INDEPENDENT OFFICES APPROPRIATIONS FOR 1953

MONDAY, FEBRUARY 18, 1952

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D. C. The subcommittee met at 10 a. m., pursuant to call, in room F-82, the Capitol, Hon. Burnet R. Maybank (chairman of the subcommittee) presiding.

Present: Senators Maybank, Ellender, Saltonstall, Ferguson, Thye, and McMahon.

ATOMIC ENERGY COMMISSION

SALARIES AND EXPENSES

STATEMENTS OF GORDON DEAN, CHAIRMAN; HENRY D. SMYTH, COMMISSIONER; THOMAS E. MURRAY, COMMISSIONER; T. KEITH GLENNAN, COMMISSIONER; M. W. BOYER, MANAGER; WALTER J. WILLIAMS, DEPUTY GENERAL MANAGER; THOMAS F. FARRELL, ASSISTANT GENERAL MANAGER; EVERETT L. HOLLIS, GENERAL COUNSEL; JESSE C. JOHNSON, DIRECTOR, DIVISION OF RAW MATERIALS; R. W. COOK, DIRECTOR, DIVISION OF PRODUCTION; CARROLL A. TOWNE, DIVISION OF PRODUCTION; COL. K. E. FIELDS, DIRECTOR, DIVISION OF MILITARY APPLICATION; CARROLL L. TYLER, MANAGER, SANTA FE OPERATIONS OFFICE; LAWRENCE R. HAFSTAD, DIRECTOR, DIVISION OF REACTOR DEVELOPMENT; EDWARD J. BLOCH, DIRECTOR, DIVISION OF CONSTRUCTION AND SUPPLY; GEORGE C. TAYLOR, DIVISION OF CONSTRUCTION AND SUPPLY; THOMAS H. JOHNSON, DIRECTOR, DIVISION OF RESEARCH; DR. SHIELDS WARREN, DIRECTOR, DIVISION OF BIOLOGY AND MEDICINE; FLETCHER C. WALLER, DIRECTOR, DIVISION OF ORGANIZATION AND PERSONNEL; MORSE SALISBURY, DIRECTOR, DIVISION OF INFORMATION SERVICES; LINDSLEY H. NOBLE, CONTROLLER; F. J. MCCARTHY, Jr., ASSISTANT CONTROLLER FOR BUDGETS.

1953 BUDGET PROGRAM

Senator MAYBANK. The subcommittee will come to order.

In accordance with the recommendation which has been made and if there is no objection from the other members of the subcommittee, we will ask that the reporter leave the room and we shall proceed in executive session.

(The reporter was excused and the subcommittee proceeded in executive session.)

Senator MAYBANK. Now, what is the amount for new obligations in 1953 you are requesting here?

Mr. DEAN. The amount is $1,255,000,000.

Senator MAYBANK. It is $1,255,000,000 and we understand you are going to come up for a supplemental, according to the newspaper reports, for some $5 billion plus to be spent over a period of years. How much would be spent this year?

Mr. DEAN. Expenditures from the supplemental would be very small in 1952. The 1953 expenditures from the supplemental program will amount to in excess of $600 million.

Senator MAYBANK. So that in the neighborhood of $1.7 billion will be spent in fiscal 1952 on your currently authorized program and you expect to request an authorization for some $4 to $5 billion additional.

Mr. DEAN. A very small amount, Senator, would be spent on the expansion program in fiscal 1952, but we need authorization from the Congress to get started.

Could you break the 1953 budget down, Mr. McCarthy?

Mr. MCCARTHY. Yes. I can summarize the information which appears on pages 1 through 15 of the budget justifications.

Senator MAYBANK. I would like the record to show that we have had an executive session here for an hour and 10 minutes discussing some of the classified aspects of the atomic energy program, and for that reason the record will not be very complete.

LIQUIDATION OF CONTRACT AUTHORITY

Mr. McCARTHY. Mr. Chairman, in addition to the $1,255,000,000 which we are requesting for the fiscal year 1953, representing new obligations to be incurred in 1953, the budget also requests $57 million for the liquidation in 1953 of prior-year contract authority granted the Commission.

Senator MAYBANK. You say you are going to go through pages 1 to 15?

Mr. McCARTHY. I will just highlight this.

Senator MAYBANK. If there is nothing secret, I would like those pages to be made a part of the record so those who are not on the committee will understand the figures. Without objection we will make part of the record, pages 1 through 15.

