Mr. DITTER. As I say, to that extent then there is some hopefullness that the rigidity in some of these controls might become less onerous. Admiral YOUNG. Well personally I think so.

Mr. DITTER. At least we might look for some hope in that direction. Admiral YOUNG. I certainly hope so.

Mr. DITTER. As that source increases?

Admiral YOUNG. Yes, because I have my troubles, too.

Mr. DITTER. Then the persistency of the excuse of military needs as contrasted with the probable other economic planning purposes, as you view it, might give way to some extent as these new sources of supply are found. I think that is fortunate.

RATION COST

Now, you have got a 60-cent per diem in either event?
Admiral YOUNG. Yes, that is about the cost now.

Mr. DITTER. AS I recall, probably 2 or 3 years ago that was about 43 cents.

Admiral YOUNG. It was much lower.

Mr. DITTER. The per diem then is about right?

Admiral ALLEN. În 1933 it was 38 cents; in 1936, 46 cents; in 1937,

48.4.

Mr. DITTER. Well, let us just use the rough figure.

Admiral YoUNG. Of 45 cents.

Mr. DITTER. Would you say, Admiral, that the increase reflects the increase in the cost of living?

Admiral YOUNG. Oh, yes; of course. For instance, the Bureau of Labor Statistics shows in 1940 the index was 70.3, and that went up until in November 1942 it was 103.6, or an increase of 33.3 percent; or translated into terms of increase over 1940, means 47.37 percent. Mr. DITTER. That was as of June 30, 1940?

Admiral YoUNG. Yes.

Mr. DITTER. It was about 45 cents, was it not?
Admiral YOUNG. Yes.

Mr. DITTER. And now it is 60 cents; is that right?

Admiral YoUNG. We have increased

Mr. DITTER. That is about a 3313-percent increase; is it not?
Admiral YOUNG. Oh, no.

Mr. DITTER. Fifteen cents on top of 45 cents?

Admiral YOUNG. Yes.

Mr. DITTER. That is a 333-percent increase; is it not?

Admiral YoUNG. Yes.

(NOTE. In 1940 the cost of the ration was $0.47213, as compared with $0.60 estimated for 1943, an increase of 27 percent.)

Mr. DITTER. So it is a fair deduction to say that the price control has not been so very effective a measure in holding down the cost of living in the Navy, has it?

Mr. THOMAS. May I make this point there, also?

Mr. DITTER. May I get an answer to this question first?

Admiral YOUNG. I would not be able to say, but the fact is there has been this increase.

Mr. DITTER. During the period of time that the thing called the O. P. A. or price control has been in operation.

Now, my distinguished friend from Texas wants to clarify the question.

Mr. THOMAS. Not to clarify, Mr. Ditter, because no point you make needs to be cleared up.

I wanted to ascertain, if I may, whether or not this 60 cents per diem for ration covers men at sea as well as those in shore establishments. If so do you have a break-down between the two? I have an idea that the ration at sea is about a third more than on shore. Admiral YoOUNG. NO.

Mr. DITTER. That has not been the past experience.

Admiral YOUNG. No; I do not think so.

Mr. THOMAS. It has been greater, has it not?

Mr. DITTER. Perhaps 5 percent.

Mr. THOMAS. Do you have any figures on that?

Admiral YOUNG. It would all depend on where the ships are, the size of the ship, and so on. For instance, if the ship were up around Iceland or at some place where the cost of food is higher, or where they are buying ashore. Also it would depend upon the size of the ship. Of course, the larger the ship the more supplies you can provide. A battleship, a destroyer would certainly not cost as much as a small boat like a subchaser.

Mr. THOMAS. Roughly can you tell us how much it does cost to feed the men at sea and those on shore?

Admiral YOUNG. I can get the figures for you.

Mr. THOMAS. Can you give us a rough estimate, whether it would be 15 or 20 percent or more?

Admiral YOUNG. It depends upon the area and where the ships are located, and their size. Then, it would depend upon the size of the station. There might be a big training station like San Diego and to compare that with a smaller one would be very difficult.

Mr. DITTER. May I recall to the mind of the distinguished gentleman from Texas the fact that during the past years, the immediate past years, we have gone to considerable extent to have placed afloat the very latest that you could possibly secure in the way of refrigerating plants on all new ships that are coming off, to have the very finest, for the purpose of keeping down the losses that otherwise might occur in consumable foodstuffs. And the Navy has gone to great lengths to provide protection for its food supply. I happen to know that in the early days of my own association with this committee that the variable between the shore stations where refrigerating facilities were available and conditions aboard ship was much larger than it has been in the more recent past.

