State, Justice, Commerce, and Labor Appropriation Bill for 1938 HEARINGS BEFORE THE SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS SEVENTY-FIFTH CONGRESS FIRST SESSION ON THE STATE, JUSTICE, COMMERCE, AND LABOR H. R. 5799 144074 Printed for the use of the Committee on Appropriations UNITED STATES WASHINGTON: 1937 COMMITTEE ON APPROPRIATIONS EDWARD T. TAYLOR, Colorado, Chairman' CLARENCE CANNON, Missouri THOMAS S. MCMILLAN, South Carolina J. BUELL SNYDER, Pennsylvania JOHN F. DOCKWEILER, California GEORGE W. JOHNSON, West Virginia JAMES M. FITZPATRICK, New York JOACHIM O. FERNANDEZ, Louisiana JOHN M. HOUSTON, Kansas JOHN P. HIGGINS, Massachusetts J. BURRWOOD DALY, Pennsylvania ROSS A. COLLINS, Mississippi WILLIAM D. MCFARLANE, Texas JOHN TABER, New York WILLIAM P. LAMBERTSON, Kansas J. WILLIAM DITTER, Pennsylvania MARCELLUS C. SHEILD, Clerk SUBCOMMITTEE ON STATE, JUSTICE, COMMERCE, AND LABOR DEPARTMENTS APPROPRIATIONS Messrs. MCMILLAN (Chairman), TARVER, MCANDREWS, RABAUT, CALDWELL, BACON, and CARTER 1 Elected chairman Mar. 5, 1937, to succeed Hon. James P. Buchanan, deceased Feb. 22, 1937. Cout. 6-4-37 SENATE AMENDMENTS TO THE DEPARTMENT OF HEARINGS CONDUCTED BY THE SUBCOMMITTEE, MESSRS. THOMAS S. MCMILLAN (CHAIRMAN), MALCOLM C. TARVER, JAMES MCANDREWS, LOUIS C. RABAUT, MILLARD F. CALDWELL, ROBERT L. BACON, AND ALBERT E. CARTER, OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, IN CHARGE OF THE DEPARTMENTS OF STATE, JUSTICE, COMMERCE, AND LABOR APPROPRIATION BILL FOR THE FISCAL YEAR 1938, ON THE DAYS FOLLOWING, NAMELY: TUESDAY, MAY 4, 1937. BUREAU OF AIR COMMERCE STATEMENTS OF J. M. JOHNSON, ASSISTANT SECRETARY; FRED D. FAGG, JR., DIRECTOR; MALCOLM KERLIN, ADMINISTRATIVE ASSISTANT TO THE SECRETARY; R. W. SCHROEDER, ASSISTANT DIRECTOR; AND JOHN S. COLLINS, ADMINISTRATIVE ASSISTANT SENATE AMENDMENTS ON H. R. 5779 GENERAL STATEMENT Mr. MCMILLAN. Gentlemen, the subcommittee has felt that, in view of the Senate's action on the appropriation bill with respect to the Bureau of Air Commerce, it would be well for you to come down and discuss briefly the changes that have been made by the Senate; and, for the purpose of the record, I may say that there was $11,707,000 submitted by the Bureau of the Budget and there was passed by the Senate the amount of $11,780,221, an increase of $73,221. In addition to that, the language carried in the House bill on commitments and contractual obligations was modified to the extent of increasing the amount from $2,000,000 to $6,000,000. I think that, with that statement, we would be glad to have either you, Colonel, or Mr. Fagg, make whatever statement you wish. Mr. JOHNSON. I would like to make a short statement and let the details be handled by Mr. Fagg, Mr. Kerlin and Mr. Collins. You will recollect that when I was here before there was a controversy as to whether we should have, for additional matters, $5,000,000 or $10,000,000, and I told you that I did not want for 1938 more than $5,000,000. I feel now just like I did then. You gave us $3,000,000 for Regular Establishment purposes and $2,000,000 to be obligated, and they removed the time element and added about $4,000,000 to be obligated. Except as a matter of expediency, I have no objection to that, just so I do not have to expend it faster than I can get experts to get the work done and decide on the most advanced types. I do not care; we have never spent in any one year $12,000,000 altogether. Mr. BACON. Your idea, I take it, is that this increase in authorization from $2,000,000, to $6,000,000 may not necessarily be taken advantage of? Mr. JOHNSON. Absolutely. We have certain things that we want to do, and until we do them I am not going to spend that $4,000,000. It is going to be undoubtedly spent next year or the second or third year. So, if that clears up the situation, I will leave the rest to these men. Even with the taking of the time element out of the $6,000,000, I wish to assure you that it will not be obligated one moment in advance of a thorough investigation as to types, qualities, and other things necessary for the work to be done in an efficient manner. DESIRABILITY OF AWARDING OUTSIDE CONTRACTS FOR CONSTRUCTION Mr. BACON. I want to ask you one general question as to administration. In spending this money for the aids to navigation, do you do it through your own construction force, or do you let that work out by public contract? Mr. JOHNSON. We will do our very best to contract as much as we can, to avoid a great