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the unserved balance of the 26- or 30-year tour, rather than a provision similar to constructive service that would carry the increased pay throughout the remainder of the life of the individual retired, but some provision for a lump-sum payment calculated to be reasonable compensation for the remaining period of the term which is not served? We have a formula, for instance, on readjustment pay for Reserves, of a certain number of months' compensation for each year served, and if we could devise a formula for compensation of months or a month for each year of the guaranteed tour not served, would the Department object to that provision?

Secretary Gates. The Department of the Navy would not object to that provision, Mr. Chairman, if this turned out to be a wise thing to do after the figures and the problem are correctly analyzed.

Of course, it would be a factor that would have to be reviewed again by the Department of Defense. But I would feel that if this turned out to be a wise thing to do, that we ought to look at it closely and consider it together.

Mr. KILDAY. Mr. Secretary, you are appearing for the Department of Defense this morning, or only for the Department of the Navy?

Secretary GATES. Well, I imagine I am appearing for the Department of Defense technically. I guess you are correct, Mr. Chairman, because

Mr. KILDAY. Then the position is that as far as the Navy is concerned, it would have no objection?

Secretary GATES. No, sir.

Mr. KILDAY. As far as the Department of Defense is concerned, it has not as yet considered or taken a position with reference to it?

Secretary Gates. Yes; there was one proposal in the tentative draft of this legislation that included a provision of this nature that was opposed by the Department of Defense. Mr. KILDAY. Was opposed. Are there any questions by the members of the subcommittee? Mr. HÉBERT. Mr. Chairman, I don't have any questions. Mr. KILDAY. Mr. Hébert, you are recognized.

Mr. HÉBERT. I don't have any questions, except I want to make an observation which while perhaps not pertinent to the bill is certainly pertinent to the organization of the Navy Department, and that is the heavy loss which it will soon suffer.

I think, Mr. Secretary, this is the first time you have appeared before the Committee on the Armed Services since your resignation was announced.

Secretary GATES. That is right, Mr. Hébert.

Mr. HÉBERT. And I think I share the opinion of the members of this committee and take it upon myself to speak for them, that the Navy will suffer a terrific loss after you leave, because the Navy has been better for you having been its Secretary. I just pay you a compliment.

Secretary GATES. I am very grateful for those remarks, Mr. Hébert. I have enjoyed my association with the committee these years, hope our friendships continue.

Mr. Hardy, Mr. Chairman, I would like to associate myself with those remarks. I made a similar expression to the Secretary privately before the session got underway. The Secretary has been

and

pretty close to us down in my territory, and I am going to miss him pretty badly. [Laughter.] Mr. HÉBERT. You have a budget man coming up now. Mr. KILDAY. Mr. Bates.

Mr. Bates. Mr. Chairman, speaking for all the other members on my side.

I would like to say that I, too, have had an intimate association with the Secretary. He was always forthright, and he was courageous in his stand, for which he should be tremendously admired. I know many of the decisions that he made were ones that he didn't especially enjoy, but nevertheless even those of us who perhaps on occasion may have looked at a problem a little differently, for different reasons, did admire the courage and the forthrightness with which he approached all these problems, and the assumption of his duties as the Secretary.

I know on many occasions somebody asked “Well, who made the decision?” and the Secretary spoke up, without any evasion,

that everybody knew exactly where he stood.

So it will be a sad loss for the country when he leaves us. On behalf of the people on my side of the aisle, we certainly trust that the future will be a bright and happy one.

Secretary GATES. Thank you, Mr. Bates. Mr. BATES. Mr. Chairman, I just have one observation on the bill. Mr. KILDAY. Mr. Bates. Mr BATEs. Mr. Secretary, in your remarks you indicated the interest of the service. And, of course, inextricably interwoven in that concept is the concept of the individual. Secretary Gates. Certainly,

Mr. BATES. And I think that the important thing we must look at in this bill is keeping faith with people, if we are going to talk about the interest of the service.

So whether these particular guarantees are guaranteed technically and legally by law, or whether they are born of custom and tradition and implied by usage, I think it is difficult to separate either one of them. Because people entering the service want to know what is ahead of them. And if custom and traditions have brought forth certain results upon which people have expected to base a career, it seems to me that the future of the service demands that we keep faith with those people and with those concepts.

I know it is difficult to work out many of these things, and particularly as we had the question of constructive credits up 2 or 3 years ago, where it was contemplated to give a fraction or the whole to people who were leaving, and the comparison of that with the people you were retaining who would get only the same emoluments even though they were selected to be retained and did in fact serve.

So it is a difficult problem we have to work out. But I think basically and fundamentally it is the faith with the individual we must keep in mind.

Secretary Gates. Well, I completely agree with you. The task of this legislation is to preserve the equities between groups of people and preserve good faith and try and level off the problem in the best interests of having the best kind of officer corps that you can 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.

envision.

Mr. Bares. 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 retirement.

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 retirement.

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. Kilpay. 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

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.

you for

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.

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.

(6) 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

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