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EXPENDITURES ESTIMATED IN 1951

Mr. ENGEL. In the entire budget of $10,000,000,000 requested, how much is for direct appropriation, not contract authorization, but cash appropriation?

I would like to know just how much of that money is going to be drawn out of the Treasury in 1950, 1951, 1952, and so on. In other words I would like to get your schedule of expenditures, exact cash expenditures balanced against levy.

Admiral HOPWOOD. The expenditures for 1951.
Mr. ENGEL. That is $10,000,000,000?
Admiral Hopwood. No. I am speaking only for the Navy.
Mr. ENGEL. Certainly.

Admiral HOPWOOD. The expenditure estimated for 1951, on the original basis, as amended by the House action, was 4.6 billion dollars; the supplemental appropriation now being considered will add 1.350 billion dollars to that in 1951, making an estimated 5.950 billion dollars expenditures in 1951. The remainder, or about 1.350 billion dollars of the supplemental will be expended proportionately: an estimated 70 percent in 1952, and 30 percent in 1953.

EFFECT OF ADDITIONAL $950,000,000 FOR AIRCRAFT PROCUREMENT

Mr. SIKES. If we were to give you $950,000,000 additional for aircraft at this time what would be the effect on the request for aircraft for the next 2 or 3 succeeding years, assuming that the world condition does not become more aggravated?

Admiral CASSADY. That would be less. We would require less aircraft, because after we once work up to the proper degree of modernization we would level off the requirements to about 200 or 250 planes

per month.

COST OF MAINTAINING A LEVEL OF 7,000 AIRCRAFT Admiral PRIDE. Yes. Say about seven-thousand-odd airplanes; under normal conditions I would think they would cost about $2,000,000,000 a year, to keep it at that level would be somewhere, say, around 2,500 airplanes a year, and the cost would be, I would think, about $2,000,000,000.

Mr. ENGEL. That is for the Navy?
Admiral PRIDE. Yes.

Mr. ENGEL. And you are asking $2,000,000,000 for the 56 groups in the Army?

Mr. SHEPPARD. What becomes of the 70?
Mr. ENGEL. They proposed 56 groups.

Admiral PRIDE. I think with the number of planes that we are discussing here it will come to pretty near one-third of whatever the cost is, the capital investment, which happens to be about $3,000,000,000, and it will cost pretty close to the billion dollars to keep them up. And if the investment, which happens to be the case in the Air Force is, say, about three times the Navy, it will cost them three times as much to keep them modernized.

Mr. ENGEL. Of course, I was figuring on the group that we were talking about in the Navy Air Force.

Admiral PRIDE. If we had the same number of planes it would be about the same ratio.

Mr. ENGEL. But we were told that it would cost $2,000,000,000 a year to keep a 56-group Air Force modernized.

Admiral PRIDE. With any air force, no matter whether it is Army, Navy, for modernization it is pretty near one-third the cost of the capital investment.

Mr. ENGEL. I do not quite agree with that, Admiral, for the reason, that the Naval Air Force has a larger percentage of small planes with an average lower cost than the B-36 or the B-47.

Admiral PRIDE. But they become obsolete, not because of what we do; but the enemy obsoletes them.

Mr. Mahon. At any time they may become obsolete, after they have been operated for 3 or 4 years, you have got to replace. The bombers and the cargo planes may last a little longer, 5 or 6 years, but whether they are obsolete or not you still have to replace them.

Admiral PRIDE. I think the history of the last few years will bear that out.

Mr. ENGEL. But you cannot rebuild all of the planes every time you get a new type of plane; you can only build a certain number of new planes each year.

Admiral CASSADY. That is right.

Mr. ENGEL. If you replace one-third of them each year we would have a peacetime tax structure that would be prohibitive. When we get in war we would have a different situation.

Mr. Mahon. If you should freeze all models of fighters and bomber aircraft and not make any alterations or changes, you would still have to replace them in 3 to 5 years.

Mr. SHEPPARD. If you used them.
Admiral CASSADY. That is right.

AVAILABILITY OF CARRIERS AND CARRIER PLANES

Mr. TABER. If you undertook to develop and bring into service 12 carriers instead of 9 would you have the carriers available to put in commission?

Admiral Cassady. Yes; we have some 15 big carriers in mothballs at the present time.

Mr. TABER. Do you have the effective planes in shape so they could be put on them?

Admiral CASSADY. At the present time it would be necessary to take out of mothballs some additional planes and operate some of the light planes.

Mr. TABER. That is, it would be necessary to take the reciprocating engines?

Admiral CASSADY. That is right.

Mr. Taber. Have you any new planes on order now that you got money for that you can very materially step up the delivery in the present fiscal year?

Admiral CASSADY. We estimate that it will take about 1 year—is that about right?

Admiral PRIDE. In fiscal year 1950.
Mr. TABER. Well, we are a little bit by 1950.

Mr. SHEPPARD. You are asking about the construction of those presently considered for delivery.

Mr. TABER. I was asking if construction beyond the group that is estimated for here was contemplated; and if they expected to get delivery of many of those in fiscal year 1951.

(Discussion off the record.)

SHIPS AND FACILITIES

WITNESS

REAR ADM. D. H. CLARK, CHIEF, BUREAU OF SHIPS Mr. Mahon. What is the next item, Admiral Hopwood? Admiral HOPWOOD. The next item is for the Bureau of Ships, and will be presented by Admiral Clark, Chief, Bureau of Ships.

GENERAL STATEMENT

Mr. Mahon. We will be glad to have a statement from you, Admiral.

