than the peninsula of Korea, 5,000 miles from the west coast of the United States, and not containing anything of real value to us or to the probable enemy.

Mr. MAHON. Then the next question which follows is this: Are the funds requested here for the Navy such as to be of the greatest possible value to our country in the event of an outbreak of war, an all-out war?

Admiral SHERMAN. The naval program, as submitted to the Congress, has been based on improving the over-all readiness of the Navy to do its part for the security of the country, with only such modifications as necessitated by this local situation. Except as the increases pertain to consumables they will all have their effect on our security in other areas. We intend to do everything possible to mold these expenditures into a unified strategic mobilization.

POSITION OF THE NAVY IN EUROPE

Mr. ENGEL. Admiral, I do not know of anyone who is better able to advise us on the European situation than you are, particularly with reference to the Navy's position in case of a possible war. I have heard estimates about German troops in Russia, Communist troops, estimated at 100,000 in eastern Germany. Let us assume that the same thing happens in Germany that happened in Korea and these 100,000 east German troops started marching into western Germany and we had a European war on our hands, what position would the Navy be in to carry out her mission in such a war? That may be either on or off the record.

Admiral SHERMAN. I would prefer to answer that off the record. Mr. ENGEL. Just let the question remain in the record and answer it off the record.

(Off record discussion).

Mr. MAHON. Thank you very much, Secretary Matthews and Admiral Sherman for your excellent assistance to the committee on this important matter.

Secretary MATTHEWS. Thank you, Mr. Chairman.

GENERAL STATEMENT ON NAVY SUPPLEMENTAL ESTIMATES

WITNESS

REAR ADM. H. G. HOPWOOD, DEPUTY COMPTROLLER

Mr. MAHON. We will continue the hearing with the Chiefs of the services.

This program is just an extension really of the regular 1951 program of the Navy, Admiral Hopwood?

Admiral HOPWOOD. That is right

Mr. MAHON. You may proceed, Admiral Hopwood.

Mr. SIKES. We will still have opportunity for questions.

Mr. MAHON. Surely.

Admiral HopwOOD. Mr. Chairman and members of the committee, the Department of the Navy has submitted for your consideration supplemental estimates for the fiscal year 1951 as the initial requirements essential in strengthening the fleet to meet current conditions. The estimate consists of a request for additional cash appropriations

in the amount of $2,648,029,000. The total revised program of the Navy for 1951, including the supplemental cash request, consists of a total cash estimate of $6,751,287,000. This sum includes $727,600,000 to liquidate prior year contract authority. Total new obligational authority requested amounts to $6,723,980,000. It includes $6,023,687,000 in cash plus $700,293,000 in new contract authority for aircraft procurement.

BASE FOR REVISED PROGRAM

In planning the revised program, the amount recommended by the Senate Committee on Appropriations was used as a base. In order to assist the committee to compare the revised program with the base and previous recommendations for 1951, I have here a table which shows a comparison of the President's budget, as amended, with the amounts approved by the House, the Senate committee recommendation, and the revised program.

TABLE A.-Total cash appropriations and new obligating authority, 1951 [In millions of dollars]

2 Includes $50,000,000 in H. Doc. 575 for antisubmarine defense.

3 Includes $124,797,000 of contract authority carry-over from 1950 for aircraft procurement. 4 Includes $100,000,000 in H. Doc. 575 for aircraft procurement.

AMENDMENTS TO THE BUDGET ESTIMATES

On the chart now before you we have depicted this table in order to present these figures more clearly. The column at the left in the chart is an analysis of the President's budget, as amended. Two amendments were submitted. The first amendment, which was printed in House Document 575, proposed the addition to the Navy estimates of $100,000,000 of aircraft procurement and $50,000,000 for construction and conversion of ships and the operation of four additional destroyers. The latter items were for the purpose of improving our antisubmarine defenses. Both of these sums were added to the bill, as approved by the House. The second amendment, Senate Document 162, on which this committee held hearings on Monday, July 17, 1950, provided $62,928,000 additional cash for the further development of Guam and the completion of certain continental facilities previously authorized, including training, operational, and research facilities. This sum was included in the bill by action in the Senate committee. Thus

the President's budget for the Navy, as amended, included a total cash appropriation request of $4,122,000,000, while total new obligating authority was $4,094,000,000.

Since the request of $728,000,000 in cash to liquidate prior contract authority has not been changed, it will simplify an understanding of the comparison if I confine my discussion to new obligating authority only.

ACTION BY HOUSE OF REPRESENTATIVES

Under the House bill, as shown on the chart, contract authority for new aircraft procurement was approved in the amount of the budget estimate. Of the total cash request considered at the time by the House, $3,331,000,000, the House approved $3,299,000,000. This was a net reduction of $32,000,000.

