The CHAIRMAN. And that is the most effective method of utilizing them?

Col. HOFFER. It is considered the most effective method of utilizing the capacity of the arsenals.

The CHAIRMAN. How do the prices which you are compelled to pay now compare with those prior to the outbreak of the war?

Col. HOFFER. The price being paid for the ammunition of the smaller calibers is about 5 per cent less than the prices paid at the outbreak of the war, and the prices for the larger calibers are from 10 to 20 per cent less.

Mr. SHERLEY. How do they compare with the cost of manufacture in the Government arsenals?

Col. HOFFER. The prices we are now paying are, as a general rule, as low, and in many cases lower, than the cost of manufacturing at the arsenals.

The CHAIRMAN. When you speak of the outbreak of the war, do you mean the declaration of war between the United States and Germany or the outbreak of the European war in 1914?

Col. HOFFER. My statement referred to the prices of the last calendar year.

Mr. SHERLEY. Are they as low as the costs in Government arsenals several years ago?

Col. HOFFER. No; they are not as low as the prices at arsenals several years ago, but that is to be expected when one considers the great advances in the prices of raw material and labor.

Mr. SHERLEY. They are lower, though, if I understand you, than the cost of manufacture now?

Col. HOFFER. They are. It is difficult to make a very close comparison for the reason that Frankford Arsenal has not completed the manufacture of ammunition with material procured at present prices and the rates now being paid for labor. The rapid changes in the price of material and also in the price of labor at the Government plants makes it difficult to determine at this time what will be the actual cost of the orders now being executed at the Frankford Arsenal, but a general statement can be made that these prices compare most favorably with the cost of manufacture at Government arsenals. They are greatly below the prices paid for similar classes of materials by our allies, and everyone having experience along these lines with whom I have talked has expressed surprise at the low price at which the Government is procuring this ammunition. Take, for example, smokeless powder. The contract price is practically 10 cents a pound less than it can be manufactured for at the Picatinny Arsenal.

Mr. SHERLEY. It is not as low, however, as the price at which you manufactured it prior to the European war?

Col. HOFFER. No; it is not as low.

Mr. SHERLEY. What are you paying for powder?

Col. HOFFER. For cannon powder-that is, powder manufactured prior to January 1, 1918-we are paying 47 cents a pound for water-dried powder and 50 cents a pound for air-dried powder. Air-dried powder is that class of powder used for large-caliber seacoast cannon. The price to be paid after January 1, 1918, will be 2 cents a pound higher owing to the increase in the cost of raw materials.

Mr. SHERLEY. That price is lower than the price at which you bought powder prior to the war, when you were not permitted, by a limitation, to pay over 53 cents?

Col. HOFFER. Yes.

Mr. SHERLEY. And, as I recall it, you were paying something under 53 cents, but above 50 cents?

Col. HOFFER. Yes; we were paying practically 53 cents a pound prior to our going into the market for these large quantities.

Mr. CANNON. Did I understand you to say that these prices were less than the prices at which you could make the powder at the Picatinny Arsenal?

Col. HOFFER. Yes, sir.

Mr. CANNON. How much less?

Col. HOFFER. I think at the present prices it is nearly 10 cents a pound less than that at which we can manufacture it.

Mr. SHERLEY. What has been done touching the creation of the powder factory for which funds were appropriated some time ago?

Gen. CROZIER. That appropriation was $500,000. The only thing that has been done about it is to conclude that that factory ought to go at the same place, as the new nitric-acid factory provided for in the national-defense act, and that when that site shall be fixed it shall be fixed with regard to the powder factory going there. Then we would ask for a considerable increase in the appropriation, because it would not be worth while to put up a powder factory for $500,000.

Mr. SHERLEY. What is the estimate of the amount of money that will be expended for powder if the appropriations heretofore made and those asked shall be available?

Col. HOFFER. Approximately $150,000,000.

Mr. CANNON. How long would this powder last?

Col. HOFFER. You mean how much ammunition it would supply? Mr. CANNON. Yes.

Col. HOFFER. It covers the estimated expenditures of ammunition to September 1, 1918, and having the artillery for 2,000,000 men supplied with what we call their initial supply; that is, the quantity they should always have on hand.

