Mr. MORRISON. They were correct so far as the records reflected the situation then. Of course, even with relation to those two periods, there were accountings that were not then in. The managing agents had not at that time given us a complete accounting for all funds disbursed or revenues received.

Mr. DAVIS. And in so far as any items had not been finally reported, you estimated those, did you?

Mr. MORRISON. For the first two periods I do not believe there were any estimates used for items of that kind.

Mr. DAVIS. That is the point I first asked you. Then, during the first two periods, everything was in, was it not, and the matters were final?

Mr. MORRISON. No; those were not final records, because a lot of the accountings, as I just told you-I could not tell you what percentage, or how many-even to-day we still get, occasionally, a supplemental accounting on an old voyage.

Mr. DAVIS. Oh, well, to all practical intents and purposes, though, and so far as any amounts were concerned, they were practically complete and correct, were they not?

Mr. MORRISON. I would rather not-I can not answer that,, because I do not know just how nearly correct they are. They were the best we could give at the time, and I think the statements we are now compiling for the committee, covering operations by fiscal years, will be more reliable than this and will give you a very good idea of how near this was to the real situation.

Mr. DAVIS. In the figures that you are now compiling here, in 1924 three years subsequent to this report, have you found any substantial differences or errors of estimation in the report compiled in July,

1921?

Mr. MORRISON. The figures have not yet been summarized that we are compiling for the committee, so that I am not able to make any comparison yet.

Mr. DAVIS. Well, generally speaking, were the estimates that you nade at that time, from your ultimate and actual experience, proven to be substantially accurate?

Mr. MORRISON. I should say within 10 or 15 per cent.

Mr. DAVIS. What percentage of this had to be estimated for the last period? You say it was not estimated as to the first period? Mr. MORRISON. For the last period?

Mr. DAVIS. For the period of the last 10 months shown, about what percentage was not in and had to be estimated out of the total? Mr. MORRISON. The figures furnished in that report for the third and last periods were based entirely on these preliminary figures that I have just described. None of that is based on actual accountings, although we had, at that time, actual accountings on some of those voyages.

Mr. DAVIS. Is it not a fact there was a report made to the Shipping Board of every voyage?

Mr. MORRISON. Yes; that is true.

Mr. DAVIS. And this report was made two or three months after the final period that you state here, was it not?

101440-24-PT 252

Mr. MORRISON. It takes quite a little while, Judge. for the vouchers to come from all parts of the world into the managing agent's offices and be recorded and distributed and closed out to the district office, and then into Washington.

Mr. COOPER. Let me ask you a question. I do not understand this myself. and I want to understand it as I go along. Did you say that you had no original reports from which you compiled this? You had some, did you not?

Mr. MORRISON. Yes, sir.

Mr. COOPER. You had some? How many?

Mr. MORRISON. The statement is divided into three periods. Just as Judge Davis has described, the figures given there for the first two periods, as I recall it, were based on actual accountings.

Mr. COOPER. For the first two periods?

Mr. MORRISON. The first two periods; yes.

Mr. COOPER. Then the estimates came in on the third?

Mr. MORRISON. The third period was based entirely on preliminary or so-called estimated statements.

Mr. COOPER. Yes. Now, how came you to make this compilation? Mr. MORRISON. At Congressman Briggs's request.

Mr. COOPER. And it was taken from the official documents, so called, in that office, was it not?

Mr. MORRISON. Exactly.

Mr. COOPER. The official documents?

Mr. MORRISON. That is correct.

Mr. COOPER. And you handed it in in reply to that request, because it contained what you thought was substantially the truth? Mr. MORRISON. Exactly.

Mr. COOPER. That is in 1921?

Mr. MORRISON. Yes, sir.

Mr. BANKHEAD. Now, let me ask him a preliminary question. if you are through, Mr. Chairman.

Mr. COOPER. These preliminary statements were by the operators themselves?

Mr. MORRISON. Yes, sir.

Mr. COOPER. And in the nature of a budget, and they were supposed to be substantially accurate, were they not?

Mr. MORRISON. These preliminary statements were required of the operators within 10 days after the voyage had terminated.

Mr. COOPER. Yes.

Mr. MORRISON. By that time they had not received complete reports from all ports at which the vessel had touched, but most of the operators submitted comparatively reliable statements, because they were familiar with the operations of those boats and could, where they had not received foreign reports, estimate the foreign disbursements and receipts.

Mr. DAVIS. And the figures covering the first two periods were not estimates, but a compilation of the records of the office itself? Mr. MORRISON. Yes, sir.

