that would otherwise be available for lieutenant commanders being considered for promotion to commander. The same is true of the Marine Corps.

To indicate the effect this has under existing law, it can be stated that without this legislation over 50 percent of all commanders and lieutenant colonels serving on active duty will be twice passed over officers.

The situation with regard to colonels in the Marine Corps and captains in the Navy is somewhat different because Navy captains are not legally passed over until their 29th or 30th year, whereas Marine Corps colonels are legally passed over in their 23d or 24th year.

Thus there are 92 colonels in the Marine Corps who have twice legally failed of selection to brigadier general whereas there are only 61 unrestricted line captains in the Navy who have legally twice failed of selection to flag officers. These captains will, of course, retire on July 1, 1959.

The problem then is how to create vacancies which will permit a reasonable flow of promotion and at the same time treat everyone in as equitable a manner as is possible under the circumstances.

There are several possible solutions to this situation. First, the Navy and Marine Corps could solve the problem by just going ahead and assessing this fantastic attrition rate against their lientenant commanders and majors. In other words, 3 out of 4 lieutenant commanders and majors would fail of selection.

Now bear in mind that these are the officers who fought in two wars and who have the experience that can only be gained in this manner. These officers constitute the future leaders of the Navy and Marine Corps.

Secondly, promotions could be retarded for these individuals so that they are not brought up for promotion until well beyond the Officer Personnel Act normal years of total service. Both the Navy and Marine Corps are now approaching the 18-year point for promotion to commander and lieutenant colonel. If this is done, a substantial number of these combat-experienced lieutenant commanders in the Navy and majors in the Marine Corps now serving on active duty will not even have an opportunity to be considered for general officer in the Marine Corps and flag officer in the Navy, and officers junior to the hump would be similarly affected.

The effect upon morale would, of course, be devastating.

There is a third possibility which the Navy and Marine Corps have rejected: Namely, to ask the Congress to authorize additional numbers in grade in excess of those now serving on active duty or the limits imposed by the Officer Grade Limitation Act to carry these officers on active duty even though there is no billet justification for them. If this is done over the next few years in order to maintain the flow of promotion and attrition contemplated by the Officer Personnel Act, the Navy would need in the peak years about 2420 more unrestricted line captain vacancies, and about 900 more commander vacancies; the Marine Corps needs 675 more colonel vacancies and 1,050 more lieutenant colonel vacancies.

The net result would be a substantial number of senior officers serving in the grade of lieutenant colonel and colonel in the Marine Corps,

and commander and captain in the Navy in excess of requirements. I the peak year, it is estimated that this would cost $63,430,000 in additional appropriations for military pay and allowances. This is 1 year's cost alone and is exclusive of special pays. Over a 10-year period, it is estimated that this would cost approximately $363,717,000 more than the proposed legislation, in active duty pay and allowance. And these officers would be paid for serving in billets that would be completely unjustifiable.

The committee will remember that we spent a great deal of time on the Officer Grade Limitation Act because the Congress insisted that severe restrictions be imposed upon the number of officers who could serve in the grade of major and above. I think we would have a very difficult time in attempting to justify additional billets just to permit a promotion system to function properly, and retain unneeded senior officers on active duty.

Then what is the suggested solution?

The suggested solution is to spread the increased forced attrition and the slowdown of promotion flow equitably among the various grades from major through colonel, and lieutenant commander through captain.

I mentioned earlier that a captain in the Navy today can expect to be retired when he completes 30 years of commissioned service and has twice failed of selection. The same is true of a marine colonel. The commander can expect to serve 26 years, as can a lieutenant colonel.

