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is here, checks the returns and pays the vouchers as they are submitted. So there is an accounting as we go along.

Mr. HENDRICKS. You have made payments already; have you not ?
Admiral LAND. Yes.
Mr. HENDRICKS. And you have found no irregularities?

Admiral LAND. I would not say that, because I am not familiar with the details. There are always disallowances. We use a polite term, we call them disallowances.

Mr. HENDRICKS. I understand that. Admiral, are we checking to find out why they are late and what can be done about it?

Admiral LAND. Yes, sir. Admiral Vickery was down there just last week, and our Regional Director gives a good deal of attention to that particular yard, because they are behind. In other words, instead of spanking No. 10, we try to help them out, and try to get them on their feet, if we can. Of course, we spank them, too.

Mr. HENDRICKS. Of course, they may need a spanking.
Thank you, Admiral.


Mr. WIGGLESWORTH. Admiral, the statement that you have given us at the opening may explain things fully, but I want to call your attention to the Treasury statement of December 15, 1942, which shows the contract authorizations and appropriations to the Maritime Commission, and also expenditures by the Commission since July 1, 1940.

The Treasury statement would seem to indicate appropriations and contract authorizations up to November 30, 1942, for the Maritime Commission and the War Shipping Administration of about $9,429,000,000. You are asking here for the fiscal year 1944, $1,239,000,000 plus, and from the Deficiency Committee a supplemental estimate for fiscal year 1943, as I understand, of $9,250,000,000, giving a total of just under $20,000,000,000.

Mr. KIRSCH. What was that last figure-$9,000,000,000? It is $5,250,000,000 contract authority.

Mr. WIGGLESWORTH. The figure I used was for contract authority plus appropriations.

Mr. KIRSCH. The appropriation is part of the contract authority, sir. We require cash to meet our progress payments against the contract authority. It is not in addition.

Mr. WIGGLESWORTH. The total in the supplemental request is $5,250,000,000?

Admiral LAND. That is right.
Mr. KIRSCH. Contract authority.

Mr. WIGGLESWORTH. Including both cash and contract authorization?

Mr. KIRSCH. That is right, sir.

Mr. WIGGLESWORTH. That would give a total of almost $16,000,000,000 against which, according to the same Treasury statement, there has been an actual expenditure as of November 30, 1942, amounting to just over $2,400,000,000. I realize that this statement speaks in terms of expenditure and not in terms of obligations.

Mr. KIRSCH. That is right, sir.

Mr. WIGGLESWORTH. Also it speaks in terms of both appropriations and contract authorizations, and there is some duplication.

Mr. K1RSCH. That is right. Not only that, but you have included in that Treasury statement the other programs of the Maritime Commission that are not involved in this construction fund. For instance, we have the 200 emergency ship program, which is a separate fund entirely, amounting to $475,000,000 for the 200 Liberty ships and facilities. In addition to that, we have the War Shipping Administration,

of $1,100,000,000 appropriation, that is combined in that figure. You Te

have got to exclude all of those elements to arrive at the amount of the it!

contract authorizations and appropriations to the Maritime Commission under its construction fund.

Mr. WIGGLESWORTH. I wish you would furnish for the record in

tabular form something that will eliminate the duplication between a contract authorizations and appropriations, so that we will see the ac

tual funds made available; the actual funds expended; and the actual obligations over and above the sums expended as of some comparatively recent date?

Mr. KIRSCH. Yes, sir. The data requested, as at November 30, 1942, As follows:

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1 lit. Appropriations, contract authority for ships and facilities, funds made available

under contract authority, and expenditures for ships and facilities as of Nov. 30, 1942


Appropriations to construction fund

Contract authority-ships and facilities

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Third Deficiency Appropriation Act, 1937.
pot L Independent Offices Appropriation Act, 1940-

Independent Offices Appropriation Act, 1941.
Second Deficiency Appropriation Act, 1940..
Public Law 5, 77th Cong.
independent Offices Appropriation Act, 1942
First Supplemental National Defense Appropriation Act, 1942.
Filth Supplemental National Defense Appropriation Act, 1942.
Independent Offices Appropriation Act, 1943.

Available from appropriations to construction fund for expenditures for

ships and facilities under contract authority. Experiditures for ships and facilities


698, 650,000 1, 502,000,000

980, 080, 000

50,000,000 65,000,000 180,000,000 1, 296, 650,000 3,850,000,000


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1 Cash on hand when the U. S. Maritime Commission was created.

