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micut, in exists of warfare against any country which is a

2 party to a mutual deseuse treaty ratified by the United

3 States. All loans and loan extensions shall be made on the

4 condition that they may be terminated at an earlier date 5 if necessitated by the defense requirements of the United

6 States.


SEC. 4. No Joan may be made or extended under this

8 .Ict mless the Secretary of Defense, after consultation with

9 the Joint Chiefs of Staff, determines that such loan or exten

10 sion is in the best interest of the United States. The Secre

11 tary of Defense shall keep the Congress currently advised of

12 all loans made or extended under this Act.


Sec. 5. The President may promulgate such rules and 14 regulations as he deems necessary to carry out the provisions

15 of this Act.

Passed the House of Representatives March 23, 1970.




49-685 O -70 - 2



Senator INOUYE. Our first witness will be Captain G. M. Hagerman, U.S. Navy, Director of Foreign Military Assistance & Sales Division, Office of the Chief of Naval Operations.

Welcome, sir. Captain HAGERMAN. Good morning. I am Captain G. M. Hagerman, U.Š. Navy, Director of the Foreign Military Assistance & Sales Division, Office of the Chief of Naval Operations. I am here as a witness of the Department of Defense and of the Navy in connection with proposed naval ship loans and extensions to friendly foreign countries.

The bill before you contains permissive legislation required to effect one part of the military assistance program, which as you know, receives extensive congressional review.

The ship loan bill this year is rather small in terms of numbers of ships and amounts of money involved. It becomes quite significant though, when viewed in light of the Navy's pressing worldwide commitments and when focused upon today's Mediterranean and Far Eastern maritime situations. The bill proposes the new loans of two destroyers and two submarines to Turkey, two destroyer escorts to Vietnam, and three submarines to China. In addition, it seeks renewal authority for the existing loans of one submarine each for Greece and Pakistan.

The original submission of this bill to the Congress occurred in May 1969. We have reached a point where action is necessary now if we are to implement Vietnamization plans as scheduled. Vietnamization turnover plans call for transfer of the first destroyer escort during August of 1970. We cannot meet this schedule. In order to commence the required pretransfer overhaul and training actions, the Navy needs assurance of turnover authority as soon as possible. Early action on the bill will also result in considerable savings both to the United States and to Turkey in the transfer of destroyers and submarines to that country

In conjunction with these transfers, as you are aware, the U.S. Navy is now reducing its force levels as a result of budgetary constraints. If transfer arrangements to Turkey can coincide with actual U.S. ship retirement dates, this type of transfer would not only provide ships to fill the Turkish requirements at considerable monetary savings to that country but would also make it unnecessary for the United States to expend unnecessary preservation costs to put those ships in mothballs. If timely authorization for the requested loans is not forthcoming, the opportunity to use these retiring ships will pass. Before discussing the military justification for the ships contained in this bill, I would like to make one or two general comments.

Our worldwide policy of collective security requires assistance from our allies. In the event of hostilities, we must be able to insure our free use of the seas and be able to deny their use to our enemies. The U.S. Navy alone cannot accomplish these objectives. We must count on the naval forces of our allies large and small to accomplish a large

number of tasks such as antisubmarine escort, patrol, mine warfare, and coastal and harbor protection in their local waters.

These are complex skills requiring many types of ships and various kinds of training. It takes time to develop substantive seapower. To enable them to perform these tasks adequately tomorrow requires our help today; and in keeping with this requirement we are proposing to lend these ships to the previously mentioned recipient countries. The ships are needed for legitimate and important defense tasks. Just as the U.S. Navy is faced with a continuing need for ship replacements and force improvements, so are the navies of the selected countries, however, they cannot afford, or do not yet have the technical ability, to construct new or replacement ships. In most instances their shipbuilding industry is just beginning to develop. By combining resources—our idle ships and their competent manpower and strategic locations—we can now make a substantial contribution to mutual defense at a minimum cost. Also it should be remembered that the tempo of operations in these navies is substantially less than that of the U.S. Navy; therefore, these ships should provide useful service for at least 10 years. During this 10-year period we estimate that some of these countries will substantially improve their own shipbuilding capabilities and become more self-sufficient in this area. These loaned ships provide that basis upon which to develop the trained officers and men necessary to generate completely indigenous navies.

We have gone a long way in building up the effectiveness of allied navies in recent years. We want to continue this trend. At the present time, we have 74 combatant ships on loan to 17 allied nations as follows:

Argentina-two submarines, three destroyers.
Brazil-two submarines, three destroyers.
Chile two submarines, two destroyers.
China-six destroyers, one destroyer escort.
Colombia—one destroyer.
Germany-five destroyers.
Greece-two submarines, six destroyers.
Italy-five submarines.
Japan-one submarine, two destroyers, two destroyer escorts.
Korea-three destroyers, three destroyer escorts.
Netherlands-one submarine.
Pakistan-one submarine.
Peru-two destroyers.
Philippines—one destroyer escort.
Spain-one helo carrier, one submarine, five destroyers.
Thailand-one destroyer escort.

Turkey-five submarines, two destroyers. They have been on loan for varying periods up to 15 years. These ships are fully operational, manned by trained crews, and are strategically dispersed. Many are maintained and operated entirely at the expense of the foreign country, and others receive varying degrees of U.S. support, but at the most, only a fraction of the cost of operating the same ship in the U.S. Navy. By means of selective loans of ships we are able to make a significant contribution at a modest cost and continue the progress of small allied and friendly navies. Loan ships have proved to be extremely effective catalysts for progress and increased competency in allied navies.