Mr. DAVIS. At the time that you compiled this and had it compiled you, of course, considered that the first two periods were an accurate representation of the records of the office, and that the last period was as accurate an estimate as could be procured at the time, did you not?

Mr. MORRISON. Yes, sir. We felt that the statement given there for the last period was as accurate an estimate as we could give at the time. As to the completeness of the figures for the first two periods, I have already said that there had been accountings that have come in since then that have modified those figures.

Mr. DAVIS. To what extent?

Mr. MORRISON. Just to what extent, I am not in a position to state. Mr. DAVIS. Not materially, though; did they?

Mr. MORRISON. It would be a guess, if I made one, and I should guess not more than 10 per cent.

Mr. DAVIS. Which way?

Mr. MORRISON. It would increase the loss or reduce the profits. Mr. DAVIS. But you do not know which that would be, whether it increased or decreased?

Mr. MORRISON. It is just the same. You reduce the profit or increase the loss, and it is a debit.

Mr. DAVIS. When will these annual statements that you have in course of preparation be completed for the use of the committee?

Mr. MORRISON. We expect to complete them early next month. Mr. DAVIS. Before we proceed further with the inquiry into this compilation I want to have this correspondence read and, if you prefer, we can have Mr. Richardson read it.

Mr. RICHARDSON (reading):

HOUSE OF REPRESENTATIVES, UNITED STATES,
Washington, D. C., May 11, 1921.
Washington, D. C.

SECRETARY OF UNITED STATES SHIPPING BOARD,

MY DEAR SIR: I should be glad to have at your earliest opportunity a statement showing

1. In some detailed form the difference in operating costs of United States Shipping Board vessels and British ships. Such information is desired not only in a statement of the total amount per ship of the same or similar tonnage, but also with reference to the more important items entering into the cost of operation of ships; such as the so-called capital cost, including depreciation, etc., also difference in wages paid and cost of manning ships, etc., together with the percentage that such costs bear to the total operating cost. For example, Mr. Rosseter, when director of the division of operations, stated before the House Committee on Appropriations in June, 1919 (hearings sundry civil appropriation bill 1920, pp. 511, 513), that “the prejudice on account of the somewhat higher wages and of the larger manning scale amounts to about 2 per cent of our operating cost." "If it costs the British $100, it

costs us $102."

2. (a) The number of Shipping Board vessels operated in the foreign trade the first year after the armistice.

(b) The average operating receipts from each vessel, together with the expense of operation and net return.

(1) Also give instances of the earnings of the freight receipts of individual vessels at different times during such period, and accompany such information with a statement of the cost of such vessels.

(c) Similar information for succeeding years.

3. The number of Shipping Board vessels being operated on the Pacific coast, on the Atlantic, on the Gulf, and on the Great Lakes on May 1, 1921.

4. Average tonnage of such vessels that were being operated on May 1, 1921, and character and material of same.

5. Number of Shipping Board vessels laid up on May 1, 1921, and average tonnage, character and material same.

6. Extent to which foreign ocean rates have declined since year after armistice, giving rates prevailing then and rates prevailing May 1 of this year.

7. (a) Total receipts of Shipping Board from operation of vessels from armistice to May 1, 1921, if possible. If not, down to as late a date as available.

(b) Total cost of operation during such periods.

(c) Total net revenue to Government, if any.

8. Total amount of ships of Great Britain being operated and total amount already laid up May 1 of this year, if figures are available.

9. (a) Average difference between cost of operation of Shipping Board vessels the first year after the armistice, and at the present time.

(b) Relation in per cent of cost of operation to gross revenue from operation during the year after armistice, and each year since.

10. (a) Total number of vessels sold by the Shipping Board and character, type, and tonnage of same.

(b) Amount of purchase price and amount still due.

11. (a) Total cost of Shipping Board tonnage, with average cost per ton and maximum and minimum costs.

(b) Value at present time.

(c) Present cost of replacement per ton, with total amount, (1) in American shipyards, (2) in British shipyards.

12. () Number of wooden ships on hand and how many disposed of by sale, with present market.

(b) Number of concrete vessels on hand and how many have been disposed of by sale, with present market.

(c) Same information with reference to steel ships.

13. (a) Cost of maintenance of Shipping Board vessels the first year after armistice.

(b) Cost for succeeding years.

(c) Average amount of increase or decrease in cost, with particular reference to cost of repairs.

Awaiting your reply, and with best wishes, I beg to remain,

Very truly yours,

CLAY STONE BRIGGS.