influx of personnel that we will have to let go later. Mr. BACON. I am very glad to hear you state that, because it seems to me that the Government can save money by advertising for bids and letting the work out by public contract to responsible bidders, instead of trying to do it all yourself and thereby building up a big construction force. Mr. JOHNSON. It is no indictment of the Government that that is true. It is true, that we can contract to better advantage than by doing it ourselves. Mr. BACON. We made some comparisons in the case of the Lighthouse Service, for example, and we discovered that they have an overhead here in Washington of but $125,000, and a total appropriation bigger than yours, for the simple reason that they do all of their work through contracts, they just having designers, planners, and so forth. Mr. JOHNSON. We will do that in Air Commerce. Mr. BACON. I am very glad to hear you state that that will be the policy, because I think the Government will save money in the long run in that way. Mr. JOHNSON. I have spent considerable money on construction work, before I came here, as Mr. McMillan knows, and it was always my policy to call for bids, which insures a low price; and the contractors have to be efficient. They have no political appointments, they have a permanent organization, and do not have to build up their forces and let them go after the completion of a job. CONTRACT AUTHORIZATION Mr. BACON. Of course, this question becomes important if we leave this $6,000,000 available to be obligated-in other words, it gives you the right to contract over a period of years. Mr. MCMILLAN. On that point, under the language carried in the Senate bill, these contracts, if let, would have to be made prior to July 1, 1938. Mr. JOHNSON. Doesn't it provide for a longer period? Mr. COLLINS. No; it must be contracted for before June 30, 1938. Mr. JOHNSON. Do you mean the $4,000,000? Mr. COLLINS. $6,000,000. Mr. MCMILLAN. In view of your statement, it seems to me that you will necessarily have to cut out your date. Mr. JOHNSON. Well, I want the date cut out, because that will make it necessary for us to decide on many technical matters in advance of the very latest developments. Mr. MCMILLAN. That is a question that I think the committee would like to know about, because, carrying as it does Mr. JOHNSON (interposing). We do not want to be called upon to contract for the $6,000,000 in 1938, do we, Mr. Fagg? Mr. FAGG. Would you want to set the date for the purposes of the bill? Mr. JOHNSON. If that may be obligated at any time during 1938 or 1939, it is all right. Mr. FAGG. Say, prior to July 1, 1939? Mr. JOHNSON. Yes; must be obligated before July 1, 1939, but I would just as well have you make me spend it in 1938 as obligate it. Mr. BACON. Will July 1, 1939, be better than July 1, 1940? Mr. JOHNSON. I am rather indifferent about that, because Mr. BACON. Obviously 1938 is all wrong. Mr. JOHNSON. That is wrong. Mr. FAGG. 1938 would virtually mean, as the colonel has said, that we might as well spend it up to that time. Mr. JOHNSON. As I understand it, the $2,000,000 that you gave us to obligate in 1938 we can spend in 1939. Mr. MCMILLAN. The House bill as passed also carried a limitation: Mr. BACON. As of July 1, 1938. Mr. MCMILLAN. And your increase is made in the Senate to $6,000,000. Now, so much for the contractual authority for your Bureau. What if anything have you to say with reference to the other changes made by the Senate? Mr. JOHNSON. If you gentlemen will bear with me for just a moment since I was here originally with you gentlemen we have made a great number of changes in the Bureau of Air Commerce. We now have about decided how we are going to use the personnel and group it to do this work under Mr. Fagg, who came in after we came to you with the budget the first time. As to the $5,000,000 that you gave us, I showed you on a diagrammatic curve that whereas the aviation industry had increased about 100 percent over 1932, our appropriations were only about 60 percent of the 1932 appropriations. We ran along last year and have been running now at about $6,000,000 rate, we came to you a couple of months ago asking for this $5,000,000 for additions to and modernization of existing air navigation aids, and you were very generous and were all right about it-the Budget, the President, the Senate, and everybody were just perfectly fine. When Mr. Fagg came in I said "Let us readjust the personnel to better perform |