- A 1 -

RECENT BUDGETARY PROBLEMS

Excerpted from: "United States Defense Policies since World War II," House Doc. No. 100, 85th Cong., 1st Sess., Nov. 1946.

VI. DEFENSE BUDGETS AND EXPENDITURES

One of the major benefits from the National Security Act has been the presentation of a single coordinated budget to Congress. Previously, the War and Navy Departments had presented separate budgets which not only had not been coordinated but usually were not related to any agreed national strategy. These budgets were reviewed by separate subcommittees and such coordination as was possible had to be achieved between these overworked subcommittees. There was no single official below the President responsible for national defense as a whole; therefore, no one to whom Congress could turn for official opinion as to how any particular program fitted into the overall concept of national defense.⁹⁶

Under the present system of unification, the Department of Defense submits a complete budget for which the Joint Chiefs of Staff have prepared recommended force requirements to meet the overall plans for our national defense. Each service prepares its own part of the budget, which is then reviewed in the Department of Defense where the budgets are coordinated to eliminate possible duplications and unnecessary items and to insure that they are in consonance with the approved national defense plans. Substantial cuts usually result in this process, to which the service chiefs may offer reclamations. Under the National Security Act, a Secretary of a military department or a member of the Joint Chiefs of Staff, after notifying the Secretary of Defense, may lay his case before Congress if he desires.

Congress has shown considerable interest in one aspect of budget preparation: the degree to which the request for funds reflects the views of military experts as to what is vital for the national security. Congressmen are well aware of the importance of balanced budgets and economy in operation; they also take to heart their constitutional responsibilities to provide the Armed Forces necessary to national defense. This often leads to searching inquiries as to whether cuts at the Department of Defense level are accepted by or forced upon the services and to what degree the Bureau of the Budget may be making military policy through budgetary revisions. Congress also has a related interest in what the executive branch does with appropriations, especially those funds which are for programs or extensions of programs in which the executive branch has shown a lack of interest.

A. DETERMINATION OF THE SIZE OF THE BUDGET

When the cost of providing for the force levels, which the military maintain they must have, is greater than the administration believes the national economy can afford within a given period, two courses of action are open: The force levels may be diminished or the period in

⁹⁶ Ibid., pp. 41, 42.
⁹⁷ Appendix D lists national defense expenditures for the fiscal years 1946 to 1956, inclusive.
⁹⁸ National Defense Establishment, op. cit., p. 60.

- A 2 -

64

UNITED STATES DEFENSE POLICIES

which they are to be provided may be extended or "stretched out." Either course tends to add to the calculated risk which we take with regard to our national security, though the second course is probably less dangerous than the first. If force levels are set and programs prepared and approved to meet those levels, in an emergency these programs can usually be accelerated to provide the combat-ready forces needed faster than where new programs must be prepared and approved, contracts let and tooling provided.

In the spring of 1946 the President called his military chiefs together and, during a discussion of the unification problem, informed them that, out of the national budget, $6 billion would be needed for interest on the national debt; of the remainder not more than a third could be used for national defense.⁹⁷ Following the policy recommended by the Budget Bureau, ceilings of $11 billion, $12 billion, and $15 billion were set by the administration for fiscal years 1948, 1949, and 1950, respectively. To bring the fiscal year 1950 budget under the $15 billion ceiling, the Director of the Budget Bureau proposed a reduction in air groups to 55, deferral of some important parts of the Navy program, and a reduction in Army materiel support.⁹⁸ The President supported this ceiling, although it was substantially below that which the Joint Chiefs of Staff and the Secretary of Defense had recommended.

The sudden eruption in Korea caused drastic increases in the defense budget and the Department of Defense found itself in the difficult situation of preparing a budget encompassing the fighting of a war and, at the same time preparing for something even more serious. Secretary of Defense Lovett explained it this way:

> We have never found a situation before in this country where we are fighting a war in Korea with one rate of expenditure; trying to provide initial equipment for three services as rapidly as possible; and at the same time trying to provide a mobilization system for vastly larger services.¹⁰

In defending the defense budget for fiscal year 1953, Secretary Lovett explained that to reach the state of readiness by July 1953, which the services desired, a much higher expenditure would have been called for than the Bureau of the Budget and the President wished, therefore there was to be a stretchout of the period in which readiness was to be developed.¹

Secretary Lovett stated:

The decision to build toward these goals rather than attempt to reach them in fiscal year 1953 or 1954 was made after careful consideration of the economic, material, fiscal, and military implications involved. The reduction from our initial request to the Bureau of the Budget was in line with these considerations and with an expenditure limitation as directed by the President.

The result was an approval of the military forces recommended by the Joint Chiefs of Staff and a determination by the President that expenditures for fiscal year 1953 for the Department of Defense and military end items financed under the Mutual Security Program should be less than $60 billion. * * *

With respect to the military situation, I believe it is fair to indicate that this buildup does not attain the number of units with modern equipment or the amount of mobilization reserves as early as the military chiefs, from a purely

⁹⁷ Forrestal Diaries, op. cit., p. 160.
⁹⁸ Ibid., p. 430.
⁹⁹ Department of Defense Appropriations for 1952, hearings before subcommittee of House Appropriations Committee, 82d Cong., 1st sess., Government Printing Office, 1952, p. 16.
¹⁰ Department of Defense Appropriations for 1953, hearings before subcommittee of House Appropriations Committee, 82d Cong., 2d sess., Government Printing Office, 1953, p. 59.

- A 3 -

65

military point of view, would consider desirable. However, the executive and legislative branches of the Government must of necessity give consideration to all the factors and to arrive at the balance which appears best for the long-term security of this Nation. The budget before you represents such a judgment by the executive branch of the Government. * * *

The attempt of the new administration in 1953 to balance the budget involved bringing the defense budget into the neighborhood of around $35 billion.³ A comparison of the new obligatory authority requested by the services with the President's allowance after review is set forth below:⁴

Total new obligatory authority requested

<table><thead><tr><th></th><th>Services' requests</th><th>President's budget allowance¹</th></tr><tr><th></th><th>Millions</th><th>Millions</th></tr></thead><tbody><tr><td>Fiscal year 1954</td><td>2 $41,280</td><td>4 $36,039</td></tr><tr><td>Fiscal year 1955</td><td>35,901</td><td>30,930</td></tr><tr><td>Fiscal year 1956</td><td>37,397</td><td>32,360</td></tr><tr><td>Fiscal year 1957</td><td>41,129</td><td>35,889</td></tr></tbody></table>

¹ After review by Department of Defense and Bureau of the Budget.

² Prior Administration request, after Department of Defense and Bureau of the Budget review, Jan. 9, 1953.

³ Present Administration request, after Department of Defense and Bureau of the Budget review, May 19, 1953.

Secretary Wilson explained the reduction in the fiscal year 1954 budget request (which had already been submitted to the Congress by the outgoing administration) on the basis that the procurement, construction, and training programs were somewhat out of phase and that there had been important slippages in some aspects of procurement, particularly in the aircraft program. The excess financing simply had been taken out of the program.⁵

When questioned relative to the prospective size of the defense budget for fiscal year 1958, Secretary Wilson, noting that the preliminary estimates of the services added up to over $48 billion, commented:

> I don't think our country faces anything like a $48 billion defense program * * * any such requirement would require some controls and partial mobilization * * *

Later, he agreed that both appropriations requests and expenditures for fiscal year 1958 might go up a billion or two.⁷

## B. UNOBLIGATED BALANCES

The matter of accumulated funds which have been appropriated for specific purposes but not actually obligated has troubled Congressmen, officials of the executive branch, and the public alike, especially since these unobligated balances for the Defense Department currently amount to nearly $10 billion. This concern is illustrated by the following colloquy which took place during a Senate hearing:

Senator ELLENDER. * * * As you may recall, last year I raised the issue as to the advisability of our—when I say our, I mean the committee—being asked

¹Ibid., pp. 89-90.

²Study of Airpower. op. cit., p. 1663.

³Ibid., pp. 1631-1632.

⁴Ibid., pp. 1632-1634.

⁵Ibid., p. 1671.

⁶Ibid., pp. 1794-1795.

66

to appropriate huge sums which are not actually obligated. For instance, in 1954, the amount of unobligated funds at the end of the fiscal year aggregated $15,706,808,000. In 1955, the amount was $12,815,170,000. Then in 1956—that is the fiscal year ending June 30—you will have unobligated money that you came in and asked for, not spent, not even contracted for, aggregating $9,834,895,000.

* * * Why is it that you have come to Congress in 1955, 1956, and asked for certain moneys, and then end up with huge unobligated balances? * * *

Mr. McNEIL. (Assistant Secretary of Defense (Comptroller) W. J. McNeil). * * * Both the Senate and the House have adopted a very fine policy of financing, when you buy a ship or aircraft, the complete ship or the complete number of aircraft. But you don't buy all of the pieces of each of these items at one time or even in the same year. You may buy the hull in the first year, place the contract for the propulsion machinery in the following September, in which case the obligation shows up the following year. * * *

Senator ELLENDER. Now let me ask you this: When you propose to build a ship, do you come here and ask the Congress for the full amount?

Mr. McNEIL. Yes, sir. * * *

Senator SALTONSTALL. The great dispute between the House and Senate committees was on the words "contract authorization" and when we eliminated the contract authorization at the insistence of the House, that meant that all the money for a Forrestal carrier had to be appropriated and gradually it was put under contract.

Mr. McNEIL. That is right.

Senator SALTONSTALL. The parts that were not put under contract were the unobligated balances.

Mr. McNEIL. Yes, sir, and the same thing applies to aircraft. There you may buy the engines this year, and the airframes the following October because of their shorter lead time. You contract for 100 airplanes. It may be obligated over a period of 18 months, depending on the lead time of the articles. This is the cleanest way that has been developed to run the business, and I believe it is much better both for the Congress and for the Department of Defense * * * *

Section 1311 of the Supplemental Appropriations Act of 1955⁹ requires satisfactory documentary evidence before funds are to be recorded as obligated and it establishes criteria for such evidence. Since it may take a considerable period of time to prepare the necessary contracts or agreements and obtain signatures, the period of time when funds are in the obligated classification tends to be shorter than under the old system with resulting increase in the volume of unobligated funds.

While large unobligated carryovers tend to look bad on the balance sheet, they can hardly be avoided under the principle of providing complete financing at the outset of a program unless good business practices are cast aside. Department of Defense Comptroller McNeil gave his views on this during another Senate hearing:

Mr. McNEIL. * * * I think, myself, that the policy followed by the Congress in providing the funds to fully cover the cost of a specific number of aircraft or other major items is a proper method of financing, because you know what you have bought when you people approve the program and finance it.

I would hate to see us rush out and make contracts for components of items earlier than necessary, because under such circumstances you buy components that later you wish you had bought of another type. But I think the principle of financing the full and complete article is right. * * *

* * * For myself I think the planned carryover probably saves money for Uncle Sam. Yes; it looks bad to have large unobligated balances, but I think it saves money because otherwise you get so many things underway with the funds you have and then Congress and the Department of Defense as a whole is in the position of having to provide additional money to finish the various projects. * * *

⁹Department of Defense Appropriations for 1957, hearings before subcommittee of Senate Appropriations Committee, 84th Cong., 2d sess., Government Printing Office, 1956, pp. 23, 26.

¹⁰Public Law 633, 68 Stat. 800 (H. R. 9936), approved August 26, 1954.

- A 5 -

67

Senator ELLENDER. I am still of the view that this money when you found it unnecessary should have been returned to the Treasury and then be reappropriated, because if you abandon a project for which you received an appropriation, then it gives you the authority to proceed on another project of a different character if you desire.

Mr. McNEIL. That is possible.

Senator ELLENDER. But why should you be given that authority without coming back to Congress? That is why I said a while ago that this excessive amount of unobligated funds will lead to a lot of expenditures that may not be necessary.

Mr. McNEIL. In naval aircraft we are telling you that we have this buying program of $1,800 million to buy certain types and models of aircraft, that we have a $1,100 million so-called excess financing accumulated partly from cancellations, partly unused.

Now there are two ways to do it: (1) you leave the money right there, add $700 million to it, and you have approved the $1,800 million program; (2) you could rescind the $1,100 million and then appropriate the full amount of $1,800 million.

The result is identical, but we have not presented it in the first fashion. Maybe there is a better way, but we have not found it.

One thing this does with a continuing type of appropriation is to provide an incentive not to buy something until you have a pretty good idea that it is right.

Congress several years ago, as you all know, provided continuing type appropriations for this major procurement. Prior to that you used to find everybody spending every nickel that was given to them because it lapsed on June 30, and was not available for use after that. You found that it was used: You found that they would resolve the question of buying something or not, largely in favor of buying it, if they had the money because the money was not any good after July 1.

With the continuing type appropriation, we are now getting a philosophy into the Pentagon, which I think is good for Uncle Sam, that June 30 has no particular significance. If something is in doubt in May or June, rather than rushing to buy it, which used to be the case, now they don't buy it in May and June and may wait until August to make the decision. At that time, they may not buy at all, or may buy an article which is a little better than what they would have bought in June.

Intangible, yes, but yet a profit has been made for Uncle Sam * * *.

The end of hostilities in Korea left the Armed Forces, particularly the Army, with huge unobligated balances. Some $60 billion was rescinded by the Congress and much of the balance was finally reduced by using these funds instead of asking for new appropriations authority. Congress is naturally concerned that their will not be circumvented by the accumulation of a large amount of excess financing which might be diverted to purposes other than those Congress had intended.

### C. PRESIDENTIAL CONTROL OF APPROPRIATED FUNDS

For many years the law was not clear as to what extent the executive branch was entitled to hold appropriated funds in reserve rather than to spend them for the purposes for which they were appropriated. While appropriations are usually made directly to the Government departments, the President has had a measure of control through the apportionment of the rate of commitment of appropriations. Generally, the Bureau of the Budget accepted the apportionments recommended by the departments but there was a notable exception in 1948 when the President took measures to impound an appropriation of $822 million. Congress had voted these funds to increase the size of the Air Force to 70 groups, contrary to what the President had recommended.

¹⁰ Department of Defense Appropriations, 1956, hearings before subcommittee of Senate Appropriations Committee, 84th Cong., 1st sess., Government Printing Office, 1956, pp. 264-265, 268-269.

- A 6 -

68

This action by the President, which contravened the will of Congress, raised a question as to whether there may have been an infringement on the constitutional responsibility and authority of Congress to provide for the Armed Forces. The question was raised during a congressional hearing on a subsequent budget. Secretary of Defense Louis Johnson, who was testifying at the time, held the opinion that the President had acted within a right he held inherently as Commander in Chief of the Armed Forces.¹¹ Congressman Shepard thought that Congress might have to "write language in the appropriation bill with mandatory phraseology" as to the funds appropriated to insure that its desires would be met¹² but Secretary Johnson pointed out that this would upset good financial management since procurement is a lengthy process and you do not obligate funds any faster than needed to keep up with good contracting procedures. Congressman Engel thought it possible that the President had had the necessary authority to impound the funds under his emergency war powers.¹³

The question remained cloudy and was the subject of a recommendation to Congress by the Hoover Commission:

Present law and practice are not clear on whether or not the Budget Bureau and the President have the right to reduce appropriated amounts during the year for which they were provided. We recommend that it is in the public interest that this question be clarified and, in any event, that the President should have authority to reduce expenditures under appropriations, if the purposes intended by the Congress are still carried out.¹⁴

The General Appropriations Act, 1951, contains this language:

SEC. 1211. (c) (2) In apportioning any appropriation, reserves may be established to provide for contingencies, or to effect savings whenever savings are made possible by or through changes in requirements, greater efficiency of operations, or other developments subsequent to the date on which such appropriation was made available.¹⁵

This gives the executive branch the legal right to establish reserves but it still leaves room for debate in the event appropriations are put into reserves on the basis that "changes in requirements" made the appropriated funds unnecessary.