The proposed legislation, stated as simply as possible, provides that twice-passed-over colonels or captains can be retired after they have completed at least 20 years of total commissioned service and twicepassed-over commanders and lieutenant colonels can be retired after they have completed at least 20 years of total commissioned service. Since the Navy does not have twice-passed-over captains with less than 30 years of service, the proposed legislation permits the Secretary of the Navy to establish continuation boards. Captains who are in their 5th year in grade as captains may be considered by these continuation boards and if they are not selected for continuation, they will be retired on June 30 of the fiscal year in which they fail to be selected for continuation. The proposed legislation also permits twicepassed-over lieutenant colonels and commanders to be recommended for continuation. If an officer is contained in his grade, he is not thereafter subject to a continuation board while serving in that grade. This is the sum and substance of the proposed legislation. There are other technical provisions which do not affect the substance of the matter.

Now the subcommittee, in considering the proposed legislation, took into consideration the fact that the captains and commanders who will be adversely affected by the proposed legislation have, for practical purposes, been subjected to very little forced attrition. There are some classes of naval officers where there has been 100 percent selection opportunity for Regular officers. In addition, because of accelerated promotion, these officers have all served in senior grades and have drawn the pay of these senior grades well in advance of their normal career patterns.

The Marine Corps is in a somewhat similar situation with respect to their colonels. This same is true to a lesser extent for majors and lieutenant colonels except that the Marine Corps did go through a reselection process with some forced attrition rather than affirm promotions for majors and lieutenant colonels that were made under the Temporary Promotion Act of 1941.

It is a fair statement to make, however, that most of the captains and colonels and commanders and lieutenant colonels now serving on active duty in the Navy and Marine Corps have not been subjected to the attrition rates contemplated by the Officer Personnel Act.

In considering this problem, the Navy and Marine Corps attempted to equate these factors with the needs of the service and the necessity for giving their lieutenant commanders and majors a reasonable opportunity for promotion. The subcommittee agrees with the legislation proposed by the Navy Department insofar as the solution suggested is concerned.

In other words, the subcommittee agrees that twice-passed-over commanders and lieutenant colonels should be retired short of 26 years of service, and likewise agrees that captains and colonels should be retired short of 30 years of service in such numbers as may be necessary in order to provide vacancies which will permit a more reasonable promotional opportunity for the majors and lieutenant commanders who constitute the hump.

But the subcommittee also took into consideration that these officers who will be affected by the proposed enactment of this legislation, that is, the individuals now serving as captains in the Navy and colonels in the Marine Corps, who had reason to believe that they would continue to serve until they had completed 30 years of service, and the commanders and lieutenant colonels who had reason to believe they would remain on active duty until they had completed 26 years of service, should receive some form of readjustment allowance to offset the expenses of severance from active duty that will occur sooner than they had contemplated.

Now, this was placed in the bill by the subcommittee. This did not come from the Department. I don't know that it has ever appeared in the budget. The subcommittee felt very strongly about this pro

vision.

Now, this raises the very interesting question as to whether or not these people who will be affected by the proposed legislation had a right to expect to serve 30 years as captains and colonels, or 26 years as commanders and lieutenant colonels.

We have an opinion that I will not at this point read, although at the conclusion of this statement, Mr. Chairman, in view of notice that has been given of a proposed amendment, I will at that time want to read at least a portion of the opinion.

In short, while it is perfectly obvious that no Regular officer of the armed services can be construed to have a contract with the Government, nevertheless, it is true that the Congress can by statute establish the means by which that officer may be discharged or retired, but the Congress can also change these statutes without exposing the Government to a charge of having violated a contract or having acted in bad faith.

On the other hand, these individuals, all things being equal, had reason to believe that if they retained their health and performed their duties in a satisfactory manner, that in all likelihood they would continue until they had reached their statutory retirement point. Now we are changing the retirement point in the law. The subcommittee was of the opinion that it was only proper that these officers should be given a separation allowance to assist them in adjusting to the necessary changes in their personal planning. To some extent, the readjustment costs that these officers may incur can be related to the years of active duty not completed.

The amount that the subcommitee felt was reasonable under the circumstances was 2 months' pay for each year of active service that these individuals will not be able to complete as a result of the enactment of the proposed legislation. But we have also provided that no individual shall receive an amount in excess of $6,000.

We believe that this lump sum payment will provide for the readjustment of these officers due to their unexpected return to civilian life at this time.

