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The 16 man-years are required 10 process the additional workload of offices responsible for the procurement of military personnel, maintenance of personnel plans for complete mobilization, assignments and reassignments of military personnel on a world-wide basis, mail and record activities, messenger service, civilian defense planning, depot and procurement activities, and medical mobilization planning and operations.

OFFICE OF CHIEF OF ORDNANCE

STATEMENT OF COL. I. A. CRUMP, OFFICE OF CHIEF OF ORDNANCE The total amount included in this supplemental estimate for departmental salaries, Office, Chief of Ordnance, for the fiscal year 1951 is $909,244. The 1951 estimate as reported by the Senate included $4,137,696 for Ordnance departmental salaries and the revised estimate brings the total to $5,046,940.

This supplemental estimate for the fiscal year 1951 will provide for 196 additional man-years over and above the 906 man-years allowed by the Senate subcommittee.

This increase is directly attributable to the increased workload imposed upon the Ordnance Department due to the current international situation. The total revised estimate for fiscal year 1951 for the Ordnance Dep ment Appropriation, "O. S. and S. A.” is over $2,000,000,000 as compared to approximately $647,000,000 in the original estimate. This insrease is primarily in the fields of major procurement and maintenance and operations. To effectively and efficiently direct and administer a program of the magnitude reflected in the revised supplemental estimates for the Ordnance Department, additional personnel for the Office, Chief of Ordnance, is urgently needed.

The full impact of the 1951 requirements cannot be obtained solely from an analysis of the project items comprising this enlarged budget. Cognizance must also be taken of the increased scope and tempo of activties and the operational requirements that demand a full and immediate implementation. The necessity for fulfilling the increased overseas ordnance requirements and maintainng adequate stores of supplies in this country in support of operational needs is obvious but at the same time the completeness and accuracy of these operations cannot be jeopardized because of the lack of personnel in the ordnance office to direct and plan these activties. The increase of 196 man-years requested is not an estimate but is based upon a thorough survey of actual requirements.

OFFICE OF CHIEF OF CHEMICAL CORPS

STATEMENT OF BRIG. GEN. E. C. WALLINGTON, DEPUTY CHIEF, CHEMICAL CORPS

The funds requested in the supplemental estimate before you for salaries, Office of the Chief, Chemical Corps, provide for only 35 civilian employees over the number allowed by the Senate Committee on Appropriations for fiscal year 1951. There has been a tremendous increase in the workload in the Office of the Chief, Chemical Corps, during the last few weeks as a result of the task force operations in Korea. The greatest increase in the volume of work has been in the fields of troop requirements, procurement, supply, research and development, budget and fiscal, and training. The increase in the size of the Army has also increased the volume of work in the Military Personnel Records Unit.

As you gentlemen well know, we are operating the headquarters of the Chemical Corps with over 50 percent of our force located 70 miles away. This has been a tremendous handicap in the past few years and it has become even more serious during the last few weeks, in our efforts to determine Chemical Corps requirements needed to successfully carry out the Korean operations and get the supplies and equipment to the fighting forces. We are requesting additional personnel only in the Washington portion of the office.

CONTINGENT EXPENSES

WITNESS

SPENCER BURROUGHS, DIRECTOR OF PROCUREMENT AND SUPPLY

Mr. Mahon. Contingent expenses, for expenses at the seat of government. Most of that money is to be used for printing and binding of additional training manuals which are required in connection with training the expanded Army.

Mr. BURROUGHS. Project 711 under this appropriation title provides funds for miscellaneous expenses of departmental activities of the Department of the Army. Project 712 represents fund requirements for the entire Army establishment for printing and reproduction services obtained from or through the Government Printing Office or the Defense Printing Service.

Total fund requirements under this appropriation heading were developed on the basis of projected plans and programs attributable to the Korean situation. More detailed information with respect to additional funds requested will be found in the justification now before you.

Mr. Mahon. Thank you Mr. Burroughs. We have already discussed this item to some length.

EXPEDITING PRODUCTION OF EQUIPMENT AND SUPPLIES

WITNESS

MAJ. GEN. JOHN K. CHRISTMAS, G4, GENERAL STAFF

On the last item, of $152,000,000, for expediting production of equipment and supplies, General Christmas, who is director of procurement, Department of the Army, is here; I would like to have him make a statement to the committee at this time.

