book value of the war stock purchased at peak prices. The replacement value or real value to naval aviation at the present time probably does not exceed $2,000,000. This material while serviceable does not move as fast as material purchased under current appropriations due to the fact that the numbers of planes using the type of material are being superseded by new types, which can not make use of this material. The reduction of surplus war stock means, of course, that the current appropriation must each year buy a much larger percentage of the material used. When it is considered that for four years the book value of war material used has averaged about $10,000,000 a year and that there is now remaining only $7,000,000 worth of such material it is readily seen that it is becoming increasingly difficult to keep aviation up to its present standard with the appropriation available. 26870-NAVY 1924- 42 REPORT OF THE PAYMASTER GENERAL OF THE NAVY, CHIEF OF THE BUREAU OF SUPPLIES AND ACCOUNTS NAVY DEPARTMENT, BUREAU OF SUPPLIES AND ACCOUNTS, To: The Secretary of the Navy. Subject: Annual report for the fiscal year ended June 30, 1924. 1. The annual report of the Paymaster General of the Navy for the fiscal year ended June 30, 1924, is submitted herewith. This report covers the financial and supply activities of the Naval Establishment for that year. 2. The report contains tables showing all of the transactions of the Navy pertaining to expenditure of funds and stores, and also details of various phases of the financial operations of the Naval Establishment interesting to other bureaus of the Navy Department and to Congress. PURCHASES The expenditure of funds for supplies and materials was less by $15,328,986 than that of the preceding fiscal year. In the number of matters handled, the activities of the purchase division of the bureau have shown a slight increase over those of the preceding year. This increase may be attributed in part to the fact that the war stock has been reduced not only in the Navy but also in the Army, from which transfers had been made in considerable quantity. Hence additional purchases are required although the value of purchases has been reduced. During the fiscal year there have been placed 2,585 contracts, at a value of $28,078,303.28, and 1,015 bureau orders, at a value of $199,020.04, making a total of $28,277,323.32, as opposed to a total value for the fiscal year 1923 of $43,606,309.91. In an endeavor to make contracts under conditions to produce the most favorable prices, an intensive study has been made of the period and form of purchase, market conditions, and others of the factors which influence prices. Particular attention has been given to the classification and expansion of the mailing list used in the advertisement of prospective purchases. This is an important feature of the purchasing system of the Navy, as by its means invitations to bid are placed directly in the hands of the manufacturers so far as possible, and ample time to submit bids is afforded. Chambers of commerce all over the United States have given close cooperation in interesting manufacturers in the submission of bids to the Navy. New sources of supply have thus been obtained and interest revived among manufacturers who had allowed their interest in Navy business to wane. The claims arising from the cancellation of contracts resulting from the Treaty for the Limitation of Naval Armaments have nearly all been settled. With the exception of a few cases still under review by the department and a few which have been carried to the courts, the claims resulting from cancellation of war contracts have been finally adjusted and settled. NAVAL SUPPLY ACCOUNT STOCK During the fiscal year 53,361 requisitions have been acted upon, as compared with 50,889 during the fiscal year 1923. Since all requisitions, except those covering material which has been excepted by the chief coordinator, are cleared through the General Supply Committee, the average time required for clearing requisitions through that committee and checking against the excess stock at other yards is about three days. In the case of requisitions indicating urgency, however, special attention is given, and the time taken is considerably less. The number of missing surveys covering material under the cognizance of Supplies and Accounts has been considerably reduced during the year. This is believed to be due to greater care exercised by the personnel afloat. Five thousand nine hundred and seventy-seven surveys covering condemned material, with a total appraised value of $1,110,080.90, have been handled, authorization for disposition by local sale given, and a permanent record thereof maintained. The Supplies and Accounts Allowance List, edition of 1921, has been twice revised by the editions of 1923 and 1924. Approximately 80 per cent of ships' allowance lists have been prepared, based on the new editions. Numerous specifications have been revised during the