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During the past 2 years my own attention and that of the military experts of the War Department has been devoted largely to developing certain important plans for so organizing and equipping our meager defense forces as to attain a high degree of military efficiency, that might be carried over into a great citizen army to be raised in case of war. Much could be done and has been done by administrative action, but for the fullest development of our immediate plans legislative authorization and increased appropriations were needed. The Congress, after a careful consideration of these pressing needs, gave the necessary sanctions and provided the requisite funds. I therefore feel that the past year has been one of substantial achievement.

Among the more important administrative accomplishments of the year may be listed the perfection of our four-Army organization, and the establishment of the General Headquarters Air Force. The outstanding Congressional actions were the authorization for the increase in the enlisted strength of the Army, the increased number of cadets at the United States Military Academy, and the promotion law—the latter coming shortly after the close of the fiscal year. Increased appropriations by Congress and allotments of funds by the Public Works Administration enabled the War Department to procure modern equipment for part of the Army. Much more is needed, but encouraging progress has already been made. Mobility is one of the most important factors in warfare, and the motorization and mechanization of our armed forces is of primary importance.


The great improvement that has recently been made in our Army is due in very large measure to the initiative, genius, energy, resourcefulness, and brilliant leadership of General Douglas MacArthur, who is completing a tour of duty as Chief of Staff. Long before he came to the War Department as the principal military adviser to the Secretary, General MacArthur had won exceptional honor and distinction by his courage on the battlefield, his devotion to duty and his attainments as a military leader. To the many and difficult problems encountered in the War Department, General MacArthur applied the same vision, intelligence, sound judgment and fairness that had won him renown throughout his service, and he has exhibited administrative ability of the highest order. On my recommendation you extended his tour of duty as Chief of Staff nearly a year in order that he might be available to advise with the Congress on legislation of vital interest to the national defense. The President, the Secretary of War and the Congress have been extremely fortunate to have had his counsel and assistance at a time when our Army was being reorganized and modernized.


While the military activities of the War Department during the past year have been of great ultimate importance to the country, its work as a public works and conservation agency is perhaps more immediately apparent and has been of unusual magnitude. With a view to assisting in relief of unemployment the War Department has rapidly advanced its carefully planned comprehensive program of river and harbor improvement and has extended its flood-control operations. This has provided work for many thousands who would otherwise have been idle, and has increased the country's tangible assets in navigable waterways, power development, domestic water supply, and recreational facilities, and at the same time has lessened to an appreciable extent the menace of floods and the losses due to soil erosion. Through the construction of these

. public works the country's natural resources have been conserved and put to their highest beneficial use in the interest of the people. These activities are in charge of the Corps of Engineers of the United States Army, probably the finest engineering organization in the world, who thereby receive invaluable training for the efficient performance of their military mission in time of war. In other words, the civil activities of the Army engineers are not only important on account of the value of the projects they construct but also from the standpoint of national defense and preparedness.

As in the previous year the War Department has aided in various other recovery measures initiated by the President. The Army continued its work of organizing, administering, and supplying work companies of the Civilian Conservation Corps, and at the close of the fiscal year was completing the arrangements necessary for doubling the enrollment of this corps of civilian workers, which has met with such universal acclaim.

Much of the work incident to the establishment of the new Commonwealth government of the Philippine Islands was done under the general supervision of the Bureau of Insular Affairs of the War Department. Within the next few weeks I expect to leave for the Philippines to participate in the inauguration of the administration of the new Commonwealth government.

The War Department, in addition to its numerous other nonmilitary tasks, operates the Panama Canal, administers the government of the Canal Zone, and directs the operation of the Federal Barge Line on the Mississippi, Missouri, and Warrior Rivers. controls this publicly owned transportation system and also the pub: licly owned Panama Railroad and Panama Steamship. Line it is engaged in the common-carrier business to an extent which should make possible some sort of a comparison between public and private ownership of such facilities.