The CHAIRMAN. For one year?

Gen. CROZIER. Until September 1, 1918. It does not provide for any daily expenditure after September 1, 1918. It provides for all the daily expenditures up to September 1, 1918, and then at that date there will be the reserve supply that they always ought to have on

hand.

The CHAIRMAN. For an army of 2,000,000 men?

Gen. CROZIER. Yes, sir.

Mr. SHERLEY. If I understand you, this is the supposition: That guns will be sent in the numbers and at the periods of time heretofore indicated by Gen. Crozier touching the first million men?

Col. HOFFER. Yes.

Mr. SHERLEY. And that this will enable you to supply all of those guns with their initial allowance of a 15 days' supply and with such reserve supply as will enable you to keep them provided with a 15 days' supply while actually engaged in the war, and will also supply the initial 15 days' supply for the guns that are to go with the second

million men, but does not make provision for the reserve necessary to keep them up to their 15 days' supply after the 1st of September, 1918; is that correct?

Gen. CROZIER. Yes.

The CHAIRMAN. For how long after the 1st of September, 1918, is a supply provided for the first million men?

Col. HOFFER. The estimates do not include nor contemplate the procurement of ammunition for any field artillery after the 1st of September, 1918. If we should succeed in carrying out the plans contemplated by the estimates by the 1st of September, 1918, we would have on hand then the initial supply of ammunition for the artillery for 2,000,000 men, and our money would be all gone. The CHAIRMAN. And no reserve?

Col. HOFFER. Except this initial supply; but no reserve of expenditures; no.

Mr. SHERLEY. But that contemplates the supplying of these guns with all the ammunition that they can use during the period up to

1918?

Col. HOFFER. Yes, sir.

Gen. CROZIER. Let us dwell on that proposition of the initial supply for a moment. It is recognized that any gun out on the firing part of the front may be called on at any time for an intense expenditure of ammunition far beyond the average. That intense expenditure is taken for the most numerous gun, the 3-inch gun, at six times the average that is, the expenditure of the intense expenditure per day is taken at six times the average per day, and they provide and intend always to have on hand in a box enough for that intense supply for 15 days.

Mr. SHERLEY. For every gun?

Gen. CROZIER. Yes; out on the front, in the theater of war at the front, for guns intended to be firing guns and not training guns or reserve guns. Now, then, that being six times as much per day and being provided for 15 days, you have 90 ordinary days provided for in reserve, and they do not want to intrench on that unless they have to. So it is provided that on September 1, 1918, if they do not get any more than contemplated in this estimate, every gun will have enough for those 15 days of intense expenditure and would not have any for ordinary expenditure every gun with an army of 2,000,000 men.

The CHAIRMAN. Does that contemplate that in the meantime there may be an expenditure of ammunition out of that already provided? Gen. CROZIER. Oh, yes.

The CHAIRMAN. And that after that expenditure has taken place, so far as can be reasonably anticipated, there will be on hand on that date this initial supply?

Gen. CROZIER. Yes.

Mr. CANNON. From the standpoint of safety this estimate should be given as carried in the bill?

Gen. CROZIER. Yes, sir.

Mr. CANNON. The estimate that you make?

Gen. CROZIER. Yes, sir.

Mr. CANNON. And that will take care of things up to the 1st of September, 1918?

Gen. CROZIER. Yes, sir.

Mr. CANNON. The war bids fair to last after 1918, so, when considering your capacity to make these explosives, get transportation, and everything else, would you be after more money?

Col. HOFFER. I should think six months before September 1, 1918, would be time enough to get the money.

Mr. CANNON. So that there is no necessity for anything beyond this estimate?

Col. HOFFER. We have not considered it so, believing that we could come before Congress at any time after the beginning of December. Mr. CANNON. After the beginning of this coming December?

Col. HOFFER. Yes.

Mr. CANNON. Then how much time would you want in which to place your contracts?

Col. HOFFER. I believe that with the plants actually going we could negotiate with them, place contracts and get them started so that the increased quantity of ammunition would begin to flow to us by the 1st of September, 1918.