This point may become a matter of issue within fiscal year 1957. The Congress in June 1956 appropriated an additional $900 million, of which $800 million was for additional aircraft and related procurement. The conference report on the bill gave this reason for the augmentation of appropriations which the President had requested:

The committee of conference is agreed that the added funds should be utilized to expedite production of heavy bombers, tankers, and other essential Air Force weapons to the optimum limit of existing facilities. The managers on the part of the House place the Department on notice that the action taken in approving additional funds above the budget for aircraft and related procurement should not be interpreted as an invitation toward waste and loose fiscal procedures.¹⁶

During the Senate subcommittee investigation into United States airpower, Defense and Air Force officials were pressed as to what

¹¹ Department of Defense Appropriations for 1950, hearings before subcommittee of House Appropriations Committee, Government Printing Office, 1949, p. 55.

¹² Ibid., p. 57.

¹³ Ibid., p. 60.

¹⁴ Budgeting and Accounting, report by the Commission on Organization of the Executive Branch of the Government, Government Printing Office, February 1949, pp. 16-17.

¹⁵ Public Law 75, 81st Cong., 2d sess., ch. 896 (H. R. 7786), September 6, 1950.

¹⁶ Department of Defense Appropriations Bill, 1957, conference report (to accompany II. R. 10986), June 28, 1956, p. 4.

- A 7 -

69

their intentions were relative to spending these additional appropriations:

Senator ERVIN. Mr. Secretary, do you not construe the fact that Congress has appropriated $900 million in excess of budget requests as an expression of an opinion on the part of Congress that the planned rate of the construction of B-52's is too low?

Secretary WILSON. I don't interpret it as such. I interpret the matter as being an expression on their part that they don't want us to be limited by funds in that area. * * *

Later, the matter was raised again:

Senator SYMINGTON. I want to be sure about this $900 million, as agreed upon in conference between the Senate and the House.

"The Committee on Conferences agree that the added funds should be utilized to expedite production of heavy bombers, tankers and other essential Air Force weapons to the optimum limit of existing facilities."

Without getting into semantics, do you feel that language prevents you from putting in more machine tools?

Secretary WILSON. No; I don't think so, and we have other money appropriated that is flexible enough to adjust our programs in the best interests of the country, and that is undoubtedly what we will do.

Senator SYMINGTON. Do you believe that language would prevent you from making any minor plant expansion?

Secretary WILSON. I do not, and we have funds for minor plant expansions anyway.

Senator SYMINGTON. It says:

"The managers on the part of the House place the Department on notice that the action taken in approving the additional funds above the budget for aircraft and related procurement should not be interpreted as an invitation toward waste and loose fiscal procedure."

Well, now, if you wanted to raise the production of B-52's to 20 a month, which as you and I both know it will not be for many months to come, you could do that efficiently; could you not?

Secretary WILSON. That is what our plan is right now, to raise it to 20 a month.

Senator SYMINGTON. And if you wanted to raise it beyond 20 a month, you could do that efficiently, could you not?

Secretary WILSON. When you say "efficiently," I would rather say we can do it. Whether we can do it efficiently or not, I would want to discuss with the Boeing officials and so forth, because I have crowded them pretty hard as it is, and this last telegram really said that they are going to get 10 of them quicker than the Air Force had asked them to do, and because I have been insisting on doing it, so I have crowded them a bit already."

The matter was again raised when General Twining was testifying:

Senator JACKSON. Is there any sound reason * * * why we should delay and postpone and stretch out our procurement of B-52's? The usual argument given is that we have got something else coming along. Let's don't get loaded down with a lot of obsolete delivery systems.

Forgetting ballistic missiles for a moment, because their timing is uncertain, at least the ICBM, I am unable to follow the logic of a delay in the procurement of B-52's. Why should we not get them as fast as possible

General TWINING. Well, I think the program that the Air Force has worked out on B-52's is a good, sound program.

Senator JACKSON. You think you will not have to go over 20 a month for B-52's?

General TWINING. No, sir; not the way we look at it now; no, sir."

At the conclusion of the hearing, Secretary Wilson sent a letter to Senator Symington, chairman of the Subcommittee on the Air Force, in which he set forth his intentions:

* * * I stated at the hearing, and now repeat, I do not propose to impound the funds and I propose to carry out the intent of Congress, subject to the limiting

17 Study of Airpower, op. cit., p. 1715.

18 Ibid., p. 1780.

19 Ibid., pp. 1822-1823.

- B 3 -

M28

MESSAGE OF THE PRESIDENT

The gradual elimination of strategic fighter wings, which are no longer considered necessary, will be completed. The striking power of the Navy will be enhanced by the addition of new and modernized attack carriers, jet aircraft capable of higher speeds and higher altitudes, atomic submarines, and guided missile ships.

A second mission is to build a defense system which will minimize the chances of a successful attack on this continent. The Continental Air Defense Command has been assigned operational control over all forces and weapons made available for the air defense mission. The Command's radar warning network, extending from the central Pacific around the northern perimeter of North America and across the Atlantic approaches, will be largely in operation during the fiscal year 1958. The interceptor squadrons of the Air Force will be further strengthened with the delivery of still better aircraft, and the anti-aircraft missile capabilities of the Army will be expanded. The Navy's antisubmarine warfare capability is being improved to meet the threat of missiles launched from submarines.

A third mission is to maintain mobile and versatile forces suitably deployed and ready for immediate action in case of aggression. Army divisions are being reorganized into more flexible units supported with the latest atomic weapons and with aviation units. In addition, the Army will increase the number of atomic support commands which are particularly suitable as back-up for the ground forces of allied countries. Taking advantage of the greater firepower and mobility gained from the new units and equipment, the number of Army divisions will be reduced by one during the fiscal year 1958. The greater mobility and effectiveness of tactical aircraft coupled with the growing guided missile capabilities of the Army, permit a reduction in the number of Air Force tactical wings. The three Marine divisions and air wings are now equipped with a variety of atomic weapons and are continually improving their capability for amphibious assault operations.

A fourth mission, to maintain control of the essential sea areas and lines of communication in case of war, is primarily the task of the Navy, although the Air Force and elements of the other services have an important part. The modern ships, aircraft, and weapons being added to the Armed Forces are improving capabilities for performing this mission as well as the first three missions. As new ships are added to the fleet, older ships will be retired and the number of active ships in the fiscal year 1958 will remain about the same.

The means of accomplishing these basic military missions constantly change as new weapons are introduced. The Secretary of Defense recently issued a clarification of the basic roles and missions of the military services. It covered the use of aircraft by the Army; the adequacy of airlift; the development, procurement, and operation of

- B 4 -

MESSAGE OF THE PRESIDENT

M29

surface-to-air guided missiles; the operational deployment of intermediate range ballistic missiles; and the tactical air support of the Army.

New authority to incur obligations totaling 38.5 billion dollars for the fiscal year 1958 is recommended for the military functions of the Department of Defense. Expenditures are estimated to increase from 36 billion dollars in 1957 to 38 billion dollars in 1958.

DEPARTMENT OF DEFENSE—MILITARY FUNCTIONS COSTS BY MAJOR CATEGORIES

(Based on existing and proposed legislation)

[Fiscal years. In millions]

<table><thead><tr><th rowspan="2">Cost category</th><th colspan="3">Budget expenditures</th><th rowspan="2">Recommended new<br>obligational<br>authority<br>for 1958</th></tr><tr><th>1956<br>actual</th><th>1957<br>estimate</th><th>1958<br>estimate</th></tr></thead><tbody><tr><td><strong>Military personnel:</strong></td><td></td><td></td><td></td><td></td></tr><tr><td>Active forces</td><td>$10,666</td><td>$10,321</td><td>$10,824</td><td>$10,664</td></tr><tr><td>Retired pay</td><td>477</td><td>515</td><td>543</td><td>555</td></tr><tr><td>Operation and maintenance</td><td>8,519</td><td>9,100</td><td>9,598</td><td>9,847</td></tr><tr><td>Major procurement and production</td><td>(12,204)</td><td>(11,731)</td><td>(12,273)</td><td>(12,030)</td></tr><tr><td>Aircraft</td><td>7,146</td><td>6,786</td><td>6,737</td><td>6,232</td></tr><tr><td>Ships</td><td>917</td><td>928</td><td>1,040</td><td>1,555</td></tr><tr><td>Guided missiles</td><td>1,168</td><td>1,506</td><td>2,039</td><td>2,646</td></tr><tr><td>Other</td><td>2,973</td><td>2,511</td><td>2,457</td><td>1,597</td></tr><tr><td>Military public works</td><td>2,008</td><td>1,973</td><td>2,242</td><td>2,122</td></tr><tr><td>Reserve components</td><td>854</td><td>1,055</td><td>1,237</td><td>1,237</td></tr><tr><td>Research and development</td><td>1,495</td><td>1,540</td><td>1,580</td><td>1,651</td></tr><tr><td>Establishmentwide activities</td><td>211</td><td>354</td><td>401</td><td>394</td></tr><tr><td>Working capital (revolving) funds</td><td>-643</td><td>-589</td><td>-398</td><td></td></tr></tbody><tfoot><tr><td><strong>Total</strong></td><td><strong>35,791</strong></td><td><strong>36,000</strong></td><td><strong>38,000</strong></td><td><strong>188,500</strong></td></tr></tfoot></table>

¹ Compares with new obligatory authority of 33,187 million dollars in 1956 and 36,387 million dollars in 1957.

This budget provides for an average active duty military personnel strength for the fiscal year 1958 of approximately 2.8 million. The Army, Navy, and Marine Corps will hold to about their current numbers while the Air Force will be increased by several thousand men.

Operation and maintenance costs will rise in the fiscal year 1958. The larger number of bases and other installations and the growing complexity of new weapons systems, particularly guided missiles and aircraft, are the primary reasons for this increase.

Major procurement and production expenditures in the fiscal year 1958 are estimated to be 542 million dollars more than in the current year. Expenditures for guided missiles will be up 35 percent; for ship construction, up about 12 percent; and for aircraft procurement will remain at about the same level. Expenditures for all other types of major procurement are estimated to be about 2 percent less than in the current fiscal year.

M30

- B 5 -

MESSAGE OF THE PRESIDENT

EXPENDITURES FOR DEPARTMENT OF DEFENSE—MILITARY

The new obligatory authority needed for the Air Force procure-
ment program for the fiscal year 1958 is less than it otherwise would
have been because of the additional appropriations for this purpose
voted by the Congress last year. Together, these appropriations will
provide sufficient funds for Air Force aircraft and related procure-
ment in the current year and in the fiscal year 1958.

Expenditures for military public works in the United States and
overseas will be about 14 percent above the current year. This
budget provides for proposed legislation to authorize new bases
and facilities for continental air defense, for further work on dispers-
ing and improving heavy bomber bases, and for essential facilities for
naval operating forces.

Research and development will continue at the same high level as
in the current fiscal year. When the portions of appropriations for
procurement, military personnel, and public works which contribute
to research and development, testing and evaluation are also con-
sidered, the total devoted to these purposes will be somewhat more
than the 5.2 billion dollars programed for the current fiscal year. A
steady military research and development effort must be maintained
over the years to assure a constant flow of new and more effective
weapons for the future.

Expenditures for the reserve components will increase in the fiscal
year 1958. Major emphasis will be placed on improving the quality
and combat readiness of the Reserve Forces through modernization
of equipment and better selection and training of reserve personnel.

- B 6 -

MESSAGE OF THE PRESIDENT

M31

The overall quality and readiness of the Reserve Forces, already higher than ever before in the peacetime history of the Nation, will be even more effective by the end of the coming fiscal year.

*Civil defense.*—All levels of government have made encouraging progress in preparing for civil defense since the Federal Civil Defense Act was approved in 1951. These gains have been partly offset by the increasingly destructive capabilities of nuclear weapons. In the light of these developments, the administration will transmit to the Congress recommendations for amendment of the Federal Civil Defense Act which will enable the Federal Government better to meet its responsibilities. To achieve maximum results, civil defense must continue to be a cooperative effort with State and local governments. Individual and local initiative and resourcefulness must be our ultimate reliance during an initial recovery period.

This budget provides under existing legislation for extending civil defense programs for public education, information, and training, and for a larger Federal staff to give assistance to the States and cities. Appropriations are included for an attack warning system which will quickly transmit warnings from the Air Force to certain key areas. Stockpiling of emergency hospital equipment and radiological detection equipment will be continued; and a substantial program of research on radiological defense, on shelter design, and on bomb-damage assessment will be carried forward.

Funds for civil defense activities are included in the commerce and housing section of this analysis.

*Development and control of atomic energy.*—Until an agreement for limitation of armaments is negotiated and an effective inspection system is functioning, this Nation will continue to increase the number and variety of nuclear weapons. In the fiscal year 1958, emphasis will be placed on weapons for tactical purposes and weapons with reduced radioactive fallout. The substantial present effort to develop military propulsion reactors will be continued.

Efforts to develop the peaceful uses of atomic energy will be greatly increased, particularly the development of reactors to produce atomic power at competitive prices.

This budget provides for increased effort by the Atomic Energy Commission to explore new power reactor concepts, to fabricate and operate reactor experiments, and to develop the basic reactor technology essential to the Nation's progress and leadership in the field. Increased support will also be given to the growing activities by private industry and public power bodies in power reactor development.

In the belief that basic responsibility for construction of large-scale commercial power reactors should not have to be assumed by the

- B 7 -

M32

MESSAGE OF THE PRESIDENT

Federal Government, no funds for construction of new large-scale
reactors are proposed in this budget. A number of new proposals
from non-Federal interests are now being developed. However, if
acceptable proposals for non-Federal construction of promising reactor
types do not materialize within a reasonable time, a request will be
made to the Congress for funds for direct construction by the Federal
Government.

As a further and necessary step to facilitate industry's investment
in atomic powerplants, legislation will again be proposed to authorize
the Government to supplement commercially available insurance
against liability arising from possible nuclear accidents.

More resources will be applied to the longer term effort to develop
thermonuclear power reactors. Increased research is planned for
1958 on the problems arising from the numerous and extensive appli-
cations of atomic energy, such as reactor safety, radioactive waste
disposal, and the biological effects of radiation. At the same time,
support of research in nuclear physics and in new uses of atomic
energy in biology, medicine, agriculture, and industry will be strength-
ened. Also, the budget provides for increases in equipment grants
and in teacher training to improve education in nuclear technology
and to help alleviate the shortage of nuclear scientists and engineers.

In order to help other nations develop their own atomic energy
programs, the 1958 budget provides for training centers in the United
States and abroad, equipment grants, and other technical assistance
from appropriations for the Atomic Energy Commission and the
mutual security program. Four nations have already accepted and
many others are expected to accept the United States offer to share the
costs of building research reactors. A number of nations have indi-
cated interest in procuring power reactors in this country, and the
Export-Import Bank will consider applications for loans to finance
such procurement. The budget also includes funds for United States
participation in a second world conference on the peaceful uses of
atomic energy to be held in calendar year 1958.

*Stockpiling and defense production.*—By the end of the current fiscal year, the stockpile of strategic and critical materials, such as rubber, aluminum, copper, and nickel, will have reached a value greater than 6 billion dollars. Further acquisitions toward the stockpile objectives will be limited in most instances to (1) materials for which contracts have already been made; (2) materials which can be procured at favorable prices and which will serve to maintain the mobilization base; and (3) materials obtained in exchange for surplus agricultural products.

