c l ?-'l',.,. e iv REF ID: A65359 e CSGLD/Bl . .?'°~ 

Lt Col HAwkine/6122/mval#?> 

3 Mar 49 .J~ .OD/ 1 

.... ,,_ PROPOSED REMARKS OF TD DIRBlCTOR OF :WGISTICS 

BEFORE COlfGDSSFISCAL YEAR 1950 BUDGET 

Gentlemen, I will outline some of the major features of the logistical support of the 

Army aa embodied in our esti~ates for fiscal year 1950. Ae you know, the detailed estimatee 

are contained in the budgets of the Technical Services and will be Justified later to you by 

the Chiefs of those Services. I would like to give you a eomewbat broader picture of tne 

logistical situation tban &.!1.f of th.e Chiefs wUl present. 

The logistical functions in support of the A-rmy and in partial support of the Air Force 

are these~ 

Research and development. 

Medical service including hospitalization. 

Operation of supply depots and other supply facilities. 

Real estate activities. 

Transportation and communication servicea. 

Operation of ports of embarkation. 

Demilitarization of. materiel. 

Maintenance and ope'ration of facilities. 

Procurement of supplies and materialR. 

Maintenance of equipment. 

Procurement of equipment. 

Industrial preparedness. 

Construction of facilities and housing. 

I will touch on each of these functions briefly, deecri'bing our plans for fiscal year 

1950 as set forth in the supporting.estimates. 

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.RESEARCH AND DEVELOPMENT 

You have heard the excellent presentation by Dr, Karl Compt~n. Chairman of the Research 

and Development Board, on the subject of research and development activities in the National 

M111 tary Establishment. · You are well acquainted with the absolute necessity for a comprehensive Army research and development program as the one means of maintaining the technical· 

superiority ot our land forces • 

. For fiscal year 1950 we are requesting about $111~6 million. This is an increase of 

about $7.8 million over fhcal year 1949 funds of $103.s million .shown in the President 1 1:1 

budget. This increase is attributable to several factors, which I should like to discuss 

off the record. 

(011 THE :RECORD REMARKS) 

Last year your Committee authorized funds_ tor establiahing the Army•~ General Research 

Office. This office, now called the Army Operations Research Office, has been established 

under contract with The Jo~s Hopkins University. Dr. Ellis Johnson has been in.stalled a.IS 

Director and. a nucleus of his staff recruited.. Thie represents the Army 0 s first opportunity 

to enter the field of "Operations Researchn or .

00perational An8.lysis" and is the Army counter~ 

part of the Navy's Operations Evaluation Group and. the Air Force 1 s Project BANDo Five high·· 

priority Army problems have been assigned to this office for solution while two others are 

being formulated for presentation. .Examples of these problems are:· detel"lllining the optimillll 

weapons system for antiaircraft defense and deviaing the most auitable materiel and techniques 

for use in psychological warfare. We feel an excellent start b.as been made and. the A.rmy 9 

and other Departments as well, will profit materially by the scientific analyses of our past 

weya of doing th.1nga in order to find out how to do them better. Included in The Q.uarter~, 

master Generaits request for funds is $2.08 million tor continuing and expanding the work 

of the Operations Research Office in fiscal year 19500 

The $lllo6 million requested in fiscal year 1950 for research and.development amount to 

2~ ot the National Military Establishment 'research and development budget already discussed 

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. ,by Dr •. Compton and repres~nts .only a:bout 2 .4% of the to~al Army budget for fiscal year 1950. 

The latter figure should be compared with the 4 to 5% usually allocated to research and 

·development by industry. I am sure that nowhere can so few dollars return such great divi·""' 

dends as in the research and development program. 

MEDICAL SERVICE INCLUDING HOSPITALIZATION 

Moving on the chart to the next logistical expendlturep there is an increase in the 

fu.nds requested for medical service because the present shortage of doctor.a and dentists 

. in the A.riny compels us to utilize civilian practitioners for some of. the care of our personnel. Costs of this were estimated at curre.nt·civil rates. 

OPERATION OF SuPPLY DEPO~S AND OTHER SuPPLY FACILITIES 

We plan· to continue operation of 75 depots •. This number remains ·relatively fixed for 

two reasons: first, all a.re sufficiently full to operate efficiently and to make evacuation of any an unduly expensive procedure; second, it seems unwise in the present international situation to weaken the +ogistical supporting system by.closing any depots •. The 

, . 

