As you will see under the commissary project, the estimated value of farm products expected to be issued to the commissary in 1949 is $95,528, which leaves a difference of $28,711. But the revenues from other sales amount to $17,000, so that combining the two establishments, the dairy-chicken farm in 1949 will show a loss of $11,469. Mr. ENGEL. And that is figuring eggs at 56 cents? General LOUGHRY. That is right.

Mr. ENGEL. And milk at how much?
General LOUGHRY. 53 cents.

Mr. ENGEL. About 12% or 13 cents a quart.

General LOUGHRY. For estimating purposes we fix the cost of milk and eggs at the estimated cost of production.

The Bureau of the Budget deducts from the amount we request for the mess the estimated value of those products.

PERMANANT IMPROVEMENTS

Will you take up the next item for permanent improvements? General LOUGHRY. The Bureau of the Budget, although it disallowed our estimates for permanent improvements at the Soldiers' Home, did allow $446,579, of the amount we estimated, for the repair of the electrical utilities.

I will state in general that I understand that the equipment, the conduits in the electrical system decrease in efficiency at the rate of about 2%1⁄2 percent per year, so that after 40 years they presumably would be unserviceable.

The electrical equipment that we have now is more than 40 years of age. This estimate and the necessity for the replacement of this electrical system is based upon the recommendations of the representatives of the Chief of Engineers, who are here this morning, and the engineer representative of the Bureau of the Budget. This is a technical matter and they are here to answer any questions you may wish to ask.

Mr. ENGEL. This is for the replacement of obsolete electrical equipment, changing from the direct to alternate current and similar changes, is it not?

General LOUGHRY. There will be an alternating system, but the $446,000 is for the replacement of obsolete equipment that has been installed for over 40 years.

Mr. Kruse, from the Office of the Chief of Engineers, and Mr. Merrick, of the engineer district, are here if you want to ask them any questions.

USE OF INMATES

Mr. NORRELL. Governor, I have read your explanations very carefully and I have just one or two questions that I want to ask you. You said in there somewhere that you use a lot of the inmates as waiters at the tables in the mess hall. I wonder how that works out? General LOUGHRY. I stated that we did not employ any members for that purpose who were over 60 years of age.

Mr. NORRELL. I noticed that, and I presume that the younger inmates are used.

General LOUGHRY. When necessary. Based upon the 60-year limitation there are only 354 eligible out of 1,500 available for waiting on

70546-48- -10

tables, and we have found that there are only about 43 percent of that number physically eligible for the job. Of the number required, a certain number volunteer and the deficiency after that has got to be made up by detail; we have no choice about the matter.

We are proposing here, in these estimates, beginning with the next fiscal year, the employment of colored waitresses so that we shall not employ members as waiters.

Mr. NORRELL. You do not plan to follow the precedure in the future you have been following unless in case of emergency? General LOUGHRY. That is correct.

Mr. NORRELL. I would like to see that done; I hate to think of a person who has been a soldier spending the evening of his life as a waiter, even on a voluntary basis; I do not think it is in keeping with the standards of dignity and I am glad to know that you are going to employ colored waitresses from now on.

Mr. ENGEL. General, when you employ these waiters they are paid for the service, are they not?

General LOUGHRY. Yes.

Mr. ENGEL. Regardless of whether they volunteer or are detailed. General LOUGHRY. That is right.

Mr. NORRELL. I do not think they should be compelled to wait tables.

Mr. ENGEL. I know.

Mr. TIBBOTT. But this is voluntary service.

Mr. NORRELL. If they want to work, but I do not believe in making them. I do not think that a soldier ought to be required to be a waiter in the last few years just before he dies; that is just going down hill too fast.

FIRE HAZARDS

Mr. ENGEL. Project 31, "Fire hazard."

General LOUGHRY. We have $50,000 in the current year.

Mr. ENGEL. What about the fire hazard occasioned by reason of the electrical system being 40 years old?

Mr. KRUSE. There are certain overlaps between the question of fire hazard and the rehabilitation of the electrical system.

A good many of the circuits, in fact, are overloaded, and the result is that they are overheated. That is what we are trying to correct. Also we are trying to provide a better lighting facility and also to provide in this installation additional fire protection in the way of signals, and so on. There is an overlapping in the two.

Mr. TIBBOTT. Do you have to make these adjustments from overloading you speak of, in accordance with certain standards? Mr. KRUSE. Yes.

Mr. TIBBOTT. Set up by the underwriters?

Mr. KRUSE. Yes; the underwriters code. And I might say there are great many circuits out there, particularly on the main line, which do not come up to the underwriters' requirements; they have deteriorated to such an extent they do not meet the underwriters' requirements.

COMMISSARY

Mr. ENGEL. The next project, No. 32, "The commissary".

You

had $414,832 in 1948 and you are asking for $443,532 for 1949. Will

you explain the necessity for the increase?

General LOUGHRY. If you will turn to page 1079 of the justifications, you will note that the increase is entirely caused by the increase in costs of rations.

In the fiscal year 1948, as you will recall, the Bureau of the Budget, fixed the ration at 60 cents. This committee, in May of last year, because of the increase in prices, fixed the cost of the ration at 68.4

cents.

The Bureau of the Budget this year has allowed us 70 cents for the general mess, and $1 for the hospital as opposed to 85 cents for the current fiscal year.

Mr. ENGEL. What is the regular Army ration?

General LOUGHRY. The cost of the regular Army ration, in September 1946, was 80.29 cents; in May of last year it was 91.43 cents, or an increase of 14 percent, on which you based the increase; the cost of the Army ration as of January 1, 1948, is $1.0253, or an increase of 27.7 percent over the cost in September of 1946.

