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by the Council of Defense Ministers, and by the Chiefs of Staff, of the North Atlantic Pact nations, we have, for the first time, a fairly clear picture of the collective military requirements of the North Atlantic community of nations. We have also appraised recent events which make it entirely possible that appropriations in excess of those which have been requested for the current year will be required in succeeding years, not only for our own military forces but also for the military-aid program. Just as it is possible that in future years this Nation will have to devote an increased percentage of its total budget to these items, it is also possible that our partners in the North Atlantic Pact will be required by the force of events, and by the force of our collective planning as well, to take similar action. The events to which I allude include the Soviet atomic explosion, the fall of China, the serious situations in southeast Asia, the break in diplomatic relations with Bulgaria and deteriorating relations with other satellite countries, the Soviet assumption of control over the armed forces of Poland, Soviet naval expansion, the increased Soviet pressures in Germany, the recent attack on a naval aircraft in the Baltic, and the recent Soviet deLands relative to Trieste.

None of this presents a happy prospect; but the cold war is not a happy circumstance. The only satisfaction that I can personally derive from the situation lies in the fact that our own Military Establishment is well on the road to becoming a stronger and more powerful organization, and one which—as circumstances require-can utilize increased appropriations in a manner which will provide substantially increased combat effectiveness, whereas, even as recently as 1 year ago, large sums of money out of any increased appropriations would have been drained off in the form of unnecessary overhead. It is particularly important that the Armed Forces maintained by the United States shall at all times provide a sound base on which can be built a Military Establishment of increased size, should circumstances so require-for our mobilization in time of emergency depends for its success upon the soundness of the forces in being which constitute our mobilization base. Speaking to this point in chapter IV of the semiannual report which I submitted to Congress on February 28, I said:

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"Before the services could make effective use of their money, therefore, it was essential that they 'get into condition.' Even if additional amounts of money had been added to their budget, large percentages of it would have failed to produce added military strength. Our watchword must be economy and efficiency in every activity-with the size of our Military Establishment on as stable a basis as possible, subject to such increases or decreases as the international situation may warrant."

In this connection, I should like to stress the fact that the economy program, far from being laid aside, is made even more necessary by the world conditions and circumstances to which I have referred. The economy program, on which we are all engaged as a team, and on which we have had such excellent cooperation and support from this committee, is to be carried on with undiminished vigor because we must continue to eliminate overhead in applying our resources to building up combatant forces. Indeed, the economy program-which has been misinterpreted and misconstrued in some quarters-is one of the principal tools used by the Department of Defense in channeling funds into the combatant forces where such funds can be used to give us added strength, and away from such wasteful expenditures as unnecessary overhead, costly duplication, and unwar ranted overlaps.

The composite picture which I wish to leave with you is based in the main on the continuing reevaluations referred to above. It is based also on recent studies I have directed the Joint Chiefs of Staff to make in the field of aircraft procurement—a field which is, as General Eisenhower pointed out in his testimony here, one of the areas of vital importance to which we have given, and propose to continue to give, close attention. But as General Eisenhower pointed out in his very valuable testimony before this committee, aircraft procuremont is only one of the areas to which serious and continuing attention must be devoted, among the other areas, as enumerated by General Eisenhower and as discussed by me a few moments ago, being antisubmarine warfare, tank and heavy ordnance procurement, Alaska construction, industrial mobilization, and intelligence.

In connection with the question of aircraft procurement, and in view of the reevaluation made of the world situation to which I referred a few minutes ago, I have had further discussions with my immediate assistants and with the Joint Chiefs of Staff. I recommend that there be added to the amounts sub

mitted to the Congress by the President in January an additional amount of $200 million in contract authorization for aircraft procurement for the Air Force, and an amount of $100 million in contract authorization for aircraft procurement for the Navy and $50 million in cash for conversion and operation of additional destroyers and small ships needed for antisubmarine defense. This recommendation has the approval of the President. (This $50 million cannot be spent during the current fiscal year and therefore cannot be met out of the savings we have heretofore made. Accordingly, it will require an additional appropriation.)

In addition, arrangements have been completed under which Marine aviation, during fiscal 1951, will include 16 Marine air combat squadrons, instead of the 12 squadrons that were contemplated when the Budget was submitted in January. The additional four squadrons that are to be maintained will be financed by means of economies elsewhere in the budget, and no additional appropriations are required for this purpose.

