are concerned, that we have supplied the other 15 or 16 UN nations?
General MARSHALL. No, sir. We have not received the reports.
I don't know if General Reeder knows about that.
General REEDER. No, I don't think we have.

Senator KNOWLAND. Somebody in Washington must know approximately what the figure is.

General MARSHALL. The only information we have, sir, is the total issue for the theater, from which they issue to the troops in other parts of the theater as well as Korea.

COST OF KOREAN OPERATION

Senator O'MAHONEY. As far as the Quartermaster General of the Army is concerned, under this phase of the appropriation, you will have no difficulty in supplying us the actual cost of the Korean operation to the 31st of July of 1951 and an estimate as to the cost up to the 1st of September of 1951.

I am hoping, you see, that we will have this bill on the floor before the month of August has passed. I want very much to be in a position to tell the Senate just what the Korean operation has cost.

This request goes to all of the arms of the defense establishment. With respect to these other expenditures abroad, they will come up in the consideration of other phases of the appropriation bill. That information will also be desired.

But throughout the presentation, from the very beginning, the witnesses have emphasized the fact that the budget being presented and now defended does not include any funds to support combat activity in Korea.

So my original question was directed toward that particular aspect first.

General DECKER. I might add, in connection with Senator Knowland's question, that this reimbursement procedure is actually in operation. A few weeks ago we got the first check, from Sweden. Sweden has a hospital unit in Korea, which we are supporting logistically, and theirs was the first reimbursement to the United States. Senator KNOWLAND. Yes. That is relatively an inconsequential number of people there.

General DECKER. Yes. And while Sweden has some hard dollars, some countries do not. If we are reimbursed in some cases it probably will be in soft currency which we may or may not be able to use. Senator O'MAHONEY. Proceed, General Feldman.

MOBILIZATION RESERVES

General FELDMAN. The use of peacetime allowances has reduced considerably the amount that otherwise would have been included if combat operations had been financed.

However, offsetting a part of this reduction is the requirement to provide for an increase of approximately 40 percent in the average strength of the Army.

In addition, there is included in this estimate the amount of $810,309,000 for mobilization reserves, and $181,785,000 for the completion of the wool reserve authorized by Public Law 843, Eightyfirst Congress. Also an amount of $300,906,000 is included to finance

a revolving stock of duck and webbing items for the Army, Nav Air Force, and Marines.

Due to the limited capacity of the duck and webbing industry. centralized control of purchase, storage, and issue of these iter was directed by the Munitions Board assuring equality of supp for all armed services.

SUBSISTENCE

The estimate for subsistence of the Army amounts to $603,309,0 as compared to the 1951 appropriation of $912,293,000, or a decres of $308,984,000.

While the amount required for consumption purposes has increas due to an additional average strength and an increase in the price food, it has been more than offset by the elimination of combat co sumption and a reduction in the pipeline requirements for the supp of other services in Korea.

Senator O'MAHONEY. Please explain that. It does not seem ve clear to me. What is the offset occasioned by the elimination of co bat consumption?

General MARSHALL. It is a matter of comparison of the two budge Senator. In 1951 we had to establish a pipeline plus provide cou consumption in Korea, that is, consumption at the rate of comb We say the 1952 budget does not include combat consumption. Senator O'MAHONEY. That is merely because you have elimina the cost of the Korean enterprise.

General MARSHALL. That is right, as far as the budget is concern Senator O'MAHONEY. The money is being spent and a deficien piling up.

General MARSHALL. That is right, sir.

Senator O'MAHONEY. That illustrates again how important i that we have the full story.

General FELDMAN. Again it should be noted that the estim anticipates peacetime operation in fiscal year 1952 and is, theref on a contingent deficiency basis to the extent that the operat continues. The computation of this estimate on the basis indica results in the application of $94,308,000 of apparently excess inv tories in reducing the gross requirements.

REGULAR SUPPLIES

The estimate for regular supplies of the Army amounts to $4 351,000 as compared to the 1951 appropriation of $489,108,000. For proper comparison the 1952 estimate includes an amoun $155,472,000 for mobilization reserves as compared to $17,074 in 1951 for this particular purpose. This leaves a balance of $329. 000 for normal operating requirements in 1952 as compared to $4 033,000 required for operational requirements in 1951, inclu combat, or a net decrease of $142,154,000.

The net figure reflects an increase for additional strength of Army which has been offset by the elimination of combat consump requirements and a reduction in pipeline requirements.

Senator KNOWLAND. I wonder at that point, Mr. Chairm whether General Feldman could throw some light as to the res for the great increase in mobilization reserves from $17 million $155 million.

The estimated number of personnel has not gone up in any such roportion.

General FELDMAN. We have an approved program on the basis hat we did not have a reserve to meet the requirements when Korea roke, and this is an effort for the first time to build up a reserve of Quartermaster supplies in the case of a continuing operation and ncreased strength at a later date.

SURPLUS SUPPLIES FOR WORLD WAR II

Senator KNOWLAND. Did we not have a considerable number of Quartermaster supplies left over from World War II?

General FELDMAN. No, sir. When Korea hit we were in very erious deficiency so far as the supply position is concerned. Senator KNOWLAND. Was that in all items of supply?

General FELDMAN. Almost a hundred percent of our supplies were in leficiency, with the exception of a few hard items.

Senator KNOWLAND. My recollection is, and the testimony in 1946 efore the War Investigating Committee, and also the Appropriations Committee was, that at the time they were declaring certain items surplus they were maintaining a war reserve in quite a substantial number of supplies.

