Mr. FLOOD. You had better add a word for the record.

Mr. MAHON. Apparently the best approach would be some sort of an air alert. We need much more authoritative, decisive and complete information than we have.

In discussing the matter of air alert I have reference to the proposal that we keep a certain percentage of the Strategic Air Command, that is a certain percentage of the aircraft, in the air at all times ready for war operation in the event of an emergency.

Mr. MCNEIL. We will try to provide it to the committee at an early date.

Part of the response ought to show what effect it would have on the readiness of the part of the force that is not airborne. That inight be a very important part of it.

Mr. MAHON. Give us the whole picture here.

(The information requested is classified and has been furnished for the committee's use.

Mr. MAHON. Off the record.

(Discussion held off the record.)

Mr. MAHON. The American people would like to have the assurance of a reasonable degree of security, especially at a time of world crisis. It has been said many times by officials of the Government, as I understand, that at this time we are not able to detect the approach of an intercontinental ballistic missile, much less shoot it down. Therefore, it is a perfectly valid question as to how we can better protect ourselves during this period.

(Off the record.)

Mr. FLOOD. To show you how important I think the interrogation you have just posed is, I would like permission to insert following your statement a statement which I issued yesterday on precisely this very thing, for the record at this point.

(Off the record.)

Mr. MAHON. The statement will be included, and give us for the record anything which is appropriate, and give us for our own use any further information which may be classified.

We have raised this question with the Secretary of Defense, Mr. McElroy; with the Secretary of the Air Force, Mr. Douglas; with the Chief of Staff of the Air Force, General White, and others. So we do have a great interest in all aspects of this important problem. (The statement referred to follows:)

Congressman Daniel J. Flood, Democrat of Pennsylvania, today demanded steps be taken "to get SAC off the ground and one-third perpetually airborne as a minimum essential of defense for national survival."

Flood said the American people had the mistaken impression, through no fault of their own, that the Strategic Air Command, operating B-52's and B-47's, representing our "Sunday punch" presently, has one-third of its planes aloft at all times in a state of operational readiness.

"Nothing could be further from the truth," Flood remarked.

The Pennsylvanian, a member of the Department of Defense Subcommittee of the Committee on Appropriations, gave it as his opinion that the United States "is wide open" when it comes to a "surprise military attack." Flood said, "Our big bombers are like so many sitting ducks to an enemy that has intercontinental ballistic missiles operational."

Contending that our present defenses indicate "we have learned preciously little from the Pearl Harbor attack that wiped out our Pacific Fleet in 1941," Flood asserted, "Our failure to keep at least a third of SAC always airborne is a virtual invitation to a trigger-happy enemy to spark off world war III with nuclear missiles."

Flood called on the administration to submit a new emergency supplemental appropriations bill immediately to give SAC the funds necessary to keep the bombers aloft and dispersed, or to make a transfer of funds from other accounts without delay so this vital defense step can be activated. He said he would be glad to assume responsibility for introducing the legislation and "to stay with it until enactment as an additional supplemental appropriation or as an amendment to the 1960 appropriations bill."

"It is an ironic and regrettably dangerous development which finds the American people being deceived by propaganda not denied officially that SAC at all times has one-third of its big bombers roaming the skies around the world. Our people have been led to believe that these guardians of the air on duty 24 hours a day, needing only the word to discharge nuclear weapons. Such is by no means the case. The administration knows it isn't so; the Pentagon knows it isn't so, and certain congressional committees know it isn't so. But the sooner we make it so the better, and curing the deficiency can't come too soon," Flood stated. Describing the situation as one of "massive deception and unreasonable neglect in the atomic age, when the Soviets are brandishing their missiles," Flood warned "continuance of this sorry condition is setting the stage for another Munich. This is the sort of thing that encourages Khrushchev to adopt his bullying tactics toward the West. If it continues uncorrected, one of these days, and pretty soon, too, he will call the boys in and give them the bad news. It's getting awfully late and the price of our unpreparedness could be capitulation."

"Fortunately," Flood said, "there is time enough to repair the damage, but it is running out rapidly. We must act promptly and with decision. What is our wealth going to be worth if we lose our freedom? It is the supreme irony of history, as has been noted, that the richest country in the world seemingly can't afford to buy a defense system that will protect itself. The guardians of the national safety who are more concerned with a fictitious 'balanced budget' than they are with a defense system second to none have much to answer for. If they can't free themselves from their dangerous thinking, then the people must rally and demand the necessary steps be taken at once. SAC is a great outfitlet's get them into the air, and keep them flying."

