as to shipbuilding; that our people, like Americans in other branches of industry, are not willing to carve out a road for themselves-that is, they are timid; they are waiting for suggestions from abroad; instead of developing men there that can take the lead, they are so timid, for fear they will make mistakes, that they have delayed the building of our ships, and delayed the taking up of more progressive methods. I know the last and largest ship which we voted on in the Naval Committee was a little in advance in size of what the Board of Construction thought we ought to take. They were not quite sure that we had yet reached the stage where we could build that ship, but we said they were building such ships abroad, and that we had better try and see if we could not.

The CHAIRMAN. Now, what you say applies entirely to naval affairs, and not to the civilian affairs, as I understand, or is it mixed? Does that apply to the Department or to shipyards, or to both?

Mr. VREELAND. What I am saying applies to the character of our board that designs battle ships.

The CHAIRMAN. The thought I want to bring out is that when you speak of being different from the usual American energy and enterprise, that is a fact in our boards, and not

Mr. VREELAND. That is a fact that applies to our naval boards and designers. The opinion has prevailed somewhat that the shipbuilders, not having work in plenty, got the longest possible time in the building of battle ships, and then used them as steady work, in order that they might pick up and get hold of all of the rest of the work as it came long, perhaps being obliged to keep up a yard, and that possibly accounts somewhat for the delay. In other words, taking it altogether, the building of our battle ships has been unsatisfactory as to time.

Mr. HAND. In the past it has been unsatisfactory, more particularly on account of delay in getting the armor; but those troubles we have had in that repsect have entirely disappeared.

Mr. VREELAND. We asked the Bethlehem people the other day about the delay in getting armor, and they denied that anything of the kind prevailed.

Mr. HAND. Yes; to-day, as I say, we have in our yards ready to put in place the armor for the South Carolina, which ship is not yet launched. But the demand of business conditions in the different trades has influenced that a good bit.

Mr. VREELAND. How much less could the Vickers yard build a ship like the South Carolina for than you could in your yard, with your contract price?

Mr. HAND. It would be very hard for me to answer that, because while I am acquainted with their yards over there-I have been there at the same time I have never had access to any information which would enable me to make any comparison.

Mr. VREELAND. What is the contract price on the South Carolina? Mr. HAND. $3,540,000.

Mr. VREELAND. That is for everything except the armament?

Mr. HAND. Everything except the armament, yes, sir, and the few pieces of furniture that the Government furnishes. The Government has been furnishing furniture that goes in the officers' rooms, here of late. They build that at the yards. Then they furnish the boats, but that amounts to very little in comparison with the entire contract.

Mr. RAINEY. Is not this true, that over in England now in building a ship they simply enlarge the blueprints, mark the various pieces out on the floor the size they ought to be, from the enlarged blueprints, nail strips of basswood over them, and cut out the basswood and construct molds, and from those molds construct the parts, and that our Navy has not advanced far enough to do that?

you

Mr. HAND. No; we have all such methods in use. I fancy that mean laying the ship down in the mold loft full size, and from that making molds out of basswood.

Mr. RAINEY. I understood they did that in England, and that that makes very much more rapid progress in building ships over there.

Mr. HAND. We always have done that. We tack them down on an immense big iron floor, several times the size of this room, and from that we mark out all these frames and make these molds.

Mr. RAINEY. Then we have just as good facilities in our yards for building ships as they have in England and Japan?

Mr. HAND. I do not see any difference in the plants.

Mr. RAINEY. The only reason why we do not do it as quickly is, in the first place, because we have to wait for material, and in the second place, there are delays about furnishing detail drawings.

Mr. HAND. Yes, sir.

Mr. RAINEY. What material do you have to wait for?

Mr. HAND. Principally plates and shapes.

Mr. RAINEY. And you get them from the mills around Pittsburg? Mr. HAND. Yes, and forgings. That is a matter of very serious delay sometimes-big engine forgings, and steel castings as well.

