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Mr. SHERLEY. Your wharf frontage is 445 feet, of which over 200 feet is in a narrow slip available for small light-draft vessels only!
Mr. PUTNAM. That distance given there includes the slips each side of our dock, which we are not able to use; these have not been dredged and the available water front is only 246 feet. That statement is not accurate.
Mr. SHERLEY. What additional frontage would this give you!
Mr. PUTNAM. This would give us 275 feet additional, and the width of that street; that would probably give us nearly 100 feet additional
Mr. SHERLEY. For the construction of a wharf you estimate $52,125 ?
Mr. PUTNAM. I would say that that estimate does not figure necessarily on this site; it would either be to develop this site or to get a new site altogether. That is rather a typical estimate, and it does not apply essentially to this site.
Mr. SHERLEY. For filling, grading, and paving you estimate $42,000?
Mr. PUTNAM. As I say, that is a typical estimate.
Mr. SHERLEY. You mean typical in that it is not an estimate of just what the money is to be expended for?
Mr. PUTNAM. It certainly is; yes, sir. The service has a good many depots and this represents average costs for similar requirements.
Mr. SHERLEY. The next detail is storehouse, coal shed, repair shop, and keepers' dwelling, $37,375.
Mr. PUTNAM. Some of those things might not be necessary if we develop this particular site.
Mr. SHERLEY. Mr. Putnam, is it not necessary to really acquaint yourself with just what you want to do and where and give us some accurate information as to the cost?
Mr. PUTNAM. The difficulty is that if we come before the committee and ask Congress to authorize the purchase of a particular piece of property the owners of that property will immediately raise the price on it, and it may not be practicable to purchase that land.
Mr. SHERLEY. I understand that, and the language carried would not necessarily restrict the money to be used in the purchase of a particular place, but, manifestly, by your own statement, your estimate here indicates nothing.
Mr. Putxam. The estimate is based more on buying another piece of property than on buying this property. Within the last few days, in talking with naval officers, they have urged us to buy this property on account of the value of having a continuous Government water front there. We have considered buying this property before, and an estimate was gotten up to either develop a new site or buy this property, or do whatever was best at the time. Of course, this estimate was submitted over a year ago, I might explain, and, as a matter of fact, there is another estimate in the Book of Estimates.
Secretary REDFIELD. That is the same one you have?
Mr. Putnam. I think it differs slightly, because it gives the unit costs.
Secretary REDFIELD. I thought Mr. Sherley had that before him. There is the unit cost as given in the Book of Estimates. The estimate you have before you is taken from the annual report.
Mr. SHERLEY. This provides for a site, water front, at $400 per front foot, $125,000; wharf, at $1.50 per square foot, $36,700; storehouse, at 9.2 cents per cubic foot, $19,715; coal shed, at 8 cents per cubic foot, $6,500; repair shop, at 18.5 cents per cubic foot, $13,735; track on wharf, $3,000; concrete wall, at $15 per cubic foot, $14,500; filling and grading, at $3 per cubic yard, $20,500; concrete pavement, at 25 cents per square yard, $23,500; shop equipment. $3,000; fire protection, $2,850; and traveling crane, $6,000; in all, $275,000. Is this estimate based on the idea of buying this particular property?
Mr. PUTNAM. The estimate was not based on any particular piece of property.
Mr. SHERLEY. I do not see how some of these estimates could have been made at all. Here is an item for filling and grading: you can not tell what filling and grading is going to be necessary if you do not know the ground you are going to fill and grade.
Mr. Putnam. That is perfectly true; until the property is definitely settled on we can only give a typical estimate for an average lighthouse depot. Mr. SHERLEY. This estimate is over a year old, too? Mr. PUTNAM. Yes, sir.
Mr. SHERLEY. I suggest that if you want the committee to act upon your estimate you accompany it with some information touching what you are going to do with the money.
Mr. PUTNAM. I will be glad to do that, but I would prefer not to tie the appropriation down to any particular piece of land; I think that puts the Government at a disadvantage in buying that land, and there might be conditions which would make this not the best place.
Mr. SHERLEY. You might, by an option, be able to obtain this land without disclosing the purchaser?
Mr. PUTNAM. We have done that in some cases, but here it has been too indefinite when this appropriation would be available.
NOTE.---The estimate now submitted by the department reduces the total amount to $225,000, and is confined to items of immediate necessity in developing the site above referred to, although it does not limit the depot to this site should it develop that it can not be purchased advantageously. . The estimate is as follows:
Depot for fifth lighthouse district.- For enlarging and improving the lighthouse depot at Portsmouth, Va., in the fifth lighthouse district, or for establishing a new depot and equipping the same, so far as funds may permit, $225,000.