*Mutual security program, military.*—The armed forces of 38 countries receive military equipment and training through the military

MESSAGE OF THE PRESIDENT

assistance portion of the mutual security program. This assistance
bolsters the military forces of countries faced with a threat of external
aggression or internal subversion.

Military assistance plans for the fiscal year 1958 have been related
to the plans for this Nation's military establishment. As in the case
of United States forces, a large part of the funds will be used for new
types of weapons for air defense.

In the fiscal years 1957 and 1958, an increasing amount of military
assistance equipment is to be furnished on a reimbursable rather than
a grant basis. Changes in legislation will be recommended to facilitate
these sales.

The level of unexpended balances for military assistance will have
been reduced for 5 successive years. The Department of Defense
has made significant improvements in the operation of this program
in this fiscal year, especially in the timing of orders and the utiliza-
tion of funds.

The new obligatory authority of 2,450 million dollars recommended
in this budget for military assistance has been included as an appro-
priation to the President, as in previous years. Consideration is
being given as to what pattern of appropriations will best serve the
aims of the Government in providing military assistance.

MUTUAL SECURITY PROGRAM

[Fiscal years. In millions.]

<table>
  <thead>
    <tr>
      <th rowspan="2"></th>
      <th colspan="3">Budget expenditures</th>
      <th rowspan="2">Recommended new<br/>obligational<br/>authority<br/>for 1958</th>
    </tr>
    <tr>
      <th>1956<br/>actual</th>
      <th>1957<br/>estimate</th>
      <th>1958<br/>estimate</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td><strong>Military:</strong></td>
      <td></td>
      <td></td>
      <td></td>
      <td></td>
    </tr>
    <tr>
      <td>Present program</td>
      <td>$2,611</td>
      <td>$2,500</td>
      <td>$2,100</td>
      <td></td>
    </tr>
    <tr>
      <td>Proposed legislation</td>
      <td></td>
      <td></td>
      <td>500</td>
      <td>$2,400</td>
    </tr>
    <tr>
      <td><strong>Economic, technical, and other:</strong></td>
      <td></td>
      <td></td>
      <td></td>
      <td></td>
    </tr>
    <tr>
      <td>Present program</td>
      <td>1,587</td>
      <td>1,500</td>
      <td>1,150</td>
      <td></td>
    </tr>
    <tr>
      <td>Proposed legislation</td>
      <td></td>
      <td></td>
      <td>600</td>
      <td>1,950</td>
    </tr>
    <tr>
      <td><strong>Total</strong></td>
      <td>4,108</td>
      <td>4,100</td>
      <td>4,350</td>
      <td>94,400</td>
    </tr>
  </tbody>
</table>

¹ Budget expenditures for military assistance do not reflect proceeds from sale of military equipment previously procured with military assistance funds, since these proceeds go directly into miscellaneous receipts of the Treasury.

² Discussed in the International affairs and finance section of this analysis. Excludes investment guaranty program.

³Compares with new obligatory authority of 2,703 million dollars in 1956 and 3,707 million dollars in 1957, excluding investment guaranty program.

- B 10 -

DEPARTMENT OF DEFENSE—MILITARY FUNCTIONS
SUMMARY OF EXPENDITURES AND BALANCES

<table><thead><tr><th></th><th>1956 actual</th><th>1957 estimate</th><th>1958 estimate</th></tr></thead><tbody><tr><td colspan="4"><strong>EXPENDITURES</strong></td></tr><tr><td colspan="4"><strong>From new authorizations enacted or recommended in this document:</strong></td></tr><tr><td>Out of new obligatory authority:</td><td></td><td></td><td></td></tr><tr><td>Current authorizations</td><td></td><td>$20,487,338, 236</td><td>$21,359,508, 319</td></tr><tr><td>Permanent authorizations</td><td></td><td>5,772,809</td><td>5,500,000</td></tr><tr><td>Total expenditures from new authorizations enacted or recommended</td><td></td><td>20,493,111,045</td><td>21,365,008, 319</td></tr><tr><td colspan="4"><strong>From authorizations proposed for later transmission:</strong></td></tr><tr><td>Out of current authorizations</td><td></td><td>150,000,000</td><td>307,000,000</td></tr><tr><td>Out of balances of prior expenditure authorizations</td><td>$35,791,355,994</td><td></td><td>40,000,000</td></tr><tr><td>Total expenditures from authorizations proposed for later transmission</td><td></td><td>150,000,000</td><td>347,000,000</td></tr><tr><td colspan="4"><strong>Other expenditures:</strong></td></tr><tr><td>Out of balances of prior expenditure authorizations</td><td></td><td>15,850,207,365</td><td>16,562,876,681</td></tr><tr><td>Out of receipts and balances of revolving and management funds</td><td></td><td>488,708,083</td><td>244,159,000</td></tr><tr><td>Total other expenditures</td><td></td><td>15,361,499,282</td><td>16,318,717,681</td></tr><tr><td>Gross budget expenditures</td><td>35,791,355,994</td><td>36,004,610,327</td><td>38,030,726,000</td></tr><tr><td>Deduct receipts of public enterprise funds</td><td>478,060</td><td>4,610,327</td><td>30,726,000</td></tr><tr><td>Net budget expenditures</td><td>35,790,877,934</td><td>36,000,000,000</td><td>38,000,000,000</td></tr><tr><td colspan="4"><strong>BALANCES NOT EXPENDED</strong></td></tr><tr><td>Balances no longer available</td><td>2,469,855,141</td><td>870,319,351</td><td>57,920,966</td></tr><tr><td>Balances carried forward at close of year in—</td><td></td><td></td><td></td></tr><tr><td>Appropriations enacted or recommended</td><td>37,494,623,241</td><td>37,618,416,759</td><td>34,648,348,793</td></tr><tr><td>Appropriations proposed for later transmission</td><td></td><td>50,000,000</td><td>1,960,900,000</td></tr><tr><td>Contract authorizations</td><td>39,428,000</td><td></td><td></td></tr><tr><td>Revolving and management funds</td><td>2,663,144,518</td><td>2,013,904,967</td><td>2,108,634,967</td></tr><tr><td>Total balances carried forward at close of year</td><td>40,197,195,759</td><td>39,682,321,726</td><td>38,717,883,760</td></tr><tr><td>Net expenditures and balances</td><td>78,457,928,834</td><td>76,552,641,077</td><td>76,775,804,726</td></tr></tbody></table>

SUMMARY OF BALANCES NO LONGER AVAILABLE

<table><thead><tr><th></th><th>1956 actual</th><th>1957 estimate</th><th>1958 estimate</th></tr></thead><tbody><tr><td>Balances rescinded during the year by Congress</td><td>$1,659,279,517</td><td>$712,428,000</td><td>$50,000,000</td></tr><tr><td>Balances expiring and lapsing and adjustment of balances downward (net)</td><td>810,575,624</td><td>157,891,351</td><td>7,920,966</td></tr><tr><td>Total balances no longer available</td><td>2,469,855,141</td><td>870,319,351</td><td>57,920,966</td></tr></tbody></table>

* Deduct, excess of repayments and collections over expenditures.

485

400100-57—A11

# "Mystery Man of the Pentagon"

by Charlotte Knight

Reproduced, with permission, from Collier's. January 22, 1954, pp. 30-36.

Editorial Note: This journalistic description of the role and power of Wilfred James McNeil, the Assistant Secretary (Comptroller) in the Department of Defense, is pertinent to the consideration of the budgetary process.

Your attention is called to the following excerpt from the (Hoover) Commission on Organization of the Executive Branch of the Government, Report to Congress on Budget and Accounting, June, 1955: (p. 54)

"Our task force commends the creation of a Comptroller in the Department of Defense and the out-line of his duties as contained in Title IV of the National Security Act Amendments of 1949. They believe this to be a sound organizational concept.

"The Assistant Secretary (Comptroller) in the Department of Defense has had to deal with matters of operating policy beyond the usual responsibility of comptrollership. For example, the lack of a civilian screen in the Office of the Secretary of Defense on military logistics requirements, has resulted in reliance on financial controls exercised by the Comptroller as a substitute for such a screen. If the Assistant Secretaries of Defense who are responsible for the several functional areas of the Department's activities made a more searching review of the requirements under their respective jurisdictions, the Comptroller could be relieved of heavy responsibilities in a field which is not logically his."

## Article from Collier's follows:

### MYSTERY MAN OF THE PENTAGON

by Charlotte Knight

Every few years the Pentagon has a major war on its hands--sometimes on a global scale, involving foreign powers, and sometimes confined within its own five famous walls. Often the internal explosions generate almost as much heat as the world-wide conflicts; in fact, some old Pentagon hands contend, only half facetiously, that World War II and the Korean

- 02 -

war were merely campaigns sandwiching such really noisy battles
as the unification row of 1947 and the fierce Air Force-Navy
"B-36" fight of 1949.

Currently the big fight is the Battle of the Budget, which
has been waged with increasing bitterness since Budget Director
Joseph Dodge informed Defense Secretary Charles E. Wilson last
spring that several billion had to be cut from the 1953-'54
defense figures previously submitted to Congress by the Truman
Administration.

When it turned out that $5,000,000,000 of the total
$7,000,000,000 cut was to come from U. S. Air Force funds alone,
all pretense of service harmony went out the window; the fact
that the Army and Navy, in comparison, lost only about
$1,000,000,000 each--with the Army getting a supplemental
$2,000,000,000 for Korea--did nothing to smooth intramural
relations. Impassioned protests from air-power advocates ranged
from sober statements that the cut-back had critically imperiled
national security to stormy accusations that a vicious anti-
Air force bias was solely responsible for the nature of the
controversial cut.

The real target of the charges was not, as an outsider
might expect, Budget Director Dodge, nor Secreaty Wilson nor
his fiery, blunt deputy, Roger Kyes (who has had to take much
of the rap for the budget cuts). It was one of the Pentagon's
old-timers; a quiet, suave, virtually unknown assistant
secretary, Wilfred James McNeil, comptroller for the Defense
Department--who still insists that the cut was justified, and
that events will bear him out.

All during the turbulent weeks while the '54 budget was
being haggled over, I kept hearing about McNeil--the Pentagon's
Mystery Man. From friend and foe (and he has many of both) I
repeatedly heard such comments as these:

"Most important man in the Pentagon; he has more power
than the Chairman of the Joint Chiefs of Staff."

"He's the only really indispensable man here. Secretaries
of Defense may come and go, but no one can replace Bill McNeil."

"With McNeil, the Navy can do no wrong; the Air Force
can do no right."

"The Defense budget is the McNeil budget, pure and simple.
Wilson and Kyes are merely the front guys for it."

Who is this man who administers the spending of 60 per cent
of your tax dollar? Why is he so unknown? Is it true, as is
frequently charged, that he wields more power behind-scenes
than the Secretary of Defense, the Secretaries of Army, Navy,
Air Force and the Joint Chiefs of Staff together? If so, why?

- C3 -

And does he really have a pro-Navy, or is he the victim of unfounded rumors?

I set about to find answers to some of these questions, to try, if possible, to cut through the distortions that result from strongly prejudiced service views. I wanted to look at McNeil from mid-center. I interviewed officials of all three services--the people who know McNeil best, work with him most closely, admire him or have tangled with him--and then the comptorller's former bosses, fellow assistant secretaries, businessmen, employees, friends.

Almost immediately I discovered one reason this man remains a mystery outside the Pentagon: although everybody there is more than willing to talk about him for hours on end, virtually nobody wants to be quoted. Ever since the uneasy unification of the three armed forces, Defense Secretaries have repeatedly forbidden interservice squabbling in public. Fear of official reprimand has driven the bickering underground. Since any discussion of McNeil and the budget almost inevitably gets into the danger zone of interservice rivalries, even four star generals retreat behind the shield of anonymity.

Nevertheless, out of the scores of interviews emerged some facts and many opinions, most of them heated.

First, the facts. W. J. McNeil, to quote from an official press release, "is responsible for all budget, accounting, reporting, auditing, and fiscal activities of the Department of Defense." In short, he is responsible for administering all funds spent to run the biggest business in the world.

McNeil, now fifty-two, has been fiscal chief for the Defense Department ever since it was established in 1947. The top-ranking Pentagon holdover from the Truman administration, he is also the only key official who has served under every Defense Secretary we have had: James V. Forrestall, Louis A. Johnson, George C. Marshall, Robert A. Lovett, and Charles E. Wilson--a circumstance which unquestionably has contributed to the theory that he is indispensible.

McNeil is also a rear admiral in the United States Naval Reserve. At the height of the budget fracas, the Navy saw fit to bestow that rank on him permanently--an ill-timed move which, if it did not embarass McNeil, certainly furnished his critics with fresh ammunition.

McNeil, a yeoman in World War I, re-entered the Navy in 1941 as a lieutenant commander. In 1944, after he had risen to the post of Navy Disbursing Officer, he was made fiscal Director of the Navy department, a post he kept even after his release from active duty in 1945. Forrestal (then Secretary of the Navy), immensely pleased with McNeil's ability to squeeze water out of budgets, gave him general charge of all fiscal and management affairs of the Navy Dept., and announced that the assignment would be the

- C4 -

"top civilian administrative career post in the Navy." In 1947, he became fiscal boss of the entire Defense Establishment.

Opponents may argue that McNeil's past service connections disqualify him for a critical position one of whose main requirements should be impartiality, but all factions agree on one fact: Wilfred McNeil knows the money side of the vast, sprawling Defense enterprise better than any one else in the Pentagon.

"The man is unquestionably a genius in his technical fiscal field," concedes one of McNeil's bitterest enemies.

Others, while admitting his capabilities, aren't willing to go so far. "McNeil is good, very good," a former Defense official told me, "but he's not the genius he's cracked up to be. He's simply the only highly placed official in the Pentagon who has ever taken the trouble to learn anything about the budget, a dull subject at best."

It's also an incredibly complicated subject. McNeil, who started his working career as a small-town bank cashier, last year supervised the spending of about $45,000,000,000—several billion more than the combined volume of business of the country's dozen largest corporations.

But the Defense Department, operating the world's largest business, can't follow normal business procedures. It is hobbled by a variety of service traditions, prejudices, rights, privileges and immunities, and limited by some 480 separate pieces of legislation. The department employs nearly 5,000,000 people (3,500,000 of them in uniform) and must buy items ranging from bandages to soap, jet engines to C rations, pillowslips to military tanks—everything it takes to operate an Army, Navy and Air Force at home and overseas. The money has to be budgeted, justified to Congress, authorized, spent and accounted for. And even though the separate armed services have their own fiscal departments, sooner or later every expenditure for every operation or item of equipment gets channeled to McNeil.

When McNeil took over, Defense spending was an almost hopeless muddle.

"To carry out their responsibilities, the Army, Navy, and Air Force had to engage in a lot of different businesses," he says. "There were entirely too many fiscal masters; fiscal management was divorced from management responsibility; there were no clean lines of authority for responsibility and management; it was all diffused. Money and responsibility should parallel each other in any business operation — otherwise there can't be any tight reins on spending. If the man responsible for operating something has to account for where the money goes, he's naturally going to make sure it isn't spent for something it shouldn't be."

- C5 -

Today the military colossus has been fiscally streamlined, largely
owing to the efforts of McNeil. He is credited with drawing up the
fiscal reorganization plans for the Defense establishment which were
accepted by the Hoover Commission and later approved by Congress as
amendments to the National Security Act. The amended laws, under which
the department now operates, endowed McNeil with greatly expanded
authority and included a number of technical innovations. The most
important was a system of corporate-type financing intended to do away
with the multitude of separate, overlapping operations which formerly
existed.

