same ends for less expenditures. No one could estimate their amount. I requested the chairman of the task force engaged in this investigation to estimate what the savings might be, if all the reforms proposed were adopted. His guess was $1,500,000,000 annually in money or money's worth. You can reduce this estimate greatly and it is a waste beyond the power of Congress or civilian officials to control under the present set-up.

Now, Mr. Chairman, I will be glad to answer any questions.

The CHAIRMAN. Thank you very much, Mr. Hoover.

May I ask you first if the presiding officer who presides or would preside over the Joint Chiefs of Staff in your recommendation should have a higher rank than the Joint Chiefs of Staff?

Mr. HOOVER. We did not believe that was necessary. He could be selected from the retired forces and not necessarily of higher rank, and certainly would not be the principal military adviser.

The CHAIRMAN. And we should deprive him of any vote in the legislation?

Mr. HOOVER. Yes, sir.

The CHAIRMAN. So that, in effect, he would be more or less a liaison officer to carry the information back and forth, for the guidance of the President on the one hand and the Joint Chiefs of Staff on the other?

Mr. HOOVER. Yes, plus the fact that a capable man would no doubt expedite the work of the organization and systematize it.

The CHAIRMAN. Equally, too, your recommendation is rather firm that the authority, or the privilege which the original act gave to the Secretary of Air, of the Navy and of the Army, to appeal over the head of the Secretary of National Defense should be discontinued?

Mr. HOOVER. Yes, Mr. Chairman. That lies at the root of establishing the authority of the Secretary of Defense.

The CHAIRMAN. Otherwise, there is nobody to blame if everybody can go to headquarters and do what they please?

Mr. HOOVER. Not only that but once they do go outside of the Secretary of Defense and the President, a situation of personal relation is set up in the Department that becomes impossible.

The CHAIRMAN. One other question, Mr. Hoover: In the event that we do establish these two or three people to assist the Secretary of National Defense, if we could find a suitable title which would remove them from conflict with the Secretaries of the Army, the Navy and the Air Force, the main objection would be eliminated of conflict, would it not?

Mr. HOOVER. I think so, and I would suggest that the committee might inquire of the Secretary of Defense what he would like those titles to be, because his idea was to assign those exact functions to those three Assistant Secretaries. He probably could give you titles that would be adaptable to the work.

The CHAIRMAN. Finally, would you recommend that we attempt in this law to deal with the military budgeting practices as separate institutions, or would you recommend to our committee that we wait for a general overhauling of the budgetary practices of the entire Government?

Mr. HOOVER. My feeling is that this is an extremely urgent matter in these services and you will not adequately reform this part of the

Government which comprises nearly a third of the whole governmental expenditures until the budgeting and accounting is straightened out. It seems to me advisable to incorporate the proposal for reorganization of the budgeting and accounting, straightway in this act. The CHAIRMAN. We should do it in this act?

Mr. HOOVER. That is my belief.

The CHAIRMAN. Might I ask if you could suggest someone who would help us to get the exact language in the form of any amendments that might be proposed before our committee for considertion-who would come from your Commission or your task force, who would be the best one to do that?

Mr. HOOVER. Mr. Eberstadt told me the committee had requested him to take some interest in that manner, and I have assigned to him. the young lawyer who had been drafting that legislation for the Commission, and also am securing for him the services of one of the accountants who examined the processes in the Defense Establishment. It is my impression that he makes a good center point with which to bring this material together for you.

The CHAIRMAN. So, in a word, it would be better for us to contact Mr. Eberstadt and get the procedure from him?

Mr. HOOVER. I think he is in position to bring these various agencies together. The Commission has dissolved practically, and so you have to reassemble these various persons to help out.

The CHAIRMAN. Thank you, sir.

And I will ask Senator Byrd if he has any questions to ask.

Senator BYRD. I want to entirely agree, Mr. Hoover, as to the imperative necessity of including the budgetary and accounting practices of the Defense Department. The chairman knows that the committee, on my motion, adopted a resolution asking Mr. Eberstadt to submit recommendations.

