defense during the period covered by this budget. In my opinion, also, it is the minimum amount which should be provided for the Department of Defense in 1951.

Two weeks ago I sent to the Chairman of the House and Senate Appropriations and Armed Services Committees a chapter of my first semi-annual report to the Congress under the provisions of the National Security Act amendments of 1949. This chapter deals with savings, absorbed costs and reductions. B cause the primary emphasis of this chapter is upon economy, and because the full report will not be delivered by the printers until the end of this month, I advised the respective Chairman that "elsewhere in the report I have discussed the strengthening of our national security-for in all that we do security comes first, and economy comes second."

Where do we stand with respect to national security?

We are farther ahead today than ever in our peacetime history. We are tailoring our defense to fit today's situation. We are getting into condition. We are converting fat to muscle. We are releasing civilians and men in uniform whose jobs do not contribute directly to national defense. By getting rid of what we no longer need for national defense, we get that much more money with which to meet our pressing requirements for combat forces. We are taking officers away from desks and assigning them to the field for combat training. We are approaching the problem of reserves realistically, and are setting up a strong nucleus capable of orderly, rapid expansion in an emergency. We are getting more defense value out of every appropriated dollar than ever before.

The Army is stronger today than at any time since the end of the war. General J. Lawton Collins, its Chief of Staff, has recently stated that:

"We have units that are ready to move right now in case of aggression; we have the best men in the Army today that we have ever had in peacetime and, although we have a number of critical equipment problems yet to solve, I can assure you that our troops, with the equipment that they have, would give a good account of themselves if we were attacked. The recent reduction in our occunation commitments has enabled us to concentrate more of our efforts upon strengthening the combat units which form the hard core of our fighting force. We are giving our divisions and other combat units more officers and men, some items of better weapons and equipment, and improved training under field conditions."

On December 31, the Army had 4,400 more men in combat units than it had in such units on July 1, 1949. Much of this increase in combat effectiveness was made possible by savings in the use of undue numbers of personnel for administrative and overhead purposes. This 4,400 increase in the number of men in combat units is even more striking when it is borne in mind that the total number of men in the Army decreased by almost 20,000 men during this period.

As for the Navy, let me repeat what Admiral Forrest P. Sherman, Chief of Naval Operations, recently put in a special message to all Navy personnel:

"Navy Department is exerting every effort to translate available appropriations into maximum fighting strength and mobilization potential. Savings made are generally available for increasing the state of readiness of authorized forces. Economies already effected have permitted increasing previously planned fleet strength by one large carrier and one cruiser, to provide additional equipment for antisubmarine warfare, and to augment general readiness. Planned economies an important contributing factor in retaining two additional Marine battalions."

are

Over-all, the readiness of the Navy has been improved and the active fleet is "ready to go." It is manned at 67 percent of wartime strength with trained personnel who seek to make a career of the Navy. This represents a substantial improvement over the situation 18 months ago when a larger active fleet in number of men and ships was manned at only 61 percent of wartime strength with many of the ships either immobilized or in a reduced operational status because of heavy turn-over of personnel and a serious imbalance in the skills and occupations required.

And, as for the Air Force, it is in the highest state of combat readiness since the war. Secretary Symington and General Vandenberg, the latter having only recently returned from an extensive tour of foreign stations, advise me that the spirit of officers and men is high. General Vandenberg states the combat readiness of the Air Force units he inspected was unexcelled at any time since the demobilization at the end of the war.

In our Air Force of today and as planned for 1951, we have 416,000 men manning 48 groups. These 48 groups ustitute the Air Force portion of the

balanced peacetime forces approved by the Joint Chiefs of Staff within the budget for fiscal year 1951. Due to organizational changes and the assignment of additional aircraft to certain groups, the so-called "48 group" Air Force has greater effective strength than did a "48 group" Air Force of a year or two ago.