The Defense Department now provides working capital for a number
of independent military businesses which furnish all three armed forces
with common services, such as shipyards, arsenals, printing plants,
and the like, thereby cutting duplication, waste and, of course, cost.
There are more than 40 such businesses so far, and McNeil would like to
see many more. The largest, and the one of which he's proudest, is the
Military Sea Transport Service, which combines all ocean-going transporta-
tion, both Army and Navy, into one business-like enterprise operating
on a revolving fund basis. McNeil claims the MSTS has saved the tax-
payers more than $150,000,000 annually, but he had to overcome some
opposition before he could set it up.

McNeil is used to opposition and takes it in stride. Nobody
loves the auditor in any business and the military establishment
is no exception. McNeil is, necessarily, a perpetual no man; it does
not make for popularity.

"Everybody always wants more money than he gets, so nobody is
ever really satisfied," Rear Admiral Edward W. Clexton, Director
of Navy Budgets, told me. "In the budget business you make sure
they don't get what they don't need. I take the view that it's my
money they're spending--and so, I'm sure, does McNeil."

Every fall the three services send their budget requests to McNeil--within ceilings which has previously imposed. From him, the requests go to the Secretary of Defense for review, and from there to the Bureau of the Budget. But first McNeil and his staff pore over the figures for several weeks, working all day and into the night, six days a week and often Sundays, trying to trim the fat out of the sums the Army, Navy and Air Force have asked for.

Their knives find little items and big. Such as $300 for a
chromium-plated saxophone (presumably as part of a project to
determine the feasibility of using chromium-plated saxophones as
opposed to the standard lacquered-brass types). Or $5,000 to install
a watering system on the golf course at Camp Carson, Colorado. Or
some 12,000,000 more gas masks than it was finally determined were
actually necessary.

During the year, members of McNeil's staff visit Army, Navy

- 06 -

and Air installations to detect financial leaks on the spot. When they found that the Supply and Fiscal Officer at the San Diego Naval Air Center was disposing of aircraft fuel cells as salvage at 26 cents each while another department was repairing the same type cells at a cost of $80, McNeil's boys cracked down. They also took action when they found the Air Force operating its own 280-bed hospital at Lowry Field, Colorado, just a few miles from the Army's 2,175-bed Fitzsimons Hospital, which has adequate capacity to care for Air Force patients.

Nothing escapes their fiscal scrutiny. They have asked some very awkward questions about airplane manifests, seeking to learn why, for example, field commanders ordered eight pinball machines marked "Air Priority" for shipment to Austria at a cost of $1,200 -- or why 32 electric organs were ordered air-shipped to Châteauroux France, at an estimated cost of $6,248. The commanders responsible are not likely to make similar requests in the future.

McNeil's aides say it's impossible to estimate the total savings that could be laid to the comptroller's blue pencil. But their figures indicate that the combined requests of Army, Navy and Air Force for the fiscal years 1950 through 1954 totaled roughly $273,511,000,000. By the time McNeil approved them, the sums had been reduced to $211,874,000,000. (Congress, incidentally, lopped off another $11,000,000,000.)

"It has always been McNeil's policy," Irving Roth of his staff told me, quoting the boss directly, "that 'anything which does not contribute to our military strength does not belong in the Department of Defense budget.'"

That's a sound yardstick -- but who's to decide what does or does not contribute to our military strength? McNeil's critics claim he's taken the job on himself, without proper consultation with the military experts. They don't dispute his right to rule that the national defense establishment can do without a $5,000 watering system for a golf course; but they hotly question his authority to decide that it can do without $5,000,000,000 worth of air power.

"The issue is much bigger than McNeil himself," a former high Defense official told me. "The dangerous thing is this increasing tendency for high-budget people, not only in the Pentagon but in the Bureau of the Budget and elsewhere, to try to control not just proper fiscal management, which is their job, but top policy as well."

Does McNeil go beyond his legal responsibilities as a comptroller?

McNeil, naturally, doesn't think so.

"The revised concept of fiscal management," he told me,

- C7 -

"forces the budget to examine the basic planning to see that the various facets of the program are in balance. There are times when the Secretary or the managers have to force a change with money. When you see that a service has forty-seven thousand too many technicians for the airplanes they've got, for instance, you decide they don't need all the personnel money they've asked for. When decisions are necessary, an analysis is made and is referred to the Secretary or the managers. Dollars represent the only real common denominator, since all programs of all departments cost money. The comptroller's office is the one place where all elements of the program come together for financing."

A high Pentagon general takes a different view of the job: "McNeil isn't content with being <u>comptroller</u>; he wants to be <u>controller</u."

"A comptroller's proper function," says another general "is to see that expenditures are kept at the austerity level appropriate for a government dealing with taxpayers' money. And McNeil has done a marvelous job in this respect. As a taxpayer, I'm grateful to him.

"But when he takes upon himself the job of 'distributing shortages,' as he did in the recent budget, he's going beyond his proper function. Consider the Air Force funds. A cut of, say, $ 500,000,000 out of the $16,700,000,000 Air Force budget approved by Secretary Lovett in January might be properly imposed by fiscal authority. But knocking $5,000,000,000 out of $16,700,000,000 takes him completely out of the field of simple austerity; then he's deciding strategy, make no mistake about it."

Thomas K. Finletter, former Secretary of the Air Force, told me: "A man as capable as McNeil in a comptroller-type function is, almost by definition, disqualified from making top policy decisions. To expect him to do so is like asking a C. P. A. to lay down the production and sales programs for General Motors. Yet, apparently, Mr. McNeil was an important participant in what I consider to be the most damaging decision to air power in the national defense of recent years -- the 1953 cutback of $5,000,000,000 in air power. This decision was a military and foreign policy matter of the highest importance. It was only partly an economic matter. It decided the force levels of the Air Force for many years."

In the final analysis, any proper attempt to evaluate the pros and cons of the McNeil question hinges on these three major considerations: to what extent is McNeil responsible for the way the cuts were made; is there a basis for charges of partisanship in connection with them; and, perhaps most important, were the reductions justified?

First, how did the cuts come about? Almost at the beginning of the new Republican administration it became clear

- 08 -

that any attempt to live up to campaign promises of reduced taxes
and a balanced budget would mean severe slashes in both foreign
aid and defense spending. After many studies instituted by the
National Security Council, the Bureau of the Budget passed on
to the Department of Defense certain fiscal "guidelines," telling
how much had to be cut, but not where; that was the responsibility
of the department. The three services in turn were told to
submit budget plans within these guidelines.

What followed is best told by Wilson's own testimony before
a Senate committee last summer. Wilson's account was immediately
picked up by McNeil's critics as definite proof that it was a
McNeil budget. From the records of the Senate hearings:

SENATOR LISTER HILL: As I understood what you said here, you and Mr. Kyes and Mr. McNeil, with your staff, announced your final decision as to this cut without the advice of the Chief of Staff, United States Air Force, and his staff; is that correct?

SECRETARY WILSON: Mr. Kyes was here, and he will have to
answer that specifically.

SENATOR HILL: I was asking you. You had the primary
responsibility.

SECRETARY WILSON: I was in Europe. Before I left I had a
conference with the President and I told him what I thought we
could do. I did not divide it up between any number of wings,
between how much the cut would be for the Air Force or the Army
or anything else . . . We had a lot of figures, and we were
working day and night on them. Mr. McNeil here has been through
it so many times that he is really not so bad on the figures, in
getting them together. I do not know how he does it like he
does.

I went to Europe. When I came back I found some figures.
I went over them quickly. They were satisfactory to me . . .

Air Force Secretary Harold E. Talbott was asked at one
hearing what part he played, if any, in the decision to reduce
the Air Force goal from 143 to 120 wings:

SECRETARY TALBOTT: I would like to say, Senator Hill, if
I may, that it is not the province at the moment of the Secretary
of the Air Force and his assistants and undersecretary. I think
that is a military decision and one that must be made by those
who are competent to make that decision . . .

SENATOR HILL: Who made it, do you know?

SECRETARY TALBOTT: I wish I did know for sure. I do not.

Had Secretary Talbott been present at the session five days

- 09 -

later, Secretary Wilson could have enlightened him. "The two men that had the most to do with it," he said then, "are sitting on either side of me . . ." The men on either side were Kyes and McNeil.

McNeil doesn't disclaim his role in the slash, nor does he place the responsibility on Kyes or anyone else. He explained the cut to me this way:

"The Air Force was overfinanced in aircraft procurement, and analysis showed it. Within the general limitations imposed by the National Security Council, we realized we couldn't have all the force goals as set by the Joint Chiefs of Staff (21 Army divisions, 408 major combat ships for the Navy and a 143-wing Air Force), but we could have better defense than then existed. The Army and Navy had either met their goals or were very close to it. So the decision was made to freeze the Army goal at 20 divisions, and the Navy combat ships at 408. The Navy's air goal was cut back from 10,800 planes to 9,950.

"But with the Air Force, because of their slowness in reaching goals, because their program was out of phase -- for instance, the bases wouldn't tie in with the activation of units or type of equipment the activating unit had, and so on -- they had only 103 wings, only 93 of which had equipment. All the others were proposed wings. So it was decided to allow the Air Force to continue their build-up with an interim goal of 120 wings, which would be two to three times more effective."

You hear a lot about proposed -- or "paper" -- wings around Washington. Senator Stuart Symington, a former Secretary of the Air Force and perhaps McNeil's sternest critic in Congress, labeled the term "a simple manipulation: personnel is reduced because of not enough planes, then planes are reduced because of not enough personnel, or vice versa."

In a stormy TV debate with Senator Homer Ferguson, a vigorous McNeil supporter, Symington charged: "This idea of clipping the Air Force, first by holding the people back because you don't have the planes and then saying, 'You see, it is a paper wing, and then holding the planes back because you don't have the people and then saying, 'You see, it is a paper wing,' is like taking an automobile and first you knock a tire off, and then you crack the carburetor and then say, 'You see, it won't run so you don't need so much money for gasoline.'"

## Criticism of Secretary Wilson

Much has been made of Wilson's failure to consult the Joint Chiefs of Staff on the budget cut. General Hoyt S. Vandenberg, then Chief of Staff of the Air Force, testified before Congress that neither he nor the Air Force approved the reduction to an interim goal. Asked whether the Joint Chiefs had approved it,

-C10 -

Vandenberg said: "They have not. As recently as March, 1953, the Joint Chiefs of Staff stated to the Secretary of Defense that any reduction in the program of 143 wings to be attained as soon as practicable after fiscal year 1954 would increase the risk to national security beyond the dictates of national prudence."

Many Pentagon insiders claim McNeil made a serious tactical error by not advising Wilson to consult specifically with the Joint Chiefs before the air budget went to Congress. I talked to one critic who said, "It is difficult to believe that this by-passing of the Joint Chiefs was accidental. Their disapproval would have interfered with McNeil's objective of cutting back the Air Force and restoring the balanced-forces concept."

"McNeil has been opposed to the 143-wing concept right from the start," a former Assistant Secretary of Defense told me. "When the Joint Chiefs' 143-wing figure was set in 1951, McNeil said to me, 'Watch and see. It won't last.'"

McNeil's friends, on the other hand, insist he did urge Wilson to consult with the Joint Chiefs, but got nowhere.

If McNeil embarrassed Wilson on the Joint Chiefs issue, some Washingtonians say, he did his boss an even worse turn by endorsing the "better-defense-for-less-money" argument that was used to justify the budget cut. Explanation of the current budget took up weeks of Congressional hearings, more than 4,000 pages of testimony, millions of spoken and written words and an avalance of figures. After listening at some length to such Pentagonese as new obligational authority, unexpended balances, apportionments, overfinancing and the like, Senator Margaret Chase Smith, despite her familiarity with military affairs, had to ask for a glossary. "I am a little confused," she said.

Trying to cut through the confusions, Senator Smith asked Wilson: "How can you cut more than five billion dollars from Air Force appropriations, cut back the Air Force's strength to 114 wings" (by June, 1954) "and still say that the Air Force will be more powerful in 1954 than if the original plan had been followed . . . ?"

The question was put differently by another senator: If we can have better defense by cutting five billion, why don't we cut ten billion and make it twice as good?"

Former Defense Secretary Lovett has been quoted as saying: "The alternatives before America are to continue the full program as planned, in order to gain the security described as minimum by the Joint Chiefs of Staff -- or go for the harder dollar. But it is nonsense to say that you are doing both."

In the face of all criticism, McNeil stood his ground. As late as mid-December, 1953, he claimed that the Air Force would be unable to use even the money it received -- that despite the

- C11 -

$5,000,000,000 but the Air Force would find itself on June 30,
1954 (the end of the fiscal year), with a surplus of at least
$2,000,000,000.

His foes claim McNeil played an extracurricular role in
making the air-power slash palatable to Congress. They say
that Congressional illustrations of Air Force "waste" were
identical to those McNeil's staff was giving out to reporters.

Charges of Back-Door Tactics
---

McNeil has been criticized even more bitterly by top
Pentagon people who claim (as one man put it) that he
"deliberately lets the Air Force budgets go to Congress with
loopholes he's supposed to plug in his office -- and then tells
congressmen about the loopholes through the back door, making
the Air Force look bad."

McNeil flatly denies that he has ever intentionally left
a soft spot in the budget of any service. He agrees that he has
discussed budget matters with congressmen -- but points out that
the back door of Congress if customarily kept open to government
officials by lawmakers who are seeking information for their
own guidance which they can't get from the cut-and-dried pages
of the official budget.

Withholding funds approved by Congress for specific
purposes is another alleged McNeil tactic which has led to
friction. A former Air Force official related one incident he
still remembers with bitterness: "Congress had appropriated
some money for fiscal 1952 for air-to-ground rockets -- with the
approval of the Secretary of Defense and the Bureau of the
Budget. To get money which has been appropriated, it is
necessary to make what's called a request for apportionment.
That used to be merely routine. But in the last few years it
has been necessary to <u>rejustify</u> the original request to the
comptroller's office.

"In the case of the rockets, when we tried to get the
money already appropriated by Congress, McNeil's people said
they had reviewed the project and did not go along with it. We
never got the rockets."

Representative Carl Vinson, ranking Democrat on the House
Armed Services Committee, is reported to have had McNeil on the
carpet for similar actions, telling him in no uncertain terms
that the committee wanted a report whenever McNeil decided to
hold up items Congress had approved.

I tried to get at the core of the charge that McNeil is
prejudiced against the Air Force; understandably, it's hard
to pin down. To begin with, McNeil has a couple of strikes
against him. The first is his own service background, which

- C12 -

makes him a target for critical references to Admiral McNeil.
The second (for which he may be equally blameless) is the
inclusion in the Navy budget of a third supercarrier at the
same time that 23 wings were taken from the Air Force.

## Misrepresented by Columnists

Certainly McNeil is sensitive to references to his
partisanship; that was evident in my own long talk with him.
A short time before, he had attended the official retirement
ceremony for General Vandenberg, the outgoing Air Force Chief
of Staff. Neither Wilson nor Kyes was present; Washington
columnists called their absence a deliberate snub to the man
who had dared to speak his mind on the budget cuts, at the same
time charging the Defense Department with purposely sending
"the man Vandenberg hates most" -- McNeil -- to represent them.
McNeil has been quoted as saying that it was not his happiest
moment.

"That's not true." McNeil told me. "There are a lot of
fine people in the Air Force. I was invited. Why not go?
I'm not mad at the Air Force. I'd be in the wrong business if
I were.