NOTE.--The present lighthouse depot at Portsmouth, Va., is entirely inadequate to the needs of the fifth district, both in area and water front. This is the principal depot of the largest lighthouse district, and is the headquarters for five tenders and two light vessels during the greater part of the year. The aggregate length of these vessels is over 1,000 feet and the total wharf frontage now available for the use of these vessels is 240 feet. Tenders frequently lay three abreast awaiting opportunity to discharge or receive cargo for two or three days at a time. This delay is estimated to cost the Lighthouse Service not less than $25,000 a year, and now that the tenders are under the jurisdiction of the Navy Department, increased facilities are an urgent military necessity. The very small area available for buoy storage necessitates much otherwise unnecessary handling of heavy buoys and appendages at large cost of time and money. The available wharf frontage of this depot should be trebled and the area increased to from 4 to 6 acres. This may be done by purchase of a new and larger site or by purchase of adjacent property. The present buildings are mainly antiquated wooden structures. They constitute a fire menace and should be replaced by modern fireproof buildings,
Detailed estimate. Unit cost :
Site, additional water front, at $400 per front foat (3124 feet)--- $125, 000 Wharf, at $1.65 per square foot (80 by 275 feet)--
36, 300 Track in yard and on wharf, at $1.50 per linear foot (2,000 feet)-- 3, 000 Filling and grading, at $2.50 per cubic yard (7,500 cubie yards). 18, 750 Concrete pavement, at $0.25 per square foot (60,000 square feet) - 15, 000 Water mains in place, at $1.50 per linear foot (800 feet)
1, 200 Electric lighting and power, wiring and conduits..
1, 650 Chemical fire engines, at $950 each (2)-
1, 900 Traveling crane (1)
5, 800 Buoy skids and chain platform, at $1 per square foot (50 by 80 feet).
4, 000 Miscellaneous equipment, lot
5, 000 Fencing, 625 feet at $4 per foot
2,500 Office for superintendent, 7,000 cubic feet at 20 cents per cubic foot. 1, 400 Acetylene generating and compressing plant
SATURDAY, AUGUST 11, 1917.
COST ACCOUNTING FOR GOVERN MENTAL AND INDUSTRIAL METHODS.
STATEMENT OF HON. WILLIAM C. REDFIELD, SECRETARY OF
COMMERCE, ACCOMPANIED BY MR. B. S. CUTLER, CHIEF, AND MR. J. L. NICHOLSON, BUREAU OF FOREIGN AND DOMESTIC COMMERCE
Mr. SHERLEY. Mr. Secretary, the following estimate has been submitted in House Document No. 315, Sixty-first Congress, first session:
Cost accounting, Department of Commerce, 1918: For arranging and standardizing governmental and industrial cost accounting methods, including personal services in Washington, D. C., and in the field, rental of quarters in Washington, D. C., and elsewhere, purchase of books of reference, periodicals, stationery, office supplies, equipment, printing and binding to be done at the Government Printing Office travel and subsistence of officers and employees, and all other necessary expenses not included in the foregoing, to be expended during the fiscal year ending June 30, 1918, $65,000.
Secretary REDFIELD. Mr. Chairman, I am very glad to have an opportunity to speak of this and introduce Mr. Cutler, the Acting Chief of the Bureau of Foreign and Domestic Commerce, who, with Mr. Nicholson, the chief of the Cost Accounting Division, is here for the purpose of giving any information the committee may desire. I would, first of all, refer to Document 315 and to the letters therein from the Secretary of War, the Secretary of the Navy, and the Chief Constructor of the Navy, the senior member of the board, which speak of the work of this service; and then I would like the committee to see the proof-unfortunately the complete pamphlet will not be ready until Monday-of the first result of this novel and efficient work in the shape of the preparation of uniform contracts and cost accounting definitions and methods, being recommendations made by an interdepartmental conference consisting of delegates from the Departments of War, Navy, Commerce, the Federal Trade Commission, and the Council of National Defense, which I will show to the committee and which indicate the persons who took part in it.
