1 AF costs only. 2 The 3 trucks listed comprise the 16-ton series of the GOER program which was terminated in June 1965. Work was officially terminated on the tanker and wrecker in February 1966. The cost of the program was $4,800,000.

CONTINUATION OF AUTHORIZED PROGRAMS AND NEW PROGRAMS

Chairman ELLENDER. All right, Dr. Foster, you may proceed. Dr. FOSTER. Thank you, Mr. Chairman. First, what do we intend to do with this money?

There are three things we intend to do. First of all, we want to continue those programs authorized by the Congress last year. That is by far the major portion of the funding. It is considerably in excess of $7 billion. Second, we want to maintain the technological lead that the United States has, and that accounts for a substantial increase that we are requesting. Third, we would like to initiate some new programs to guard against the problems that we see arising from the Soviet efforts. These new programs are in part an evolution of past programs, but in part they are new initiatives, programs that will change the way of doing the job. Those new initiatives are approximately 30 in number and involve a total request for about $300 million. I would like to come to those later.

That is how we propose to spend the money.

PROGRAM PLANNING: THREATS FACING UNITED STATES

In trying to plan for our research and development, it is very clear that it is difficult to set the exact amount of defense research and development effort the Department ought to undertake. In planning ahead it is hard to know what we will need, because we are really driven by future military needs-which are partly driven by what the threat is, or what it will be at that time, and partly by what will be able to do about it-and in many cases we don't know what we will be able to do about it.

So you just can't make a 10-year projection for research and development. But I do believe it is driven by the threats that we face. If this country did not feel threatened from abroad, I believe the nature of our people is such that we would just slowly or precipitously reduce the request for research and development to essentially zero. Chairman ELLENDER. And all of that threat comes from communism.

Dr. FOSTER. I believe in general that threat comes from communism—that is, I don't think we should blame them for all of it. We are in part responsible.

Senator YOUNG. Every nation that I can remember that advanced very far did it because they had large research and development programs. Hitler's Germany was one. Russia is now devoting a great effort to it. It seems that it always has to be defense related, otherwise, no country seems to want to do the research and development that is really necessary to make it a leader in other industries.

Dr. FOSTER. I think that is correct, sir, although it is not, in my view, characteristic of the American system. I think, left to its own devices, the United States would let its military research and development drop, as well as its whole military system.

Senator YOUNG. If it were not for its being defense related, we would not appropriate anything like this amount for research.

Dr. FOSTER. I think that is correct. We tend to channel our efforts into the civil side, and I am all for it. That is exactly the point I would like to talk about.

RUSSIAN RESEARCH AND DEVELOPMENT EXPENDITURES

I believe that the challenge we are facing is, of course, as Admiral Moorer has described to you, primarily from the Soviet Union. Let me look, however, at the research and development side.

Let me show you the research and development effort of the Soviet Union, their total national effort, and compare that with the United States.

(Slide presentation.)

Now the Soviet looks like this. It started off in 1955 at roughly $4. billion in American equivalent dollars. It has grown rather steadily until at the present time, as best we can judge, it is in the vicinity of $22 billion to $24 billion-this is in 1968 dollars. [Deleted.]

Chairman ELLENDER. What is included in that effort?

Dr. FOSTER. This, Senator, includes their research and development for civil purposes, research and development for space, for atomic energy, and for military equipment-their total national research and development program.

Senator CASE. That includes pure research also?

Dr. FOSTER. Yes, sir-institutes, everything.

Chairman ELLENDER. You include in that, of course, all the moneys that are spent in colleges. For instance, they have a large university devoted entirely to agriculture. We also spend a lot of money, but it is private industry. You should add what private industry in the United States does.

