Gen. SQUIER. I am not sure that they could not lose them, and they might be destroyed.

Maj. ELLIOTT. If they lose them, they must report the loss.

The CHAIRMAN. Of course, if there is any activity on the front, there is a certain amount of wastage that you are not able to check up through the personnel of your corps as to just how it happened. For instance, as to how so many miles of wire have disappeared. Gen. SQUIER. The chief signal officer of the division would report. Maj. ELLIOTT. He would know whether it was lost in action. The CHAIRMAN. But being lost in action is like charity, it covers a multitude of sins, and there is no use in deceiving ourselves about that, because accountability at the front is, of necessity, very loose.

Gen. SQUIER. There is a division officer right there with every division, and when an officer under him loses something, he goes right after it to ascertain, for instance, "Why did you lose this yesterday?" He is right on the job. He is dealing with the S. O. S. supplies, and if a man does anything unusual, he is punished for it.

The CHAIRMAN. Do you know what is being done in connection with the captured material? With the advance of our troops there is a certain amount of Signal Corps equipment that comes into the hands of the troops. While much of it is destroyed, in the way of instruments and things of that kind, wire and a lot of other things are capable of being reused.

Gen. SQUIER. They are reused in rehabilitating the service in every way possible.

The CHAIRMAN. Is it carried in the total of your supplies?

Gen. SQUIER. Yes, sir; in this way: We get a check back from our chief over there, Gen. Russel, as to all the supplies that come in locally. We give him funds to buy supplies locally, and we keep a check on that on this side. He says, for instance, that he can not get any more of this, or that he can get this from some salvage. We have a continual exchange, and we know the state of his supplies, and we check over it all the time.

PURCHASES ABROAD.

The CHAIRMAN. To what extent do you expect to spend this money abroad?

Gen. SQUIER. We have that right here in this statement, if you will look at the items. That is item 19, covering emergencies.

The CHAIRMAN. That would show a very small percentage. That figures, roughly, $6,000,000 out of $200,000,000.

Gen. SQUIER. There are some notes on page 19. For instance, we sent a million dollars to Rome the other day, and we send money to England. We send it as our forces go into different parts of the world.

Maj. KLOCK. The expenditures really are small outside of the purely domestic expenditures. A great many of them are expenditures that apply direct to the unit table. We not only have reports as to what they get, but as to what they expect to get.

The CHAIRMAN. That seems to be an emergency fund to take care of emergency needs. What I am after is this: You have in round figures an outlet of $200,000,000, and I am trying to find out how much of that will be expended in America and how much abroad.

Gen. SQUIER. I can not give the percentage, but certainly nearly all of it will be expended in America.

The CHAIRMAN. Now, General, I would like to have prepared and submitted a statement as to the amount of the expenditures that you contemplate having to make during the fiscal year 1919.

Gen. SQUIER. Actual expenditures?

The CHAIRMAN. Yes.

Gen. SQUIER. All right.

The CHAIRMAN. Showing expenditures that will come from the Treasury.

Gen. SQUIER. Yes, sir.

The CHAIRMAN. Then I would like to ask you this question: Whether or not you will in any way be embarrassed if you are given that sum of money and the balance of your requirements in the form of authorizations to enter into contracts?

NOTE. It is estimated that of the deficiency estimate of the Signal Corps of $104,180,934, $70,000,000 will actually be required for disbursement before June 30, 1919, and that the remaining sum, $34,180,934, will be obligated during that period for disbursement subsequent to June 30, 1919.

Gen. SQUIER. The answer is no.

CONTRACTS-CANCELLATION OF.

The CHAIRMAN. What protection are you giving to the Government in connection with the contracts you enter into touching their cancellation?

Gen. SQUIER. We can cancel any contract.

Maj. ELLIOTT. Some contractors object to that clause in our contracts.

Maj. KLOCK. We can cancel all of them.

Gen. SQUIER. We can cancel anything we want.

The CHAIRMAN. To what extent does such a provision in your contracts result in forcing you to pay higher prices?

Maj. ELLIOTT. That is problematical.

Maj. KLOCK. I think it has no bearing.