The work is being done under the guidance and by the force of this division for the purpose of determining sound methods in Gov. ernment contracts and of determining costs of operation. There were engaged upon the 9th of August only five men, and I should be very glad to have you know just what these men were then doing, because it will show you the particular confidential and war character of this work. It is all a matter of military value at the moment. In the first place, then, at that time Mr. Nicholson, the chief of the division, was in Philadelphia with the cost inspector for the shipyards in that city, making investigation of special items of cost in connection with Governinent contracts in the two shipyards there. This was specifically requested by the compensation board of the Navy through Admiral Capps. The report of this division, on one plant, if accepted by the compensation board and the shipbuilding company, represents a saving to the Government in that single plant of over $100,000. At the same time Mr. Nicholson was arranging to meet a committee of the National Canners' Association, representing the canners of milk, to discuss with them the price at which the quartermaster should purchase milk during the month of August. In that investigation the price submitted to the Government by the milk manufacturers was so reduced as to make a net saving to the Government of $10,000 per month.
Mr. Mulhern was at the William (ramp & Sons' shipbuilding plant making a special study of the items of cost which the division was requested to report on there for the Navy, working in conjunction with the United States Navy cost inspection office. Mr. Frank J. Scott was in Philadelphia at the Pennsylvania Shipbuilding Co., working in connection with the Navy cost inspection office on certain matters in which they desired our assistance. Mr. Wilson was in Washington in cooperation with the food administrator on the subject of cost investigation in bread-baking establishments. Mr. Pfau was in the office taking care of the routine correspondence.
We are now able to say to you that the investigation into the cost of peas, tomatoes, corn, and string beans along the same lines as milk will probably result in a saving in those articles of $50,000 monthly to the Government, being the difference in costs submitted by the canners and the findings of our Division of Cost Accounting. We point out as regards the estimates for the coming year that there are probably 100 or more different food products still to be examined, and in a majority of the cases we think a direct saving will result to the Government from the work we will do.
Mr. CUTLER. Those savings are monthly, Mr. Secretary.
Secretary REDFIELD. Yes; that is $10,000 a month and not $10,000 a year. There are 15 other shipyards to be examined. I point out to you that this work has never been done before. This is not work which has ever been undertaken and has arisen in connection with the special war emergency of the time.
Mr. SHERLEY. Mr. Secretary, you have referred several times to your division as though there was an existing division for the doing of this work. What is the fact as to that!
Secretary REDFIELD. We have five men engaged in this work, which for lack of a better name, we call a division. Of course, it has no legal existence as a division. Technically, I suppose, they would be commercial agents.
Mr. SHERLEY. Has this work been done under the head of the Bureau of Foreign and Domestic Commerce?
Secretary REDFIELD. Yes; thus far under the general appropriation for promoting commerce.
Mr. SHERLEY. Now, that bureau has an existing personnel, a chief, assistant chiefs, and chiefs of divisions and various clerks and stenographers. Is this force in addition to that, or is it taken from that force ?
Secretary REDFIELD. It is in addition to that, in the sense that all the men are employed under the promotion of commerce fund.
Mr. SHERLEY. Then this has come out of the lump sum "to further promote and develop the foreign and domestic commerce of the United States, including exchange on official checks, $125,000”?
Secretary REDFIELD. I think that is the case, is it not, Mr. Cutler? Mr. CUTLER. Yes, sir.
Secretary REDFIELD. That is the broad charter under which it seemed possible and correct to do this work,
Mr. SHERLEY. Are you employing men in the District of Columbia ? Secretary REDFIELD. No, sir; they are not employed in the District of Columbia, as I have read to you.
Mr. CUTLER. They are employed all about the country.
Secretary REDFIELD. The work has been done in Philadelphia and out of town entirely.
Mr. CUTLER. You will not find more than one man at any one time in the office here.
Secretary REDFIELD. We have had Mr. Pfau in the office here, but he is the only one, and for that reason we are putting it before you in the form of a definite appropriation, because we have not the money to continue the work. It has been done at very low cost. These gentlemen, for the most part, have volunteered their services, but it is of so great economy to the country that I told Mr. Cutler that I thought we should continue it under the promotion of commerce fund only until we could get an estimate before you for your consideration.
Mr. SHERLEY. It is a rather novel idea that a fund of that kind should be the basis for the development of a division on cost accounting in a department. We have had, of course, a number of proposals from the various departments for the creation of cost-accounting divisions, some of which we have acquiesced in and some of which we have declined. It is rather novel that you should have unconsciously been developing one under this language.
Secretary REDFIELD. The work, you may remember, of cost accounting proper was turned over to us by the Federal Trade Commission, but was not prosecuted, for the reason. I think, that we lost the man that they had employed upon it.
Mr. SHERLEY. They made a direct request for an appropriation of funds which Congress did not see wise to allow.
Secretary REDFIELD. There comes up here this opportunity and this very necessary thing to be done, which had to be done for the good of the Government and the country, and had to be done at once. We believe that the broad charter for promoting commerce is