building at 1624 H Street NW., on the southeast corner of Seventeenth and H Streets, and the Wallach House, at 1801 I Street NW., for the Ordnance Bureau. The Ordnance, in addition, have rented out of their appropriation the Knickerbocker Hotel, 1701 and 1703 New York Avenue. They have under contract a building for their drafting force at Eighteenth and E Streets, a six-story building, built expressly for that purpose, to which an addition of three stories is now being made, which they have included in their estimates.

The CHAIRMAN. Do I understand you to say that the Secretary of War appointed a board to take up the question of additional quarters for the War Department?

Mr. SCOFIELD. Yes, sir.

The CHAIRMAN. Who were the members of that board?

Mr. SCOFIELD. The Assistant Secretary of War, Judge Ingraham, Col. Harts, Maj. MacArthur, Capt. Kruesi, and Mr. Kiefer, of The Adjutant General's Office. These estimates are the result.

The CHAIRMAN. Did the board investigate the buildings belonging to the Government on the south side of Pennsylvania Avenue?

Capt. KRUESI. Yes, sir. We recommended that one building be repaired. That is included in this estimate, 506-508 Fourteenth Street.

Mr. SCOFIELD. The Darby Building, so called, which was damaged by fire on May 9. It is almost opposite the District Building on Fourteenth Street.

The CHAIRMAN. Are there any other buildings which were found suitable?

Mr. SCOFIELD. No other buildings were found suitable. A thorough investigation was made some time before; Col. Harts had it made. It was thought that the Oxford Hotel building might be used. It was used prior to 1888 by the Quartermaster's Department. as an office building, but the Treasury Department had a lease with the present tenants and did not feel that they should be compelled to vacate it.

The CHAIRMAN. That lease is at will.

Mr. SCOFIELD. Yes, sir. Subsequently the Treasury Department decided to take that building. They have also decided to take the Emergency Hospital building, which we were going to use. We have taken the Panorama Building on Fifteenth Street and Ohio Avenue and are using it for the depot quartermaster. We examined the Grand Army of the Republic Building and thought we could use it. It was not as suitable as you would think from the exterior. There was an objection on account of the fact that the Grand Army of the Republic people use that building. The officials of the Treasury Department did not encourage us very much.

The CHAIRMAN. It has been turned over to the Grand Army of the Republic for their use.

Mr. SCOFIELD. Yes, sir. They have had it at a nominal rental. Mr. CANNON. They are on the third floor?

Mr. SCOFIELD. Yes, sir. The first floor, which we thought could be used to great advantage, is occupied by the Public Health Service. At that time the Secretary wrote a letter to you about it. It was made in pursuance of your suggestion to the Secretary.

The CHAIRMAN. Mr. Cannon made that suggestion.

4400-17-6

Mr. CANNON. It was suggested at one of the hearings.

Mr. SCOFIELD. Yes, sir. The Secretary came back and told me and I immediately got busy and asked Col. Harts to have a personal investigation made and I went myself and inspected the buildings. I found that these buildings which I thought could be used-the Darby Building, the Grand Army of the Republic Building

The CHAIRMAN (interposing). Where is the Darby Building? Mr. SCOFIELD. On Fourteenth Street, just below the Avenue, 506508 Fourteenth Street. It was occupied as a paper-box factory and a lithograph shop. They had three or four separate enterprises in it. It was rejected by one or two persons that I tried to persuade to use it for an office building. I also thought that the Graham Building could be utilized. I asked Col. Harts to have the buildings inspected. He had an engineer investigate them very carefully-in fact, every building on the squares owned by the Government, and as a result of that investigation three buildings were selected.

The CHAIRMAN. I read a statement that the Oxford Hotel people had offered to supply the Treasury Department with an equal amount of space elsewhere if they were permitted to continue their lease. Do you know whether that is so?

Mr. SCOFIELD. I do not know. I saw that in the paper. I had talked to Mr. Wilmeth, or somebody in his office, and my impression is that he said it was so. I am not sure that I talked with him.

BUILDING EIGHTEENTH AND G STREETS.

The CHAIRMAN. You also ask to be authorized to enter into a contract for the lease of a building for the period of five years at an annual rental of not exceeding $92,800.

