16, 1933, the contractor hereby expressly agrees that from the beginning he will prosecute the work with the utmost vigor and despatch and will make every possible effort, without reference to the otherwise normal rate of progress, to accomplish the maximum amount of work within the first and second years thereof.

This clause certainly indicates very clearly that the purpose and the intent of the work is to provide employment, and under such circumstances it seems to me to give the Secretary of the Navy the right and the authority to make inquiry why there is not a maximum amount of work and to take steps to see that the purpose of the contract in this respect is carried out. Has anything been done by the Navy Department to enforce article 1?

Captain DUBOSE. The Navy Department has on several occasions communicated in writing with the New York Shipbuilding Co., as well as with other contractors who have received contracts for the construction of naval vessels. I refer to contractors who received contracts at the same time the New York Shipbuilding Co. received its contract. The representatives of the Navy Department held several conferences with the contractor before the strike came on in connection with the strike and in connection with progress of construction of the vessels. The Department has several times expressed dissatisfaction with progress being made and has urged the contractor to expedite work in every way possible. While that particular provision is written into the contract, there is a further provision requiring completion of the contract within a certain time.

Mr. MARCANTONIO. We will come to that.

Captain DUBOSE. It is difficult to decide in the early stages of a contract whether a contractor is or is not making the utmost effort to complete on time. So long as the contractor is going to complete within contract time, we have nothing to say.

Mr. MARCANTONIO. A moment ago you testified that it was your opinion that the contractor had not acted as expeditiously as required under article 1 of the contract. Is that correct?

Captain DuBOSE. I made the statement that the contractor had not made the progress the Navy Department had expected under the terms of the contract.

Mr. MARCANTONIO. In that respect the contractor has not fulfilled his obligations under the contract?

Captain DUBOSE. I would not make a positive statement to that effect. The condition that prevents the contractor from making the progress expected by the Department and by the contractor may have an important bearing upon the progress.

Mr. MARCANTONIO. What are the conditions that you believe justify the contractor in not fulfilling the obligations resting upon him by reason of his contract?

Captain DuBOSE. I am not sufficiently acquainted with the internal workings of the New York Shipbuilding Co.'s plant to answer that question.

Mr. MARCANTONIO. We are faced by a practical proposition and at the same time a legal proposition, It is quite obvious, and I think we are all agreed, that the progress required under the terms of the contract has not been accomplished. You state this is due to certain conditions that justify the contractor in not fulfilling his obligations.

Captain, just what are those conditions that justify the contractor in not fulfilling the requirements of his contract?

Captain DUBOSE. In answer to a similar question I stated that I could not give a categorical answer. I can state the possible reason for that.

Mr. MARCANTONIO. I do not want you to interpret, and I do not believe that the committee is interested in opinions. What we are interested in is getting the facts.

Captain DUBOSE. I will therefore confine my statement to facts. Answering categorically, I am unable to state.

Mr. MARCANTONIO. Do you know anybody in the Navy Department who can answer the equstion categorically?

Captain DuBose. I do not.

Mr. MARCANTONIO. What steps, if any, have been taken to ascertain a categorical answer?

Captain DUBOSE. Your whole line of questioning is premised upon the assumption that the Navy Department assumes that satisfactory progress has not been made. I have stated that satisfactory progress in this matter has not been made but that there are certain conditions which prevent that progress, specifically, at the present time there is a strike in the contractor's plant. And there was a strike there a year ago.

Mr. MARCANTONIO. What are those conditions at this time?

Captain DuBOSE. The condition at this time is that there is no work being done on account of the strike. There was a strike a year ago, as I remember, that caused a cessation of work for a period of weeks, and after that strike was over it took the yard some time to get back to its normal rate of progress.

Mr. MARCANTONIO. Do you say that the strike is the thing that justifies the nonfulfillment of the requirements of that contract?

Captain DuBose. I did not say that.. One contributing factor to the lack of progress has been these strikes.

Mr. MARCANTONIO. Do you say that these strikes justify the contractor's nonfulfillment of the terms of this contract?

Captain DuBOSE. I did not say that.

Mr. MARCANTONIO. Is it not the duty of the Navy Department to ascertain whether or not these conditions justify the delay and whether the conditions are due to the fault or negligence of the contractor, resulting in his nonfulfillment of the requirements of his contract?