Includes $115,000,000 specifically authorized plus cash on hand-determined to be $100,000,000~(8 total of $215,000,000 contract authority). As of Nov. 30, 1942 obligations had been incurred for the full amount of contract authority.

The difference between this amount and total appropriations to the construction fund represents funds available for expenditures for administrative expenses and

purposes other than to liquidate obligations in. curred for ships and facilities under contract authority. Requests for funds required in 1944 to liquidate obligations incurred under existing contract authority are contained in the regular budget estimates for that year. Requests for additional funds required in 1943 to liquidate such obligations are contained in the supplemental estimates for 1943. Exclusive of transfers to the emergency ship construction fund and the War Shipping Administration und which totaled about $325,000,000.

Mr. WIGGLESWORTH. The appropriation as quoted that is before us, according to exhibit A in your justification, contains a major item of $1,227,000,000 for ship construction. That is wholly for liquidating obligations already entered into, as I understand it. Mr. KIRSCH. Contracts up to October 31, 1912.

Mr. WIGGLESWORTH. Then there is a small item for operating warehouses, $324,000, plus; a small item for the Bureau of Standards, $24,000; a small item for the Navy Department for model-basin tests

$20,000; an item for miscellaneous claims, $1,000,000, and an item for miscellaneous expenditures, $1,500,000. What are the last two items!

Admiral LAND. Would you like an explanation of that?


Mr. WIGGLESWORTH. I understand from your justification that they constitute reserve against unforeseen expenditures?

Admiral LAND. I have an explanation of that here that I should like to put in the record, or read it, if you wish.

Mr. WIGGLESWORTH. I would be glad to have it.

Admiral LAND. This is something that I want to understand myself, because I do not like miscellaneous items any more than you

do. The Commission carries in its records approximately $140,000,000 of contingent liabilities for claims pending in the Court of Claims and other courts, arising out of construction and operation of ships, by the old Shipping Board and Fleet Corporation, dating back to the last war. Some of the larger claims, when paid-like the Bethlehem claim of over $7,000,000—will require separate appropriations, but payment of smaller claims will be made directly out of the construction fund without asking Congress for specific additional funds. For that purpose, the Bureau of the Budget allowed a nominal contingency of $1,000,000.

Ås to the provision for miscellaneous expenditures, $1,500,000, this is what was actually spent by the Commission from July 1, 1941, to June 30, 1942.

Promotional erpenses

$8, 152. 32 2, 688. 43 7, 553. 18

Exhibits and training (other than seamen's training)
Ship models---
Operating equipment at terminals and warehouses.
Accrued insurance on vessels sold under construction differential

subsidy agreements---
Consolidated advance purchases for warehousing--
Transfers of funds to other Government departments :
Bureau of Standards--

$16, 600.00 Navy Department-

200, 182. 43

306, 586. 59 490, 759. 63

Miscellaneous items.

246, 782. 43 18, 880. 69


1,081, 403. 27

We have asked in this bill for $1,500,000 because these are indeterminate and intangible and never capable of satisfactory explanation in advance.


Mr. WIGGLESWORTH. The balance of the appropriation is for administrative expenditure—$19,350,000 for the Maritime Commission, and $3,650,000 for the joint services of the U. S. M. C. and the W. S. A. That is a total of $23,000,000 for administrative expenses.

Admiral LAND. That is correct.

Mr. WIGGLESWORTH. What should that be compared with in the present fiscal year?

Mr. KIRSCH. $16,625,000 for 1943.

Mr. WIGGLESWORTH. Was that all for the Maritime Commission proper!

Mr. KIRSCH. Yes, sir.
Mr. WIGGLESWORTH. $16,625,000?

Mr. KIRSCH. That includes the appropriation that has been made of
approximately $12,000,000 and $4,600,000, which will appear in our
supplemental request.
Mr. WIGCLESWORTH. How much in the supplemental request?

Mr. KIRSCH. Approximately $4,600,000 added to the $12,000,000 previously appropriated will give us $16,625,000. That includes the Maritime Commission plus this joint service organization.

Mr. WIGGLESWORTH. That is, the $16,600,000 does?
Mr. Kirsch. Yes, sir; that is comparable with the $23,000,000.

