the officers eligible for consideration for selection for promotion to the grade of rear admiral may base its recommendation in the case of Capt. Walter R. Gherardi upon his comparative fitness for the shore duties of the grade of rear admiral, and that in the event of his selection and subsequent promotion he shall be carried as an additional number in grade.

The records of the Navy Department show that Capt. Walter R. Gherardi was born on August 9, 1875. He was appointed to the Naval Academy in 1891; graduated therefrom in 1895 and has since that date remained continuously on the active list of the Navy. He was promoted to successive grades in the normal course and was duly selected with his contemporaries on the Navy list for the. grade of commander and captain.

In 1924 while on active duty as aide to the Secretary of the Navy and accompanying that officer on an inspection trip he received an injury to the head in a minor automobile accident which resulted in the formation of a tumor on the brain and necessitated a major operation for its removal. As a result of this operation Captain Gherardi retains a certain minor optical defect. The medical examining board has certified that he is not physically qualified for duties at sea but is so qualified for duties on shore and has further certified "that the operation on the candidate's skull was necessitated by the result of a wound received while traveling with the Secretary of the Navy on official duty and while in the performance of his duties, and that such wound was incurred 'in the line of duty.' Captain Gherardi has been passed over by two selection boards for selection for promotion to the grade of rear admiral. In view of his heretofore excellent service record it appears possible that the action of the selection board in not selecting him for such promotion may well have been due to his physical condition. Under the provisions of United States Code, title 34, section 298, the report of the selection board must certify that "the officers therein recommended are the best fitted of all those under consideration to assume the duties of the next higher grade, except that the recommendation of the board in the case of officers of the former Engineer Corps who are restricted by law to the performance of shore duty only, and in that of officers who may hereafter be assigned to engineering duty only, shall be based upon their comparative fitness for the duties prescribed for them by law." Obviously the selection board may not under this law select an officer who is qualified for shore duties only, unless he is a member of the former Engineer Corps or assigned engineering duties only, when for other officers the duties of the next higher grade include sea duty.

On the other hand, under the provisions of United States Code, title 34, section 272, officers whose physical disqualification extends only to sea duty and is occasioned by wounds received in line of duty are not to be debarred from promotion because of such physical disqualification for sea duty. Accepting the verdict of the medical examining board, that Captain Gherardi's disability arises from a wound received in line of duty, it appears that if selected he may be promoted. Also from the intent of the statute, of long standing (R. S. 1494), it may be inferred that such disqualification should not constitute a complete bar to selection.

The bill simply permits Captain Gherardi to be selected, like the officers of the former Engineer Corps, upon the basis of his comparative fitness for duties on shore, and thereby permits the selection board, if it sees fit, to select him for promotion on that basis. It also makes him an extra number in the grade of rear admiral, if so selected and promoted, as is done also by the original statute of August 29, 1916, for officers of the former Engineer Corps. The bill does not direct Captain Gherardi's selection nor does it authorize his promotion without selection but removes the present bar to selection. This removal is believed justifiable both by the intent of R. S. 1494, United States Code, title 34, section 272, and also by the excellent naval service rendered by Captain Gherardi.

The cost of the bill H. R. 17001, if enacted, and if Captain Gherardi is selected and promoted, will be $300 per annum.

The bill H. R. 17001 was referred to the Director of the Bureau of the Budget with the above information and a statement that the Navy Department contemplated recommending that the bill be enacted. The Navy Department has been informed this date that this proposed report is not in conflict with the financial program of the President.

In view of the foregoing, the Navy Department recommends that the bill H. R. 17001 be enacted.

Sincerely yours,

T. DOUGLAS ROBINSON,
Acting Secretary of the Navy.

о

A HEARING ON THE BILL (H. R. 9352) PROVIDING FOR SUNDRY MATTERS AFFECTING THE NAVAL SERVICE

HOUSE OF REPRESENTATIVES,

COMMITTEE ON NAVAL AFFAIRS,

Tuesday, February 5, 1929.

The committee this day met at 10:30 o'clock a. m., Hon. Fred A. Britten (chairman) presiding.

The CHAIRMAN. The committee will be in order and resume consideration of H. R. 9352, which is a bill providing for sundry matters affecting the naval service.

STATEMENT OF REAR ADMIRAL CHARLES R. MORRIS, SUPPLY CORPS, U. S. NAVY, CHIEF OF THE BUREAU OF SUPPLIES AND ACCOUNTS.-Resumed

The CHAIRMAN. Admiral Morris, will you be good enough to take the witness chair?

Admiral MORRIS. Certainly.

