(b) Service of an individual as a member of any such advisory committee, or in any other part-time capacity for a department or agency hereunder, shall not be considered as service bringing such individual within the provisions of section 109 or 113 of the Criminal Code (U. S. C., 1940 edition, title 18, secs. 198 and 203), or section 19 (c) of the Contract Settlement Act of 1944, unless the act of such individual, which by such section is made unlawful when performed by an individual referred to in such section, is with respect to any particular matter which directly involves a department or agency which such person is advising or in which such department or agency is directly interested.

STATUS OF TRANSFERRED CIVILIAN PERSONNEL

SEC. 305. All transfers of civilian personnel under this Act shall be without change in classification or compensation, but the head of any department or agency to which such a transfer is made is authorized to make such changes in the titles and designations and prescribe such changes in the duties of such personnel commensurate with their classification as he may deem necessary and appropriate.

SAVING PROVISIONS

SEC. 306. (a) All laws, orders, regulations, and other actions applicable with respect to any function, activity, personnel, property, records, or other thing transferred under this Act, or with respect to any officer, department, or agency, from which such transfer is made, shall, except to the extent rescinded, modified, superseded, terminated, or made inapplicable by or under authority of law, have the same effect as if such transfer had not been made; but, after any such transfer, any such law, order, regulation, or other action which vested functions in or otherwise related to any officer, department, or agency from which such transfer was made, shall, insofar as applicable with respect to the function, activity, personnel, property, records, or other thing transferred and to the extent not inconsistent with other provisions of this Act, be deemed to have vested such function in or relate to the officer, department, or agency to which the transfer was made. (b) No suit, action, or other proceeding lawfully commenced by or against the head of any department or agency or other officer of the United States, in his official capacity or in relation to the discharge of his official duties, shall abate by reason of the taking effect of any transfer or change in title under the provisions of this Act; and, in the case of any such transfer, such suit, action, or other proceeding may be maintained by or again the successor of such head or other officer under the transfer, but only if the court shall allow the same to be maintained on motion or supplemental petition filed within twelve months after such transfer takes effect, showing a necessity for the survival of such suit, action, or other proceeding to obtain settlement of the questions involved.

(c) Notwithstanding the provisions of the second paragraph of section 5 of title I of the First War Powers Act, 1941, the existing organization of the War Department under the provisions of Executive Order Numbered 9082 of February 28, 1942, as modified by Executive Order Numbered 9722 of May 13, 1946, and the existing organization of the Department of the Navy under the provisions of Executive Order Numbered 9635 of September 29, 1945, including the assignment of functions to organizational units within the War and Navy Departments, may, to the extent determined by the Secretary of National Defense, continue in force except to the extent modified by the provisions of this Act or under the authority of law.

TRANSFER OF FUNDS

SEC. 307. All unexpended balances of appropriations, allocations, nonappropriated funds, or other funds available or hereafter made available for use by or on behalf of the Army Air Forces or officers thereof, shall be transferred to the Department of the Air Force for use in connection with the exercise of its functions. Such other unexpended balances of appropriations, allocations, nonappropriated funds, or other funds available or hereafter made available for use by the Department of War or the Department of the Army in exercise of functions transferred to the Department of the Air Force under this Act, as the Secretary of National Defense shall determine, shall be transferred to the Department of the Air Force for use in connection with the exercise of its functions. Unexpended balances transferred under this section may be used for the purposes for which the appropriations, allocations, or other funds were originally made available, or for new expenditures occasioned by the enactment of this Act. The transfers

herein authorized may be made with or without warrant action as may be appropriate from time to time from any appropriation covered by this section to any other such appropriation or to such new accounts established on the books of the Treasury as may be determined to be necessary to carry into effect the provisions of this Act.

AUTHORIZATION FOR APPROPRIATIONS

SEC. 308. There are hereby authorized to be appropriated such sums as may be necessary and appropriate to carry out the provisions and purposes of this Act.

DEFINITION

SEC. 309. As used in this Act, the term "function" includes functions, powers, and duties.

SEPARABILITY

SEC. 310. If any provision of this Act or the application thereof to any person or circumstances is held invalid, the validity of the remainder of the Act and of the application of such provision to other persons and circumstances shall not be affected thereby.

The CHAIRMAN. We are glad to have with us this morning Secretary James V. Forrestal. If you are ready to start, the committee will be glad to hear you.

