his property being reclaimed. Each of Oakland's two claims falls in this latter category. To date, no settlement has been made with respect to any third party claims arising out of either of these two freezes, with the exception of the so-called Testa claim. As you know from your conversation with Mr. Sargeant, of this office, we have had considerable discussion with Oakland concerning their two claims but, thus far, no definite action has been taken. I shall continue to keep you advised of the action taken by the Army in connection with all the claims received by the Department in this matter. Sincerely yours, F. SHACKELFORD, Department Counselor. Hon. HERBERT C. BONNER, APPENDIX 6 MUTUAL SECURITY AGENCY, Washington 25, D. C., February 14, 1952. United States House of Representatives, Washington 25, D. C. DEAR MR. BONNER: During the course of the Bonner subcommittee briefing by the ECA mission to Greece in November, it is understood that you asked some questions as to what the administrative costs of the ECA mission to Greece had been during each of the years of its operations, and what the ratio of these costs were percentagewise to the total aid furnished to Greece. These questions were not fully answered with the information available at the meeting. We believe that the attached table will furnish the answers to your inquiry. You will note that the aid totals shown on the table differ from those furnished by the mission during your visit. This results from the fact that the totals given by the mission represent aid received while those shown on the attached table are the aid allotted during the periods shown. The figures shown for administrative expenses do not include the expenses of attached United States personnel engaged in technical assistance activities. The dollar costs of this staff are included in the over-all costs of the technical assistance program. The technical assistance local currency costs are provided by the Greek Government and not from the United States portion (5 percent) of the local currency counterpart account. Sincerely yours, GEORGE W. LAWSON, Jr., (Table referred to above retained in subcommittee files.) Hon. HERBERT C. BONNER, APPENDIX 7 DEPARTMENT OF THE AIR FORCE, Chairman, Intergovernmental Relations Subcommittee, House of Representatives. DEAR MR. CHAIRMAN: Reports that have reached me of the recent hearings held by your committee indicate that there are doubts in your mind regarding certain of the actions which the Air Force is taking or is planning to take in the supply field. I am writing you this letter in order to correct any misapprehensions you may have about certain features of the Air Force procurement and supply system, and also to repeat my previous invitation that you and your committee visit our Air Matériel Command at Dayton, Ohio. I believe that such a visit would clear up a number of issues in your mind, since the Air Matériel Command and its installations are the very heart of the Air Force supply system. At the outset, let me assure you that our supply activities are proceeding in accordance with directives of the Secretary of Defense, in coordination with the Army, and in accordance with my testimony before your committee last summer. We are not in any sense acting in disregard of higher level policy or directives, nor in conflict with the intent of the Unification Act as we understand that intent. It may be appropriate at this time to review some of our basic thinking on the questions which have concerned your committee. Since 1917 when the first air supply depot was established at Middletown, Pa., it has been our conviction that it is more efficient, and in some respects essential, for the Air Force to have its own supply system. We also believe in crossservicing, wherever practicable, and if it results in greater efficiency. In certain parts of the world, we render complete supply support for both outselves and the Army. There are a number of other places where the Air Force is pretty much on its own, or at least in a dominant position. Obviously, in those areas we are compelled to accept full responsibility for distribution. In England, in north Africa, in Greenland, in the Philippines, and in the Middle East, our activities and operations are so much larger than that of the other services that it makes sense for the Air Force to perform the distribution functions. There must be, we believe, enough flexibility in the system so that differing arrangements can be made at various levels and in various parts of the world dependent on the local situation. In Panama and Hawaii, the Air Force has no depot supply facilities but relies entirely on the Army or the Navy. On the continent of Europe, as you were briefed, we have a plan for the support of our Air Forces which we think would be the best arangement for that area. It should be borne in mind that in the event of war this area may become a combat zone. I mentioned this in my testimony last summer. We are preparing the details of this plan for submission to the Secretary of Defense for his review in accordance with his July 17, 1951, directive. We feel that there are certain common-use items, now handled by the Army, which should be our concern from the time these items enter the military distribution system. I refer to the field of distribution as distinct from procurement. We have no intention of changing the existing procurement pattern. In some of your committee's hearings, you have been reported as stating that the Air Force intends to set up technical services similar to those in the Army. I can assure you that the Air Force has no such intention. As a matter of fact, the logistic systems of the Army and the Air Force are organized along different lines. The Army technical service organization would not fit into the organization of the Air Force. In the Army, the various technical services are organized along commodity lines; that is, vehicles, weapons, chemicals, electronics, housekeeping equipment, construction equipment, etc. A single technical service is responsible for one or more of these commodities in the sense that it is responsible for all of the various functions involved with that commodity. Examples of these functions are research and development, specifications, requirements, procurement, distribution, maintenance, disposal, and