Mr. RICHARDSON (continuing). The next letter is dated

Commander R. D. GATEWOOD,

Division of Construction and Repairs,

New York City.

MAY 19, 1921.

MY DEAR COMMANDER GATEWOOD: I am attaching hereto copy of a letter received from Congressman Briggs requesting certain data.

Will you kindly indicate in a memorandum to me if the information requested applies to your division or department; if so, which questions? Also indicate whether this information has been compiled in the past and if so, where available? If the data requested has not been compiled in any other form or is not now available. how much time and labor would be involved in answering completely the questions applicable to your division or department? Kindly let me have your reply at the very earliest opportunity.

Yours very truly,

JOHN J. FLAHERTY.

Secretary.

The next document is on the stationery of the United States Shipping Board Emergency Fleet Corporation, dated:

WASHINGTON, D. C., May 19, 1921. Memorandum for Mr. Keene, acting director of operations: Mr. Tweedale, general comptroller.

I am attaching hereto copy of letter received from Congressman Briggs requesting certain data.

Will you kindly indicate in a memorandam to me if the information requested applies to your division or department: if so, which questions? Also indicate whether this information has been compiled in the past and if so, where available? If the data requested has not been compiled in any other form or is not now available, how much time and labor would be involved in answering completely the questions applicable to your divis on or department. Kindly let me have your reply at the very earliest opportunity. Joas J. FLAHERTY,

Secretary.

The next letter which I am asked to read is dated

From: A. Tweedale, genera! comptroller.
To: John J. Flaherty, secretary.

Subject: Request of Congressman Briggs.

MAY 23, 1321.

1. Answering your memorandum directed to Mr. Keene and myself under date of May 19 concerning the request of the Hon. Clay Stone Briggs for statements of various activities of our operations,

2. I do not think it would be amiss to mention at this time and suggest that we secure a meeting with Mr. Briggs and acquaint him with the information furnished in the statement prepared by Mr. Teal, which was in effect a preliminary handling of the Edge resolution, and also with the comprehens.ve reply to the Edge resolution which no doubt will be in the hands of the Senate in the next week or 10 days.

3. The questions asked by Mr. Briggs that we consider should be handled by this department are No. 2, b and e: 7, a, b, and e; 9, a and b; 10, a and b; 11, a. b, and e; 12, b and c; 13. a, b, and c.

4. It is felt that some of the questions asked by Congressman Briggs are answered in the Shipping Board reply to the Edge resolution, although perhaps not as specific in some instances as Congressman Briggs has requested, but in a general way.

5. To supply the answer to question 2, b, asking for "the average operating receipts from each vessel, together with the expense of operation and net return for vessels operated in the foreign trade the first year after the arm stice." would entail a detailed analysis of the records and could be suppl ed, but only after considerable time and expense had been incurred.

6. Question 7. a, b, and c, could be answered after information relative to question 2, b, was furnished.

7. Question 9, a and b, would require detailed analysis of voyage accounts. The information could be obtained but it would require a considerable length of time and extra expense.

8. Answer to question 10, a and b, can be furnished, but it would require some time to complete it.

9. The same applies to questions 11, a and b, and 12, a, b, and c, although under question 11 we could not give the total cost but the expeditures to date. Answer to 11, b, asking for the "value at the present time" would be a matter of opinion largely, and perhaps this question would be one that should be answered by the operating division.

10. Answer to question 12, a, b, and c, could be furnished without as much labor as the work involved on some of the other questions.

11. My suggestion is that this whole question be placed before Congressman Briggs by personal contact of the heads of the divisions which would be required to furnish the information, with the thought as suggested above that perhaps the replies to the Edge resolution would suffice. Of course we are anxious to comply with requests from those to whom the information is due. However, if we could avoid taking the time and money at this time to analyze and prepare these statistics, when we are making a mightly effort to bring our work to a current basis, it certainly would be helpful to us.

A. TWEEDALE, General Comptroller.

The next letter is merely a formal letter to Congressman Briggs, under date of May 24, notifying him that the data will be prepared. Mr. DAVIS. By whom was that signed?

Mr. RICHARDSON. Signed by John J. Flaherty, secretary of the United States Shipping Board. The next letter is a notification from the director of the division of construction and repairs, to John J. Flaherty, secretary, stating that appended to the letter are answers to certain of Congressman Briggs's questions, and then follows a long detailed summary of answers to those questions, and figures. Do you want them read in at this point, or just include them in the record without reading?

Mr. DAVIS. Just let that be inserted.

(The papers above referred to are filed as Exhibit No. 103.)