Secretary KORTH. Well, actually, I did not. I came here in January, sir, and at that time the budget for submission

Mr. RIVERS. That is right.

Secretary KORTH (continuing). To the Congress was set.

Mr. RIVERS. Yes.

Secretary KORTH. Mr. Connally, my predecessor, was the first member; that is, the first Secretary of the Navy under this administration.

Mr. RIVERS. Well, now, are you just completing the first program of, we will call it, the Kennedy administration's

Secretary KORTH. Yes, sir.

Mr. RIVERS (continuing). Replacement and modernization program?

Secretary KORTH. Yes, sir. That is contained in the 1963 budget request, which has been approved by both Houses of Congress and has now, of course, been approved by the conference committee. It is subject to action by the respective Houses.

Mr. RIVERS. Follow me, Phil.

In 412 last year we had the Kennedy proposal for the second year of the Kennedy administration.

Secretary KORTH. No, sir, that was the first real proposal.
Mr. RIVERS. Well, that is what I am trying to say.

Secretary KORTH. That is right.

Mr. RIVERS. That was really the first year.

Secretary KORTH. That is correct, sir.

Mr. RIVERS. Now coming up in November, or whenever you get the budget before the proper people.

Secretary KORTH. Will be the second complete Kennedy proposal. Mr. RIVERS. Under 412.

Secretary KORTH. Yes, sir.

Mr. RIVERS. This is what we are talking about-412.

Secretary KORTH. Yes, sir.

Mr. RIVERS. Now, FRAM comes-does FRAM come under 412, too? Mr. KELLEHER. No, sir, that is under general authority.

Secretary KORTH. No, sir.

Mr. RIVERS. So, this year, in this budget year which is coming up, you have X number of ships.

Secretary KORTH. That is right, sir.

Mr. RIVERS. Now, I want to know how that stacks up with your statement?

Secretary KORTH. Well, it stacks up quite well, sir. Actually, we have some increases that we have requested of the Secretary of Defense but which have quite naturally not yet been acted upon.

Mr. RIVERS. Now, Mr. Hardy and Mr. Bates here, both of them, have taken figures and they persuaded the chairman and me that from their own figures, that we are orderly liquidating the fleet if we follow what we are doing now.

Mr. BATES. Mr. Chairman

Mr. RIVERS. Wait

Mr. HARDY. My Chairman

Mr. RIVERS. Wait

Mr. BATES. On that point, there is a vast difference between the first increment and that which you reach in fiscal year 1968.

Now, what do we have-37 ships this year?

Admiral GRIFFIN. Thirty-seven new ships in 1963; yes, sir.
Secretary KORTH. Yes, sir.

Mr. BATES. Obviously, 37 ships a year is not the answer to this problem.

Mr. RIVERS. It is not the answer.

Secretary KORTH. That is quite true.

Mr. BATES. So, you are going to build this up over a period of time. Secretary KORTH. That is correct, sir. It increases.

Mr. BATES. So, only the first 1 or 2 years has been approved, which have a relatively low level.

Secretary KORTH. That is correct.

Mr. BATES. And which on a sustained basis will not do the job. Secretary KORTH. That is absolutely correct.

Mr. RIVERS. Now wait a minute

Mr. HARDY. That raises in my mind a more fundamental question, I think, and that is how we arrive at these limited numbers that are already in the bill, the ones that Mr. Bates just mentioned, for the next year or two. I don't remember over what period of time.

Now, I wonder whether we are talking now about selling OSD on the idea of providing an adequate Navy, that is an adequate ship building program. I am wondering whether actually our presentations to OSD are as strong as they might be, and I wonder whether that is the reason our numbers are so small now. Whether the Navy has been going into OSD with its hat in its hands and saying we are already half licked.

Otherwise the schedule that we are working on now, that Mr. Bates just pointed out, is a schedule which will completely liquidate the Navy within a relatively short period of time.

Mr. RIVERS. That is right.

Mr. HARDY. Unless you step it up.

Secretary KORTH. Congressman Hardy, if I can say this? When you say it is a meager amount, you must judge this in relation to truly lean years which we have had before. It has been a significant

increase.