Mr. SCOFIELD. That is for the rental of 125,000 square feet, more or less, at the corner of Eighteenth and G Streets, one square from the War Department, a building which it is proposed to be erected by the Commerce Building Co. It is immediately back of the building which the company has just completed for the Interstate Commerce Commission. They propose to rent it for $92,800, which is fifty-some cents a square foot.

Capt. KRUESI. Fifty-eight cents a square foot gross and 74.2 cents per square foot net rentable area.

Mr. BYRNS. Do you think that it is advisable for the Government to rent buildings for a period of five years?

Mr. SCOFIELD. For three years, anyway.

The CHAIRMAN. These people have already erected the building for the Interstate Commerce Commission at Eighteenth and Pennsylvania Avenue, and they have a lot which goes back to G Street? Mr. SCOFIELD. Yes, sir.

The CHAIRMAN. That is an 11-story building?

Mr. SCOFIELD. Yes, sir.

The CHAIRMAN. And if they add to that building they can then get the Avenue frontage-that is, they can have the height which comes from the frontage on the Avenue?

Col. HARTS. I think that is the rule. If it is the same building, I think they can get the Avenue frontage.

The CHAIRMAN. They ask 74 cents a square foot. That is high?

Mr. SCOFIELD. That is not high at present prices.

The CHAIRMAN. I think the Interstate Commerce Building was very much less.

Mr. SCOFIELD. Thirty-six and a fraction cents.

Capt. KRUESI. That is gross. That compares to 58 cents gross. Mr. BYRNS. What is the cost of the Department of Labor Building, right near there?

Capt. KRUESI. One-tenth cent more per foot per annum.

Mr. BYRNS. I understand that the Department of Justice gets their building cheaper?

The CHAIRMAN. Then, there is the Commerce Building.

Capt. KRUESI. That is quite a bit cheaper. That was built some time ago, when the land was a great deal cheaper.

Mr. SCOFIELD. All of that land has gone up very greatly since the construction of the Interior Department Building, the Red Cross Building, and other buildings in the vicinity.

The CHAIRMAN. Were there any inquiries made as to what returns these figures would give on the investment?

Mr. SCOFIELD. So far as I know, there was not.

Capt. KRUESI. They said they could not tell what it would cost to build. and no one would build it upon fixed-price contract. They have got to build from day to day.

The CHAIRMAN. They must make a contract for the material. You do not mean to tell me anything like that. No man starts a building without making a contract for material.

Capt. KRUESI. They have not been able to contract yet, because this is a paper proposition now.

The CHAIRMAN. They do not expect to have this building on their hands at the end of five years, because if they make this contract they will put a provision in it that the War Department must surrender at the end of five years such portion of this building as may be required by the Interstate Commerce Commission?

Capt. KRUESI. Yes, sir.

The CHAIRMAN. So that they expect to have an immediate tenant for a large part, if not all. of this building when it is finished. Therefore it is not such a speculation as it would be if they were building on a five-year contract with the War Department with no hope of filling it afterwards.

Mr. SCOFIELD. We are really tenants by sufferance?

Capt. KRUESI. Not for the five years. The Interstate Commerce Commission told me that they had requested this company to buy that other lot in order to have ground for an addition for their future purposes. That came to me from the Interstate Commerce Commission, and then Mr. Evans afterwards confirmed it. They said that they had done that at the instance of the Interstate Commerce Commission, which will eventually need more space than they now have.

The CHAIRMAN. If you people make this lease, they will have that condition in it?

Capt. KRUESI. They put that in a letter to us.

The CHAIRMAN. Regardless of the wishes of the War Department, they would have to vacate when the Interstate Commerce Commission wanted the property?

Mr. SCOFIELD. Mr. Byrns, answering your question about leasing for five years, the provision is "not exceeding five years."

Mr. BYRNS. I assumed that it was.

Mr. SCOFIELD. It is for a period not exceeding five years from the date of completion, at an annual rental of $92,000. That is this building at Eighteenth and G Streets.

Mr. BYRNS. I wanted to know whether it was contemplated to rent it for five years.

Mr. SCOFIELD. The owners of the Monroe Court Building wanted a five-years' lease on that, but we got them down to three years; that is, we told them that we could only get appropriations from year to year, and that we would ask for an appropriation for the fiscal year ending June 30, 1918, and at the same time ask that Congress authorize us to enter into a lease for two years more at the same annual rental.

The CHAIRMAN. When will that building be available?
Mr. SCOFIELD. On August 1.