Mr. ENGEL. Will you place in the record that part of project 32, subproject 8, which gives the ration?

(The statement referred to follows:)

NEED FOR ADEQUATE ALLOWANCE FOR INCREASED COSTS TO OBVIATE DEFICIENCY REQUESTS

Mr. MAHON. At this point, Mr. Chairman, would it be wise to have some understanding about these increases in costs? It has been developed, as a result of your interrogatories, that these figures were made months ago. Actually they are not current; they do not mean what they appear to mean, and I wonder if the general should not, upon our request, give us some enlightenment with reference to specific projects.

Mr. ENGEL. He did that, Mr. Mahon, on a number of items.

Mr. MAHON. Yes; I was here when he did that on some items. So that we may conclude, except in cases where you have mentioned the increase in the costs that there would be no material increases and that we are not to be concerned about those except where you made specific reference?

General LOUGHRY. I will say, Mr. Chairman, that I cannot make a comprehensive answer, but I am more interested in the cost of rations and the cost of feed for the dairy and chicken farms than in anything else..

Mr. MAHON. You think there is enough money in this bill, even though prices have risen tremendously, to take care of the situation there?

General LOUGHRY. I have given the chairman the figures covering the commissary.

Mr. MAHON. Yes; I got those figures.

Mr. ENGEL. You are referring and comparing this record with the Army mess?

General LOUGHRY. Those percentages are based upon the increased cost of Army ration.

Mr. MAHON. The chairman, Mr. Case, and myself are members of the Deficiency Subcommittee and we have all the work there we need, and I do not see any use of purposely creating a situation that will bring about a deficit and need for Deficiency Committee action. I would like to see the thing settled here with a fairly good figure to obviate that necessity. Mr. Chairman, I think you know the situation I am referring to.

Mr. ENGEL. Yes.

Mr. MAHON. We ought to have some of these projects taken care of. Mr. SCRIVNER. Right now what we are doing is trying to forecast for the next 12 to 18 months.

Mr. MAHON. Yes.

Mr. SCRIVNER. I do not think the general or anybody else can tell us what the prices are going to be a year from now or 18 months from now; they may be less or they may be more; some of them should be less.

Mr. MAHON. The fiscal year will begin in 6 months.
Mr. SCHRIVNER. Yes.

Mr. ENGEL. Some may be up and some possibly may come down. Mr. SCHRIVNER. In situations like we are talking about here, for the operation of the dairy farm and the chicken farm and the mess, I do not see anything inherently wrong in the possible necessity of having to come before the Subcommittee on the Deficiency and ask for a deficiency appropriation.

Mr. MAHON. But I want us to take care of it insofar as the increases can be foreseen.

Mr. ENGEL. Are there any further questions? If not we will close the hearings on this item and thank you, General, very much. General LOUGHRY. Thank you, Mr. Chairman.

WEDNESDAY, JANUARY 14, 1948.

PENALTY MAIL

STATEMENT OF MAJ. A. H. HARNAR, ARMY POSTAL SERVICE, EXECUTIVE OFFICER.

NEED FOR APPROPRIATION FOR THE DEPARTMENT OF THE ARMY

Mr. CASE. Major Harnar, we have an item before us for penalty mail. Will you please explain the necessity for this appropriation. Major HARNAR. Public Law 364, Seventy-eight Congress, provided that governmental agencies deposit in the Treasury of the United

States an amount equal to the costs of handling penalty mail matter utilized by the agencies concerned. Section 5 of the law, however, exempted the War Department from the provisions of the law. Public Law 239, Eightieth Congress, approved July 24, 1947, repealed section 5 of Public Law 364, and the War Department therefore immediately became subject to the remaining provisions of Public Law 364.

Mr. CASE. What you are saying is that for the first time the War Department had to come under the same provisions with respect to penalty mail.

Major HARNAR. Yes. From 1944 until July of 1947 the War Department was exempt from the act.

Mr. CASE. I think the members of the committee are familiar with the penalty mail provision; we have had to deal with that in other appropriation bills.

BASIS FOR ESTIMATE FOR 1949

Major HARNAR. Yes. Since there were no figures available as to the exact amounts of official mail matter of the War Department which in previous years entered the United States postal service, an estimate could not be based on past usage. Consequently, inquiries were sent to the major oversea commands, commanders of armies in the United States, and departmental services, requesting an estimate of the various types of official penalty mail matter (envelopes, cards, labels, tags, and wrappers) which would be required by each of the civil functions within their area during the fiscal year 1949 (tab A). A consolidation of the estimated figures furnished by the various commands shows the estimated usage of official penalty mail matter by the civil functions activities to be as follows:

Cemeterial..-

Alaska communication system.

Rivers and harbors and flood control..
Government and relief in occupied areas.

Total...

$3,735, 000 90, 000 6, 468, 750 956, 250

11, 250, 000

On the basis of cost-of-handling figures furnished by the Bureau of Accounts, Post Office Department, for the fiscal year 1949 ($20 per thousand pieces) funds necessary for the volume of official penalty mail matter to be used by civil function activities administered by the Department of the Army is as follows:

NEED FOR SUPPLEMENTAL ESTIMATE FOR 1948

Mr. CASE. I notice in your estimates, at page 1132, you show a supplemental estimate for 1948 of $200,000. Have they received. that money?

Major HARNAR. As far as I know they have not. I do not think they have, because we have not yet been billed by the Post Office Department for any of the usage.