"We have differences just as heated with the Navy, but you
don't hear about them. What I object to is that our differences
with the Air Force are often made into public issues by outside
groups. The Air Force Association puts out a lot of untrue
statements. And I've been told by Air Force people that the Air
Force wrote Yorty's speech for him." The reference was to a
bitter attack on McNeil made by Representative Samuel W. Yorty.

McNeil points out that, after all, he has a son who is a
pilot in the Air Force. Major Evan McNeil. He also has another
son, Wilfred James, who is a Navy jet pilot, and a son-in-law,
Lieutenant Ronald Deane, in the Army. "You see," he adds,
smiling, "complete unification in our family."

Around the Pentagon you'll hear that McNeil's staff of
50 is "loaded with ex-Navy officers." It isn't, although the
Navy is most heavily represented among the dozen top jobs.
Chief among the former naval officers is Lyle Garlock, deputy
comptroller, who was a lieutenant commander. Of the three key
Assistant Directors of the Budget for Army, Navy and Air Force,
one is ex-Army, one ex-Navy; the man handling the Air Force
section is a former administrative assistant in the Navy
Department. "Why don't you have an ex-Air Force person in that
spot?" I asked Garlock.

"We couldn't find anybody qualified whom the Air Force
was willing to let go," he replied.

A former top Defense official told me: "The real wrong
has nothing to do with McNeil personally. It is an institutional
wrong. The first error is having anyone as comptroller who is

CLC

- C13 -

closely identified with any service, Army, Navy or Air. Any-
thing he does is naturally suspect. The second flaw is the
absence of any continuity in the Office of the Secretary of
Defense except way down in the fiscal department. Any new
Secretary of Defense, unfamiliar with the intricacies of the
department, is forced to turn to the one man who's been there
long enough to have the answers -- in this case, the comptroller."

Said another observer: "When Lovett was here, McNeil
couldn't get away with what he does now. Lovett screened his
ideas, took the good ones -- and there were a lot of them --
and rejected the bad. With Lovett, McNeil came up against someone
who knew figures and knew the military better than he did.
Now he has free rein."

What is McNeil's reaction to all the criticism leveled at
him? In general, friends say, he is unperturbed. I asked
McNeil himself. "If you have a course of action, if you've got
convictions, you don't lose spirit," he said. "If the group
working with you is good, if you have confidence, as I have,
in their ability to dig up facts, if you feel your position is
solid, you can be immune to criticisms based on emotion.

"To make a decision based on facts, or influence a decision with facts is proper. To employ power just for the sake of it -- that is wrong."

McNeil's staff is fanatically loyal. They praise his own
devotion to his work, his willingness to support them, and his
unfailing patience.

The comptroller is at his desk every morning at eight
thirty, and leaves at any time from six to eleven. "I don't
recall his ever having left at five," said Garlock. "The staff
never questions overtime on Sundays, because the boss always
puts in more hours than anyone else. Mrs. McNeil says he was
always like this. She says he applied the same amount of
energy to his jobs with the Washington Post, or the bank or
wherever he worked."

## Some of His Earlier Jobs

McNeil was a bank cashier in Searsboro, Iowa, in 1920.
Later he became president of the First State Bank in Brandon,
Colorado, and then in 1926 returned to Iowa, this time as an
automobile distributor, and later as a promotion official for
the Des Moines Register and Tribune. He went East in 1934 and
worked in Hagerstown, Maryland, as a country division manager
for the Washington Post. In 1938 McNeil was made assistant
circulation manager of the Post and moved to Washington.
Although he was fired from this job in 1941, the Post had since
tried to hire him back at his own figure, according to reports.
McNeil, who now makes $15,000 a year, declined that offer (and
others even higher-paying from industry).

- C14 -

McNeil has a veritable passion for anonymity. "If you remain anonymous, you can get things accomplished," he said. He doesn't make the cocktail circuits, doesn't play golf or "much of anything." "What do you do for exercise?" I asked. "Turn the lights on and off," he said, "That's about it."

When asked once by a Pentagon press correspondent why he stayed in a job that required so much effort and paid so little money compared with what the comptroller might make in industry, McNeil answered: "I get paid $7.22 an hour for a front-row seat for the greatest show on earth."

But anyone in the Pentagon will tell you McNeil's role is scarcely that of a spectator, even from a front-row seat. He is on stage, front and center, as perhaps the most powerful member of the cast.

GOVERNMENT SECRECY AND NATIONAL SECURITY

by

Harry H. Ransom.

## Introductory

What is a proper government secret in the atmosphere of Cold
War? What types of information, if available to the public, would be
prejudicial to national security? How much should be disclosed about
United States capability and plans? How much should be revealed of
what is known to the Government about Russia's capability and in-
tentions?

The degree of disclosure of information possessed by government
officials has always been a moot issue for democratic governments.
United States information policies in the decade since World War II
have accentuated this problem to such an extent that the question is
asked whether the present degree of secrecy does not in fact endanger,
rather than foster, national security.

Contrasting views on current secrecy policies are well illustrated
by an episode occuring in the Fall of 1957.

## The Aviation Week Disclosure

The fact that the United States has been tapping Russia's missile
secrets for over two years by long-range radar based in Turkey was
revealed in the October 21, 1957, issue of Aviation Week. Here it was
told that missile detection and performance monitoring equipment based
in Turkey, has, since the summer of 1955, given precise information
about Russian testing of Intermediate Range and Intercontinental
Ballistic Missiles.

Some persons high in government considered this to be a harmful
disclosure of highly secret information. Most vocal among these was
Mr. Robert Cutler, Special Assistant to the President for National
Security Affairs. According to persistent press reports, Mr. Cutler
harshly denounced Aviation Week for the disclosure. His forum for
denunciation was an off-the-record meeting of the Commerce Department's
Business Advisory Council October 26 (1957) in Hot Springs, Virginia.

Mr. Cutler did not speak from a prepared text and no transcript
of remarks was made at this meeting. Press reports indicated, however,
that Mr. Cutler had been profoundly disturbed and angered by the
Aviation Week disclosure of United States radar tracking of Soviet
missiles tests. He later advised a Congressional committee (Moss
Government Information Subcommittee, House Committee on Government
Operations) that he had told Business Advisory Council members that

[1] Aviation Week, October 21, 1957, pp. 26-27.

- 2 -

"the publication of this story was in a category of things prejudicial to our nation and its people in the free world struggle for survival."/2

With apparent reference to the *Aviation Week* article, Mr. Cutler further stated:

> The deliberate publication of information classified as secret on the grounds of military security will, I hope, lead your committee and the Congress to examine existing law with a view to determining whether it effectively protects the people of the United States from public disclosure of information helpful to an opponent dedicated to destroying our individual liberties.

By the publication of data about the American missile-detection radar net in Turkey, the editors of *Aviation Week* demonstrated sharp disagreement with the Cutler thesis of information secrecy. Indeed, in the following week's issue of his magazine, the *Aviation Week* editor complained of President Eisenhower's "continued refusal to tell the American public facts on the Soviet missile program that scientific intelligence has been reporting to him for two years..."/3. The magazine's editor has suggested furthermore that the radar complex in Turkey by which this information was gained was a secret to no one except "the vast bulk of the American people."

## The Issue Joined

In this example, the issue of secrecy versus disclosure is joined./4 From where Mr. Cutler sits, as the President's right hand adviser on national security affairs and as the guiding force of the National Security Council's secretariat, the *Aviation Week* disclosure was a "shameful" thing and prejudicial to the national interest.

/2 The *New York Times*, November 25, 1957.

/3 *Aviation Week*, Editorial by Robert Hotz, editor, October 28, 1957, p. 21.

/4 As this is written (December 1957) similar controversy surrounds the question whether the contents of the secret but highly publicized "Gaither Report" should be publicly disclosed. In the Spring of 1957, Federal Civil Defense Administration proposed a $40 billion shelter program for protection against nuclear blast and radiation. Alarmed at the magnitude of the proposed expenditure, President Eisenhower asked for a study for the National Security Council. The (H. Rowan) Gaither Committee was appointed with the task of advising the NSC. The Gaither Committee soon discovered it necessary to consider the nation's overall defense posture and Soviet capabilities. Its estimate and the recommendations were submitted to the President and NSC in the Fall of 1957. This was a secret document and its contents were not publicly disclosed. "Leaks" to the press suggest, however, that the Report finds a decreasingly favorable power balance between the United States and Russia. Presumably the Report recommended radical changes in defense policy and expenditures to assure long-term national strength. To counter rumors about the Report's findings,

LC

- 3 -

From the vantage point of the editor of *Aviation Week* no disservice
to the national interest was seen. Indeed, too much information, is is
argued, is hidden behind the cloak of the government's classification
program. [5 The end result, for a number of reasons may be less national
security rather than more. Spokesmen for the press, and committees of
Congress -- notably the Moss Subcommittee on Government Information --
have joined in the chorus of protest against the degree of government
secrecy which has evolved with the Cold War. The scientific community,
also, has been particularly vociferous in the post-World War II decade,
protesting restrictions placed upon the free flow of information.

L5

the President's Press secretary on December 28, 1957, stated that
reports of American weakness at this time "are not true" and are
"completely contrary to the [Gaither] report" which "says just the
opposite." He gave no further details. The question remains acute:
Should the Gaither Report be disclosed to the American people?
In sharp contrast to prevailing practices, the Defense Department
gave elaborate publicity to the attempt to launch the first American
test satellite Vanguard on December 6, 1957. The detailed publicity
build-up accentuated the international embarrassment suffered by
the United States when the Vanguard rocket was an explosive failure.
Officials of the Navy apparently had strongly protested the deviation
from routine secrecy on missile test firings in the case of the Van-
guard rocket. Other sharp criticism was heard of the degree of
information given prior to this test. Information officials were
presented with peculiar difficulties in this case. In the first
place, Project Vanguard is, in a sense, a nonmilitary scientific
endeavor, associated with projects of the International Geophysical
Year. Secondly, it has been difficult to maintain secrecy for a
project which may be observed by "birdwatchers" (and newsmen with
cameras) on beaches near the test site in Florida. On December 29,
1957, the Pentagon's Assistant Secretary for Public Affairs, Murray
Snyder, announced that no advance official announcement will be made
about forthcoming test firings. This represents another reversal
of policy. The question remains: What information policy should
prevail in such a case?

- 4 -

THE NATURE OF THE PROBLEM

"A people who mean to be their own
governors must arm themselves with
the power knowledge gives. A
popular government without popular
information or the means of acquiring
it is but a prologue to a farce or
a tragedy or perhaps both."

James Madison [1822] (Letter to W. T. Barry, 4 August 1822)

"We have cloaked the operations of
the Executive Branch of Government
in veils of secrecy unknown to any
previous epoch of our history."

Walter Millis [1956] (Arms and Men, New York, 1956, p. 360)

The sharp contrast in the two quotations above -- one from the early 19th Century, the other from the mid-20th Century -- raises the question of whether the forms and principles of the Founding Fathers meet the requirements of national security in the nuclear-missile age.

A framework for balancing liberty versus authority is the genius of the American governmental system, as constituted by the Founding Fathers in 1787 and tempered by those groups within the separate states who insisted upon an early appendage of the Bill of Rights. Maintaining the liberty-authority balance is increasingly difficult in the nuclear age. Considerations of "national security" have placed ubiquitous restrictions upon the free flow of information -- the lifeblood of free government.

A major bulwark of liberty is an informed public. A high degree of freedom of information in science and its military application also is a prime requisite for progress. Democracy can be debilitated if leaders enshroud government operation with a "paper curtain." And scientific and military progress can be suffocated by rigid compartmenting of information. [6] But democratic government possibly can be destroyed in another way, namely by disclosing to a potential enemy, openly or inadvertently, information that may enable him to surpass, surprise, or deter us with modern instruments of force.

The central problem, then, is to discover precisely what information falls within this latter category. The issue often comes down to whether the external dangers of disclosure are of greater danger to national security than the internal dangers of secrecy. But there is also the

[6] Expert witnesses before the House Special Subcommittee on Government Information testified in 1956 that there would have been no atomic bomb if the security regulations of 1956 had been in force in 1939. See *25th Intermediate Report*, p. 9.

- 5 -

parallel problem of administrative practice, arising out of the
separation of powers system of government. Under the American system,
there is a dynamic conflict between the Executive and Legislative
branches and this conflict usually turns on the Congressional require-
ment for information which the President controls. The problem has
another dimension at a time when the United States is heavily involved
in collective security arrangements. Officials of the Executive branch
must now always consider the effect of the release of information upon
allied governments.

An Acute Pentagon Problem

Supplying the information required for representative government
is a problem peculiarly acute within the Department of Defense. Spending
two-thirds of the national budget and employing three-fourths of the
government's personnel (1957), the Department's activities have a
profound influence upon the lives of millions of Americans, upon the
industrial and scientific community, indeed upon the sum of American
society. If Department of Defense activities are of great concern and
significance to the American public, so are they of interest to a
potential enemy, who stands to profit by knowledge of the Department's
plans, equipment and operations.

In this age of possible jet-nuclear-missile warfare, some persons
argue that national security depends, as never before, upon successful
development of, and the security of, weapons systems which our science
and technology have produced. Unless advances (lead-times) in this
field are properly safeguarded, national security can be weakened. On
the other hand, it has been Congently argued that the more precise the
information about American military capability possessed by a potential
enemy, the more effective will be a policy of deterrence; the more
telling the threat of massive retaliation.

Dr. Vannevar Bush has summed up the problem as that of "distinguishing
between information which rightly and properly belongs to every man and
information which for the safety and security of every man must be pro-
tected."/7

Balancing Disclosure and Secrecy

The task, then, is to strike the proper balance between two
conflicting necessities of this era: (1) the need of the general public,
and of the scientific community, for information essential to the
exercise of self-government and for scientific progress, and (2) the need
to secure vital information from disclosure to a potential enemy.
Certainly there is no easy formula for achieving this balance. The
problem is magnified by the "Cold War" atmosphere of international ten-
sion producing an extended period in which the nation is neither at
peace nor at war.

7 Address before American Society of Newspaper Editors, April 16, 1948,
Washington, D. C.

- 6 -

Attempts to strike the balance between public disclosure and secrecy have taken the form of an elaborate system of classifying non-public information into three major categories, TOP SECRET, SECRET, and CONFIDENTIAL. By means of Executive Orders, directives and regulations, elaborate systems now also exist for prior review, censorship or clearance of information emanating from Department of Defense, the military services or associated agencies.

There are several dimensions to the problem of government secrecy and national security. There is the negative, or restrictive, information function. The basic issue here is what information should be withheld. By means of a classification system, administrative rules and regulations, and management customs and practices, information emanating from within the Pentagon is tightly controlled. In effect, this negative function is a form of censorship, under which certain categories of persons are privy to specified categories of information. The purpose of this function is to maintain a limited secrecy for information the public disclosure of which is believed to be unwarranted.

Secondly, there is the positive information function, which may be termed the propaganda function of the Pentagon, and of other agencies of national security. The issue here is what, and how, information should be released. The Office of Secretary of Defense, and the three armed services and their subordinate units engage in the systematic distribution of information through the public media regarding the role and mission of the various military organizations. Each of the armed services in 1957 was spending about $1 million annually directly on public information. The Office of Secretary of Defense in 1957 had a public information budget of half a million dollars. In addition, many man hours and dollars are expended upon legislative liaison and other forms of information. This is also true in other agencies concerned with national security, such as the Department of State, the Atomic Energy Commission, the Federal Civil Defense Administration.

A third category may be termed the passive information function. This would include responses to external inquiry, such as from Congress, the Press, scholars or from others seeking, on their initiative, information from the Department of Defense and other agencies.

