The CHAIRMAN. Now, as I understand it, the Government has made a contract for the sale of this property?

Captain RICHARDSON. Yes, sir.

The CHAIRMAN. It is necessary for something to be done in the way of having an appraisement made before the Government can effect the sale?

Captain RICHARDSON. Yes, sir.

The CHAIRMAN. If you effect the sale you can bring into the United States Treasury something like a million and a quarter dollars? Captain RICHARDSON. Well, I think something around a million dollars; it is a pure guess.

The CHAIRMAN. Something over a million dollars or a million and a quarter. Will you lose that opportunity if there is delay in the conclusion of that sale until the next term of Congress?

Captain RICHARDSON. I could not say positively-yes, we would lose it, for it is within the province of the company to refuse to enter into a new contract that would give us that power.

The CHAIRMAN. Would the Government lose any money by putting off action on this bill?

Captain RICHARDSON. I think so.

Mr. VINSON. I think there is considerable confusion about the situation. In the first place, this bill has nothing to do with the sale of any property at South Charleston. This bill is merely to employ an auditor to make an appraisal. Now, that is all there is to the bill. And bear this in mind: We are not selling any power plant, because we do not own any power plant. This corporation owns the corpus, the physical property of the power plant; it is on their land. We have machinery in this plant that generates 20,000 kilowatts; they have machinery in this plant that generates 50,000 kilowatts. Now, after this appraisal is made, then it is the purpose of the department, under the law giving them the authority, to sell to this corporation, under a contract they have with it, certain pieces of electrical generating machinery which they are now renting from the Government. I make that statement just to clear up the situation. Now, if they could have this appraisal made without this legislation, they could do exactly what they want without coming to Congress.

Mr. BRITTEN. The comptroller's decision is responsible for it.

Mr. VINSON. But in their judgment they have got to have an electrical engineer, that will cost $10,000 in fees, to pay some one for services; and they want permission to employ someone to do that work, because the appropriation does not specify any expend tures for appraisal work. Now, that is all there is to this bill. After this appraisal is made, they do not have to ask Congress for the right to sell it, because Congress has already given them the right to sell it. They have a contract under which these people have got to buy it within three years after the valuation is put on the property.

Mr. MILLER. Which opportunity the department may lose?

Mr. VINSON. Yes This contract is made for one year. Suppose this concern says, "We will not make another contract with you.' Where would you stand? You can not force a corporation to sell stuff to the United States at the Government price; it takes two to make that kind of contract. The machinery will just stand there. Mr. BRITTEN. They might tell you to remove it.

Mr. VINSON. Yes; they will say, "We do not want it." It occurs to me that if they can not get this appraisement made without authorization, we ought to give the department permission to spend some money to put an appraisal on it; and when the appraisal is made, that is the end of it, because here is the law that gives them the right to sell it, and we have a contract saying that these people have got to buy it at the appraisal value at the time they first made the contract with the Government.

Mr. BRITTEN. If it was not for the comptroller's decision they would not be here at all.

Mr. VINSON. No.

The CHAIRMAN. The Government can not complete the contract and get this money unless this bill passes.

Mr. VINSON. You are absolutely right.

Mr. BRITTEN. I move that we report the bill favorably.

Mr. VINSON. You have got to have the appraisal before the sale can be completed.

Mr. DREWRY. Why can you not make an appraisal without paying a man $10,000?

Captain RICHARDSON. The contract provides that the appraisal shall be made by this method.

Mr. DREWRY. Why can you not do it by some other method? Captain RICHARDSON. Both parties are interested in determining the price, and they want to have a disinterested man on the board of appraisal.

Mr. VINSON. This is really the fee for the umpire?

Captain RICHARDSON. Yes, sir.

Mr. DREWRY. How long will it take to make the appraisal?

Captain RICHARDSON. They will have to visit the whole plant and go all over it.

Mr. DREWRY. But it seems you ought to know, before you fix a fee of $10,000 to pay a man

Captain RICHARDSON. That is not the fee fixed.

Mr. DREWRY. It says not in excess of $10,000.
Captain RICHARDSON. That is the limit.

Mr. DREWRY. Here we are voting on something that we do not know about; we do not know whether you are going to pay him $10,000 or what.

Captain RICHARDSON. But you can not decide what a man's pay is going to be until you go into the market and find out what a man of that particular caliber should have.

Mr. DREWRY. Precisely, and before you come here and ask us to vote for a bill to pay a man not in excess of $10,000, you ought to go and find out what you can get a fair appraiser for.

Mr. VINSON. I move we cut the fee down to $5,000.

Mr. DRANE. Because whatever you put as the maximum, they get. Mr. DREWRY. Sure.

Mr. VINSON. The Navy Department will appoint an appraiser and the corporation will appoint one appraiser. Now, those two appraisers might get together, and there would not be any need for an umpire. But suppose they do not agree. Then the two of them will agree on some electrical engineer who will be the umpire, and the majority will dominate; and for that service a fee of $5,000 is rather a nice fee.

Mr. DRANE. That would be only half, because the other side would pay the other half.