The CHAIRMAN. It might have a serious bearing.

Maj. KLOCK. Most of our contractors are very loyal in that particular.

The CHAIRMAN. Do they not put in as a factor in their prices the risk incident to a curtailment of the orders?

Maj. ELLIOTT. It is possible, but I do not believe they do.

The CHAIRMAN. To what extent are you making contracts on the cost-plus basis?

Gen. SQUIER. Practically none, although we do have a certain amount of contracts which practically amount to that. That is due to our development, or to certain developments in regard to things of which nobody knows the cost.

The CHAIRMAN. I asked you yesterday, but I do not know that I got a full answer, to what extent does this money that you are now asking for represent moneys that will be put into the creation of facilities for producing the materials desired?

Gen. SQUIER. Comparatively little, I think.
Maj. KLOCK. Very little.

Gen. SQUIER. In the case of field glasses, we may have to do that. Maj. KLOCK. That is a very small percentage. The contracts cover such a long period of time that we find that where contractors need money they can go to the War Credits Board and get an advance on their contracts that will take care of their requirements.

The CHAIRMAN. That is not just what I meant. It occurred to me that, due to the very great increase in the quantity required, you might be met with a situation where you would have to create facilities, and, in order to create those facilities, that you would do what the Ordnance people have done, and finance, according to the terms agreed upon, the creation of those additional plants. Now, I want to know to what extent there is any project of that kind involved in here?

Gen. SQUIER. My answer to that, in general, is that we expect to have a very small per cent, if any, of advance money for the increased facilities. It is possible that we may have to in the case of two or three items, such as field glasses that I mentioned, and possibly some of the tube men may have to be helped a little. I think that they will get away with it themselves. So we are remarkably free from that feature. We get all the people down here, bring them together, and confer. I sent for everybody on field glasses and they spent several days here and we looked over the whole situation as to the optical glass. Sometimes we try to work out a scheme so that they can handle it themselves and usually we have been successful. I do not know, but I suppose that we will have to help the field-glass men in one case.

Maj. KLOCK. In one case we will.

Gen. SQUIER. We probably will never have enough field glasses; from a certain standpoint there never will be enough, the same as with the airplanes, perhaps, but we will be pretty well equipped. The neck of the bottle is glass, once made in Germany, which we did not know how to make at the beginning of the war. We have had the Bureau of Standards and the people in Pittsburgh working on it, and we have had to nurse them along and help the different factory people get the glass.

Mr. EAGAN. There must be any number of field glasses in private use the country over?

Gen. SQUIER. Yes; we have had them turned in.

Mr. EAGAN. Have they responded liberally?

Gen. SQUIER. Yes, sir; splendidly. We have had a great many glasses turned in by private people. We issued an advertisement and received quite a good many glasses.

Mr. EAGAN. And opera glasses?

Maj. ELLIOTT. We turn over all opera glasses and small glasses of that character to the Navy.

Gen. SQUIER. We divide with the Navy. In some cases they need them more than we do.

Maj. KLOCK. We are not in the same position as the Quartermaster Department or the Ordnance Department, because the plants that produce the bulk of our materials are actually begging for business, and the extension of plant facilities for our material is rare for that reason. We have a little bother about money for extra tools. It is sometimes necessary to advance money or to go to extraordinary means of paying for the stuff immediately upon receipt, just as

quickly as we can have it O. K'd to help the manufacturer out. We avoid in every possible form the scheme of putting public money in private plants. Wire is the most difficult thing-the steel wire. We use both steel and bronze. I met the vice president of the American Steel & Wire Co., who is chairman of the manufacturers' committee, and asked him the question direct if with this big program any of his factories were going to need money in connection with the extension of the plant for the making of special wire (some is special) which they would not use again so far as we know now. They have anticipated the increased production and have not asked for anything.

PRICE OF WIRE.

The CHAIRMAN. What is the situation touching the price which you pay for wire now?

Maj. KLOCK. The question of the price for wire is handled, so far as we are concerned, directly by the War Industries Board and is in course of very serious study. It is simply a problem of raw material and labor with an overhead which is almost constant.

