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significance. Costs include those resulting from procurement contracts, orders placed with other governmental agencies, and labor, material, and overhead for production accomplished in Government arsenals.

It may be noted that the greatest proportionate increase in funds is evident in this area. The amount requested will provide: (a) For purchase of equipment not now available for units operating in or destined for deployment to the Far East Command; (7) for replacement of combat losses of critical items of equipment where such losses are in excess of normal peacetime consumption; (c) funds for expediting production; (d) approximately $490,000,000 for modernization of equipment.

This is the first opportunity that the Army has had since World War II to make perceptible progress in this important field. Now we are faced with an old-fashioned conventional type of war that is somewhat different from that anticipated and our ground forces are carrying the brunt of it—not only outnumbered but temporarily outgunned. A major effort financially and industrially is required to overcome our deficiencies.

I have had prepared a chart which shows a further breakdown of the dollar requirements for certain major items in this category. These requirements are as follows: Subcategory:

Thousands of dollars C. Combat vehicles and artillery-

753, 554 E. Ammunition and guided missiles--

414, 677 Expediting production

125,000 I. Railway, construction and heavy materials handling equipment

96, 444 F. Electronics and communications_

87, 655 G. Vehicle (noncombat)

55, 783 B. Ships and harbor craft.

44, 256 A. Aircraft

36, 087 Accelerating production in ordnance facilities

25,000 D. Weapons

7, 478 H. Special training equipment---

4, 289 Total

1, 650, 223 The funds requested will not be sufficient, however, completely to re-equip the Army.

CIVILIAN COMPONENTS

For category V, civilian components, the cost of additional requirements included in the supplemental request are estimated at $33,154,000. This amount will provide: (a) Additional week-end training of National Guard units (for the purpose of qualifying an estimated 70 percent of individuals in small arms firing) and for an acceleration of school training programs; (b) an increase in the number of ORC units receiving 48 drills per year and an increase in active duty training and administrative support; (c) $9,000,000 is included for the Reserve Officers Training Corps to provide for pay, allowance, and administration of an additional 28,750 basic and an additional 9,000 advanced students,

RESEARCH AND DEVELOPMENT AND INDUSTRIAL MOBILIZATION

In categories VI and VII, research and development and industrial mobilization, the Army has a number of very high priority requirements. No money is included for those items in the Army budget, since it is understood that a lump-sum appropriation for activities in these fields will be made to the Secretary of Defense, with later allocations to the services to meet their demonstrated needs. The over-all importance of these activities is so great that close coordination by agencies of the Office of the Secretary of Defense is necessary in order to insure the best use of funds which can be made available.

ESTABLISHMENT-WIDE ACTIVITIES

For category VIII, establishment-wide activities, the supplemental amount requested will provide: (a) Contingency items totaling $10,000,000, of which an allocation of $5,000,000 has already been made to the Commander in Chief, Far East; (6) $4,585,000 for accelerated production and distribution of military maps and supporting operations incident thereto; (c) $599,000 for an expanded Armed Forces information and education program resulting from strength augmentation of the services.

In addition to these amounts I have discussed, there is included in the supplemental Army estimate a total of $4,393,000 for the Alaska Communication System. This is a civil works item but is presented at this time because of its importance militarily.

In summary, I wish to point out that the Army is now carrying out a greatly expanded program in order to provide the necessary support of our operations in Korea. Our estimates are conservative, but it is considered that they are adequate for the present. An acceleration of programs, or increase in the scope of the operations to be undertaken will require a recomputation of our requirements.

There are present with me today representatives of the Army General Staff who are prepared to give you such additional detailed information as you may desire in connection with their particular field. Later the heads of the various estimating agencies will appear. I am personally grateful to the members of the committee for affording me this opportunity to appear before them. Thank you.

Mr. Mahon. That is a very excellent over-all statement, I think, General.

Of course, these categories are rather broad and the funds rather large. In order to get the real picture we will have to go deeper into the various categories.

BASIS OF COMPUTING SUPPLEMENTAL ESTIMATE

I would like to ask you to tell us how this budget was put together. In other words, if this budget is on a firm basis, it is entitled to be a real guidepost for us in this bill. If it is just thrown together in a haphazard way it may not be worthy of as much credence as we otherwise might give it.

General DECKER. Yes, sir.

Mr. MAHON. I realize that you have been working on a timetable which has made it impossible for you to do as thorough a job of

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calculations as you might otherwise have done. I do not see how you could have arrived at some of these figures without more or less blocking things off and making some guesses.

Just tell us how you arrived at the various figures for the various purposes such as maintenance and operation, military personnel, major procurement and production, civilian components, research and development, and so forth. How did you come up with those figures!

General DECKER. The guides that we had to follow were, of course, the decisions reached by the Joint Chiefs of Staff, approved by the Secretary of Defense and the President. There were certain assumptions that had to be made in connection with the development of the estimates.

Insofar as the increases in strength are concerned—that has to do with military personnel-that is figured on a purely mathematical basis. So many men will cost you so much money insofar as pay and subsistence are concerned. Those are fixed figures.

However, when you get into the field of computing the costs of the operations in Korea those must be based on an estimate of what those forces will be and what the operations are that will be conducted.

In that connection we have followed the guidance of the Joint Chiefs of Staff.

If I may, I would like to go off the record for a minute.
(Discussion off the record.)

Mr. ENGEL. In the final analysis, however, you based your requirements upon the recommendations of those unit commanders in the field who were actually carrying on the combat operations; is that right?

(Discussion off the record.)

General DECKER. Insofar as the funds requested for major procurement and production are concerned, we have tried to bring about a certain improvement in the equipment status of the Army.

