[No. 38]

TO ABOLISH THE NAVAL HOSPITAL FUND (H. R. 10663)

26255-1131-L

NAVY DEPARTMENT,
OFFICE OF THE SECRETARY,
Washington, D. C., December 11, 1926.

The CHAIRMAN COMMITTEE ON NAVAL AFFAIRS,

House of Representatives, Washington, D. C.

MY DEAR MR. CHAIRMAN: Replying further to the committee's letter of March 25, 1926, transmitting the bill H. R. 10663, "To abolish the naval hospital fund," and requesting the views and recommendations of the Navy Department thereon, I have the honor to advise you as follows:

A knowledge of the history of the naval hospital fund is necessary for a comprehensive understanding of its beneficent purposes. The following brief sketch will outline the history of the fund and its sources of revenue:

By the act of July 16, 1798 (1 Stat. 605), Congress provided for the relief of sick and disabled seamen through a tax of 20 cents per month per capita and authorized the President to purchase land and erect hospital buildings from the moneys so collected for the accommodation of sick and disabled seamen.

The act of March 2, 1799 (1 Stat. 729), directed the Secretary of the Navy to impose a like tax upon the officers, seamen, and marines of the Navy and to pay the same to the Secretary of the Treasury and provided further that the officers, seamen, and marines of the Navy should receive the same benefits and advantages as were then provided for the sick and disabled seamen of the merchant vessels of the United States.

The single fund established by the two acts above mentioned continued until by the act of February 26, 1811 (2 Stat. 650), Congress established a board known as the "Commissioners of Navy Hospitals," consisting of the Secretary of the Navy, the Secretary of the Treasury, and the Secretary of War, and by the same act voted the sum of $50,000 out of the marine hospital fund to be paid to these commissioners and to constitute the beginning of a separate naval hospital fund.

Since February 26, 1811, the naval hospital fund has had no connection with the marine hospital fund or with any other funds. of any kind. The commissioners were authorized and required to procure at suitable places proper sites for Navy hospitals and to cause the erection of hospital buildings.

On July 10, 1832 (4 Stat. 572), Congress made further changes in the basic law, by which the commissioners of Navy hospitals were released and discharged from all further trust connected with the naval hospital fund and the Secretary of the Navy was constituted (161)

20038-26-No. 38

the sole trustee; all the powers and duties theretofore imposed by laws on the commissioners of navy hospitals were transferred by the act of July 10, 1832, to the Secretary of the Navy, and all acts and parts of acts contrary to the provisions of this act were repealed.

The acts of February 26, 1811, and July 10, 1832, when later condensed, were reenacted into section 4810 of the Revised Statutes, which stood without change from 1874 until March 4, 1913, when it was reenacted by Congress (37 Stat. 902), without change in the original language except by the addition of the two provisos shown, to read as follows:

SEC. 4810. The Secretary of the Navy shall procure at suitable places proper sites for navy hospitals, and if the necessary buildings are not procured with the site, shall cause such to be erected, having due regard to economy, and giving preference to such plans as with most convenience and least cost will admit of subsequent additions, when the funds permit and circumstances require; and shall provide, at one of the establishments, a permanent asylum for disabled and decrepit navy officers, seamen, and marines: Provided, That hereafter no sites shall be procured or hospital buildings erected or extensions to existing hospitals made unless hereafter authorized by Congress: Provided, That the sum of $70,000 is appropriated, to be paid out of any money in the Treasury not otherwise appropriated, for the building of a new power plant at the naval hospital, Chelsea, Massachusetts, said sum of money to be paid into the Treasury from the proceeds of sale of land authorized by the naval act of June twentyninth, nineteen hundred and six.

In the earlier days of this trust fund sites were procured and buildings were erected at various times from its moneys; in later times the three New England hospitals at Portsmouth, N. H., Chelsea, Mass., and Newport, R. I., were erected without appropriation by Congress, at a cost of $847,000, defrayed entirely from the naval hospital fund, and at other naval hospitals new buildings were erected and repairs to old buildings made at an expenditure of approximately $2,000,000 more. The three hospitals mentioned at the time of their completion were proclaimed the best examples of complete modern construction in the United States.

The naval hospital fund is not an appropriation but is a trust fund which derives its revenues from within the naval service and is administered by the Secretary of the Navy, who is its sole trustee. These revenues are:

(a) By the deduction of 20 cents per month from the pay of each officer, seaman, and marine. (Secs. 1614 and 4808, R. S.)

(b) By fines imposed on officers, seamen, and marines. (Sec. 4809, R. S.) (c) By the value of one ration per day allowed for each officer, seaman, and marine during his continuance in hospital, the value of the ration for this purpose being specified under "Provisions," annually in the naval appropriation act. (Sec. 4812, R. S.)

(d) By the relinquishment of disability pensions due officers, seamen, and marines during continuance in hospital. (Sec. 4813, R. S.)

(e) By forfeitures on account of desertion. (Naval appropriation act, June 7, 1900, 31 Stat. 697.)

(f) By proceeds of sale of naval hospital fund property, when so authorized, as by acts of June 12, 1858 (11 Stat. 317), and July 2, 1890 (26 Stat. 213), when the naval hospital fund was reimbursed for land belonging to it which was transferred and sold in the sums of $50,000 and $92,000, at Chelsea and Brooklyn, respectively.

If the fund should be abolished, it would be necessary that Congress should provide in its stead annual appropriations for the support of all of the naval hospitals, 15 within the continental limits and 4 beyond, including repairs and upkeep of buildings and grounds,

heat and light (fuel), subsistence, laundry, and practically all other expenses of maintenance except the pay of civil employees and ambulance service. It is impossible to estimate with any degree of accuracy just what the additional appropriation would amount to in the event the naval hospital fund were abolished.

The bill (H. R. 10663) was forwarded to the Bureau of the Budget with the above information as to cost and a statement to the effect that the Navy Department contemplated making an unfavorable report thereon, and under date of December 1, 1926, the Navy Department was advised that this report would not be in conflict with the financial program of the President.

In view of all the foregoing, the Navy Department does not recommend the enactment of the bill H. R. 10663.

Sincerely yours,

CURTIS D. WILBUR,
Secretary of the Navy.

A BILL To abolish the naval hospital fund

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That any money remaining in or due to the naval hospital fund, unexpended or unobligated, on the 30th day of June, 1933, shall be returned on said date to the Treasury of the United States, and thereafter all money which is authorized to be placed in said naval hospital fund in accordance with law shall be covered into the Treasury of the United States direct. On and after July 1, 1933, no checkage shall be made against the pay of any officer, enlisted man, or nurse for the support of said naval hospital fund, and the said naval hospital fund shall be abolished.

[No. 39]

O