fi Mr. SHEPPARD (interposing). Just a moment. I am not talking at the moment about the modification program; I will address myself to that later, but I am inquiring now into the question, whether as of this moment you have put out any contracts for new tank production in its entirety?

General REEDER. No.

Mr. SHEPPARD. In a way you have put out some orders?
General REEDER. Yes.

Mr. SHEPPARD. Have you under way as of the moment, considering the lead time elements contracts as they pertain to the necessary metals?

General REEDER. Yes. We expect that the new orders, that is, there will be new orders to Cadillac to get the first stuff on the lineMr. SHEPPARD. That is in anticipation, however, that there will be available the steel needed?

General REEDER. Yes.
(Off record discussion.)

SUPPLEMENTAL FUNDS FOR KOREA

Mr. SHEPPARD. How much of your present budget, whether it be the budget that is presently before the Senate, or whether it be the proportionate part of the presentation here, will go for the repayment of expenditures that have been made by reason of current events? That would be affected, of course, by your having such ability to regulate as between the two, but how much of this so-called repayment category will come out of the budgets to which I have referred?

General REEDER. Directly authorized from these expenditures, at least obligated-they are only in the obligation phase-just jotting down the items quickly, I come out with $330,000,000 of procurement in some of the bigger items.

Now in addition to that, on the personnel side, we have already hired civilian personnel to get on with shipping stuff to General MacArthur. We are opening an ammunition loading place in Washington State. We have spotted General MacArthur money to spend, and what his exact expenditures for hire in Japan to accelerate his operations I am not sure we know as yet.

General DECKER. We do not.

RENOVATION OF AMMUNITION

Mr. SHEPPARD. In my opinion, based upon the questions and answers as to the renovation of ammunition that was presently in stock, as I recall the reply was to the effect that you contemplate putting a considerable portion of that out in contractual category instead of it being processed or overhauled within your own organization?

General REEDER. No; there will be very little of that done that way. I do not know who answered that question.

Mr. SHEPPARD. It might be that I have reached an erroneous conclusion.

General REEDER. Yes. The experience has been that even with greater supervision, the contractor has more explosions and more hazards than occur in the operations in our own arsenals, and when the supervision, from the safety consideration is adequate, the cost of the

contractual operation becomes a greater figure than when it is done in our own plants. We propose to take on people, and we have already told them to put on a swing shift in the important lines.

Mr. SHEPPARD. You say that you are confronted, in your analysis of procedure, with the fact that the hazards of renovating the ammunition has been greater in the private contractual category than they are where carried on under military operations?

General REEDER. That is right.

Mr. SHEPPARD. Upon what premise do you make that kind of an answer; what has your experience been?

General REEDER. I should rather have that question answered by General Ford, Chief of Ordnance, who is responsible for that activity. Mr. SHEPPARD. In other words, you gained your information from General Ford?

General REEDER. That is right.

Mr. SHEPARD. Then I will direct my inquiry to him at the proper

time.

Now when it comes to the cost, did you furnish General Ford that? General REEDER. Costs?

Mr. SHEPPARD. Yes, or was that secured from the Budget Department?

General REEDER. That would be the cost experience within the Ordnance Department, which keeps track of the relative costs.

ALLOCATION OF CONTRACTS FOR PRODUCTION AND OVERHAUL

Mr. SHEPPARD. Is there general indication, insofar as it is presently contemplated in the budget we have before us, that it is going to expedite and confine as much of the actual rehabilitation work as possible under military supervision as against the private contractual operation-I mean, in the general concept of it?

General REEDER. I would like to break that question into two parts if I may?

Mr. SHEPPARD. Certainly.

General REEDER. The production and overhaul. The overhaul and rehabilitation can generally be done more expeditiously in the lines which we have set up by putting on a swing shift, as the lines are set up and going, and as soon as we have the spare parts they can go right ahead.

Now as to the spare parts, we are putting out that to the manufacturers of them, they are put out to commercial industry. When it comes to the production of the major items, we want to go as far as possible to the commercial makers. We want, for example, to have Cadillac ready to produce the light tanks in case of war. The medium tanks will be assembled in Detroit, but the engines will be made by Continental, for example, I have forgotton who makes the tractors, and so on. That all goes out to the civilian manufacturers. We put out, in the case of ordnance-of course it varies to the manufacturers that we have. But we are anxious, wherever it is possible, and that is the Under Secretary's direction, that we utilize production just as far as possible to simultaneously give us industrial preparedness, which means utilizing the civilian facilities for producing everyone of the articles in these categories. They may, of course, utilize our stand-by plants.

Mr. SHEPPARD. What you are telling me is that your policy in general is to utilize existing facilities wherever you find it?

General REEDER. That is right.

Mr. SHEPPARD. I think that is a laudable approach to the problem.

FUNDS REQUESTED FOR RESEARCH AND DEVELOPMENT

Now, what would you say in reference to the military share of the $190,000,000?

General REEDER. We requested $55,000,000, roughly, for research and development, which was in two categories.

(Off record discussion.)

DIVISION OF RESPONSIBILITY FOR DETERMINING BUDGETARY REQUESTS

Mr. SHEPPARD. With reference to the inquiry Chairman Mahon made relative to the composition of the budget: You have within the Department what is called the planning board that is in operation? General REEDER. The research and development board?

Mr. SHEPPARD. I mean the strategic board, Joint Chiefs of Staff. General REEDER. Yes.

Mr. SHEPPARD. When an issue of this character prevails, what is the procedure? Are you told by this particular group that you are to have so much manpower and then you start building your requirements for that manpower, or do they hand down an operating plan for the procurement of manpower and all the other adjuncts thereto? General REEDER. You are referring to the Joint Chiefs of Staff? Mr. SHEPPARD. Yes.

