The Chairman stated in a letter which I will leave with the committee:

It is the general consensus of opinion that the funds necessary for this program should be obtained as quickly as possible, that contracts for the items shown in the estimates can be promptly and advantageously placed, and that industry can absorb the orders to the extent represented by the estimates. * * * Our divisions have placed considerable emphasis on the need for reappraisal of standards and specifications if the goal as set down is to be fully met.

It is our opinion that every effort should be made to place contracts for the items in the estimates as quickly as possible after funds are made available and that the load should be spread as broadly throughout American industry as can be done. If these principles are followed, I am confident that the objectives set forth can be attained, with perhaps minor exceptions, the importance of which does not effect any change in the objectives.

COORDINATION

The lend-lease requirements in this program have been coordinated in the Bureau of the Budget with those of the Lend-Lease Administration for the remainder of fiscal year 1942, and the programs so adjusted that no duplication exists.

CONSOLIDATION OF APPROPRIATIONS

(See p. 12)

Under war conditions, the large number of appropriations under which our funds are provided has proved to be a handicap to administration in the field, particularly in overseas forces. In order to simplify administrative procedure, we are proposing to consolidate the appropriations of the Quartermaster Corps and Welfare of Enlisted Men, to be disbursed and accounted for as one fund; and also those of the Corps of Engineers. The consolidation is requested primarily to simplify the problem of the commander and administrator in the field, by reducing the number of appropriations with which he has to deal. The consolidations, in general, are those which the Congress authorized in the first World War, and are essential to the satisfactory accomplishment of the command and administrative functions of the Army.

In connection with that, we have set up an administration in the general staff for the allocation of funds which will be under General Somervell and myself, and that applies also to the transfer between appropriations.

TRANSFER BETWEEN APPROPRIATIONS

It is also proposed to increase the interchangeability of funds between appropriation titles, which has been in effect for the past two fiscal years, from 5 to 25 percent. As the fiscal year progresses, unforeseen requirements arise under certain appropriations and we frequently find it possible to supplement those appropriations by transfer from others where the need for funds is less urgent. Under this authority, we are able to some extent to avoid the necessity for more frequent appropriations. The increase in the percentage of transfer now proposed is desired as a means of meeting the many emergencies which will arise under war conditions. The authority requested is

substantially the same as was granted in the defense aid appropriations contained in the Second Supplemental National Defense Appropriation Act, 1942, Public Law 282, approved October 28, 1941.

I shall be glad to answer any questions regarding the program. The CHAIRMAN. The letters to which you refer, General Moore, will be included as a part of your statement, if you have no objection. General MOORE. I prefer that they not be published in the record. The CHAIRMAN. When your statement is returned to you you are free to go over it with a pencil, and if there is anything you think should not go into the record you may delete that, or you may elaborate anything which you think might be explained a little more clearly. During our discussion here this morning, if you will indicate to the reporter what is not for the record, that will not be taken down, or if there is anything taken down which you later decide should be omitted, that is entirely within your discretion. General MOORE. Yes, sir.

MATÉRIEL PROVISION IN TERMS OF MEN

The CHAIRMAN. I would like to ask you this general question, General Moore: It is according to our understanding that up to this time we have provided critical and essential materials for an army of a certain number of men and that we have provided production facilities to supply an army of a certain number.

I notice in your statement you mention other figures. [Discussion off the record.]

The CHAIRMAN. And it proposes to increase the production facilities up to what?

General MOORE. The production facilities are increased, not for a certain number of men, but to attain production levels to meet the objectives set by the President. In other words, it is a question of producing facilities to provide a certain rate of production.

AMOUNT OF ESTIMATES FOR DEFENSE AID

The CHAIRMAN. In section 102, relating to lend-lease material, which we will take up later in detail, I would like to ask you, General Moore, at this time, if you can tell us, generally speaking, how much of this is intended to be transferred?

General MOORE. Approximately $12,000,000,000.

