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Gen. CROZIER. Well, a strong argument could be made in favor of that; I realize that, but it is not the usual method in this country. When profits are figured upon articles made and sold the usual method is to figure them as a percentage of the cost of manufacturing.
The CHAIRMAN. Is 10 per cent the usual cost?
Gen. CROZIER. I think 10 per cent is very considerably less than the usual cost and the usual allowance; that 10 per cent is less than is usually agreed upon among manufacturing people as to what is a proper profit on the cost of manufacture. I think that they generally consider that it should be far greater than 10 per cent; I will not say far greater, but considerably greater than 10 per cent.
CAPACITY OF PLANTS.
The CHAIRMAN. What is the capacity of these plants--their daily capacity?
Gen. CROZIER. Well, they think that when they are going at full tilt they will have a capacity of 10,000 a day in all three of them, but our rate does not call for that capacity at the beginning. We have a schedule of deliveries, but I do not think I have it here. It calls for completion of the contract in about 14 or 15 months.
The CHAIRMAN. We are raising an army of 1,000,000 rnen?
The CHAIRMAN. And they are supposed to be equipped and ready before the end of this fiscal year?
Gen. CROZIER. Yes.
The CHAIRMAN. Of course, they are not all available for all of that Army?
Gen. CROZIER. Yes; 600,000 rifles are ready, and there will be more, too. I think there will be a couple hundred thousand more which we will manufacture in the meantime at the Government armories.
The CHAIRMAN. What is your allowance per man?
Gen. CROZIER. Well, I think that considerably less than threequarters of the million men will carry rifles. In our estimates heretofore we have been making an estimate of wastage of rifles at 15 per cent, which we thought we might realize in six months, and then that would give us time to see how it was going, and we could ascertain what modifications of that estimate would be necessary.
The CHAIRMAN. Statements have repeatedly been made that they average three rifles per man abroad.
Gen. CROZIER. I know that those statements have been made, and I know made with a great deal of authority, too; but they were based upon the experience of the early months of the war, when the circumstances were such as to produce great wastage, particularly on the part of the English and the French allies and on the part of the Russians also. These armies were fighting in retreat. Every man who got a sore foot was lost with his rifle to the enemy; a great many were thrown away under those circumstances, and the wastage was enormous, and the assumption was made-you might say, jumped
at—that that was the normal wastage and would continue. Now, under the conditions to which the war has settled down, particularly on the western front, the wastage is not nearly so great, and I am glad to be able to say that I do not believe it is one-quarter what it has been estimated to be. Instead of being, as that statement would make it, 200 per cent, I do not believe it is 25 per cent.
The CHAIRMAN. An army of 1,000,000 men, according to your estimate, with an allowance for wastage, would not require probably more than 1,000,000 rifles!
Gen. CROZIER. I do not think it would require as many as that. You mean 1,000,000 rifles altogether, including wastage?
The CHAIRMAN. Yes.
Gen. CROZIER. I think that would be enough for the arming of 1,000,000 men for at least a term of six months, and perhaps a year.
Mr. GILLETT, That wastage would not begin until our troops get over there?
Gen. CROZIER. Yes; that is, the wastage of campaigning.
ENLARGEMENT OF THE GOVERNMENT PLANTS.
The CHAIRMAN. In view of the necessity for this additional output has any plan been proposed for the enlargement of the govérnmental capacity at the two plants?
Gen. Crozier. No, Mr. Chairman, I have not submitted any estimates for that, except as an enlarged output will come from increased efficiency. We will replace some of the machines that need it, and at the Springfield Armory we are improving the water plant, which will contribute to the efficiency of the establishment; but as to planning for an enlargement of the armories, we are not providing for any.
The CHAIRMAN. Is it feasible!
Gen. CROZIER. Yes; but we would not realize on it within, probably, something more than a year.
The CHAIRMAN. I mean, could the present capacity be enlarged within a reasonable time to increase materially our output there?