The forces we already have in being, plus what our potential allies are developing, should tend to discourage aggressive action by any potential enemy. For the security and the peace of the world look not only to American manpower, American industry, and American weapons, but also to the potential of all of our partners under the North Atlantic Pact who have joined with us for the defense of our common idea.

APPENDIX AA

(Referred to on p. 2603)

STATEMENT OF SECRETARY OF DEFENSE LOUIS JOHNSON BEFORE THE ARMED SERVICES SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, JULY 25, 1950

Mr. Chairman and members of the committee, the last time I appeared before this committee was April 26, 2 months before the Republic of Korea was invaded. At that time I said:

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"The Secretary of State and the Secretary of Defense, as a working committee of the National Security Council * 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 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 demands 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. * ** *99

Gentlemen, circumstances do so require. That is my reason for being here today, in support of supplemental appropriations in the amount of $10.5 billion. I know that all of you are familiar with the contents of President Truman's message of last Wednesday. That document presents, better than anything I might say, the reasons for our request for this supplemental appropriation. The chairman of the Armed Services Committee, the Honorable Carl Vinson, said of the President's message that it was a "firm message which will be heartening to all Americans." In making this statement, Chairman Vinson added:

"I want especially to say that I am delighted to know, from the President's message and from my own contacts with the Defense Department, that what has been recommended has the complete and unstinted support of all the civilian and military leaders of the Defense Department. This is a splendid example of teamwork and efficiency in the Defense Department.

I am extremely grateful to Chairman Vinson for his generous support. It is entirely accurate to state that this supplemental appropriation has the unanimous approval and support of the civilian and military leaders of the Department of Defense.

The appropriation problems with which this committee, the Congress, and the Department of Defense have had to deal in recent months have not been easy ones. I know of no better summation of these problems than the one which your chairman, George Mahon, made on the floor of the House in support of this committee's recommended budget for 1950. You will recall that on that occasion, Chairman Mahon said: “If war comes soon, we are appropriating too little. If we have miscalculated the dangers, if the threat of war is just a deceptive mirage on the horizon, we are appropriating too much.

The dilemma described by Chairman Mahon was a dilemma which confronted not only this committee and the Department of Defense, but also the President and the people of the United States. It was not a new dilemma. My predecessor as Secretary of Defense, James Forrestal, outlined this dilemma very aptly in testimony before the Senate Armed Services Committee on April 21, 1948, about a year prior to the time that I became Secretary of Defense on March 28, 1949. On that occasion, Secretary Forrestal quoted the following excerpt from a memorandum he had received from the Joint Chiefs of Staff:

"Based solely on military considerations, it is the opinion of the Joint Chiefs of Staff that the administration should advocate a balanced Military Establishment commensurate with the 70 air-group program for the Air Force. * * * The Joint Chiefs of Staff recognize, however, that the phrasing of this balanced Army, Navy, and Air Force program) must be made responsive to such other factors as the capability of the aircraft industry to expand, the impact of the cost of the program on the national economy, and the calculated risk which can be accepted in the light of changing world politico-military situations."

After quoting the foregoing memorandum from the Joint Chiefs of Staff, Secretary Forrestal then went on to make the following statement:

"I think that I can say to you, therefore, that the President, the Joint Chiefs of Staff, the Secretary of Defense, and the Secretaries of Army, Navy, and Air Force as well as the Senate and the House of Representatives, I feel sure-are all in agreement, as a military matter, on the desirability of what the Joint Chiefs have described as 'a balanced Military Establishment commensurate with the 70 air-group program.'

"The Joint Chiefs ** * * have also reported to me that a force of the recommended size would require, in fiscal 1949, additional appropriations in excess of $9 billion. *

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"In my opinion, the Joint Chiefs were entirely correct in addressing themselves exclusively to the military considerations. That is their job. But they were equally correct in pointing out that other considerations-'the impact of the cost of the program on the national economy,' for example-are factors which the President and the Congress must consider.

