pelled to operate second-line aircraft for an extended period of time. Because of the long lead time involved in aircraft procurement, contracts for replacement aircraft should be placed forthwith to prevent further serious impairment of combat readiness. The supplemental estimate herein presented provides for modernizing combat forces of the Navy and Marine Corps which are currently committed to combat or which, in accordance with current plans, would be committed to combat in an initial mobilization period. Further provision for necessary replacement aircraft will be included in subsequent procurement programs, together with the necessary support aircraft to sustain the presently programed combat strength. 2. Ordnance for new aircraft: Senate bill, 1951__ Proposed supplemental_. Revised requirement, 1951 Proposed increase in program, $24,630,000 for ordnance equipment The increase in estimate for this activity provides for the procurement of guns and fire-control equipment required for installation in the additional aircraft to be procured under the "Piloted aircraft procurement" activity. Ordnance requirements are determined entirely by the particular models and numbers of aircraft procured under that activity. Mr. MAHON. I would like to ask a few general questions, gentlemen. STATUS OF FUNDS FOR AIRCRAFT PROCUREMENT Admiral Pride, in the final part of your statement you have given us some over-all figures. I would like to ask how much money the Navy had on hand at a given date, like the 1st of July, for the procurement of aircraft which had not been obligated or expended. Admiral PRIDE. There is none that was not obligated. The expenditures would be according to deliveries. May I send that up later, after we have checked our ledger balances? Mr. MAHON. Yes. (The following information was submitted for the record:) Construction of aircraft and related procurement appropriation status 'Total obligational authority to June 30, 1950 Deduct: Unfinanced obligational authority at June 30, 1950.. Total appropriations provided Deduct: Expenditures to June 30, 1950. Unexpended balance at June 30, 1950___. $1, 957, 819, 000 739, 749, 000 1, 218, 070, 000 990, 854, 117 227, 215, 883 NOTE.-Foregoing table excludes the $124,797,000 of 1950 contract authorization held in Presidential Reserve and later incorporated in the fiscal year 1951 procurement program. Mr. MAHON. All of it was obligated on the 1st of July that had been available to you. Of course, our omnibus bill carrying the military appropriation has not yet cleared both Houses and gone to the President and become a law. Have you at this time obligated any of the funds provided in that bill for aircraft procurement? I believe something over $700,000,000 is in that bill. Do you have the authority to do that? Admiral PRIDE. Yes, sir. Congress gave us authority and we have issued letters of intent for that entire sum. Mr. MAHON. Of course, it will take some time to get the details of that procurement program worked out. Admiral PRIDE. That is a finished program so far as the Bureau is concerned. We are writing up the firm contracts now. UNFINANCED CONTRACT AUTHORIZATION Mr. MAHON. How much outstanding contract authorization does the Navy have at this time for aircraft procurement? Admiral PRIDE. We have none. Mr. MAHON. I do not mean that which has been obligated. I mean that is outstanding. Captain SCHOECH. You mean that which has not yet been expended? The expenditure, Mr. Mahon, will take place over a period of about 30 months after we get the money. Mr. MAHON. I understand. Captain SCHOECH. It will take about 25 to 30 months, before it is all expended. Mr. MAHON. I understand that we give you obligational authority in two ways. We give you cash and we give you contract authority. I was asking how much contract authority is outstanding as of this date. Captain SCHOECH. None. Admiral PRIDE. We have used it all up. Mr. MAHON. I do not mean that you have not used it all up by way of obligating it. I am asking how much is outstanding that has not been liquidated. Mr. LEWIS. By appropriations? We do not have that figure here, Mr. Mahon. Mr. MAHON. You understand me? I want to know how much contract authorization is outstanding for which there has not been an appropriation. Admiral PRIDE. I understand and will insert that figure in the record. (The information requested is as follows:) Unfinanced contract authorization at June 30, 1950.... Appropriation thereagainst contained in 1951 omnibus bill_ $739, 749, 000 530, 000, 000 209,749, 000 information,. Perhaps you Balance to be appropriated in subsequent years. Mr. TABER. I have a table here which shows some furnished at request from the Department of Defense. would like to see it. It shows $308,000,000 as of June 30 unobligated out of funds that