Captain DUBOSE. There has not been anything thus far to indicate to the Navy Department that the contractor has been negligent or at fault to such an extent as will not permit him to fulfill the provisions of the contract within the time specifically mentioned in his contract, which time will probably be increased for causes specifically set forth in paragraph 11 of the contract, to which you have referred.

Mr. MARCANTONIO. We are coming to paragraph 11. Will you state what you find in paragraph 11 of the contract to warrant the conclusion that the delay is not due to the fault or the neglect of the contractor?

Captain DUBOSE. The feature of paragraph 11 that I am talking about is in the proviso at the top of page 6. [Reading:]

Providing, That in the judgment of the Secretary of the Navy, such delay shall not have been due to fire or to unforeseeable causes beyond the control and without the fault or negligence of the contractor, including, but not restricted to, acts

of God or of the public enemy, acts of the Government, fires, floods, epidemics, quarantine restrictions, strikes

* *

Mr. MARCANTONIO. So that you say that what justifies the nonfulfillment of this contract is this provision as to strikes in paragraph 11 (a) of the contract?

Captain DUBOSE. There is nothing to indicate that the contractor is not going to fulfill his contract on time.

Mr. MARCANTONIO. At the same time you admit that the proper rate of progress has not been made.

Captain DUBOSE. I also said that it was problematical whether the contractor could make up that loss of time or progress in the remaining months of the contract, considering the due extension of time to be allowed for strikes.

Mr. MARCANTONIO. Do you not think that the Navy Department should be apprehensive because of the continuance of this strike, because proper progress could not possibly be made?

Captain DUBOSE. The Navy Department is very apprehensive that we are not going to get those ships as soon as we thought we would. Let us say that this impending strike lasts x months and the contract time is extended x months, and instead of being required to complete in, say, 36 months, the contractor is required to complete within 36 months plus x months. There is nothing to indicate that he will not complete in that time.

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Mr. MARCANTONIO. You assume that the time limit for completion will be extended.

Captain Du BOSE. I do not think there is any question but what the contractor, when he resumes work on these vessels, will ask for an extension of time, due to the strike, under the terms of the contract, and it will be allowed.

Mr. MARCANTONIO. Despite the fact that on page 6 of the contract, after we come to the words "unforeseeable causes we have the words "beyond the control, and without the fault or negligence of the contractor." Has the Navy Department attempted to ascertain whether one of the causes of delay, a strike, is with or without fault or negligence of the contractor?

Captain Du Bose. Yes.

Mr. MARCANTONIO. You have taken steps to ascertain that?
Captain Du BOSE. Yes.

Mr. MARCANTONIO. What are the conclusions?

Captain DU BOSE. You have stated that you do not want opinions, but you want facts.

Mr. MARCANTONIO. In this particular matter I am willing to make an exception. What conclusions has the Navy Department reached about that matter?

Captain DUBOSE. I cannot answer that question. The answer should come from the Secretary of the Navy.

Mr. MARCANTONIO. You are not in position to answer the question? Captain Du BOSE. I do not feel at liberty to answer. I have a personal opinion, though, which is of no value.

Mr. MARCANTONIO. Despite the fact that you place very little value upon your personal opinion, the committee places a great deal of value upon it, and we should like to know your personal opinion in view of the fact that you have been in close contact with this matter.

Captain DUBOSE. My personal opinion is that the fulfillment of the contract in this case has been delayed by an at present indefinite, unascertainable time. The contractor was delayed by a strike in 1934. That strike as a matter of record started at a certain time and ended at a certain time. The contractor has, under the terms of the contract, served notice on the Department that he will claim an extension on accouut of that strike. That particular question has not been settled by the Navy Department. The contractor claimed, say, 6 months' extension of time for completion. That has not been granted by the Navy Department. These claims for extension or extensions are usually adjudicated at the end of the contract, at the termination of the contract. We adopt that practice because it is possible for a contractor to make up time caused by strikes and so forth in the remaining months of the contract. The proper procedure in the present strike would be, when the strike is terminated and the men have gone back to work, for the contractor to file with the Department a claim that the contract time for completion should be extended for a certain length of time.