The CHAIRMAN. Admiral, where did we stop yesterday?

Admiral MORRIS. We should start this morning with section 12. The CHAIRMAN. Section 12 provided:

That the General Accounting Office is hereby authorized and directed to credit the accounts of Daniel A. Neumann, formerly a lieutenant in the Supply Corps of the Naval Reserve Force, in the amount of $894, which sum represents payments made by said officer to Lieut. Harry S. Lyons, United States Naval Reserve Force, on forged pay receipts.

Tell us about that, Admiral.

Admiral MORRIS. This occurred in 1918, when there were a great many reservists in the service and they were constantly moving from one place to another. The officer to whom payment was made effected the payment by forging the name of a reserve officer. This amount, $894, represents two separate payments. After the second payment was made Lyons was apprehended after a trap had been set for him. He was placed in confinement on the Granite State and while there, by forging the name of the commanding officer of that vessel to a pass, he got over the gangway and disappeared. He has not been apprehended.

Mr. ANDREW. You are speaking of Lyons-he was never apprehended after his escape from the vessel?

Admiral MORRIS. That is right. I may add that the disbursing officer in this case was an inexperienced reserve officer.

The CHAIRMAN. Where is the reserve officer now? He is not in the service?

Admiral MORRIS. He is not.

The CHAIRMAN. This, then, means only a bookkeeping adjustment. Admiral MORRIS. This would remove the charge from the accounts of Neumann.

The CHAIRMAN. The Government can not hold anything he has? The Government does not expect him to pay back?

Admiral MORRIS. It would be impossible to obtain it from him. The CHAIRMAN. What about the time limitation? I refer to the statutes of limitation.

Admiral MORRIS. That has run.

The CHAIRMAN. So that you merely request this action for a bookkeeping purpose?

Admiral MORRIS. It would clear the charge now against the accounts of Neumann. The unusual conditions then existing in New York showed that this was hardly the fault or due to the negligence of Neumann.

The CHAIRMAN. You would say that he used every care and precaution to protect the Government's funds?

Admiral MORRIS. The department considered that to be so, and it issued a certificate of relief, but the Comptroller General declined to honor it and remove the charge from Neumann's account.

Mr. ANDREW. If Lyons, who forged these checks, should be apprehended, the statutes of limitation operate and nothing could be done with him?

Admiral MORRIS. No; that is not quite right. If he should be apprehended we could prosecute him, but he has never come within the jurisdiction of the Navy.

Mr. ANDREW. I move that we favorably report this item.
The CHAIRMAN. Next is section 13, which provides:

That the General Accounting Office is hereby authorized and directed to credit the accounts of Capt. Walter B. Izard, Supply Corps, United States Navy, retired, in the amount of $455.22, which sum represents payments made by said officer to H. Hanakahi, carpenter's mate, United States Navy, during the period from July 1, 1923, to March 15, 1924, on forged pay receipts.

Admiral MORRIS. This is simply a continuation of the relief granted in the case of Captain Willet; rather, it is a continuation of Captain Willet's case. The fact that these pay receipts were not genuine was not discovered before Captain Izard had made these payments. It is the same, as I have said, as section 9 of this bill. The CHAIRMAN. Did we approve section 9?

Admiral MORRIS. Yes. Under date of March 15, 1922, the Secretary of the Navy forwarded a certificate of relief under the act of July 11, 1919, to the Comptroller General, but such certificate was not accepted for the same reasons as outlined in the case of Captain Willet.

The CHAIRMAN. Were there any good reasons-of course there must have been-why that certificate looking to the relief of Captain Izard was issued?

Admiral MORRIS. Because the department, after careful investigation, considered that there was no fault or neglect on his part. He took every precaution to protect the Government's money, but these payments were made before the matter was checked.

The CHAIRMAN. These payments were made over a period of eight months. Did it take that long to check up and asecrtain that the receipts were forgeries?

Admiral MORRIS. It did not, except it w is continuing through that time, and, evidently, also on account of some collusion in the shop

between the supervisor and the man who presented this forged pay receipt.

The CHAIRMAN. Was Hanakahi apprehended?

Admiral MORRIS. The timekeeper was apprehended and turned over to the civil authorities.

I should like to make a correction of the bill at this section. It says these payments were made during the period July 1, 1923, to March 15, 1924. That should read "during the period from July 1, 1913, to March 15, 1914."

The CHAIRMAN. The payments were made between July 1, 1913, and March 15, 1914, instead of between July 1, 1923, and March 15, 1924?

Admiral MORRIS. That is correct.

