WEDNESDAY, NOVEMBER 16, 1921.

NAVY DEPARTMENT.

STATEMENT OF MR. A. E. SHOEMAKER, REPRESENTING THE SOLICITOR'S SECTION, OFFICE OF THE JUDGE ADVOCATE GENERAL OF THE NAVY.

DAMAGE CLAIMS.

The CHAIRMAN. "Damage claims: To pay the claims adjusted and determined by the Navy Department under the naval appropriation act for the fiscal year 1911, on account of damages occasioned to private property by collisions with vessels of the United States Navy, and for which naval vessels were responsible, certified to Congress in House Document No. 121 of the present session, $7,413.26."

Will you be kind enough to tell the committee what these claims are and how they originated?

Mr. SHOEMAKER. These claims, Mr. Chairman, arose out of collisions involving naval vessels, and they have been determined and adjusted under the provision of the law known as the act of June 24, 1910 (36 Stat. L., 607), which act authorizes the Secretary of the Navy to determine and adjust claims arising out of collisions when the amount is not in excess of $500, and certify them through the Treasury Department to Congress for appropriation each session. The CHAIRMAN. How many of these claims are there?

Mr. SHOEMAKER. There are 26 of them. I may say that I have here a brief of the facts in each case that I will leave for your information and convenience. The statement in House Document numbered 121 gives the name of the claimant, the names of the boats involved, the property damaged, and the amount of the claim and the address of the claimant.

The CHAIRMAN. But it does not show anything about how the accident occurred?

Mr. SHOEMAKER. No; the facts are contained in these copies of the memoranda submitted to the Secretary of the Navy for his information and approval.

Mr. ANTHONY. Under the law, can the Secretary of the Navy settle all claims on accourt of collisions?

Mr. SHOEMAKER. When the amount is not in excess of $500.

Mr. ANTHONY. Can he settle any other kind of claim against the Navy?

Mr. SHOEMAKER. Yes; there is a provision of law which authorizes the settlement of claims out of existing naval funds for damages caused by naval aircraft up to $500 in amount.

Mr. ANTHONY. How about cases where officers of the Navy incur expenses under official orders that are disallowed by the auditor or by the comptroller, can the Secretary of the Navy make them good? Mr. SHOEMAKER. No; he can not.

Mr. ANTHONY. How are such officers in the Navy reimbursed?

Mr. SHOEMAKER. If the auditor disallows their claims there is no power in the Navy to settle them so far as I know. They would have to come to Congress with their claims.

The CHAIRMAN. These are claims for damages to ships or other private property?

Mr. SHOEMAKER. Yes; they are all cases of tort involving damages to ships, docks, piers, and things of that kind.

The CHAIRMAN. In which cases it was found that the ships owned by the Government were responsible?

Mr. SHOEMAKER. Yes; and they have all been adjusted in accordance with the provisions of the law, which reads as follows:

The Secretary of the Navy is hereby authorized to consider, ascertain, adjust, and determine the amounts due on all, claims for damages, where the amount of the claim does not exceed the sum of $500, hereafter occasioned by collision, for which collisions vessels of the Navy shall be found to be responsible, and report the amounts so ascertained and determined to be due the claimants to Congress at each session thereof through the Treasury Department for payment as legal claims out of appropriations that may be made by Congress therefor.

The CHAIRMAN. How do you arrive at a settlement in these casesthrough a board appointed in each case?

Mr. SHOEMAKER. In practically every collision case there is a board or court convened. In the more important cases the body is termed a court. Witnesses are summoned on both sides, the owner of the privately owned vessel is requested to be present in person or by representatives, his witnesses are examined, and the board, upon the facts presented, reaches a conclusion as to responsibility.

The CHAIRMAN. Is this board assembled on the spot at the time of the accident?

Mr. SHOEMAKER. It is assembled on the spot as soon as practicable after the accident, generally the next day.

The CHAIRMAN. Has the captain of the Government ship the power to assemble the board or to appoint them?

Mr. SHOEMAKER. If he is the senior officer present. The senior officer present generally does that; but if a collision occurs in the harbor of New York, generally the commandant of the district convenes the board, and he is the reviewing authority there. He passes on the findings of the board and then sends the record to the department.

