grams discussed with and approved by you. Some of those programs had to be reduced to some extent to fit within the total. But as of this June 30, the only excess obligational authority we will have are relatively small amounts which in the 1959 budget have been taken as a credit against the 1959 request. Therefore, if the supplemental were not provided, there are certain programs which should be undertaken this year that will have to be postponed until 1959, and in addition we will have to ask for this same sum in addition to the current 1959 request.

Mr. MAHON. You have a lot of money that you will not need to commit in the fiscal year 1958 which you are using to plan against for the fiscal year 1959, I assume?

Mr. MCNEIL. Yes; but we have that pretty well worked out so it is reserved to complete specific ships, aircraft, or specific construction. Mr. MAHON. Yes. That is the question that I would like for us to explore in great detail, but I do not think we will want to undertake that just at this very moment. We will do it later in this hearing.

Secretary McElroy, I have been working with defense appropriations since 1940, and there is still a lot that I do not understand about the technicalities of some of these budget processes. It would be absurd to expect you to have in your mind every figure. I think that the witnesses from the Navy and the Air Force can give us greater detail. It would be impossible for you to have all that on the tip of your tongue. We can get the details from them.

Of course, the principal witness in this area would be Mr. McNeil. I would like more or less to discuss with you the overall situation, what it looks like, and what you are proposing and why do we need to do what you are going to propose.

If you will proceed, we will listen to you with great interest.

GENERAL STATEMENT OF THE SECRETARY OF DEFENSE

Secretary MCELROY. Before I open with my formal statement, I would like to say to you that I very much appreciate the expression of cooperative spirit on the part of the committee. I think the degree to which we can keep this on the basis where it is in relationship to the national interest the better off we will be, and that is certainly the way that I am approaching my job here, and I hope that is the way you will observe my conduct as I go along.

Mr. Chairman and members of the committee, the cooperation of the committee in arranging this early hearing in order that the Defense Department can present justification for the President's request for supplemental appropriations for fiscal year 1958 for the further strengthening of our defense posture, is very much appreciated. At an early date after transmission of the fiscal year 1959 budget to the Congress, we will be ready to make a full presentation of the fiscal year 1959 defense program to this committee.

PROGRAMS TO BE ACCELERATED WITH SUPPLEMENTAL FUNDS

In working out the program for fiscal year 1959, we found a number of highly important areas in which progress could be significantly accelerated if additional funds were made available early in calendar year 1958. The major areas include ballistic missiles, a ballistic missile detection system, and dispersal and alert facilities for the Strategic Air Command. In the light of recent demonstrations of

Soviet scientific progress and the implications this progress has for Soviet military technology, the Department of Defense recommended, and the President has approved, a supplemental appropriation request for fiscal year 1958 totaling $1,270 million, including $10 million to be derived by transfer.

It is a little premature to be talking about this, but I think for you to understand the supplemental it is almost necessary to talk to this degree about the 1959 budget.

Mr. MAHON. Yes. And I would like to remind all of us on the committee that this is strictly an executive meeting and there is to be no premature release by me, or anyone else, of anything that transpires in the committee. We were a little lax in some of our missile hearings last fall in connection with that long-standing rule which I think was all right.

These hearings will be printed very quickly. I wish that you would see to it, General Moore and others, that we get the transcript of the hearings back quickly, because if we are going to act quickly we need to have the printed hearings before us. If you can get the transcripts corrected without delay it will be very helpful.

General MOORE. We will do that, Mr. Chairman.

Secretary MCELROY. After advancing this portion of the financing into fiscal year 1958, the fiscal year 1959 budget for the Department of Defense will call for new obligational authority of a little over $39.1 billion, plus $345 million to be derived by transfer from Army, Navy, and Marine Corps stock funds in lieu of new appropriations. The budget also provides for direct obligations of approximately $41.1 billion and expenditures of approximately $39.8 billion.