. operation of the depots will be about the same as in 1949. 

REAL ESTATE ACTIVITIES 

Our. real estate activity for the Regular'Army will remain about the same. It is interesting to note that wher~as funds required for rents and leases, disposal and.management 

of real property amount to ·about $14 million, the anticipated income to the Government from 

sales, permits, leases, etc., ·will amount to about $9 million. 

TRANSPORTATION AND COMMUNICATION SERVICES 

Communication aervice for fiscal year 1950 remains at the level of this fiscal year. 

We are now operating far below commercial standards in that regard. Funds for procurement 

of commercial communication service are very restricted. 

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The cost of transportation for the Army results from a mathematical calculation, knowing 

the tonnage and personnel to be moved and the unit price of movement. In carryill8 out occu-

· pation and 1 ts other missions, the Army. expects t~ move· a half-million persons to and from 

overseas points, t·o supply five million measurement tons of. cargo and to move three million 

short tone of supplies within the United ~tates. To do the job the Army will operate 43 

passenger vessels and 44 cargo ships.· The buik of the cargo.wili move in commercial bottoma 

the equivalent of the annual operation of 68 more ships. 

, 

OPEBATION OF PORTS OF. EMBARXATION 

In connection with our transportation overseas of personnel and cargoj we will continue 

to operate the port installations at New York, New Orleans, San Francisco and Seattle. The 

'scale of operation is at the 1949 level. 

DEMILITARIZATION, OF MATERIEL 

The sale and salvage of military suppliea, equipment and materiel is progressing satisfactorily. As you.know, $25 million was made available to the Department of the Army in 

1949 to carry out this pJ;"ogram and this fund. was derived from the sale or .salvage of ammunition and equipment which was demilitarized. because it no longer had. military-use or value. 

In the fiscal year 1950 the Army is asking authority to expend $22.5 miilion for this purpose, since we anticipate that a~ least. this amount will be derived. from the sale of scrap 

and. components resulting from this operation. During fiscal year 1949 the Army is receiving 

$2 for each.dollar expended in carrying out this operation and .it is. contemplated that thie 

·same ratio will be continued in fiscal year 1950. 

MAINTENANCE AND OPERATION OF FACILITIES 

I wish to present the funds for .new CQnstruction in connection with those for maintenance and operation of facilities. New construction is budgeted for in the amount o! 

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$12 million, which is within the remaining authorization for construction amounting to 

... 

$15 million. The Army will request additional authorizing legislation and, upon paasage, 

will ask for further appropriation for new construction. Of the .funds now requested, 

$9 million are for construction of family quarters; these will each have .l,080 square feet, 

the size authorized by Congress for non-commissioned officers. The remaining $3 million 

cover a barracks at Camp Lee, Virginia, and seven high-priority non-housing projectst four 

of which are for research and development and three for port operations in Alaska. 

In addition to the construction fundsp the Army requests in its mainte~ance and operation funds, $31 million to convert temporary barracks into family quarters on an austerity 

basis. Approval of the new construction and of this item will allow the Army to obtain 

6p54g more sets of family quarters. This is only a small fraction of its priority needs, 

but the effect will be very great. The serious effect upon the Army of shortage of family 

quarters cannot be over-emphasized. Large numbers. of Army personnel are being forced to 

.live under deplorable conditions and many of these are at the same time paying exorbitant 

rents. Others have invested their savings in houses at premium prices and will be forced 

to sacrifice these homes when they change station. Lack of sufficient housing has created 

a great morale problem for the Army. The Army is obligated to provide reasonable !acilities for keeping together the families of Army personnel, for most of our posts are constructed in locations wher.e the civilian communities are in· no position to absorb the 

numbers involved. 

Now with reference to maintenance of our facilities with the limited funds which we 

have been provided we have been able to perform what we call breakdown maintenance. This 

means that no repair is effected until the roof leaks and then only the part of the roof 

which leaks is patched. That is the ty:pe of maintenance vhich we have been able to provide 

·within the limited funds allowed us for our temporary buildings. since the war. Such mainte--

nance is costly in both short and long term.. Fersonal inspect,ion indicate~ that unles:s we 

improve the standard of maintenance of our temporary structures, ;hey will soon be beyond 

· repair. .Breakdown maintenance also increases operating costs. The water syst.em which leaks 

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into the ground uses water which must be paid for even though all the water taps on the post 

are turned off. Eventually one can operate the pumps and buy water without having it reacb 

the consumer. The funds requested in this budget are sufficient only to maintain our facili~ 

ties at this P!esent standard. The Chief of Engineers wiil justify these funds to you in 

greater detail at a later date. 

