Figures have been presented heretofore prophesying a maximum annual naval budget of around $555,000,000 for the support of an establishment of the proportions presently authorized. That figure was increased a year ago by $29,000,000. During the hearings on the present bill it developed that it would need to be further increased because of an underestimate of the number of enlisted men that would be needed. Since that estimate was prepared leave laws have been enacted, adding several million more not previously contemplated. Again, it is manifest that shipbuilding costs have assumed proportions never contemplated by the former estimate. The committee has no more recent prophecy of what the ultimate figure might be. Contrasted with the appropriations for the current fiscal year, which amount to $526,543,308, including a reappropriation of $10,000,000, the Budget calls for an increase of $37,863,153. By general purposes and in some cases by appropriations, that amount is distributed as follows: Naval and Marine Corps personnel including Reserve activities-- $10, 239, 759 Operation of the fleet- Repairs to the fleet.. Miscellaneous operating charges.. Maintenance and operation of shore stations.. Additions and improvements to shore stations.. Experimental and tests.. Training, education, and welfare.. Fleet improvements.. Yard and district craft_ Additions and improvements, Marine Corps__ Replacement of naval aircraft... Replacement of naval vessels.. Strategic and critical materials_ Replenishment of naval supply account fund.. Net increase_ 2, 472, 690 2,983, 173 529, 037 774, 064 6, 242, 074 -778, 000 41, 156 4, 281, 800 213, 400 212,000 -7,048, 000 13, 700, 000 -3, 000, 000 7, 000, 000 37, 863, 153 The contributing factors to that net increase are generally outlined in the statement of the Navy budget officer, commencing on page 13 and extending through page 18 of the hearings. The committee is in possession of complete details. The whole may be said to be responsive to the present expansion policy, which encompasses every phase of naval activity. That would not be true, of course, as to increases on account of personnel which would ensue from a change of status. Many of the details will be found hereinafter as a part or independently of the explanations presented of action which the committee is proposing. REDUCTIONS EFFECTED BY COMMITTEE There follows an itemization of every money change effected by the committee in the order in which the appropriations appear in the accompanying bill: Contingent expenses, Navy Department: To be generally applied.. Decreases $7, 125 30, 000 Prison overhead expenses.- Allowances for civilian employees abroad.. $2, 440 Transfer to Salaries, Office of Naval Communications, 1, 900 for pay of two cryptoanalysts___ 5, 200 9, 540 Provide for establishment of 2 new naval R. O. T. C. units, instead of 5, and for increased enrollment at existing units__ Operation and conservation of Naval Petroleum Reserves: Investi- Salaries, Office of Director of Naval Communications: Transfer Renovating paintings, Naval War College. Decreases $10,000 15, 200 $500 50, 566 51, 066 Naval Reserve: Continue available during the fiscal year 1939, in lieu of the appropriation of a like amount, that portion of the 1938 appropriation administratively withheld from obligation as of December 8, 1937............. Naval Academy: Pay of employees: Continue three part-time clerks instead of providing 371, 000 Disallow additional clerk, Department of English $1,216 1,260 Maintenance and repairs: Current and miscellaneous expenses: Allow $1,000, instead of $3,500, for expenses of lectures on social and economic subjects- Disallow sixteen additional employees in Commissary 21, 150 2,500 Maintenance and upkeep of buildings....... Allow half of estimate for program of refurnishing 6, 500 25, 000 Defer repair and improvement of bridge across 22, 500 80, 126 Naval Home, Philadelphia, Pa.: Provide compensation in lieu of evaluated worth of allowances for certain privileges when not availed of.. Bureau of Engineering: Continue available during the fiscal year 1939, in lieu of the appropriation of a like amount, that portion of the 1938 appropriation administratively withheld from obligation as of December 8, 1937. Bureau of Construction and Repair: Outfits for 470 fewer recruits than estimated... Pay, subsistence, and transportation, Navy: 317, 248 Flying pay for 2 rear admirals.. Continue available during the fiscal year 1939, in lieu Maintenance, Bureau of Supplies and Accounts: Naval Supply Account Fund: In lieu of a direct appropriation to Strategic and critical materials: Make available an amount more Allow one-half of amount requested for railroad cars $48,000 6,000 60,000 Decreases $7, 000, 000 1 2,500,000 231, 530 Provide for modernization of elevators on a 5-year, in- Lesser amount, to be generally applied, for additional 25,000 139, 000 1 182, 000 Bureau of Aeronautics: Transfer between "Aviation, Navy," and "Salaries, Bureau of Aeronautics." Marine Corps: Pay: Continue available during the fiscal year 1939, in lieu of the appropriation of a like amount, that portion of the 1938 appropriation administratively withheld from obligation as of December 8, 1937...... Contingent: Construction of dam for augmenting water sup- Defer project for advance base force equipment, Replacement, Navy: Owing to modification by Budget Bureau of allocations to new ship construction... Disallow funds requested for expenditure upon vessels commissioned in the fiscal years 1936 and 1937, not deemed a proper charge to the cost of new construction_.. Net decrease. 