(4) military construction; and (5) research, development, test, and evaluation.

This rearrangement will not change the basic manner in which funds are to be appropriated for the Department of Defense. Specifically, under each title or category funds will continue to be appropriated for each military department and there is no proposal to appropriate all funds directly to the Secretary of Defense. Furthermore, to facilitate consideration of the budget request, the House Committee on Appropriations is being provided with all the information necessary to effect complete comparability between the new appropriation structure proposed for 1960 and the current appropriation structure.

The 1960 budget proposes that funds for operation and maintenance activities of the Navy be provided under a single appropriation for "Operation and maintenance, Navy"-this being a consolidation of the 10 present appropriations for this purpose in the Navy. This would provide some additional flexibility for the Navy. Aside from this proposal the 1960 budget provides for no additional flexibility or transferability over what was approved in the 1959 Appropriation

Act.

In order to present to the Congress a clearer picture of the effort to develop new weapons and equipment, to simplify administration, and to carry out suggestions made by the Appropriations Committees, certain funds formerly included in other appropriations, particularly procurement, are now included in the appropriations for research and development, the scope of which has been broadened to include test and evaluation. These appropriations will continue to be made separately to each military department, as in the past.

And I might say in summary on this question of the proposal for consideration by the Appropriations Committee of a new way in which appropriations be made, is that there is no intent in that, nor is there any likelihood of there being granted, any important additional flexibility to the Department of Defense.

The money is not intended to be appropriated other than to the services for the functions that are indicated.

This, in the opinion of the Department of Defense, was a proposal for consideration only by the Appropriations Committee of a way in which the Congress, itself, and the public could better understand the purposes for which this money is being appropriated. And if the Congress does not believe that, of course they won't appropriate it that way. But we feel as if it is our obligation to make such proposals to the Congress when we believe a better public understanding can be achieved. But there is nothing under the rug on this, Mr. Chairman, and members of the committee.

This is solely an attempt to try to reflect better to the people of this country just what their very large sums of military appropriations are going for.

The CHAIRMAN. Thank you, Mr. Secretary.

Secretary MCELROY. Mr. Chairman and members of the committee, I said last year, "The Nation is prepared to meet the threat it faces today." That statement is still true now in February 1959. Our forces are fully capable of carrying out their assigned missions and will continue to have this capability during the foreseeable future.

Our research and development programs are being pressed vigorously to make certain that the statement will be true regarding our future capability. It is always a pleasure to appear before a committee which is so thoroughly conversant with the problems of the Department of Defense. I thank you for letting me take so much of your time with this statement, and I shall be glad to answer to the extent of my ability, any questions you may care to ask me.

The CHAIRMAN. Thank you, Mr. Secretary.

Members of the committee, you will recall a few moments ago I stated that we worked out the hearings to proceed along the line, that when the Secretary had finished his prepared statement, then we would go in executive session and hear General Twining, whose statement will relate considerably to the prepared statement of the Secretary. Then, later on, either today or tomorrow or some other time, in a continuation of this hearing, we will have the Secretary back in public session to answer questions.

Now the committee will go in executive session.

All people in the room who have no relation to the Department of Defense and are not cleared by the Department of Defense are respectfully requested to retire.

(Whereupon, at 10:50 a.m., the committee proceeded in executive session.)

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, Washington, D.C., Tuesday, February 3, 1959.

The committee met at 10:15 a.m., Hon. Carl Vinson (chairman) presiding.

The CHAIRMAN. Now, members of the committee, we get back now to our executive hearing.

This is highly classified information that is being revealed to you by General Twining.

Now it is necessary for me to go before the Rules Committee at 10:30, and I will ask Mr. Gavin to go with me.

Then I will ask Mr. Kilday to preside over the committee and to take the testimony in executive session. When the testimony has been completed in executive session, I will ask Mr. Kilday to have an open hearing with the Secretary of Defense.

I have a great many questions I am anxious to ask him, and ask him in public.