NEED FOR FUNDS AND PRODUCTION CAPACITY

The CHAIRMAN. We have previously provided for this fiscal year, General Moore, that is, for the year ending June 30, 1942, in round numbers, 34%1⁄2 billion dollars for the Army, and back of that we have provided a further very material sum. These are staggering amounts.

I would like to ask whether, in requesting this additional amount of $22,000,000,000 which you are asking for here, you are merely estimating that or asking for it on a contingency basis, on what might happen, or if you can definitely see right now an immediate and specific need of it.

General MOORE. We are asking for this on a definite basis of the number of troops we will have, and on the needs of the nations associated with us. It is for an all out effort.

The CHAIRMAN. Congress will be in session during the rest of this war. We are going to be sitting here practically every day, and we can act immediately on any funds which might be needed.

In view of the fact that you are asking for a portion of this amount in a sense as an insurance, do you not think this can be scaled down to the needs we actually have in sight, and the quantities you can actually promptly produce?

General MOORE. No; we have the needs for this amount firmly in sight, including our own forces and those of the associated powers. The CHAIRMAN. And you have the production capacity to produce it?

General MOORE. Yes, sir, that is what the War Production Board

says.

INTERCHANGE OF APPROPRIATIONS

(See pp. 11, 13, 20, 23)

The CHAIRMAN. In section 101, on page 10 of the committee print of the bill, you ask for an increase in the limitation of interchangeability from 5 to 25 percent, and I notice on pages 21 and 22 of your statement, in connection with interchangeability, you refer to simplified administration by a consolidation of the appropriations of the Quartermaster Corps and the Corps of Engineers.

In your request for interchangeability you request, in effect, an interchangeability of 100 percent as between appropriations under the Engineers and the Quartermaster Corps respectively, and then as between the appropriations of all branches, including the Engineers and Quartermaster, you request 25 percent interchange right.

The CHAIRMAN. In the Air Corps appropriation you have $14,000,000,000 and for Ordnance $22,000,000,000, making a total of $36,000,000,000. Twenty-five percent of that would be $9,000,000,000. In other words, you would be in a position to appropriate, without consulting Congress, over $9,000,000,000 there, and that is a tremendous sum. Now, Congress has never pinched the Department in the matter of funds, but we have supplied all the funds you have needed for the purposes for which you needed them. Do you not think this is going a little strong to ask us to appropriate sums aggregating_an amount like that, to be practically at the discretion of the War Department, or for use wherever they wish to use them?

General MOORE. It is not discretionary with the War Department, because the Bureau of the Budget, the fiscal control agency of our Commander in Chief, the President, must approve the transfer. Whenever we desire to make transfers, we must present our case to the Bureau of the Budget for approval. Furthermore, we cannot very well make any such transfer between appropriations as you suggest, because our appropriations are based upon detailed estimates, and we follow those estimates to the extent of our ability to do so. 1 say that, because they cover certain specific items. We simply want flexibility in the appropriations, so that if, for some reason, a

need suddenly arises for an unforeseen contingency, we can transfer funds from a project which is not so critical, to the item where it is urgently needed. Our estimates are based largely on firm requirements and, generally speaking, they will be expended on that basis.

The CHAIRMAN. Up to this time you have had a leeway of 5 percent, and that would amount to $1,800,000,000. Now, do you not think that that is sufficient, in view of the fact that Congress is sitting every day? Do you not think it would be sufficient if you have a latitude of 5 percent under these large sums? What is the necessity for increasing that amount, when you have been able to operate on a basis of a 5-percent transfer?

General MOORE. In certain appropriations, our need for transferability will not amount to 5 percent; but in others it would be impossible to meet our needs with a 5-percent transfer limitation. We would use this power only in case of emergency. I think Colonel Helmick, who has gone into this with the Budget Bureau, could give you a further explanation of it.

