force, that it would be dominated by mercenaries who might take over the Nation or might be dominated by blacks or by some other racial or ethnic strain, proved to be false claims as well as gratuitous ones, and they are totally without support in the makeup of that portion of our military organization that is volunteer.

If you isolate out of the total force those people who have chosen to reenlist, given the option of getting out of the service, you find that the racial minority portion of the total force is within about 1 percent of the racial minority percent of the total national population in that age group.

Finally, we believed then and now, Mr. Chairman, that once the transition to an All-Volunteer Force has been accomplished, the military force will be more effective and will consist of many fewer people than would its conscripted counterpart.

There are some rather encouraging signs of progress in addition to the lower draft calls which I cited a moment ago. They include the fact that today 7 out of every 10 enlistees are true volunteers compared with 6 of 10 a year ago and only 5 of 10, 2 years ago. In the last half of calendar 1971, 25,000 more true volunteers enlisted than in the corresponding period of 1970.

I know you are concerned, Mr. Chairman, about quality. The mental skills of enlistees, which is sometimes referred to as the quality mix, measured by the results of Armed Forces Qualification Tests, were better in 1971 than they were in 1970. Also in 1971 we enlisted 12 percent more high school graduates than we had in the previous year. A year ago when we were here we talked about the special manning problem in the Army combat skills. One of the remarkable responses of the Army management system to the challenge of the All-Volunteer Force lies in the fact that the combat arms enlistments in the Army have increased from a monthly average of 250 in the last half of 1970 to 3,000 monthly average in the last half of 1971, a whopping increase of 1,200 percent.

A further note of great encouragement insofar as the Guard and Reserve supply picture is concerned, in January of 1972 almost 10,000 soldiers who were separating from active duty enlisted in Army Guard and Reserve units. This, gentlemen, was an enlistment program for prior service personnel that was tried in 1971 at two Army posts, Fort Hood and Fort Lewis, and was very successful there. It was, therefore, expanded to 20 posts for calendar 1972. This January's record of almost 10,000 soldiers with trained skills shipping over is the first indication of real success in that expanded program.

We, of course, have special problems with the All-Volunteer Force. Prominent among them are the supply problems in the Guard and Reserve community and the problem of procuring and retaining of a sufficient number of physicians in other health professions. At the end of December 1971 the Guard and Reserve were 45,000 below their congressional mandated strengths, despite great emphasis that has been recently placed upon their recruiting programs.

Now, if these shortages continue certainly congressional support for not only bonuses but other actions that would stimulate enlistment and retention in the Guard and Reserve will be required. We think that is absolutely vital.

The problem of meeting our requirements for physicians and other health professionals is, of course, complicated by the national shortage of professionals in the national health field. Dr. Richard Wilbur, my colleague, Assistant Secretary of Defense for Health and Environment, has taken the lead in developing a number of solutions, not only to solve the supply problem but to increase the efficiency of our military health care system. It is his judgment, with which I concur, that we are not doing an effective job of utilizing the talents and time of our military doctors.

If I may, gentlemen, I would like to comment briefly on the role of the Guard and Reserve in the Total Force Concept. You are familiar with the fact that during the Vietnam buildup, approximately fiscal 1965 to 1969, equipment that would have been assigned to the Guard and Reserve was diverted to build up the active forces in Vietnam. The result was that the equipment inventories of the Guard and Reserve actually declined by almost $100 million during this period. That does not begin to indicate how critical the situation was, because much of what was called equipment was in fact obsolete stuff that could not have been used if the units had been mobilized.

The combination of having no equipment and being unable to train people served as a suction which attracted people to the Guard and Reserves for the wrong reasons. There were long lineups of people who perceived the Guard and Reserve as a perfectly safe haven from the draft and the war, and so we had the ideal recipe for disaster in the fact of insufficient equipment, a questionable mission, ill-trained units, and the wrong people.