GENERAL STATEMENT

Mr. Mahon. General Christmas, the committee will be glad to have a statement from you.

General CHRISTMAS. Mr. Chairman, I have a prepared statement covering the item, expediting of production of equipment and supplies.

1. Commencing in June 1940 and continuing through the major part of World War II, the Congress appropriated some $7,500,000,000 to the War Department under the appropriation expediting production equipment and supplies for national defense. Prior to Pearl Harbor all apportionment to the using services from this appropriation were made in person by the President with this authority being delegated on December 12, 1941, to the Under Secretary of War.

2. It should be noted that the above $7,500,000,000 included expediting funds for the Air Force and the Manhattan project, however, even with the deduction of these two items, the expediting funds for the Army were over $5,000,000,000.

3. World War II expediting funds were used for purchases of land, erection of facilities, procurement of installations and production equipment in contractor's plants, and, in general, as the name implies to expedite procurement of equipment and supplies. They were not used to cover items such as operation of facilities, overtime, adjustment of contracts, increased cost of materials, and similar expenditures which are chargeable to procurement costs.

4. The estimates now before you are for a similar appropriation in the amount of $125,000,000. It is contemplated that this fund will be utilized in much the same manner as the World War II funds. However, it should be noted that the need for funds of this type is not as extensive at this time as it was just prior to Pearl Harbor since we have maintained many plants and manufacturing facilities in stand-by since World War II. There is a need, however, for funds to rehabilitate some of these plants and put them in condition for immediate production. While we do not anticipate that extensive new production facilities (involving procurement of land and buildings) will be required, it is highly probable that some expenditures for new facilities will be involved and expansion of existing facilities will be required.

5. It is estimated the $125,000,000 will be required as follows: (a) Partial or complete reactivation of Government-owned stand-by plants

$30, 000, 000 (6) Production equipment for Government-owned plants-

15, 000, 000 (c) Expansion of privately owned industrial facilities (other than equipment)

25, 000, 000 (d) Production equipment for privately owned industrial facilities. 55, 000, 000

6. The above categorical breakdown is self-explanatory by title. However, the following more detailed explanation may further “clarify the need for the funds:

(a) Reactivation of plants: The plants referred to are those required for manufacture of explosives, smokeless powder, rocket powder, ammonia, small arms, artillery ammunition, certain combat vehicles, and similar type equipment. The estimate is based on expected requirements as a result of the present military situation and the known capability of the plants to begin production and is intended to cover costs such as renovation, supplemental power, transportation, housing, or other needed facilities.

(6) Production equipment for government-owned plants: This estimate is based on the fact that the equipment at Government-owned plants is in general in fairly good condition and reasonably complete. However, certain shortages exist and some process lines will of necessity need replacing.

(c) Expansion of privately owned industrial facilities (other than equipment) : This includes such items as additional power resources, lighting systems, additional transportation facilities and other facilities, provisions of facilities designed to provide necessary security measures, modification of facilities to enable expansion of the labor force and in general, such revisions as are required for rapid production of war material and which are of little or no value to the contractor in peacetime operations.

(d) Production equipment for privately owned industrial facilities: This includes cost of Government furnished equipment to enable contractors to produce items required and includes acquisition of new equipment and shipment, handling, renovation, modernization, and repair of items now in the departmental reserve.

7. It is planned to administer these funds in the same manner as was done in World War II, and which proved to be eminently satisfactory. Funds will be allocated to using services by specific projects which have, in each case, the approval of the Under Secretary of the Army. It is felt this procedure will prove adequate and efficient supervision and insure that governmental funds are properly administered.

8. The appropriation of this $125,000,000 by the Congress will enable the Army to gear its production to the needs of the combat troops under the present emergency, and I earnestly request the appropriation of these funds.

Briefly, Mr. Chairman, this is a request of funds to expedite production of equipment, and it is based upon the historical record, a record of its use in World War II; it is predicated upon the history at that time. It is to be administered by the Under Secretary of War, as it was by Judge Patterson in World War II; 90 percent of it will go for ordnance.

