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direct appropriation. I say that because if the Government is going

I to appropriate the money, then they will appropriate $2 million to build the units you are talking about and will base the rents on the $2 million of appropriated funds.

Senator LEHMAN. No.
Senator CAPEHART. So it would be exactly the same.

Senator SPARKMAN. I wonder if we had better not hold this argument for executive session when we start marking up the bill, and let these gentlemen talk to us today while they are here.

Senator LEHMAN. I want to say if it is a direct appropriation, then even if the building cost only $1,500,000 that is all the Government has to and that is all that is appropriated.

Senator CAPEHART. Of course you have to let the contractor make a legitimate profit on the building, just as you do with every other contractor for the Government.

Secretary FLOETE. Mr. Chairman, in conclusioin I would like to say we think it would be a grave mistake to interfere with the amount of the appropriated fund for building we are trying to get this year, because unquestionably under any circumstances there will be a lag in getting it into effect.

So we do feel we should go ahead with this program. Of all the methods we have considered heretofore, the methods employed by S. 1501 appear to us to be the best adapted to meet our requirements as a supplemental approach to the appropriated funds.

Senator LEHMAN. Mr. Secretary, may I ask this question? I have pointed out there is divided responsibility and authority. Whereas the work is done by the services, the guaranty is issued by the FHA. Do you see any way in which this could be done directly by the services without involving the FHA?

Secretary FLOETE. I think it could be.

Senator CAPEHART. The Senator means having the military be their own insuring agency.

Secretary FLOETE. Yes, sir.
Senator CAPEHART. I think that is the better plan.

Secretary FLOETE. I do not think there is any doubt it can be set
up rather simply
Senator PAYNE. Mr. Chairman?
Senator SPARKMAN. Yes, Senator Payne.

Senator PAYNE. I wanted to ask the Secretary whether or not he cared to comment on the extension of the Wherry Act also ?

Secretary FLOETE. Yes, sir. Senator PAYNE. You would be in favor of that too? Secretary FLOETE. I think the services would spend a certain amount of money in getting plans and specifications together. I think we should disregard that and ask for an extension as to those projects where the individuals are certified by July 1 to the FHA and which were put into commitment by the FHA in the following year. That takes care of any expenditures that may have been made in the way I mentioned, and protects them.

On the other hand, I think if S. 1501 would be enacted it is a better device than the Wherry Act by far for providing this housing:

Senator PAYNE. Would you care to comment on why we have not been able to get more work done under the Wherry Act than we have accomplished up to date?

I have before me here some charts which we have made up in the past from which I would like to talk. These charts have been developed from information secured

by us during the present spring from the three military services. They are as accurate as a chart of this kind can be. We do not profess to say they are exact to 1 or even 100 or more units, but we do say they give you the general picture.

We have started out by using the projected military strength for June 30, 1956, of 2,859,000 men. We have secured the information from the services as to what their participation will be in that number, and as you will note on page 1, there is a total of 1,027,000 in the first column, which is the Army, consisting of 113,400 officers and 911,000 enlisted men.

Generally the Navy consists of 857,000 and the Air Force of 975,000. That is the basis on which we have developed the subsequent figures.

We know from experience about 90 percent of our military strength consists of enlisted men and about 10 percent officers. There is some variation, but that is the general rule.

We also know approximately 80 percent, in the case of the Air Force 85 percent, of the officers are married. In each case approximately 20 percent of the enlisted men are married.

From those figures, which are well substantiated, we developed certain gross housing requirements which are shown in the righthand side of chart 1.

In the case of the Army, 230,000 units, consisting of 88,000 for officers and 134,000 for enlisted men; in the case of the Navy and the Marine Corps, a total of 227,000 units; and in the case of the Air Force, 270,460, including 113,000 officers and 154,000 enlisted men.

We believe that gives us our gross requirement of the men and officers entitled by permanent law to public quarters.

Senator CAPEHART. A total of 727,000 ?
Secretary FLOETE. Yes, sir.
Senator CAPEHART. How many do you have at the moment?
Secretary FLOETE. That follows in the subsequent sheets.
Senator CAPEHART. I see.

