time we are expanding our pilot-training rate to the maximum which we consider economically feasible at this time. This expanded rate still will not meet our requirements and will have to be further expanded as soon as practicable, in order to supply additional pilots for our active forces, to fill our Coast Guard and foreign training commitments, and, very importantly, to provide a sound mobilization base of Organized Reserve Naval aviators.

NAVAL AIR RESERVES

I am sure you are well aware of the many and significant contributions of our Naval Air reservists who were ordered to active duty subsequent to the outbreak of the Korean war. We have placed heavy demands on our Organized Naval Air Reserve units and we have had to order many Volunteer reservists to active duty to make up for the pilot deficiencies attributable to the previously inadequate pilot-training program. The magnificent response of our Naval Air reservists to these continued calls to duty is well known and need not be repeated here. By its demonstrated performance, the Naval Air Reserve has proved its vital place in our national defense.

Our demands on the Naval Air Reserve throughout this period have materially depleted its future mobilization potential should further hostilities develop. The day is rapidly approaching when we can no longer count on the potential of World War II trained pilots for combat duty and we are now confronted with an urgent need to train new pilots for our Naval Air Reserve Squadrons if they are to be capable of fulfilling their major defense roles upon mobilization. We consider it imperative that our Reserve be maintained in an efficient status and that provision be made for its future needs by an expansion in the pilot-training rate and by the procurement of more modern aircraft for Reserve units. We are making progress as rapidly as feasible toward meeting these requirements and we are planning in future years to further restore the presently depleted military potential of our Reserve units.

OTHER MAJOR AVIATION PROGRAMS

While we consider aircraft and flight operations to be the key to any aviation planning, that does not mean they are any more important to the end result than are ships, bases, and research and development. Since Korea, we have expanded our aviation bases to the minimum needs of the authorized forces. We have undertaken the modernization of our bases to accommodate modern aircraft and supporting aeronautical equipment. Construction estimates for aviation bases do not appear in the aviation appropriations as they are presented in the joint public-works budget as a part of the over-all public-works

program.

Aviation research and development represents one of our most important program areas because the effectiveness of naval aviation is directly influenced by the rate of progress achieved in the prosecution of our research and development projects. If we are to make satisfactory advances in the field of aeronautics, it is essential that we maintain a vigorous research and development program. We are making considerable progress, but so is the enemy, and we must strive continually to improve for we can ill afford to fall behind. Our research and development program as planned is vitally necessary to obtain the required technical advantage.

IMPACT OF 1952 ACTIVATION COSTS

At the time the President submitted his recommendation on our "Aircraft and facilities" appropriation to the Congress, a supplemental 1952 appropriation request was under consideration to support the 1952 expansion in naval air combat forces. Budgetwise, it had been assumed that most of the large activation costs involved in this expansion would be covered by supplemental funds in 1952 and the 1953 estimates therefore were predicated on meeting large activation costs from suplemental 1952 funds. Subsequently it was decided to meet these activation costs by deferring essential procurement until 1953 and 1954. This decision has substantially compounded our problems of operating within the amount recommended by the President and imposes on us reductions greater than those reflected in the House action when it reduced the appropriation by $75 million.

If the House reduction is permitted to stand, there would in effect be a double cut, the one composed by the lack of a supplemental 1952 request, thereby adding to our 1953 requirements but not to the 1953 request, and the one imposed by the House itself. Under these circumstances, the $75 million reduction would have a very serious impact both on our operating forces and on the bases established for their support. More specifically, we are confronted with a very real prospect of having to curtail our flight operations appreciably and of having to close some stations which were recently reactivated at considerable cost to the taxpayer. On the other hand, it must be recognized lessening of the tempo of our flying program will lead inevitably to a decrease in over-all military readiness. For this reason, we are urging that the full amount recommended by the President be approved by the Senate.