In my judgment, the Defense Establishment of this country is permeated with waste and inefficiency and duplication of effort. It will be recalled that when the unification bill was before this committee in Congress, that it was repeatedly urged to be passed because of the possibilities of economies. Yet, when the Secretary of National Defense appeared before the committee about a week ago, in response to questions he stated that perhaps $40,000,000 had been saved, but he could not give a detailed account of that; $40,000,000 out of about $14,000,000,000, which is a very small fraction of 1 percent, and in my judgment it is possible and probable, after a very careful analysis of the unification, that insofar as the administrative costs are concerned, it has been actually increased instead of decreased. I want to say, as one member of this committee, that I do not intend to vote for this bill unless it has incorporated in it procedures to reform the accounting system and bring about the greater efficiency and economy in the administration.

Mr. HOOVER. The difficulty here, Senator, is not to be blamed on any particular official or group. It is the outgrowth of a generation of antiquated processes and nobody in the Navy or Army today, with their accounting equipment can determine, except with difficulty, what the cost of any particular function is, and without some determination of the cost of each function and the ability to compare it to some similar function in other areas-it is hopeless to make the comparisons.

Senator BYRD. My only criticism is the department itself has not done all it could to improve that system. The department doesn't need laws and directions from the Congress to do that, but no effort has been made by the Department to do that. That is my criticism, and I ask you if that is borne out by your investigation?

Mr. HOOVER. Yes. One of the chief probems of our investigation was the whole accounting set-up

Senator BYRD. Has the Department of National Defense made any effort to approve administrative budgetary practice within the department?

Mr. HOOVER. I think there has been some effort. The budgetary officer in the Navy has worked very hard to establish the budget into some sort of workable form.

Senator BYRD. Who has prevented it? Has any existing law prevented it, or some other official prevented it?

Mr. HOOVER. I presume the Appropriations Committees of Congress had something to do with the form of budget, and the Navy has not as yet been able to get it adopted.

Senator BYRD. You think perhaps the appropriations bills passed by Congress are responsible?

Mr. HOOVER. I would not want to say that was the whole responsibility. There are a great mass of figures in the antiquated form, and for the Appropriations Committee to sit down in an Appropriations Committee meeting and try to reorganize the presentation becomes almost hopeless. I think you must get at the root of the whole form of budgetary and accounting practice.

Senator BYRD. In your judgment, the amendment proposed by Mr. Eberstadt, if it were adopted, it would be considered as a satisfactory reform of the budgetary system?

Mr. HOOVER. You know Congress in 1945 passed an act relating to the control of Government-owned corporations and set up a modern accounting system for them and a modern budgeting system for them.

Senator BYRD. I happened to be one of the patrons of that.

Mr. HOOVER. That simplified the operation of those organizations and improved their efficiency. There is no reason why a similar action, not of course of the same type as that, should not be taken here to put the accounting and budgeting in shape. Those are not difficult problems in a modern accounting.

Senator BYRD. Do you know, Mr. Hoover, when Mr. Eberstadt can get those amendments to the committee?

Mr. HOOVER. I do not know.

The CHAIRMAN. The clerk just informed me that they have been working with Mr. Eberstadt and his assistants and now have the third draft prepared. They have prepared successive drafts trying to refine it and better it, and get it in the best possible shape, and it is very much expected that before the end of this week we will have something tangible to lay before the committee.

Senator BYRD. No further questions.

The CHAIRMAN. Senator Bridges.

Senator BRIDGES. Mr. Chairman, I have been very interested in President Hoover's statement, and, like Senator Byrd, I am particularly interested in the financial end of the picture, as I know the chairman and other members of this committee are.

I agree with what President Hoover says, about the difficulty of getting through the maze of figures which are presented to the Appropriations Committees each year, and in order to get any understanding of all the ramifications, I think you have got to go back and start at the very root of the thing, in a simplified system.

I think his suggestions are excellent.

There is one other thing that I am particularly interested in, President Hoover, and that is on your statement relating to the Joint Chiefs of Staff and the chairman of the Joint Chiefs of Staff. I have a feeling, Mr. President, that while we are for unification of our national defense effort-and I supported it and I am for it, but I do not want to see a too great concentration of power in any one man at the top, whether he be the Secretary of National Defense or whether he be the Chairman of the Joint Chiefs of Staff, or whatever he might be. I think there might come a time in this country when that would be a very dangerous thing, and I think that history will record that where you had too great a concentration of power, that is where nations have lost.