The CHAIRMAN. The price was fixed on basic steel and iron more than a year ago, as I recall.

Maj. KLOCK. It was changed a little recently by a change of basing.

The CHAIRMAN. I was going to ask whether that had been subject to modification since?

Maj. KLOCK. Only as to where the prices were based.

The CHAIRMAN. How is the price of wire now in comparison with what it was prior to the war?

Maj. KLOCK. The principal changes are the cost of the labor and in the increase of the basic cost of copper.

The CHAIRMAN. What does that amount to? I am not talking about copper; I am talking about wire.

Maj. KLOCK. Thirty per cent in round figures.
The CHAIRMAN. Over the prewar price?

Maj. KLOCK. Yes, sir.

The CHAIRMAN. And as to copper, what is it?

Maj. KLOCK. The question as to copper is a little difficult. Mr. Baruch forced the price down through a certain period away below what it had been, and that price, which was half the prevailing price at that time, did not obtain beyond a certain agreement which he made. The price very soon came back to 22 and 23 cents and is now 26 cents. That is the last figure I have. Twenty-two cents is the only figure I can use. He had a figure of 17 or 18 cents. I should say 20 per cent in round figures.

PHOTOGRAPHY-LAND, ETC.—BUILDING FOR STORAGE OF FILMS, ETC.

The CHAIRMAN. Among other activities, you are engaged in land photography, and the deficiency estimate involves $2,000,000? Gen. SQUIER. Yes, sir.

The CHAIRMAN. The purpose of this activity, I take it, is to create a photographic history of the war?

Gen. SQUIER. Yes, sir; that is one of the things.

The CHAIRMAN. And in addition to that certain training for military purposes?

Gen. SQUIER. Yes, sir.

The CHAIRMAN. Your increased program does not require you to increase 100 per cent your expenditure in photography, does it? Gen. SQUIER. Yes, sir; I think it does.

The CHAIRMAN. Why?

Gen. SQUIER. In the first place, the size of the Army is more than double; that would be one reason. In the second place, the increasing application of photography in different directions as the war progresses and its rise in the evolution of the war to uses each day more extensively than previously. I might say that photography has risen to be one of the main military weapons now, almost, and the everyday map is made up by it, for instance, and there are all sorts of uses from a strictly military standpoint.

The CHAIRMAN. To what extent is this estimate, which with what you have had totals nearly $4,000,000, to be used for pictorial photographs in connection with the history of the war, and to what extent is it to be used for war purposes?

Gen. SQUIER. The entire pictorial history of this war for all time. comes out of this fund.

The CHAIRMAN. I understand; but how much is to be used for this purpose?

Gen. SQUIER. The analysis here will help you the best I can. All of the mapping and picture part and the equipments that are being ordered are to be deposited, as far as I know, although that is directly under the General Staff, and they are to be used for propaganda work, probably through the Bureau of Public Information.

The CHAIRMAN. I think the committee is familiar with the purposes. I am trying to get purely a financial statement.

Gen. SQUIER. I do not know that I could give you more than an estimate at this stage of the war.

The CHAIRMAN. The notes you give would seem to indicate that something over $1,000,000 at least of your new estimate of $2,000,000 is to be for pictorial purposes?

Gen. SQUIER. I should think so; yes, sir.

The CHAIRMAN. How much of the old appropriation of $1,888,000 is to go for the pictorial history of the war?

Gen. SQUIER. I did not know that you were going to ask that question. I can tell you roughly. Maj. Klock, about what is the proportion?

Maj. KLOCK. About 60 per cent.

The CHAIRMAN. That would indicate that you are going to spend this year probably $2,500,000 for that purpose?

Gen. SQUIER. Yes, sir.

The CHAIRMAN. That seems to be quite a sum for that purpose. Maj. KLOCK. There is a wider variety of channels than we contemplated in the first estimate.

The CHAIRMAN. They will be just as wide as the money will permit?

Maj. KLOCK. Of course our activities follow absolutely the directions of the Chief of Staff.

Gen. SQUIER. All of this photography is under the General Staff. I am directed to furnish it; that is all. I am the supply department