Much has happened to turn that picture around. These factors that I mentioned are being eliminated. There are highly encouraging signs of revitalization within the Guard and Reserve. Equipment inventories are being replenished at an annual rate in excess of $500 million. Much of this is equipment rehabilitated upon the redeployment of units from Vietnam. The Guard and Reserve budget increases have continued from $2.1 billion in fiscal 1969 to a recommended $4.1 billion in fiscal 1973. And, as I have already noted, the Guard and Reserve enlistments are beginning to respond to these increased recruiting efforts.

The increased readiness of the Guard and Reserve units, coupled with the high cost of manpower that concerns you, Mr. Chairman, certainly should underscore the urgency of increased reliance on the Guard and Reserve in our national defense system. In fiscal 1973, to pay, clothe and feed the active force member will cost the taxpayer an average of $9,100 a year. That is more than five times the cost of maintaining a Reserve member.

It seems to me the implication of this is clear. If we rely more on the Guard and Reserve, provided we make them into capable, deployable units, we can provide more defense for the dollars invested. In short, we think the Guard and Reserve are potentially the most economical part of our defense system. We think it is a security bargain and we intend to fully exploit this potential.

I would like to comment briefly on military retirement.

Certainly, an essential ingredient of effective force management is a retirement system that encourages the right people to stay in and

provides adequate benefits for retiring members at costs that can be managed.

Currently the interaction that takes place between grade limitations, advancement opportunities, and the military retirement system is indeed troublesome. Unlike most public and private retirement plans, the military system provides no retirement annuity until the member has completed 20 years of service. As a result, there is a tendency for the services to retain people not needed to the 20-year point in order to establish their retirement rights.

Conversely, at the 20-year point people have the opportunity of retiring with incomes that typically are greater than the incomes of their service colleagues who remain in the service. This, as you know, is because the combination of military retired pay and the pay from a civilian job almost always exceeds the active duty pay of the individual who remains. So, we have the curious phenomenon of a system which on the one hand serves to oversupply the services and on the other hand acts as a retention disincentive for the long-servicecareer members whose retired colleagues leave and have higher incomes than they do.

It was because of these and other considerations that the President convened an interagency committee a year ago to study the military retirement system and to make appropriate recommendations for changes in it. I happen to be chairman of that committee. We have completed our study of nondisability retirement and survivor benefits for both the active and Reserve forces and we will complete the rest of the study soon.

In the meantime, we are reviewing these matters with military departments preliminary to presenting legislative recommendations which reflect not only the best thinking of that committee but the best judgment of DOD and the executive branch.

This is a critical area, not only because of the high cost of military retirement annuities but because of the very substantial interaction it has upon the services' policies on tenure and upon the services' policies for career force management.

I would like to comment briefly on the mix of people in military grades.

During the recent period of force reduction, the proportion of senior officers in the services increased, just as the proportion of senior officers decreased or lagged behind during the earlier periods of rapid force buildup. However, as we approach fiscal 1973, and reach a relatively stabilized baseline force, the picture changes.

If you exclude the health field, physicians, dentists, and nurses, the distribution of senior officers is very similar to that of 1964, when the force was about the same size, with one exception. That exception is the grade of colonel, in which there is in this period of time an increase of about 800, due mainly to the grade relief which was enacted by Congress in 1966 to provide Air Force officers with promotion opportunities comparable to those of the other services.

The comparison between military grade mix and civilian grade mix is interesting. There are dissimilarities between the two which make these comparisons somewhat imprecise but there are two factors which I think should be mentioned in passing.

One is that within DOD the civilian grade escalation or so-called "grade creep" has been less than it has been in the civilian employment governmentwide. The other is that grade escalation in the mili tary community compares at least favorably with grade escalation in the civilian community.

This is not by way of washing away the problem and suggesting that we do not have mixture problems. It is only my way of suggesting that, on a relative scale, military grade mix and tendencies toward escalation do not compare unfavorably with earlier periods like 1964 when our force was about the same size, nor do they compare unfavorably with escalation factors which have occurred in the civilian sector.