Mr. HARDY. And you got to judge it in relation to the trend that is taking place in the Military Establishment, too, Mr. Secretary. Secretary KORTH. That is correct, sir.

Mr. HARDY. And that is what is bothering me. And also bothered— and this is another part of this fundamental thing that I think we are talking about.

I am also bothered about what is happening. We are conducting these hearings because of a genuine concern

Secretary KORTH. I agree.

Mr. HARDY. That the fleet is about to become incapable of meeting our national requirements.

Secretary KORTH. We have that same concern.

Mr. HARDY. Now, then, if as we explore this thing we find out that maybe our presentations to OSD are not strong enough_and maybe we are going in there half licked before we get there, we have been told how much we can present. We have been through this thing before, Mr. Secretary, long before your hitch here.

Secretary KORTH. Yes, sir.

85066-62—No. 75- -2

Mr. HARDY. If the Navy is going to OSD on its program already stripped down to a bare minimum and then that is cut in OSD, what have we got to look forward to in the future?

Suppose we develop a case here can we count on the Navy, or how much can we count on the Navy to support its own requirements? That is what I am talking about. How much can we count on the Navy to back us up?

Frankly, I didn't think you did too good a job, on this proscription, in the appropriations bill. I don't think we had the help we should have had. And that is part of the conversion and construction program.

Secretary KORTH. You are speaking now of private versus public yards?

Mr. HARDY. That is what I am talking about on that one.

But I am talking now: Can we count on the Navy to go into OSD and fight for what it honestly believes, or are you going to get whipped and go in there with half a request?

Secretary KORTH. Well, I would like to say this, if I may, Congressman Hardy, that from my experience thus far, which is quite true, only a limited period of time, of 6 months, I do not believe that the Navy has gone down to OSD with its "hat in hand," with a fixed dollar amount being placed upon it.

I honestly believe that when we show requirements, valid requirements, to the Secretary of Defense, that the Secretary of Defense will grant us the fulfillment of those requirements, irrespective of the dollar amounts involved.

And I say this also as was said by Admiral Anderson and by me in January, when we appeared before the full committee, that we were satisfied with the substantial increase which we had in the shipbuilding and construction program for the 1963 budget.

Mr. HARDY. Well, you know that it is usual procedure for OSD to say to each of the services: "Here is the maximum you can ask for."

Secretary KORTH. That has not been stated to us, and I don't think that any responsible member of the Navy staff will tell you that we have been told that we have a fixed dollar amount.

to.

Mr. RIVERS. So that is what I was getting, to try to come around

I am glad Mr. Hardy has interjected what he has, and Mr. Bates. If you think you need a heavy cruiser, a nuclear cruiser, a guided missile cruiser-the modern ship-you are going to ask for that category, and you are not going to settle for two DDG's of some other category.

Secretary KORTH. No, sir. We are going to ask for what we honestly believe, from the professional standpoint and otherwise, is needed by the Navy to do its job.

Mr. RIVERS. With your wide, wide world spread of commitments, which are getting thinner and thinner every day-now you say with the first year's program of this administration, under Mr. Connally, you are not alarmed?

Secretary KORTH. Not alarmed by what is in their first increment. I am alarmed if we don't get what we think we need in the fu

ture.

Mr. RIVERS. All right.

Now this next year, come this next fall, are you asking for an increase over what you got this year?

Secretary KORTH. Yes, sir.

Mr. RIVERS. What percentage, say

Secretary KORTH (addressing Admiral Griffin). Can you give me that?

Mr. RIVERS. Just give me a horseback

Admiral GRIFFIN. I would say about 15 percent, sir.

Mr. RIVERS. Is this an orderly increase to this goal on which you have your sights at this time?

Secretary KORTH. Yes, sir.

Mr. RIVERS. Now, at the proper time, will the committee get the benefit of the categories?

Secretary KORTH. Oh, absolutely. Absolutely.

Mr. RIVERS. This will be in executive session, won't it?

Mr. KELLEHER. Yes, sir.

Secretary KORTH. We will have the complete detail on it.