"The impact on the economy of an additional $9 billion program is a matter that deserves-and will, I am sure, receive the most careful attention by both the President and the Congress.

"My insistence, throughout the consideration of these matters, has been that they must be considered in a rational and organized manner-and not on a basis of emotional reaction. * * *

"If the Congress and the President should ultimately decide that the military considerations, at this juncture in world history, outweigh the fiscal considerations-then we should, by all means, embark on the $9 billion additional program. But if the Congress and the President should ultimately decide that a program of somewhat lesser magnitude is required-in the interest of national solvency and in the interest of avoiding, so far as possible, allocations, rationing, price controls, and a host of other restrictions-then we should proceed in such a manner that we will get the most national security for each dollar we spend.

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"Bearing in mind over-all considerations such as those I have just been discussing, and after receiving the Joint Chiefs' $9 billion recommendation of April 14, 1948, I asked the Joint Chiefs this supplementary question: Granted the military desirability of the $9 billion program, what program would the Joint Chiefs recommend-in the general vicinity of $3 billion--as the most effective military program within the limits of the funds that will probably be available to us?

"Yesterday, I received the unanimous reply of the Joint Chiefs-and I again emphasize the unanimity of the reply. Their specific recommendation on the more limited basis envisioned by my more recent question-was that the $3 billion program should be increased by $481 million.

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"The program I am here discussing, therefore, is a program which would increase the original 1949 budget request by $3,481,000,000.

The $3,481,000,000 which Secretary Forrestal recommended, when added to the 1949 budget as originally submitted, gave a total recommended military budget of $13,507,000,000 for the fiscal year 1949. In other words, the dilemma presented by the competing military and economic considerations was resolved at the 132 billion level.

The President, his advisers in the executive branch of the Government, and the Congress solved the dilemma at that time by deciding that the fiscal considerations were equally as important as the military. The substance of that decision has been repeatedly ratified by the President, his advisers in the executive branch of the Government, and the Congress, all of whom reflected the will of the people of the United States.

At the outset of my remarks today, I quoted from my testimony of April 26. You will recall that my concluding remarks on April 26 dealt with the same dilemma I have just been discussing. On that occasion, I said:

66 * * * 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 * because I think that it constitutes the best argument that I could possibly present as to the fundamental soundness of the budget

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One month ago the Republic of Korea was invaded. The action of the United Nations, supported by the United States, called for the use of troops, ships, and aircraft to repel this criminal aggression which threatened the peace of world and the security of our own country. In the light of the actual fighting that is now in progress, we have reached the point where the military considerations clearly outweigh the fiscal considerations.

However, in our efforts to get the most efficient use of our military appropriations we have not had to deal with the same sort of competing considerations as those I have just been discussing. For all of us were equally determined to get maximum preparedness out of every dollar appropriated—and this determination to get the maximum return on the defense dollar will continue to govern our actions.

In enacting the National Security Act Amendments of 1949, the Congress added language specifically addressed to this point, and required the Secretary of Defense to submit to the Congress, twice each year, "itemized statements showing the savings of public funds and the eliminations of unnecessary duplications and overlappings that have been accomplished pursuant to the provisions of this act."

Carrying out this congressional mandate has been the steadfast policy of the Department of Defense, and a prime condition of our efforts in this regard has been the elimination of unnecessary overhead, with a simultaneous improvement in the combat potential of the Armed Forces. Indeed, the over-all combat potential of our Armed Forces was at a higher level on June 25-the day the Republic of Korea was invaded-than had been the case at any time since postwar demobilization was completed.

I realize that the foregoing sentence could be regarded as a fine, glittering generality, so I would like to make it concrete. For that purpose, I will use specific illustrations.