Now there are some additional provisions in this bill which I think I should explain in more detail.

The bill submitted by the Navy Department would have permitted certain officers who will be retired under the provisions of the proposed legislation to gain additional constructive credit for retirement purposes beyond that which is authorized by law today.

We have deleted that provision from the bill.

In addition to adding the readjustment pay to which I have referred, we have also inserted a provision which prevents the proposed legislation from being used with respect to physicians, dentists, members of the Medical Service Corps and the Nurse Corps so long as the doctors draft law is in effect.

It is the opinion of the subcommittee that physicians and dentists serving on active duty in the Navy should not be subjected to early retirement under the provisions of this act while we are still involuntarily calling physicians and dentists to active duty to meet the medical and dental needs of the armed services.

And in view of the fact that the physicians and dentists are being involuntarily called, we thought it was also wise to provide this exception for members of the Medical Service Corps and the Nurse Corps. I might add that there was no intention on the part of the Navy to apply this proposed legislation to these four corps but we felt that it would be wiser to make the law very clear in that respect. We now come to the subject of cost.

The cost aspects of this type of legislation are complex and necessarily speculative. Not only must the increased cost of early retirements of captains, colonels, commanders, and lieutenant colonels in the event of the passage of this legislation be weighed against the increased cost of the early retirements of the excessive numbers of lieutenant commanders and majors who will be retired in the event. that this legislation fails, but also it is necessary to consider the relative cost of active duty pay under both of these contingencies.

The subcommittee made considerable inquiry into the original cost figures submitted by the Navy Department. It insisted on a resubmission of the long-term retirement costs based on not one, but three

actuarial tables. They have been inserted into the hearings. It examined carefully the Department's estimates of differences in the costs of active duty pay both with and without the legislation.

As a result of its inquiries, the subcommittee feels that the maximum cost of the proposed legislation, including the readjustment pay recommended by the subcommittee, will not exceed $15 million spread over the next 60 years.

The CHAIRMAN. How many?

Mr. KILDAY. 60.

During the first 7 years of the program, it is probable that the proposed legislation will actually result in a total increase of expenditures of only $3,500,000, including the readjustment pay.

Now, as is stated in the prepared statement, Mr. Chairman, these figures are very difficult to arrive at. They must necessarily be speculative.

From our broad knowledge of the personnel system we know that when a man is retired, he is going on the retired roll and another one is going to step up. But that doesn't mean that he is going to cost you as much as the other one because he is a man of lesser service and in a different pay bracket, so he then costs you less.

That is just an indication of how complicated the ascertainment of costs in this thing will be.

I want to say, Mr. Chairman, that the subcommittee gave this very careful consideration.

But it was not only in this session that that was done.

The subcommittee heard this problem discussed and a proposed solution in the last session of Congress, and in the session of the Congress before that the subcommittee held a hearing on the problem, quite a long, exhaustive hearing on the problem.

Now as to those who approach this thing with any qualms, I want to tell you that I was with you through a period of 2 years on this and I guess I was sort of hoping that the problem would just go away. But it hasn't gone away. It is still here. And I have resolved the qualms that I had about this because we have reached the point where something has to be done. That is all there is to it. Something has just got to be done about the situation.

I guess the irresistable force has met the immovable object in this

matter.

I think we can all understand it better and I think the House can understand it better if we put it this way. There are 3,500 officers, Regular officers in the Navy and Marine Corps today who must be relieved from active duty. They must be attrited. They are eventually going to be attrited whether there is legislation or not. If there is no legislation 6,300 officers are going to go out at the lower grades, younger, more vigorous, but well experienced officers, because there are no vacancies in the next higher grade for them.

So 3,500 are going to go out before those 3,500 thought they would have to go out of the Navy and the Marine Corps.

What this legislation will do is to provide some selectivity as to who shall go out, whether it shall be your young men who are coming up the ladder and those to whom you are going to have to look in the years to come to maintain an efficient and a vigorous Navy, or whether you are going to, by a process as nearly equitable as this committee