Flood also called for the activation of selected Army reservists "so the country can be prepared for any emergency. We have what it takes to cope with any form of organized tyranny, but in these days of lightning warfare, it's forces in being and in readiness that count. Should there be another war, M-Day will be D-Day. We must be ready to go at the opening gun."

Mr. MAHON. Mr. Sheppard, will you take over the committee? Mr. SHEPPARD. In conjunction with what the chairman has just stated, one of the witnesses appearing before the committee prior to the appearance of you gentlemen was asked a question by the chairman, as I recall it about the possibility of keeping additional planes in the air, and his response was, as I recall it, "It would be to our general national advantage to do so under existing circumstances, but you gentlemen must keep in mind it would also encompass a very large expenditure." I want the record to show I am quoting this from memory and not from the actual statement.

So there undoubtedly is a distinction in the thinking of the military people on this subject. I do not think it is predicated on lack of interest in the defense aspect, but the limitations under which they have to work. I am familiar with those limitations. That is evident in the statement, as I interpret it.

Mr. MCNEIL. There is certainly no lack of interest, but the problem is not so simple as saying, "Fly three times as much." You have personnel, supply, warehousing, replacement aircraft, and so forth. You have to consider the whole structure.

Mr. SHEPPARD. It does encompass a very definite survey of the total picture.

Mr. MCNEIL. Together with the fact that if you do that, what effect does it have on the reaction time of the balance of your force?

I have heard this discussed pro and con at some length, although I am certainly not an expert on the subject.

(Off the record.)

DISPOSITION OF REAL PROPERTY

Mr. SHEPPARD. Mr. Secretary, I would like to refer to page 14 of your statement wherein you are discussing surplus and the manner in which it is disposed of. When I use the word "surplus" and when I interpret it, I take the picture as a whole. I mean by that the disposition of properties which have been declared excess to military requirements, et cetera. Am I wrong in my interpretation in going that far?

Mr. MCNEIL. I was speaking of personal property, not real property.

Mr. SHEPPARD. While we are on the surplus issue, I ask you this question because of the fact you have been connected with the military so long. What can be done to expedite the disposition of real property and physical assets thereon? This thing has not gotten off the ground, with due respect to everybody. It just has not.

Hypothetically the Army, Air Force, and Navy as of this time say, "We do not want this property, and survey it out." Then it goes into a terrific time element. I know it has to be cleared through departments, and I know that takes time. Is there not something which can be done to expedite this situation? The longer it stays in our inventory, the more dollars we are expending.

Mr. MCNEIL. That is correct. Of course, the first step, as you know, is to make a decision that the property is to be disposed of. That is the No. 1 problem and probably the most difficult. Once it is decided that it is not needed, it can be done, but there are still difficulties. It does take time. It is happening; but some of the disposals are difficult to handle, "politically," as you no doubt know.

I think the Navy had some experience with that this spring. Secretary Gates had to spend much of his time the first 2 months of this year on this problem because they had listed some 30 or 40 activities where activities would be reduced or eliminated.

Mr. SHEPPARD. May I ask the gentleman one question at that point? Does the gentleman feel from his long years of experience that we now have to adjudicate the requirements of the military service, insofar as its properties are concerned and its operational requirements, upon politics instead of cold dollars and cents? I want the gentleman to think about that answer very carefully, because now we have, properly so, a very generous exposé in the press about spending proclivities, et cetera. It might be well if we had the example set on the top level, administratively speaking, in getting some of these liabilities out of our hair, because the longer we keep them the more costly they are. If they are to be resolved upon a political premise, then of course, the whole disposal situation becomes what? Nothing but a merry-go-round. And it really has no intent.

Mr. MCNEIL. The fact is, there are so-called political pressures. I will broaden that statement, however, because the pressures are not just political. States, cities, and local chamber of commerce naturally bring pressure to keep activities going. Pressures of that type cer

tainly make it much more difficult to get a decision to eliminate or stop using the facilities.

Mr. SHEPPARD. The Chair hates to say this to his friend because we have been such warm friends. I do not want to place myself in an untenable position. But if we are to approach with any degree of sincerity and honesty the balancing of the budget, controlling our expenditures within our income, somewhere along the line somebody must have enough intestinal fortitude to do the job. Doing the job in the field we are presently inquiring into means somebody will have to say, "Gentlemen, I am sorry, this is it." We seem to be very lacking in that field of decision.