BACKGROUND OF HOUSE REDUCTION

Although the House reduction was specific as to amount, $75 million, the factors designated as accountable for the reduction were rather general and are for that reason difficult to evaluate. It appears to us generally, however, that the reduction was predicated primarily on an implicit feeling that potential savings should be possible in a program of the magnitude of the one we are presenting. The specific factors mentioned were travel, repairs to stations, man-years, and procurement economies. These I could discuss at some length, but they alone do not account for a reduction of the magnitude of $75 million, except possibly in the very general and very intangible area of procurement

economies.

Even if all travel were completely eliminated, if all station repair projects were completely terminated, and if all of the personnel represented by the 2,800 additional man-years were discharged, the savings would amount to only $25,000,000. Obviously no such drastic measures could be taken without completely paralyzing our total program and that certainly could not have been the intent of the House committee. We have, however, endeavored very carefully to reexamine our entire program with a view toward seeing whether any part of the House reduction could be absorbed without unduly impairing the program. Unfortunately, these reviews have shown that our original estimates were too conservative and that a reduction in estimates could be made only by curtailing essential program objectives.

AVIATION TRAVEL

Of the general reasons designated for the reduction in our "Aircraft and facilities" appropriation, travel is the smallest dollarwise and represents one of the most commonly misunderstood items in our budget. Before discussing this item in detail, I should like to make clear our complete and unreserved acceptance of your expressed desire that travel be rigidly controlled and that expenditures for this purpose be held to a very austere minimum. We subscribe fully to this policy dictum established by the Congress in preceding years and we prepared our original budget estimates in full accord with this specific objective, notwithstanding the apparent increase cited in the House committee's explanatory notes.

There is budgeted for travel in 1953 the same amount as is being expended in 1952. More than 80 percent of this amount finances the transportation costs of fleet personnel attending technical training schools at which they learn to operate and maintain the highly complex equipment characteristic of modern aviation. I have spoken earlier of the vital importance of this training program. It is, without exaggeration, the keystone of our whole defense effort. Without it we would not have the trained personnel so necessary to man our combat aircraft squadrons and the supporting aviation technical ship and shore billets. We see no possibility of reducing this volume of travel without relying on unskilled youths to operate the very large investment being made in complex and intricate operational equip

ment.

Expenditures indicated for travel in 1952 did not include travel costs associated with the expanding technical training program which has tripled during the past year and which will increase another 73 percent in 1953. Other travel, which is minor, has been budgeted at 10 percent less in 1953 than in 1952. According to disinterested personnel borrowed from industry to review our program, we actually are too strict in authorizing travel. It has been their recommendation that we authorize increased travel on the part of our senior industrial personnel to acquaint them with new methods and new procedures. We did not incorporate these recommendations in our estimates but we believe that they have considerable merit and that more, rather than less, travel actually might contribute significantly to greater

economy.

STATION REPAIR PROJECTS

One of our most troublesome areas is the Aviation Shore Establishment, both because we have been expanding our combat forces without a corresponding expansion in station facilities and because retrenchments in appropriations in early postwar years prevented the allocation of sufficient funds to stations to make essential repairs as the need for them arose. The general neglect of station facilities that occurred throughout this period led to accelerated deterioration of buildings, utilities, and aircraft operating areas, with the result that by the beginning of the Korean conflict a large backlog of repair projects had accumulated at our air stations.

Many of these deficiencies had by that time reached such proportions that they could be corrected only through public works appropriation projects and most of these have been provided for under that program. There still remains, however, a backlog of major repair projects that totals more than $50 million and new projects are accumulating at the

rate of approximately $16 million annually. Against this requirement of $66 million we budgeted only $12.4 million plus another $4.1 million for station-activation costs and other nondeferrable items. With the $12.4 million budgeted we can accomplish only a relatively few of the most urgent projects, even though accomplishment of all projects would in the long run actually constitute real economy.

Experience gained in recent station activations has proved the basic economy of correcting promptly defects which, if left unchecked, would lead to widespread deterioration. It is my firm conviction that any reduction below the extremely conservative estimate submitted for fiscal year 1953 would result in serious damage to the taxpayer's extensive investment in station facilities and would again lead in a very few years to many costly repair projects of a scope of such magnitude as to require inclusion in the public-works appropriation.