Mr. BRITTEN. It seems to me we are quibbling over a shoestring. Captain RICHARDSON. The money that would be used to pay this man's fee comes out of the appropriation for "ordnance and ordnance stores," which is the main operating appropriation of the Bureau of Ordnance.

Mr. VINSON. We do not make the appropriation at all?

Captain RICHARDSON. No, sir.

The CHAIRMAN. There is an amendment offered reducing the amount fixed as a maximum for this fee from $10,000 to $5,000. Does anybody object?

Mr. LINEBERGER. I object to that.

Mr. MCCLINTIC. If you put the maximum at $5,000, that means that the Navy would pay $5,000 and the power company would pay $5,000; it seems to me that would be enough for one man's work. Mr. DREWRY. This bill says not in excess of $10,000. Now, Mr. Butler suggests that we make an amendment so that it would be not. in excess of $5,000. Then the Navy would pay $2,500

Mr. MCCLINTIC. No; you are wrong there. He could be paid $5,000 by each party.

Mr. BRITTEN. Do you really believe we could get the services of an engineer capable of handling a million-dollar proposition of this kind, for $5,000?

Mr. DREWRY. It says one-half of the fee and expenses, half of $10,000 would be $5,000.

and oneCaptain RICHARDSON. If you cut it down to $5,000 you would not get the caliber of man we need.

Mr. LINEBERGER. May I say a word on this appraisal? I happen to be an engineer, and I think I know something about how these things are done. I practiced my profession for 10 years; I am a graduate civil engineer; I may not know much about anything else, but I do know something about this. This engineer is going to have a number of assistants, for whom he is going to have to pay, and they are going to have to go into details that this committee perhaps can not appreciate. He is going to have to be a high-caliber man, and $10,000 is a small fee to appraise a proposition where a million dollars is involved.

Mr. BRITTEN. It is nothing at all.

Mr. VINSON. As a matter of fact, under the bill, all the Government can pay anyhow would be $5,000.

Mr. MCCLINTIC. Well, that is a different construction.

Mr. VINSON. Now, if this is coming out of the ordnance fund, I would like to know how the ordnance fund has got $5,000 extra in it that it has not allocated to other purposes.

Mr. BRITTEN. It is not $5,000, but they will take it out of their appropriation; that is one of the safeguards.

Mr. VINSON. I understand that, but it will take that much out of the ordnance appropriation. I move the bill be reported favorably. Mr. MAGEE. I second it.

(The question was put and the bill was ordered favorably reported. Thereupon the committee proceeded to the consideration of other business, after which at 11.57 a. m. it adjourned.)

[No. 132]

TO EQUALIZE THE PAY OF CERTAIN OFFICERS OF THE MARINE CORPS WITH THAT OF OFFICERS WITH CORRESPONDING SERVICE IN THE NAVY (H. R. 9464)

OA/L16-4(6) (270118) L.

NAVY DEPARTMENT, Washington, February 7, 1927.

The CHAIRMAN COMMITTEE ON NAVAL AFFAIRS,

House of Representatives, Washington, D. C.

MY DEAR MR. CHAIRMAN. Replying further to the committee's letter of February 24, 1926, inclosing a copy of a bill (H. R. 9464) to equalize the pay of certain officers of the Marine Corps with that of officers with corresponding service in the Navy, and requesting the views and recommendations of the Navy Department thereon, I have the honor to advise you as follows:

The purpose of this bill is to give to officers of the Marine Corps appointed from civil life the same constructive service as is given to officers of the Navy under the act of March 3, 1899 (30 Stat. 1007), which provided

that all officers, including warrant officers, who have been or may be appointed to the Navy from civil life shall, on the date of appointment, be credited, for computing their pay, with five years' service.

Under this act civil appointees to the line and the staff corps of the Navy (Medical Corps, Supply Corps, Dental Corps, Civil Engineer Corps, and Chaplain Corps) were given credit for five years' constructive service to place them on a pay footing with line officers appointed from the Naval Academy.

The act of March 3, 1899, cited above, was repealed by the act of March 4, 1913 (37 Stat. 891), as to persons commissioned after that date, but those then in the Navy still retain the credit for constructive service.

Officers appointed to the Marine Corps from civil life have never had the benefit of credit for constructive service, with the result that such officers appointed on or before March 4, 1913, find themselves with five years' less credit for pay purposes than officers in the Navy with the same length of actual commissioned service.

The personnel act of March 3, 1899 (30 Stat. 1007), gave to officers of the Navy the same pay and allowances as received by officers of the Army and Marine Corps, except that the pay of Navy officers was reduced 15 per cent when serving on shore. Prior to that act the pay of officers of the Navy and Marine Corps was not computed on the same basis. By the act of May 13, 1908 (35 Stat. 127), the pay of Navy officers was made the same as that of officers of the Marine Corps for shore duty, but Navy officers received an increase of pay of 10 per cent for sea duty, which increase marine officers did not become entitled to until the act of March 3, 1915 (38 Stat. 948). Prior to March 4, 1913, officers of the Army and Marine Corps were in the same status with respect to pay.