ships remaining will be placed in year-round operating status by augmenting their crews with personnel transferred from inactivated vessels, thus increasing the yearly number of cruises and providing 10,000 additional training billets. The air components of the Navy and Marine Corps Reserve will operate 1,844 aircraft of all types from 27 air stations-a reduction of 339 aircraft below 1950. SHIPS AND SHIPBUILDING There will be 653 vessels in the active fleet in fiscal 1951, a decrease of 78 from the 731 vessels appropriated for in 1950. There will be 239 major combatants in 1951, compared to the 288 major combatants in 1950. Ten shipyards will be operated in fiscal 1951. The Long Beach Naval Shipyard, which will be inactivated in 1950, will be kept in a maintenance status. Shipbuilding work under prior authority will continue at about a $300,000,000 expenditure rate during fiscal year 1951. No new obligating authority is requested to initiate new shipbuilding or conversion for fiscal 1951. As the Secretary of Defense pointed out, this action is not to be interpreted as meaning that a reasonably adequate shipbuilding program, including new starts, will not be provided for in future budgets. New types of ships must be built and existing ships converted in order that the Navy may keep pace with progress in scientific warfare. In addition to providing the replacements required to maintain a balance fleet, it is through new construction that new ship types, new instruments, new systems, improvements, innovations and the use of new weapons are developed. Developments in carrier planes, for example, demand basic changes in deck strength, deck height, launching catapults, fuel and ammunition supplies, and handling equipment. AIRCRAFT The Navy and Marine aviation programs for 1951 comprise a total of 4,389 operating aircraft for the Regular Establishment and 1,844 for the reserve components. This is a reduction which affects both the regular and reserve programs, the regular by 21 percent and the reserve by 16 percent below 1950. However, by greater utilization per aircraft, we shall be able to continue at approximately the 1950 level of flight operations. Very significant reductions in the aviation combat units are indicated at the beginning of 1951. Attack carrier air groups are to be reduced from 14 to 9. Antisubmarine squadrons, which operate from the small carriers, will be reduced from 8 to 7. Patrol squadrons will be reduced from 30 to 20. The Marines will operate 12 squadrons in 1951, compared with 23 provided for in 1950 estimates. The aviation shore establishment is being reduced by five stations in 1951. The proposed procurement of 817 aircraft included in this budget, will offset attrition and improve, somewhat, our aircraft inventory position, but it does not represent actual requirements. Other witnesses will present our aircraft program in greater detail, but I should like to point out that the rate of modernization of our aircraft con tinues below the standard required to maintain this force in first-line condition. INDUSTRIAL MOBILIZATION Our industrial mobilization program under this budget will continue at the 1950 level of a little less than $14,000,000. The vital importance of industrial mobilization planning must not be overlooked. În any future war, no matter how well trained our personnel may be, or how modern our fighting equipment may be at the onset, our staying power will be directly dependent upon the ability of industry to mobilize and achieve peak production more quickly than ever before. Our plans and budget for industrial mobilization have been correlated with those of the other two services. As stated earlier in testimony of the Chairman of the Munitions Board, our proposed program in the 1951 estimates represents the best balance possible under the over-all budget. ORDNANCE Procurement of ordnance is being primarily restricted to ordnance material required to improve the effectiveness of antisubmarine warfare and antiaircraft defense systems in the active fleet. The number of ordnance shore stations will be decreased from 60 in fiscal 1950 to 56 in fiscal 1951. Of these stations, 33 will be actively operated, while the balance will be kept in a maintenance status. This continues the policy of disestablishing, leasing, or inactivating stations not required for peacetime missions. At the end of fiscal 1947, for example, there were 82 active ordnance stations. RESEARCH AND DEVELOPMENT The research and development program presented in the Navy budget has been integrated with the programs of the Army and the Air Force and approved by the Research and Development Board. Naval ships, aircraft, weapons, and tactics must keep pace with the rapid advances being made in scientific warfare. PERFORMANCE BUDGET The Navy budget which includes the