This paper deals primarily with the negative, or restrictive, information function, with particular reference to military information. Negative and positive information functions are, of course, highly inter-related. A fine line sometimes exists, also, between information which can be classed as "military" and "non-military."

Most Pentagon officials accept the concept of classifying certain types of information in various grades, such as TOP SECRET or SECRET, for example. But some disagreement always exists as to what information

8. A number of other categories of classification also have been widely used, such as "For Official Use Only" and "Strategic [Technical] Information."

- 7 -

should be so classified. And there is the normal suspicion sometimes,
from the outside, as to the motives of those who classify certain
types of information. Some suspect that administrative convenience,
rather than reasons of national security, prompt the classifying of some
information. "When in doubt, classify," seems to be the rule.

Widespread dissatisfaction consequently has existed both within
and outside the national military establishment about public information
policy and its administration in the decades since World War II. If it
is difficult to fashion and apply criteria for grading specific
information among the TOP SECRET, SECRET and CONFIDENTIAL categories,
it is infinitely more difficult to construct an objective standard for
deciding whether information should be "classified" at all.

Information Policy and A Society of Competing Elements

Given the size, scope and importance of Department of Defense
activities; given the need of public information to the proper functioning
of self-government; and given the delicate power balance in international
relations, public information is a function abounding in thorny admin-
istrative problems. These are accentuated by a national setting
containing the following competitive components:

(1) <u>Two-party political system</u> of presidential-Congressional government, with those in control of the Executive Brance in competition, sometimes fierce, with the party out of power. This factor is magnified somewhat when one party controls the Executive and the other party organizes the Congress. Information is a vital weapon in the two-party, and Executive-Legislative, struggle.

(2) Service differences of opinion on strategy, force levels and weapons. Competition among the Army, Navy and Air Force for the budget dollar, particularly in our separation of powers system of government which fosters "end runs" to Congress, and "leaks" to the press results in considerable unauthorized public disclosure of military information. Unauthorized disclosure of this type, involving opinions as well as facts, have produced some of the biggest headaches to Department of Defense information security administrators. On the other hand, an Executive tendency to over-classify and to "gag" dissenting opinions accentuates the public's problem of securing truly vital factual information and opinion.

(3) Competition among members of the press often causes thorny problems for information security administrators in Department of Defense. Competition among newsmen for the "scoop" or the news "beat" is a traditional incentive of American journalism. Such competition is a guarantee of a free press. The journalistic fraternity has always

- 8 -

tended to advocate liberal government information policies and to criticize harshly the natural tendency to secrecy of executive agencies. [9] In time of war, however, journalists and editors have been generally cooperative with voluntary censorship programs and other restrictive arrangements. But in a time of "Cold War" we are in a "twilight zone" with no agreement on criteria for disclosure. There is also an inherent and healthy suspicion by the press that governments use the security excuse to hide "mistakes" as well as military secrets. [10]

(4) Competition exists among private industries which engage in mutual competition for defense contracts and maintain elaborate public relations programs and thereby tend to give out much information on weapons production to stockholders, in advertisements, in popular magazines, in business conferences, and in trade and technical journals.

(5) The requirements of scientific progress. By tradition, scientists are inclined to report the results of their experimentation. In this way results for here and there are pieced together, leading to further hypotheses and experimentation. This accumulation of knowledge is vital to scientific progress. Consequently the scientific community offers the loudest protests against narrow security measures which a majority feels are self-defeating.

Scientists have attacked existing secrecy regulations in harshest terms. Dr. Chauncey D. Leake, chairman of the Committee on the Social Aspects of Science of the American Association of Advancement of Science, has stated: "American scientists have been particularly harassed by ill-advised security regulations which have hampered their scientific activities, inhibited their scientific interests and given them a serious sense of anxiety and frustration." [11] Anyone doubting whether Dr. Leake speaks for a majority in the scientific community might examine the testimony and statements of a panel of leading scientists before the Congressional Special House (Moss) Subcommittee on Government Information, in March, 1956. [12]

One eloquent witness before this committee was Lloyd V. Berkner, president of Associated Universities and a specialist in geophysics and electronics. He surveyed what he believed to be the results of a policy of "excessive military security and restriction on information" in the decade since World War II. Important among these was his finding that "The free flow of knowledge of scientific progress on which really important creative ideas completely depend has been severely hampered."

[9] Such criticism has grown in recent years and the American Society of Newspaper Editors, American Newspaper Publishers Association and other groups have mobilized to combat restrictive policies.

[10] Recall the quip, "Doctors bury their mistakes, the bureaucrats and the military classify theirs."

[11] "What We Don't Know Hurts Us," The Saturday Review, January 4, 1958, p. 38.

[12] "Availability of Information from Federal Executive Agencies," Part 4, Panel Discussion on Scientific and Technical Information, Hearings, Subcommittee, House Committee on Government Operations, 84th Congress, 2nd Session, March 7 - 9, 1956.

- 9 -

Excessive secrecy, he argues, has backfired. While aimed at the potential enemy, the boomerang has returned to restrict American scientific progress. [13]

Recent Soviet technological achievements have tended to substantiate this argument.

Devising a workable and effective Department of Defense public information policy within this whirlpool of conflicting interests is indeed a challenge. After almost a decade of operation under unification (National Security Act of 1947) little satisfaction exists with information policy. Yet criticism of the system often is contradictory.

## Contradictory Criticism

On the one hand Secretary of Defense Charles E. Wilson in late 1956 expressed serious concern over recurring unauthorized disclosure of classified military information. He appointed a special committee in August, 1956 to survey the problem. [14]

A subcommittee of Congress, on the other hand, commented simultaneously that "the informational policies and practices of the [Defense] Department are the most restrictive -- and at the same time the most confused -- of any major branch of the Federal Government. ... the Pentagon may some day become no more than a huge storage bin protected by triple-combination safes and a few security guards." [15] A loud amen could be heard from large segments of the press, whose professional societies long have been critical of Executive informational policies, particularly in the Department of Defense.

In spite of Executive efforts in the past decade to regulate public statements by military and civilian leaders of the Department of Defense, considerable discretion has been left to them regarding informational contacts with the press. Note the following statement of JCS Chairman Admiral Arthur Radford as to the general policy prevailing in 1956:

> The Department of Defense gives discretionary authority or permission for interviews in the press. In other words, the Department's approach to the conduct of its information activities is predicated on the importance of an informed public for safeguarding our democratic form of government. Thus, the latitude given top officials in answering questions from the press and public is unlimited except for the responsibility to conform to the directives and guidelines set forth by the Office of the Secretary of Defense and the Departments of the Army, Navy, and Air Force which cover the release of or access to particular information. Senior officials are expected to use discretion and commonsense in responding to questions from the press and public so as to give information consistent with the national interest, and at the same time, so as to safeguard and protect classified information from the hands of a would-be enemy." [16]

[13] Ibid., pp. 752-754.

[14] See the Report to the Secretary of Defense by the Committee on Classified Information, 8 November 1956, Charles A. Coolidge, Chairman.

[15] 84th Congress, 2nd Session, House Report No. 2947, Twenty-fifth Intermediate Report of the Committee on Government Operations, July 27, 1956, pp. 88-89.

[16] Statement in Hearings, House Subcommittee on Appropriations, Department of Defense Appropriations for 1957, 84th Congress, 2nd Session, January 27, 1956, p. 297.

- 10 -

Yet it is the "directives and guidelines" of the Secretary of Defense and higher authority which have been the bone of contention for several years. Notable among such directives, for example, was an order issued by Secretary Wilson that the only material to be released from the Pentagon was that making a "constructive contribution" to the mission of the Department of Defense.

The major institutions outside the Executive Branch for informing the public today are Congress/17 and the Press./18

## Vantage Point Determines Attitude

Opinions on government secrecy tend to vary with the vantage point of the observer. From the Executive point of view, information is something to be controlled in order to enhance the success of the administrative mission. Any Administration wants a good press. Additionally, leaders of the Executive Branch, by role and by tradition, have and feel a responsibility for protecting information from public disclosure. Members of Congress and the journalistic fraternity normally do not feel such a responsibility.

Congress and the press are on the same side, generally, in the struggle for information. Legislators of the "Opposition Party", particularly, often join hands with aggressive newsmen in attempts to pry loose certain types of information. Yet Congress has its own secrets to protect, such as figures on money spent on so-called Congressional (travel) "junkets."

And the "executive session" of Congressional committees has become increasingly common. This may be the result in part of the need to protect the security of sensitive testimony of Executive Branch officials. But it may also be due in part to what Congress feels are its own special requirements for secrecy.

Congress and the press are joined from time to time by an aggrieved armed service in pursuit of information with the Executive, for one reason or another, considers "sensitive." Or Congress and the press may receive the "cooperation", on occasion, of an aggrieved military leader, such as a General MacArthur, a General Ridgway, or a Colonel Nickerson. Conflict over information policy is an inevitable by-product of the democratic process. The point at which a proper balance is achieved between disclosure and secrecy will always be debated by groups with conflicting responsibilities and contrasting perspectives.

17 For an analysis see *The Right of Congress to Obtain Information from the Executive and Other Agencies of the Federal Government*, Study by the Staff, House Committee on Government Operations, May 3, 1956, Committee Print, 84th Congress, 2nd Session.

18 For a report on the contemporary problem by a newsman, see Raymond Allen, *The Denial to the American Press of Access to Information in the Federal Government*, A report to the American Civil Liberties Union, ACLU Press Release of November 4, 1955, New York, N. Y.

- 11 -

## The Evolution of Information Policy

The problem of achieving this balance is older than the Republic. Writing in 1813, Thomas Jefferson recalled that "The first misfortune of the Revolutionary War induced a motion to supress or garble the account of it. It was rejected with indignation." Since that date, the government was most actively and extensively engaged in the security and management of information in periods of war -- until the advent of the Cold War.

By the time of the outbreak of the American Civil War, both the methods of war and the techniques of communication had reached a stage which presented complex information policy problems to the civilian and military leadership. During that war, policy and procedure fluctuated widely regarding censorship and the security of government information. In the turmoil of press-military-governmental relations, many precedents were set for subsequent generations. As an example, General Joe Hooker is credited with instituting the practice of the newspaper by-line, which resulted in much-needed improvements in the accuracy and responsibility of press reporting from the battlefield.

Some newspapers, the *New York World* and the *New York Journal of Commerce* for example, were temporarily suppressed, in 1864. Thomas E. Knox, a reporter for the *New York Herald* was arrested by General William T. Sherman as a spy and narrowly escaped the gallows. Sherman subsequently instituted an accreditation system for war correspondents.

The Civil War presented the government with problems peculiar to that war. It also offered experience in information control which was to influence the shaping of future policy. The general freedom of information during the war, supported by a sympathetic though often harassed President, has been a boon to historians of the war.

An apocryphal cable on the eve of the Spanish-American War from a famous entrepreneur of sensational journalism to his war correspondent: "You furnish the pictures and I'll furnish the war" suggests something of the ascendancy of press influence in the United States by the end of the 19th Century. If Mr. Hearst's opinion of the power of the press was somewhat exaggerated, it was nonetheless true that "public opinion" by the time of the first World War, was of great concern to the government. The government decided that it was important not only to impose secrecy on certain types of information but also to have a hand in painting the pictures in the public mind about the war.

### World War I.

Consequently a dual public information function evolved during the first World War, the *negative* (censorship) and the *positive* (propaganda).

[19] Quoted in James Russell Wiggins, *Freedom or Secrecy*, N. Y., Oxford University Press, 1956, p. 94.

- 12 -

Censorship during the war began with the promulgation of voluntary regulations by the State, War and Navy Departments on March 24, 1917. One such regulation requested that "no information, reports, or rumors, attributing a policy to the government in any international situation, not authorized by the President or a member of his cabinet, be published without first consulting the Secretary of State." Additionally, the Espionage Act of 1917 and the Trading With the Enemy Act of the same year, were formidable deterrents to unauthorized disclosure of security information. The former was administered by the Attorney General, the latter by the Postmaster General. Both applied vigorous, and many believe over-zealous, enforcement of these statutes.

Using emergency war powers, President Wilson on April 14, 1917, created the Committee on Public Information. With George Creel as Administrator, war censorship was instituted. Creel's major function, however, was to generate propaganda in behalf of the war effort. He had little faith in press censorship. The best guarantee of military information security, he felt, was censorship at the source by the military departments. Censorship of the press during the war was, therefore, on a voluntary basis.

In carrying out the propaganda function, the Creel Committee, as it was known, institutionalized the public information function to a degree unknown in American government previously. Within Creel's central agency were combined the government's propaganda efforts and the supervision of voluntary censorship. In effect, the government in the first World War undertook to manage the public view of the war. [20]

## World War II

Within a few days after the attack on Pearl Harbor, President Roosevelt outlined information policy in an address:

> This Government will put its trust in the stamina of the American people, and will give the facts to the public as soon as two conditions have been fulfilled: First, that the information has been definitely and officially confirmed; and second, that the release of the information at the time it is received will not prove valuable to the enemy directly or indirectly.

To carry out the government's war information policy called, in effect, for triple-function machinery. First was the problem of censorship; secondly, the duty of accurately informing the public about the war; and thirdly, the function of propaganda in support of the war, both at home and abroad. Unlike World War I, these functions were kept separate.

When Pearl Harbor was attacked, no organization existed to prevent valuable information from reaching the enemy. Government censorship in

[20] For accounts of government information activities in World War I, see George Creel, *How We Advertised America*, N. Y., 1920; James R. Mock, *Censorship, 1917*, Princeton, 1941; and Mock and Cedric Larson, *Words that Won the War*, Princeton, 1939.

- 13 -

time of peace was abhorrent. The Federal Bureau of Investigation was
given temporary control over censorship. Shortly after the war's outbreak,
Congress passed the first War Powers Act, giving President Roosevelt
authority to establish censorship over all communications between the
United States and foreign nations.

The Office of Censorship was established on December 19, 1941, by
Executive Order under the authority of the First War Powers Act. In
announcing the appointment of Byron Price, an executive of the Associated
Press, as Director of Censorship, President Roosevelt stated:

> All Americans abhor censorship, just as they abhor war. But
> the experience of this and all other nations has demonstrated
> that some degree of censorship is essential in wartime....

> The important thing now is that such forms of censorship as are
> necessary shall be administered effectively and in harmony with
> the best interests of our free institutions.

The Executive Order stated that the Director:

> ... shall cause to be censored, in his absolute discretion,
> communications by mail, cable, radio, or other means of trans-
> mission passing between the United States and any foreign
> country ... in accordance with such rules and regulations as
> the President shall from time to time prescribe.

The Office of Censorship had two main objectives: (1) to prevent the
transmission in or out of the country of information which might be useful
to the enemy, and (2) to obtain external information from the communications
examined which might be of value to the prosecution of the war. Unlike
the World War I arrangement, the agency was completely separated from the
task of war information and propaganda. A number of other informational
agencies existed. The resulting jurisdictional confusion led to several
reorganizations during the war. Agencies handling war information
included the Office of Facts and Figures, the Office of Government Reports,
the Office of War Information, the public information divisions of the
separate armed services, the many emergency war agencies, as well as the
regular departments of government.

Voluntary censorship of press and radio was instituted not on the
basis of Executive Order but by a Presidential letter to Byron Price on
January 27, 1942:

21 Executive Order No. 8985, December 19, 1941.

22 See The United States at War, Washington, Bureau of the Budget, 1945, Chapter 8, "Informing the Public."

- 14 -

As President... I hereby authorize and direct you in your capacity as Director of Censorship to coordinate the efforts of the domestic press and radio in voluntarily withholding from publication military and other information which should not be released in the interest of the effective prosecution of the war.

