World-wide Inventory, Tanks (Ordnance) Acceptable, and/or convertible to acceptable, types: Light tanks (gun): Tank, light, M24 (75 millimeter gun), total______ 3, 979 Medium tanks (gun): Tank, medium, M26 (90 millimeter), total__. Tank, medium, M4A3 (76 milimeter gun) Total_ Tanks, flame thrower: Tank, flame thrower, M42B1, M42B3, total____ Unacceptable (obsolescent) types: Medium tanks (gun): 1,911 2,337 1,338 1,271 754 638 6,33% 149 Mr. Arnstein was informed that the above data was basically as of June 30. 1948; but did not include tanks being shipped or earmarked for shipment for foreign military aid. How the Eberstadt Committee arrived at the figure of 15,960 from the above data is unknown. However, it appears significant that the difference between the actual total submitted of 17,875 gun tanks and the figure of 15,960 is approximately the same as the figure of 1,911 quoted for total M26 gun tanks on hand. Substracting 1,911 from 17,875 gives a result of 15,964, which could have been rounded off to 15,960. This is purely a matter of conjecture but it appears to be the closest approach in the reconciliation of the two figures. In a cursory addition of the totals the figure of 1,911 could have been assumed to be included in the 6,338 total shown beneath it. If this should be the case, it was a very serious oversight in the treatment of the data presented. As a separate action, several weeks later the Eberstadt Committee (Mr. Arnstein) orally requested the number of tanks that the Army had on hand at the end of the war. He was told that the records of the Ordnance Department indicated that there were 25,045 gun tanks on hand at the close of the war. At this point, and without further coordination with the Department of the Army the "scoop" was released to the press that the Army had lost 9,000 tanks. Had the Eberstadt Committee asked for a statement on the disposition of the difference between the gun tanks on hand in August 1945 and June 1948 they would have been furnished the following data: On hand at termination of hostilities (August 1945). Total Disposition as follows: 25,045 17, 875 7,170 Shipped to foreign military aid from the zone of interior_ 537 71 203 102 720 5, 537 Total___ 7.170 COMMITTEE COMMENT The Army has stated that it has material sufficient to equip only 18 divisions. although at the end of the war it had 89 fully equipped divisions and great additional quantities of material in the pipe line (volume II, p. 147). ARMY COMMENT The Army had on hand at the end of World War II, 89 division sets of equipment. The equivalent of 30 division sets has been disposed of by (1) disposition to United States civilian economy; (2) disposition overseas; (3) destruction or demilitarization; (4) transfers to Red Cross and UNRRA; (5) salvaging; and (6) rendering military aid to Greece and Turkey. Since equipment was disposed of by these means, a serious imbalance has resulted in Army stocks. For example the Army has enough 90 millimeter guns for over 200 divisions and only enough motorized road graders, 12-inch mouldboard, for 25 divisions. At the cessation of hostilities, equipment overseas in areas in which occupation troops were or would be deployed in the main was left in place for their consumption. As of January 31, 1948, distribution of the property in oversea areas was as indicated below. This equipment is not readily recoverable in an emergency. There remains, therefore, 41 division sets of equipment for use in an emergency. Of the 41 division sets, the equivalent of 23 is either unbalanced in quantity, obsolescent, or requires overhaul and rebuild. Therefore, only 18 division sets of equipment are definitely available to meet an emergency. COMMITTEE COMMENT Under the requested National Guard appropriation an error of $30,000,000 was caused by a clerical mistake of inserting a "3" before the item of $9,000,000 for 155-millimeter howitzers (volume II, page 147). ARMY COMMENT When the original stencil for the page containing this item was cut, an amount of $31,000,000 plus was shown in "total cost" column but the error was detected and a correction made prior to submission; however, the original figure “3” was not completely eradicated and was visible on the document submitted to the Budget Division of the Army Comptroller's Office. The total of the page showed that the figure “3” in question was not included; furthermore the clerical error did not appear on the page forwarded to the Bureau of the Budget. These facts were pointed out specifically to the committee's representative during the investigation. COMMITTEE COMMENT The Army's original budgetary requests for fiscal year 1950 included an item for tropical worsted uniforms at $129 apiece, enough for all the enlisted men in the Army, and then some: (vol. II, p. 147). ARMY COMMENT Original budget estimates included an item of tropical worsted uniforms for 1,284,500 enlisted men, of whom 