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Mr. Mahon. Good. You may amplify that statement for the record, if you would like.

Mr. MAHON. When you are dealing in the procurement of aircraft and electronics you are dealing in high-priced material?

General RAWLINGS. Yes, sir.

Mr. Mahon. You are dealing with manufacturers who want to show the highest possible dividends to their stockholders and themselves.

General RAWLINGS. Yes, sir. These contracts, as you know, are subject to renegotiation. Nevertheless, we will do our best to write sound contracts.

Mr. Mahon. I understand that the contracts are subject to renegotiation, but we would like to have assurance that everyone having to do with this thing will bend every legal and moral effort to getting the job done in such a way that we will not have to apologize for it later.

General RAWLINGS. Yes, sir. We are well aware of the impact that this has on our resources. We are going to do our very best.

Mr. MAHON. There is another thing which I would like to bring out.

With the North Koreans breathing down our necks on the southern tip of South Korea it is relatively easy to get money for the Defense Establishment and for the Air Force. When things look rosier, and we hope they will, it is a more difficult job. It seems to me that the whole Defense Establishment ought to take note of this, that the manner in which the emergency funds provided under this program are expended will have a lot

of weight with Congress and the American people in the planning of future programs.

Mr. CANNON. In other words, you are on record?

General RAWLINGS. Yes, sir. We are well aware of that. I can give you my assurance, and I know the Chief and the Secretary feel the same way, that we will do our very best.

I am sure that we will find situations where we have not done as we should, but we will deal with those when they occur.

Mr. Mahon. I believe Mr. Norrell has a question.

ABILITY TO REACH PROGRAM GOALS

Mr. NORRELL. Considering these categories together and on a unit or percentage basis, how much of it do you have now in operation? What is your best guess on a percentage basis?

General Rawlings. I am sorry. I did not quite understand the question, Mr. Norrell.

Mr. NORRELL. Considering the categories together and on a percentage basis, those which you have outlined here, how much of the program now would you say was activated and in operation?

General RAWLINGS. Sir, today we have the 48-group program. · It is all activated. Today we have about 416,000 officers and men, whereas the ending strength will be 548,000.

Mr. NORRELL. I do not want to go over that again, but how much will you have to accelerate your program in order to meet the 1951 goal? Could you answer that on a percentage basis?

Mr. Mahon. May I interject this thought: I believe Mr. Norrell has in mind the fact that in the regular budget you requested a certain amount of funds and in this budget you are requesting a certain amount of funds. Some of these funds will be diverted to Korea.

General RAWLINGS. I will say that the total program is about double the level we had in 1950. Is that about it?

Mr. NORRELL. I think so. The fact is then, you are reasonably certain you can reach these goals if you have the money?

General RAWLINGS. Yes, sir. We feel that we can reach them.

As I explained, on this personnel item, for example, we think we can do a little better that this, and we need to do a little bit better. Others, in reviewing it, have not held to that view. We think we can, and are trying to support that position.

In the case of aircraft procurement, we have made a thorough analysis, as Mr. McCone and General Shepard have shown you. They have actually talked with the presidents of aircraft companies, and they all feel that they can make the program,

We know there are going to be some material difficulties. Of course, a lot of that will depend on what happens on priorities, but there will be problems of material.

The Munitions Board, as I understand it, is working on a priority proposition that should solve that problem.

In terms of labor, the manufacturers all felt that the labor was available for this program and that there would be no problem there.

Is that about it, sir?
Mr. NORRELL. Yes, sir.

General RAWLINGS, General McNaughton feels, on the training, that we can accomplish the program,

Our operational people feel that we can accomplish the flying-hour program,

We may be wrong, but we believe we can. We are working to that end.

Mr. NORRELL. That is all.
Mr. MAHON. Are there any questions?
(Discussion off the record.)