CIVILIAN PERSONNEL

Turning now to the subject of civilian personnel, we are asked by the House committee to absorb an increase in average employment of approximately 2,800 civilians. Percentagewise the increase is, as the House committee observed, relatively small and for this reason it might appear not too great an undertaking to develop ways and means to absorb the increase within our existing establishment. The increase in average employment does not, however, represent an increase in employment over the number of civilians presently on board. What it reflects is the fact that during 1953 the new personnel hired during 1952 will be on the job for a full year whereas during 1952 they were employed for a part of the year only.

I should like to emphasize particularly that our estimates do not contemplate any increase in personnel over those now employed. Our original estimates contain no provision for personnel to man the new training station being activated during June of the current year nor do they include any provision for personnel to man the new overseas station in the NATO area or the additional auxiliary landing fields programed for continental United States. We are planning to try to absorb these and sizable other new requirements by making reductions in our existing establishment, in keeping with the austere level on which our whole program is predicated, but we do not feel we can make further absorptions without adversely affecting the planned operating objectives.

PROCUREMENT ECONOMIES

As for procurement economies, our aviation procurement is very highly specialized and ranges from major aircraft components to all of the technical bits and pieces required to support an aircraft operating program. Here also we already have made full allowance for every feasible economy and we cannot, in fact, support our program with less than the amount requested. On the contrary, we are discovering every day that the unit prices on which our budget estimates were based last summer are unrealistically low and that, when we actually place our contracts we will have to meet these higher unit prices at the expense of procurement quantities.

Every effort will be made, I can assure you, to achieve all procurement economies that are reasonably attainable. This would have been

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done under any circumstances, but a very strong incentive for saving lies in the disturbing imbalance between resources and program objectives which existed even prior to the House reduction. We still are hopeful of salvaging most if not all of our program objectives under the funds recommended by the President but we are sufficiently realistic to recognize that this could not be done if those amounts were lowered to the extent reflected in the appropriation bill passed by the House of Representatives.

At this point, however, it should be borne in mind that there is one procurement practice which we are following that is costly in terms of end product currently delivered. I have reference here to the practice of spreading procurement among a number of producers to build up mobilization capability rather than concentrating on established sources operating at peak capacity. If procurement were centralized in established plants operating at peak capacity, we undoubtedly could save a substantial amount in dollars, but we would at the same time completely nullify the extensive mobilization preparedness program currently under way.

SUMMARY

We believe that our planned naval aviation program fits the minimum needs of our Nation at this time. It reflects a very careful balancing of military resources with defense requirements arrived at after an exhaustive evaluation of all phases of the national defense structure in terms of industrial capacity and military potentials. If we are enabled to carry through our plans we will be ready, on the basis of the minimum necessary mobilization structure, to take our full part in a general war if that cannot be avoided.

Our estimates of the costs of implementing these plans have been very thoroughly screened by competent experts outside the Navy and were reduced before being presented to the Congress to an austerity level relative to the program objectives established for us by the Joint Chiefs of Staff. We believe, however, that we can meet these program objectives within the austere estimates submitted but the action of the House in imposing reductions and placing a restrictive ceiling on expenditures will, if affirmed, most certainly weaken our position and jeopardize our capability as a fighting force.

Although these House reductions were unaccompanied by any detailed showing of where real savings could in the opinion of the House be made, we have most carefully and most conscientiously reanalyzed our program to see where reductions could possibly be made without seriously impairing our program. These studies have clearly confirmed the fact that the House reductions would seriously jeopardize our minimum plans. We accordingly are requesting of you gentlemen approval of our naval aviation program and approval also of the appropriations necessary to carry out these plans that are so vital to the defense of our Nation. A detailed justification of the estimates to support these plans are contained in the budget books you have before you and I and the other representatives of naval aviation here with me are available to assist, as you may desire, in your examination of our proposed program.