year about $600 for this purpose. Of course that was mostly for China and when it was required in Alaska. The CHAIRMAN. But if, for instance, the value of the franc depreciates Lieut. BRETT (interposing). Either the Government gains or loses. If the value of the franc depreciates, I guess the Government gains. Mr. SHERLEY. I do not see how the Government can gain anything by it unless the soldier loses by it. Lieut. BRETT. It is not the intention that the soldier shall lose. Gen. SHARPE. I submitted a full letter explaining this to the Secretary, and I went over it with the Secretary of War. I would like to put that in the hearings. The CHAIRMAN. I would like to see it. (The letter referred to is as follows:) WAR DEPARTMENT, OFFICE OF THE QUARTERMASTER GENERAL OF THE ARMY, From: Quartermaster General. To: The Adjutant General of the Army. Washington, March 27, 1917. In compilance with instructions of March 20, 1917 (A. G. O. No. 2548726), to submit all requests for legislation through the office of The Adjutant General for the consideration of the Chief of Staff and the Secretary of War, the following proposed legislation is recommended: The Regular Army appropriation bill carries from year to year the following provision: "For payment of exchange by acting quartermasters serving in foreign countries and when specially authorized by the Secretary of War by officers disbursing funds pertaining to the Quartermaster Corps when serving in Alaska, $600.” The varying cost of exchange in foreign countries, a variance in certain European countries during the present war conditions that at times approximates 50 per cent, has made the accounting of funds by acting quartermasters on duty in foreign countries a most perplexing and in some cases expensive matter. Officers of the Navy, to whom the cost of exchange is a much more expensive and important matter than it is to Army officers, have a provision in regulations that enables them to make use of the circular issued by the director of the United States mint as a basis for settlement. This circular, which is published quarterly by the Treasury Department, is issued in pursuance of the provisions of section 25 of the act of August 27, 1894. With the rates of exchange given in this circular legalized, the Government is very properly charged with the loss of exchange and is as properly credited with any gain by exchange. Under this system in accounting for the proceeds of bills of exchange in their accounts current, quartermasters will credit the United States with the legal United States gold equivalent of the face value of the bills and credit or debit the United States with the premium or loss on exchange, as the case may be. It is therefore recommended that in the estimates now being prepared an additional amount be allowed for cost of exchange which will be necessary in the event that United States troops see service in foreign countries, and it is further recommended that the provision of law allowing for such cost of exchange be amended to read as follows: "For payment of exchange by acting quartermasters serving in foreign countries and when specially authorized by the Secretary of War by officers disbursing funds pertaining to the Quartermaster Corps when serving in Alaska, $- ; and all foreign money received shall be charged to and paid out by disbursing officers of the Quartermaster Corps at the legal valuation fixed by the Secretary of the Treasury and published on the first day of each quarter." HENRY G. SHARPE, The CHAIRMAN. Now, suppose the value of the franc is fixed at 19.5 cents that is the way it runs, is it not? Gen. SHARPE. It is about that. The CHAIRMAN. Suppose it is fixed at 19.5 cents on the 1st of July, then for three months you would have the Quartermaster Corps paying out francs to the soldiers by check at a valuation of 19.5 cents. Gen. SHARPE. Yes, sir. The CHAIRMAN. But suppose after the 1st of July and before the 1st of October the value of the franc should be 19 cents, you would still be paying the soldier on the basis of 19.5 cents, and he would lose half a cent. Gen. SHARPE. If he wants to, we will pay him with our own checks, and then he can get full value. The CHAIRMAN. Do you pay them in checks or currency? Gen. SHARPE. Either one. We could give him a check if he desired it, although ordinarily we pay the men in currency. We could do it either way, but the men are usually paid in currency. The CHAIRMAN. It is the custom to pay them in currency? Gen. SHARPE. Yes, sir; we pay them in currency. The CHAIRMAN. Do you want to pay them in the currency of the country in which the payments are made? Gen. SHARPE. Yes, sir; if it is granted, we want to do so. We want to do so if it is to the advantage of the man. I understand that the English Government has a system of