General FELDMAN. Yes. That was quite true in 1946, but bearing in mind that every appropriation subsequent to VJ-day have been balancing budgets. So that all of the excesses that we had on hand, progressively each year were reduced to the extent that they were applicable to the needs of the Army then in being. So that progressively through 1949, when the cut-off date on these reserves was computed, we have reduced those excesses.

Senator O'MAHONEY. In other words, you are living on the World War II "fat," so to speak.

General FELDMAN. Yes, we were, definitely, and at the time Korea broke we were in a very serious deficiency position.

Senator O'MAHONEY. General Decker, I may say at this time that I asked Admiral Clexton, when the Navy was on, to close the testimony for the Navy by a statement showing what has been done by the Navy with the appropriations which had been made from year to year since the end of the shooting. As a result, we would have a picture of what the reserves were and how the reserves were consumed and what the actual cost of operating was.

I would also like to have that for the Army.
General DECKER. Yes, sir; I will do that.

CLOTHING AND EQUIPAGE

General FELDMAN. The estimate for clothing and equipage amounts to $1,647,681,000, as compared to the 1951 appropriation of $1,697,367,000. Of this total $1,543,108,000 represents the amount to be appropriated under the project for purchase of clothing and equipage.

However, the estimate contemplates the transfer of $1,130,000,000 from this project to a stock fund during the fiscal year 1952, leaving $413,108,000 for the supply of troops. Included in the transfer are funds for mobilization reserves, wool reserve, and duck and webbing pool mentioned previously.

Senator KNOWLAND. Mr. Chairman, I want to get absolutely on this point regarding the war reserves we had left over. I like to know how much, if any, Quartermaster equipment had declared excess under the MDAP program within the last year or

RELATION TO MDAP PROGRAM

In other words, have we declared certain items in Quarterma equipment surplus as we have ordnance equipment for ship overseas to the MDAP nations, and are we now finding that ha declared more excess than perhaps we should have, we are havin purchase those same items in order to equip our own forces? General FELDMAN. We will include fractually in a statement you, sir.

But if my memory serves me correctly, we have declared few eve or surpluses for application to the MDAP program. Such sup that were furnished in quantity from stocks were on a reimburs basis.

(The information referred to is as follows:)

Excess items applied to MDAP without reimbursement, fiscal year 1950

Nonstandard items applied to MDAP without reimbursement, fiscal year 1.

Senator YOUNG. May I ask a question here?

Could you give an estimate of the amount, if any, of the A share of this $60,650,000,000 appropriation that will be made able to the other nations? What part of this equipment that be made available under this appropriation, so far as the Army i cerned, will be later turned over to other nations?

General FELDMAN. None, to our knowledge. This is merely on the requirements of our forces, which have been approved b Joint Chiefs of Staff.

Senator YOUNG. But you do intend to turn over some of equipment to other nations, do you not?

General FELDMAN. I am speaking only of Quartermaster now, and, to my knowledge, no equipment has been turned o them without reimbursement.

Senator KNOWLAND. Is that reimbursement at original co replacement cost, or at a percentage of original value?

I as

ecause reimbursement might cover any one of those three methods f reimbursement.

General FELDMAN. Generally speaking, it will be on the replace

ment cost.

Senator KNOWLAND. That may make quite a difference because here prices have gone up we could be replacing the same item at nywhere from 10 to 50 percent higher.

General FELDMAN. That is quite true.

General REEDER. I believe I can answer that better because the Quartermaster does not enter very largely into the MDAP program. Senator KNOWLAND. I realize that, but I wanted the record lear on that.

MATÉRIEL FURNISHED MDAP

General REEDER. There has been a gradual change. In the 950 MDAP program we had three types of matériel. We had that which was excess to our needs, MDAP was charged only the cost of outting it back into tip-top shape.

Next we had equipment which fell in the upper part, the fringe of our reserve, which we furnished at World War II cost.

Finally, the majority of it was furnished at replacement prices, present-day replacement prices.

In the 1951 program there was very little excess and everything else has been charged at present-day replacement prices.

Senator KNOWLAND. Since I neglected, when the Signal Corps and Ordnance people were here, to go into this matter, I would like the same figures in those services, as I just asked for in the Quartermaster Service, as to just how much has been turned over under the MDAP program, and whether they are in categories which we now find we have to replace.

TRANSFER OF CLOTHING AND EQUIPAGE TO STOCK FUND

Senator O'MAHONEY. General Feldman, I wonder if you would amplify the statement in the first paragraph on page 3, in which you state the estimate contemplates a transfer of $1,130,000,000 from the clothing and equipage project to a stock fund during fiscal year 1952. General FELDMAN. I will ask the budget officer to answer that, sir. Senator O'MAHONEY. All right, General Marshall.

General MARSHALL. In preparing our budget, Mr. Chairman, and submitting it through channels, the Bureau of the Budget determined that we should include in a stock fund such items as the wool reserve, mobilization reserves, and all our stocks. Therefore, we will be faced with two propositions: A budget for items of normal usage, and a budget through a stock fund for the other items.

Senator O'MAHONEY. What do you mean by a stock fund? General MARSHALL. A stock fund is similar to the Navy revolving stock fund, where all of your stocks are in a revolving fund, and the only thing budgeted for is the consumption. You buy everything from that stock fund.

We have not had one previously. We have been instructed to install it and have initiated the stock-fund operation as of July 1.

The purpose of this transfer was that the money would be requested under the appropriation.