of the work showed they could be undertaken without exceeding the limit.

Mr. WOLVERTON. When you asked for an additional $450,000 last spring you said that $400,000 or $450,000 on the face of your present estimate covered a margin and that $50,000 was for additional work; so that between April and the present time there has been a difference in the estimate of at least $350,000.

Admiral BEURET. It is $400,000.

Mr. WOLVERTON. Now, personally, I am interested not in confining this to the amount of $13,600,000 but any other amount that is necessary, and if there should be a margin in this so that we would not have to depend upon deferring certain work which may be necessary it ought to be a margin in cash rather than a margin in deferring important work.

Admiral BEURET. The department knew that and this bill is its considered action. This is what we recommend.

Mr. WOLVERTON. Can you submit to us a statement that will show by revision of estimates the absolute necessity for this entire amount to cover actual work that has or is to be done?

Admiral BEURET. I do not know whether I can persuade you or not, but I can submit an itemized statement of the present revised estimate. Mr. WOLVERTON. Would that statement include your reference to the changed conditions where some of your previous estimates had increased or decreased?

Admiral BEURET. It would include a comparison by items of the original and revised estimate.

Mr. WOLVERTON. Also, would you be able to tell us more definitely what would have to be deferred in order to provide a margin such as you have mentioned?

Admiral BEURET. I could tell you more definitely, but I could not say positively. I could tell you in a general way for the greater part of the work.

Mr. WOLVERTON. I think that statement would be very helpful. Mr. HALE. Your idea, Mr. Wolverton, is the same as mine. I think it would be very helpful to us to have three comparisons, the first should show the original estimate, the second the revised figures, and the last the latest figures.

Admiral BEURET. We are only proposing that the sum of $13,600,000 be authorized.

Mr. HALE. But you have an expenditure of $13,900,000

Admiral BEURET. Those were alterations that were considered by the department, but it does not mean that they are immediately urgent. We might do them next year or five years from now.

Mr. HALE. I would like to have those specified and to have such of them marked with a star, perhaps, as should be selected at the present time if you found you could do some of them within the limit of $13,600,000.

Admiral BEURET. The statement I believe you desire is as follows:

·Estimates for the modernization of the "Oklahoma" and "Nevada"

1 These three items should be considered together for each vessel. The amount authorized was $13,138,000, some of the work under the estimates for "Miscellaneous repairs" being deferred.

Mr. WOLVERTON. In April when you asked for the increased authorization the ships were then approximately between 5 per cent and 10 per cent complete-I think the work had progressed that far? Admiral BEURET. It was about 6 per cent or 7 per cent.

Mr. WOLVERTON. In December, the present month, when you make these additional estimates how near complete are the ships in question?

Admiral BEURET. Possibly 60 per cent. I think ordnance is farther along than that.

Mr. WOLVERTON. At that stage of progress have we arrived at a point where we can determine definitely that there will not be any more unforeseen circumstances that might make it necessary for you to come back and ask for an increased authorization to complete the work?

Admiral BEURET. We can not determine anything of that sort definitely, but in the ordinary use of the terms I would say yes. Mr. WOLVERTON. The ship has been opened up sufficiently to indicate, in your opinion, repairs that are necessary?

Admiral BEURET. There will be nothing further in my opinion. Mr. WOLVERTON. Would there be anything, in your opinion, that would make this sum of $13,600,000 insufficient to cover all the work involved?

Admiral BEURET. Personally, I can not think of anything that will result in any material change in the estimate.

Mr. WOLVERTON. What I fear and would provide against is that, having in mind the original estimate was $12,800,000, and you actually authorized $13,138,000 worth of work based upon the navy

yards' estimate, and your estimate in May for the work that you desired to do amounted to $13,194,000

Admiral BEURET (interposing). The sum of $13,194,000 represented work that we had contemplated undertaking. That was the understanding.

Mr. WOLVERTON. I have not completed my statement. Now your amount has arisen to $13,600,000 without any margin being provided for. I am fearful of this, that if additional work should appear necessary I can readily understand why bureau heads might not want to come here and ask for more money but would prefer to have the work go undone rather than put themselves in a position of coming here and asking for further authorization; and for that reason I would rather be in the position of seeing this particular appropriation sufficient to cover what you actually have in mindcover any contingencies, even to the extent of providing a cash margin. Admiral BEURET. We have considered that and are of the opinion that we have provided one.

Mr. WOLVERTON. There is no margin in cash, you say, based upon present estimates?

Admiral BEURET. Yes; there is always a margin in any estimate. Mr. WOLVERTON. How much is it in this case?

Admiral BEURET. I do not know how much the margin is. Everybody in making an estimate provides a margin.

Mr. WOLVERTON. When you asked for the original amount you provided an estimate of $400,000 for that?

Admiral BEURET. That was for unforeseen work, but all estimates include a margin. If an estimate is correctly made you practically never hit the spot. Suppose you had 10 items. You might hit the total amount all right, but the chances are that some items will be over and some will be under. In this case we knew from previous experience that when we open up a ship to the extent we opened up the Oklahoma and the Nevada there will be additional items necessitating attention. We do not know what they are. When we come to the Pennsylvania and Arizona the items will be different, but our experience in working with these ships over the years indicates that there is always something of the kind arising. We are in this position with these ships-we have opened them up for the major alterations. We have torn everything out and thoroughly examined it. Before that we had simply looked at the ship.

Mr. WOLVERTON. What did you mean by saying in answer to Mr. Hale's question that there was no margin left?

Admiral BEURET. I meant the margin for unseen work, because we did not think that was necessary. We can not say how much a man is going to spend in doing a job. It is impossbile to do that. You have to argue from previous experience. If there are enough individual items the chances are that the overs and unders will balance and the total will be practically correct.

