maintaining a capability to use conventional weapons. No one can predict with any degree of accuracy the pattern of conflict which might develop from various tense situations. There will be many situations in which we will not want to use large nuclear weapons we now have in our arsenal; where this is the case, we have and are prepared to use conventional weapons.

In building the budget which will enable us to carry on the program I have indicated, we have followed certain principles:

On the programs which are considered to have unquestioned essentiality, the rate of development has been maintained and, where advisable technically, increased.

We have rigorously examined all other programs which, in view of current technical information may be considered marginal, could be eliminated or reduced.

Let me give some examples of how this policy has been applied to the 1960 program. The Navy, as you know, has had under active development two ship-based surface-to-surface missile programs. The older of the two programs was the intermediate range Regulus aerodynamic missile designed to be fired primarily by specially designed or modified submarines in a surfaced position. The second is the intermediate range Polaris solid propellant ballistic missile planned to be fired by specially designed submarines in a surfaced or submerged position, as I previously mentioned.

Now, the Regulus II is a good weapon and its development had progressed satisfactorily. However, the Polaris system promises to be far superior in overall effectiveness. Since this system has now reached the point where we can have confidence in its early operational availability, the Regulus II is no longer of the same importance. Considering the extremely high costs involved in developing, producing, operating, and maintaining the training and logistics support for two distinctly different missile systems, both designed for similar mission-we decided to concentrate our efforts on the Polaris, the more advanced of the two, and drop the Regulus.

The Redstone-Pershing relationship presents a similar picture. The Redstone is a liquid fuel tactical missile which has been in production for some time and which is already in the hands of Army units. The Pershing, a solid propellant tactical missile now under development, promises to be a distinctly superior field weapon. Since the potential of this missile is so great and its success is reasonably assured, we have decided to taper off future production of the Redstone and shift the emphasis to the Pershing.

In the same way the air-to-ground Hound Dog is replacing the Rascal program, and the tactical range solid propellent Sergeant will replace the liquid fuel Corporal.

The antimissile missile offers a somewhat different example. Last year studies were being made on Nike-Zeus as well as other possible anti-missile-missile systems. Among the candidates under study was the land-based Talos which, although designed for use against manned aircraft and aerodynamic missiles, does appear to have a limited potential as an antimissile missile. There were also two studies under contract for the development of an entirely new Air Force system, Wizard. As these studies progressed, however, we found that many of the components being considered were basically similar in concept to the Nike-Zeus system. Careful weighing of all of the

relevant factors led to the conclusions that the Nike-Zeus at this time offered the best promise of success and that work on the present alternative systems should be dropped. Thus, our available skills and talents in this area could be concentrated on the Nike-Zeus and on advanced research to develop an improved antimissile system in the years ahead.

A number of other projects have been dropped from the program for a variety of reasons. Because of technical difficulties and delays resulting in successive cost increases in the Navy's P6M Seamaster program, it was deemed impracticable to continue production beyond the 14 required for test and tactical development of the jet seaplane concept. Because of a change in tactical concepts the Air Force decided to drop the decoy missile, Goose. Similarly, the Army dropped the Dart missile because of failure of the system to meet anticipated capabilities.

The reason for canceling the Navy F8U-3 all-weather fighter is well known to you. You will recall that in the House report which accompanied the Defense Appropriation Act for 1959, the Department of Defense was directed to make a selection between the F8U-3 and the F4H-1, both of which are all-weather fighters designed for the same mission. Concurrent development of these two aircraft has been carried through preliminary evaluations. Both aircraft demonstrated outstanding flight performance. The F4H-1 has been chosen for procurement because it demonstrated greater weapon system effectiveness, better safety of operations, greater mission versatility, and greater growth potential.

Specifically, the fiscal year 1960 budget provides increased funds for such advanced missile systems, as the Nike-Zeus, Pershing, Polaris, Titan, and Minuteman. Funds are also provided to continue production of the Atlas, Bomarc, Hawk, Nike-Hercules, Talos, Terrier, Tartar, and other missile systems. A final increment of funds is included in this budget to complete the presently planned production. program for Jupiter and Thor. If an early decision is made, we can extend this production for the needs of our allies over and above the eight squadrons presently planned. In this event additional production would be financed by direct purchase or through the military assistance program.