Secretary FLOETE. On chart 2 that relates to the Army only. It starts out with 230,000 gross requirements and shows 88,000 officers and 134,000 enlisted men.

Then we have as assets presently owned, 81,800 in the case of the Army, of which 52,000 are permanent public quarters which Congress has heretofore appropriated funds to build. There are 21,000 Wherry Act and rental guarantees. There are only very few of those in New York, and a very small additional number. That gives us a deficit of the difference between 230,000 and 81,800, or 148,000 units. That is before providing for any civilian support.

Admittedly, the amount of civilian support is a tough thing to determine. You actually cannot determine it unless you go to a specific installation and make a survey to determine at that special or particular time that there is so much civilian support.

Senator SPARKMAN. When you speak of civilian support, do you mean units that are available in the community for officer occupancy?

Secretary FLOETE. Yes, sir. They are privately owned.

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Senator SPARKMAN. For occupancy by married personnel, officers and enlisted men?

Secretary FLOETE. Yes, sir. And it varies very considerably. But we have fond from our experience under the Wherry Act and also under last year's Appropriation Act that it runs some place around 45 to 50 percent. We have used the general figure of 45 percent. We admit it is not sound, but it is close enough, I believe, again to give you a proper picture.

Senator PAYNE. Mr. Chairman, if I may just ask a question there? Senator SPARKMAN. Yes, Senator Payne.

Senator PAYNE. In that figure on community support—and the same would be true on the other charts that are included—is the determination made that the facilities that would be available through private sources in the communities or surrounding areas would be both adequate and at a rate of rental that would be in line with that which the enlisted and officer personnel would be able to afford without having them being "fleeced?"

Secretary FLOETE. That is right. We would use those criteria in determining it.

Senator PAYNE. Right.

Senator CAPEHART. This does not give effect, however, to certain sections of the country where there is a tremendous deficiency on the part of the community services, like camps that are isolated, or camps out in thinly populated sections.

Secretary FLOETE. That is correct. Senator CAPEHART. You make no effort to give any effect to that sort of thing?

Secretary FLOETE. We feel it falls within 45 percent.

Senator CAPEHART. The overall total, but you may have exaggerated situations.

Secretary FLOETE. Oh, yes.
Senator CAPEHART. At given points.
Secretary FLOETE. That is correct.

Senator CAPEHART. Because the camp has 50,000 servicemen in it and it is supported by a town of perhaps 10,000, or a series of little towns numbering a few thousand each, 50 miles away.

Secretary FLOETE. Yes.

Senator CAPEHART. You have a lot of situations like that, do you not?

Secretary FLOETE. But we still think it averages out at about that.

Senator CAPEHART. I understand that, but you do not have the houses, though, in those isolated sections.

Secretary FLOETE. That is right.

Senator CAPEHART. For example, it would be pretty hard to make an argument that in Washington, D. C., with a camp within 5 miles of Washington, D. C., you would not have a lot of houses available.

Secretary FLOETE. That is right.

Senator CAPEHART. They might not be the proper kind and they may be a little too expensive, but I would say the boys would be able to find some place to live.

But taking isolated sections, perhaps in Wisconsin, Oklahoma, or portions of Texas, or up in Senator Payne's State of Maine, or other points, they are just not available regardless of the cost or regardless of the condition that the houses are in. They are really your most troublesome spots, are they not!

Secretary FLOETE. That is right. Of course, when you determine that when one of the services has a requirement at any given station, then we examine it carefully and then all those facts come out. Maybe there is no community support at all.

Senator CAPCHART. Is not the tendency to disperse and get your troops scattered and get them away from the large cities? Is that not more or less the general policy?

Secretary FLOETE. Yes, sir; that is right.

Senator CAPEHART. Of course, it almost has to be with the Air Force, because they have to be out where they can take off and land with their airplanes. They cannot be near the highly populated areas because of training men in airplanes and other reasons.

Secretary FLOETE. On that basis then in the case of the Army we have a community support of about 70,000 units, which leaves us a deficit of 78,312.