PROCUREMENT OF SUPPLIES AND MATERIALS 

The procurement of supplies and materials means the purchase of food, clothing~ spare 

parts, individual equipment for personnel, material for maintenance and repair and generally 

consumable materials. Included are the spare parts and materials used to maintain both fa~ 

.cilities and equipment. In this category of procurement we are at or below the 1949 level 

except in one fi~ld where the situation was so be.μ. that we had to provid.e additional funds. 

In our estimates for food we are relying upon a slight decline in prices. In the matter 

of many spare parts and materials, we are in a precarious position. It is true that after 

the war we had large stocks of parts. However, each year these stocks become exhausted 

in respect to more and more items and our need .for replacement funds grows. The Chiefs of 

Technical Services will explain in more detail the extent to which stocks have been exhausted. 

The stock levels of spare parts are inadequate in several categories of Ordnance. Tra.nspor--

tation • .Chemical and Engineer supply, but we have been able to make only a partial improvement in the most serious category of Transportation supplies. General Heileman, Chief of 

Transportation, will discuss with you this particular situation in detail. Much Engineer 

equipment must be deadlined for a long period when it breaks down because funds have not 

permitted stocking of necessary spare parts and delivery on spot-purchase cannot be effected 

quickly. 

MAINTENANCE OF EQ,UIPMENT 

Maintenance of equipment falls into two categories, maintenance of that which is in the 

hands of troops and maintenance of stock in depots. We will continue a reasonable maintenance 

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~f troop equipme~t and minimum in-stor~e maintenance of our stocks. ln our depots is . . . 

equipment needing repair.which is valued at more than $3 billion~ The cost of the repair 

required is little more than $600 million. ·0.:r that equipment, ve shall repair in 1950 

only that which is needed to issue to troops or to the reserve components, insofar as the. 

latter have appropriations with which to pe:i. This curtailment of our overhaul and rebuild. 

program, which wai l,au.nched with !heal year 1949 funds·, is acceptable ·on the basis that 

some iesuea will be made which will require overhaul and.r~build in. connection with the 

contemplated North Atlantic Pact or some similar foreign aid arrangement • 

.la y~u have been ~old, the Army iA fiacal year. 1950 will consist ot 10 divisions, and 

part ot their 1upporti11g troop1 and 1ervice1. The equipment in .the hande of thi1 force coate 

.. . 

about $4 billion new. The ave.race life -of thi_1 equipment· h estimated to 'be about 8. 7 years. 

Qn thie ba1i1, ve 1hould have $460 million a year in procurement of. new equipment merely to 

replace equipment a1 it wear• out. Actuallf we allc for fJ66 million in the1e estimates. 

!l.'hat h po111 ble because we are at the 1ame time udng up our depot etocka from the var. 

However, you muet note that in tllh proce1,1 we are con1tantly depleting ou~ war reserve. 

Al10. we very slowly modernhe the armament o! our personnel. 'we: are tr1ing to e!fect modernisation in th• moat economical wa,.v; namely, by ~Q¥ing improved materiel w~en a considerable 

replacement o! a &11'en 1 tem 11 nece1isar7. i'htii. we intend. to buy vast·l1 improved radio sets 

to fill exi~ting 1hortag11. iconomy ia 1erved only whe~ our purchaae o! any given item is 

in eu.fficient .quantity to 1ecur• the benefit• of· large-sc_ale production. ~n fiscal year 1950 

we plan to proc'D.re aut.omatic antiaircraft weapons for about 10 battaliona. !rhis is a gun 

·known a1 the. "S.lq1weep•r" - out1tandi11g and tar in ad.Tance ot any known simil~r weapon. . . . 

In thia !i1cal year 1949 we embarked upon a program.ot·modif1ing our medium ~26 tank to 

make it the !9Q.U&l or auperior of &n1 medium tank in existence. In these estimate.a we ask 

about $26.5 million to keep that production line going at the rate of about one tank a day. 