STRATEGIC AIR COMMAND

The supplemental request of $1,270 million being presented today includes $219 million for the acceleration of the Strategic Air Command dispersal and alert program. This program entails construction work at additional bases to provide for the further dispersal of the Air Force's strategic bomber units and the relocation further north of a number of air refueling tanker units. It also includes funds for the construction of additional runways and crew facilities at the runways to permit a substantial reduction in the reaction time of the Strategic Air Command. The dispersal phase of this program has been underway for some time and is proceeding very well. The funds requested in this supplemental will move forward appreciably the completion date. The alert phase of the program has been tested and it should be accelerated.

The funds requested in this supplemental will permit a prompt start on the construction of necessary alert facilities at a number of SAC bases.

MISSILE PROGRAMS

Funds in the amount of $329 million are requested for the construction of a new ballistic missile detection system to augment the existing continental defense warning network. Included are $169 million for the procurement of the necessary equipment and $160 million for the construction of the radar sites and communications lines. The early

initiation of this program is considered to be essential in view of Soviet missile progress.

In order to permit the acceleration of the Atlas, Thor, Jupiter, and Polaris ballistic missile programs $683 million is requested. The Jupiter and Thor have already been ordered into production and with these additional funds, development, test, and evaluation of the Atlas and Polaris missiles will be accelerated and production of both will be started.

I might interpolate this: When the announcement was made that we would proceed with production on Jupiter and Thor, it was made clear at that time it was being done with the expectation that if it were to be continued, there would need to be consideration by the Congress of the appropriation of additional funds.

The $683 million includes $222,800,000 for the procurement of missiles and ground equipment, $52,200,000 for missile research and development, $112 million for the construction of missile sites and $296 million for construction of the first three fleet ballistic missile submarines designed to employ the Polaris missile. A prompt start on these three ships is essential to bring them into proper phasing with the missile which recent developments indicate can be operational appreciably earlier than originally planned.

might say that has been one of the most encouraging advances in the technical area that has taken place since I have been on the scene. Quite a number of those areas of considerable doubt in the development of the Polaris submarine have been resolved to a sufficient point that it does not seem hazardous to move out more rapidly in the ordering of production units.

Also included are $29 million for five SAGE centers, construction. authorizations for which failed to be transmitted to the Congress in time for enactment last year.

ADVANCED RESEARCH PROJECTS AGENCY

The $1,270 million total includes $10 million for the Advanced Research Projects Agency. This amount is proposed to be derived by transfer from such annual appropriations available to the Department as may be designated by the Secretary of Defense. We are also requesting authority for the Secretary of Defense to transfer unexpended balances in other appropriations which were previously made available for programs that will now be administered by this new Agency. The sums proposed for transfer are to be merged with this appropriation, the $10 million, and are to be made available for the same purposes and time period. It is most important that authority be granted to transfer funds from this appropriation to any other Department of Defense appropriation, to permit this Agency to utilize the great facilities and skills which exist in the military depart

ments.

Initially the new Agency will be given full responsibility for research and development of the antimissile missile and for outer space projects. Other special projects of this kind which are not clearly the responsibility of a single military department or which may be more appropriately performed by this Agency will also be assigned to the Agency. The Agency will not ordinarily take over research and development of weapons systems which fall clearly within the missions of any one of the military departments.

It is contemplated that programs assigned to the Agency will be developed in coordination with the military departments to the point of operational use so that they may be phased into the operation of one or more of the military services with a minimum loss of time or interruption of development and production, unless overriding considerations dictate otherwise.

We propose to establish the new Agency promptly and appoint a highly qualified Director. The Director will have authority to perform work directly with his own staff and facilities, to arrange for the performance of work by other agencies of the Government, including the military departments, and to enter into contracts with private business or educational and research institutions.

I think that I should interpolate here and say as you may have read, we are also asking for 15 positions that are in the classification of scientific and professional and 10 supergrade positions for this Advanced Research Projects Agency. I have failed to mention that in the written statement, so I want you to know that I did not do that deliberately. It was simply a matter of oversight and I want to correct that by the interpolation at this point.