So, therefore, I am going to ask that the committee meet this afternoon at 2 o'clock.

Now, General Twining, you may proceed.

(Reporter excused.)

(Whereupon, at 10:17 a.m., the committee proceeded in executive session.)

AFTERNOON SESSION

The CHAIRMAN. Now let the committee come to order.

I understand, members of the committee, from Mr. Kilday that General Twining gave his classified statement this morning. Later on during our inquiry, if we find it necessary to call him back, why we will respectfully request him to reappear.

I think we should now open the hearing before the full committee, in open session, with the Secretary.

Mr. Secretary, I want to compliment you on your statement.

In general, it gives the committee firsthand information about the Department of Defense in a general manner. Perhaps it might be that you cannot go into into detail on certain questions that will be asked during the hearing this afternoon. And if you cannot, have no hesitancy to pass them over until we can have an executive session.

Now, at the outset, Mr. Secretary, I want to say that when the President submitted his budget message I read the proposed new method of appropriating funds. It caused me considerable concern. I addressed communications to each member of the Appropriations Committee and pointed out the dangers that I saw in it from the interpretation I placed on it.

I was happy to note from your statement that probably I was anticipating things that would not arise and that appropriations will be continued to be made to the separate services as they have in the past, is that correct?

Secretary MCELROY. That is correct, sir.

The CHAIRMAN. I want to read this in the record. The Secretary says:

This rearrangement will not change the basic manner in which funds are to be appropriated for the Department of Defense. Specifically under each title or category funds will be appropriated—

I wish the reporter would underscore this

for each military department, and there is no proposal to appropriate all funds for the Secretary of Defense.

I want to thank you for clearing that up. At that point I think it might be pertinent that I place in the record correspondence that I had with the Appropriations Committee, and in particular my letter to Mr. Mahon in response to one from him wherein I pointed outand I think this should be in the cognizance of every member of the committee that under any interpretation of the law the only way we can make appropriations to the Department of Defense is in three instances, which are specified in the statute.

The law makes it absolutely necessary to appropriate to the separate departments. I refer to the statutes in here, which are the statutes in reference:

Nowhere in the law directly or by interpretation is there any authority to appropriate funds to the Secretary of Defense, except in three instances.

1. Appropriations to the Office of the Secretary of Defense for the immediate operation of that office with regard to salaries, office supplies and so forth.

2. Specific authority contained in section 203(b) of the Nationad Security Act which creates the Director of Defense, Research and Engineering.

3. The authority contained in Public Law 85, 325, with respect to Advanced Research Projects Agency——

referred to as ARPA.

Now those are the only three instances where I can find in statute that we have given the Appropriations Committee authority to appropriate directly to the Department of Defense. And I repeat, I am happy to note that the appropriation this year will continue to go as it has in the past, and that is to the military departments. (Secretary McElroy nods.)

Mr. KILDAY. Are you leaving that subject?

The CHAIRMAN. Yes; I am going to leave it.

Mr. KILDAY. May I ask one question in connection with it? Mr. Secretary, I call your attention to your prepared statement, about the middle of page 19, the paragraph beginning there. Secretary McELROY. Yes, sir.

Mr. KILDAY (reading):

Changes in the manner in which our fiscal year 1960 budget requests are presented reflect for the most part a rearrangement of the appropriations for the Department of Defense in terms of major purposes rather than of organizational units.

That is substantially, I believe, the language of the President's message and perhaps of the budget, itself.

May I ask what is meant there by "organizational units"?

Secretary MCELROY. Organizational units would be Army, Navy, and Air Force.

Mr. KILDAY. So that this language will state, then, that it is requested that the funds be appropriated for major purposes rather than for the Departments of the Army, Navy, and Air Force?