were available prior to that date. (Discussion off the record.) OUTSTANDING CONTRACT BALANCES Mr. MAHON. As of June 30 what was the total of your aircraft. procurement program that had not been liquidated? Admiral PRIDE. Outstanding contract balances at June 30, 1950, under appropriation "Construction of Aircraft and Related Procurement", $966,964,883. TOTAL CASH AND CONTRACT AUTHORITY AVAILABLE IN 1951 Mr. MAHON. If the present request for funds totaling $950,000,000 which is immediately before us and the $646,000,000 plus which was before us a few days ago is approved, if the entire supplemental requests for aircraft procurement is approved by the Congress, as I anticipate it will be, what will be the total number of dollars in cash and contract authorization for new aircraft procurement that will be available to you in fiscal 1951; and how much of that will not have been liquidated? Admiral PRIDE. The total available for aircraft procurement in fiscal 1951 will be $2,319,353,000. Of this amount $1,619,060,000 is cash, $575,496,000 is new contract authority, and $124,797,000 is old contract authority carried over from fiscal year 1950. This amount will be fully obligated early in the fiscal year and will be liquidated over the ensuing 2 years. EFFECT OF SUPPLEMENTAL FUNDS ON THE RESERVE PROGRAM Mr. MAHON. What relationship does this proposed increase in the Navy aircraft program have to do with your Reserve program and Reserve units? Admiral PRIDE. It will modernize about half the Naval Air Reserve. Mr. MAHON. How long will it take to modernize this segment of the Reserve force? Admiral PRIDE. It will take about 2 years. EFFECT OF SUPPLEMENTAL FUND ON MILITARY POSTURE OF THE NAVY Mr. MAHON. Am I correct in saying that this supplemental program for the Navy is designed to strengthen the Navy on an over-all basis and is not too closely related to Korea? My point is this: Is this not really a program not necessarily to achieve victory in Korea but to give us a stronger naval position in the event greater strength on the part of the Navy should be required to meet other emergencies? Admiral PRIDE. May I ask Admiral Sherman, who has come in, to elaborate on that? Mr. MAHON. Yes, I would like for you to elaborate on that. Admiral SHERMAN. As you know, sir, for 3 or 4 years the Congress has been informed of a continuing deficiency in new aircraft for the Navy. We have been operating largely with the aircraft that were delivered at the end of the war. As each year has passed we have been one more year out of date with regard to the greater part of our aircraft inventory. Mr. MAHON. That is correct. Admiral SHERMAN. This program this year, consisting of what was in the original 1951 appropriation bill, the large omnibus-type bill, plus the increment that was before the committee previously and this increment, accomplishes four objectives, on the assumption that the operating level for naval aircraft is the level of 7,335, which has now been approved by the Joint Chiefs of Staff and the Secretary of Defense for the fiscal year 1951. Assuming that that level continues and that there is no further increase, this program in its three parts will fill the existing deficiency in combat aircraft for the regular Navy; it will provide for the program increase from what was originally contemplated for fiscal 1951 to what is now represented in the 7,335 figure; it will furnish aircraft to replace estimated attrition in the Korean operation, and it will supply airplanes for application to the modernization of the Naval Reserve. I would like to interject one point off the record. (Discussion off the record.) Admiral SHERMAN. The number of approximately 862 aircraft is not quite sufficient to equip the operating strength of the Naval Air Reserve and Marine Corps Air Reserve units ordered to report to the commanders in chief of the Atlantic and Pacific fleets for active operations on D-day if a D-day occurs. Again, off the record. (Discussion off the record.) Admiral SHERMAN. On the 21st of July, the Secretary of Defense directed that representatives of the Navy and the Air Force-namely, the two Under Secretaries-bring the aircraft-procurement program for the services to a comparable basis. That was done, and the estimates now before you represent the results of that conference and appropriate action by the Joint Chiefs of Staff, with the comment that they fall short of filling the requirements of the Reserve units which are in the accelerated modernization program of the Navy, as now agreed to by the Joint Chiefs of Staff. By law, I am responsible for the readiness of the operating forces of the Navy. This estimate of our requirements is one to which I subscribe thoroughly. I could not agree to any greater degree of risk than is involved in this program in the