100,000 $100, 000 15, 000 115, 000 3, 100, 000 2, 536, 850 5, 636, 850 15, 210, 967 Increase. The more important of the items embraced on the foregoing list will be explained below in sequence under their respective titles. Those which involve continuing available amounts of 1938 appropriation administratively withheld from obligation have been previously commented upon herein. NAVAL RESERVE OFFICERS' TRAINING CORPS By act approved August 6, 1937, the maximum number of enrollees in the Naval Reserve Officers' Training Corps was increased from 1,200 to 2,400. Up to this time the 1,200 have been allocated to units averaging 200 each, maintained at the following six universities: Yale University, Harvard University, Northwestern University, Georgia School of Technology, University of Washington, and University of California. The Department contemplates employing the added number by establishing 5 new units averaging 200 enrollees each at 5 educational institutions yet to be chosen, and to increase the size of 3 existing units by a total of 200 enrollees. The first year's cost of the proposed plan, which contemplates an initial enrollment of 490 students, is $100,600. That figure includes the cost of certain equipment for the entire additional 1,200 enrollees, because it is considered to be more economical to make certain purchases in that way. The ultimate cost should stabilize around the cost of conducting the activity as at present constituted, which is $84,400 for the present fiscal year. The committee was not impressed with the need to take full advantage of the new authorization at once. It is an activity that lends itself to expansion in increments and the committee proposes procedure in that way, establishing two new units and adding to the number of enrollees at existing units. This course would admit of a reduction of $50,566, which the committee is recommending. Tables touching this activity, showing enrollments, graduates, and consequent Reserve officers, appear on pages 96 and 97 of the hearings. NAVAL RESERVE The Budget estimate for this component is $9,161,320, which is a net reduction under the current appropriation of $115,789. That contraction results mostly from a reduction that will occur in the number of aviation cadets who will be given flight training at Pensacola (from 406 to 340 average). The consequent saving largely is absorbed by an increase in the number of aviation cadets who will assume an active duty status with the fleet (from 451 to 674 average), and by the added cost of increasing the number of flight hours (from 264 to 288) which the Department deems wise to require of aviation cadets undergoing flight training. The estimate divides $2,706,055 for the seagoing branch and $6,455,265 for the aviation branch. The committee has not disturbed the estimate except to provide, as previously indicated herein, that $371,000 of the current appropriation, which has been administratively withheld from obligation, shall be available to defer to that extent the cost of this activity during the fiscal year of 1939. This appropriation excludes former enlisted men who have transferred to the Naval Reserve. Their number during the next fiscal year is estimated at 19,240, and there is included for their pay under the appropriation "Pay, subsistence, and transportation, Navy," $15,507,347. The following table shows the strength of the various branches of the Naval Reserve on September 30, 1937, and the numbers for whom 2 weeks' active duty training is provided for the present fiscal year. The accompanying bill provides for the same number to take active duty training during 1939: For the present fiscal year funds were made available for the first time for training members of the merchant marine branch of the Naval Reserve. Out of the 100 officers and 120 men provided for, 32 officers and 13 men have been given training thus far. NAVAL ACADEMY The committee has effected reductions totaling $80,126 in the estimates submitted for the support and maintenance of this institution. The items have been previously stated herein. Owing to the increased number of midshipmen resulting from four appointments, which became effective in 1935, there has been need to increase the number of employees in the commissary department during the academic year. This has been done by assessing each midshipman $1 per month. An estimate was presented of $21,150 for the employment of 16 additional persons in the commissary department with view to relieving the midshipmen of the charge which they now bear. The committee is not disposed to recommend a change in the present practice at this time. The number of appointments to the Naval Academy is continued at four in the accompanying bill. The present authorized line officer strength of the Navy is 6,531, exclusive of officers carried as additional numbers. The exclusion of the latter, it is submitted, is for |