I would like to comment now, Mr. Chairman, on the factor of stability and the importance of having a stable force. I believe strongly that the root cause of many of our manpower problems in the Defense Department is turbulence, which I define as the frequent and sometimes excessive moving of people into, inside, and out of the services. In the rapid buildup of forces related to Vietnam, including the typical short tours and the early-out requirements, our Armed Forces have had the highest degree of turbulence in their history. Especially hit were the Marine Corps, which had more men in uniform during Vietnam than in World War II, and the Army, whose total number of soldiers entering and leaving each year exceeded the total size of the Army.

The cost impact of these things has been tremendous. But in my view, even more important than the cost impact is the effect of turbulence upon the organization's ability to sustain morale and credibility with people. A military unit within a turbulent situation is very likely to be victimized by under-manning or by a failure to fill job slots at the time they are vacated. A unit with a substantial number of vacant slots encounters great trouble in keeping its people busy doing missionoriented things and in maintaining unit readiness, but these are the typical problems with which squad leaders, petty officers, and unit commanders have had to cope.

I met with a group of business people and professional people in the Midwest yesterday and I said, "How would you like to run a company of 20,000 employees where your annual separations and retirements exceeded the total employment of your company? How would you like to have a production force that turned over every 6 months, foremen who turned over every 3 months and superintendents who turned over every 6 months?" I said, in terms closely approximating these, that these are the problems with which our senior petty officers, our unit commanders, our squad leaders have had to cope in recent years in the services. And this, gentlemen, is the stuff of which drug adventures and racial violence are made the stalemates which are caused by undermanned units, continuing rotation, new faces, people typically being deprived of the opportunity to remain anywhere long enough to develop a sense of unit identification or proficiency in their jobs or personal security.

I personally regard the regaining of force stability as one of the most important needs of the Armed Forces. We can talk all we want about other problems related to people, but unless and until we stabilize our force, we do not really give the individual who is the leader

or the other individual who is the follower the opportunity to respond effectively and efficiently to the military system.

Finally, let me touch on a couple of other areas, the military versus civilian mix and the so-called "civilianization" objective.

Civilians today account for a higher percent of our total manpower requirement than they did in the average 1964 to 1971 time frame. With our reductions in force having been largely accomplished by the end of fiscal 1973, we must press hard for better answers in this area, if for no other reason than the fact that the civilian employee costs less than the military member does, provided they can both produce the same result. Frankly, I do not know at this point how much further we should go in increasing the civilian portion of our total defense work force. There are, as you know, some jobs that have to be performed by military rather than civilian personnel simply to provide military people the opportunity for rotation from overseas tours and particularly from unaccompanied tours. There are other jobs that have to be performed by military members because their background is essential to the effective performance of the job. But certainly, this is an area that deserves a good deal of additional examination and better answers than we have been able to provide.

Utilization of women is another issue to which we expect to address increased attention. Actually, the mix of women in the Armed Forces has increased more than the mix of women in private industry. Total women in the forces today are about 42,000. 33,000 of them are nonmedical and that is an increase of 50 percent in the last 5 or 6 years. The projection of the services would increase that figure by a significant amount in the next few years.

Whatever the picture of male chauvinism, I am sure we will have to give that subject additional consideration.

Let me talk finally to some quality considerations because I know that you, Mr. Chairman, and other members of this committee are concerned that we not permit the erosion of quality as we move away from reliance on the draft.

Essentially, our quality objective in terms of people is twofold. First, we want to achieve a balance between the bright people and the mentally taxing jobs, and between those in the lower mental categories and the less difficult jobs. Our objective is not to get all bright people. Our objective is not to get people with all limited capabilities. Our objective is to get people whose abilities are commensurate with the jobs that have to be performed.

It was our judgment in the course of the last calendar year that the Army was being overburdened with people who were over their heads in terms of job assignments, and so we reduced, as the Army requested we should, the proportion of mental Category IV people who were being inducted or enlisted into the Army. We think that presently we have a force whose composition is roughly commensurate with the demands of jobs.

The second thing we seek to do in terms of quality is to select personnel under what I call the whole person concept. This takes into consideration not only how an individual does on a series of tests, because some people perform better than they test and some people test better than they perform, but also takes into consideration the individual's school record, his personal attitude, his motivation and