"Voluntary codes" were issued stating what should or should not be published. These regulations were largely the work of the War and Navy Departments and the Maritime Commission. Small Press and Radio Divisions were established within the Office of Censorship to refine, interpret and disseminate these codes.

Codes were revised every six months, describing categories of news not to be published unless authorized by "appropriate authority." These included: troop strengths and movement, shipping activity, ship sinkings, air attacks, disposition of aircraft, descriptions of fortifications, production contracts and capacity, weather reports, rumors on enemy damage, photographs or maps useful to the enemy, and reports of casualties. /23

The Office of Censorship was abolished on August 15, 1945. Voluntary censorship is generally considered to have been successful. At war's end Byron Price summarized the principles upon which, he said, censorship had been conducted. These were enunciated, doubtless, by a veteran newsman with an eye toward the future.

He stated, in part, that voluntary censorship:

must never base a request on any security consideration which may be questionable. ... avoid interference with editorial opinion.... must never be influenced by non-security considerations of policy ... make every effort to avoid multiple censorship... must be absolutely impartial and consistent.... must operate openly, advising the public of every request made to the press. To do otherwise would undermine public confidence and foster unwarranted suspicion both against the Government and the press. /24

One can illustrate the delicate nature of press-military relationships in a democracy, particularly in time of war, by recalling that World War II started and ended in the United States with a press furor. Just three days before Pearl Harbor, the *Chicago Tribune* and the *Washington Times Herald* printed portions of a secret war plan of the United States. The war which followed softened the controversy over this publication. No prosecution was attempted by the government.

At war's end, the news of the signing of the German surrender was flashed to the world by Associated Press Correspondent Edward Kennedy, in spite of a previous pledge not to release the story until a later hour. Breaking the agreement, Kennedy "scooped" his colleagues, who were infuriated.

23 For a discussion of World War II censorship see Theodore Koop, *Weapon of Silence*, Chicago, 1946.

24 See Office of Censorship, *A Report on the Office of Censorship*, Washington, Historical Reports on War Administration, Series I — 1945.

Associated Press privileges were temporarily suspended throughout Europe, but this lasted only a brief period, except for Kennedy.

After August 15, 1945 the communications media were free to print at will such information as they could gather from all sources. Such censorship as existed thenceforth -- until 1954 -- was imposed at the source through the discretionary power of the government to withhold information within its control.

## Post-War Policies

After the war the defense establishment and other national security agencies continued to employ security designations of TOP SECRET, SECRET, CONFIDENTIAL and RESTRICTED for material not to be disclosed except to persons with specified clearance.

The Atomic Energy Act of 1946 contained strict provisions regarding the publication of information on atomic secrets. For the first time in United States peacetime history the Federal courts were empowered to issue injunctions at the request of a government agency -- the Atomic Energy Commission -- to prohibit the printing or distribution of certain information./25

## Public Information in the Cold War Era

The Cold War has brought an expanding American government with worldwide activities unparalleled in history. It has also produced an American society never more publicity nor public-relations conscious. The bipolarization of world power, an accelerating technology, our commitment to the concept of collective allied security, and the massive machinery for national defense have at the same time resulted in the most restrictive government information policies in peacetime history. The difficulties inherent in making and "coordinating" policy within our Executive Branch, of negotiating policies with our many allies, of negotiating acceptance of such policies with the United States Congress, particularly the Senate, and the development of a great government "Secret Service" -- such as the Central Intelligence Agency have produced unparalleled secrecy in American governmental affairs.

In the post-war decade could be heard the mounting cry of editors and reporters that the sources of independent information within the government were drying up. At the same time the government was flooding the press and the public with "managed" information.

One well-known reporter has spoken of such a trend: what he called "the growing tendency to manage the news" by government officials./26

/25 For a discussion of this and later statutory provisions, see Herbert S. Marks and George F. Trowbridge, "Control of Information under the Atomic Energy Act of 1954," *Bulletin of the Atomic Scientists*, April 1955, pp. 128-130.

/26 James Reston, Testimony in *Hearings* Subcommittee on Government Information, House Committee on Government Operations, November 7, 1955, Part I, p. 25.

- 16 -

Another journalist, Marquis W. Childs observed:

> Among working reporters in Washington there is a growing concern over what appears to be a concerted effort to suppress legitimate news -- and with a system of rewards and punishments to see to it that only news which is favorable, or is reported in a favorable light is given to the public. Partly this is a carry-over from the big and little wars of the past fifteen years, when propaganda was an instrument of warfare. Partly it reflects the tensions of the cold war and the continuing struggle against Communist imperialism. /27

A deterioration of relations between the United States and Soviet Russia in the post-war decade has produced more and more tension and suspicion and a growing desire by government officials to restrict the free flow of information about the military establishment but also beyond this into the overall field of national policy and of scientific and technical information which might aid the enemy. Such restrictions have produced, as earlier suggested, protests from both the journalistic and scientific community.

## Unification and Public Information

With "unification" of the armed forces in 1947, the first Secretary of Defense, James Forrestal, issued a memorandum, dated October 10, 1947, dealing with Public Relations. In addition to restricting security information Mr. Forrestal discussed the release of non-security information and directed that only such data "not inimical to the national security shall be released." He then added that the National Security Act of 1947 established a unity principle and "the conduct of public relations is to conform to the spirit of the law," and "interservice controversies are to be avoided."

To this end he required prior approval by his office of announcements on subjects (principally general policies, budget-making and inter-service disputes) which the National Security Act made his responsibility as Secretary of Defense. He also put under this directive any news release affecting more than one department unless the release had the mutual agreement of all departments concerned. /28

This was supplemented on February 4, 1948, by another memorandum from Mr. Forrestal to the three service secretaries and the Joint Chiefs of Staff which stipulated that no speech, press release or article touching upon a controversial subject could be released either by them or by the Under Secretaries, Assistant Secretaries, and Deputy Chiefs of Staff or Vice Chief of Naval Operations without prior clearance from his office. This

/27 United Features syndicated column, December 3, 1954.

/28 Presumably this directive was not intended to contradict the Unification Act's authorization that any service Secretary or military chief has the right to present to Congress any recommendation after first so informing the Secretary of Defense.

- 17 -

directive was "intended to promote a closer and more harmonious
integration of the armed forces by preventing the inevitable
differences of opinion about policy matters from becoming topics
of public debate and controversy."

Thus not only were military secrets to be kept under the cloak
of security, but an attempt also was to be made to control at the
source public knowledge of divergent opinions within the Pentagon.
Anyone who has followed military affairs of the past decade knows
that Forrestal's directives have been something less than effective
on this score.

To administer control of such information Secretary Forrestal established (July 19, 1948)an Office of Public Information within the National Military Establishment. A director was made specifically responsible for "developing and coordinating overall public information matters."

On March 17, 1949 Secretary Forrestal centralized all public information activities of the military establishment within the Office of the Secretary of Defense. The Office of Public Information was designated as "the sole agency for the National Military Establishment at the seat of government for dissemination of information to media of public information."

Mr. Forrestal retired from office soon after this and his
successor, Mr. Louis Johnson, issued on April 14, 1949
Consolidated Directive Number One, an even more restrictive rule,
termed by the press a 'gag rule.' This was subsequently withdrawn
on June 4, 1949.

By June 1950 the U.S. was at war in Korea and much of the
same atmosphere that prevailed during World War II returned.
Voluntary censorship was attempted in Korea but it soon gave way
to Field Press Censorship following unfriendly press relations
between General Douglas MacArthur and some of the war
correspondents. 29

In December 1950 President Truman directed prior White House
clearance of policy statements by high military officials. Mr. Truman
accused General MacArthur of disobeying this requirement when he was
relieved of his command the following April.

From 1950 onwards the concept of security has been expanded
far beyond the military establishment. An indication of this was the
Truman Executive Order No. 10-290 of September 24, 1951. This spelled

29 For a newsman in uniform's view of this see Melvin B. Voorhees, *Korean Tales*, New York 1952.

- 18 -

out censorship regulations for all Federal Departments based largely upon
State Department and military censorship codes. It provided for classifi-
cation of documents in the categories of TOP SECRET, SECRET, CONFIDENTIAL,
and RESTRICTED. The latter category has since been abolished. The Truman
order empowered heads of Federal agencies to designate persons within
their organizations authorized to classify information. Earlier disputes
over delineating these classifications were evaded by using very general
language to define them. This order drew sweeping condemnation from such
organizations as the American Society of Newspaper Editors, Sigma Delta Chi
journalistic fraternity, and the managing editors of the Associated Press.
Opposition to it was based in part on the following points: it extended
to nonmilitary agencies what was essentially a military classification
scheme; it failed to define the precise criteria for the various categories
of classification; it invested agency heads with power to delegate
classifying responsibilities; no system was provided for reviewing the
decisions of classifying officers; and no appeal system from such decisions was
established. This order was a by-product of the Cold War. It raised the ques-
tion, as yet unresolved: What constitutes national security information?

President Truman, in promulgating Executive Order 10-290 admonished government officials not to abuse their new authority and not to use it for covering up mistakes, dishonesty or other embarrassments. He promised that his own White House press office would handle any complaints of over-classification or other abuses. The press generally did not rest easily with these assurances and criticism of the system continued.

The Truman order incurred the ire not only of the press but of the
President's political opponents in the Senate. On October 2, 1951,
Senator Styles Bridges, (R., N.H.) and twenty-four other Republican
senators issued a statement as follows:

"We...pledge to the American people that we
shall fight to guarantee that in the difficult
days ahead, no man's voice shall be silenced.
We shall vigorously resist any attempt to conceal
the facts from the American people. We shall
defend to the utmost the fundamental right of
free, unlimited discussion of controversial
questions in government. We shall rally to
the defense of any person against whom reprisals
are directed as a result of his constitutional
right of freedom of speech."

Later, on September 18, 1952, the staff of the Republican Policy
Committee of the United States Senate prepared a long report, the title
of which gives the gist of its contents: "The Growth of Federal
Censorship under 20 Years of Democratic Administration." Further the
Republican Party platform for 1952 contained the pledge: "...not to
infringe by censorship or gag order the right of a free people to know
what their government is doing."

- 19 -

The Eisenhower Administration and Public Information

With a change in administrations in 1953, the press continued
its criticism of Executive secrecy and was joined by a rising chorus in
Congress, mainly, as might be expected, from Democrats. In spite of the
Republican 1952 campaign pledge and the vigorous resolution of Republican
Senators in that same year, most segments of the press seem to agree that
during the period 1953-1957, secrecy in the Executive Branch became more
pervasive than ever. The Cold War continued to generate pressure for
secrecy. Revelations of continued progress in Soviet science and
technology and Soviet espionage activities convinced many persons that
our own security of information was not tight enough.

President Eisenhower did however attempt to correct the worst
abuses of Truman's Executive Order No. 10-290 by substitution of
Executive Order No. 10-501, promulgated on November 6, 1953. This order
deprived twenty-eight Federal agencies of power to classify information
on national security grounds. The order restricted classification powers
to seventeen agencies; it limited the authority of agency heads to
designate this responsibility; it attempted to define more clearly
the various security classifications (removing the RESTRICTED classification
entirely); and it made provisions for appeal and review.

The President stated:

"Throughout the lengthy consideration of this
order it has been the purpose to attain in it
the proper balance between the need to protect
information important to the defense of the
United States and the need for citizens of this
democracy to know what their government is doing."

Although most critics believed that this was an improvement
over prior regulations, few conceded that the proper balance between
the needs of security and the need for public knowledge had been
attained. Some felt that the new order constituted no more than
"window dressing." One critic put it: "Actually all this new
Eisenhower order did was to placate some of the editors, temporarily,
and eleminate a few of the more glaring absurdities in President Truman's
directive." / 30.

If the 1953 Eisenhower classification regulations placated some
critics of information security, the fires of controversy were to burn
even brighter in the two years which followed. Fuel was added by two

30 Allen Raymond, *Report* to the American Civil Liberties Union,  
October 24, 1955, p. 39.

- 20 -

actions of the Executive branch, one in 1954; the other in the
following year. 31

Non-Military Strategic Information

On November 5, 1954, Secretary of Commerce Sinclair Weeks announced that at Presidential direction, as recommended by the National Security Council, the Office of Strategic Information was created within the Department of Commerce. 32 This new office, since abolished, was to work with the business community in "voluntary efforts to prevent unclassified data from being made available to those foreign nations which might use data in a manner harmful to the United States." In effect, in the interest of national security restrictions were placed upon the release to news media of certain kinds of industrial information. This provoked further protests from the press, from the technical and trade publications chiefly affected, and from journalistic societies.

R. Karl Honaman, a public relations specialist from Bell Laboratories, was named Director of the Office of Strategic Information, with instructions to restrict the flow of technical information which might be of use to a potential enemy. Here Mr. Honaman had to try to balance two conflicting requirements, one, the need for inter-industry communication — so important to technological progress — and the other, the need to protect information of Strategic importance. This move by government to institute, in effect, a fourth classification — STRATEGIC INFORMATION — was criticized, particularly from within the journalistic fraternity, on a number of specific counts: (1) a new classification had been added by an Administration pledged to a freer flow of information from the Executive Branch (2) no clear-cut definition of "strategic information" was made (3) a clear danger existed that the system could be used to discriminate against some companies while showing partiality to others by giving out information on a "need to know" basis (4) a new kind of censorship, albeit voluntary, was to be instituted on non-military information, and (5) such a system would inhibit and stifle technological progress.

31 A third Executive act of great importance, but more relevant to the problem of Congressional access to information, was President Eisenhower's letter of May 17, 1954 to the Secretary of Defense at the time of the Army-McCarthy hearings. In this letter the President directed the Secretary to advise his personnel to refrain from disclosing to the Senate Committee on Government Operations any conversations or communications, documents or reproductions pertaining to intra-departmental advice or negotiations. This letter has been used by almost a score of other government agencies as authority for withholding information from Congress.

32 The section of the NSC directive establishing the OSI is reprinted in 25th Intermediate Report, House Committee on Government Operations, pp. 21-22.

- 21 -

Honaman's argument was that an expert piecing together industrial news, normally published in great abundance in the United States, can produce a highly accurate military-industrial profile by using items which in themselves are not subject to military classification. In a speech to newspaper editors, he illustrated his case with the story of an engineer who had applied to a defense contractor for a job and while awaiting security clearance decided to survey the United States military missile program from the public print. As Honaman told the story:

"He consulted published information available in a public library. This included daily newspapers, technical magazines, and government publications... for three months...and wrote a report on the U.S. guided missile program. His report, 45 pages... included detailed information which gave for each weapon its name, model designation, manufacturer, guidance system, method of propulsion, length, diameter, range and maximum altitude. He also included certain reasonable deductions concerning the high level plans and policies of our whole guided missile program. The report was accurate and reasonably complete. It contained so much that it was necessary to classify it." 33

Honaman's critics point out that classifying the engineer's report was useless if one assumes that Russian intelligence specialists also put together the same information from similar sources. One critic argued that the new restrictions would not work "unless most of our industrial magazines and normally published data are to become so blacked out as to be useless to anyone." 34

Commenting on the National Security Council directive calling for the establishment of the Office of Strategic Information, Walter J. Murphy, editorial director of the Applied Journals of the American Chemical Society, told a Congressional committee in 1956:

"There seems to be a childlike belief on the part of a great many people in this country - people who should know better - that (1) we have all, or practically all, of the scientific and technical brainpower of the world residing in this country. (2) If each night we lock up our store of scientific and technical reports, we will thereby curtail the scientific and technological advances of other countries.