The CHAIRMAN. And the Secretary of the Navy approves or disapproves the findings.

Mr. SHOEMAKER. Yes, sir. It goes to the Judge Advocate General, who reports as to the regularity of the proceedings and then to the Bureau of Navigation, which also passes on the case, and occasionally, in an important case, it goes to the Chief of the Bureau of Operations. The CHAIRMAN. Does the board consist of officers or civilans? Mr. SHOEMAKER. The board consists of officers.

Then these records go to the Judge Advocate General's Office, solicitor's section, for consideration of claims that may arise out of the collisions, claims of the Government or against the Government, as the case may be.

The CHAIRMAN. Does the board consist of anyone except Government officers?

Mr. SHOEMAKER. No, sir.

The CHAIRMAN. So that the Government passes on the claim for damages said to be done by a Government ship to somebody else's property and its conclusion is the conclusion upon which this finding is based.

76214-21 -39

Mr. SHOEMAKER. Not necessarily. We do not follow those reports necessarily.

The CHAIRMAN. But whatever is approved, the conclusion is the conclusion of our own people.

Mr. SHOEMAKER. Yes. There is no one representing the owner of the damaged property on the board. These investigations are primarily for matters concerning Navy personnel, but we use the records as a basis for determining responsibility and liability for damages caused, but they are not always sufficient for the purpose, and we have to seek further information elsewhere.

The CHAIRMAN. The finding of the board which is assembled at the time is simply a recommendation which is finally acted upon through the Judge Advocate General and such other officials as may be able to properly advise the Secretary of the Navy who finally passes on the subject?

Mr. SHOEMAKER. Yes, sir.

The CHAIRMAN. And that has all been done in each one of these cases?

Mr. SHOEMAKER. Yes, sir.

TUESDAY, NOVEMBER 15, 1921.

NAVAL ESTABLISHMENT.

STATEMENT OF ADMIRAL ROBERT E. COONTZ, CHIEF OF NAVAL OPERATIONS; REAR ADMIRAL DAVID POTTER, PAYMASTER GENERAL OF THE NAVY AND CHIEF OF THE BUREAU OF SUPPLIES AND ACCOUNTS; MR. CLYDE REED, SPECIAL ASSISTANT, BUREAU OF SUPPLIES AND ACCOUNTS; AND COMMANDER E. A. COBEY, BUREAU OF SUPPLIES AND ACCOUNTS.

The CHAIRMAN. Admiral, please state your name and rank. Admiral CooNTZ. R. E. Coontz, admiral, United States Navy, Chief of Naval Operations, and Budget Officer for the Navy Department.

ANTIDEFICIENCY LAW,

The CHAIRMAN. Admiral, you appear to have before us a request for deficiencies amounting to $27,000,000 for 1922. Have you ever read the law that has relation to deficiencies?

Admiral CoONTZ. Yes, sir.

The CHAIRMAN. Have you ever made any attempt to comply with it?

Admiral CoONTZ. Yes, sir.

The HAIRMAN. What attempt?

Admiral CooNTZ. The attempt first to bring the expenditures down as low as possible, and secondly, the attempt in the case of the Secretary of the Navy recently, when he found he had not money for the reservists, he discharged them all.

The CHAIRMAN. But the first thing required is to apportion the appropriation over a period either monthly or quarterly, not on the basis of the anticipated needs of the department, but on the basis of the appropriation.

Admiral CoONTZ. Yes. sir.

The CHAIRMAN. What apportionments have been made in connection with the appropriations for the Navy Department for 1922?

Admiral CooNTZ. The bill did not pass until the 12th of July of the present year, and the attempt was made at once to come down on all the various appropriations as quickly as possible to a lower basis, the result being that from that time, I think, in practically each appropriation we have reduced. It has not been possible to exactly apportion these things by the 12 months under the circumstances. The CHAIRMAN. Why not?

Admiral COONTZ. The reason is that the last bill was what we would call an unbalanced bill, i. e., sufficient in some items for the maintenance of efficiency and insufficient in others. This was known from the beginning.

The CHAIRMAN. Who decides that question?