U.S. RESEARCH AND DEVELOPMENT EXPEnditures

Dr. FOSTER. I am doing that, sir. That is exactly the point. It is just those things I would like to put in, Mr. Chairman. The United States, starting in 1955, had a total national research and development effort of about $9 billion. This included all the private, industrial, and federally supported programs. So it rose, as you see, rather steadily, at about the same rate as the Soviet Union's. The only significant trend is subsequent to 1968 when it appears that our effort in constant dollars is on the decline.

CONVERSION OF RUBLES TO DOLLARS

Now to be quite honest about the critical aspects, there are two. First, what is the absolute magnitude of this Soviet effort? This is supposed to be in equivalent effort; of course, they are using rubles and we are using dollars. But we have done our very best to make the conversion from rubles to dollars appropriate in each area. That is, in agriculture there is a large difference in the effectiveness of using the ruble and the dollar, whereas in the military area there is very little.

RUSSIAN EFFICIENCY CATEGORIES

Chairman ELLENDER. Why? What is the difference?

Dr. FOSTER. I think the difference has to do with the efficiency with which they do the job in different kinds of activities. They are really quite efficient when it comes to building major works like dams or missiles. When it comes to other matters, however, particularly in the civil area-automobiles, agriculture- they are not just as efficient. Senator HRUSKA. Computers?

Dr. FOSTER. I don't really know what the problem is with regard to computers. It may be some internal reluctance to accept the displacement of manpower. I don't know why they can't get computers. Senator CASE. Does this include medical research-everything? Dr. FOSTER. Yes, sir; everything.

Senator CASE. Literally?

Dr. FOSTER. The total national research effort.

Senator CASE. If people wanted to discover who wrote Shakespeare's works, that would be included?

Dr. FOSTER. Yes, sir; in both countries.

Now I don't know the absolute magnitude of this. It is a very difficult conversion, and every economist is likely to come up with a different number here. The best estimate I can get is that this is good to about [deleted] percent.

CONVERSION UNCERTAINTY

Chairman ELLENDER. Suppose you put it where you think is accurate. Where would that curve end?

Dr. FOSTER. You mean in the future?

Chairman ELLENDER. No; I am talking about the present. You expressed some uncertainty there.

Dr. FOSTER. Sir, there is an uncertainty about the conversion from rubles to dollars, an uncertainty associated with our detailed knowledge of what is really going on in every program in the Soviet Union. [Deleted.]

APPLICATION OF U.S. Costs

Chairman ELLENDER. If it is $20 billion, what will it cost us?

Dr. FOSTER. It would cost us $20 billion. This is in U.S. equivalent dollars to do what the Soviets are doing in each field.

Chairman ELLENDER. For paying those who do this work?

Dr. FOSTER. Yes, sir. It includes the observation that they pay their people for instance, in the military services-perhaps one-fifth of what we pay ours and in engineering or science, perhaps a third of what we pay our people.

Chairman ELLENDER. Wouldn't that be the way to measure?

Dr. FOSTER. We do measure it that way; yes, sir.

Chairman ELLENDER. If you do that, why would you not exceed the expenditures we make, according to the chart? You want to make a strong case, and I want you to prove it.

Dr. FOSTER. I am going to prove it.

Chairman ELLENDER. AS between us and Russia. That has been the case all along. You can produce many things in Russia for about a fifth of what they cost here.

Dr. FOSTER. That is correct, sir. You are absolutely right. The Russian numbers would be considerably lower. But I have put down on this chart the amount of U.S. dollars it would take to perform in the United States what is actually done in the Soviet Union, in order to give you a feeling for the equivalent effort. I must have some common independent indicator of effort. It is true they don't pay their people as much as we do. What I have done here is to give you the number of dollars it would cost us to pay our people to do what they are doing, and that gives you an opportunity to compare the efforts, in both countries.

Chairman ELLENDER. How about results?

Dr. FOSTER. This is in terms of results, sir.

Senator CASE. That is right. It must not be in terms of manpower. Dr. FOSTER. That is a better way to put it-results.

Senator CASE. That is a very, very elusive thing.

Dr. FOSTER. That is a much better way of saying it.