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REF ID·: A65359 

The re.sult will ·be less than our requirement.s for the. active Army, but it will prevent the 

costly experience of stopping.a production lirie and starting it up at a later dat'e. During 

this present fiscal year we initiated a program on a small scale to replace worn out tac.-. 

tical vehicles. ·1n this request before you, we are asking for funds to continue this re~ 

placement on a somewhat larger scale. With the exception of those on current procurement, 

the youngest of 'our military type trucks came off the production line in 1945. By the end 

of· fiscal year 1950 these will be six years old and by the time delivery of the vehicles 

here programmed is obtainedp our youngest vehicle will probably be seven years old. Re-

·member that the rest of our trucks are from one to three years older than these youngsters. 

·Such old trucks a.re not suitable to ship overseas with troops in emergency - they would 

break down under arduous service and put our men at a considerable disadvantage. We want 

t therefore to begin buying new trucks. for replacement at the same ·time that we a.re using up 

our· stocks of World War II vehicles. Included in our procurement are many lesser items in 

smaller amounts. Especially important is the procurement of serV'ice test models in small 

quantity •. By use of these we test ·out the results of our research and development programo 

Ilf.DUSTBIAL PBEPABiDNESS 

You see that because of our small procuremen~ program, we are depleting our war reserve. 

Also, because ve can afford to procure only a· few items each year, we are not keeping American industry familiar with the Ar~•s manufacturing needs and the know-how necessary to produce them in quantity by ma.es production method~ in an emergency. In t.hese circumstance.a, 

it is advisable and indeed imperative to devote considerable sums to measures of industrial 

preparedness. The be~t industrial preparedness is achieved by an orderly, sizeable, annual 

program of procurement as was so ably brought out in the .Fi.nletter Report, "Survival in the 

Air Age·" Since we cannot, ~fford such a program of procurement, we are asking a considerable 

increase in the funds devoted to industrial mobilization. 

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Mr .• Carpenter .• the Chairman of the .Munitions .Board. and other representatives ~ppeared 

before you the last of January and explained in de~ail the position of the National Military 

Establishment with respect to industrial preparedness. The Army indq.rses this program and 

we propose to implement our share. 

Part of our industrial preparedness consists of maintaining standby plalits and a partial 

machine tool reserve. The plants are concerned with manufacture of ammunition, explosives 

. and chemicals which are not required or readily manufactured by the civilian economy. The 

funds requested a.re to maintain these.plants in such condition that they can· be restored to 

operatton in a reasonably short time; there is no marked increase of funds in this categor;y 

of industrial mob(lization. The machine tools for the reserve have been hunt·ed down· and are , , •I 

being shipped into assembly points for storage. ·.The processing, storage and care ot these 

tools require further funds •. A very large increase has been asked in the funds devoted to 

working with. industry. Thus far 0 our work with industry has con.shted chiefly of obtaining rather cheaply preliminary plans as to production of military items. We should now 

proceed to more detailed and costly studies and, where necessary. to tooling up and even 

in some case.s to a small quantity production to test out the production techniques. Such 

planning measures are essential if industry is to be ready to. convert promptly to military 

production, as, for example. from an electric appliance plant to a. facility producing rocket 

launchers. The steps begin with planning by management and production engineers and progress to the design of jigs. dies, tools and fixtures. When the item is important and·the 

manutacturing process difficult, the planning may proceed to the physical acquisition of at 

least some of the special tools and fixtures required. It m~ be of such importance and complexity as to justify setting up the production li~e for a short run so that the efficiency 

of the pl~ing can be tested, and labor and management both given the essential know-how. 

The result of such carefully planned measures is that production to arm our forces 

in the event of war can be expected six months earlier in those fields which have been prepared than in similar fields where there has been no industrial preparedness. We buy time9 

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time that would enable our men to face an enemy confidently months • sooner than would otherwise 

be possible. A dollar epent in industrial mobili-zation will buy many times the manufacturtng 

-~ 

know-hdw of the same dollar spent in procurement. . 

In closing I should like to point out that we have carefully allocated the limited funds 

in these estimates to provide the best balance ~e could among the various functions which 

make up logistic support and to give emphasis: to the most imperative needs at the expense of 

essential but less important requirementa• 

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