Mr. Mahon. To expedite production ?
General CHRISTMAS. To expedite production.

Mr. Mahon. And produce the ordnance which may be needed for the Korean conflict?

General CHRISTMAS. That is right. And it will go for capital expenditures, what the businessman calls capital expenditures. For instance, when we are dealing with a private contractor, for capital items which we cannot expect him to pay. If, for example, security requires a fence around his plant, we cannot expect him to be interested in that; or for new machine tools for which he may have to change.

Mr. Mahon. Do you have experienced men who will know how to administer this program in such a way as to get value received for the dollars expended ?

General CHRISTMAS. I believe we have. For example, we have people in my office, graduates from the Harvard Business School, and men with other training which will equip them, I believe, to do this job.

They would have to make these requests upon the Under Secretary; it is not allocated to the individual technical services; they will have to come up with a justification for it.

There would be some of this money also used in bringing in the stand-by plants, those which we need in support of this program. It will not be used for overtime nor night shifts, or things of that kind.

Mr. MAHON. Any questions, gentlemen!

Mr. ENGEL. Would you have any objection to inserting a clause in the bill requiring the Secretary of Defense to report the expenditures under this item quarterly to the chairman of the Appropriations Committee and to the ranking minority member?

General CHRISTMAS. No; there would be no objection to that. We think we should report it.

Mr. ENGEL. I do not like to turn $125,000,000 over in the form of a blank check without knowing at least what is being done with it.

(Off-record discussion.)

Ì think there should be included a clause requiring you to make a statement to the chairman of the Appropriations Committee to the ranking minority member—to the chairman of this subcommittee and the ranking minority member, showing just what has been done with the money. That should be done quarterly.

General CHRISTMAS. Personally, I see no objection to that. General Decker is the man to pass on it.

General DECKER. I have no objection.
Mr. Mahon. Thank you very much, General.
General DECKER. I have nothing further to offer, Mr. Chairman.
Mr. MAHON. If we need to get additional information, we can get

it from you.

General DECKER. Yes; I shall furnish anything the committee may desire.

THURSDAY, JULY 27, 1950.

DEPARTMENT OF THE NAVY

WITNESSES

HON FRANCIS P. MATTHEWS, SECRETARY OF THE NAVY ADMIRAL FORREST P. SHERMAN, CHIEF OF NAVAL OPERATIONS REAR ADM. H. G. HOPWOOD, DEPUTY COMPTROLLER

Mr. MAHON. We will resume our hearings.

We have with us the Secretary of the Navy and other representatives.

Before hearing you, gentlemen, we will insert the appropriate portion of House Document No. 657.

(The matter referred to is as follows:)

DEPARTMENT OF THE NAVY

"Military personnel, Navy”, $425,489,000 ;
“Navy personnel, general expenses”, $19,016,000;
"Military personnel, Marine Corps”, $128,395,000;
“Marine Corps troops and facilities”, $149,766,000;
“Aircraft and facilities”, $149,078,000 ;

"Construction of aircraft and related procurement”, $646,269,000, to remain available until expended : Provided, That the aircraft procurement program established under this head in the Defense Appropriation Act, 1951, is increased by $646,269,000;

“Ships and facilities”, $483,748,000;

"Construction of ships”, '$160,000,000, to remain available until expended : Provided, That the limitation under this head in the Defense Appropriation Act, 1951, on the total obligations to be incurred for construction, conversion, or replacement approved during the current fiscal year is further increased by $160,000,000;

“Ordnance and facilities”, $216,077,000;

“Ordnance for new construction”, $25,000,000, to remain available until expended : Provided, That the limitation under this head in the Defense Appropriation Act, 1951, on the total obligations incurred for armor, armament, and ammunition, for construction, conversion, or replacement approved during the current fiscal year is further increased by $25,000,000;

"Medical care”, $16,431,000;
“Civil engineering”, $35,404,000;
“Service-wide supply and finance”, $163,562.000;

“Service-wide operations”, $29,794,000; and the limitation under this head in the Defense Appropriation Act, 1951, on emergencies and extraordinary expenses, is hereby increased by $1,143,000.

Gentlemen, we will be happy to hear from you in connection with the supplemental budget.

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