Mr. MCNEIL. I think I have to agree with you. However, I think you will find that there have been a number of decisions, probably more the last year or two than in any previous similar period since demobilization following World War II. Quite a number of them were listed and reported to you this year.

Mr. FORD. Mr. Chairman, the guilt in this situation, if there is any, does not rest entirely with the executive branch of the Government. This subcommittee and the Congress have been guilty in at least one instance where by law we kept a single installation open which the military felt should have been closed for reasons set forth not once but several times.

Mr. SHEPPARD. The Chair is fully conversant with the gentleman's comments and he is 100 percent right, but that does not obviate the responsibility, whether the responsibility rests in the Congress or in the executive department.

Mr. FORD. I agree on that.

Mr. SHEPPARD. When we evaluate the entire picture, the Congress has been guilty on at least three occasions that I know of as against 350 which still exist.

Mr. MCNEIL. As a suggestion it might be very proper as a part of these hearings this year or at some other period in the future to have us justify the facilties we retain for use or retain in a standby mobilization base.

Mr. SHEPPARD. I was not referring to that, because those things which are declared in standby mobilization I think are serving a useful purpose as against future potential expansion. I think that is absolutely necessary, and I think it is a good approach to it. I was addressing myself to the retardation of, first, the declaration, and then when the declaration is made, getting the thing out of our hair. It is taking all too long. When a declaration is made, it takes 18 months before it traverses the requirements through governmental departments within the District of Columbia, and in my opinion that is all too long.

Mr. MCNEIL. I think Mr. McGuire has done a pretty good job the last couple of years of getting the program for disposal of personal property into high gear. Certainly more progress than we have had before.

DISPOSITION OF PERSONAL PROPERTY

Mr. ANDREWS. Mr. Chairman, may I ask a question about the disposal of surplus?

Mr. SHEPPARD. You may.

Mr. ANDREWS. On page 14, Mr. Secretary, you say

With major procurement continuing at over $15 billion per year-and with but normal peacetime loss or usage—material with an acquisition cost of perhaps $10 billion or more must be disposed of annually if inventories are to be kept reasonably "clean.'

Do you mean by that you are buying $15 billion worth of inventories. a year and disposing of $10 billion?

Mr. MCNEIL. In the procurement accounts for major equipment, the appropriations year after year for the last 7 or 8 years have been and probably for the next 2 or 3 years will be above the $15 billion level. For example, consider aircraft, ships, tanks, trucks, all other types of equipment. During their normal life, say 5 to 8 years for aircraft, some of them will be lost by accident. In the case of ammunition and missiles some will be fired in training and therefore are "consumed." Perhaps two-thirds of such items may still be in inventory somewhere in the system by the end of their useful life. When you are running at a $15 billion level, disposal of material with acquisition costs of about $10 billion a year has to be undertaken. That figure would of course include the acquisition cost of airplanes for example which may not have any resale value at the time they are scrapped.

Mr. ANDREWS. I think that is wrong if you are buying $15 billion worth of inventories a year and winding up with $10 billion worth of surplus. Is that year after year?

Mr. MCNEIL. Year after year. That is the point which so many do not understand. This is a wasteful business, perhaps, but that is the situation. Take the B-52's, for example, which cost $8 million apiece. I do not know how long they will be in service, but let us say 7 or 8 or 9 years. At the end of the 9th year this piece of equipment with an acquisition cost of $8 million will be "washed out." True, we may salvage some of the parts and put some of the engines in storage for possible future use, but for the most part the value is gone.

Trucks, for example, may have a life of 10 or 12 years having been overhauled and rebuilt perhaps once or twice. While they still may have some life, they have only a fraction of the original value.

Mr. ANDREWS. I understand they are worth practically nothing when you get through with them, but it appears to me that is a pretty big figure for surplus, $10 billion a year out of $15 billion annual acquisition.

Mr. MCNEIL. That is the acquisition cost of material which will eventually be for disposal in one form or another.

Mr. SHEPPARD. Mr. Secretary, your statement about the control of your surplus I assume contains basic information on the operations of our respective stock funds, is that correct?

Mr. MCNEIL. Yes, sir.

MANAGEMENT OF SUPPLY INVENTORIES

Mr. SHEPPARD. I wish you would supply to the committee at the moment, if you have it available, and if not, supply it for the record, what particular group or groups are charged with responsibility for the continuous scrutiny of the inventory..

38515-59-pt. 4- -3