year, new specifications adopted, and others canceled. A number of specifications covering material under the cognizance of Supplies and Accounts were revised and brought into agreement with those of the Federal Specifications Board. That board has adopted many of the Navy specifications. Revised price bulletins have been issued covering all items shown in the Standard Stock Catalogue, as well as material purchased or manufactured which is not therein listed. During the year 36,983 requisitions, 3,360 Naval Supply Account requests, and 1,916 manufacture requests have been checked against records of excess stock for the purpose of utilizing, so far as possible, excess materials available at various yards and stations. By this means an expenditure of $2,232,551 has been prevented and a corresponding transfer of excess stock from one yard to fill the requirements of another yard or station has been made. A careful check of Naval Supply Account and manufacture requests has resulted in the elimination of items to the value of $512,623. LEASED PROPERTY Warehouses W-1 and W-2 at the Navy supply depot, South Brooklyn, have been vacated by the Navy. These buildings under the terms of the original lease have become the property of the city of New York. The fleet storehouse near the Newport Training Station has been abandoned and the building sold to the owners of the land. The rented storage in aircraft storehouse "C" at South Brooklyn has been vacated and the property returned to the city of New York This space had been used by the navy yard, New York, for the storage of boats and life rafts. The Navy has vacated all leased storage in the municipal warehouses at Point Richmond, Calif. These warehouses had been used by the navy yard, Mare Island, for the storage of provisions and clothing. SALES OF SURPLUS MATERIAL AND OF SCRAPPED NAVAL VESSELS Surplus lists have been issued during the year authorizing sale of Naval Supply Account material to the value of $6,652,496.65 and of appropriation purchases account material to the value of $8,016,324.69. These lists, 945 in number, represent approximately 33,000 items of stock. Early in the year condemned material was included with surplus material in sale by auction, and it was found that this method increased the return for condemned material by approximately 30 per cent. As an instance a large quantity of bolts, nuts, and washers which had been offered by sealed bids and the bids rejected because of low offers was later sold by auction at a net increase of $8,000 over the amount first bid. At a sealed-bid sale of approximately 1,000,000 pounds of bolts the best offer received was $22.50 per ton. This was rejected, and within a few weeks the bolts were sold by auction for $66 per ton. Similar instances have demonstrated the value of this method of sale of condemned material. The sales forces of the central sales office and at the several shore stations have been reduced by 335 employees, amounting to a reduction in the pay roll of approximately $380,000. Further reductions are contemplated. In accordance with those provisions of the Treaty for Limitation of Naval Armament which require the scrapping of certain vessels, the following vessels have been sold on an "as is, where is" basis, and the scrapping by the purchasers now satisfactorily progressing, will be completed within the time allowed by the treaty: United States, Constitution, Indiana, South Dakota, North Carolina, Montana, New Hampshire, Louisiana, Georgia, Rhode Island, Connecticut, Constellation, Ranger, Iowa, Massachusetts, Vermont, and Nebraska. Where bids received on naval vessels were not satisfactory, as in the cases of the Michigan, Minnesota, Kansas, Delaware, and South Carolina, they were scrapped at the navy yards and the materials disposed of on a tonnage basis. The yards were benefited from an employment point of view and better prices for the Government resulted from the adoption of this procedure. The vessels which were under construction on the ways of the navy yards, New York and Philadelphia, have been completely scrapped, while at Mare Island and Norfolk the ways will be cleared within the near future. In compliance with the terms of the treaty, the vessels sold were first rendered unfit for war purposes, and such materials as the Navy desired to retain were removed therefrom. All work in connection with scrapping has not yet been completed, but it is believed that the Navy thus far has been most successful in the sales of these ships and that a substantial return has been received. If the vessels had been destroyed by sinking they would represent a complete loss, and considerable additional expense would have been involved. The wrecks of the U. S. S. Tacoma and of the destroyers off Honda Calif., have been sold. The old Alabama and Indiana, used for targets in Chesapeake Bay, which have been lying on the bottom for several years and regarded as a total loss, have been sold at a satisfactory figure. |