Marine Corps, is submitted in a structure materially different from previous years, and is termed a performance-type budget. It high lights the general character of programs to be accomplished and services to be rendered, rather than upon abstract objects such as personal services, supplies, et cetera. These items are, after all, only a means to an end. The all-important aim in budgeting is the purpose to be achieved (what the Navy and Marine Corps do)-the operation, maintenance, and repair of ships and aircraft, together with the personnel required to man them and their costs. Management responsibility parallels fiscal responsibility. The performance budget is not new for the Navy. For fiscal 1948 the President's budget was printed in two forms the conventional and an "alternate" on a performance basis. This alternate form was suggested by the Navy Appropriations Subcommittee of the House in 1947. High priority legislation precluded consideration in the 1948 act. Mr. MAHON. I think it might be pointed out for the record that at that time Mr. Sheppard was Chairman of the House Subcommittee for Naval Appropriations, for 1947, and, of course, he now is vice chairman of this subcommittee. Secretary MATTHEWS. Yes, sir. The Department of Defense Appropriations Subcommittee of the House recommended the new form in its report on the 1950 bill. The Hoover Commission endorsed the performance budget. Instead of 48 appropriations the new basis provides 21. Appropriation titles are meaningful instead of "Maintenance, Bureau of Ships" we have "Ships and facilities." Meaningless titles as "Miscellaneous expenses" are eliminated. In view of its long-standing and well-known desire to push forward with improvements in its budget structure, the Navy welcomes this. opportunity to submit for your consideration its 1951 budget estimates on a revised basis. MANAGEMENT IMPROVEMENT The Department of the Navy has under way several additional programs to improve the efficiency and economy of our operations. An on-site survey program was initiated in June of 1949 to determine the minimum essential shore establishments necessary to the support of the peacetime Naval Establishment. A collateral objective is to make such recommendations regarding organization, staffing and physical plant and improvement needs for all naval activities in a given naval district as will permit the maximum amount of monetary savings without serious impairment of operating efficiency. Certain of the general provisions in the bill are now under study as to their possible implications affecting naval personnel. It is understood that the general provisions will be the subject of later hearings. In conclusion, the funds which the Navy requests are essential to support the international policy and commitments of the United States. Our Navy today is stationed at many distant places in support of these commitments. The funds which we seek are necessary to maintain the reduced operating forces in readiness to meet any emergency that may arise. Admiral Sherman will tell you about the operating forces and how they will be used. General Cates will discuss Marine Corps requirements. Admiral Hopwood will tell you about the financial aspects of the estimates. I want to assure you that the Bureau Chiefs, and any other Navy personnel whom you may wish to question, will appear before you to discuss any aspect of the estimates in which you may be interested. LIMITATION ON TESTIMONY OF WITNESSES BEFORE THE COMMITTEE Mr. PLUMLEY. Mr. Chairman, might I interrupt right there to ask this: Will they answer any questions we may ask? Secretary MATTHEWS. They will try to. I am quite sure they will be capable of doing it. Mr. PLUMLEY. Are there any restrictions now imposed by anybody as against an opportunity for this committee to ascertain what it wants to know? Secretary MATTHEWS. Not the slightest, Mr. Plumley. Mr. MAHON. I want to thank you for your statement, Mr. Secretary. We will proceed with the statement of Admiral Sherman. BACKGROUND AND EXPERIENCE OF ADMIRAL SHERMAN Admiral Sherman, I think the record should show your background and naval experience. Will you give us a statement as to your naval experience and background? We would appreciate it. Admiral SHERMAN. I graduated from the Naval Academy in 1917. I went immediately to the Mediterranean and served there for a year in a gunboat and destroyers based at Gibraltar. Then I spent a year on the coast of France as chief engineer of a destroyer. Then I served in various battleships and destroyers until 1922, when I became a naval aviator. I served in various fighting squadrons at various times, and was at one time in charge of fighting plane instruction at Pensacola. I served in the Lexington, Saratoga, Langley, and Ranger. Mr. ENGEL. In what capacity? Admiral SHERMAN. I was