this decision it was held by the Comptroller that "An enlisted man of the Navy is not entitled to medical treatment at public expense while on leave of absence or furlough." The Comptroller General then concludes on this particular question as follows:

This law (sec. 1586, Revised Statutes) makes a distinction as to the right to medical treatment between officers on duty and those not on duty, and its effect is to limit the furnishing of medical attendance to those not on duty to such medical facilities as may be furnished by the Navy Department except as otherwise provided by law. (Words and figures inclosed in parentheses supplied.)

The

At present there are in the Fitzsimons General Hospital approximately 20 patients on the active list and 15 on the retired list. charges for all naval patients paid during the last fiscal year amounted to $37,081.72, the charge for those on the retired list being estimated at less than $16,000.

The enactment of the proposed legislation will not involve the appropriation of additional moneys from the Treasury, as the entire expense, except in time of war, will be a charge against the naval hospital fund.

The proposed legislation was referred to the Bureau of the Budget with the above information as to cost and a statement that the Navy Department contemplated recommending its enactment. Under date of February 8, 1927, the Director of the Bureau of the Budget advised the Navy Department that the proposed legislation is not in conflict with the financial program of the President.

In view of the foregoing and in order that existing arrangements between the War and Navy Departments for the hospitalization of certain patients at Fitzsimons General Hospital, Denver, Colo., may continue and that the Navy may enter into similar arrangements with other Government agencies, the enactment of the proposed legislation is recommended.

Sincerely yours,

CURTIS D. WILBUR,
Secretary of the Navy.

A BILL To provide for the care and treatment of naval patients, on the active or retired! ist, in other Government hospitals when naval hospital facilities are not available

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That hereafter the Secretary of the Navy may provide for the care and treatment of naval patients on the active or retired list and members of the Naval Reserve entitled to treatment in naval hospitals in other Government hospitals when appropriate naval hospital facilities are not available and the Government agencies having control of such other hospitals consent thereto. All expenses incident to such care and treatment received by naval patients in other Government hospitals, excepting Saint Elizabeths Hospital, shall be chargeable to the same appropriation or fund as would be chargeable with the care and treatment of such patients in a naval hospital: Provided, That the deductions authorized by sections 4812 and 4813, Revised Statutes, shall apply to such care and treatment in other Government hospitals, except Saint Elizabeths Hospital, and shall be credited to said appropriation or fund: Provided further, That nothing in this act shall be construed as authorizing the payment of any transportation except as authorized by existing law.

[No. 155]

HEARING ON THE BILL (H. R. 15131) AUTHORIZING THE SECRETARY OF THE NAVY TO MODIFY AGREEMENTS HERETOFORE MADE IN THE SETTLEMENT OF CERTAIN CLAIMS IN FAVOR OF THE UNITED STATES

HOUSE OF REPRESENTATIVES,

COMMITTEE ON NAVAL AFFAIRS,
Friday, February 18, 1927.

The committee thus day met, Hon. Thomas S. Butler (chairman) presiding.

The CHAIRMAN. The committee has met this morning for considering of H. R. 15131, which is a bill introduced by Mr. Davey to authorize the Secretary of the Navy to modify agreements heretofore made for the settlement of certain claims in favor of the United States.

(H. R. 15131 reads as follows:)

A BILL To authorize the Secretary of the Navy to modify agreements heretofore made for the settlement of certain claims in favor of the United States

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Navy be, and he is hereby, authorized, in his discretion, to accept in full settlement from debtors of the United States the present value of all noninterest-bearing obligations for the repayment of money advanced to said debtors to assist them in carrying out contracts with the United States entered into during the late war, such contracts having been executed by the Secretary of the Navy on behalf of the United States or by others acting under his authority.

SEC. 2. The words "present value," for the purpose of this act, shall be the outstanding amount of each obligation, reduced by the interest thereon from the date of settlement to the date of its maturity, such interest to be computed at 41⁄2 per centum simple interest per annum.

The Navy Department's report on this bill is as follows:

NAVY DEPARTMENT, Washington, D. C., February 16, 1927.

The CHAIRMAN COMMITTEE ON NAVAL AFFAIRS,

House of Representatives.

MY DEAR MR. CHAIRMAN: With further reference to my letter of January 15, 1927, relating to a bill (H. R. 15131) to authorize the Secretary of the Navy to modify agreements heretofore made for the settlement of certain claims in favor of the United States, and to my hearing on this bill before the Committee on Naval Affairs, I wish to state that upon further study of the effect of section 2 of this bill I desire to modify my previously expressed approval of the bill as it stands.

The bill would be more in accordance with the intent to authorize settlement at present worth, and would be to the advantage of the Government, if amended by striking out section 2 of the bill, which defines the words "present value" as appearing in section 1 of the bill, and inserting in line 5 of section 1, after the word "value," the words "reckoned at the rate of 44 per centum per annum.' With these amendments the bill will meet with my approval.

Very respectfully,

CURTIS D. WILBUR,
Secretary of the Navy.

The CHAIRMAN. Admiral Campbell, will you give us the reasons why an amendment is proposed to H. R. 15131?