(The pages referred to are as follows:)

BUDGET ESTIMATES FOR FISCAL YEAR 1953

Appropriation requested

GENERAL STATEMENT

An appropriation of $1,312,000,000 is required to provide for the 1953 estimates. The amount requested for new obligations in 1953 is $1,255,000,000. The remaining $57,000,000 is required to liquidate obligations incurred under contract authority in prior years. The appropriation of this amount will practically complete the financing of all contract authority amounting to $1,566,224,628 granted the Commission for the fiscal years 1948 through 1951. No new contractual authority was granted for 1952 and none is being requested for 1953.

Comparison of estimated obligations

Actual obligations in 1951 and estimated obligations for 1952 and 1953, shown separately for operations and additions to plant and equipment, compare as follows:

! Includes an estimated $1.2 million of reimbursable work for other agencies, for which an appropriation is not requested.

Cost-performance presentation

The Commission's budget for fiscal year 1953 is the third annual budget to be presented on a cost-performance basis. The funds required for operations and for plant and equipment are presented separately and in a different manner.

Operations. For each of the several programs into which the Commission's activities have been grouped, the funds required for operations are expressed in terms of incurred costs. These costs include the expense of labor, materials, and services actually to be consumed during the year for each operating activity. Not included in the budgeted costs are the depreciation expenses applicable to the various fixed assets used in each activity, although depreciation expenses and reserves are recorded in the Commission's accounts and shown in its financial statements.

The amount of obligations to be incurred for operations has been determined by adding to or deducting from the total of the operating costs estimated for each program, the estimated costs of reimbursable work and the estimated net increases or decreases, respectively, in inventories, cash working funds, unliquidated obligations, and transfers to or from other agencies.

The

Plant and equipment.-The obligational authority required during 1953 for plant and equipment has been estimated in terms of the amounts of contracts and orders to be placed during the year for this purpose. The costs to be incurred during the year for plant and equipment are also shown, as well as the resulting changes in working capital and unliquidated obligations for this work. appropriation amount requested for plant and equipment, however, is based directly on the requirement for new obligational authority, and does not depend upon the rate at which construction costs are expected to be incurred during the year.

2. Weapons program. The weapons program is concerned with the production of atomic weapons and their maintenance in a state of constant readiness. To this end, research, development, and testing are also carried on in order to improve existing weapon types, devise new types, and enlarge the body of fundamental scientific knowledge related to the use of nuclear energy in weapons.

Operating costs of the weapons program are estimated at $228.0 million in 1953, compared with $200.6 million estimated for 1952. Increased numbers of weapons will be produced in 1953; weapon-testing activities will be continued; and the personnel strength of the principal weapons laboratories at Los Alamos and Sandia, in New Mexico, will be higher than in 1952.

3. Reactor development program.-Major emphasis in reactor development is directed to increasing the output and efficiency of reactors for the production of fissionable material, including both existing reactors and those under construction; developing reactors of radically changed design for this same purpose; and providing prototype reactors for the propulsion submarines and military aircraft. These efforts contribute to the longer-range objective of economical production of electric power. Extensive research is also devoted to general problems of reactor design, such as development of new materials, shielding, and systems of heat transfer and chemical processing. While maximum use is made of Commissionowned facilities, in 1953 more work will be carried out by industrial contractors in their own plants and laboratories.

Operating costs for reactor development in 1953 are estimated as $92.4 million, compared with $65.2 million estimated for 1952.

4. Physical research program.-Research in the physical sciences of physics, chemistry, metallurgy, and mathematics seeks to provide fundamental knowledge and understanding as a basis for future atomic energy achievement. This research is carried on in the Commission's laboratories and to an increasing degree is supported at numerous universities and colleges throughout the United States.

Operating costs in 1953 for physical research are estimated as $43.1 million, compared with $37.3 million estimated for 1952. Much of the increase represents the cost of nuclear studies to be undertaken with new large-scale research instru

ments.

5. Biology and medicine program.-The Commission's primary concern in the field of biology and medicine is to determine the nature and extent of radiation and other atomic energy hazards; to prescribe adequate protective measures for the Commission's operations; and to provide relevant information to its contractors, the Federal Civil Defense Administration, and the Department of Defense. Research on problems specifically related to these responsibilities and on the whole broad problem of the reactions of living organisms to ionizing radiation is carried on in Commission laboratories and supported at a large number of universities, colleges, and hospitals. Also supported or encouraged is the application of radioactive materials to biological and agricultural research and to the study and treatment of cancer.

The estimated operating costs to be incurred in 1953 for biology and medicine are $24.6 million, compared with costs of $23.3 million expected in 1952.

