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bought by the Government and at what figure, and whether it would be desirable for the Government to make that additional outlay?
Gen. CROZIER. The circumstances differ at different establishments. The officer who has been in direct charge of these negotiations and has been following them through in such detail as we have been able to go into in the time at our disposal is here now, Maj. Jamieson, and I suggest that he answer your question as far as he can. He has a list of the people with whom he has made arrangements and some with whom he has had tentative negotiations in the different cases. In some of these different cases some conclusion at least has been reached as to the nature of our use of the land upon which these plants are intended to be installed.
Maj. JAMIESON. There are on this list five companies with whom machining contracts are contemplated. Of these five companies the land on which three of them are to manufacture guns can be purchased by the Government at a relatively low cost, either now or at any stage of the contract or upon the completion of the contract. In the case of the fourth company we are providing for machine-tool equipment only, to be placed in a leased building, and so will avoid the question of building construction and land. In the case of the fifth company I am not yet prepared to state, but I believe there will be no trouble in acquiring the land in that case.
The questions which you raised, Mr. Sherley, have all been discussed in connection with the negotiations and have all been carefully considered.
Mr. SHERLEY. I am very glad to hear that.
Maj. JAMIESON. In every case we have an agreement by which that organization will continue to take subsequent contracts at our option and to operate the plants which are to be created until the time is reached when they are no longer required.
There are six forging companies with whom contracts are contemplated in addition to the Bethlehem and Midvale steel companies who previously made them. In two cases the plant and land can be taken over by the United States. In the other cases the extensions to the buildings are relatively nominal and do not involve large expenditures. In the sixth case the extension to building is to be erected on ground leased by the Government. All of these buildings are of a standard sectional type of construction which can be readily removed and immediately becomes stock structural steel, such as contracting concerns and building contractors regularly have in stock.
Mr. SHERLEY. To put it in a basic way, perhaps, you anticipate a situation where either the land can be acquired and, therefore, the Government own the plant, including the land, or where the investment in building is negligible and the machinery could be moved by the Government and be used elsewhere or disposed of, or cases where the buildings are of such a character of construction as to be demolished and still have considerable value as structural material! In other words, you do not estimate that the investment that the Government will make in so equipping these private concerns will represent anything like a total loss after the completion of the program in the way of field artillery for which they are being created ?
Maj. JAMIESON. No, sir; it will represent nothing like a total loss.
· Mr. SHERLEY. I asked some little time ago for a general statement as to the value of the output that would result from these extensions. You were to supply those figures. Have you them now!
Maj. JAMIESON. The forging and machining plants now contemplated by the negotiations with private concerns involve an estimated investment of $14,060,000. The estimated value of the product from those plants over a period of 12 months is $46,095,550.
Mr. SHERLEY. You speak of an investment of $14,000,000. I got the impression from the testimony of Gen. Crozier the other day that the investment in the way of plant and equipment was between $30,000,000 and $40,000,000.
Maj. JAMIESON. That is correct; but of that the present plants contemplate only $14,060,000 on the proposition of private manufacturers in the United States. The balance of that plant investment it is proposed to put in the Watervliet Arsenal for the larger and more difficult types of guns in order to take advantage of the skilled knowledge of that organization and the repair and maintenance plant abroad for relining guns which are not in service.
Mr. SHERLEY. Major, as I recall, you stated that your investment in the way of buildings and equipment for private plants totaled something like $14,000,000 ?
Maj. JAMIESON. Yes; of those negotiations that are substantially closed, and there will be at the most about one more.
Mr.' SHERLEY. Now the additional outlays in plant equipment which was in the mind of Gen. Crozier when he estimated something between $30,000,000 and $40,000,000, relate to the increase in plant capacity at the Watervliet Arsenal and the creation of plant abroad!
Maj. JAMIESON. Yes, sir.
Gen. CROZIER. That would not account for the whole difference. There is another one that you have not finished negotiations with.
Mr. SHERLEY. That was stated above? The one which you have not gone as far with as the others in your negotiations involves an outlay of approximately how much money?
Maj. JAMIESON. I would say approximately $2,000,000.
Mr. SHERLEY. So that something over $16,000,000 will represent the outlay with private plants?