transportation. The Air Force, on the other hand, is organized along the functional lines. Each functional organization is responsible for handling all of the various commodities within that function. Our Research and Development Command looks after the research and development on items we procure. Similarly, procurement with which the Air Force is charged is handled through a single procurement agency. The same philosophy of functional organization pertains in the fields of distribution and maintenance. If any new items enter our distribution system, they are incorporated into the system we already have. No new organization, such as a technical service or even a new command, is involved. In fact, the Air Force could not use such a technical service without revamping its entire philosophy of organization. On a number of occasions during the course of your hearings you have mentioned that the Air Force was establishing a new supply system for common items. I touched on that subject briefly in my testimony before your committee on July 20, 1951, but apparently I did not completely clarify the situation in your mind. The Air Force has no intention of establishing a new supply system. We believe the one we have is completely adequate for the job. It currently is handling more than 80 percent of all supplies used by the Air Force, in dollar volume. It has been in operation for 35 years, and has reached a stature comparable with any supply system. The integration of the remaining 20 percent of supplies into our distribution and maintenance system will not change that system. Rather, it will permit a more effective use of that system. It has been suggested several times in your hearings that the armed services should have a single supply organization similar to the British Ministry of Το Supply. Like the other civilian officials in the Defense Department, I do not feel that this would be the answer to our problems. The task of providing the supply needs of even a single service poses immense problems of management. triple the size would make the problems even more unmanageable. Moreover, to do so would be discarding the experience of our highly efficient and economical American industries. When business concerns are relatively small, it is to their advantage to operate under a single or centralized supply system. When they reach a certain size, however, the point of diminishing returns is reached. Thereafter, they require subordinate units to operate their own supply systems. General Motors is a good case in point. Its divisions handle their own supplies, including common items. That company and many others have discovered that good supply management eschews the cumbersome, ineffective, and costly centralized system after the point of diminishing returns has been passed. Each of the armed services, of course, is many times as large as General Motors in the number of items, amount of tonnage, and the number of dollars handled. In closing, let me assure you that we in the Air Force sincerely share your desire to minimize the cost of defense activities to the Government. All major actions in the supply field are given careful consideration by the responsible civilian and military officials. If you have any doubts about the wisdom or the efficiency of these actions, I hope you will give us an opportunity to explain the reasons which led to our decisions. House of Representatives, Washington 25, D. C. DEAR CONGRESSMAN BONNER: It has been brought to my attention that your subcommittee from the House Committee on Expenditures in the Executive Departments is planning on being in the Far East theater during an investigation of the effectiveness of our military supply system. At the present time I am attempting to arrange my work so that I will be able to make an overseas study of certain activities of our Federal agencies. I realize it is difficult to plan ahead to a great extent. However, I will make every effort in setting up my schedule to have a program flexible enough to permit me to participate with you in the valuable work of your group. It was thoughtful of you to suggest my joining the subcommittee en route, and I shall hope to see you then. House of Representatives, Washington 25, D. C. DEAR CONGRESSMAN BONNER: At your request I am happy to forward to your subcommittee a few of the reactions which I had to certain phases of our expenditures overseas. I had an excellent opportunity in the course of my travels to evaluate certain areas of these expenditures. I know that the subcommittee will be interested in these views because they pertain quite closely to the interest you have maintained in the military and economic overseas programs. We have embarked on a world program for mutual security. A review of our activities outside the continental limits of the United States indicates that the friendly nations, while emphasizing the security nature of their relationship, have not given equal stress to the mutuality necessary for common defense in many phases of these programs. My interest has been especially alerted to our appropriations for. military air construction sites and depots in, for instance, North Africa and France. In regard to the French sites offered, it would appear that they are apparently not primary choices. Indeed much evidence is available to indicate that we have no assurances as to leasing, mutual use, or possible American property title to these sites. A further consideration, a French interior tax which approximates 16 percent levied on projects of a nature so essential to France would indicate that some speedy cooperation should be undertaken between the United States and France to resolve the need for this taxation since these sites are of as necessary a nature to France as they are to us. In this regard, also, I would like to interest your subcommittee in the costs which are apparently being assessed against the United States for traffic movements across the interior of many of the countries of our allies in Europe. It is difficult to understand that in moving our troops across the terrain of an ally-in effect coming to their rescue in a crisis-the American taxpayer must be charged a high price for that privilege. In the Far East much military construction and building is proceeding before a