It is frequently stated that it costs more to build a battleship in a government yard than in a private one. This is true in a degree; it does cost something more for reasons that will be explained further on, and this notwithstanding that the government pays no taxes, makes no allowances for depreciation, pays no interest on the capital invested (i. e., appropriations) and has no indemnity nor insurance cost. Moreover, as the clerical and drafting forces and other classified employees are paid from the appropriations designated in their appointments, their pay does not constitute a proper charge against new construction, nor likewise does the pay of the naval officers on duty in the yard. In this particular the government has the advantage of a private yard which has an overhead expense not only in the pay of the classified employees, but also in that of the officers of the company.
The Cost of Building a Battleship in a Navy-Yard
By Rear Admiral Albert Gleaves, U. S. Navy