General REEDER. The Joint Chiefs of Staff assign the mission and the major forces, and from that point forward we develop from that mission and those forces the lesser things that go with it, the requirements of those troops, the equipment and supplies.

Mr. SHEPPARD. And the conclusion, insofar as the amount of guns, ammunition, tanks, and so forth, is your responsibility. General REEDER. Is our responsibility.

Mr. SHEPPARD. And in the broad application of manpower and the geographical location of operations is the only plan that emanates from the Chiefs of Staff down to you?

General REEDER. That is right; they make up the plans and we fill in the gap.

Mr. SHEPPARD. With that particular operation in view, as I presently interpret it, your duty is more or less a mathematical, mandatory concept, of so many men, so much equipment, so much food, so much clothing, throughout the entire Department; is that correct? General REEDER. Yes; except that quite a bit of judgment is involved from the standpoint as to what shall be the weapon, what risk to take, here and there, in respect to how much money is available, and what we should put the money into to try to get the plan of the Joint Chiefs of Staff in operation.

Mr. SHEPPARD. Of course, at that time, as I interpret it, that plan lays down the manpower policy which they have established, the geographical aspects of it, and they also lay down the factors as to the total amount?

General REEDER. No.

General DECKER. That comes through the Comptroller's Office of the Secretary of Defense.

Mr. SHEPPARD. The percentage of hazard involved is back on you people, insofar as the type of material that is to be used is concerned, whether this type of tank, this type of gun, or this type of ammunition, and so forth?

General REEDER. That is right.

Mr. SHEPPARD. I think that is all.

Mr. MAHON. Mr. Sikes.

General DECKER. Mr. Chairman, may I correct an impression that may have been made with reference to the opening of additional installations? We also plan to open some industrial plants.

Mr. MAHON. We will discuss that more thoroughly under research and development?

General DECKER. Yes,

Mr. MAHON. Mr. Sikes.

Mr. SIKES. I would like to commend you, General Decker, upon your helpful and informative statement, and I would like to say for the record that we are glad to have you here before this committee. I recall the very fine work you did at Fort Jackson with the guard. General DECKER. Thank you.

EFFECT OF SUPPLEMENTAL FUNDS ON COMBAT EFFECTIVENESS

Mr. SIKES. I find myself leaning to the conclusion that a great part of this $10,000,000,000 is for defense as a whole, that you are building for a hypothetical world conflict, without too much regard to the immediate need in Korea, and I hope I am wrong in that respect, because I think the emphasis should be on the immediate need. It seems to me that we have at the moment a military establishment with a broad base, but with comparatively few combat units. For instance, we have only 10 divisions of 630,000 men, and the picture that has just been presented by the Army indirectly reflects no material change that would build up a higher percentage of combat units for early usefulness.

Am I wrong in my conclusion?

General DECKER. This budget, of course, 'was designed to carry out the concept of the Joint Chiefs of Staff as to both the needs arising out of the Korean situation, and also generally to improve our military position.

It is true that there are not many additional combat units that immediately become apparent. There is only one division. But in a 10-division Army we lack very much of the combat and service support, to make it effective; most of the military personnel is necessary and being utilized in that area.

We have developed, as this chart shows, the largest proportion of the available funds for the use of procurement and production, which will give you the articles the Army will need if war comes in a larger measure than was expected at the moment.

Mr. SIKES. What can we tell the House about your ability, with this $10,000,000,000 appropriation, to provide additional combat troops in Korea within the near future? Why is it that more combat teams are not being developed for emergency use in Korea and in other areas, should an emergency develop in other areas?

General DECKER. That is exactly what we are trying to do. And, I would like this statement off the record.

(Off record discussion.)

Mr. SIKES. Let me ask you another question.

USE OF NATIONAL GUARD AND OTHER RESERVISTS IN PRESENT EMERGENCY

We have a National Guard and Reserve in being of about 850,000 men in units. Why can we not call those men in, speedily process them, and move them into combat or into combat readiness and thus achieve a saving in time and secure a higher percentage of combat units? General DUFF. During the last few days we have called into active service 92 units of the National Guard and Organized Reserve. Mr. TABER. How many men are involved?

General DUFF. I have the exact figure. Around ten thousand three hundred some odd men.

Mr. SIKES. Those 10,000 men were composed of what kind of troops in the main? Were they infantry, artillery, quartermaster troops, radar teams, or what?

(Discussion off the record.)

Mr. SIKES. Is all of that included in the over-all plan which you have just described?

General DUFF. That is right.

Mr. SIKES. But it does not reflect an increasingly large percentage of combat effectiveness; is that correct?

General DECKER. That is correct.

Colonel DALEY. Mr. Sikes, may I go off the record?

Mr. SIKES. Surely.

(Discussion off the record.)

Mr. SIKES. Now you have given us a better picture than we have had heretofore. In other words, in the men that are being called in there is a higher percentage of combat troops than there has been heretofore?

Colonel DALEY. That is right, sir.

Mr. SIKES. However, it still appears low. Is that as high a percentage as you feel you can achieve in combat units?

Colonel DALEY. Yes, sir, Mr. Sikes, because we will still have a few. deficiencies in our general reserve in terms of combat-service support.. I would like to go a little further. We are using our recruiting stations as the induction stations for the selectees coming in. We had to increase them to handle the big load. They were staffed for an ordinary flow. Their workload will be increased over 100 percent, sir.

The pipeline includes the detachment of patients, those people who will be hospitalized for over 120 days, the combat casualties coming in from Korea. It includes trainees in the replacement training centers required to maintain the Army.

We have to keep that pipe full, just like we do the food and clothing, all the time. The pipe is full from the ZI to overseas commands.

This pipe is, of course, attributable to the increase in the Army. It is a little above normal because of having to provide for combat losses included.