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all conscience, say to the American people that in my judgment this hemisphere and this Nation are in serious danger and that every possible step for national defense must be taken with the utmost rapidity.

In the presence of such dangers, our safety and security lie in creating for ourselves impregnable means of defense and in utilizing these means whenever and wherever they may be most effective.

The country has overwhelmingly accepted the view that the rendering of the greatest practicable material aid to those nations which are actively resisting the forces of conquest is an essential part of

our own defense effort. Through the enactment of H. R. 1776, this has become a settled and decided policy of the Nation. The measure now under consideration by your committee is the next and indispensable step in the carrying out of that policy. It appropriates funds necessary to furnish in adequate amounts and with adequate speed planes, ships, guns, and food for the nations which now heroically endeavor to stop the movement of conquest.

There is no need now for me to discuss in detail the necessity for this entire course in the defense of our own security and vital interests. All the reasons have been advanced and tested in the full freedom of debate. We are united upon it, we have set our hands to the plowthe people, the Congress, and the Executive.

The war which is being fought in Europe and in Africa together with the hostilities and the moves of conquest which are going on in Asia have become, under the Tripartite Agreement, closely interrelated. In the light of this situation, we are sending materials to several countries, in various parts of the world, whose defense is essential to our defense. The effort which we make will have to be on a large scale, because the needs which it is intended to meet are and will be large needs. Some of these countries cannot manufacture for themselves the complicated machinery and the great variety of munitions for which they now have urgent need. This country is fortunate in being able to produce vast quantities of most of the things that are called for. This country will have to produce them— we will produce them.

I advocated the passage of the lend-lease bill and I now urge prompt action on this appropriation as essential for the execution of sound foreign policy for the United States. The object of that policy is to assure the safety, the independence, and the interests of the United States against all threats. That cannot be successfully done unless we ourselves are strong and are in a position to share our strength with other nations which are helping to defend our interests.

If we have to find protection through our foreign policy, we must be strong. Today, as ever, the essential basis of the strength of a nation is the spirit and courage of its people. But no matter how great the spirit and courage, it cannot sustain itself without adequate arms. The production of adequate arms requires the coordination of finance, industry, labor, sacrifice, and brains of the whole people. Our unity and our purpose must express themselves in the continuous and combined industry of all of those who play a part in production. Our safety and the success of the course upon which we have set ourselves demand the courage and the wisdom to go full out in furnishing adequate material aid to the nations whose defense is necessary to our defense. When we do this, we take the most effective step

possible in the circumstances to keep war away from our hemisphere, from our own Nation. Doing this, we act in defense of our homes, our institutions, our liberties, our way of life.

In this task, half measures will not suffice. There is much to be done and the task is urgent. We must strive with all our will, all our power, and all our resources. To be content with less would be to invite disaster. No people in history have had such opportunity to learn from the tragic example of others. We cannot stint and we must not falter.

Mr. WOODRUM. Mr. Secretary, the committee appreciates your statement and, in executive session, before you gentlemen came in, we decided, if agreeable to you, we would first like to have a statement from you, Secretary Stimson and Secretary Knox and then perhaps the committee would like to ask you some questions.

Now, Mr. Secretary Stimson, the committee will be very glad to hear from you.



Secretary STIMSON. Thank you, Mr. Chairman. The Secretary of State has admirably summarized the broad reasons for the bill and, as I reflected over your request, I thought probably I could be most helpful if I gave, as tersely as possible, the nature of this bill as it relates to the War Department and the reasons for the necessity of the broad and flexible items of appropriation which the estimates have set forth.

Of course, this set of estimates is vitally different from the ordinary requests for appropriations for our Army in time of peace. These are for an estimated amount necessary to enable a number of other nations, whose defense the President deems to be vital to our defense, to make a successful defense in a war which is now actually going on. Thus, we are making estimates for the appropriations necessary for the defense of a number of nations.


First, these nations are already engaged in a gigantic war. war covers an area of many portions of the world, from Great Britain to the Far East, containing many very different terrains, such as northeast Africa and Malay Asia, in addition to Europe. The character of the weapons vitally necessary for success in such a war are constantly changing and developing and, finally, the time necessary for the construction of such modern weapons is very long-from 1 to 2


In the next place, these nations are fighting a very powerful enemy which has great power of secrecy itself, with the constant power of suprise attack. And this same country which has been able to maintain such complete secrecy over its own actions, has shown an intense and meticulous effort to spy out the resources and powers of its enemies.

Finally, the British Isles which are now the pivot of the defense on which our own defense is based, are at a special disadvantage. They are a small terrain, surrounded by a huge semicircle of attack. They are, therefore, under constant reconnaissance. Germany has an unusual power to learn Britain's defense and for the element of

the morale of Great Britain, which is one of the most vital elements which have entered into her defense thus far, it is important that such elements of secrecy as she has been able to maintain under these most adverse conditions should not be broken, if possible, while she is undergoing that attack.

These preliminary points which I have shown by this analysis show the reasons why an appropriation bill, and the estimates for that bill, must necessarily have as much flexibility in the breadth of the items and the contents of the bill and as much freedom from publicity as is compatible with free government. That, however, of course does not mean that this bill has abandoned all safeguards in favor of purely uncontrolled Executive action. The bill itself contains very great changes over the situation which has existed hitherto and these are in the direction of the interests of American defense. When you contrast the situation which has existed, you can see the advantages of these changes.

Hitherto, all efforts by the various democracies which were seeking weapons in our market were separate, were competitive, and were entirely in their own hands, the supervision which we could exercise being very slight. That was disruptive to our own defense and that placed in the hands of others the power of interference with our own facilities for manufacture.