Senator LEHMAN. Is that the overall figure including isolated camps ?

Secretary FLOETE. Yes.
Senator LEHMAN. Does it include the community support?

Secretary FLOETE. Yes, sir. It includes everything. That is worldwide.

Senator SPARKMAN. Everything we have had so far relates to the overall, worldwide situation?

Secretary FLOETE. Yes, sir. Then developed in the same manner you will find on chart 3 the Navy. As you go through that you will find the same information is given—the gross requirement, and the effective assets and the deficit, as well as the estimated community support. It gives a net deficit of 45,000 units. In the case of the Air Force the gross requirements are 270,000 units and the assets are 77,000 units, with a deficit of 193,000. The figure of community support is 83,000, leaving a net deficit of 110,000.

Throughout these things, the services do not necessarily agree with our figures. I think we have been more conservative than they have. For instance, we estimated community support generally higher, but the difference is not in our fundamental approach to it, but simply that they felt there was less available and they needed more.

Senator CAPEHART. I think if I may say so, possibly the big weakness in these figures is these camps in isolated sections.

Secretary FLOETE. Well, but within the averages we will take care of them.

Senator CAPEHART. You cannot take care of a house in Oklahoma with a house in Washington, D. C. That is my point.

Secretary FLOETE. No. But I am only talking about averages here and not pinning it down to isolated camps.

Senator CAPEHART. The point is, you have these camps scattered all over the United States and all over the world. Many of them are in sections where there is very little population around them, and very few houses. I think maybe those are the most troublesome spots.

Secretary FLOETE. They are, sir.

Chart 5 gives the geographical distribution of this net deficit. You see, we estimate the net deficit after giving consideration to everything now owned and the community support. Within the continental

last year.

United States in the second column you will find there are 165,000 required here. I am inclined to think that that figure should be actually 180,000, because included in the assets are certain projects under the Wherry law which have been requested by the services, but which are not under contract. But I think those figures of 165,000 as broken down into 51,000 for the Army and 33,000 for the Navy and 80,700 for the Air Force are what is given for the continental United States.

In the Territories and possessions there is a further requirement of 11,000. In foreign countries it is 56,000, making up a total deficit of 233,000.

Now that gives us the general picture of what our requirement is. I think these other gentlemen here are better prepared to speak on the morale features of this matter and on the effect of the failure to have houses on the rate of reenlistment, so I will not say anything about that I will leave that to them.

Senator CAPEHART. How much direct appropriation do you have at. the moment, or how many units do you have under direct appropriation at the moment?

Secretary FLOETE. We only have $75 million that was appropriated
Senator CAPEHART. How many units will that build?
Secretary FLOETE. That will build about 8,000.
Senator CAPEHART. 8,000 units?

Secretary FLOETE. Because some of it was used for other than housing.

Senator CAPEHART. So you have a direct appropriation at the moment for 8,000 units with this deficiency of 233,000

Secretary FLOETE. That is correct. In this year's program we show on chart 6 what we are asking for by way of direct appropriation. . We are asking for an authorization of $254 million and an appropriation of $365 million. The difference is the $110 million cash carried over from last year's authorization bill that was not funded last year.

Senator CAPEHART. And this $254 million would build about 8,000 units?

SECRETARY FLOETE. No. We will get out of the $365 million a total of about 26,000.

Senator CAPEHART. In other words, if you get this direct appropriation you will be able to build 26,000 ?

Secretary FLOETE. Yes, sir.

Senator CAPEHART. And the appropriation you are working under at the moment builds 8,000 houses. Is that right?

Secretary FLOETE. Yes, sir. That is approximately right. To meet the gross requirements we have considered all the methods that have occurred to us. We have considered using a revolving fund from prior unused appropriations. We have considered the lease-purchase agreements and have considered the Wherry Act, and considered creating a Military Housing Corporation, with authority to issue bonds; and we have found objections to all of those methods. There is something wrong with every one of them. So last year we went to the appropriated fund method and Congress authorized $175 million, and appropriated $75 million.

Senator CAPEHART. That would build how many units?
Secretary FLOETE. About 13,000 units.

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