STATEMENTS OF REAR ADMIRAL EDWARD H. CAMPBELL, UNITED STATES NAVY, JUDGE ADVOCATE GENERAL OF THE NAVY, AND PICKENS NEAGLE, SOLICITOR AND CHIEF OF THE DIVISION OF CONTRACT AND REAL ESTATE MATTERS, NAVY DEPARTMENT

Admiral CAMPBELL. The proposed bill as drafted is to enable the different corporations and firms to whom money was advancednoninterest bearing-to settle at present value. There is a regular method of computing present value that is used in the Treasury Department, and it was intended that that method should be used. By that method they compute what amount of money deposited now would amount to the obligation at the time of maturity. They usually compute it at compound interest. The way section 2 is drafted, reading, "The words 'present value,' for the purpose of this act, shall be the outstanding amount of each obligation, reduced by the interest thereon from the date of settlement to the date of its maturity, such interest to be computed at 44 per centum simple interest per annum," might result in a case like this: I will cite a hypothetical case-there might be a million dollars due in 25 years. By the wording of this section 2 the words "present value, for the purpose of this act, shall be the outstanding amount of each obligation, reduced by the interest thereon from the date of settlement to the date of its maturity," the date of maturity may be 25 years hence. The interest on a million dollars at 414 per cent for 25 years would be more than a million dollars and that would wipe out the entire indebtedness, which was not intended. If an indebtedness matured in one year and this method were followed, the amount that would be paid to the Goven ment would have to be 4.44 per cent to equal the amount intended. If it ran for 10 years, the amount would have to be more than 7 per cent.

The CHAIRMAN. What amendment do you propose? Admiral CAMPBELL. To put in section 1, line 5, after the word "value," the words "reckoned at the rate of 44 per cent per annum.' That will be the regular way of determining present value.

Mr. MILLER. How much is affected by this proposed legislation? Admiral CAMPBELL. There are nine different loans involved. Mr. MILLER. Loans by the United States Government? Admiral CAMPBELL. Loans by the United States Government. Mr MILLER. What is the character of the loans? What character of institutions got that money?

Admiral CAMPBELL. The first one is the Bethlehem Shipbuilding Corporation.

Mr. MILLER. What was that loan for?

Admiral CAMPBELL. They were loaned $28,000 to be paid back in 10 payments. Mr. Neagle can tell you the particular circumstances. Mr. NEAGLE. That was for plant facilities-shipbuilding.

Mr. MILLER. What did it include?

Mr. NEAGLE. Machinery installed and buildings erected.

Mr. MILLER. The Government loaned them money to buy machinery?

Mr. NEAGLE. The Government loaned them money to buy machinery and to erect buildings.

Mr. MILLER. The Government loaned them $28,000 to be returned in how many equal payments?

Me. NEAGLE. $28,000 is still due. The original loan was $70,000. Mr. GAMBRILL. They were made during the war?

Mr. NEAGLE. Yes; or as a result of war operations.

Mr. MILLER. Who else received a like loan?

Mr. NEAGLE. The next company is William Cramp & Sons Ship & Engine Building Co. They got $210,000 on one loan; $201,000 on another loan, and $480,000 on another loan.

Mr. MILLER. Were those amounts advanced as loans for the same general purposes?

Mr. NEAGLE. Yes, sir.

Mr. MILLER. These loans were made in 1921 and 1922 to the Cramp Co., after the war?

Mr. NEAGLE. The loans were made during the war and the Government retained title to the plan and buildings erected and furnished. The contract stipulated that after the war the companies should buy the things from the Government at a stipulated price. Admiral CAMPBELL. The next loan was made to the General Electric Co. That is $1,000,000.

Mr. MILLER. How much is outstanding on that?

Mr. NEAGLE. $1,000,000.

Mr. MILLER. They have repaid nothing?

Mr. NEAGLE. That is right.

Mr. MILLER. Is the loan to be repaid in a lump sum?

Mr. NEAGLE. It will be due in 1928.

Mr. MILLER. Is there a dispute over the amount of that claim? Mr. NEAGLE. No.

Mr. MILLER. Is there any disposition on the part of the company to contest the claim?

Mr. NEAGLE. No. They approached the Navy Department last year or the year before to see whether they could make some settlement on present worth.

Mr. MILLER. To discount their own paper along that line?
Mr. NEAGLE. Yes.

Mr. MILLER. What reply did the Navy Department make?
Mr. NEAGLE. We had no legal authority to do anything.

Mr. MILLER. This proposed bill would give you the desired legal authority?

Mr. NEAGLE. Yes; to settle at present worth.

Mr. MILLER. What is the next loan?

Mr. NEAGLE. To the New York Shipbuilding Corporation, and it amounts to $105,913.80.

Mr. MILLER. Is that loan one made under similar conditions as you have stated in the other cases?

Mr. NEAGLE. Yes, sir; they are all alike.

Mr. MILLER. Who are the remaining ones?

Mr. NEAGLE. The Staten Island Shipbuilding Corporation, amount $288,180. Then there is the Wellman-Seaver-Morgan Co. with one loan of $399,271.64 and another loan of $9,000. That firm is particularly interested in getting this legislation through. They want to pay at present worth.