Mr. Mahon. General Rawlings, I have some questions here which
I would like to propound in connection with the projected program.
In fact, I have three questions. I believe I will recite all of them.
They are not directly related to each other, but I believe I will recite
all of them and ask you to give me some responses as to your views.

EXPANSION OF AIR FORCE

The first question is: Can the Air Force expand faster than the rate indicated in the proposed increase? How much faster? What would a faster expansion mean in terms of impact on our industry?

General RAWLINGS. Obviously, in an all-out effort with full controls and unlimited dollars a faster program build-up could be accomplished. We are sure that the program we have presented to you today can be accomplished and, in fact, improved upon in certain instances. For example:

The amount of $307,000,000 for military personnel is conservative and possibly inadequate to support the Air Force personnel build-up in fiscal year 1951 as recommended by the Joint Chiefs of Staff and approved by the Secretary of Defense. The sum was arrived at

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hastily before a careful analysis could be made of personnel procurement and training capabilities, and before à requirements grade structure could be developed to fit the augmentation.

In order to immediately reinforce our Far East Air Force, it has been necessary to make heavy withdrawals of skilled personnel from our combat and support units in the United States. It is essential that these withdrawals be replaced without delay by personnel fully trained and qualified in the skills required. Our reservists and prior-service airmen constitute the only resource we can draw upon to meet this requirement. In order to obtain from these two sources the skilled technicians needed, we must offer them the grade in which they were discharged or the grade in which they are now serving in the Reserves. Under the law, it is mandatory in the case of involuntary recall of reservists to permit them to serve in their Reserve grade. This procurement program, combined with the recent legislation enacted by Congress to involuntarily extend all enlistments, will require an airman grade structure considerably higher than that provided within the $307,000,000 program contained in the President's estimate.

Similarly, in the case of the officers, we intend to meet our expansion requirements through the voluntary and involuntary recall of our Reserves. This source represents a wealth of war-trained and experienced officers immediately usable in their grades and skills. Under the law, it is mandatory in the case of involuntary recall that these officers be permitted to serve in their Reserve grade. You will recall that at the end of World War II the War Department announced a policy under which a large portion of our war-time officers who were being demobilized were eligible for a terminal-leave promotion. Since the war, the Air Force has operated under a policy which required that all such officers who were voluntarily recalled to active duty were required to accept and serve in the grade they held just prior to their demobilization. We now have approximately 14,000 such officers in the active Air Force. Under our current officer recall program, which will result in the recall of several thousand Reserve officers in their Reserve grade, it is obvious that these 14,000 Reserve officers now serving in the active establishment in a lower grade must receive some consideration for promotion to their Reserve grade. This will be impossible with the grade structure provided in the $307,000,000 appropriation for military personnel in the President's supplemental estimate, and may result in a serious morale problem.

Finally, the present encouraging upward trend of our voluntaryenlistment program and our reserve-recall program, plus the legislation for involuntary extension of enlistments, leads us to believe that we will be able to economically accelerate our personnel build-up during fiscal year 1951 considerably above that provided in the $307,000,000 program. Also, that we will be able to attain the total strength increase recommended by the Joint Chiefs of Staff, which is 20,000 additional to that provided for in the $307,000,000 program.

In summary, we believe it is necessary that the Air Force accomplish the build-up and the state of combat readiness recommended by the Joint Chiefs of Staff at the earliest practicable date. Therefore, it may be necessary for us to ask for additional funds to meet these objectives. This will be done when additional experience supports the validity of our plans.

Also, there is a possibility that additional construction items may be required to get us the proper support. Certainly additional dollars could be used in this direction.

Mr. Mahon. Gentlemen, are there any further questions in connection with this matter?

Mr. TABER. I do not believe so.

Mr. Mahon. General Rawlings, after we have had an opportunity to look further into the information which you, General Shepard, General Todd, General Wood and others who have assisted us here have supplied us, we may have some other questions.

General RAWLINGS. Yes, sir.

Mr. Mahon. Would you be available to come down for an informal meeting at any time?