announcing rates of exchange in this way. The CHAIRMAN. You say that you will prepare a statement explaining this? Gen. SHARPE. Yes; I will send it up. The CHAIRMAN. When the men were in Mexico did you find it was the custom to draw all their pay or leave some to their credit? Gen. SHARPE. We made the payments down there in American money. The CHAIRMAN. Did they draw all their pay, as a rule? Gen. SHARPE. Yes, sir; except those who had made allotments to their families. The CHAIRMAN. They did not leave it to their credit? Gen. SHARPE. No, sir. Mr. Chairman, we submitted a proposition by which that allotment would be continued. We provided for a base pay of $15 for every man who had a dependent family, but that was not considered. The allotment we have now in the law, a man can raise it to any amount he wants to. PAY TO BENEFICIARIES OF OFFICERS AND ENLISTED MEN. The CHAIRMAN. "For six months' pay to beneficiaries of officers and enlisted men who die while on active service from wounds or disease not the result of their own misconduct, $24.925,000." Gen. SHARPE. That is just an assumption, Mr. Chairman, of the number, one-half year's pay which they would get. The CHAIRMAN. That is based on what number of men? Lieut. BRETT. Yes, sir. The same way with aviation. PAY TO BENEFICIARIES OF OFFICERS AND ENLISTED MEN OF AVIATION SERVICE. The CHAIRMAN. $495,000 for one year's pay to beneficiaries of officers and enlisted men who die as the result of aviation accidents? Lieut. BRETT. Yes, sir. The CHAIRMAN. I do not suppose that you intended to drop out the paragraph making all the pay appropriations one fund? Gen. SHARPE. We do not know how that occurred. PAY OF TROOP A, NORTH CAROLINA NATIONAL GUARD CAVALRY. The CHAIRMAN. There has been a request submitted that there be included a proviso that the appropriations of the Quartermaster Corps shall be available for paying the pay of 1 captain, 1 first lieutenant, and 43 enlisted men of Troop A, North Carolina Cavalry, for one day in April, 1917, and the subsistence of the enlisted men at 40 cents each for one day. The statement is made that under the circumstances under which the services were rendered the appropriations are not available for this purpose. Lieut. BRETT. When the commanding general of the Southeastern Department ordered that troop to guard the bridges, etc., he did not know that they had been mustered out of the Federal service. The next morning he had a telegram from the commanding officer of the company calling attention to the fact that they had been mustered out of the Federal service, and he immediately rescinded the order. The CHAIRMAN. That is, the commanding general of the Southeastern Department ordered this troop to guard the bridges, etc.? Lieut. BRETT. Yes, sir. The CHAIRMAN. And they served one day? Lieut. BRETT. Yes, sir. The CHAIRMAN. When he ascertained that they were no longer in the service? Lieut. BRETT. It was an error to issue the order. Capt. DALY. They were not in the Federal service when the order was issued. The CHAIRMAN. And this is to pay them the subsistence for one day? Lieut. BRETT. Yes, sir. The CHAIRMAN COMMITTEE ON APPROPRIATIONS, JULY 19, 1917. House of Representatives. MY DEAR MR. CHAIRMAN: 1. I have the honor to request that the following proviso be inserted in the next deficiency item scheduled for consideration: "Provided, That the appropriations of the Quartermaster Corps shall be available for paying the pay of one captain, one first lieutenant, and fortythree enlisted men of Troop A, North Carolina Cavalry, for one day in April, nineteen hundred and seventeen, and the subsistence of the enlisted men at 40 cents each for one day." Owing to the circumstances under which the services were rendered, the appropriations of the Quartermaster Corps are not available for the purpose. 2. The following extracts from the records in the case show the necessity for the proviso: DEPARTMENT ADJUTANT, [Telegram.] LINCOLNTON, N. C., 1.20 p. m., April 2, 1917. Governors Island, N. Y.: Your orders, dated March 30, No. 37021, directing this troop take charge safeguarding important bridges and other works, is acknowledged and will be obeyed immediately. In this connection attention is invited to fact that troop was mustered out Federal service 26th and has not been mustered in again. WARREN A. FAIR, Captain, Commanding Troop A, North Carolina Cavalry. [Third indorsement.] HEADQUARTERS EASTERN DEPARTMENT, TO THE ADJUTANT GENERAL OF THE ARMY: April 27, 1917. 1. Troop A, North Carolina National Guard, was mustered out of the Federal service on March 26, 1917. At the time of the receipt of such report work incident to effecting the initial muster in the service of the United States of National Guard organizations that had been called therein by the President on March 25, 1917, was being rushed to these headquarters without regard to hours, and such condition, coupled with greatly inadequate clerical asssistance, delayed temporarily appropriate recording of the muster out of the troop of Cavalry in the premises. 