The defense budget as reported out by the House Committee on Appropriations reduced the amount recommended in the President's budget message by approximately $200 million. We consider that the items cut out which total this amount are of vital importance, particularly in view of the present world situation, and we earnestly recommend that these items be restored by your committee.

For similar reasons, we are adding to the procurement program for the Department of the Army, out of savings made elsewhere, a sum of $24 million to help speed up the research and development for certain weapons, particularly antitank weapons.

With respect to all of the foregoing, there is one point that I want to emphasize, and it is this: These increased amounts for the Army, the Navy, and the Air Force are for "hardware," and nothing else. The additional $200 million for the Air Force, for example, is to be used for planes-and not for extra people, or extra overhead, or extra anything else. The same is true of the money for the Army and Navy. What we need is hardware-and what I am outlining to you, therefore, is a program that is addressed exclusively to the procurement of hardware.

In conclusion, I should like to comment on a situation which seems to me to be remarkable. I have reference to the fact that this year's budget for the Military Establishment, with very little variation, has received the approval of the Executive Office of the President, the Secretary of Defense, the Appropriations Committees of the Congress, and other responsible persons, such as General Eisenhower, In other words, there has been substantial unanimity of opinion on a vital point, namely, the fact that the world in which we live requires military expenditures of approximately the amount which the President submitted to the Congress last January. Consider for a moment how unusual it is to find that all of the responsible authorities who have spoken to this subject have been in complete agreement on more than 95 percent of the military budget. The House Appropriations Committee has suggested some reductions; General Eisenhower has suggested the possibility of some increases. But even taking the maximum of these suggestions--both on the minus and on the plus side-there has been no suggested variation which would affect the military budget in an amount greater than 4 percent. I call this fact to your attention in closing because I think that it constitutes the best argument that I could possibly present as to the fundamental soundness of the budget which is before us.

(Referred to on p. 2602)

13 MARCH 1950.


I want to thank you for this opportunity to discuss, in broad outline, the military budget for fiscal year 1951.

Work was commenced on this 1951 budget over a year ago. The President and the late Secretary of Defense Forrestal requested General Eisenhower to come to Washington and assist the Joint Chiefs of Staff in making recommenda

tions of the forces and matériel requirements upon which this budget could be based. Discussions of this problem were based upon decisions as to the roles and missions for each Service, reached at Key West and Newport in March and August of 1948. Beginning in December 1948, General Eisenhower and members of the Joint Chiefs of Staff reexamined our military requirements in this light as well as in terms of the strategic situation. These preliminary discussions culminated in a second Key West conference in May 1949, in which I participated.

As a result of these extended studies and discussions, General Eisenhower made recommendations as to the composition of the forces which should be maintained and the major matériel requirements which should be provided in fiscal year 1951. The forces and major matériel requirements to be provided by the budget before you are essentially those that he recommended. Each of the military departments formulated and submitted on 1 August 1949 a preliminary budget on this basis. After a preliminary review by my staff these preliminary budgets were consolidated and presented to the President on 15 August, 30 days in advance of the deal line for such presentation. Just prior to the submission by the military departments of their preliminary budgets, the President advised that $13 billion in new obligational authority could be allocated for Department of Defense military functions under the over-all Federal Budget for 1951. This $13 billion does not include $500 million for stockpiling of strategic materials, which is included in the appropriation of the Treasury Department.

At the time of submission of the preliminary estimates on 1 August 1949, certain items were still not settled. Under General Bradley's leadership the Joint Chiefs of Staff continued to address themselves to these items. Consideration also was given to the further recommendations of each of the three military departments, with the result that adjustments coninued to be made. After consultation with the Bureau of the Budget, final determinations were made in December-with subsequent approval by the President for incorporation in the Budget.

The estimates of the military departments on August 1, 1949, upon which the fiscal year 1951 budget was based, provided for certain forces and major matériel procurement within a $13 billion total. We profited greatly, however, by the hearings we held as the work on the savings program, and the work on the budget proceeded to its final phase during November and December, during which time the representatives of the Army, the Navy, and the Air Force presented the needs of their respective establishments.