Mr. HAYDEN. All naval construction contracts contain a clause which permits the Government to order such changes of plans and specifications, and even in the contract itself, as the Secretary may deem best, the compensation of the contractor to be adjusted afterwards by a board on changes. What effect; if any, have the changes which are customarily ordered as a ship progresses upon the building? Mr. HAND. I have a case just in point now that might be of some help to you and to the committee. We got a contract last October for two torpedo boat destroyers for the Government. They are boats about three hundred and some odd feet long, and they are very high power, being 29 knots speed. These boats have about 10,000 horsepower in them, and they burn coal for fuel for the generation of steam. Since the contract was awarded us for these boats, there has been a similar class of boats in the English navy, but faster, being 33-knot boats, which have made some very exceptional and successful trial trips, and these particular boats instead of burning coal for the generation of steam under the boiler, burn oil for fuel. They are boats which are well known as the Tartar class in the English navy. There were some four or five of them, and they were spread over different shipyards in England, and they all had more or less pride in turning out the fastest boat of that class. These boats were all very successful, and I presume that after the powers that be in the Navy Department saw the great success which attended these boats, and the complete absence of trouble of any kind on the trials, they attributed it to the fact that they burned oil for fuel, and then they immediately took that up with us, and it is under consideration now to make them a proposition as to what our price would be.

Mr. HAYDEN. To change?

Mr. HAND. So that instead of burning coal for fuel under the boiler we will install apparatus for burning oil as fuel.

Mr. VREELAND. So that progress on those boats is in abeyance? Mr. HAND. No; they do not give us the word in the meantime to stop work; they do not do that, but we go ahead on our own responsibility, and we go ahead because we would get no extension of time if we did stop unless so ordered. We are morally certain that the Government is going to make this change, but we do not know it. Mr. VREELAND. But they have given you liberty to adopt an oil-burning furnace?

Mr. HAND. No; the change has not yet been ordered. There is only one case where the shipbuilder has a right to decline to make changes, and that is in case the value of the change amounts to more than 5 per cent of the value of the contract. If it amounts to more than 5 per cent, the ship contractor does not have to agree to make the change; he can set the Navy Department aside and go ahead with the contract as originally written.

The CHAIRMAN. Is it at the Government's expense, or yours?
Mr. HAND. At the Government's expense.

Mr. RAINEY. Five per cent of the gross total?

Mr. HAND. Five per cent of the contract price.

Mr. RAINEY. Then you are compelled to allow that margin in bidding on a battle ship?

Mr. HAND. No; hardly that. What I want to convey is this: If you had a contract with the Navy Department for a ship that cost $1,000,000 and the Navy Department wanted to make a change in some part of that ship, which we will say totaled $40,000, notwithstanding there might be a great detriment to us to make that change we would be obliged to do it if the Secretary so ordered it; but if that change which the Navy Department wanted to make amounted to $55,000, then we could say to the Secretary that we preferred going ahead; that it was too much of a change, and we would suffer too much pecuniary loss; that we would prefer going ahead on the contract as originally written. This is based simply on the amount, 5 per cent of the contract price.

Mr. RAINEY. Then, on a ship of that kind they would have to add to the expense of building it, and they would have a right to add an expense of $40,000?

Mr. HAND. Yes, sir.

Mr. RAINEY. I am not finding fault with your company, but only with the Bureaus here which make this system possible. In making your bid, if you were bidding on a ship that cost $1,000,000

Mr. HAND. That is simply for example?

Mr. RAINEY. Yes; that is simply for example. It would not be impossible that the Bureau would compel you to make $40,000 worth of changes, and you could bid $40,000 less, could you not?

Mr. HAND. Oh, no: we get paid extra for that.

Mr. RAINEY. Oh, that is it?

Mr. HAND. Yes, sir.

Mr. HOLDER. Do you recall, at a previous hearing some years ago, that Mr. Charles Cramp testified that he had built battle ships or cruisers for the Russian fleet, that the French yards could not compete, and also that he made money on it? Can you explain how that speed was possible at the Cramp yard at that time for a foreign. Government over what it would be for ours?

Mr. HAND. No; I am not familiar with the case. Mr VREELAND. Were those cruisers built in the Cramp yard for Russia faster than those we were turning out at that time? Mr. HAND. They were of the same type as the Alabama. They were turned out almost at the same time. I think they had their trials at almost the same time. It was only a very short time after the trial of the Retvizan that we went to work to try the Alabama. But the reason why the other ship was completed so very much earlier was simply because in the case of the Russian ship we furnished all the armor.

Mr. HOLDER. How many ships did you build for Russia?

Mr. HAND. We built the Retvizan and the Variag, the Retvizan being a battle ship; but the armor was under our contract, and we could turn around and make a contract direct with the armor companies, and they could deliver it to our works.