Gen. CROZIER. Well, that would depend on what you would call a reasonable time, and I think that now we could do this: We could proceed with the enlargement of our plants, and perhaps could carry it on at such a rate that at the conclusion of the contract for 1,000,000 rifles with these private manufacturers we might not need their capacity any more; that might be possible. · The CHAIRMAN. Then we would be getting a better arm, would we not?
Gen. CROZIER. Yes; we think the Springfield rifle is a better rifle than the Enfield rifle. However, we can do this, or we can consider it at least and we shall consider it as soon as we get some energy and talent which is free to be devoted to it--we will see if we can not pass over to the manufacturing of the Springfield rifle instead of the Enfield rifle in some of these plants. Before you get away from that point, I would like to say
The CHAIRMAN (interposing). I asked that in anticipation of what might come later.
Gen. CROZIER. There is just one point that I would like to mention in order to make my answer complete. At the present time the demand for tool workers and jig workers, skilled workers of that kind, is very great, indeed. We need people to increase our machine-gun capacity and for other purposes and to put in an unnecessary increase in capacity in the manufacture of these small arms would make a further demand in that very limited supply of skilled workers which I think would, in regard to some of the other things we need, interfere with the successful turning out of military implements. That is another reason why I do not think that would be wise at the present time.
The CHAIRMAN. Are there any other plants capable of manufacturing rifles of the character desired ?
Gen. CROZIER. There are other rifle-making plants in the country. There is a large plant at Bridgeport, Conn., belonging to one of the companies with which we are dealing—the Remington Arms Co. There is another plant, or, rather, a group of plants, which belong to the New England Westinghouse Co. Both of those plants are manufacturing Russian rifles at the present time.
T'he CHAIRMAN. Of the same model?
There is another plant operated by Messrs. Hopkins & Allen at Norwich, Conn., which has been manufacturing Belgian rifles.
The CHAIRMAN. A Member of the House, Representative Chandler, of New York, made the statement that he had a communication from the representative of a company that was prepared to enter into a contract and to give bond to supply the Government with rifles of the modern Springfield patent in such quantities as they might require.
Gen. CROZIER. In what length of time?
The CHAIRMAN. Within the specified time. Do you know about that?
Gen. CROZIER. Yes, sir. I have had transmitted to me a proposition of that kind. I think it not unlikely that the statement which was made to the Member of Congress was true, that somebody could be found to enter into a contract for the production of rifles of the United States model who would be able to give a bond for the proper execution of his contract, but the time which has been indicated to me as that within which deliveries would commence at a given rate was, in my opinion, entirely beyond the possibilities.
The CHAIRMAN. What was the time.
Gen. CROZIER. I do not remember. I think it was five months. I have not the letter before me, but I think it was five months. I may be mistaken. I think that anybody who has had any experience in the manufacture of rifles would tell you that the production in any reasonable quantity of such a rifle as the United States model of 1903 could not commence within five months of the time of starting on the enterprise.
The CHAIRMAN. The statement was made that they had a plant nearly ready to start the work.
Gen. CROZIER. Nobody has such a plant except the Government itself. There is no plant equipped for manufacturing the Government rifle in the possession of any party in the world, except the Government of the United States.
The CHAIRMAX. You said that the investigation of the three plants which make the Enfield rifle resulted in a practical agreement between your bureau and the representatives of those plants that it would take at least a year before they could commence to deliver the Springfield model ?
Gen. CROZIER. Yes, sir; and that with all their advantage of machinery installed in buildings and in the hands of a set of operatives who have been trained to the use of it.
The CHAIRMAN. Do you recall the name of this concern, whether it was a well-known reputable manufacturing concern?
Gen. CROZIER. I do not now recall the name of the company, but I have that in the records in my office and can transmit it; but I do remember this, it was not the name of any arms manufacturing company which is among those who are making arms in any number for anybody at the present time.
The CHAIRMAN. What did you say the names of the three companies were
Gen. CROZIER. The Winchester Repeating Arms Co., the Remington Arms Union Metallic Cartridge Co., and the Remington Arms Co. of Delaware.