In the fiscal year 1960 budget we are proposing to make no significant reductions in numbers of active duty military personnel. The Department of Defense has followed the policy since the end of the Korean war of reducing the number of military personnel as new and more powerful weapons were integrated into the forces. Although we shall continue the flow of new weapons to our forces in 1960, it seems prudent to keep our numbers at the level planned for the current fiscal year. Our fiscal year 1960 budget therefore provides for an active duty military personnel strength of 2,520,000 at the end of fiscal year 1960-Army 870,000; Navy 630,000; Marine Corps 175,000; and Air Force 845,000. The Army, Navy, and Marine Corps strengths are the same as those planned for June 30, 19, but the Air Force strength is 5,000 less.

I believe these levels are adequate to meet our commitments and our national objectives. They represent a realistic assessment of our manpower needs in flexible combination with other elements of our strength

As you know, the President has asked that Congress remove the mandatory minimum strengths prescribed for the Army Reserve and National Guard by the 1959 Appropriations Act. The action of Congress in establishing minimum strengths for the Army Reserve and National Guard was contrary to previously accepted procedure under which determination of Active and Reserve Force strengths has been left to the executive branch.

Both the Active and Reserve components of our Armed Forces are indispensable, but they require balance to be effective. Their needs change with changing conditions.

Several years ago, we allowed men to join Reserve units without prior training. Under such conditions a great deal of effort and time were required to bring the individual to a minimum state of readiness. Today the reservist must accept active duty training prior to joining his Reserve unit or receiving mobilization assignment. Previously, relatively few men with prior service in the Armed Forces went into the Reserves. Now, almost all who leave active duty must complete additional Ready Reserve obligation. These two facts have radically changed the old concept of paid drill training.

We believe the Reserve strengths provided in the fiscal year 1960 budget are appropriate to supplement the active components in furnishing the required defense structure. These numbers are a total of 1,030,000 reservists on paid status at end fiscal year 1960-Army Reserve 330,000 (270,000 in drill pay and enlisted 6-months training status, 60,000 in other paid status), Army National Guard 360,000; Navy Reserve 145,000; Marine Corps Reserve 48,000; Air Force Reserve 72,000; and Air National Guard 75,000.

In the questions which you were good enough to present to us in advance, Mr. Chairman, you asked how the Joint Chiefs of Staff as a corporate body participated in the formulation of the budget. The members of the Joint Chiefs of Staff, in their individual roles as Chiefs of their respective military services, participated closely and continuously in the preparation of the fiscal year 1960 budget. Early in December, a special meeting of several hours duration was arranged in order to give the Joint Chiefs of Staff and the Secretaries of the military departments an opportunity to discuss the 1960 military programs directly with the President.

Subsequently, the Joint Chiefs of Staff evaluated the military programs for the Department of Defense as a whole, prior to the presentation of these programs to the National Security Council. As a result of these studies, the Joint Chiefs of Staff formally advised the Secretary of Defense that while each individual service Chief had some reservations with respect to the funding of some segment of his own service program, the Joint Chiefs of Staff considered the fiscal year 1960 budget "adequate to provide for the essential programs necessary for the defense of the Nation for the period under consideration."

They also, I might say, included a statement to the effect that they saw no important gaps in the 1960 defense program.

Throughout the past year we have been working to put into effect the improvements in our organization made possible by the Defense Reorganization Act of 1958. The implementation of this act is scheduled to be completed this month, but work will proceed for the indefin

ite future on the development of improved procedures and administrative relationships to insure that the organizational changes will make a maximum contribution to the efficient management of the Department of Defense.

The new chain of command, running directly from the President and the Secretary of Defense through the Joint Chiefs of Staff to unified and specified commands, has been established. All of the unified and specified commands had been transferred to the new command structure by January 1, 1959.

The force structure and missions of unified and specified commands have been approved.