830,500 were Army personnel and 454,000 were Air Force. Since this uniform had not been previously stocked or issued, sufficient quantities to include all necessary sizes had to be procured to provide the initial issue for all enlisted men, establish the necessary depot stock levels, fill the distribution pipe line, and provide for replacement requirements until deliveries for future fiscal years could be effected. Unit cost was shown as $40.48. This item, however, was subsequently deleted by the Army Budget Advisory Committee and accordingly was not included in the budget request submitted to the Bureau of the Budget. COMMITTEE COMMENT There was also an item of $213,519,000 for stock piling of clothing and personal equipage, which would seem in part unnecessary unless vast amounts of the surplus army clothing accumulated during the war have been lost or dissipated (vol. II, p. 147). ARMY COMMENT Funds in the amount of $213,519,000 were included in the initial fiscal year 1950 budget in accordance with recommendation submitted by the Quartermaster General that a stock pile of basic textile items be established for use on a revolving fund basis. This amount of funds was based on an estimated cost of basic textiles to supply combined Army-Air Force requirements for 1 year. The establishment of such a stock pile would permit flexibility in the use of funds so as to accomplish procurements on most efficient seasonable basis, thereby reducing the impact on industry and cost to the Government. When the President's National Military Establishment budgetary ceiling was established, it became apparent that funds would not be available for a textile stock piling purpose, as budgetary estimates were confined to this figure. The amount was reduced to $100,000,000 and carried as an item in the alternate "B" Budget discussed through Secretary of Defense and Bureau of Budget echelons for approval in the event the President subsequently decided to provide funds for an Army of 800,000 enlisted personnel. Since the strengths of both Army and Air Force were subsequently further reduced instead of being increased, the textile stock piling item was eliminated from the budget. It is emphasized that action referred to above did not contemplate the stock piling of any end items of clothing and equipage. With respect to disposition of large quantities of Army clothing and equipage as surplus, it is advised that relatively very little clothing was disposed of. The Army released 771,000 pairs of combat service boots, etc. These releases were made in order to relieve the civilian economy in the critical period of reconversion, in accordance with the findings and recommendations of the Mead committee, the Office of War Mobilization and Reconversion, the Surplus Property Administration, as well as individual Members of Congress. Inadequate appropriations for maintenance during fiscal years 1947, 1948, and 1949 forced the Army to release. as surplus, items which it knew would be needed in the near future to meet continuing Army requirements. In addition to the foregoing, the Army has transferred large stocks of clothing and equipage to the National Guard, Organized Reserves, and Reserve Officers Training Corps, on a reimbursable basis, which, further depleted available stocks on hand. Secretary ROYALL. Now, as illustrative of the error, I will take the item of 102 tanks, which the report says the Army had asked for funds to modernize-102 more tanks than it possessed. The CHAIRMAN. The charge is the Army asked for funds to modernize 102 more tanks than the Army actually had? Secretary ROYALL. Yes. The CHAIRMAN. That is found, I am advised, in the Hoover report at the top of page 12, the exact wording being: For example, an examination of the 1950 budget revealed estimates requesting modernization of 102 more tanks of a certain type than the Army actually possessed. Go ahead. Secretary ROYALL. The explanation is that after the request was prepared, we transferred 102 tanks to the Marine Corps. That fact was called to the attention of the committee, the Eberstadt committee. The CHAIRMAN. In other words, you had 102 tanks when the request for the money to modernize them was prepared? Secretary ROYALL. That is right. The CHAIRMAN. But subsequent to that request, these 102 tanks were transferred to the Marine Corps. Senator KNOWLAND. Mr. Chairman, right at that point, because I think this is an interesting development-when the transfer of 102 tanks was made to the Marine Corps, did the Department of the Army come in and ask for a reduction in the budget item which was for the modernization of the entire number? In other words, you were going to have 102 tanks less to modernize. Was an adjustment made in your budget request to take care of that reduction of 102 tanks? Secretary ROYALL. General Arnold, will you tell exactly how it was done? General ARNOLD. The report on which the Eberstadt