And I am not yet in a position to tell you whether the Secretary of Defense will approve our request for the 1964 budget, because it just went down yesterday afternoon.

Mr. RIVERS. I see.

Secretary KORTH. To Defense.

Mr. RIVERS. But we have reason in this committee to have apprehensions, have apprehensions in a lot of areas, about the integrity of the services being protected in the Department of Defense-if you catch the point.

Secretary KORTH. Yes, sir.

Mr. HARDY. That is the substance of the background of the things I was saying a minute ago, Mr. Secretary.

I wish to goodness I hadn't observed in recent years what has seemed to me to be a rather clear breakdown of the individual services' willingness to stand up and be counted in OSD.

Now, the trend that has been toward concentration has been such that I am afraid that some of us have lost our courage.

Mr. RIVERS. Well

Mr. HARDY. I hope it doesn't apply to the stand

Secretary KORTH. Certainly I will stand and be counted.

Mr. HARDY. That is what I am talking about.

Mr. RIVERS. Thank God we don't have any reason to feel that way about you.

What we are going to do is help you in this area as much as we can. Secretary KORTH. I appreciate that.

Mr. RIVERS. And I have no doubt that we will be rewarded in the information which we seek.

But these are some of the things

Mr. HARDY. On that point. However, in trying to help you, we have to have a little backbone in your people, too.

Secretary KORTH. I agree with that, sir.

Mr. HARDY. That is why I brought this up.

I am not critical, but it is a situation that I think we have got to work together. We have to stick together. And we have to fight hard.

Secretary KORTH. I agree with you.
Mr. RIVERS. Or we will sink separately.
Secretary KORTH. That is right, sir.

And that is very aptly put with reference to the modernization program of ships.

Mr. RIVERS. We won't hang. We will sink.
Secretary KORTH. That is right, sir.

Mr. RIVERS. Mr. Hardy and Mr. Bates are fresh out of another committee in which they are doing pretty well.

Mr. HARDY. I wish we hadn't found out a lot of things we have discovered.

Mr. BATES. Mr. Chairman, I would like to ask one question here. Mr. RIVERS. Anyway, let's get off that other committee for the time being and address ourselves to this problem.

Mr. Bates, you go ahead.

Mr. BATES. Now, Mr. Secretary, for the 7-year program, you have for fiscal 1964 a total NC-that is new constructionSecretary KORTH. Yes, sir.

Mr. BATES. Of 52 ships?

Secretary KORTH. I think that is right, sir.

Mr. BATES. Now, did I understand Admiral Griffin to say a moment ago that next year will be a 10 percent increase over the present year? (Transcript changed to 15 percent.)

Secretary KORTH. Approximately.

Admiral GRIFFIN. Approximately, sir.

Mr. BATES. Well, that means we will have 41 ships instead of 52 projected, if you are talking about the number of vessels. We had 37 ships this year.

Secretary KORTH. You can't quite do it that way, sir.

Mr. BATES. No

Admiral GRIFFIN. My 10 percent had relation to the overall money value, sir, and not necessarily with regard to specific numbers of ships.

Mr. BATES. Well, I don't have before me the money value. In terms of number of ships, it would only be 41 ships instead of 52?

Admiral GRIFFIN. Well, we can go into specific detail on this, sir. later on in executive session.

Mr. RIVERS. Executive session?

Admiral GRIFFIN. We will examine that completely, sir.
Mr. BATES. Then let me ask the question, then.

Admiral GRIFFIN. Yes, sir.

Mr. BATES. This 10 percent increase will bring you to the 52 ships!
Admiral GRIFFIN. It will not quite do that, sir.

Secretary KORTH. You cannot really use ships as the 10 percent.
Mr. BATES. Well-

Secretary KORTH. NOW

Mr. BATES. Here is the program for 1964. It says 52 ships.
Secretary KORTH. Yes, sir.

Mr. BATES. You already have your submission.

Does that include 52 ships or a less number of ships?
Secretary KORTH. No; it includes the number that is on there.
Mr. BATES. It does?

Secretary KORTH. Yes, sir.