SENATE COMMITTEE ACTION

In the Senate, the Committee on Appropriations has restored $29,000,000 of the $32,000,000 cut out in the House. However, the Senate committee applied dollar figures in lieu of limitations in chapter X-A of the bill, as approved by the House, and for the object classes involved has reduced the estimate by $16,000,000. In addition, the Senate committee added the $63,000,000 for public works. The net effect of Senate committee action is an increase in new cash of $77,000,000 over that included in the House bill, to a total of new obligating authority amounting to $4,076,000,000.

Mr. MAHON. That was added by reason of the public works program, which was not ready for consideration by the House committee at the time the House acted.

Admiral HopwOOD. That is right; as you recall, about a week or so ago the committee held supplemental hearings on the Public Works increment for the initial 1951 appropriation.

The only change in the revised program for 1951 from the Senate committee's bill is the addition of new cash in the sum of $2,648,000,000, bringing the total cash for new programs requested for the revised 1951 program to $6,024,000,000. This results in an increase of total new obligating authority, both cash and contract authority, to $6,724,000,000.

If there are any questions on that section, I will be glad to clarify them.

Mr. MAHON. That is really the picture of the whole thing?

BREAKDOWN OF REVISED ESTIMATES, 1951

Admiral HopWOOD. That is the picture, yes. We can furnish for the record this breakdown of the revised estimate if you like. Mr. MAHON. That will be fine.

(The breakdown is as follows:)

COMPARISON OF NEW OBLIGATING AUTHORITY BY MAJOR BUDGET PURPOSE Table B is a breakdown of the estimate for the revised program by cost category compared with the Senate bill.

TABLE B.-Comparison new obligating authority by major budget purpose, revised program for 1951 and Senate committee bill

COMPARISON OF NEW CASH, EXPENDITURES, AND CARRY-OVERS,

1949, 1950, AND 1951

Admiral HOPWOOD. I would like to insert in the record at this point a comparison of the expenditures similar to the one that was submitted in the consideration of the initial 1951 bill.

In other words, the expenditures for 1951, including amendments, were 4.6 million dollars; this supplemental will increase the expenditures to $5,950,000,000.

(The statement referred to follows:)

Comparison total new cash, expenditures, and carry-over 1949, 1950, and 1951

Admiral HopWOOD. In the Senate Committee bill, the amounts allocated to military personnel costs totaled $1,382,369,000 and provided for an average military personnel strength of 460,938. The increase of $560,651,000 in the supplemental request will increase average strength to 626,889 and will bring the total allocated to this category under the revised program to $1,943,020,000. End-year strength is planned at 717,818 for fiscal 1951, including Marine Corps.

Mr. TABER. How much will the average strength be increased? Admiral HopwOOD. The total average strength will be increased by 165,951 man-years.

OPERATION AND MAINTENANCE

The. category "Operation and maintenance" includes all maintenance and operation costs of ships, aircraft, and supporting facilities such as the shipyards, air stations, ordnance depots, and hospitals. The increase of $848,778,000 requested for this category includes:

The $55,000,000 for troops and facilities will provide for expansion of Marine Corps operations. The $129,000,000 for aircraft and facilities will provide for restoration of aircraft now in mothballs to active service condition and the additional costs of operation of aircraft operating in the Korean area.

I might say there that 1,750 aircraft will be taken out of mothballs for this program. $367,000,000 is provided for expanded fleet operations and supporting facilities, including the activation costs of 282 ships. The active fleet will be increased from 629 ships proposed in the budget estimates to 911 under the revised program. Other increases in operation and maintenance costs are related directly to the expansion of fleet operations and include increased maintenance of armor, armament, ammunition and related facilities, increased operations in the supply system, and increased costs of operation of personnel receiving and training facilities. The total for the revised program under this cost category is $1,993,621,000.

MAJOR PROCUREMENT AND PRODUCTION

The category "Major procurement and production" includes procurement or production costs of major items such as new aircraft, ships, electronics, weapons, ammunition, heavy materials handling equipment, etc. The $1,237,032,000 increase recommended for this category will expand the aircraft-procurement program from $749,843,000, included in the Senate committee bill, to a new total of $1,370,253,000. The ship-construction and conversion program will receive an allocation of $185,000,000 of the increase, mostly for conversion. The allocations for all other major procurement, including tanks for the Marine Divisions, ammunition, new weapons, et cetera, will amount to $441,622,000. The total revised program under this category amounts to $2,207,835,000.

ESTABLISHMENT-WIDE ACTIVITIES

The only other increase contemplated in the revised program is for establishment-wide activities. The increase of $1,568,000 in this category will be allocated to the appropriation "Service-wide operations," which finances functions for which operation costs are not readily allocable to primary programs. The increase provides for the production of charts for surface and air navigation and oceanographic charts and related publications for undersea warfare; and other items.