committee based their remarks was a budget that never left the Department of the Army. That was the original requirements budget. The CHAIRMAN. You mean it was tentative? General ARNOLD. That is correct, sir; very tentative. No budget went from the Department of the Army for official request. Secretary ROYALL. The correction was made before the budget was sent forward. Senator KNOWLAND. Was that item in your over-all request to the Congress? General ARNOLD. It was not. The CHAIRMAN. Then the correction was made before it left the military department—the Army? General ARNOLD. Yes. The CHAIRMAN. So the statement here was erroneous, completely? General ARNOLD. That is right. Senator JOHNSON. When the estimate was made, you had the tanks, and when you got rid of the tanks a reduction was made in the amount to be requested. The inference is you are asking Congress for money for tanks you did not have. General ARNOLD. We did not do that. The CHAIRMAN. That is a complete error? The CHAIRMAN. All right. Secretary ROYALL. Since that query was made and answered by General Arnold, there is another instance in here where the criticism of some figures not gibing is a criticism of our informal work sheets in the Army. It is like a man working out his income tax. The CHAIRMAN. Where is this? Secretary ROYALL. The error was discovered before it was formalized and yet the criticism is on some informal work sheets used in the Department. I think I can locate that for you. The CHAIRMAN. Is that the statement that appears on page 12, which reads as follows: In another place a misplaced figure added some $30,000,000 to budget estimates. Is that the figure to which you have reference? Secretary ROYALL. Yes; that is the one, and that was merely on an informal work sheet, which was quickly caught and corrected before it was sent forward. The CHAIRMAN. So that was not the formal Army budget sent forward for the consideration of Congress? Secretary ROYALL. That is correct, sir. The CHAIRMAN. Very well. Secretary ROYALL. In regard to the comment made as to the number of tanks, the committee was furnished a detailed statement of the dis position of everyone of those tanks to explain the difference between the ones we had at the end of the war and the ones we have now. That break-down was given in detail, and it is correct. A considerable number of certain models of tanks were declared obsolete and of no further value to us and were demilitarized. Some were furnished as foreign aid from zone of the interior, et cetera. But a detailed breakdown was given to the committee, and yet in the report it was treated as if there had been a discrepancy or complete miscount of the tanks The CHAIRMAN. Thus, as far as I am able to ascertain at the moment, the examples given of loose or irresponsible budgeting in the Department of the Army, insofar as they have been set forth in this report, according to what you have just said, have all proved to be erroneous. There were only two given, as I recall. Secretary ROYALL. Without exception, they are erroneous. The CHAIRMAN. Both of those are erroneous for the reasons you have stated? Secretary ROYALL. That is right, sir. The CHAIRMAN. Go ahead. Senator JOHNSON. Was the information supplied to them before the report was issued to the effect that they were erroneous? Secretary ROYALL. In some instances it was and in other instances it was given to them immediately the report came to our attention, with the request that the report be corrected and, if not corrected, that a copy of the letter be affixed; but in most cases the man investigating knew the facts before the report was published. Of course, I am confident that the members of the committee didn't know the facts. They had to rely upon their staff. Senator JOHNSON. What has happened since you wrote this letter in March? Secretary ROYALL. We have never received reply to the letter of March 7. No correction has been made in the report, and apparently the copy of the letter was not attached to the report, as we requested. I am incorrect. The letter was acknowledged, but no action has been taken. Senator JOHNSON. Just a routine acknowledgment and they didn't discuss the facts that the letter contained? Secretary ROYALL. It did not. Senator KNOWLAND. I wonder if we might have for the complete record a copy of the acknowledgment so the things can speak for themselves. Secretary ROYALL. That will be done. Mr. Chairman, we did not make the letter public at the time nor since that time, because the report of the Commission had not been declassified and, therefore, we did not feel it appropriate to do so. At present certain parts of that report have not been declassified and two or three of the exhibits which were attached to this letter relate to a still classified portion of the Hoover Commission report. We have extracted those, but if the committee itself would like to have that, we will furnish it. |