RATE OF MODERNIZATION OF EQUIPMENT

As I have pointed out in my introductory statement, this does not provide completely for the equipping of the Army, but it takes a good step forward in giving us this new equipment which we should have if our Army is to be brought up to a better state of combat readiness.

Mr. MAHON. In other words, since the end of hostilities you have bought very little modern equipment for the Army!

General DECKER. If I may give you an example of that, sir, in fiscal years 1949, 1950, and 1951 there was approximately $8,800,000,000 appropriated for the Armed Forces for major procurement. Of that the Army got about 10 percent, or $800,000,000. That is what we have had to use in modernizing our equipment.

We have made certain progress in that field, but it has been far below what should have been made to bring our Army to the stature it should be.

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AVAILABILITY OF WORLD WAR II MATERIALS

Mr. MAHON. We have billions of dollars worth of ships and aircraft and ordnance. I do not have the exact figures on my tongue, but I think in our regular hearing we had those figures given.

What would you say to the suggestion, "Well, at the end of World War II you had billions of dollars worth of munitions and weapons. You have not expanded them. Why do you want more?” What is your reaction to that approach

General DECKER. It is true that we have a great many items on hand from World War II, but those stocks are unbalanced.

In the ammunition field, for instance, we have great amounts of ammunition on hand, but we do not have ammunition of certain types that we have to buy at this present moment. An 8-inch" shell does you very little good when you have a 105 howitzer to fire. That is putting it on an oversimplified basis, but that is about what it amounts to.

We had a great deal of equipment in overseas areas at the conclusion of the war. The Army was demobilized posthaste. We had to send the men home. We could not do anything with that equipment in the way of inventorying it, shipping it home in an orderly process, and so on. We had to dispose of it on the spot.

You are familiar with the efforts of the Foreign Liquidation Commission in disposing of that property left in overseas areas. A great deal of it went there. Our depots were choked with it.

Some of that material was needed to help the civilian economy, and it was disposed of in that manner.

Those stocks which existed at the end of the World War were disposed of generally. We kept on hand items which we felt we would need in the case of another mobilization, but there are unbalances in those stocks and there are new items coming in from our research and development program all the time that we have to buy because they were not left over.

Mr. MAHON. Nevertheless, you do have left over vast stores of ammunition and ordnance?

General DECKER. That is correct. We have great quantities of it. We have taken those stocks into account in arriving at these estimates. Wherever the stocks were sufficient to provide for our needs we have not asked for additional funds.

Mr. Mahon. General Reeder, would you amplify that?

General REEDER. I think possibly I can go through and bit by bit pick up just what we mean.

PROCUREMENT OF AIRPLANES

The first thing is that we have bought hardly any aircraft. We are not air-minded, particularly, but we do use liaison planes. We still have the old L-5, the life of which was supposed to be 5 years, as our principal plane. We are replacing a large part of those.

Mr. ENGEL. By “we” you mean the Army as distinguished from the Air Force? General REEDER. Yes, sir. Whenever I say “we” I mean the Army.

Mr. MAHON. The record shows, I believe that the Army has procured about 2,000 planes.

General REEDER. I think the number is a little high. About 500: However, that procurement was placed in June.

Mr. SHEPPARD. What was your answer? The procurement was placed in what?

General REEDER. Last June. They are not planes in hand. Mr. MAHON. Pardon me just a moment. Reading :) The major procurement of aircraft involved the use of about $6,260,000,000, or 13 percent of the total of about $50,000,000,000 which we have had during a 4year period just preceding this time. This permitted the procurement of 10,238 aircraft; 4,943 for the Air Force, 3,837 for the Navy, and 1,458 for the Army, mostly liaison planes.

The amount which you supposedly have secured from appropriations since World War II is 1,458 planes, I believe. Of course, they are the cheap planes.

General REEDER. Yes, sir; they are the cheap planes.

Actually, until this past fiscal year we have been experimenting to see what kind of a plane we wanted. Finally, at the end of the fiscal year, we placed an order through the Air Force with Cessna for the first quantity of liaison planes we have gotten.

(Discussion off the record.)

General REEDER. The Transportation Corps, which is not particularly romantic, went through the last war in a low priority in harbor craft, tugs and barges, and so on, which were mostly wooden. We have figured up this

year that within the next 5 years we must replace that fleet. It is very high in the cost of maintenance, and we will make money in the long run by getting modern craft instead of what we have. This takes a bite out of that replacement program,

Now, when we come to the ordnance aside from ammunition the money lies in large items.

I think this might as well be off the record. (Discussion off the record.)

REACTIVATION OF INSTALLATIONS

Mr. MAHON. I would like to ask about the reactivation of installations-posts, camps, and stations, as the result of this accelerated program.

General DECKER. We are planning at present to activate two additional replacement-training divisions. Those will be located at Fort Jackson and Camp Breckenridge.

Mr. Mahon. Is Fort Jackson now on a stand-by basis?

General DECKER. It was scheduled to be inactivated at the end of August when the National Guard training for this summer will be completed there. It has been reduced to a complement of approximately 50 officers and 350 men to help service the National Guard during their summer training.

Mr. Mahon. You propose now to utilize Camp Jackson?
General DECKER. Yes.
Mr. MAHON. What about Camp Breckenridge?

General DECKER. Camp Breckenridge has been in a stand-by status and is being reopened as a replacement-training division. Fort Jackson is in Columbia, S. C. Breckenridge is in western Kentucky.

Mr. MAHON. Of course, we realize the opening of new installations, or the reactivation of installations, is expensive in itself. As far as

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