Admiral YOUNG. I would say, Mr. Thomas, that it is about 20 percent higher afloat.

I think we could very easily determine the cost at the large training stations where you have daily delivery of fresh supplies, it is at least lower. Also, you can have deliveries of fresh supplies of meats and vegetables. I think it would be fair to say that it would be about 20 percent.

Mr. THOMAS. On the basis of a million officers and men in the service, how many would be afloat and how many on shore? Admiral YOUNG. Well, I think we can give that. Mr. THOMAS. Roughly.

Admiral ALLEN. Due to the large number of men in training, we have a very large number ashore right now-about two-thirds-and one-third afloat.

Mr. THOMAS. About 2 to 1. That would bring your ration down under normal conditions to around 51 or 52 cents, would it not, on the basis that everybody is ashore?

Admiral YOUNG. Well, if they were all ashore.

Mr. THOMAS. Yes.

Admiral YOUNG. That is about correct.

The average cost of the general mess ration for the quarter ending December 31, 1942, prior to audit and from returns received to date, is: $0.71194 for activities afloat and $0.57864 for activities ashore.

LEND-LEASE CREDITS FOR FOOD SUPPLIES

Mr. THOMAS. Now, with reference to Lend-Lease: There is one question that I am not quite clear on, and that is with regard to LendLease Administration. Did I understand you to say that a portion of these funds that will be appropriated will be used by the Bureau of Supplies and Accounts to buy Lend-Lease foods in Australia and New Zealand?

Admiral YOUNG. They will have to be used as in some way we have to adjust that through bookkeeping. We have to have the funds; the food has to be procured.

Mr. THOMAS. You will recall that we made an appropriation for a specific thing known as Lend-Lease.

Admiral YOUNG. Yes.

Mr. THOMAS. And now in addition to that we are supplementing the Lend-Lease funds with some naval funds; is that not correct? Admiral YOUNG. No; I did not say that. We have got to buy this food anyway and if we get some down there, whatever portion we are able to buy there is handled by way of transfer as a bookkeeping credit as we do not actually spend the money.

Mr. THOMAS. Yes.

Admiral YOUNG. It is a bookkeeping item.

Mr. THOMAS. You mean you do not pay Australia and New Zealand; that is handled through Mr. Stettinius' organization?

Admiral YOUNG. Through Mr. Stettinius' organization.

Mr. THOMAS. Mr. Stettinius made a very fine statement the other day concerning what we are getting from Australia and New Zealand in return for Lend-Lease materials we are sending them.

Admiral YOUNG. But we do not know what we will have to buy. Mr. THOMAS. As I understand what you say is this: That any additional funds we give Mr. Stettinius under Lend-Lease will be increased by the amount the Navy is allowed here?

Admiral YOUNG. Oh, no; that will be saved. The amount will be saved; it will be handled under Lend-Lease, but certainly it will not be spent a second time; that will come back to you.

Mr. THOMAS. It will only be spent one time, but it will be handled through Lend-Lease?

Admiral YOUNG. We are going to have to buy the supplies, but it will be handled as a debit against the acccount. It does not mean necessarily a transfer of money.

Mr. THOMAS. I see.

83297-43-24

Admiral YOUNG. But we have to set up the appropriation so as to provide for the food for the men in that area.

Mr. THOMAS. And you do not know, as a matter of fact, whether you are really going to pay for the food you get down there or whether it is going to come in under lend-lease?

Admiral YOUNG. I know what the Navy will do.

Mr. THOMAS. Does the money go to Stettinius?

Admiral YOUNG. The amount is set up as an allocation for the purchase of food and everything will clear through lend-lease.

Mr. THOMAS. I do not think I made myself clear.
Admiral YOUNG. Perhaps I did not understand you.

Mr. THOMAS. To get it clear, it is lend-lease to Mr. Stettinius for whatever you get down there; is that correct?

Admiral YOUNG. No; I think they just acknowledge the receipt; it is a balancing figure down there. In other words suppose we get a certain amount of supplies, a million dollars' worth of supplies, that voucher goes to Melbourne to be checked over by lend-lease and passed on by the Army and Navy Board, and the figures for the $1,000,000 is broken down.

