If you don't do that, why, you don't maintain the morale and obviously you lose the objectives you seek. So they are inextricably

interwoven.

Mr. BATES. That is all.

Mr. BENNETT. Mr. Chairman.

Mr. KILDAY. Mr. Bennett.

Mr. BENNETT. I have one brief question and one brief comment before that.

With regard to the comment, I humbly say that I feel the Navy has had many fine Secretaries but the man who is before us as the Secretary of the Navy has never been exceeded by his patriotism, his ability, and dedication to the public service. I am deeply grateful for my privilege of having been a Member of this Congress and having met him and known of his fine work.

Secretary GATES. Thank you, sir.

Mr. BENNETT. Now, with regard to the question I would like to ask-perhaps I should know the answer to this question, but will this bill give full retirement for all detrimentally affected by the provisions for shorter service?

Secretary GATES. No, sir-no, Mr. Bennett, it will not. They will get retirement at the age that they are separated.

Mr. BENNETT. Then some people, if this enactment was carried out, would get no retirement?

Secretary GATES. No; they would all get retirement, but they would not get retirement of the same order of magnitude as if they served out the 30 years or the 26 years.

Mr. HARDY. Mr. Chairman

Mr. BLANDFORD. May I say, Mr. Bennett, that they would get all of their retirement that they have earned up to the date of their retire

ment.

Secretary GATES. That is better expressed.

Mr. BENNETT. That is what I wanted to understand.

Mr. HARDY. Mr. Chairman.

Mr. KILDAY. Yes.

Mr. HARDY. I wanted to pursue that same point just a little bit. I understood, Mr. Secretary, that in the drafting of this legislation or in the consideration of it, there was some discussion of including such a provision in this legislation. Did I understand you to say that the Department of Defense opposed such a provision?

Secretary GATES. Yes. There was not consideration of giving maximum retirement. I think the other feature that I discussed earlier that was reviewed on one of the drafts by the Department of Defense was more in the nature of what I would call in layman's language a separation allowance, of so many months per year-maybe 2 months per year of service that had not been served to count toward retire

ment.

Mr. HARDY. I am thinking in terms of the equities that might be involved in lieu of what has generally been considered to be an obligation on the part of the service to keep these people on active duty for a specified period of time. Now, was there any alternative proposal advanced by representatives of the Department of Defense? Secretary GATES. No, there was not, Mr. Hardy.

Mr. HARDY. Well, now, Mr. Chairman, it seems to me that the Secretary is in an awkward sort of a position if he is acting as spokesman

of the Department of Defense here this morning, if we try to pursue this point with him. I would think that at some point in the consideration of this legislation we are going to need to have somebody from the Department of Defense who actually has participated in considerations of this, because as the Secretary says, the Navy does not oppose some sort of an adjustment.

Mr. KILDAY. We may discuss that with the Department of Defense, or we may take independent action.

Mr. HARDY. I am inclined to the view that we should take our independent action. The only reason I brought in the question of the Department of Defense is that I thought we should have the benefit of any real worthwhile information they might give us. But I am not at all sure that I am going to be guided by it.

Secretary GATES. This gets into, again, Mr. Hardy, about what the chairman and Mr. Bates discussed about the equities between individuals. There is a problem: If you lose a lot of officers around 20 years of service you build up a substantial retirement cost for a great many officers.

This must be weighed against the retirement cost of officers more senior. The briefings I think will bring this out.

Mr. KILDAY. Mr. Huddleston?

Mr. HUDDLESTON. I have a number of questions, Mr. Chairman, but I will hold them for Admiral Smith and Mr. Jackson.

Mr. KILDAY. Mr. Secretary, the Chair uses this opportunity to tell you he is sorry to know that you are leaving. I do appreciate the service you have rendered to the Navy and to the country.

I am glad to know that you will be with us I think-your resig nation date is such that you will be with us through most of this

session.

Secretary GATES. That is right, Mr. Chairman. Thank you for your remark.

Mr. BLANDFORD. May I say, speaking for the staff, Mr. Secretary, that we, too, will miss you.