definite assurance on policy has been devised, capable of linking these programs to possible future use of installations in these areas. Aside from the substantive points referred to there would appear to be a lack of proper utilization of personnel overseas. It would appear that Government service within the United States should be used as the basis for filling of assignments in these important programs in foreign countries. Transfers of personnel, especially military, should not be regarded as routine where they merely mark time until a relief is indicated. A study should be made of the present situation to remedy defects in administration so that enthusiasm, initiative, and improved administration could be brought to these areas. Finally, since we depend on our allies for their part in global defense, we should not forget that they, in effect, lean to a great extent on us for recognition and financial support. It should be brought to the attention of the Congress that a firmed-up policy should be instituted in our relationship with these nations. Every commitment should be thoroughly scrutinized and every safeguard insisted upon as a prerequisite to financial aid. I hope that these views may be of some value to you in the work of your subcommittee. Sincerely yours, JOHN F. KENNEDY, Member of Congress. APPENDIX 10 BIBLIOGRAPHY FOR BONNER SUBCOMMITTEE OVERSEAS INVESTIGATIVE TRIP OCTOBER 20 TO DECEMBER 5, 1951 1. On Active Service in Peace and War, Henry L. Stimson and McGeorge Bundy, 1947-48. 2. The Forrestal Diaries, the Viking Press, 1951. 3. Speaking Frankly, James F. Byrnes, Harper Bros. Publishing Co., 1947. 4. United States Naval Logistics in the Second World War, Duncan Smith Ballantine, Princeton University Press, 1947. 5. Crusade in Europe, Dwight D. Eisenhower, Garden City Publishing Co., 1951. 6. Global Mission, Henry Harley Arnold, Harper Bros. Publishing Co., 1949. 7. Our Jungle Road to Burma, Robert L. Eichelberger, Garden City Publishing Co., 1951. 8. United States Government Organizational Manual, 1951-52 (GPO). 9. The Midyear Economic Report of the President, by the Council of Economic Advisors, transmitted to the Congress July 23, 1951 (GPO). 10. A Decade of American Foreign Policy, Basic Foreign Policy Documents, 1941-49, prepared at the request of the Senate Committee on Foreign Relations by the staff of the committee and the Department of State, Senate Document No. 123, Eighty-first Congress, first session. 11. International Financial Statistics, volume 4, No. 9, September 1951, International Monetary Fund, Washington, D. C. 12. The Administration of Foreign Affairs and Overseas Operations, a report prepared by the International Studies Group of the Brookings Institution, for the Bureau of the Budget, 1951 (GPO). 13. Creating a Commission to Study the Administration of Overseas Activities of the Government, and to Make Recommendations to the Congress with Respect Thereto, Committee on Expenditures in the Executive Departments, Senate Report No. 543, July 11, 1951; also Hearings on S. 1166, May-June 1951; Eighty-second Congress, first session. 14. A Commission to Study Overseas Activities of the Federal Government, Hearings on H. R. 3408 and H. R. 3697, June-August 1951, House Committee on Expenditures in the Executive Departments, Eighty-second Congress, first session. 15. Economic Cooperation Administration, Twelfth Report to Congress, March 31, 1951. 16. Foreign Aid, Final Report of the House Select Committee on Foreign Aid (Herter Committee), House Report No. 1845, Eightieth Congress, second session. 17. Voluntary Foreign Aid, the Nature and Scope of Post-War Private American Assistance Abroad, With Special Reference to Europe, A Study by a Special Subcommittee of the House Committee on Foreign Affairs, Eightieth Congress, second session (subcommittee print). 18. United States Foreign Aid Programs in Europe, a Report of the Subcommittee of the Committee on Foreign Relations, on United States Economic and Military Assistance to Free Europe, Senate Document No. 56, Eightysecond Congress, first session. 19. Cooperative Housing in Europe, A Report of the Banking and Currency Subcommittee Investigating and Studying European Housing Programs, Senate Document No. 148, March 10, 1950, Eighty-first Congress, second session. 20. Report to the President by the Economic Survey Mission to the Philippines, October 9, 1950, State Department Publication No. 4010, Far Eastern Series No. 38 (GPO). 21. Special Mission to Australia (Carnahan Commission), House Report No. 1087, September 25, 1951, Eighty-second Congress. 22. Malaya, The Forgotten War, Graham Greene, Life, July 30, 1951. 23. The Old Ills of Modern India, William J. Bullitt, Life, October 1, 1951. 24. Mutual Security Act of 1951, House Committee on Foreign Affairs. House Report No. 872 (on H. R. 5113), August 14, 1951, Eighty-second Congress, first session. 25. The Mutual Security Act of 1951, Senate Committees on Foreign Relations and Armed Services, Senate Report No. 703 (on H. R. 5113), August 27, 1951. Eighty-second Congress, first session. 26. Mutual Security Program for Fiscal Year 1952, Basic Data Supplied by the Executive Branch of the Government, House Committee on Foreign Affairs. Eighty-second Congress, first session (Committee Print). 27. Unification, Hearings April-May 1944, Select Committee of the House on Post-War Military Policy (Woodrum Committee), Seventy-eighth Congress, second session. 28. Unification, Hearings on S. 84 and S. 1482, October-December 1945, Senate Committee on Military Affairs, Seventy-ninth Congress, first session. 29. Unification, Hearings on S. 2044, April-July 1946, Senate Committee on Naval Affairs, Seventy-ninth Congress, second session. 30. National Security Act of 1947, Hearings on H. R. 2319, April-July 1947, House Committee on Expenditures in the Executive Departments, Eightieth Congress, first session. 31. Review of Major Problems in Military Procurement and Recommendations, A report to the Munitions Board by the Industry Advisory Committee on Military-Contractor Relationships, prepared by J. Anthony Panuck, August 31, 1951. 32. A Summary Report on the Medical Supply Systems of the Army, Navy, and Air Force as of 30 June 1949, Prepared by the Executive Office of the President, Bureau of the Budget, September 1950. |