EMERGENCY FUND

In addition to the $1,270 million supplemental appropriation requests, an increase of $100 million is requested in the transfer authority available for the Department of Defense emergency fund. As you know, the Congress appropriated $85 million and provided transfer authority of $50 million for the emergency fund for the current fiscal year. To date, we have used $46,625,800 of the emergency fund and $21,813,000 of the transfer authority for such important projects as the Jupiter IRBM-a continuation of the test program, the Army backup for the United States scientific satellite and the Polaris missile development program. This leaves a balance of $38,374,200 in the emergency fund and $28,187,000 of transfer authority, which does not appear adequate to cover additional research, development, test, and evaluation requirements during the remainder of the fiscal year. The additional transfer authority will enable us to exploit promptly any breakthroughs or unanticipated technological developments.

SUMMARY OF SUPPLEMENTAL REQUEST

In terms of appropriations the $1,270 million in supplemental requests may be summarized as follows:

Advanced Research Projects Agency, OSD.

Shipbuilding and conversion, Navy..

Procurement of ordnance and ammunition, Navy.

Research and development, Navy.

Procurement other than aircraft, Air Force..

Research and development, Air Force_

Military construction, Air Force.

$10, 000, 000 296, 000, 000 31, 800, 000 22, 200, 000 360, 000, 000

30, 000, 000 520, 000, 000

One hundred million dollars of additional transfer authority is requested for the emergency fund, OSD.

Additional authorization is required for military construction, Air Force, and the request for such authorization is being transmitted to the Congress. That is being done this morning.

Mr. Chairman, we have just completed a most thorough review and analysis of our defense programs and budget. On the whole, our military position is sound. Recent Soviet scientific and technological progress, however, makes it both desirable and prudent to accelerate promptly the programs which I have outlined here today.

Mr. MAHON. Mr. Secretary, as I said earlier, I think that it may take an hour or so to fully develop the present situation with respect to available funds; with respect to funds that are held in reserve against certain programs, and with respect to funds the use of which has not been planned, and so forth. I do not think it is proper to interrogate you on that. You work very closely with Mr. McNeil and other people with respect to that.

Secretary MCELROY. We anticipated the likelihood that such questions would be asked. Mr. McNeil is fully prepared and I know in general terms what the situation is. I think that the questions could be far more satisfactorily answered if they were answered by Mr. McNeil.

Mr. MAHON. You and Mr. McNeil are in full agreement with respect to the fiscal picture?

Secretary MCELROY. That is correct.

UNOBLIGATED FUNDS

Mr. MCNEIL. I have a short statement that I may make in that connection. For several years we did have excess carryover balances of unobligated funds. As you will recall, there was as much as $15.7 billion in 1955. It has been gradually brought down in succeeding years and at the end of the fiscal year 1959 it will be down to a little over $7.5 billion. This is about the value of the materials, components and services still to be ordered to complete programs started through the current fiscal year.

Mr. WIGGLESWORTH. At the end of 1958 or 1959?

Mr. MCNEIL. 1959.

Mr. TABER. That is not unobligated.

Mr. MCNEIL. It is unobligated, but with minor exceptions it is all earmarked to complete ships, aircraft or bases, and so forth. It gets back to this basic question: Are we going to go on a partial financing basis, or are we going to continue to fund ships, aircraft and other programs completely in line with the policy of this committee and the Congress?

Mr. MAHON. That is enough at this moment. I think other witnesses will be better able to discuss this. That is no discredit, Mr. McElroy, as far as you are concerned. They are supposed to have it better in mind.

SUFFICIENCY OF SUPPLEMENTAL ESTIMATE

Now, I would like to ask you if you think this program is all, generally, that we need to do at this time by way of a supplemental? In other words, you are coming up with your big budget Monday. Congress should take action within a very short time and make available to you any funds which you now require for highly essential programs, so you should get pretty quick action. Of course, we all know $1.2 billion will not solve the military requirements.