One question on this allowance. Would I be correct in saying that the attitude of the Department of Defense between last year and this year was altered in view of the pay increase granted last year and that the feeling in the Department was that this rather substantial increase, particularly in the grade of captain, compensated for the difference between what they might have approved last year when they forwarded the bill over and their position this year, in which they did not go along with the Navy proposal that an allowance be paid? Secretary GATES. Yes, that is a very large part of the thinking. Mr. BLANDFORD. That is all, Mr. Chairman.

Mr. KILDAY. Thank you, Mr. Secretary.

Secretary GATES. Thank you, sir. Admiral Smith

Mr. KILDAY. I understand you have other commitments. You may keep them, if you desire. If we need you, we will send for you.

Secretary GATES. Thank you.

Mr. KILDAY. Thank you, Mr. Secretary.

Now, I believe Admiral

Secretary GATES. Admiral Smith.

Mr. KILDAY. Admiral Smith.

Admiral Smith, we are glad to have you with us.

Now, I am going to ask the members of the committee to permit the admiral to complete his statement. He has, I understand, charts and slides. And I believe if we do that, that he will answer a whole lot of questions that might otherwise be asked. So I am asking the committee to permit the admiral to complete his statement without interruption.

Now, you go ahead, Admiral, in your own way.

Admiral SMITH. Thank you, Mr. Chairman.

Mr. Chairman and members of the committee, Secretary Gates has stated the overall dimensions of the Navy and Marine Corps' personnel situation and has expressed his personal convictions as to the necessity for corrective action.

I necessarily will go into much greater detail, into showing the plan necessary for the corrective actions.

I would like to state at this point, sir, that Secretary Gates has required of us the most exhaustive studies into this whole situation, and Assistant Secretary Jackson has worked very closely with us in the working out of the details.

We have conferred at intervals with the Secretary, and I can state that we have his complete approval of the plan we present to you, and that of the Assistant Secretary Jackson.

I further would like to state, sir, that we are very greatly indebted to counsel of this committee, Mr. Blandford. We have sought his advice on many occasions during the past few months, and we are deeply grateful for his advice.

The problem can be stated quite simply by emphasizing, once again, that one-third of the Navy's Regular officers are concentrated in only 4 years of the 30-year span of the service career. These people in the 4-year groups, in the grades of lieutenant commander and commander, are virtually contemporaries from the standpoint of years of service and experience, and the basic problem is to sift these 8,000 officers down to the 2,000 captains' jobs that are available. Under present law there are only two ways to do this: Either to maintain promotion flow by an unacceptably high rate of promotional attrition, or alternatively to stretch out the promotion process so that an unacceptable degree of stagnation will result.

We are here proposing a third alternative, a middle way, which requires legislative relief. Reduced to its simplest terms, the proposal is as follows:

(a) To make a temporary change in the retirement point of 26 years of service for commanders so that, between now and 1970, commanders who fail of selection to captain may be retired involuntarily with 20 or more years of service.

(b) To acquire temporary authority to convene continuation boards to retire a portion of our captains who have had at least 5 years' service in grade.

Both of these features will provide a better opoprtunity for officers in the hump by creating additional vacancies in the commander and captain grades. Improved opportunity for these officers is mandatory for the well-being of the Navy and Admiral Burke has asked me to state his earnes recommendation that favorable consideration be given to the bill before you. We have reviewed together, on a virtually continuous basis, the immediate effects and future implications of our situ

ation. Officially, as Chief of Naval Operations, and personally, as a professional naval officer, he views it as one of the most critical problems facing the Navy.

Now, let's begin at the beginning. the hump is, and how it came about. Commander Hill.

I want to show you, first, what
This will be presented to you by

Commander HILL. Mr. Chairman and members of the committee, before you is a graphic display of our officer distribution as it exists today based on a count made of our officers on July 1, 1958. The colors are standard and we will use them throughout the presentation. They are green for captains, red for commanders, and blue for lieutenant commanders.

Now, we are painfully aware of the fact that this situation is a situation involving people. But to show you some of these problems graphically, we have to show the people here as bar-graphs, which are in a sense a group of poker chips, and you can pile these poker chips up in any number of different ways. If we build them up by grade, you would find that we would have just enough captains, just enough commanders, and just enough lieutenant commanders to meet our needs, and the numbers are within the legal limitations. But we have piled them up here by years of service, and here you will see that between 1942, those officers commissioned between 1942 and 1945-they pile up so that, as Admiral Smith has said, one-third of our Regulars are separated by only 4 years from the standpoint of years of service and they are virtually contemporaries from the standpoint of experience.