Maj. JAMIESON. Yes; but, Mr. Chairman, we have provided in this, roughly, for all small-caliber guns from 75-millimeter to 155millimeter howitzers and for 700, out of approximately 1,400, 155millimeter guns. We leave unprovided for 100 155-millimeter guns and 1,400 9.5 howitzers. The procurement of those guns is just as urgent a question as the procurement of the smaller types and they should go into the Army in proper proportion.
Mr. SHERLEY. I appreciate that.
Maj. JAMIESON. And we are putting those larger ones in the Watervliet Arsenal, so that the expenditures of these moneys at Watervliet are just as urgent as those in the private plants. FACILITIES FOR MANUFACTURE OF MOBILE ARTILLERY.
(See p. 833.) Mr. SHERLEY. General, reverting back to the item that we left quite a little while ago in order to get into a discussion again as to the plans for increasing capacity of private concerns, you were about to state the total amount that you desired for increasing the facili
ties for the manufacture of mobile-artillery cannon at Watervliet? The estimate now pending is $750,000?
Gen. Crozier. That estimate was for plant equipment, buildings, and machinery, for a certain increased output of the small-size field artillery. We think it is worth while to put in the Watervliet Arsenal as large a proportion as its organization can well handle of the increased plant in buildings and machinery for manufacturing the larger sizes of field artillery, up to 94-inch howitzers. As far as the machinery and the equipment are concerned, except the equipment in buildings, I can rely upon the appropriations for the artillery itself, just as I am relying on those appropriations for machinery and equipment for plant extensions made by private manufacturers; but I think that these plant extensions at the Watervliet Arsenal ought to be permanently housed and that we should secure from this expenditure a plant at that arsenal which will be permanently useful, and therefore I should like to have this estimate increased by an amount which will be sufficient to cover the buildings of a permanent character for the larger field-artillery plant which we expect to put there from the appropriation for artillery itself.
Mr. SHERLEY. And that will amount to how much?
Maj. JAMIESON. If they are permanent in character, it will cost for the building alone of the floor space required to produce six guns a day, which is the minimum that we should consider at this time, $1,000,000 for the present type of permanent buildings. If you put up a standard saw-tooth-construction building, with brick side walls, steel sash, and glass, it will cost about $650,000, which would be a difference of about 331 per cent higher cost for the more permanent character of construction.
Mr. SHERLEY, How much more permanent would it be?
Maj. JAMIESON. It would be entirely permanent. The other one is entirely permanent for normal manufacturing purposes but would not conform in style and structure to the present buildings at Watervliet Arsenal.
Mr. SHERLEY. Would we lose anything except architectural design and beauty?
Maj. JAMIESON. Mr. Chairman, I do not think we would.
Gen. CROZIER. Those saw-tooth buildings are awful looking things for any kind of permanent structure at a decent place.
Mr. SHERLEY. Have you land within the grounds for these buildings?
Gen. CROZIER. Yes; we have the land.
Mr. SHERLEY. Now, General, will you explain your present estimate of $750,000! You have already said that that was for the building of small guns within the 94-inch size. What capacity do you expect to get from such a plant and does that include the equipment or do you expect to get equipment out of your funds for manufacture!
Gen. CROZIER. For the object of this estimate, namely, the increase in the capacity for small size field artillery, that includes equipment as well as buildings. The subject started with an estimate made by the commanding officer of the Watervliet Arsenal some time before the war and called for something over $300,000 for this purpose. That estimate was submitted first over a year ago. Then it was revised in October of last year, 1916, which brought up the sum, which before had been placed at $323,000, to $425,000. Then it was revised
again last May, when $600,000 was estimated to be required for a modern mobile artillery gun factory, which was expected to bring it up to date.
There was not involved in that estimate a very marked increase in the capacity of the plant, but it was expected to cheapen the output. It was stated in connection with it that a large portion of it was carried on in an old building which was formerly a lumber shed and was inconvenient and caused the work to be carried on rather inefficiently, the men being crowded, the buildings not well lighted, and the machinery not well arranged. The project involved a new building and keeping the old building for storage and a transfer of the machinery to the new building; but, as I say, it was submitted as an improvement rather than an enlargement of the plant. I was not willing to spend any such sum of money without getting a considerable increase in the capacity, and so I caused the estimate to be further revised, with the result it came back with the estimate increased to what is now before you, $750,000. The capacity we expect to get out of that establishment with this estimate will be about 1,000 guns a year when working the plant as hard as it can work.