Admiral CLARK, Mr. Chairman and members of the committee: the supplemental appropriations which I am here to justify are those for "Ships and facilities” and “Construction of ships, Navy”.

SHIPS AND FACILITIES

The total supplemental request under “Ships and facilities" is $483,748,000. This request is to provide for increased expenses due to

(a) The activation of those vessels which have been directed by the Chief of Naval Operations for return to the active fleet;

(6) Maintenance and operating expenses for those ships which are being restored to the active fleet;

(c) Increased operating expenses for those vessels which are taking part in the Korean operation;

(d) Pipeline or "stocking' requirements at advanced bases to care for the material requirements of the vessels taking part in the Korean operation;

(e) Procurement of ships' components, repair parts, and electronics equipment.

() Miscellaneous minor support items for the foregoing major expenses.

The expenses involved in this supplemental request which are explained briefly but in somewhat more detail under each of the budget activities concerned have been computed by (1) multiplying the unit activation estimates for the types of vessels concerned by the numbers of those vessels; and (2) by multiplying the estimated unit consumption requirements for repair parts, components, and so forth, by the number of vessels. (The consumption estimates for those vessels operating in the western Pacific have been increased above normal.)

The summation of these two computations, when taken together with the material procurement requirements and estimates for "pipeline” requirements, accounts for all but a minor portion of the total supplemental request.

SUMMARY JUSTIFICATION DATA

Mr. MAHON. We will insert the prepared justifications at this point.

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(1) Repair of ships.-An increase of $204,744,000 is required to provide for the costs of direct labor or Navy stock account material (material of common usage) necessary in order to activate ships as directed by the Chief of Naval Operations and to cover the costs of procurement of repair parts and components which are necessary in activating these vessels and maintaining them in service after they have joined the fleet.

(2) Alterations and material improvements program.-An increase of $44,000,000 is required to cover expenses incident to the accomplishment of certain critical and high-priority alterations and material improvement program items in vessels of the current active fleet, as well as those which are being activated.

(3) Supplies and equipage. -An increase of $9,000,000 is required to provide for the cost of consumable supplies which are used

by the military personnel aboard ship for day-to-day maintenance and repair. This $9,000,000 covers the cost of consumable supplies for those vessels being activated and also provides for a higher rate of consumption on those vessels engaged in the Korean operation.

The above total of $257,744,000 for budget activity 1 may be restated in a different way—one which is not tied in with budget subactivities but may be more descriptive of the type of operation to be performed at this particular time:

Activation costs.-Fifty-six million, three hundred and twenty thousand dollars of the requested increase is to provide for the activation expenses of the vessels which have been directed for activation by the Chief of Naval Operations. Such expenses are made up primarily of costs incident to the removal of the vessels from "moth balls," repairs which are found necessary in order to make the vessel fully ready for sea, the cost of components and repair parts which are used in the accomplishment of activation work and the final outfitting of the ship with full allowances of on-board components and repair parts.

Alterations and material improvement items.--An increase of $44,000,000 is requested to cover the installation costs (labor and Navy stock account material) and costs of general components which are required for the accomplishment of high-priority alterations -and material improvement program items necessary to improve the fighting characteristics of the fleet.

Maintenance and operation of activated vessels and increased consumption rates for ships in the Korean operation.—Thirty-three million, four hundred and twentyfour thousand dollars of the requested increase is to cover expenses in connection with maintenance and operation of activated vessels and increased consumption requirements. Maintenance and operation expenses cover labor for emergency and voyage repairs; costs of supplies and equipage (consumable supplies) which are used by the ships' complements in accomplishing routine maintenance work; and the cost of components and repair parts which are necessary for emergency and voyage repairs.

Inventory and pipeline requirements.-One hundred and twenty-four million dollars is requested under this main heading (budget activity 1) to provide for the acquisition of inventories to meet "stocking” and pipeline requirements both continental and extra continental. (The latter will include stocks at a number of supply points in forward areas.) It is estimated $39,000,000 will be immediately incident to the maintenance and repair of operating vessels in far Pacific areas and $85,000,000 will be required incident to the acquisition of materials for which the Bureau of Ships has technical cognizance and responsibility. 2. Maintenance and preservation of Reserve Fleet: Senate bill, 1951.

$5, 700, 000 Proposed supplemental.

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(1) An increase of $115,900,000 for electronics major procurement. (2) An increase of $14,700,000 for electronics maintenance parts.

Details regarding the above procurement will be furnished under separate cover. 5. Research and development: Senate bill, 1951.

$25, 392, 150 Proposed supplemental

0 Revised requirement, 1951.

25, 392, 150 No increase is required for this budget activity. 6. Maintenance and operation of shore facilities: Senate bill, 1951.

$133, 477,

126 Proposed supplemental.

74, 800, 000

Revised requirement, 1951..

208, 277, 126

PROPOSED INCREASE IN PROGRAM

(1) Maintenance and operation of shipyards.-An increase of $74,550,000 is required to cover indirect costs incident to the new activations and emergency and voyage repairs covered by budget activity. These indirect costs are tied in directly

with the labor which is needed to accomplish the activations and repairs on vessels as directed by the Chief of Naval Operations. They cover all the expenses of overhead employees and all of the leave, holiday, and supervision expense of productive employees as well. In other words this estimate pays for a substantial portion of the labor cost required for all the new work covered by this supplemental estimate. In addition, such indirect costs cover security requirements such as added personnel for police and fire departments.

İn arriving at the total labor load involved in activating vessels, the Bureau of Ships has assumed that the activation program will be spread over the remain

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