Admiral CooNTZ. So far as the Navy Department was concerned it regarded the number of men to be looked out for and various other considerations of that character as the basis, considering that there were certain items in which deficiencies were allowed and in which they always have been allowed, and which for a number of years have been carried. That has been the custom. The present Secretary of the Navy, however, was not satisfied with that scheme, and he has therefore endeavored to bring the items down, but in order that he should have no deficiencies he asks for this money at this time well ahead. He does that in order that he may take such steps as are desirable in case it should not be forthcoming.

The CHAIRMAN. What do you call this if it is not a deficiency?
Admiral Coontz. It is a prospective deficiency.

The CHAIRMAN. I do not think you have caught the question I asked. What I really asked was how you made your allotment of the appropriation, and not how you made your assignment of ships and that sort of thing. I want to know what you did with the appropriation in the way of allotting it, and not how you may have decided to do this or that. How did you allot the money, or how did the Secretary direct the allotment to be made?

Admiral CooNTZ. The Secretary of the Navy made the allotment in every case, except in three or four of those matters, in order that he might insure that there would be no deficiencies. There are about four cases where that was not done.

The CHAIRMAN. Will you be kind enough to tell us for the record here just how much was apportioned to each of the bureaus or activities for the several months or quarters out of the appropriation?

Admiral COONTZ. The bureaus themselves allot the appropriations for matters coming within their own cognizance. The appropriations are actually administered by the several bureaus with the approval of the Secretary of the Navy. The Secretary directed that no deficiencies be incurred, but of course it was soon demonstrated that the amounts appropriated under some items were inadequate to meet the necessities.

The CHAIRMAN. That is one requirement of the law that is imperative, and an appropriation act is just as much the law as is the Constitution of the United States.

Admiral CoONTZ. Yes, sir.

The CHAIRMAN. It is just as sacred and inviolate, and it should be observed to the same extent. Of course, everybody who holds a high position, as well as everybody who holds a low one, swears to obey the laws and the Constitution.

Admiral CooNTZ. Yes, sir.

The CHAIRMAN. But we find that you people of the Navy did not pay any attention to the laws on this subject in the past year.

Admiral COONTZ. I think that we were paying as much attention to it as was possible under the circumstances.

The CHAIRMAN. That does not answer the question at all.

Admiral COONTZ. We were certainly paying more attention than I have ever known to be paid in the past.

The CHAIRMAN. It is not a question of the past, present, or future. The law is mandatory and obligatory not only in the past but now and at all times. When you ask for a deficiency after the first four months of the year in which you are operating, it must be manifest to everybody that you have not made any attempt to obey the law. Now, if we cooperate with you in the violation of the law by allowing a deficiency, we will be violating it as much as the Navy.

Admiral COONTZ. We have come to you at the end of the first four months asking for a prospective deficiency to carry the Navy Department through, with the idea on the part of the Secretary that that was what would come to pass.

The CHAIRMAN. It is not for you to decide that. The thing for you to decide is what the law directs to be done. Are you superior to the law? That is a thing we would like to find out. We want to know whether the law as written by the Congress of the United States is to be respected even by the Navy. It must be respected by other people, and I do not see why you are superior to everybody else. Admiral COONTZ. We do not consider ourselves, so, sir. The questions you are placing before me, Mr. Chairman, it seems to me, are questions that should be answered by the Secretary of the Navy, who is the responsible head of the Navy Department specifically in regard to authorization of expenditures.

The CHAIRMAN. The Secretary of the Navy has been invited to come here, and if he does not come

Admiral COONTZ (interposing). If the hearing could have been had on any other possible date the Secretary would have come, but this is the last day for his annual report, and he has been working on it all night and all day. He would undoubtedly be here if it were possible for him to come.

The CHAIRMAN. If you are not competent to answer these questions, or if you are not authorized to answer them, some one should come with that authority.

Admiral COONTZ. I do not think I am authorized to answer those questions, Mr. Chairman, because the Secretary of the Navy, I know, has his views on those questions, and he will be very glad to tell you what they are.

The CHAIRMAN. Any view that is held contrary to the law ought not to be given any consideration. I do not care whether it is held by the Secretary of the Navy or anybody else, and, so far as I am concerned, as chairman of this committee, I propose to endeavor to see that the law is obeyed and that the allotments must be made on the