Our problem, then, is that we have to find some way to give equitable promotion opportunity to these people in the hump, and equitable job opportunity, since ahead of them the officers shown here( prewar officers, which are green since they are all captains) will leave the service in small increments over a long period of time, some of them presently as far as 10 years from retirement.

Now, how this situation came about can be explained by going back a period of 14 years. At the end of World War II we had approximately 7,000 Regulars in the U.S. Navy. They were commissioned largely before the war.

Mr. KILDAY. Did you say at the end or at the beginning of World War II?

Commander HILL. At the end of World War II, sir. I beg your pardon, sir. At the end of World War II we had approximately 7,000 Regulars, which are again shown here. Green for captains, for those officers commissioned between 1919 and 1930; red for commanders, for those officers commissioned between 1931 and 1938, and blue for lieutenant commanders, those commissioned from 1939 to part way into 1942.

I would like to interject here, sir, that at that time the promotion point to captain was in the 15th year of service. The promotion point to commander was in the 8th year of service. And the promotion point to lieutenant commander in the 3d year of service.

Now, the buildup at the end of World War II to man our postwar fleet to approximately 24,000 or 25,000 Regulars posed a procurement problem that would have been insurmountable if it had not been for the vast number of World War II officers on board originally commissioned between 1942 and 1945.

There were very few officers senior to that area, and we did augment some of them into the Regular Navy, as you see here.

At that time, in 1945, there were none junior to this area. And the manning of a fleet in being was an immediate problem. Thus, in 1948, when the OPA became law, the buildup of the Regular Navy reflected this hump in the area 1942 to 1945.

Now, let us carry these year groups, these officers from 1945 and senior, forward to today and look at it. This is our officer distribution from the 1945 group and senior and the 1929 group as it exists today. Promotions have been delayed so that we are promoting to captain in the 19th year of service, to commander in the 16th year.

Mr. KILDAY. Excuse me, commander.

Commander HILL. Yes, sir.

Mr. KILDAY. I asked that no questions be asked until you completed, but I find I have to ask questions to understand you and to follow you. You probably remember the integration into the Regular Navy that took place prior to the establishment of this Committee on Armed Services.

Commander HILL. Yes, sir.

Mr. KILDAY. I, for one, not having been on the former Naval Affairs Committee, am not familiar with the manner in which these officers were integrated into the service. Were they distributed by grade or just how were they integrated?

Commander HILL. They were taken in-I would like to go back to the previous slide, Mr. Chairman. They were taken in in the only area that we had officers in significant number. Those commissioned from 1942 to 1945, and they were taken in in their present grade. Their present grade extended from lieutenant commander and commander for some of the most senior to lieutenant and to lieutenant, junior grade, at that time. There was little distribution into the senior groups beyond those commissioned in 1938, since there were few Reserve officers in any significant number serving on board then. Mr. KILDAY. Then in whatever grade they happened to be serving, if selected they were integrated in that grade in the Regular service? Commander HILL. That is correct, sir.

Mr. KILDAY. There was no-in the Army and the Air Force, which was then part of the Army, there was a formula under which there was constructive credit for age, years of service, and things of that kind, in order to distribute them through the grade structure. But nothing of that kind was done in the Navy?

Commander HILL. No, sir.

Mr. KILDAY. Then you had a hump at the beginning.

Commander HILL. That is correct, Mr. Chairman. We started out this promotion system with a hump.

Mr. KILDAY. That is all I have. Go ahead, Commander.

Commander HILL. Now, this is the situation today, Mr. Chairman. Again we mention that the promotion point to captain is in the 19th year, to commander in the 16th year, and to lieutenant commander (we show here only the hump) but as you perhaps noted by the first chart, the promotion point to lieutenant commander for the last people in the hump was in the 12th year of service.

Now, more importantly, we find that the hump is still confined to the same year groups-those officers commissioned from 1942 to 1945.