

General HAISLIP. That is right, and they got the best information, best advice, that they could.

PLANNING ERROR

Senator THYE. General, how in the world did you start with a plan. that you found was more than a million dollars, $1,400,000 in error in cost and the kitchen facilities and space that did not compare with your old? What kind of a plan did you enter upon? Are we certain that you are not going to find when you get through with the whole structure, that you have not found yourselves still short in some of your planning?

General HAISLIP. I hope not.

Senator THYE. That is a staggering error, $1,400,000 and the kitchen facilities are smaller than the old unit. It just does not add up. General HAISLIP. I was told that the consulting engineer on the kitchen was recognized as one of the hotel kitchen authorities.

Senator THYE. It was for his company that he was working with? General HAISLIP. I think the man who had designed the kitchen was the man who dealt with large hotels where they start serving meals early in the morning and serve all day. So they have food cooking all day long. They didn't realize that we had a thousand men who arrive in the messhall en masse and they must be served a thousand meals all at once.

So you must have a much larger cooking capacity to serve meals in that manner than you do to serve the people that drift in and out of the dining room practically all day long.

When we discovered it, we went at it as scientifically as we could. We got the district engineer, the division engineer from New York, consultants of the Quartermaster General, the architect, and the consulting engineer. We sat down and restudied the whole thing and it cost a lot of money to change it. Of course, the kitchen was only one of the changes we made.

Senator ELLENDER. These costs I presume were about what they finally would have been if the plan had been originally drafted?

General HAISLIP. No, sir, Senator. That is why the changes cost so much. When we started to do it one way and then stopped and changed, that is where the additional cost began.

Senator ELLENDER. That is where the contractor got after you? General HAISLIP. That is where the money started going in an awful hurry.

Of course, we thought we were all right until we had the final accounting. Even after we had been over here last year we didn't know there would be a shortage. Then when we had the final accounting some months later we saw we were well behind.

Senator ELLENDER. What is the cost of operating the whole facility? Are you within your estimate?

General HAISLIP. Yes, sir; I think we will be able to do it, Senator. We have two fine buildings that cost more than we thought they were going to cost, but I feel if we had built them as originally designed, we

would have been subject to a lot of criticism to put all that money into a building and then find it was unsatisfactory.

General HAISLIP. May I prepare a concise statement for the record on the increased cost of our new facilities?

Senator THYE. I think that would be helpful.

(The statement referred to follows:)

The contract for the domiciliary building was let in the early days of Korean hostilities when price increases and materials shortages were anticipated. It was considered wise to expedite the completion of plans and accept bids as early as possible. Looking back from where we sit now, it probably would have been better to have taken time for a more deliberate review of the plans.

In the kitchen we found we were building a mess hall to accommodate 2,500 members and that, in certain areas in the kitchen, the capacity was even less than in the kitchen we now have which has a capacity of 1,000. The specialists who designed the kitchen and bakery facilities were the most experienced available in hotel work but the requirements of a facility for aged soldiers is unique and hotel experience may not fully apply. As construction progressed and we had studied the problem much further, we were convinced that the staging of meal service had to be reduced and, consequently, greater capacity had to be provided. This was one item.

Also, when the contract was let, detailed plans had not been completed for the closets in each of the bedrooms, for the details of the diversionary shops, nor for the barber shop. No provision had been made for a taproom as the sale of beer in the home had been authorized after the plans were drawn. The sale of beer in the home has proved a great morale factor and has cut the misbehavior of members in half. No sun deck had been provided where men could take sunbaths without leaving the building. These all added to the cost over and above the original contract price. Further, it was found that additional electrical outlets would provide greater safety for the building and had to be installed. There were several other unexpected changes. It was obvious that the parking areas planned for the building when the plans were drawn in 1948 were entirely inadequate for the future. In connecting up the heating tunnels to the new building deterioration was uncovered in the tunnels and a great deal of the steam distribution system had to be renovated in order to insure that the building could be heated. All of these cost extra money. I admit, on several items we badly underestimated the cost. We asked for and were provided $318,000 for the nurses' home but the lowest bid for the structure turned out to be $477,500. You provided us with 313,000 for the renovation of the existing hospital-group buildings but when detailed plans and careful estimates of costs were completed we found that it would cost $606,000. Again, you provided us with $144,500 for the renovation of the mess hall in the hospital, but an accurate estimate of its plans has brought out that we will require an additional $64,119 to complete the job. However, no money was wasted and we have more per dollar than if less had been spent.

LANDS AND STRUCTURES

General HAISLIP. 3. Lands and structures: In view of the $230,000 increase under this object class, I would like to recall to the committee the fact that the Supplemental Appropriation Act, fiscal year 1951, appropriated from the permanent fund, United States Soliders' Home, the sum of $12,750,000 to initiate the construction of the new United States Soldiers' Home to replace the present old and obsolete plant.

The principal items provided for by this act were a new domiciliary building, a 210-bed nursing unit as an addition to the hospital, a nurses' home, renovation of the mess-hall building, hospital, and renovation of the existing hospital-group buildings.

The construction program started with the new domiciliary building and as construction progressed it was found that increases in construction and design costs but principally essential changes in the original plans absorbed into the domiciliary building and the 210-bed nursing unit practically all of the funds appropriated.

There remain, therefore, no funds for the nurses' home, the renovation of the mess-hall building, hospital, or the renovation of the existing hospital-group buildings, all of which are essential projects which must be constructed as soon as funds can be obtained.

ADDITIONAL FUNDS REQUIRED

The additional funds required are $1,147,985, which will complete the original program, including increases in costs of construction and design and an accurate cost estimate prepared by engineers from the office of the division engineer, North Atlantic division, New York City. It should be noted that the $318,000 originally set up for the nurses' home has now grown to $477,500, as a result of competitive bids submitted by reputable contractors.

The renovation of existing hospital-group buildings has increased from $313,000 originally set up, to $606,366, because of increased costs of construction and design, and particularly because we now have an accurate cost estimate based on firm plans developed by the district engineer and the architect and approved by the division engineer, North Atlantic division, New York City, and home authorities.

The breakdown of the amount of $1,284,000 for permanent improvements to the home is as follows:

A. New nurses' home, $477,500.

B. Renovation of LaGarde, Forwood, and Barnes annex building, existing hospital, $606,366.

In order to modernize facilities built in 1906 and 1920 to provide adequate and economical patient care and medical facilities.

C. Renovation of hospital mess, $64,119.

These funds are necessary to supplement 1954 appropriations of $144,500 for this project. This supplemental amount was made necessary as a result of architect-engineer studies in cooperation with the Corps of Engineers to provide adequate mess facilities for the existing hospital and the new 210-bed ward wing.

D. Street lighting, hospital area, $88,000. To replace present antiquated lighting system and to provide modern street lighting in existing as well as the new hospital areas.

E. Demolition of Barnes Building, $28,015. This building was built in 1873. It has been condemned as unsuitable for further continued use. It is now being used for the housing of some patients on the second floor and civilian employees of the hospital, and it also contains 2 apartments occupied by 2 resident doctors and their families.

F. Preliminary plans and sketches for a new service area, $20,000. The capacity of this service area to be limited to that necessary for the institution as presently authorized.

FURTHER STATEMENT ON LAND PAYMENT

When I appeared before this committee last year there was discussed the turning over to the General Services Administration of 156 acres of Soldiers' Home property on the south end of the reservation and the fair value of that land.

Since that time the home has been notified that the land would be paid for at the rate of $12,000 an acre. On learning of this valuation the home requested the General Services Administration to justify what seemed to be a low price for the land.