Mr. WOLVERTON. Having in mind the condition you relate and having in mind that these ships have progressed 60 per cent and in the remaining 40 per cent are other contingencies which might present themselves, is it necessary to have some actual margin in addition to what you are referring to?

Admiral BEURET. I do not think so. I appreciate your position, Mr. Wolverton. We did not decide to renew our request for

$13,600,000 without very careful consideration. I can not say that we are necessarily correct. We might be mistaken, but we do not think we are mistaken. We honestly bring this up as being what we expect the cost to be.

Mr. WOLVERTON. Having in mind that in April last you asked for this increased authorization on the basis of $50,000 actually expended, leaving a margin then of $400,000, it disturbs me

Admiral BEURET (interposing). That margin is what we wanted to cover the items that have now been found necessary.

Mr. WOLVERTON. When you appeared before this committee on May 4, last, Mr. Vinson asked you, "But you will ask for more money next December?" You answered, "We hope not. However, the chances are we will."

Admiral BEURET. Yes; if you will remember Admiral Hughes testified at the same time and he said

Mr. WOLVERTON. Continuing, you said, "We hope that we shall not have to ask for the full amount of the proposed increase."

Now you have asked for it. Why have conditions changed since last April to make this necessary? I think the committee should have that information.

Admiral BEURET. We wanted the authority to expend $13,600,000. We anticipated that with the condition of work as it would be in December when we would have to ask for the money we would know definitely whether we had to ask for $450,000 or $200,000 or whatever amount was required. You gentlemen decided not to act at that time because you were not convinced we needed the additional money.

Now we are in the position as if we were arguing before the Appropriations Committee for the money. We expect, if you authorize $13,600,000, to provide for items to the extent of $450,000 because we expect to find them. If you had authorized $13,600,000 last spring we expected to study the situation the same as now and in December ask for $450,000 or a less sum if necessary because we thought and we now think that the work has arrived at the point where the estimates are probably accurate. There is nothing like an error of, say, a million dollars. The ship has been opened up and all these items we anticipated might arise, have arisen.

Mr. WOLVERTON. If the record of the testimony taken here in April should be read by members of the House, it would indicate that in asking for $450,000 you were only intending so far as you could see to spend $50,000. Now that situation has changed. You have actually estimated that that money, $350,000, must be spent. What we want to be in a position to do is place ourselves in a position on the floor of the House to give definite information as to what the changed situation is that occasioned a change from $50,000 in April to $400,000 in December.

Admiral BEURET. I forecast that situation in the testimony you just read.

Mr. WOLVERTON. Continuing your testimony of last spring this question was asked you "You can not conceive of any situation that will require the expenditure of this $450,000 you are now requesting? It is only for contingencies?" You answered, "I am not talking about work that we have in sight. All the work we have in sight is included in the estimate. The other thing is the margin. It is a question of judgment whether we should authorize up to the limit of

cost or not. What we wanted you to do is to authorize all the work at the start, because that is the way to do it most economically."

Admiral BEURET. I have no different idea now. We tried to put the case as fairly as we could before the committee. It is not always possible for two people to understand each other, particularly when they have had a different training; but we tried to put the case fairly before the committee at the time. Probably we overstepped and gave the committee the impression that we were asking for this money out of the air but we were not. We are not. We would not ask for $13,600,000 unless we thought we required it. We do require it now. We expected to study these estimates in the same way this fall if you had authorized this additional expenditure last spring because we would have come before the Appropriations Committee and would have to meet the same arguments we have met here. Mr. WOLVERTON. Still reading from the record I find:

Mr. BRITTEN. You have indicated or suggested that in the request for an increase of $450,000 there is included a margin of safety.

Admiral HUGHES. The increase is purely a margin of safety at the present time. All the work we originally contemplated is laid down with one or two minor items we had to cut out. I believe we will make a saving on these items to cover the increased cost. However, the amount we are asking of you from the point of view of the department is purely a margin of safety and not to cover the work now released; it is to cover any items that may develop or increase cost over the advance estimates.

Mr. BRITTEN. What margin of safety have you there? Might not the amount be $100,000 or $150,000?

Admiral HUGHES. The margin of safety-we are asking for an increase of $450,000, I believe it is, and about $413,000 of that, at the present time, is a margin of safety.

Mr. BRITTEN. When do you expect to have this work completed?

Admiral HUGHES. June 30, 1929.

Mr. BRITTEN. On the 30th of June, 1929?

Admiral HUGHES. Yes, sir. We expect these vessels to be ready to leave the yards at that time.

Mr. BRITTEN. It looks to me that, if you are correct in your statement, of this $450,000 requested, approximately $413,000 is the margin of safety.

Admiral HUGHES. Yes, sir; that is true from present condition of the work. Mr. WOLVERTON. The basis upon which you go to Congress now has changed since April. At first it was to provide a margin of safety and now it is to be expended for actual work. That specific information is the thing I would like to have. I would like to be definitely assured that there is nothing that can happen as the next 40 per cent of the work progresses that might require still further margin.

Admiral BEURET. I can only give you the assurance that we have studied the situation and that is our belief.

The CHAIRMAN. For the benefit of the committee I think it will clarify the situation to ask you a few questions-most of your money will be spent for a specific purpose and that is in connection with the turret guns. You are willing to set aside, if you have to do so, certain repairs and minor alterations that were originally contemplated and estimated for. Between now and the next day you come here if you will turn to page 356 of the hearings before this committee in the Sixty-ninth Congress, second session, January 4, 1927, you will find some 10 or 12 items enumerated If you will take that information and have two corresponding columns showing where this $450,000 will go, you will clear up the situation.