General RAWLINGS. At any time, sir.

Mr. MAHON. With that assurance, let me thank you and the others for your presentation, and assure you that we will give the matter our best attention and consideration.

General RAWLINGS. Thank you, sir.

FRIDAY, JULY 28, 1950.

EMERGENCY FUND

WITNESSES

W. J. MCNEIL, ASSISTANT SECRETARY OF DEFENSE (COMP

TROLLER) MAJ. GEN. PATRICK W. TIMBERLAKE, DIRECTOR OF STAFF,

MUNITIONS BOARD WILLIAM WEBSTER, CHAIRMAN, RESEARCH AND DEVELOPMENT

BOARD VICE ADM. EDWIN D. FOSTER, CHIEF, OFFICE OF NAVY MATERIALS LYLE S. GARLOCK, ASSISTANT COMPTROLLER, OFFICE OF SECRE

TARY OF DEFENSE COL. ROBERT MOORE, SPECIAL ASSISTANT TO THE COMPTROLLER

Mr. Mahon. Mr. Assistant Secretary, we have been giving almost around-the-clock consideration to this supplemental budget, and we would like to talk to you about this budget from the standpoint of supplying us with any information in connection with the over-all program that you think would be helpful to us.

First, will you introduce the gentlemen you have with you?

Mr. McNeil. On my left is Mr. William Webster, Chairman, Research and Development Board.

Next to him is Major General Timberlake, Director of the staff of the Munitions Board.

Back of him is Vice Admiral Foster, Chief of the Office of Naval Material.

To my right is Mr. Garlock, Assistant Comptroller, Department of Defense

First, Mr. Chairman, we would like briefly to outline the additional requirements for research and development and industrial mobilization, and then to answer any questions you may have with respect to these items.

Mr. ENGEL. That is out of the $190,000,000?

Mr. McNEIL. Yes. Then it might be helpful if these gentlemen first make their own statements to you in connection with their work. Mr. Mahon. I think we might proceed in that manner.

First we will insert the language for these funds requested in House Document No. 657.

(The language is as follows:)

EMERGENCY FUND

For transfer by the Secretary of Defense, with the approval of the Bureau of the Budget, to any appropriation for military functions under the Department of Defense available for research and development or industrial mobilization, to be merged with and to be available for the same purposes, and for the same time period, as the appropriation to which transferred, $190,000,000.

Mr. MCNEIL. Mr. Webster will take up the $120,000,000 item for research and development.

RESEARCH AND DEVELOPMENT

Mr. WEBSTER. First, gentlemen, I think I might take just a few seconds to distinguish between research and development.

In research the difficulty of getting qualified personnel is often a serious bottleneck. Because of this difficulty it is frequently impossible to expand a program as far as we would like unless we cut down on other programs in order to transfer personnel to provide the build up and ability. The making of such adjustments, and the recruitment: of good research personnel, are both ticklish tasks that make it very difficult to estimate precisely what can be done to expand our reasearch efforts.

In development we have an entirely different situation. Development funds are often spent largely for hardware. The development phase of anything comes after the research phase, and while to a certain degree there is an optimum rate of development, that rate can usually be readily adjusted upward or downward, within limits, by adjustment of the funds available.

Another characteristic of development is that in its final stages it is often almost indistinguishable from the early stages of procurement. In the case of a new item, particularly, the first few procured in production are often used as development models in order to permit final development to remove production bugs and get procurement really rolling. When any large-scale procurement is contemplated it becomes especially important to intensify our efforts on items in the final development stage in order to be sure that insofar as possible the material procured incorporates the latest technological advances.

Now, this sum of $120,000,000 is an estimate based on the best judgment we can get as to what can properly be spent in research and development as a part of the present expansion program. If the procurement of equipment for the expanded forces advances faster than has been anticipated it is assumed, of course, that additional development funds be obtained either on a supplemental basis or by a broadening of the 10-percent transfer flexibility that is being requested.

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