an assistant air officer in the Lexington when she went into commission. I served in the Saratoga as squadron and wing commander. I served on the staff of the Commander Aircraft in the Pacific on two occasions. I was with Admiral Yarnell as gunnery and tactical officer. I was with Admiral Butler as flag secretary. I became force aviation officer on the staff of Admiral Bloch, and later fleet aviation officer on his staff. I graduated from the Naval War College in 1927. My Navy Department experience during that same period was 3 years in the Bureau of Ordnance as Chief of the Aviation Section in that Bureau. In January of 1940 I came ashore and was in the War Plans Division of the Office of the Chief of Naval Operations, with additional duties on the Canada-United States Defense Board. I acted as naval air adviser at the Argentia Conference. At the beginning of the war, I was assigned as a member of the Joint Strategic Committee, which was the first full-time joint planning agency established in our country. I went to sea in April of 1942, and took command of the carrier Wasp. I commanded her until she was sunk in the South Pacific in September of 1942. I then served approximately 1 year as chief of staff to Admiral Towers, Commander Aircraft, Pacific Fleet. I I then went with Admiral Nimitz and I was his deputy chief of staff, responsible for plans and operations until September of 1945. represented the Navy at the initial surrender conference in Manila in August 1945. I was then assigned briefly in command of Carrier Division 1, and in December of 1945 I became Deputy Chief of Naval Operations, for Operations. I left the Navy Department in January of 1948, and commanded the Sixth Fleet in the Mediterranean until I came to Washington at the end of October; and on the 2d of November I asumed my present duties. Mr. MAHON. Thank you, Admiral. STATEMENT OF ADMIRAL FORREST P. SHERMAN Admiral SHERMAN. Before discussing the approved Navy Department budget for the fiscal year 1951, it will be helpful to review briefly the major changes in the size and character of the Naval Establishment since September 1945. In September 1945 the Naval Establishment included 8,1491 ships, 23,880 operating aircraft, 335,471 naval officers, 2.926.252 naval enlisted, 37,664 marine officers, and 443,647 marine enlisted. The Navy had on hand ships which had cost about $22,000,000,000, shore establishments which had cost about $7,000,000,000, and equipment and supplies including aircraft which had cost about $12,000,000,000; a total investment of about $41,000,000,000. During the ensuing 12 months the fleets were quickly demobilized and we attained a strength of about 3,763 ships and of about 500,000 naval enlisted, with other personnel in proportion. From September 1946 to the spring of 1948 the operating forces were gradually contracted with consonant reductions in personnel. During the same period inactivation or disposal of shore facilities proceeded in an orderly manner, although much more slowly than the inactivation Or ships and the release of naval personnel. From the spring of 1948 to the summer of 1949 there occurred a period of expansion during which plans for the operating forces were revised upward, and there were actual increases in various categories of the operating forces and of naval personnel. For example, the planned strength in large carrier air groups was 14 in fiscal year 1947, 11 in fiscal year 1948, and 24 in fiscal year 1949 (although the strength of 24 was not actually attained). The appropriations for 1950 again envisaged a shrinkage from the 1949 level and those recommended for 1951 a further shrinkage. Actually, as you know, decisions were made early in fiscal year 1950 to reduce during 1950 to the levels planned for fiscal year 1951. Again using the example of the larger carrier air groups, this involved a reduction from the planned 24, actually about 16, in fiscal 1950 to the figure of 9. Fluctuations in plans for operating ships were less marked but tended to follow the same pattern. I would like to interject at this point an amplification of the effect of the planning for 24, although only 16 groups were actually reached. The point is that aviation personnel was put in training for the planning figure of 24, and because the period of training lasts a year and a half, some of that planned expansion is still with us in terms of pilots who are completing training at this time. I bring this out to show you the after effects of an expanded plan, even though the plan is subsequently cut back. Mr. PLUMLEY. Are they still available and usable? 18,149 commissioned and in service vessels comprised the following type: Major combatant.... Minor combatant_ Fleet train (includes tenders, supply transports, large landing craft). Total. 803 1, 738 4,548 1, 060 8, 149 |