Insofar as possible the work of the War Department is decentralized to regional staffs. The United States is divided into nine corps areas. Each corps area is under a corps area commander, and is an autonomous administrative unit, subject only to such centralized control as is necessary for proper coordination and for economies in purchasing. However, with such a large organization and such diversified activities the maintenance of considerable personnel and offices at the seat of government is unavoidable. At present, the War Department occupies in whole or in part a large number of buildings in various parts of the District of Columbia, many of which are rented. During the past year it has been called upon to surrender

some of its space to provide office room for various emergency relief agencies. This has served to aggravate the already overcrowded conditions under which the Department functions and the great disadvantages resulting from the partial occupancy of numerous widely separated buildings. Hence, in the interest of efficiency and economy, I wish to renew the recommendation that I made last year for the immediate construction of a suitable building to house in one structure the War Department activities in the District of Columbia.

THE ARMY OF THE UNITED STATES In this report I shall not attempt to deal in detail with the organization, equipment, training, and administration of the Army of the United States. Those subjects are adequately covered in the annual report of the Chief of Staff and the reports of the heads of the various arms and services. However, I wish to comment generally on the strength and improvement of the components of our Armythe Regular Army, the National Guard, and the Organized Reserves. I am happy to report that in training, morale, and general efficiency there has been a steady improvement in each of those elements of our defense force.

REGULAR ARMY Strength.-On June 30, 1935, the strength of the Regular Army, exclusive of the Philippine Scouts, was 11,979 officers and 118,727 enlisted men. In the Philippine Scouts there were 58 officers and 6.371 enlisted men. The strength of the Regular Army on that date was practically the same as it had been for several years, the number being limited by the amount appropriated each year for its maintenance, although the authorized strength fixed by the National Defense Act is approximately 18,000 officers and 280.000 enlisted men.

The Congress took a very important step in the War Department Appropriation Act for the fiscal year ending June 30, 1936, by making funds available for an increase in the enlisted strength of the Regular Army from 118,000 to 165,000 men. This will stiffen our national defense establishment, which was too small to carry out its assigned missions, although it is still far below the minimum of 280,000 deemed necessary by the National Defense Act. The recruitment of the additional men began immediately after the close of the fiscal year covered by this report, and indications are that the increased strength will be attained before the close of the ensuing fiscal year. The new recruits are of a particularly desirable type. Nearly all of the new men are being assigned to combat units.

In providing for this increase in the Army enlisted strength, the Congress adopted a recommendation made by the military experts 10 years ago and renewed annually since that time. Frequent studies by the War Department General Staff disclosed that the least force that could successfully carry out the essential duties of the Regular Army should consist of 14.000 officers and 165,000 enlisted men. It will be observed that while the Congress authorized an increase in the enlisted strength to the extent required, no increase in the number of officers was directed. The need for additional officers is also urgent. They are required not only for service with Regular Army organizations and installations, but also for duty with the National Guard, Organ

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ized Reserves, and Reserve Officers' Training Corps units. I earnestly recommend that Congress authorize the commissioning of these additional officers in annual increments until a total strength of 14,000 is reached.

The increase in the Corps of Cadets at the United States Military Academy from 1,374 to 1,960 was necessary to avert a future shortage of officers. The first class to be enrolled under the new authorization entered the academy during July 1935. The members of this class who complete the course will be commissioned in 1939. These graduates will be needed as replacements for officers leaving the active list. By 1939 the normal separations of commissioned officers will have increased so that the number of graduates from the Military Academy will even then be insufficient to fill the vacancies. Hence to provide for any increase in commissioned strength it will be necessary to draw on young men from civilian life. Large numbers of young college graduates who have had Reserve Officers' Training Corps training and who now hold Reserve commissions will be available for appointment to the Regular Army, and will be excellent officer material.