This bill places in the hands of the representatives of this Government the decision as to what, if any, weapons are to be transferred and the amount of such transfers. And, what is more, it postpones the transfer, leaving the entire matter in our hands of the decision of which shall go to which place until the weapons are completed and the knowledge is in our hands as to where they will do the most good. And, furthermore, the bill requires, as of course you gentlemen know, periodic reports to the Congress of what has been done during each 90 days of its operation.

But the essence of the new situation is that the bill has placed in the hands of representatives of the United States, responsibly devoted to the defense of the United States alone, the entire decision upon all of the activities in the making of munitions which take place in this country, and that is an enormous change for the benefit of the United States in the sitation which we now are facing.

Now I want to enumerate the efforts which we have made to supervise and systematize these efforts, in this situation which is so novel and so extraordinary. It has not been a haphazard effort at all. We have endeavored to exercise all of the care, so far as the War Department is concerned, which we do over the ordinary estimates which we lay before you gentlemen every year.

In the first place, the British submitted a confidential list some months ago of their requirements. That list was placed in the hands of our supply officers who held long conferences with the British as to that list. During those conferences the supply officers of the Department matched the estimated unit costs of the British requirements as against the unit costs with which we were familiar as to our own weapons. Then they determined the amount which, according to their best judgment, it was advantageous to produce and finance at this time.

In this task which I have thus described, each of the supply arms and services of the War Department worked over the British data

and their work was coordinated through the office of the Undersecretary of the War Department and the Chief of Staff of the War Department in the same way which is done regularly with our regular estimates. And after that came the review of the Budget in the ordinary way.

In summation of this, I wish to make it clear that the British requirements as now presented have gone through the normal course of War Department procedure in respect to appropriations which we now ask for and present.

Now, as to some further characteristics which come up: Of the War Department items, practically all or 95 percent are those which can be used for our own Army purposes and which would be vitally useful in case Britain should fall. Only 5 percent represent purely British types of weapons, including the facilities to be erected for such weapons, as distinguished from our American types and their facilities. And even in the case of this last 5 percent, the plant facilities necessary for construction, that is, the tools and the plants for these purely British items, could be used by us on very short notice.

In other words, as you are doubtless familiar, I might give as an example that the British use the .303 caliber rifle. The facilities for the construction of that rifle which they are using in this country today, under their contracts for its creation, could be transferred so as to manufacture the .30 caliber rifle which we use, I am informed, in about 2 months. And, in the same way, the facilities for the ammunition could be transformed. And that is true largely of other British items.

Then, finally, there is this thing to be remembered. There have been great benefits accruing to this country in the cooperation which this bill and the formulation of these items have involved. There has been a standardization of weapons to a very large extent between the two countries, and such a standardization would be vitally important if, in the exigencies and contingencies of the future, this war should spread to this hemisphere while the British were engaged in fighting in other parts of the world.

In the second place, vital improvements have been secured for our own weapons in this free exchange of information which has passed between the two countries. Most of those improvements are such that it would not be in the national interest to make them public, but I think it is already known, for instance, that one of the examples has been that we are now using in our planes and tanks a revolving turret which is of the utmost importance, and which came to us from Great Britain.

To sum up the estimates with relation to this bill, I can put it in a very few words. The Army has already made a large contribution from its stores to the British defense when, last June, it largely reequipped the British Expeditionary Forces after the defeat at Dunkirque. It can contribute further a number of vital articles and munitions during the year 1941. But the majority of the items of appropriation requested in this bill are for the equipment of the forces of Great Britain in 1942.

With wonderful courage in this hour of crisis and suffering, she is planning to continue the fight until she has not only saved the British Isles but has rescued Europe from the subjugation which it is now

under, put an end to the rule of force, and restore free government among the nations.

The defense of South America, if we were alone, would be a far more difficult and expensive task than to render this aid to Great Britain now. In such an event, practically every item contemplated here would be vitally useful to us.

That, Mr. Chairman, in a few words, or as briefly as I could make it, represents my view of the scope of the bill from the standpoint of the Army.

Mr. WOODRUM. Thank you, Mr. Secretary. We will now hear Secretary Knox, of the Navy Department.



Secretary KNOx. Mr. Chairman, you have listened to such excellent statements touching the general features of this situation, particularly the statement of the Secretary of War as to some of the details, that I will not burden you with anything save a very brief statement.

The estimates for naval material which are incorporated in the various subdivisions of this bill were made by our regular naval officials after consultation with representatives of the British as to their requirements. These conversations created a picture in the minds of our naval representatives of the most urgent needs of the British Admiralty for defense articles. On this basis we then prepared estimates of the cost of procuring these needs. In addition, we also prepared estimates of the cost of facilities necessary to produce them, the administrative cost of procurement, and a necessarily very rough estimate of the cost of testing, repairing, and so forth. The figures so prepared were presented to the Director of the Budget.

It should be remembered that, in appraising the needs, it was necessary to take into consideration the possibility that particular items of ordnance or airplanes, for example, might have to be produced to designs quite different from those at present in use, to keep pace with the developments of the war. This factor was, of course, taken into consideration in preparing the estimates. Likewise, it might happen during the progress of the war that more articles in a certain category and less in another would be required. In order to meet this difficulty, the bill before the committee permits limited transfer between categories.

The articles to be procured are suitable for transfer to a foreign country and, with minor exceptions, are also suitable for our own use should circumstances, when they are completed, dictate that they should be retained.

That concludes my statement, Mr. Chairman.

Mr. WOODRUM. Thank you, Mr. Secretary. We will now hear Mr. Smith, the Director of the Budget. Mr. Smith, we will be glad to have your general statement, and then the members of the committee may want to ask you some questions.

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