STATEMENT OF HON. JAMES V. FORRESTAL, SECRETARY OF THE NAVY

Secretary FORRESTAL. Mr. Chairman and members of the Armed Services Committee, the statement that I have to make is a relatively brief one and does not go into any great detail on the bill, such as Judge Patterson's statement does. I had not consulted him in the preparation of this statement, but it so happens that my statement and his fit in a fairly good pattern, and I think we will save some of your time if I do not go into specific detail.

What I say in this statement on the bill to unify and integrate the departments that deal with our national security is based on two main premises:

First, there is a need, apparent during and since the war, for the planned integration of all of the elements, energies, and forces in our Nation which have to be drawn upon to wage successful war. In these categories come not merely the Army and Navy and the State Department, but industry, and by "industry" I mean industrial management, which I regard as one of the keystones which produce success in war-labor, transportation, civilian economy, and not least important, a study of 2 raw materials and stock piling of those basic materials which in wartime have to be imported in greatly increased quantities.

Second, nothing in any plan for the unification or consolidation of the purely military elements of our national security system should destroy the morale and autonomy of the Navy and its components, including particularly the Fleet Marine Forces and naval aviation. The identity of the naval service, with all of the considerations of morale and corps spirit involved, must be preserved.

The character of modern war is global and the Navy's point of view is essential in the conduct of a global war. I believe that had the status of the Navy in the war recently ended not been that of an equal partner, it is probable that the Pacific war would have continued long beyond August 14, 1945.

Naval insistence that the Pacific war-and I say this with no oblique references to the Army because their preoccupation necessarily was in what I call the great central plane of battle in Europebe waged concurrently with the struggle in Europe enabled the United States and her allies to compel the surrender of Japan within 312 months after the fall of Germany.

Having stated these premises, I will proceed with the discussion of the bill now before you.

Both the War and Navy Departments, after the end of World War II, recognized the need for bringing our security organization into consonance with the demands of our international position and of modern warfare. Differences, and they were quite considerable, dealt not with the ultimate objective but as to the method of achieving it.

Those differences have been resolved. The War and Navy Departments are in agreement that the bill before you, considered in its entirety, presents a sound and workable accommodation between three points of view:

One is the viewpoint of the Army, that there should be a single department in which the three services, the Air, Navy, and Ground Forces, should be divisions or branches. Another is the viewpoint of the Air Forces, that they are entitled to be placed on a parity with the other two older services. And the third is the viewpoint of the Navy, that actual physical consolidation would decrease efficiency, that it would destroy the morale of the naval service and that it would dangerously follow the patterns of the discredited Japanese and German organizations for war.

I should be less than candid if I did not admit that this bill is a compromise. But it is a fair compromise and as the President stated, a sound and workable solution. It is a compromise which would not have been possible without the unselfish and cooperative attitude with which the negotiators of both services attacked the problem; and all of this could have been done without the understanding, and may I say patriotism, of the Secretary of War and his Chief of Staff, General Eisenhower, and of Admiral Nimitz.

Because this bill is a compromise I should like to emphasize what I have said previously, and that is that the bill should be considered in its entirety. Both sides made concessions. There are no doubt certain provisions which the War Department would have preferred to omit and there are probably some things not in the bill which the War Department would like to have had included. The same thing is true of the Navy, and I expect of the Air Forces. It has been a case of give and take on both sides and the bill is the result of that attitude on the part of all participants. If any single item were withdrawn or modified to the advantage of any one service the mutual accommodation would be thrown out of balance.

Any step of this sweeping character for the unification of the services must rest fundamentally on the belief of all concerned that it is for the good of the country and that it will work. Military services are accustomed to discipline but even military men cannot be stuffed into strait-jackets through a charter or blueprint. The good will of the working organization is necessary whether it is a business organization or a military one; whether it is a sales force or a labor

union. Good will can make any organization work. Conversely, the best organization chart in the world is unsound if the men who have to make it work do not believe in it.

I am not naive enough to suppose that legislation, no matter how excellent, can insure the cooperation and good will that I consider so essential. These attributes come from the heart rather than from the mind and therefore are beyond the scope of legislation. But if we can carry into practice the spirit of cooperation and good will which the Army, Navy, and Air Forces demonstrated throughout the war, and brought to the drafting of the letter which Judge Patterson and I sent to the President on the 16th of January, I am confident that we can create the unity upon which success must rest.