"... If we padlock our scientific and technical knowledge, we will be withholding it from our own scientists and technologists just as much as from a potential enemy. Anyone who has had the slightest contact with science knows it is an elementary fact that a report of one piece of progress catalyzes further advances. ..." 35

34 Ibid., p. 50.

35 Quoted from *Hearings* of April 27, 1956, in 25th Intermediate Report, House Committee on Government Operations, Rept. No. 2947, p. 23.

Secretary Wilson's 'Constructive Contribution' Directive

On March 29, 1955, Secretary of Defense Wilson issued a directive requiring officials of his department to adhere to new regulations for prior review and clearance of material to be published. The directive stated:

"Such review and clearance shall be related not only to a determination of whether release of the material would involve any technical or substantive violation of security but also to a determination of whether release or publication of the material would constitute a constructive contribution to the primary mission of the Department of Defense." /36

The directive specifically required that manuscripts, speeches and news items to be released to the public through news media by military or civilian personnel of Department of Defense be submitted for review and clearance not less than three days in advance of public release.

The directive further required all D.O.D. personnel to assume responsibility that their speeches, articles and information releases are "consistent with the national security and the policies and objectives of the Department of Defense." /37

A memorandum from the Defense Secretary was issued simultaneously directing that each service secretary supplant military officers with civilians as service public information chiefs, and service public information personnel sharply reduced in number. These new regulations were believed to have been the result of the Secretary's growing impatience with publicity about inter-service rivalries. They also apparently resulted from White House pressure. President Eisenhower on a number of occasions had demonstrated impatience with the amount of unauthorized information appearing in the press on new weapons and defense planning.

Loud protests emanated from the press at the issuance of these Pentagon orders. Hanson W. Baldwin wrote that "A new kind of iron curtain, Pentagon model, is being tried out in Washington this week." /38

36 Department of Defense Directive No. 5230.9, March 29, 1955, page 2, Sec. III.

37 Ibid., Sec. VI.

38 "Pentagon Iron Curtain," New York Times, April 7, 1955.

American journalistic societies, particularly the Freedom of Information Committee of the American Society of Newspaper Editors, made formal protests to the Pentagon, demanding a clear definition of what would constitute "constructive contribution." It was widely suggested that it was, after all, up to the press and the public to decide what is, in fact, "constructive."[39] Many press representatives protested vigorously at a designation of a "grey area" of security information. This covers information that is not legitimately a military secret, but which might prove helpful to a potential enemy, particularly when pieced together with additional facts.

Managing editors of the Associated Press at their annual meeting in Colorado Springs in November, 1955, adopted a resolution, stating:

> The Association expressly condemns the withholding of information that has not been classified and that is not eligible for classifying on the pretext that it is not 'constructive' or on the excuse that even though it is nonsecurity information it might be of 'possible use' to a potential enemy.[40]

> If Republican members of Congress were energetic in performing the opposition party function of criticizing the Executive for restrictive information policies, Congressional Democrats have been no less so under subsequent Republican Administrations. Senators particularly vocal include Senators Stuart Symington and Hubert Humphrey. "No careful reader of our press can doubt that this country is menaced by a deliberate policy on the part of our Government to withhold information from the American people," said Senator Symington in 1955.[41] Senator Humphrey, inserting into the *Congressional Record* a long discussion of the problem, stated in the same year: "This shroud of silence which has descended over the government prevents not only the American people from knowing what it is doing, but prevents the Government itself from functioning as it should."[42]

## The Moss Committee

An extensive Congressional probe of Executive information policy began on June 9, 1955 with the establishment by the House Committee on Government Operations of a Special Subcommittee on Government Information, headed by Rep. John E. Moss, Democrat of California. The study by this committee, still ongoing in late 1957, has included detailed questionnaires and special studies and has produced several thousands of pages of reports and hearings.[43] The Moss Committee has been particularly concerned with the information function and policies in the Department of Defense.

[39] Secretary Wilson discussed his new directive at length with Washington newsmen at press conferences on April 12 and April 26, 1955.

[40] Quoted in Wiggins, *Freedom or Security*, p. 110.

[41] Speech in New York City, July 7, 1955.

[42] Congressional Record, August 3, 1955, Vol. 101, No. 133, daily edition pp. 11319-11329. Here Senator Humphrey has inserted a series of exhibits, drawn from correspondence between R. Karl Honaman and J. Russell Wiggins, Chairman of the Committee on Freedom of Information, American Society of Newspaper Editors, and news stories on censorship from leading newspapers, and other documents.

[43] See the 25th *Intermediate Report*, House Committee on Government Operations, and numerous other documents of the Moss Committee in the 84th and 85th Congresses.

- 24 -

Its intermediate report issued on July 27, 1956, stated that the informational policies and practices of the Department of Defense are most restrictive of any major branch of the Federal Government. The Moss Committee was also highly critical of the rate of declassification of documents in the Department. It stated:

> The Defense Department and its component branches are classifying documents at such a rate that the Pentagon may some day become no more than a huge storage bin protected by triple-combination safes and a few security guards. Millions of documents each year are being added to the Defense Department's classified files, and only a small fraction are being declassified annually. √44

> Further, "Unless some operative system of declassification is developed in the near future, we may find ourselves completely walled off from our past historical achievements as well as from future progress in basic science." √45

> But, as always, the many voices of Congress have not been in harmony on this issue of freedom of information. In its Report on the Department of Defense Appropriation Bill for 1956, the House Committee on Appropriations complained that "Too much information has been released which is of no benefit to the American public but which is of tremendous value to our opponents." √46 A similar view was earlier expressed by Congressman George H. Mahon, Democrat, Texas, in appropriations hearings for 1955. "I think the damage that has been done to this country by the spies and subversives is just a tiny drop in the bucket compared to the damage that has been done by the release of public information as to national defense procedures and programs, and developments, through the Department of Defense, through the Congress and through industry, and through trade journals and so forth." √47

## The Coolidge Committee

Secretary Wilson's views were more in harmony with Congressman Mahon and the Appropriations Committee than with the Moss Subcommittee. On August 13, 1956 Mr. Wilson appointed a special Committee on Classified Information, headed by Charles A. Coolidge, Boston attorney and former Assistant Secretary of Defense. The Coolidge Committee was composed of a senior retired officer from each of the military services.

"I am seriously concerned over the unauthorized disclosure of classified military information," Wilson wrote Coolidge. He requested that the Committee make an examination of laws and regulations, organization

√44 Report, p. 89.

√45 Ibid.

√46 House Report No. 493, 84th Congress, 1st Session, May 5, 1955, p. 15. In its report on the appropriations bill for 1957, however, the same committee warned the DOD not to use Congressional concern for unauthorized leaks as an excuse for "withholding legitimate information from the press and public, nor...as a coverup for inefficiencies and weaknesses of administration."

√47 Hearings, House Subcommittee on Department of Defense Appropriations for 1955, 83rd Cong., 2nd Session, March 31, 1954. p. 558-559.

- 25 -

and procedures, and adequacy and effectiveness of the Department of
Defense system in protecting security information.

In its Report on November 8, 1956, the Coolidge Committee revealed
its seemingly contradictory conclusions that there had been too much
secrecy in the Pentagon in the past and that those who violate secrecy in
the future should be more severely punished. The committee criticized over-
classification of information by the Pentagon but at the same time was
critical of unauthorized disclosure of classified information by high-
ranking military and civilians in the Pentagon. Some twenty-eight
recommendations were detailed to cope with this dual problem.

After a three-month study, which included interviews with some fifty
persons concerned with defense information, recommendations included the
following:

* Restrict visits to defense plants of reporters for trade and technical journals and require that officials of private industry discuss only unclassified information with them. The Committee said it received compelling evidence of "real harm caused by information published in trade and technical journals.

* Require all press interviews with Pentagon personnel be arranged through the Office of Public Information, with a representative of that office sitting in if the official desires.

* Create a special unit within the Office of the Secretary of Defense to investigate and "prosecute" security leaks by defense personnel or to oversee the prompt investigation of such by the services.

* Establish Courts of Inquiry in all three military departments when unauthorized disclosures of information occur.

* Impose stern discipline for those who make unauthorized public disclosure of security information.

* Hold responsible the commanding officer of the service, office or unit when the source of improper disclosure cannot be discovered.

* Take disciplinary action against individuals who disclose information regarding an interservice dispute concerning opposition to a decision already made by the Secretary of Defense, even if the information is not classified.

* Warn industry against disclosure of classified information in advertisements. In extreme cases contracts should be withheld from companies making such disclosure.

- 26 -

*Summon newsmen before grand juries to disclose their sources of classified information which they publish, and which "obviously gravely damages the security of the nation."

*Issue from the Pentagon a "forceful statement outlining the differences between ordinary peace" and the current "cold war".

Upon receipt of the report, Secretary Wilson appointed a three-man committee to study the implementation of its recommendations "found to be constructive." He expressed specific reservations, however, about the last two recommendations listed above, indicating at once that these particular recommendations would not be followed. /48

## The Wright Commission

An important aspect of the information security problem was studied in recent years by another government group -- the Commission on Government Security, Lloyd Wright, chairman. The Wright Commission, authorized by Congress in 1955, studies the whole spectrum of government security policy.

Of particular interest here is the section of the Wright Commission Report (June, 1957) dealing with the government's document classification program. /49 The Wright Commission reviewed the historical background of the classification program, its legal basis, and the scope and mechanics of current classification policy.

Among its fifteen recommendations, perhaps its most important and controversial is that the CONFIDENTIAL classification be abolished. The Commission concluded that this classification serves no useful purpose which could not be covered by TOP SECRET or SECRET. The Commission recommended also abolition of personnel security checks for access to documents or material classified CONFIDENTIAL. The Report also stressed the danger to national security arising from overclassification of scientific and technological information.

The Commission concluded that the basic problem of document classification is balancing the "need to insure that hostile eyes and hands do not gain access to information or material that our country wishes to safeguard" with the requirement that "our people and our friends have access to all information or material which will help achieve our objective of peace and security." /50

48 For a detailed report by the Secretary of Defense on implementation of 16 of the 28 Coolidge Committee recommendations, see House Government Operations Subcommittee, Hearings, Part 9, 85th Congress, 1st Session., April 10-12, 1957, pp. 2321-2353.

49 Report, Commission on Government Security, Washington, June 21, 1957, "Document Classification Program," pp. 151-186.

50 Report, p. 172.

- 27 -

## Conclusion

The problem of document classification considered by the Wright Commission indeed goes to the heart of the problem of secrecy versus disclosure.

Consider, for instance, the official definition of the CONFIDENTIAL category of classification: "... defense information or material the unauthorized disclosure of which could be prejudicial to the defense interests of the nation." Clearly a wide latitude is given to human judgement as to precisely what information falls under this rubric. An overzealous classifier might decide that 90 per cent of information normally disclosed in Congressional military appropriations hearings falls under this category; or 30 per cent of the information appearing daily in *The New York Times*.

Were such a zealot given his way and were 90 per cent of Congressional hearings on military affairs -- or 30 per cent of material appearing in *The New York Times* -- brought under the veil of secrecy, the nature of American government would be changed fundamentally.

Utilization of the SECRET category raises similar questions. By definition, this category is to be used for:

> ... defense information or material the unauthorized disclosure of which could result in serious damage to the Nation, such as by jeopardizing the international relations of the United States, endangering the effectiveness of a program or policy of vital importance to the national defense, or compromising important military or defense plans, scientific or technological developments important to national defense, or information revealing important intelligence operations.

Here, again, the importance of human judgement -- and fertile ground for disagreement -- is evident. Recall that Mr. Cutler of NSC, and the editor of *Aviation Week* were in basic disagreement.

Even the TOP SECRET category, though more precise than the others, will be interpreted differently by different individuals at different times. It is to be applied to:

> ... information or material the defense aspect of which is paramount, and the unauthorized disclosure of which could result in exceptionally grave damage to the Nation such as leading to a definite break in diplomatic relations affecting the defense of the United States or its allies, or the compromise of military or defense plans, or intelligence operations, or scientific or technological developments vital to the national defense.

Few will quarrel with the assertion that war plans, secret intelligence operations and estimates, diplomatic negotiations, certain characteristics of new weapons systems, and confidential advice to the President by his advisers must be secured from public disclosure.

- 28 -

But in a period which is neither war nor peace, honest men will differ
on the precise point at which there is more danger to national security in secrecy
than in disclosure. Walter Millis, for one, has wisely suggested the need
for "a much more precise definition of the categories of information for
which protection is really essential to the national security and a
separation of all other forms of secrecy from the imperatives of security
and the penalties imposed in its name." /51

In the *Aviation Week* disclosures of United States-Turkey-based radar
operations, given as an example at the beginning of this paper, this
problem was well illustrated. Mr. Cutler, who deplored the disclosure,
finds it difficult to give his real reasons in this particular case.
But he has developed his philosophy elsewhere, and it may be termed the
*conservative* view of information security. In his position of vital
importance in national security policy making, he viewed the problems of
waging total Cold War as a "seamless web." /52 Information, to him,
is a weapon of psychological warfare and something which must be centrally
managed and restricted to prevent a rocking of the ship of state. Mr. Cutler
puts the burden of proof on those urging fuller disclosure of information.

The editor of *Aviation Week*, on the other hand, is interested in
promoting his view of air power and missile requirements of the United
States. In so doing, it is important to him to have fuller disclosure
of what is know to the American government about Russian air power and
missile progress. Thus he takes the *liberal* view of information disclosure,
and joins those in Congress, other segments of the press and elsewhere who
insist upon disclosure in the name of free speech and a free press. The
*Aviation Week* editor's interests, and responsibility, as he views them,
thus come into direct conflict with Mr. Cutler's interests and responsibility,
as he views them. Which view, if prevailing, best promotes national security?

America cannot continue to operate as a free society and still maintain
security for all types of information which would benefit a potential enemy.
In attempting to maintain widespread secrecy, it is possible to stifle our own
scientific progress, debilitate the democratic process, and in effect, to undermine
national security from within. Although there are risks in fuller disclosure of
government information, these may be not as great as the risks of
pervasive secrecy.

Inevitably, systems for promoting information secrecy tend to spread
throughout the governmental system and to cover ever-broadening fields.
American scientists seem convinced that scientific progress has suffered
severely from this tendency (and social scientists who would study con-
temporary government and its institutions also have found blockades) and
the American press seems strong in its conviction that government informa-
tion no longer flows with requisite freedom.

51 "Individual Freedom and the Common Defense," N.Y., The Fund for the Republic, November, 1957, pp. 78-79.

52 See his article "The Seamless Web," *Harvard Alumni Bulletin*, June 4, 1955, pp. 663-665.

Information policy must be constantly reexamined and re-appraised both from within and outside the government, so that the difficult-to-achieve balance between disclosure and secrecy will be assured.

Constant suspicion of government tendency toward secrecy will help maintain a healthy Republic. Such suspicion, kept alive by a free and responsible press, and by organized scientists and others to whom freedom of information is vital, can provide important checks upon excessive secrecy.

The world today is quite different from that in which Thomas Jefferson, Patrick Henry and others expressed the concepts of liberty. Yet freedom of information, not an original concept with the Founding Fathers, has a lasting validity which transient bureaucracies must not be allowed to subvert.

American governmental leaders must reckon with the wisdom of Thomas Jefferson's comment to Elbridge Gerry:

> Your fellow citizens think they have a right to full information, is a case of such great concernment to them. [Military Affairs] It is their sweat which is to earn all the expenses of the war, and their blood which is to flow in expiation of the causes of it. [53]

[53] Letter of January 26, 1799