In the case of the Navy, what the fleet is doing today would not have been possible 2 years ago. In March of 1948, just after the Communists staged a coup in Czechoslovakia, Secretary of Defense Forrestal was gravely concerned about the readiness of the Active Fleet. In a memorandum which he received on March 23, 1948, the following significant statement appears: "As of March 22, there are 111 vessels of the Active Fleet immobilized and 66 reduced to limited

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In addition,

operations (or a total of 177) by insufficient personnel. most of the operating Active Fleet vessels are under peacetime allowance." The situation was one of the factors which led Secretary Forrestal to request the supplemental appropriation of $3,481,000,000, which I have already discussed above. This situation was also one of the factors which has led the Department of Defense to advocate a greater fighting strength for each ship, even at the expense of reducing the total number of ships in the Active Fleet. The ships we need are ships that can float and fight. A ship that only floats is a liability instead of an asset. On June 25, when the Republic of Korea was invaded, every ship in the Active Fleet was capable of getting under way and moving into action. Off the shores of Korea, we are being provided with daily illustrations of the readiness of the ships in our Active Fleet.

In the semiannual report which I recently submitted to the Congress, I discussed the general situation I have been describing above in these words:

"Over-all, the readiness of the Navy has been improved and the Active Fleet is 'ready to go.' It is manned at 67 percent of wartime strength with trained personnel who seek to make a career of the Navy. This represents a substantial improvement over the situation 18 months ago when a larger Active Fleet in number of men and ships was manned at only 61 percent of wartime strength with many of the ships either immobilized or in a reduced operational status because of heavy turn-over of personnel and a serious imbalance in the skills and occupations represented."

In the case of the Air Force, there has been a substantial increase in our actual combat potential. In chapter IV of the semiannual report which I submitted to Congress last February, I discussed this point in the following words: it is worth noting that on January 1, 1948, the Finletter Commission recommended 70 groups manned by 401,000 men. On that date the report also noted that the Air Force stood at 337,000 men for 55 programed groups.

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** * * the size of a 'group' is subject to change. As President Truman has pointed out, "The number of groups is a somewhat misleading measure of airpower since the character, size, number of aircraft, and other elements of the group are not fixed but constantly changed as conditions require.' An example of the type of change to which the President referred is the programed size of each B-36 heavy bombardment group-which stood at 18 planes per group less than a year ago, and which stands at 30 planes per group today. In this connection it should also be noted that the programed size of nine groups which stood at 30 B-29's or B-50's per group 2 years ago, stand at 45 today. In addition, these groups include 20 B-29-type tankers which increase the effective range of each individual bomber.

"In our Air Force of today and as planned for 1951, we have 416,000 men manning 48 groups, but due to the organizational changes noted above, these 48 groups, according to Air Force estimates, are equivalent to 521⁄2 groups of the size envisaged in the previous concept of the 70-group program.'

I should also like to comment briefly on the situation with respect to the Army. In March of 1948, the Army's strength was 542,000. The Army's budgeted strength for the current fiscal year was 630,000, prior to the supplemental request which the President submitted to Congress yesterday. In addition to this increase in numbers, there has been a further increase arising out of the fact that proportionately more men are now in combat units, and proportionately less men are in noncombat categories. In my semiannual report, I pointed out that "this increase in combat effectiveness was made possible by savings in the use of undue numbers of personnel for administrative and overhead purposes." Between March 1948 and June 1950 the actual manpower strength of the Army's mobile striking force in the continental United States-the general reserve-has increased by 165 percent.

As this committee knows, all of the top officials of the Department of Defenseboth civilian and military-have been seriously concerned lest even the increased strengths I have been describing should be inadequate to meet the needs of world conditions. In order to do everything possible to meet this situation, we set up a Defense Department Management Committee, immediately after the enactment of the National Security Act Amendments of 1949. To assist this committee in carrying out the recommendations of the Hoover Commission with respect to the Department of Defense, we employed the management engineering firm of Robert Heller and Associates. The first paragraph of the directive of the management committee reads as follows: "Pursuant to the authority vested in me by the National Security Act of 1947 as amended, I have established a Defense Management Committee. The mission of the committee is to bring about pro