Mr. GRISWOLD. When was work started under this contract?

Captain DUBOSE. This particular contract is dated August 22, 1934. We have been talking about a strike in 1934, which strike had nothing to do with this contract. It had a bearing upon another contract.

Mr. GRISWOLD. Have you some ships that have been in process of construction under contracts entered into at a time prior to this contract?

Captain DUBOSE. Yes. There are 2 cruisers building and 4 torpedoboat destroyers. Contracts for 4 destroyers and 2 cruisers are dated August 3, 1933.

Mr. GRISWOLD. They have been under way now approximately 2 years?

Captain DUBOSE. Approximately 2 years.

Mr. GRISWOLD. Can you state the percentage of progress of those boats?

Captain DUBOSE. The committee can draw its own conclusion. I will give the progress at the time the strike stopped work on the four torpedoboat destroyers and the progress at the present time, according to the latest reports, on four other destroyers building in another shipyard. Percentages of completion of the four destroyers by the New York Shipbuilding Co. were, July 1, for hull, 47.6, 46.4, 44.4, and 44.4. Four similar vessels building at another yard were, on July 1, for hull, 66.1, 59.3, 55.5, and 50.9 percent complete.

Mr. MARCANTONIO. What I am trying to ascertain is: What has the Navy Department done to determine whether this strike is the fault or due to the negligence of the contractor.

Captain DUBOSE. The Navy Department has not passed upon that question.

Mr. MARCANTONIO. It has not passed upon that question? Captain DUBOSE. No; the fact there is a strike is well known. Mr. MARCANTONIO. Do you not think that question is of vital importance to the Navy Department in view of the Department's duty to enforce the contract?

Captain DUBOSE. I do not see that that necessarily follows.

Mr. MARCANTONIO. You feel that the continuance of this strike or whether or not the strike is with or without the fault and negligence of the contractor is not important in the enforcement of the contract? Captain DUBOSE. Not necessarily. The facts, as the Navy Department knows them, are that there is a strike and no progress is being made in the construction of those vessels on account of the strike. The Navy Department has not decided as to the fault.

Mr. MARCANTONIO. If this company ceased work completely on the construction of these vessels the Navy Department would inquire why?

Captain DuBOSE. Not necessarily. It is perfectly possible for the contractor to say he will void the contract and tell us to go ahead and finish the vessels under the contract.

Mr. MARCANTONIO. What has the Navy Department done under the terms of this contract to complete the work itself, if anything? Captain DuBOSE. That eventuality has not materialized.

Mr. MARCANTONIO. But one eventuality has materialized, namely, work has ceased.

Captain DuBOSE. Yes.

Mr. MARCANTONIO. The Navy Department has informed itself that the work on the vessels has ceased on account of the strike? Captain DUBOSE. That is the perfectly, definite statement made to the Navy Department by the contractor.

Mr. MARCANTONIO. The contract provides that when there is any cause for cessation of work the contractor is liable if it is due to his

fault or negligence. Am I right in that statement? Am I right in my interpretation of the contract?

I am

Captain DuBOSE. I do not know whether you are or not. not qualified to render an opinion as to the legal provisions of the contract. I would not attempt to do that.

Mr. MARCANTONIO. Has the Department submitted this contract to its legal advisers to determine whether there has been a breach of contract?

Captain DUBOSE. Not so far as I know. There has not been an occasion for that.

Mr. MARCANTONIO. Do you not think that 11 weeks' cessation of work constitutes quite an occasion?

Captain DuBOSE. For doing what?

Mr. MARCANTONIO. Submitting the contract to the legal advisers of the Navy Department to determine whether its provisions have been violated by the contractor.

Captain DUBOSE. I do not see that that follows. Assuming that the Navy Department did that and it was found that the contractor had violated the provisions of the contract, what would the Department do?

Mr. MARCANTONIO. There are certain remedies which the Navy Department could apply or exercise.

Captain DUBOSE. Yes; but I do not know how that would help the situation at Camden. We are interested in having these vessels finished.

Mr. MARCANTONIO. I understand that; but at the same time no work has been done on these vessels during the last 11 weeks. Captain DuBOSE. That is right.