When loaned, ships are manned and operated by the recipient government; however, the title remains with the United States and the possession of the ship cannot be relinquished to a third party without consent of the United States.

We do not receive second-rate sailors for the training in the United States that precedes a ship transfer, but rather members of their carefully selected first team. By the time a foreign crew completes individual specialized and team training in the United States, it is a fully effective crew, as evidenced by the fine records attained by foreign ships in the underway training phase of our transfer program. In addition, almost all of the officers and men of the recipient navies are favorably influenced by their associations with America and the American way of life.

We do not now, nor do we expect to have at any time in the future, the total forces necessary to carry out all possible naval tasks worldwide. Nor should we be in a position where all counterinsurgency or limited war naval tasks in support of our allies throughout the free world must be assumed by the United States. Every necessary task a friendly foreign navy undertakes in its own defense frees the United States from the obligation to provide for accomplishing that task. Despite outmoded ships and equipment, these navies have a proven capability to operate effectively within their material limitations. The absence of these capabilities would creare vacuums in many areas of the world which, if not filled by the United States could be filled by naval power hostile to our national objectives. Moreover, lack of continued support to these friendly navies would negate the training effort that has gone toward improving their efficiency. Our ship loan program has shown excellent results in this respect. Should we lessen our efforts at this point, we would be wasting more than a decade of hard work and a large investment in the future.

The following specific military justification exists in each case for the extension and new loans requested in this bill.


The Pakistan Navy is primarily a light escort, patrol, and coastal minesweeping force with a modest antisubmarine warfare (ASW) capability. The Navy's one submarine is intended primarily to provide ASW training for the surface forces. This submarine has completed overhaul in the Golcuk shipyard in Turkey at a cost to Pakistan of over $1 million. This is indicative of Pakistan's resolve to keep the submarine in a high state of readiness. It also shows Pakistan's willingness to participate in area cooperation. In view of the possibility of reduced British naval forces east of the Suez after 1971, extension of this loan will assist in keeping a free world naval presence in the Indian Ocean area. This is the only U.S. Navy ship on loan to Pakistan and is the basis for providing U.S. Navy training to key officer personnel and maintaining a friendly, meaningful navy-tonavy dialog.


The submarine now in the Greek Navy, for which extension is requested, is an effective operating unit of the Greek Navy and provides valuable ASW training services to their surface ships and to their newly formed ASW patrol aircraft unit, all of which remain

firmly committed to NATO roles. The submarine is in excellent condition and completed a $1 million overhaul at Greek expense in January 1969. In October 1969, the Greek Navy purchased from the United States a $243,000 replacement battery for this submarine. Since April 1967 the current government of Greece has continued to meet its NATO commitments and has continued to provide facilities for the use of the U.S. military. It is in the U.S. interest that Greece continue to be a stable and reliable NATO ally. Our access to Greece, and its cooperaton in the Alliance, continue to provide valuable security benefits to us. Greece's importance as a logistical and tactical base for NATO has been highlighted in recent years by the increased Soviet naval activity in the Eastern Mediterranean. A continued U.S. presence is important to the defense of the southern flank of Nato and is not easily replaceable in today's political climate.

Specific and continuing actions on the part of Greece, and their navy in particular, justify our continued faith in their desire to fulfill ship loan commitments. The Greek Navy has been an active participant in NATO exercises, and in operations in support of NATO in their area. Greece was helpful as a refuge during the evacuation of U.S. refugees from Israel and the Congo. Ports in Crete, in the islands, and the mainland provide safe havens for units of the Sixth Fleet and their crews. Naval assistance also includes the use of the shores of the island of Crete for amphibious landing exercises and the harbor at Suda Bay for the refueling of our ships. The restrictions on provision of major end items of military equipment to Greece have had a debilitating effect on the Hellenic Navy. Approval of this loan would enable the Greek Navy to carry out effective antisubmarine warfare, and help insure Greek preparedness to meet her NATO responsibilities.


The Turkish destroyers in the current bill are requested as first priority item toward the modernization of the Turkish Navy. The recent availability of relatively modernized destroyers in an operating condition as a result of fiscal year 1970 budget cuts has substantially lowered the cost of providing these ships. Therefore, it is now readily within our capability to assist the Government of Turkey in achieving the second priority of their navy; namely, submarine modernization. The lack of available MAP funds prohibited the request for these units in our original submission of this bill to the Congress, although the military requirement for more modern submarines was well recognized. Since that time, however, we are being forced to retire from active duty a number of U.S. submarines. In addition, members of the House Armed Services Committee, after having visited the Turkish naval establishment this past winter, urged the inclusion of two submarines in the bill. The Departments of Defense and State concur with the addition of those submarines to the bill. Within the limits of present and programed funds we are about to inactivate several submarines which have the type of modern sonar and elect onic sensors required by the Turkish Navy to carry out their NATO commitments. This will represent a major improvement in the quality of Turkey's submarine fleet. Turkey is a staunch ally of the U.S. as a member of NATO. Since the June war of 1967, there has been a steady increase in Soviet naval activity in the Mediterranean, as I have previously mentioned. In view of this increasing

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