6. Community operations.-The communities of Los Alamos, N. Mex., Oak Ridge, Tenn., and Richland, Wash., and certain housing at other locations, are operated to provide essential support for the weapons and source and fissionable materials programs. The costs of operating and maintaining the housing, commercial facilities, public utilities, schools, and other municipal services are largely offset by revenues.

The estimated net costs to be incurred in 1953 for community operations are $2.8 million, compared with $3.0 million in 1952.

7. Program direction and administration.-The salaries and other expenses of Commission personnel engaged in general management, executive direction, and technical supervision of program operations, the negotiation and administration of contracts, and other related administrative activities, are grouped together under the general heading of program direction and administration. The salaries and other expenses of Commission personnel engaged in nonadministrative activities, such as safeguarding shipments of fissionable materials and property, and providing police and fire protection at plants and communities, are included under the programs to which their work relates. The Commission administers its widely scattered operations through the Washington headquarters office, eight operations offices, and more than a score of local area offices.

The estimated costs of $35.4 million to be incurred in 1953 for program direction and administration compare with costs of $31.4 million estimated for 1952.

8. Other obligational requirements for operations. In addition to the operating costs summarized above, obligational requirements are also affected by the following:

(a) Costs of reimbursable work to be performed for other agencies are expected to amount to $1.2 million in 1953, the same amount as in 1951 and 1952. Although these reimbursable costs increase the total obligations to be incurred, they are offset by reimbursements in the same amount in arriving at the appropriation request.

(b) Stores inventories must be increased $3.2 million in 1953 to supply the expanding requirements of the operating programs. In 1952 they will show an estimated increase of $6.0 million compared with a decrease of $1.5 million in 1951. The total value of stores inventories at the end of 1953 will be $85,378,556.

(c) Special reactor materials being stockpiled for future use are expected to increase $5.6 million in 1953, compared with an estimated decrease of $0.8 million in 1952 and an increase of $6.4 million in 1951. The total value of such inventories at the end of 1953 will be $18,292,504.

(d) Other special materials, being stockpiled for future use for purposes other than construction of reactors, will increase in 1953 by an estimated $2.0 million, the same as the estimated increase for 1952. The increase in 1951 was $0.2 million. The total value of these special materials inventories at the end of 1953 will be $6,714,532.

(e) Working capital advances to operating contractors will increase by an estimated $0.7 million in 1953. An estimated decrease of $18.9 million is expected in 1952, compared with an increase of $10.7 million in 1951.

(f) Unliquidated obligations for operations will increase by an estimated $22.2 milion in 1953. The estimated increase for 1952 is $118.2 million and the actual increase in 1951 was $50.4 million. This continued growth in unliquidated obligations reflects the increasing annual cost of the Commission's production and research programs and the fact that most of the contracts for operation of Commission plants and laboratories are executed in the year preceding that in which the costs will be incurred. The cost of the following year's operations under such contracts is therefore included in the unliquidated obligations outstanding at the close of the fiscal year.

SUMMARY OF PLANT AND EQUIPMENT PROGRAMS

Plant and equipment obligations

The estimated obligational authority required in 1953 for plant and equipment is $453.5 million. Obligations in 1952 for this purpose are expected to be $585.6 million, compared with actual obligations in 1951 of $1,457.5 million.

The obligational authority required for each of the plant and equipment programs is summarized below.

1. Source and fissionable materials facilities.-Obligational authority of $311.4 million is requested for source and fissionable materials facilities in 1953. An estimated $360 million will be obligated for this purpose in 1952, compared with actual obligations of $1,247.5 million in 1951.

The $284.2 million requirement for the Savannah River plant project represents more than half of the entire request for plant and equipment. Appropriation of this amount would bring to $1,180 million the obligational authority granted for this over-all project. The remaining $27.2 million for source and fissionable materials facilities is required for numerous projects which will supplement or improve major facilities already in use or under construction, mainly at Hanford, Wash., Oak Ridge, Tenn., and Fernald, Ohio.

2. Weapons facilities.-New obligational authority of $55 million is required in 1953 for weapons facilities. Obligations of $114.3 million are expected to be incurred in 1952, compared with actual obligations of $103.6 million incurred for weapons facilities in 1951.

Most of the $55 million request is required for projects initiated at numerous sites in prior years. The major new project to be undertaken is a new building for the technical area at Los Alamos, for which $6.9 million is required.

3. Reactor development facilities.—The obligational authority required in 1953 for reactor development facilities is $44.1 million. In 1952 it is expected that $50.1 million will be obligated for this purpose, compared with actual obligations of $52.6 million in 1951.

Approximately $37.1 million of the $44.1 million requested is required for the continuation, initiation, or completion of construction work on a number of experimental and prototype reactors designed to produce fissionable materials