Because of these conferences and the savings and economies instituted in fiscal 1950, as well as the elimination of unnecessary or doubtful items, the plans for 1951 have been modified to provide significantly more powerful military forces within the same dollar requirements. As compared with the estimates made by the military departments on August 1, Navy strength has been increased by three attack carriers, three carrier air groups, one cruiser, and one battleship in reduced commission. There will be two marine divisions instead of six battalion landing teams. The Army will be organized into ten divisions rather than nine, and will also have two additional antiaircraft battalions. The Air Force will increase the number of planes per group in three additional bomber groups.

Also, since August 1, 1949, $150 million was added to aircraft procurement for the Air Force and $50 million for the Navy. In addition to the 200-percent increase in the allocations for antisubmarine warfare equipment, 700,000 hours were added for flying in combat-type units in the Navy, and Army civilian component allocations were increased by $6 million for armories for the Organized Reserve. Army matériel procurement was increased by $41 million, including $10 million for new type signal equipment for the mobile striking forces of the Army, $17.5 million for heavy ordnance, including special prime movers, and $7.8 million for modernized portable bridges and other new engineer equipment. Despite this strengthening of the military services, over and above that thought possible last August, I would be less than candid if I did not point out that the 1951 budget, which you have before you, does not provide all the military forces the Joint Chiefs of Staff believe should be maintained if only the military point of view were to be taken into consideration. Nevertheless, the Joint Chiefs of Staff support the President's budget because they recognize the importance to national security of the maintenance of a sound economy. Consideration was given to all such factors by the President in submitting to the Congress a military budget within the $13 billion figure which we are discussing today.

The budget provides for a total of 1,507,000 man-years of military personnel— 630,000 for the Army, 461,000 for the Navy and Marine Corps, and 416,000 for the Air Force.

Under these recommendations for the Army, this Budget will provide 10 divisions, 48 antiaircraft battalions, and other combat and service units. Complementing the active Army will be the National Guard with 350,000 personnel and the Organized Reserve with 255,000 in regular training.

The Navy under these recommendations will operate an active naval fleet of 652 ships, including 238 combatant ships. Two Marine Corps divisions will be maintained. A total of 5,900 aircraft will be operated by the active forces, and 2,500 by the reserve forces. Supplementing the Navy and Marine Corps will be 204,850 members of the Naval Reserve and 50,772 of the Marine Corps Reserve in regular training.

It is contemplated that the active Air Force will be organized into 48 groups and 13 separate squadrons, approximately its present strength. The Air National Guard and Air Force Reserve will be organized into 27 groups and 25 base wings, respectively. A total of 8,800 airplanes, from trainers to heavy hombers, will be operated by the active Air Force, and in addition 3,400 by the Air National Guard and the Air Force Reserve.

The planned standard of maintenance of military installations is comparable to present standards. The amounts allocated for this purpose are less, however, because of the reduction in the number of stations and the reduction in the number of civilian personnel assigned to maintenance tasks.

Funds necessary for maintenance and operation of the equipment used by the military forces will be continued at about the present level-although in certain areas increased emphasis will be given to improvement in the maintenance of equipment and in training standards.

The budget contemplates the employment, from authority requested in this budget, of approximately 140,000 fewer civilian personnel than in 1950. While the number of civilian personnel released up to this time is now approximately 163,000, it should be remembered that a portion of those which have been released were paid from prior years and Civil Functions appropriations and that some additional reductions within the military departments will be necessary in order to live within the funds requested in this budget for civilian employment.

Aircraft procurement as provided for in this budget will permit the continuation of approximately a $2.0 billion annual program. The $2.0 billion will permit us to place orders in fiscal year 1951 for 2,200 aircraft, 1,383 for the Air Force, and 817 for the Navy.

Primarily as a result of authorizations granted in prior years, 2,713 aircraft are scheduled for delivery in 1950-1,732 for the Air Force, and 981 for the Navy. This will require the expenditure of $1,700,000,000 this year. Deliveries of new aircraft in 1951 are estimated at 2,297-1,383 for the Air Force, and 914 for the Navy-requiring the expenditure of $2 2 billion in fiscal year 1951. Cash payments for aircraft on order lag the provision of procurement authority by one to three years, depending on the type of aircraft involved. Because aircraft procurement was at a much lower level two years ago, our cash payments are now showing a substantial increase.