Mr. RAINEY. You did not have to submit your specifications back to the Russian Government, like you do here?

Mr. HAND. No, sir; there was a full staff of Russian officers stationed at our works all that time.

Mr. RAINEY. Oh, yes.

Mr. VREELAND. You say you are not delayed in getting armor at present?

Mr. HAND. No, sir. Well, the point I wanted to bring out in response to your query, Mr. Hayden, was in regard to these torpedoboat destroyers. If the Government makes this change at once, that will probably set aside two months' work that we have already done on these boats, and then we will have to go out and order new materials and wait for them to come in, entailing a loss of, I should say, not less than three months in the completion of that contract.

Now, to continue my few remarks, and I will be very brief, I wanted to make an illustration to the committee of what there is likelihood of happening in case this bill should become a law at the present time. Having built some boats which were successful in every respect for the Russian Government, in the last two months we have been invited to submit proposals for battle ships, modern battle ships, for the Russian Government again. In fact, the design and proposals for such a ship were mailed to the Russian admiralty on Saturday last, together with our prices. Now, those prices which have been sent in to the Russian Government are based on a tenhour working day--ten and a quarter hours really we work in our place-fifty-six and a quarter hours a week.

This ship is one which would compare favorably, and I think will be very close, to what the naval committee are now considering in their appropriations for the United States Navy.

Mr. VREELAND. In the present naval bill?

Mr. HAND. In the present naval bill, both as regards displacement, armor, and the amount of horsepower to be placed in the ship. We will, of course, tender bids for these boats under the present naval bill. I was thinking of the practical difficulty we would have to encounter in case we got this contract from the Russian Government, and in case we got a battle ship to build for the Navy Department, and, further, in case this bill should become a law. We would then have two ships, almost identical, being built side by side, one of which we could not afford to work anything but ten hours on, because our pro

posal is given for such a boat based on working ten hours a day. By the provisions of this bill we would be allowed to work only eight hours on the other ship. In that case it would be pretty hard for me to say what would happen. We could not have two bodies of men, one working eight hours and one ten hours, without the greatest confusion, without everything, it seems to me, being at sixes and sevens in the management of the yard, and I think that is a question in our particular case which it would be well for the committee to ponder over and elaborate, because we would certainly have to ponder over it in case any of these things I have mentioned should come to pass.

Mr. HAYDEN. You know the temperament of your employees, and have studied them for years. Under the circumstances you have described, which class of men would be most dissatisfied, those who worked eight hours and got eight hours' pay or those who would work ten hours, getting ten hours' pay?

Mr. HAND. Mr. Hayden, it is my firm idea, knowing the men as I do, that the men who would have to work eight hours would be very much more discontented than the men who would work ten hours cheerfully and contentedly.

Mr. HAYDEN. For the additional pay?

Mr. HAND. For the additional pay; yes, sir. I just wanted to say a word about our workmen as we have them in the yard to-day. They seem to be satisfied with their lot. Many of them have never worked any other place. They have homes near by; they have comfortable homes; they seem to be well off. We try to take care of them. We never had a case for damages go before a jury. We have a fair-sized pension list every month of old and disabled employees who still come regularly every Friday to be paid, and on the whole I think we have got a pretty well contented body of men working for us. In some departments we have, as has been mentioned in these hearings before, a subcontract department. There we take a man and try to make a business man of him, because we allow him to bid to us for his labor just exactly in the same way as we receive bids from material men for supplies.

Mr. HAYDEN. That is, his own labor and the labor of those whom he associates with him?

Mr. HAND. And those whom he employs. He has the same privilege of employing workmen under him as we have of going out and employing people to come and work for us. There are only one or two restrictions we impose upon him, and that is that the men hẹ employs shall become, for the time being, employees of our own, and abide by the rules and regulations which govern the rest of our workmen whom we employ. To my own knowledge this has been a source of great profit to many of our leading contractors, as we call them. Some have been enabled to purchase homes in the neighborhood and they stay by us; they had much rather work under that system than to work under slightly advanced wages in other yards, because they do not have any opportunities there. All they can make in other yards is a weekly stipend, whereas under the conditions such as we have, under the subcontract system, there is no limit as to what a man might make per day. The only limit is the amount that he can do during the daylight hours. We have often had them come to us and ask whether we could not furnish them light on board