The CHAIRMAN. The Winchester Repeating Arms Co. operated without making any profit at all in 1914 and 1915, and in 1916, which was the year when they had this great, big British contract, their profits were $1,627,000.
Gen. CROZIER. They had the large British contract before the commencement of 1916. They had this British contract, I think, through most of the year 1915.
The CHAIRMAN. Did they not get into trouble and have to be taken over?
Gen. CROZIER. They did get into trouble, a great deal of trouble. They not only did not make any profit, but I am informed that they suffered a very considerable loss.
The CHAIRMAN. Their profits in 1916 were $1,627,000?
Gen. CROZIER. I am not in the confidence of the companies in regard to their financial transactions, but I would suggest this: That in order to show that profit in 1916, there may have been a very considerable crossing off of loss leaving it out of the account, which resulted from this contract. I have been told this: That in the readjustment with the British Government an arrangement was made so that these manufacturing companies were safeguarded against loss, except the loss of interest on their investment in the plant.
The CHAIRMAN. In other words, they eliminated the interest on the investment from the cost?
Gen. CROZIER. They eliminated the interest from consideration, and they were insured against operating loss. They got out without any profit and they got out without any interest on their investment, I understand. I am not sure of that.
The CHAIRMAN. Did the British Government have a practical price per rifle?
Gen. CROZIER. They had in the beginning; yes, sir.
Gen. CROZIER. I think it was in the neighborhood of $30. I am not certain as to that. I know that some contracts were made for military rifles at about that figure.
Mr. Sisson. These people who make this offer to manufacture these rifles for you--of course, you do not want a bond, you do not want a forfeiture, you must have the rifles, that is what you need ?
Gen. CROZIER. Yes, sir.
Mr. Sisson. But if these gentlemen can do what they say they will do, could not some arrangement be entered into whereby you could give them a trial, and in the event they made as good a rifle as these other people and delivered it to you in five months, the means with which they accomplish the end 'is a matter with which you have nothing to do?
Gen. CROZIER. In ordinary times that is true; we might say that we would give them the opportunity and they might take the risk, and if we should not get the rifles we would not pay any money. · Mr. Sisson. That might not necessarily interfere with any other program and it would give you the rifles very much more quickly than by pursuing the one plan?
Gen. CROZIER. There would be this danger: In the first place, I think the Government has a duty to consider a little bit, whether it might be misleading its investing citizens into the support of an enterprise which apparently has the Government's sanction when the Government does not believe in it.
Mr. Sisson. That takes up the paternalistic side, which might cause some discussion about what a man does with his money?
Gen. CROZIER. If he is sure he will do that with his own money.
Mr. Sissox. Some bank might finance him. He does not need a guardian. The question is whether a man can do what he says he can. If he can not, you would lose no money and get no rifles, but if he can, you simply get within 5 months that which it would take you 14 or 15 months to do without his effort ?
Gen. CROZIER. Here is what we would suffer under those conditions: We would suffer the disadvantage of having another organization competing for the insufficient supply of labor, the insufficient supply of machinery, and the insufficient supply of energy for the prosecution of an enterprise in whose success we would not believe. That would be a decided disadvantage. Then there is another disadvantage also. If we had confidence in this thing, if we relied on it at all, we would make the expected rifles a part of our program and correspondingly cut down some other part. If we did not have any confidence in it, we would have to make it an additional part to our program, requiring the obligation of additional Government funds which we would have to ask you for.
Mr. Sisson. It would not necessitate necessarily additional funds. If the people complied with the contract you could use the money in paying them instead of continuing this arrangement here?
Gen. Crozier. We would have to make an arrangement in advance. When I reach the conclusion that we want a certain number of riffes I have to provide for getting them. If I embark on a means of getting them without any confidence, I run the risk of leaving the troops in the face of the enemy without rifles.
Mr. Sisson. I do not suppose that anybody would want you to do that, but an arrangement might be made where other individuals desiring to do this service for the Government at a profit and where