If new authority for aircraft and related procurement as requested in the budget is approved by the Congress, it is estimated that we will have as of 1 July 1950 total unexpended authorizations for aircraft and related procurement of $5.6 billion. Of this sum approximately $3.5 billion will be unfinanced contract authority for which cash appropriation will be required in 1952 and succeeding years.

While no provision has been made for the laying down of new vessels for this year, shipbuilding work under prior authority will continue in fiscal 1951 at about a $300 million rate. (This action for next year is not to be interpreted as meaning that a reasonably adequate shipbuilding program, including new starts, will not be provided for in future budgets.)

Other major procurement, such as guns, guided missiles, trucks, tanks, and other ordnance, engineering, and electronic items will be increased by a little over 20 percent as compared with the procurement program for these items in fiscal year 1950.

This procurement, combined with that authorized by the Congress in the last two fiscal years, will provide a continued flow of improved equipment which will assure us that the combat units will be better equipped a year or two years from now than they are today.

The continuation of the procurement program in this budget also makes a substantial contribution to our industrial mobilization potential—and this is further improved by the allocation of approximately $100 million for care and maintenance of our reserve plants, reserve machine tools, and for planning for increased production in those areas where production would have to be expanded quickly in case of an emergency.

We have continued Research and Development at almost the $600 million level of 1950. This program is extremely important in our peacetime effort and we consider that adequate emphasis must be placed on new methods and techniques to keep us in the forefront of scientific progress. During the past year the Research and Development Board has accomplished a great deal through the review and elimination of unnecessary projects. We expect to intensify this critical examination during the next year. As there are new projects of high priority continually being presented for integration into the Research and Development program, the program should become increasingly effective.

While funds for stockpiling of strategic and critical materials are not included in the $13 billion budget for the Department of Defense, we consider this a matter of vital importance in the total mobilization picture, and of primary importance in an emergency. As the President stated in his message to the Congress, $500 million additional authority has been requested in the 1951 budget. This amount, when combined with the authority made available last year, will permit the continuation of an orderly stockpiling program through the next fiscal year.

In the closing days of the first session of this Congress, provision was made for certain military public works, particularly in Alaska and Okinawa. The budget, as recommended by the President, contains no detailed request for additional public works funds, although the contingent item of $371 million anticipated the later submission of such a program. However, since the submission of the budget to the Congress, a 1951 public works program which calls for $300 million of the contingency item has been developed. It is expected that this program will be submitted for your consideration during the current hearings.

This budget provides $11,400,000 for the operation of the Office of the Secretary of Defense, including the Joint Chiefs of Staff, the Research and Development Board, the Munitions Board, and other Boards and staffs. This is $50,000 less than the funds provided for the current fiscal year. Numerous additional requirements—such as the Weapons Systems Evaluation Group and the Civilian Components Policy Board-have been met, and pay increases for civilian personnel have been absorbed within this smaller total.

In the course of your hearings at this session, your Committee will find reflected in the detailed estimates reduced dollar requirements for many functions and activities of the Department of Defense. These reduced requests reflect what we have already done in absorbing increased costs and in effecting savings and reductions, and what we confidently feel we can do in the coming year in providing support for an effective military force at a lesser cost.

In summary I would like to sketch in broad outline the results of our efforts to achieve our common objectives. This budget contemplates, as stated in the President's Message:

That, "total personnel assigned to combat forces will be the greatest since the completion of demobilization following Warld War II." That, $2.0 billion will be available for aircraft procurement-about the same as the volume of orders placed under fiscal year 1949 authority and planned for use in fiscal year 1950.

That, military personnel will be slightly less in total number than in 1950-but requiring almost the same allocation of funds.

That, the National Guard and the Air National Guard will be continued throughout fiscal year 1951 on a level program at the strengths attained during the current fiscal year-and that the Organized and Volunteer Reserve forces will be continued at approximately the current level. That, with the execption of shipbuilding, and aircraft procurement mentioned above, other major procurement will be increased.

That, Research and Development and Industrial Mobilization will be continued at about the same level as in fiscal year 1950.

This is the defense structure for which we request $13 billion this year as compared with the $14.2 billion which was requested last year. In my opiniou forces of the relative readiness to be maintained will provide a sufficiency of

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