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Mr. HARRY. It seems if we are going to talk about the dollar costs that are involved here, wouldn't we have to take into account the dollar costs of maintaining combat proficiency? After you get a fellow trained up so he is ready for combat, then you still got a continuing cost to maintain that combat proficiency,

General LEE. That is right.

Mr. HARDY. And wouldn't that have to be taken into account in connection with trying to determine the actual dollar savings through reenlistments or through

General LEE. Mr. Hardy, I think it would depend on where you lost the man. If you lost him to civilian life at the time he just became combat ready your figure is $120,000 as Mr. Burgess last said. That cost you there. Now, if you keep him on for another 2 or 3 years and lost him, certainly you are putting more money into him to keep him combat ready.

Of course, he is returning something to the United States Government by being in the force and being part of the active force.

Mr. Hardy. When you finish spending that $120,000 he is combat ready?

General LEE. Yes, sir. Mr. HARDY. And when you train his replacement up to that point, his replacement allegedly is combat ready also ?

General LEE. At that point.

Mr. HARDY. But if this fellow stays on active duty you still have to be continually spending money to maintain his proficiency.

General LEE. That is right.

Mr. HARDY, Suppose over this period of 17 months of training in order to maintain the proficiency of the fellow who was trained 17 months ago, you have got to spend a certain amount to keep him in the situation that he would be, or rather that his replacement would be in 17 months later?

General LEE. That is right. That would vary as I say, depending on where you lost him, how many months out into the future you lost him after his 17 months. It would vary, and continue if he stayed in for 20 years

Mr. Hardy. My point is this: From the standpoint of making a dollar comparison you can't say that it is $120,000 difference.

General LEE. You can, I believe up to the point, if you take the two to the same point in training.

Mr. RIVERS. Combat readiness?
General LEE. Yes, sir. I believe you can say that.

Secretary BURGESS. Of course he is saving you something, too, while he is staying with you.

Mr. HARDY. Of course he is. But I am trying to answer these questions in my own mind and actually, I don't see this $120,000 economy.

Secretary BURGESS. It is a protection of investment.

Mr. Hardy. Of course, you have a protection there that we can't put a dollar value on.

Secretary BURGESS. That is right, sir.
Mr. RIVERS. Go ahead, Mr. Secretary.

Mr. BLANDFORD. Before you get into the statement, two things, I would like to indicate that the $3,200 figure was consistent with the reenlistment bonus bill. I have the hearings here. Mr. Burgess, you

were using 100,000 people multiplied by 3,200, and what General Lee was testifying to before the committee -just to act as his adviser at this moment, he was talking about a 5 percent increase over and above existing rates which translated into people would give you a lesser number than 100,000, but would result in a savings of approximately $68 million. So that there wasn't anything inconsistent in it, Mr. Bates.

Mr. Bates. I was out to lunch then. [Laughter.]

Mr. Gavin was giving me some important information. I missed your point.

Mr. WILSON. It is in the record.

Mr. BLANDFORD. The reenlistment bonus testimony does jibe. The Secretary was talking about 100,000 people multiplied by $3,200

Mr. RIVERs. Don't let us get this thing any more confused because we have to get through here.

Mr. BATES. I understand the top of the chart referred to 100,000 men and the figure was $320 million, which is quite a bit different than the question I directed to the Secretary.

All I asked him was what does the 10 percent represent? He said if you increase reenlistments by 10 percent then you are going to save not 320 to 220.

Mr. BLANDFORD. No. He was referring to 10 percent of the people. General Lee was taking 5 percent of a lesser number.

Mr. RIVERS. Let us find out.
Secretary BURGESS. I understand the figure that way.
General LEE. We are talking about two different figures.

Mr. BATES. I merely asked the question does it mean if you increase enlistments by 10 percent, does that mean you save 220 million, 320 million ?

Secretary BURGESS. $320 million.
Mr. BaTEs. By increasing reenlistments by 10 percent?
Secretary BURGESS. That is what I used.

Mr. BLANDFORD. That is on the basis that 1 million will leave the service in fiscal 1956. Now what General Lee was referring to was a 5 percent increase over and above existing reenlistment rates, not on the basis of 1 million leaving the service but on the existing reenlistment rates. And the $3,200 figure multiplied by the number of people that would be expected to reenlist representing a 5-percent increase in the reenlistment rate would give you a net savings of $68 million.

Mr. WILSON. Not a 5 percent over

Mr. BLANDFORD. Because it is not 5 percent of a million people 5 percent of 400,000 or 500,000. Mr. BATES. That is as clear as mud.