Colonel HELMICK. There are many rather small appropriations where the 5-percent limit is insufficient. The 5-percent transfer limitation applies not only to any amount that may be transferred out of an appropriation but, also, to amounts which may be transferred into an appropriation. The proposed 25-percent limitation applies in the same manner. There are a number of small appropriations, notably the ones for schools, which have required augmentation, and we have been hampered in the amounts which we have been able to transfer to them under the 5-percent limitation. The 25 percent is desired as a reserve to meet emergencies as they arise. It will permit a quick use of funds available to the War Department to meet the unforeseen emergencies which arise in war. As General Moore has stated, all of our estimates are based upon specific requirements; and it would be in cases of extreme emergency only that an appropriation which is based on a firm requirement would be robbed of funds for transfer to another appropriation.

The CHAIRMAN. To what extent have you availed yourself of the 5-percent transfer privilege up to this time?

Colonel HELMICK. Very little so far.

The CHAIRMAN. Up to this time the 5-percent transfer privilege has been ample?

Colonel HELMICK. Up to this time the 5 percent has not hurt us materially, but it has cramped us in some cases.

The CHAIRMAN. Have you used the 5-percent transfer privilege in any particular case?

Colonel HELMICK. Yes, sir; we used it up to 5 percent last year in some quartermaster appropriations, regular supplies I think, where we were limited in the amounts which could be transferred into the appropriation. The 5-percent limitation in the small appropriations makes the amount which they could be augmented comparatively insignificant.

The CHAIRMAN. We will take up the details with the Chief of the Department. Is there anything further that you wish to call to our particular attention at this time?

General MOORE. No, sir; not aside from the statement I have made.

WAR PRODUCTION BOARD'S RELATION TO PROGRAM

Mr. SNYDER. General, to what extent does the War Production Board tell you or the Army what you are to get?

General MOORE. They do not tell us what we shall get. We ask them for what we want. We submit our own requirements.

Mr. SNYDER. To what extent do they curtail your requests in any way, or do they give you what you ask?

General MOORE. They give us what we ask if they have the capacity to produce it. They have given us figures on what they think can be produced during the calendar year 1942 and the following year. They tell us the ceiling of production within a certain time, and we give them our requirements on the basis of what the production resources can stand.

Mr. SNYDER. What do you mean by the expression "all-out insurance basis"?

General MOORE. I did not mean all-out insurance, but I meant all-out war.

Mr. SNYDER. What do you mean by an all-out war?

General MoORE. I mean that we cannot foresee at this time how many troops we will need to carry the war to a conclusion. It will actually take our whole or "all-out" productive capacity, as we see it, to carry the war to a conclusion.

DETERMINATION OF LEND-LEASE ALLOCATIONS

Mr. SNYDER. Who determines the lend-lease adjustments that are made with reference to the different sections or units?

General MOORE. Do you mean the distribution?

Mr. SNYDER. Yes.

General MOORE. That is determined by the Munitions Assignment Board, which reports to the combined Chiefs of Staff Committee. The Chiefs of Staff Committee consists now of the Chief of Staff of the Army, the Chief of Naval Operations, the Chief of the Army Air Forces, and the Commander in Chief of the United States Fleet, for the American side; and there are the corresponding representatives on the British side. Then there is the Munitions Assignment Board with a corresponding number of British and American officers, headed by Mr. Hopkins.

Mr. SNYDER. With reference to transfers, the Bureau of the Budget would not in any way go contrary to your requests, would it, if you stated that certain moneys should be made available to you in a different channel so as to enable you to better prosecute the war?

General MOORE. I do not think they would, if the request was reasonable.

Mr. SNYDER. You would have to be the one to determine whether it was reasonable, or not, because surely you would know more about that than they would.

General MOORE. That is true.

IMMEDIATE ENLISTED STRENGTH OBJECTIVE

Mr. WOODRUM. What is the augmented program, or what is the present objective?

General MOORE. About 3,600,000 men.