Mr. CANNON. But this is all the money you need now?

Col. HOFFER. All we think we need; yes, sir.

Mr. SHERLEY. What I would like to ask you is this: What do you consider to be your ability to supply, in the quantities and at the times that have been indicated, the various kinds of ammunition contemplated under this and previous estimates or, to put my question in another way, this estimate is based on a certain program touching numbers of men and the times at which those numbers of men will be actually at the front. Assuming that this program is to remain practically as has been outlined what, in your judgment, is the probability as to your being able to meet your part of that program in the way of supplying this ammunition?

Col. HOFFER. We hope to be able to meet this program. How much delay may result from the inability to get the raw material, to get the necessary transportation within the United States, and all the other questions involved in the matter of priority, it is impossible to estimate at this time, and it is impossible to estimate what the delays may be, but we feel confident that any deficiency in the quantity of ammunition, due to unexpected interference, can be met by the procurement of ammunition from our allies. In either case the money is required.

Mr. SHERLEY. I am not now dealing with the money end of it. If I understand you, you do not anticipate, then, any inability to actually supply the guns with the ammunition according to the scheme which is outlined; in other words, should you fall down, through any cause that can not be prevented, in obtaining that ammunition in this country, there is a leeway by aid of our allies to enable you to meet the situation?

Col. HOFFER. We believe that we can meet the situation in that way.

The CHAIRMAN. Is there any danger that if $10,000,000 was spent for nitrate to be used as fertilizer that it would in any way interfere with the supply that you need for ammunition?

Gen. CROZIER. I do not think there would be any danger, Mr. Chairman, if the nitrate is bought and brought into the country, because clear up to the time that it is used for fertilizer it will be

available in an emergency for transfer to military purposes, and in the meantime we would go right ahead and import nitrate of soda for the military purposes, and the limitation on it would be the limitation that is on everything else-ocean transport.

The CHAIRMAN. The theory was that a certain amount of nitrate of soda in the possession of the Government or the powder manufacturers could be turned over for this purpose and that thereafter they might be supplied by importation with enough necessary to be used for this purpose?

Gen. CROZIER. I do not know what the reserve stock in the hands of the powder makers is, but just now no powder makers, explosive makers, feels particularly uneasy as to the supply of sodium nitrate. I think there is more uneasiness among the agricultural people than there is among the military people, because the agricultural people are actually very much concerned about the price, whereas the military people do not concern themselves so much about the price of this particular thing.

The CHAIRMAN. As they do about the supply?
Gen. CROZIER. Yes, sir.

STORAGE FACILITIES FOR AMMUNITION.

The CHAIRMAN. You are asking for $5,000,000 for storage facilities. We gave you $1,000,000 for storage facilities in the last sundry civil bill, and you are asking $500,000 additional?

Gen. CROZIER. When we come to that particular item, Mr. Chairman, I am going to tell you that it has been provided for otherwise. and that it need not be appropriated for.

The CHAIRMAN. Maybe you will be able to say the same thing about the $25,000,000 which you are asking for storage terminal and shipping facilities; will that be dropped out?

Gen. CROZIER. No, sir.

The CHAIRMAN. Please make some explanation about the $5,000,000.

Gen. CROZIER. Although most of those items are for storage, they are for different purposes, and I think you had better have from Col. Hoffer an explanation of the purpose of this particular storage. The CHAIRMAN. I was wondering whether you had duplicated your request unconsciously?

Gen. CROZIER. We will divide the story between us. About the $1,000,000 that was asked for and appropriated.

The CHAIRMAN. That was for nitrate?

Gen. CROZIER. No; the storage for nitrate has been provided, you appropriated for that, and it is all right. It has been fully explained and allowed. What we are asking now has nothing to do with it. The million dollars to which you referred has also been appropriated and is all right. What it was intended for was to increase the permanent storage capacity at the arsenals. It would have been asked for in the course of the next four years, even if we had not gotten into war. Now that we have gotten into war it was asked for right at the beginning and was appropriated for. It is for the purpose of storing the finished product in readiness for its distribution to the troops, in storage buildings at the arsenals which will be useful after the war is over. The $5,000,000, of which Col.