Mr. Wilson. In other words 10 percent of a horse is much bigger than 5 percent of the horse's leg.

Mr. BLANDFORD. May I ask one question because this is going to come up on the floor just as sure as we are sitting here. I know Admiral Grenfell will be very happy to answer this question.

You talked about insurance rates for hazardous occupations and we say that the hazard insurance rates are very high for those engaged in flying. That is not true of people engaged in submarine duty. Therefore, you cannot use the same argument for submarine pay that you use for flight pay.

Now, we are going to be faced with that, because somebody usually does raise the question of why should submarine pay be the same as flight pay? If you are going to argue that you are going to give more pay because of higher insurance rates you can't make the same argument for those in the submarine category.

Secretary BURGESS. Maybe Admirals Grenfell and Holloway can give a better answer.

But my feeling about it is this: You have to protect and encourage the buildup of trained personnel in the submarine force because if that level drops, you are then in a situation of more danger than you are, say, with one man in a jet plane. I mean you have a whole crew in that craft. So I think that you have to realize that the Navy has built the submarine force up to a safe performance record. You have to maintain a safe performance record because if you don't you are then getting into some real great hazard because of the particular operation of that type of vessel.

Mr. BLANDFORD. I think that is a good answer, Mr. Chairman. I think we should have it in the record.

Mr. RIVERS. I think so, too. I think that is a good answer, Mr. Secretary.

Go ahead, Mr. Secretary.

Secretary BURGESS. This chart shows that the accident rate due to pilot error falls off sharply after the first few years of flying.

(The chart follows:)

MAJOR ACCIDENT RATES OF AIR PILOTS RELATE DIRECTLY TO THE PILOT

EXPERIENCE LEVEL

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Secretary BURGESS. As flying hours build up among career personnel, the accident rate flattens out. While the data shown on this chart applies to fiscal year 1953, the experience in 1954 was essentially the same.

The Navy reports comparable experience with equipment losses due to new personnel.

Sizable materiel costs as well as training costs could be saved if we can avoid the necessity of training so many new men to replace officers leaving the service.

Reduced accident rates also accomplish additional savings through decreased public liability payments and death benefits, as well as resulting in improved morale in the service.

In seeking a solution to the problem of turnover, we have looked to field studies to determine what influences military men most in the election of a military career.

(The chart follows:)

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Secretary BURGESS. Results of a survey covering approximately 40,000 Air Force officers and men are shown on this chart.

Tangible benefits are important to 33 percent of those surveyed; 51 percent said increased pay is most important. Also, of those not intending to reenlist, 62 percent considered pay most important. Other service studies generally show the same pattern of interests.

Mr. RIVERS. Did you submit Mr. Secretary, some sort of a figure that they could rely on about the increase, 5 percent, 10 percent?

Secretary BURGESS. We have generally discussed this pay situation with people in the field who will benefit from it.

Mr. RIVERS. A definite figure?
Secretary BURGESS. No, sir.

Mr. Rivers. They just complained they weren't getting enough money?

Secretary Burgess. That is right, complained pay was most important.

Mr. BATES. What is that “16 percent intangible"?
Is that the wife! [Laughter.]

Mr. Hardy. She is very tangible.

Mr. Bates. As important a factor as any is the wife, I think more important than the pay.

Secretary BURGESS. That is right. That is a very important factor. Mr. Bates. You are an ex-serviceman if they don't like it. Secretary BURGESS. That is right.

Mr. Wilson. The second 9 percent there, having to do with decrease in transfers is something that you can't come to Congress about. That is one of the problems within the services.

Secretary BURGESS. I would like to submit there that if we can stabilize the force, and cut down the turnover, the leaving of people, that will in itself be a stabilizing force to this moving problem. Because as you lost a person you have to move people to take his vacancy. And one of the important elements in this move problem, which we recognize is a deterrent to morale, a very large deterrent, is the nature of the service. But if we can stabilize the force I think we can make creditable gains.

Mr. RIVERS. It is based on what the figures show now, whether or not we get into a shooting war, and the stability of the forces as you envision them today.

Secretary BURGESS. In evaluating the overall personnel instability problem it became evident that the lagging level of military pay had become an important factor.

Military pay has increased less since 1949 than that of industrial workers, salaried business management personnel, or civil servants. It has also lagged well behind the cost of living.

This chart shows increases from 1949 to 1952 on the left; increases from 1949 to 1954 on the right; both superimposed over the corresponding increase in the cost of living.

(The chart follows:)

MILITARY COMPENSATION Has Nor KEPT PACE WITH PAY OF OTHER MAJOR

GROUPS

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