international situation that now confronts us. The shortage which has been mentioned here, which we do not intend to fill or do not ask to fill at this time, is one which I feel can be accepted because of the large orders that would have to be placed to fill completely the accumulated deficiency and to extend our preparation further into these Reserve units which has not been done, since shortly after the end of the war. To try to order all the aircraft at this time, I feel, would not be prudent management. On the other hand, our aircraft position even under this program can be made deficient by an increase in the extent of hostilities or by any action which requires a higher level of naval aviation forces to be maintained in this period of increased preparedness as contrasted with general mobilization. One other factor which I think the committee should take cognizance of is that because of decreased orders in the past for military aircraft in this country, both from the Air Force and the Navy, we are now in a very critical international situation. The total production of military aircraft in this country is, and will still be under the program, low compared with what would be desirable for the security of this country, and is low in contrast with the production rate of military aircraft in this country as it existed prior to Pearl Harbor. It may be of interest to the committee to recall that the House initiated a 10,000-plane program for the Navy in early May of 1940, prior to the invasion of the Low Countries by the Germans. I feel strongly that the requirement for a greatly augmented production of military aircraft in this country is greater now than it was in early May of 1940. I strongly urge the appropriation of the sum of money now requested for procurement of naval aircraft. BALANCE OF FORCES Mr. MAHON. I do not lay much stock in comparisons as between the Air Force and the Navy Air. As I understand it, the program before this committee supposedly brings about a balance of modernization, aircraftwise, as between the Air Force and Navy Air. Is that correct? Admiral SHERMAN. The requirements of the Air Force and the Navy are different because of the difference in the character of the two services; and, therefore, they are not susceptible of complete standardization. In the conference of July 26, which I mentioned, I heard a presentation of the Air Force procurement program by the Under Secretary of the Air Force, and I would say that this program, while not as complete for our purposes as that is for theirs, would put us on what could be called a comparable basis, and certainly would put us in a much healthier condition in this area than we have been in for some 4 years. DELAY IN SUBMITTING SUPPLEMENTAL REQUEST Mr. MAHON. There is one thing which I think the record should make clear. That is the reason why this 950-million-dollar aircraft program was not presented in the same package with the 10.5-billiondollar military program. I would like for that to be clear on the record. Admiral SHERMAN. The original estimate by the Departments for the 10.5-billion-dollar program were prepared concurrently and separately and with somewhat different understandings as to the degree to which we were to go in that particular program. When the programs were brought together, the situation became apparent immediately, and action was started within the Department of Defense to place our program on a comparable basis with the other. CAREFUL SCREENING OF SUPPLEMENTAL REQUEST Mr. MAHON. Were the Joint Chiefs of Staff aware of this situation at the time the 10.5-billion-dollar program was sent to Congress, and have the Joint Chiefs of Staff completely and fully considered and approved the additional 950 million dollars requested here? Admiral SHERMAN. You will recall, sir, that the Secretary of Defense and the Secretary of the Navy both mentioned the discrepancy. The Secretary of Defense mentioned it in his initial presentation before this committee and also in his initial presentation before the Senate Appropriations Committee. The Joint Chiefs of Staff have specifically approved the accelerated modernization of the aircraft squadrons of the Regular Navy and the Marine Corps, and those elements which are required for active service at the outset of the general mobilization, and at the time of their action were aware of the funds involved. DELIVERY OF AIRCRAFT Mr. MAHON. Now, 1,310 aircraft are provided in this estimate, I believe. When will the first of these planes be available to the Navy? Admiral PRIDE. The delivery of airplanes to the Navy will be stepped up immediately under the impact of this program. It would be hard to say which airplane was identified with this particular sum of money. The whole program will be stepped up, and the deliveries |