Now, I wonder, Mr. Hoover, if you have any thought as to just how you can get a greater coordination and greater unification of the services without giving more concentrated authority, which would eliminate the identity and integrity of the services, more along the line you offered as to the Chairman of the Joint Chiefs of Staff, which I think is a good suggestion.

Mr. HOOVER. Increase in power, as recommended here, is power to administer by civilians and it is quite a different thing from power to make policies or power to the military arm. That power is proposed by the committee to be conferred on the Secretary of Defense—the power to administer. The policies are to be made by the Congress and the various committees set up under the act and by the President. That proposed here is not a dangerous form of power.

The Secretaries of the various arms become, under this bill, in effect, the administrators of divisions in the Department of Defense. They have about the same position relatively, from an administrative point of view, to similar divisional officials in other departments of the Government, subject to the Secretary in charge.

Their titles are rather more elevated than those of the officials in any other department, but that is about the only departure from the regular form of departmental organization.

I might say that the Commission, of which I was head, recommended that their titles be reduced to Under Secretaries. I did not agree to this and dissented on the ground that they have important functions on public occasions.

The CHAIRMAN. You are pretty definite, and I am getting again for the record, Mr. President-you are pretty definite, really definite, in your recommendation that the power of the Secretary of the Army and the Secretary of the Navy and of the Air Force to appeal over the head of the Secretary of National Defense should be taken away from them?

Mr. HOOVER. That is a very positive recommendation in the Commission's report. It is a unanimous recommendation of the whole Commission.

Senator BRIDGES. Let me get that straight. You believe that the powers of the Secretaries of the Navy, Air Force, and the Army to

appeal over the head of the Secretary of Defense should be eliminated? Mr. HOOVER. Yes, sir.

Senator BRIDGES. So that they could not go to the President of the United States or to the Congress except through the Secretary of National Defense?

Mr. HOOVER. That would be a partial result. However, the Congress has the authority, and uses it constantly, to call for departmental officials to appear before its committees and no doubt they would express their views. That is a power that cannot be circumscribed by any legislation. The President can also call for any official.

Senator BRIDGES. The thing I am afraid of, Mr. President, is this, that these officials of the Army, Navy, and Air Force, who are fine conscientious men in the service of their country, who have convictions and yet, they are also interested in promotions, they are also interested in their careers, and they know that if they do not play along with their respective bosses and their general policies, as far as their military or naval or Air Force future is concerned, it is nil. What I am concerned about is if we have a great crisis here or we approach one, I want the key individuals in our respective services to be able to function to the best of their convictions and judgment. The United States, in a great crisis, should not depend on one person who may make a fatal mistake. If so, we are all gone. I would rather have the combined judgment of some of the best brains in this country, the best that has been produced in the services, than I would of the judgment of one mediocre individual who may some day be appointed Secretary of Defense in this country, I certainly would not want to it conceivably could, if the radical element gains any prominence, and you had some individual-I could name possibly someone—as Secretary of Defense in that country, I certainly would not want to have my country and its safety placed in the hands of such an individual, or some individuals I could name who have held high places in this Nation. What I am looking for, Mr. President, is some way of getting unification and coordination, yet not putting all our eggs in one basket, in case of a great crisis here.

Mr. HOOVER. Senator, I think you are looking for an impossible thing. If you want organization, you must have subordination. You cannot have officials with authority independent of superiors. If you are going to have any kind of constructive administration, in any kind of organization, you must have steps of authority. I think there are other answers to this. The first is that any man whose conscience bothers him to the extent that he thinks the safety of the Nation is at stake and he must do something about it and if he can get no hearing from his superiors, it is his business to resign and go out and state to the country what his opinion is and propagandize as much as he likes. He has no business to go behind his superiors. Beyond this, there is created in this act a body called the War Council where all of these secretaries are able to present their views. That is a distinct opportunity for any subordinate to get his views before his colleagues and up to the Secretary of Defense. I cannot conceive of setting up any organization, where subordinates have the right of appeal over their superiors.

Senator BRIDGES. I wish there were some way that it were possible to distinguish between an administrator and a person who is in a