Mr. ANDREW. Why did you wait 15 years in this case before bringing the matter to the attention of the committee?

Admiral MORRIS. Under date of March 15, 1922, the Secretary of the Navy forwarded a certificate of relief under the act of July 11, 1919, to the Comptroller General, but that certificate was not accepted. The department considered that Captain Izard was without fault or negligence, but the Comptroller General declined, as I have said, to accept the certificate.

Mr. ANDREW. It has been 15 years since this happened?

Admiral MORRIS. The certificate of relief issued on March 15, 1922, in this case.

Mr. VINSON. The Navy Department after careful investigation decided to issue the certificate of relief in accordance with the act of July 11, 1919, but the Comptroller General declined to honor the department's certificate?

Admiral MORRIS. Yes.

The CHAIRMAN. The department desires to clear the bookkeeping record of Captain Izard and this legislation is necessary to do that? Admiral MORRIS. Yes.

Mr. VINSON. Have the funds of Captain Izard been held, or has he been required to pay over the money?

Admiral MORRIS. No.

Mr. VINSON. When did the Comptroller General learn that the certificate of relief had issued at the Navy Department and when did he decline to honor it?

Admiral MORRIS. In 1922.

Mr. VINSON. The Comptroller General in auditing the books of Captain Izard discovered this outstanding item?

Admiral MORRIS. The department forwarded this certificate of relief and it was presumed the Comptroller General would accept it. Mr. ANDREW. That was nine years after the forged receipt had been paid, evidently.

The CHAIRMAN. Is there any objection to approving this item? [After a pause.] Apparently not.

The CHAIRMAN. Next is section 14, which provides:

That the General Accounting Office is hereby authorized and directed to credit the accounts of Lieut. Thomas C. Edrington, Supply Corps, United States Navy, in the amount of $7,388.78, which sum represents a payment made by said officer to the F. W. Mark Construction Co. (Inc.), under department contract No. 2005 (Yards and Docks, 3269), dated September 30, 1918, as amended by letter change issued by the Bureau of Yards and Docks, under date of December 21, 1921, authorizing an increase in the contract price on account of "the elimination

of work in excess of eight hours a day after the date of the armistice, November 11, 1918."

Tell us about that, Admiral.

Admiral MORRIS. Relief in this case is requested because the contract in question was amended by the contracting bureau and under the circumstances there was apparently no reason for the disbursing officer to question the legality of the payment and request an advance decision. The Navy Department considers Lieutenant Edrington should be relieved from responsibility for the alleged overpayment by legislation, as it was not the result of fault or negligence on his part. In his decision the Comptroller General held that where a contract for Government work provides that under authority of the Executive Order of March 22, 1918, the contractor had the right to employ labor in excess of eight hours a day, at specified increased rates per hour for overtime work, the restoration of the prohibitions of the so-called eight-hour law, after the emergency which caused the suspension thereof had passed, did not obligate the Government to pay any expenses incurred or damages sustained by the contractor. As I have said, the contracting bureau realized that the changed condition limiting the employment of the contractor's men to eight hours a day did cause him loss when it issued the change order, and it was acknowledged. On that basis the disbursing officer made pay

ment.

The CHAIRMAN. Let me understand this. The Mark Construction Co. had a contract during the war?

Admiral MORRIS. Yes, sir.

The CHAIRMAN. And the Bureau of Yards and Docks issued a letter change, which is a supplement to the contract, authorizing certain additional payments for overtime. In the meantime the armistice came along, and this company's change order ran over the armistice period of November 11, 1918, but the paymaster did not take cognizance of that fact, but paid the company in full after that date. Admiral MORRIS. That is not quite it. In the contract there was no limitation on the contractor in regard to employing men for only 8 hours a day.

The CHAIRMAN. There was no limitation in that respect?

Admiral MORRIS. No, sir. During the emergency there was a suspension of the so-called 8-hour law.

The CHAIRMAN. We understand that.

Admiral MORRIS. At the time of the armistice an order to this effect was put out, "Discontinue immediately all overtime on contracts except emergency plant and transportation repairs. Notify immediately all contractors."

The CHAIRMAN. That order stopped the overtime pay, excepting in emergency cases.

Admiral MORRIS. Time over eight hours. Then the contracting bureau, realizing that this contract had been entered into under a different condition, issued a change letter that, in effect, increased to this extent the amount of the contract.

The CHAIRMAN. When did the contracting bureau, which is the Bureau of Yards and Docks in this case, issue this change letter? Admiral MORRIS. December 21, 1921.

The CHAIRMAN. That was about three years after the armistice. When was the work done?