The organization of the Joint Chiefs of Staff has been strengthened to provide the military assistance required for effective strategic planning and operational direction. The former committee system of the Joint Chiefs of Staff has been replaced by seven new major staff groups, including one for operations.

The functions of the Joint Chiefs of Staff and of the military services have been revised to reflect the new chain of command for the operational direction of the Armed Forces. The relationships between the major components of the Department of Defense have been reviewed and brought into line with the 1958 Reorganization Act.

A director of Defense Research and Engineering, Dr. Herbert York, has been appointed with the mission to assure that all scientific and technological resources of the Department of Defense are put to the best possible use. Because of the importance of this new position, I should like to take a minute or two to discuss it.

The Director of Defense Research and Engineering will supervise and coordinate all Department of Defense research and engineering programs. He will be responsible for providing effective leadership, eliminating unnecessary duplication, encouraging basic research, and developing an integrated research and development program covering all operational needs.

We plan to continue the Advanced Research Projects Agency. It will be an operating agency paralleling the research and engineering organizations of the military departments. The Director of this Agency will report to me administratively. However, his research programs will be subject to the supervision and coordination of Dr. York's office just as are those of the military departments.

Just for clarification, it was never intended that the Director of Defense Research and Engineering would, himself, set up the major laboratory and technical facilities for carrying on these research and engineering projects.

It was intended that he would do the directing and supervision but that most of the actual carrying on of this research and engineering would remain with the Services.

Now additionally, for those programs which are assigned to the Advanced Research Projects Agency, that Agency would serve in the same relationship on the projects assigned to them as the services do on theirs.

So we have now in the Department of Defense four agencies for carrying on research and engineering projects. But all of these programs are under the supervision and direction of the Director of Defense Research and Engineering of the Department of Defense.

If any further clarification of that is required, I will be glad to take care of it in any questions.

Mr. Holaday's job as Director of Guided Missiles has had two quite different aspects. One has been to monitor and supervise all research and engineering work in the field of guided missiles; the other has been to assure appropriate priority handling of all guided missile problems in connection with their transition from the research, engineering, and testing stage into production and procurement. The research and engineering responsibilities of the Director of Guided Missiles together with the personnel involved will be transferred shortly to the Director of Defense Research and Engineering. And this has already been clearly discussed and understood both by Mr. Holaday and Dr. York.

We will proceed with deliberate caution with respect to the priority and production responsibilities in order not to lose any of the momentum the program has developed. Therefore, for a time at least, Mr. Holaday will remain as a special assistant to me with the assignment to continue to handle those special aspects of the program which are beyond the research, engineering, and testing phase. He also will continue as Chairman of the Ballistic Missile Committee to coordinate and accelerate high priority projects.

Returning to other organizational steps we have taken, the charters of most ofthe major officials in the Office of the Secretary of Defense have been revised to reflect the provisions of the 1958 Reorganization Act and to enable these officials to work effectively as the principal functional staff assistants of the Secretary of Defense. The revision of the remaining charters will be completed in the near future.

The reorganization of the civilian secretariats of the military departments, to include the reduction from four to three Assistant Secretaries prescribed by the new Reorganization Act, will be completed in early February.

Operating methods in the Office of the Secretary of Defense have been reviewed and the reporting requirements of the military departments reduced. Nearly 200 joint Department of Defense committees have been abolished.

Directives have been issued to facilitate the transfer of officers between the military services and to establish new review procedures for promotions involving three- and four-star officers.

All of these measures have contributed to the development of an increasingly effective organizational framework for our Defense Establishment. The job ahead is to establish within this framework, by day-to-day contacts on all organizational levels, the management relationships that will improve the decision-making process, clearly fix responsibilities, and provide to all agencies of the Department a full understanding of the broad national requirements that determine our military policy. The attainment of this objective will provide the teamwork that is essential for the continued maintenance of an effective and, at the same time, efficient defense effort.

Changes in the manner in which our fiscal year 1960 budget requests are presented reflect for the most part a rearrangement of appropriations for the Department of Defense in terms of major purposes rather than of organizational units. These broad categories are: (1) Military personnel; (2) operation and maintenance; (3) procurement;