Mr. WIGGLESWORTH. How much of that is for the joint services?
HE Mr. KIRSCH. Approximately $3,200,000.

Mr. WIGGLESWORTH. As far as the War Shipping Administration

proper is concerned, that is taken care of in an entirely different bile appropriation ?

Admiral LAND. Yes, sir. file

Mr. WIGGLESWORTH. And their funds will be requested subse

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Mr. KIRSCH. Yes, sir.

Mr. WIGGLESWORTH. You have given us a break-down here of the administrative expenses for the Maritime Commission under schedule 3-A totaling $19,350,000. I do not want to go into too much detail, but I notice that the Commission's staff is increasing about 20 percent, from 47 to 59. Why that increase?

Admiral LAND. Most of it is ship construction. We divide it into its component parts, into the Production Division, Technical Division, field forces, and, of course, accounting. The program is expanding, as I indicated in


first statement. Mr. WIGGLESWORTH. All in the cffice of the Commissioners? Admiral Land. No; not all in the office of the Commissioners, but that is all incidental to it. I thought you were speaking of the overall increase.

Mr. WIGGLESWORTH. I was taking a few of the items here and the first one I noticed was the office of the Commissioners, an increase of about 20 percent. Admiral LAND. Yes; that is correct. Mr. WIGGLESWORTH. What is the explanation for that?

Admiral LAND. It is primarily concerned with the shipbuilding program. The over-all increase in that is about 50 percent as compared with what it previously was. As I indicated, the program has been more than doubled since February.


Mr. WIGGLESWORTH. Your Division of Personnel is to go up 26 per


Admiral LAND. We tried to give a fairly elaborate break-down of the major changes in that on pages 13 to 19 of the justifications.

Mr. Kirsch. Mr. Wigglesworth, on page 12 you will find a breakdown individually between various divisions showing which offices have been increased and which have been decreased.

Mr. WIGGLESWORTH. I see what divisions are to be increased, I am asking for a further word in explanation of the increases.

Admiral LAND. It is on account of the doubling up of the program. Let us take personnel. We are talking of shipbuilding. You have to have 20,000 officers and 100,000 men for this merchant marine, as against about two to four thousand officers and 50,000 men formerly. Naturally, in order to do that, you have to have a larger recruiting and manning organization. You have to have a larger training organization. You have to go out into the sticks, and we have run rather a foul of the Army and the Navy and the Marine Corps and the Coast Guard, and it is devil take the hindmost in the matter of getting personnel.

You cannot do it without people who will go along and drum up trade for you. So we have offices established in all the major ports of the United States. We have gotten the academies to come in with the merchant marine, the State academies, all of which are expanded tremendously, and on the proportions in the figures that I have just given you, it is just blowing everything up.

Mr. FITZPATRICK. Has the Federal Government taken over that Fort Schuyler Merchant Marine Academy?

Admiral LAND. The Navy has. Mr. FITZPATRICK. I mean the Navy. Admiral LAND. Yes. Mr. KIRSCH. We have a place across the water on Long Island. The Merchant Marine Academy on Long Island is the one that the War Shipping Administration has.

Mr. WIGGLESWORTH. The bulk of your increase is in the Divisions of Purchase and Supply, and Finance, and the Technical Division, and in your four regional offices.

Admiral LAND. That is correct.

Mr. WIGGLESWORTH. They all show a tremendous increase which I assume are all directlyAdmiral LAND. Directly concerned with the shipbuilding program. Mr. WIGGLESWORTH. With actual construction.

Admiral LAND. Yes, sir; and for your information, we are doing our own purchasing. On the first Liberty ship contracts we did it on the outside, and it was not entirely satisfactory, although they did a good job. We feel we can do a better job and are doing a better job, so that accounts for the purchase and supply increase, and it also accounts for part of the production increase, because they are tied closely together.


Mr. WIGGLESWORTH. You refer to your Price Adjustment Board. What results in dollars and cents has that Board realized to date?

Admiral LAND. I have prepared a statement on that here that I would be very glad to submit, or read, as you desire. But, before reading it, I would like to say this. These price adjustment boards or renegotiation boards are set up by four departments of the government, Army, Navy, Treasury, and ourselves. The policy of the set-up is that that branch of the government that has the major financial interest in the thing takes control. That means, for example, that as to some of the major electrical concerns, such as Westinghouse

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