Personnel.—The efficiency of any organization is always dependent in

very large measure upon the intelligence, energy, and enthusiasm of its individual members. Such a spirit cannot be maintained with out a decent recognition of loyal service. Our Army is no different in this respect from any other organization. I have felt for the last 2 years that the morale and efficiency of our commissioned personnel were endangered by the promotion stagnation. Many officers had spent their entire Army careers in the same grade and the prospect for future advancement was rather dismal. Officers were growing old in junior grades. Under such circumstances it was but human that an officer should become discouraged and be incapable of putting forth his best efforts. It was with the greatest enthusiasm, therefore, that the Army as a whole greeted the enactment of a highly satisfactory Army promotion law.

Under the terms of the new law nearly half of the promotion list officers below the rank of colonel receive immediate advancement, and all of the other officers are so elevated on the list as to bring them from 2 to 8 years nearer promotion than they would otherwise have been. The effect on the commissioned personnel was electrical. Though they had suffered many disappointments the officers had fought off discouragement, hoping that their plight would be recognized and corrected by the Congress. That hope has now been realized, to the great advantage of the Army as well as of the officers.

The new promotion law also provides for voluntary retirement for officers of World War service with graded retired pay. While it is not probable that many officers will take advantage of this provision, it does afford an opportunity for those who wish to retire from active service to do so without the pecuniary loss that they would suffer by resignation.

The Army appropriation acts for the past 2 years have contained a provision that there should be no more than 11,750 officers in the Regular Army whose original commissions bore dates prior to June 1 of each of the years affected. Compliance with this provision necessitated the separation from the active list of about 300 officers, in addition to those affected by normal attrition. This was accomplished by the retirement of officers not qualified physically for active field service, by encouraging the voluntary retirement of officers of more than 30 years' service, and by invoking class B proceedings against officers regarded as failing to meet the high standards of professional fitness required in the Army. To separate additional officers from the active list by these methods is becoming increasingly difficult, and it is respectfully suggested that directives of this character be omitted from future appropriation acts.

Pay schedules in the Army, both for officers and enlisted men, are relatively too low. The recent elimination of temporary reductions of pay and allowances, and the restoration of longevity increases, have been of material benefit to the members of the military service, who renounced opportunities for making money when they entered a public career in the Army, and who are therefore entitled to economic security. However, it should be borne in mind that since 1908 there has been only one slight increase in the compensation of Army officers, and that they have suffered financial injury from the higher price level that has prevailed since the World War. In terms of real wages, Army officers and enlisted men are worse off today than they were 30 years ago. I hope that as soon as the economic condition of the country warrants the added expense the Congress will consider an upward revision in Army pay schedules. I wish especially to call attention to the desirability of restoring the reenlistment allowance, the elimination of which has been a genuine hardship on the fine noncommissioned officers of the Army, who render such valuable service in our military organization and who are so frequently overlooked.

During the past year Regular Army officers have been utilized by the War Department and by other executive departments on many tasks not directly related to their military duties. This was especially true in connection with the work of the various agencies set up for the relief of unemployment and for the advancement of economic recovery. These officers applied their broad knowledge of public affairs and their executive and organizing ability to these new duties and invariably discharged them with great credit to themselves, to the Army, and to the Government. By their success in these undertakings they demonstrated the priceless asset the people of the country have in this fine body of professional men, whose training enables them to perform creditably a wide variety of unrelated duties in the public service.

I have availed myself of every opportunity to visit military posts throughout the country and in the Canal Zone. I hope soon to have the privilege of inspecting the Army establishments in Hawaii and the Philippine Islands. At each station I have visited I have been struck by the uniform excellence of the troops and the high standard of efficiency that was everywhere apparent. Despite the many discouragements that the military personnel has encountered, its enthusiasm, morale, and devotion to duty leave little to be desired. I am informed by my military advisers that never in the history of the Army has efficiency been higher than at present. Our defense force may be relied upon to perform its duties in peace or war in a manner in keeping with the finest traditions of our military history.

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