Mr. THOMAS. And the voucher that is down there?

Admiral YOUNG. It is for the same amount of supplies that was furnished; it is handled as a balancing figure.

Mr. THOMAS. In other words they usually sign a receipt for so many purchases made down there?

Admiral YOUNG. Yes.

Mr. THOMAS. That is the way this is handled?

Admiral YOUNG. Yes.

Mr. DITTER. The fact of the matter is that it is a bookkeeping clearance, and whatever you get out of Mr. Stettinius through lend-lease, and this substantial item, is pure velvet?

Admiral YOUNG. As a bookkeeping item.

Mr. DITTER. You will have that much more in your pocket, so far as subsistence goods are concerned than you would have?

Admiral YOUNG. But it will not be spent.

Mr. DITTER. Than you would have if you had to go out and buy them somewhere else?

Admiral YOUNG. It will not be spent; it will all be handled through lend-lease.

Mr. THOMAS. Suppose you take some specific items.

Admiral YOUNG. Well, meat.

Mr. THOMAS. What other items are you buying?

Admiral YOUNG. We buy potatoes, cabbage.

Mr. WHITTEN. Dairy products?

Admiral YOUNG. Dairy products.

Mr. WHITTEN. What about wheat?

Admiral YOUNG. Very little wheat. Sugar, down there. There are many items, miscellaneous items which we have picked up through that arrangement.

Mr. THOMAS. Would you say the total represented a half, or 60 percent?

Admiral YOUNG. I would say probably 20 or 25 percent.

Mr. THOMAS. A very small amount?

Admiral YOUNG. Because we cannot get all our staple items; they still must be brought in from the States. We are undertaking to de

velop this source of supply to save the use of refrigerator ships. There are very few refrigerator ships and we are trying to save them having to run back and forth through the Pacific, except as to the fresh items.

(NOTE. The method of settlement for lend-lease and lend-lease in reverse has not been established. However, it appears that the question involved here is the reduction which might be made for prospective receipts from lend-lease in reverse. This item is so indefinite that it could not be taken into consideration, since the fleet may be operating in some other area; also operating losses may be increased greatly, such losses being covered only to the extent provided by the cost of the ration.)

RATION COST FOR MIDSHIPMEN AND FOR NURSES IN HOSPITALS

Mr. COFFEE. Admiral, I noticed the item about midshipmen, 80 cents per day, and in hospitals. The particular reason for the increase in cost to midshipmen is because of the small number of men and therefore the increase in the price of food?

Admiral YOUNG. Which page do you refer to?

Mr. COFFEE. I am referring to page 260.

Admiral YOUNG. Midshipmen, 80 cents; nurses, subsistence in hospitals; that is 80 cents per day.

Mr. COFFEE. Yes; and the reason for that 80 cents for midshipmen, for subsistence, is because of the relatively small number of men, is it? Admiral YOUNG. And a different type of food, a little better food, more milk, and more dairy products. These boys that we have are young men, and the standard type of mess is a little better.

Mr. COFFEE. The hospital increase is due to the special meals? Admiral YOUNG. This cost includes not only the cost of the provisions, but also the cost of operating the hospital mess-service and equipment. The 80 percent is the amount paid to the hospital fund. Mr. THOMAS. These boys eat a little higher up on the hog than the rest of the Navy, do they not?

Admiral YOUNG. Well, they do very well.

Mr. SHEPPARD. Admiral, taking into consideration the quantity of food that apparently will come through the lend-lease operation and the saving by your appropriation through the arrangements which we have just referred to, is it reasonable to assume that we might be able to make some reduction in this estimate based upon the potential supply in that area?

Admiral YOUNG. I think it may have a small effect upon the over-all cost, but the differences, due to the relatively small amount involved, should not result in much reduction, since there is an increase in the amount of losses due to this operation for which allowance has not been made. The prices down there are pretty well established on the relative prices through the Joint Purchase Board, which determine that, and I do not find any unfairness in the charges.

Mr. SHEPPARD. Either on or off the record in your discretion, Admiral, viewing the situation in that general area, would you say we would have access under this lend-lease procedure to a great deal of supplies from Australia and New Zealand?

Admiral YOUNG. I do not have those figures, Mr. Chairman, because that would involve the Army also. The Army is down through that area, and I do not have those figures.

Mr. SHEPPARD. In commenting about the cost to both Mr. Ditter and Mr. Thomas, am I correct in my premise in assuming that a com