COMMERCE BUILDING Co.,
Washington, D. C., July 18, 1917.

BOARD ON ADDITIONAL SPACE FOR THE WAR DEPARTMENT, WASHINGTON, D. C.

GENTLEMEN: Responding to your inquiry as to the real estate appraisement of the property and of the building value referred to in our proposal to you of June 29, 1917, would say the appraisement, which is presumed to represent twothirds of the value of the property, amounts to $25,866.

This property, portion of which was bought by us some time ago, represents an actual investment to us of over $90,000.

The estimated cost of the buildings is as follows:

1.966,000 cubic feet, at 40 cents.

Architectural fees---.

Loan fees, carrying charges, etc..

Total building value..

Land value_---

Total investment____

$798, 000 40, 000 30,000

868, 000 90,000

958, 000

Our estimate of the cost to us of the taxes and insurance is $12,800. Our agent has been in touch with practically all of the large loaning companies in Philadelphia, New York, and throughout New England to arrange for our first-mortgage loan on the property, but has hed very little success and is of the opinion that the loaning companies consider this investment as representing a temporary requirement only of the War Department, consequently it appears impossible for us to secure a first-mortgage loan without having at least a 10-year lease; consequently we would be obliged if, in making your request for necessary legislation, you will stipulate that the lease should be for a period of 10 years.

Very truly, yours,

VICTOR J. EVANS, Per JAMES BAIRD.

(Referred to the Assistant and Chief Clerk. W. E. Kruesi, captain, Office Quartermaster General.)

NAVY ANNEX.

The CHAIRMAN. You are asking to be authorized to take over the unexpired portion of the lease on the Navy Annex at an annual rental of not exceeding $40,000.

Mr. SCOFIELD. The way that came about was this

The CHAIRMAN (interposing). Why do you make it $40,000, when the annual rental is $35,000 and something?

Mr. SCOFIELD. I though it was $40,000.

The CHAIRMAN. What do we pay for the Navy Annex-$35,000?
Mr. SCOFIELD. The Marine Corps occupies a part of it.
The CHAIRMAN. That is all in the Navy Department.

Mr. SCOFIELD. They have a separate appropriation, or a separate provision, I think.

The CHAIRMAN. I find that $40,000 is the rental of it. How much space is in that building?

Mr. SCOFIELD. 88.000 feet.

Capt. KRUESI. That is close to net. It is close to 88,000 feet net. The CHAIRMAN. The only one of these buildings that you would get immediately would be

Capt. KRUESI (interposing). Monroe Courts.

Mr. SCOFIELD. At Fifteenth and M Streets NW.

Capt. KRUESI. Yes, sir. We can get that by the 15th of August. He said at the time, that was two weeks ago, that if he could know at once, we could get it on the 15th of August, or six weeks from then.

The CHAIRMAN. How long would it take to get these other buildings?

Capt. KRUESI. It would take seven months to get the building at Eighteenth and G-that is, they would not promise it sooner than seven months. We might get the Darby Building, which is to be repaired at a cost of $15,000, in about six weeks. That is a Government-owned building on Fourteenth Street.

Col. HARTS. We thought we could probably get that in about a month.

The CHAIRMAN. That is your own building?

Col. HARTS. Yes, sir.

Mr. GILLETT. You are liable not to get the appropriation for a month.

Capt. KRUESI. All of these figures are based on the time that the appropriation is made.

The CHAIRMAN. Now, as to the Navy Annex Building?

Mr. SCOFIELD. We can get that whenever they move out, and they expect to move out about next March.

The CHAIRMAN. What will you do in the meantime?

Mr. SCOFIELD. We have supplied the immediate needs in the Darby Building and the Monroe Courts Building.

Capt. KRUESI. Then there is the building we propose to erect on the square. That would be ready in 60 days from the time of the appropriation. That would provide a very large amount of space, 150,000 feet, on the Government-owned square between Fourteenth and Fifteenth Streets and C and D Streets.

CONSTRUCTION OF TEMPORARY BUILDING ON FOURTEENTH, FIFTEENTH, C, AND D STREETS NW.

The CHAIRMAN. Now, you are asking $150,000 for the construction of a temporary building or buildings on the Government-owned square south of Pennsylvania Avenue between Fourteenth and Fifteenth Streets and C and D Streets. You expect to get what for that amount?

Capt. KRUESI. One hundred and fifty thousand feet, net.