2. On March 30, 1917, the commanding officer, Troop A, North Carolina Cavalry, National Guard, was inadvertently given instructions to guard bridges, locks, and other instrumentalities in the vicinity of Lincolnton, N. C., and in this connection attention is invited to inclosures to this indorsement, which further supplements this communicaton. 3. It is recommended that the personnel of this organization, as reported in paragraph 1, second indorsement hereon, receive Federal pay for one day and that $0.40 per man per day be authorized to cover the rations utilized by the personnel of this organization during that time. LEONARD WOOD, Major General, Commanding. [Second indorsement.] HEADQUARTERS TROOP A, CAVALRY, TO HEADQUARTERS EASTERN DEPARTMENT, Governors Island, N. Y.: 1. There were assembled 2 officers, captain and first lieutenant, with 8 sergeants, 6 corporals, 1 cook, 2 horseshoers, 2 buglers, 3 first-class privates, 21 privates, 43 enlisted men altogether. 2. As we had cooking facilities, the cost of rations per man was estimated on the basis of 40 cents per man per day. 3. The troop had three meals, viz., dinner, supper, breakfast. The order was received about 9.30 a. m. and the troop notified, and the telegram countermanding the order was received about 7 p. m., too late for the men to return home, so they were given breakfast next morning and dismissed. W. A. FAIR, Captain, Commanding Troop A, North Carolina National Guard. [Telegram.] GOVERNORS ISLAND, N. Y., COMMANDING OFFICER TROOP A, North Carolina Cavalry, Lincolnton, N. C.: Orders March 30 countermanded. Issued through error. former status. You will revert to SIMPSON. TO THE ADJUTANT GENERAL: [Eleventh indorsement.] WAR DEPARTMENT, JUDGE ADVOCATE GENERAL'S OFFICE, 4. It is clear that the orders of March 30, 1917, did not operate as a call of the National Guard into Federal service and were not intended to so operate. In fact, the commanding officer of the troop, upon receiving the orders, was apparently aware of the fact that the orders must have been issued through error, as he telegraphed inviting attention to the fact that the troop was mustered out of service "and has not been mustered in again." The terms of the orders clearly indicated that they were issued by the direction of the department commander and were not intended as the orders of the President calling the National Guard into the Federal service. I do not concur in the recommendation of the Chief of the Militia Bureau that the Secretary of War, representing the President, "might now ratify the action of the commanding general, Eastern Department, in calling out this troop," as I do not think the case presented is a proper one for ratifications. It is suggested that the proper procedure in this case would be to include an item in the pending urgent deficiency bill, now in conference, or in the next appropriation bill, authorizing the pay and rations for this troop during the period under consideration, To the Quartermaster General, for the necessary action as recommended in paragraph 4 of the eleventh indorsement hereon. By order of the Secretary of War: 3. The cost of the pay and rations for one day is $57.93. Very respectfully, J. T. DEAN, Adjutant General. WM. M. INGRAHAM. Assistant Secretary of War. SUBSISTENCE OF THE ARMY. (See p. 402.) The CHAIRMAN. For subsistence you are asking $329,672,218.15. The regular Army appropriation carried $18,500,000 and the deficiency bill $133,000,000? Gen. SHARPE. Making a total of $151,540,000. We have already expended of that $22,637,788.11, which includes the expenditures only up to and including the 26th of July. The CHAIRMAN. This estimate is based upon subsisting how many men for how long? Capt. DALY. 1,039,000 men. The original deficiency estimate was $183,000,000. $133,000,000 was appropriated. The CHAIRMAN. That was on the basis of 2,000,000 men for eight months. Capt. DALY. The estimate was reduced $50,000,000. The CHAIRMAN. You are asking in addition $279,000,000, which would be for another million men for another year? Capt. DALY. The estimate is $329,000,000. The CHAIRMAN. That is on the basis of 2,000,000 men for a whole year? Capt. DALY. No. That is on the basis of the difference between 1,032,000 and 2,033,000, plus the $50,000,000 that you cut out of the original appropriation. Mr. SHERLEY. Even that would not explain it. Capt. DALY. We have added $100,000,000 for six months' reserve. The CHAIRMAN. You got your original estimate. That was based on an army of 1,079,000 for one year, $201,000,000, for the additional |