Mr. SHERLEY. Now, General, let me see if I understand you. You had a couple of appropriations made last year for increasing the gun capacity of Watervliet Arsenal, I think-$156,000 in one item and $680,000 in another. Was that for the same purpose you are now asking this $750,000 for?
Gen. CROZIER. Did not those relate to seacoast artillery?
Mr. SHERLEY. They were appropriations for increasing the gun capacity.
Gen. CROZIER. How did they read, may I ask?
Gen. CROZIER. Yes, sir; that is for the manufacture of seacoast artillery, and has particular reference to the manufacture of 16-inch guns.
Mr. SHERLEY. I wanted the record to show that so there will be no confusion about these items. Now, you are asking for $750,000.
Gen. CROZIER. Yes, sir.
Gen. CROZIER. I think I just mentioned it. It is 1,000 guns, but of very small sizes.
Mr. SHERLEY. Up to and including 6-inch guns?
Gen. CROZIER. That would mean three sizes-3-inch, 4.7-inch, and 6-inch howitzers.
Mr. SHERLEY. Six-inch guns?
Mr. SHERLEY. The 6-inch guns you are figuring to make, along with the 91-inch howitzer, in this other plant you are talking about?
Gen. CROZIER. Yes, sir.
Mr. SHERLEY. What is the building going to cost?
Mr. SHERLEY. Does that contemplate a building of similar construction to those that exist now, or will it have a saw-toothed roof?
Gen. CROZIER. No, sir; it will be a permanent building which would harmonize with those now at the arsenal.
Mr. SHERLEY. Now, if you are given that amount for the building, you would still have money available out of your appropriation for field artillery for the rest?
Gen. CROZIER. Yes, sir; I should think so.
Mr. SHERLEY. Now, General, you have asked for $35,077,700 for the arsenals in the estimates that are submitted now, without taking into consideration the additional sums that from time to time you have mentioned. If you include the $25,000,000 for terminal storage, or a net sum of $10,077,700 for arsenal improvements, you will have had in the past two years $15,618,395 for arsenals, as against $1,290,022 for the previous two years. That is a tremendous expansion, and, of course, the reason for it is apparent to all of us. But, in view of the large sum that you have had and of the very large sum that you are now asking, could you not submit a table indicating what, if any, of the items might be properly postponed at this time, having in mind the very great cost of buildings, machinery, etc.? For instance, there are a number of items that we have been going over during the past day or two, some of which are desirable but all of which are not equally urgent.
Gen. CROZIER. I think I have mentioned the ones that are not very urgent. There were one or two cases that I have suggested where you might cut down the items to some extent. You will still have to spend the money, whether you spend it at the arsenals or not. If you spend it at the arsenals, you will own what you get for it, but otherwise you will not.
Mr. SHERLEY. I am not speaking now of those big plants. You have got a lot of items in here that are small in comparison with items as they go nowadays, yet they run up to some considerable figure.
Gen. CROZIER. Yes, sir; that is true, and all of them are for the purpose of securing efficiency at the arsenals. Some few of them are for increasing the size of the plants, but most of them are for increasing the efficiency and some of them are for changes in location. For instance, you cut it down to $10,000,000, I think, Mr. Chairman, leaving out the terminal storage facilities. Now, $3,000,000 of that $10,000,000 will come out right away in connection with the proving grounds. That leaves $7,000,000 for arsenals.
Mr. SHERLEY. On the other hand there is quite a sum of money that you are figuring on taking out of the appropriation for manufacture in equipping
Gen. CROZIER (interposing). Yes, sir; that leaves a part of that out of consideration, because it will have to be used anyway. If you use it at the arsenals you will use it for equipment where it is intended to be used and where it will have to be stored ultimately anyway. A part of these sums, also, and a large part of them, are necessary for the completion of projects for the expansion of the capacity of the arsenals which are already under way. If you should cut