Secretary MCELROY. Well, under each of these functional categories there is a breakdown: Army, Navy, and Air Force. So that while there is a grouping of funds for these various functional purposes, the appropriating is not in one total sum to the Department of Defense for all of the organizational units that would benefit in these areas, like personnel or operation and maintenance or whatever it might be, but it is independently given as a subheading under these five functional categories for Army, Navy, and Air Force.

Mr. KILDAY. Well, of course, you have the major categories, for instance, of personnel or I think they generally word it pay and subsistence, or maintenance and operations?

Secretary MCELROY. That is right.

Mr. KILDAY. Construction and so forth?
Secretary McELROY. Procurement.

Mr. KILDAY. But it isn't proposed that for construction, let us say, that the funds be in one lump sum under the control of the Secretary of Defense only?

Secretary McELROY. No, sir.

Mr. KILDAY. But that construction for the Navy in given amount, the Army in given amount, and the Air Force?

Secretary MCELROY. That is right.

Mr. KILDAY. And be expended under the direction of the Secretary of the military department to whom appropriated?

Secretary MCELROY. Yes.

The CHAIRMAN. That is exactly what I had in mind. I am glad to have that cleared up.

Mr. KILDAY. Well, the organizational unit was the thing I didn't quite understand. It is a new term of reference with us.

Mr. HARDY. Mr. Chairman, could I clarify

The CHAIRMAN. Right on this point?

Mr. HARDY. Just on this point.

Does the proposal carry with it any additional authority to transfer funds within these so-called major functional purposes?

Secretary MCELROY. No. As I said here in my statement, the only place in which you might consider that there might be some

expansion of flexibility would be in the fact that in the Navy, operations and maintenance-instead of having 10 separate segments of the Navy operations and maintenance, these are grouped as 1. So if you would consider that that gave the Navy added flexibility, then in that one respect there might be added flexibility. But there is not any as far as the Secretary of Defense is concerned.

Mr. HARDY. I am glad to get that clarified, but I want to be sure that we do understand it. Because when we get into a major change in the arrangement of an appropriations bill sometimes we find ourselves with built-in flexibility that wasn't anticipated.

Secretary MCELROY. Well, I haven't discovered that that happens in the Defense appropriations. Because I think it has been kept pretty clearly under the supervision of the Congress.

Mr. HARDY. Well, I am afraid, Mr. Secretary, that a heap of things that the Congress used to supervise have gotten away from us. And I am hoping we can get a little better control over them than we have had in times past.

Secretary McELROY. Well

Mr. HARDY. I don't want to see us do something here even in the guise of improvement which might subsequently whittle away what little bit of authority we do have left.

Secretary MCELROY. Well, I am sure that the same concern that this committee would have would be felt also by the Appropriations Committee that deals with these defense matters.

Mr. HARDY. Well, I don't know. Sometimes the Appropriations Committee, itself, likes to take away a little of our authority.

Secretary MCELROY. Well, that I would say is between you and them. [Laughter.]

The CHAIRMAN. Now, Mr. Secretary, the second question I want to ask you is on page 15, in the middle of the page.

As a result of these studies, the Joint Chiefs of Staff formally advised the Secretary of Defense that while each individual service Chief had some reservations in respect to the fund

and so forth.

Now, the question is: Are you in position to inform the committee what reservation each one of the service Chiefs had, or do you prefer that we obtain that from them?

Secretary MCELROY. Well, I would say or suggest, Mr. Chairman, that you yould be more satisfied if you got it from them. Although I might say to you, sir, that this same question was asked in another committee and we filed-or we have the information in the course of preparation from each one of the Chiefs for submission for the record. And if you would like us to do so, we would do the same thing here.

The CHAIRMAN. All right. Then we will ask each one of the Chiefs for that information.

Secretary MCELROY. And this will be over his signature, sir.

The CHAIRMAN. Let's see. I think there is one more question that I wanted to ask you.

Now, Mr. Secretary, I think I should make this kind of a statement before I ask you this question.

It is with reference to the appropriations bill last year. For the information of the committee, and Mr. Secretary, I think you should