This bill provides an organization which will allow us to apply the full punitive power of the United States against any future enemy. It provides for the coordination of the three armed services, but what is to me even more important than that, it provides for the integration of foreign policy with national policy, of our civilian economy with military requirements; it provides continuing review of our raw material needs and for continued advance in the field of research and applied science.

This bill provides that the three military departments are to be combined into a national-defense establishment headed by a Secretary of National Defense. Certain functions now carried out separately by the services will be controlled at the top level. Any inefficient and wasteful duplications which might otherwise arise should thereby be avoided. The budgets of the three services will be integrated and the procurement and distribution of supplies centrally coordinated.

The bill makes it quite definite that each department shall be administered as an individual unit by a Secretary who shall have the right of appeal to the President. We have the assurance of uniform policy for all services with the Secretary of National Defense supervising and controlling while each individual service under its Secretary remains autonomous with respect to internal administration. This is a matter upon which the Navy Department has had strong convictions and which I have come to share through experience. It is my belief that in any field of human activity, whether it is business or government, there is a definite limit to the size of an administrative unit which can be successfully directed by any one man. To borrow a phrase from economics, there is a point of diminishing efficiency return on management. There is a point, in other words, beyond which human beings cannot successfully direct an organization with the hope of having even casual knowledge of the operation of the component parts.

My experience in the Navy has been the foundation for that belief. It took me several years to grasp the details involved in administration of an organization as large and as complex as the Navy Department, and while it may be said that a good administrator should not concern himself with details, I hold that there are some details that he must understand. For the balance, he has to know the instruments and the machinery through which they are administered. I mean by that, that he has to know the places to go, he must know the people who have the knowledge, and he must have the swift intuition, so to speak, that will enable him to get at the sources of information on how things are done.

For a single man actively to administer an organization of much greater size that the Navy itself would require a period of years during which he would be in effect a novice. In fact, there is some doubt in my mind that any man-and bear in mind that the tenure of office of the average Secretary of the Army or Navy has been on the order of 212 years, and I think the average of the Navy is somewhat less than thatin any reasonable length of time would be capable of learning enough of the details necessary to efficient administration of an organization on the scale of a single department for war./

I have again in mind not merely the tenure of office of the individual concerned, but I have in mind the speed of both modern life and war, which does not permit much time for people to learn.

There is a vast difference, to take simply one example which I have discussed from time to time with Judge Patterson, and which I think he has come to share, between the operation of a navy yard and an Army ordnance plant, or for that matter any industrial organization. In a shipyard, you cannot apply the methods of mass production. I discussed that subject with Senator Byrd, and he has some knowledge of that because of his knowledge of the Norfolk Navy Yard. You have repair and you have manufacturing and you have equipment and you have inventory controls and you have merchandising in the sense of having to store goods readily accessible to customers. It is a melange of functions of many different kinds of businesses.

That is one reason why, when you come to inspect navy yards that you find at first what looks like a pretty confused operation. But out of the seeming confusion there comes order in the sense that ships are ready to go to sea.

It is clear to me that the experience of the past war made necessary certain changes in our governmental system for national security. Both World Wars showed, as I said earlier, that modern total warfare requires more than an army or a navy. It requires the use of agencies of Government other than the military departments, and in fact every department of Government had a part in the last war. Military strength today is not merely military power but it is economic and industrial strength. I might say also that it is fiscal strength. It is technological resourcefulness, and it touches every field of knowledge. It is science, history, and politics, on the part of the military men, and a perceptive attitude as to the part played by government itself, and I mean by that that the military men have to be conscious of the meaning of democracy. Men fight not for abstractions, but for the concrete things that they can visualize in terms of their own country.

I do not need to emphasize that point, since most of you are well aware of it, but I have come to be aware of it a lot more than I had earlier in life, that these military men are thoroughly aware that the foundations of our society rest upon the participation of the people governed.

Above all, modern war is economic and it is world-wide. Prior to World War II this was not fully appreciated. It was appreciated very little by us in World War I because until the end or toward the end of the war we were not confronted by the manifold problems of the shortage of materials, of transportation, of supply, and of manpower that we faced in this one very shortly after the onset of it. shortage of manpower, the necessity for the evaluation of priorities,

The