note the upward trend in the restricted line and staff corps communities in the Lieutenant Commander grade which is caused primarily by our direct procurement programs for medical officers.

Chart #14 shows officer promotion from a different perspective. The lower graph presents actual numbers of promotions in the combined grades indicated. Captain, Commander and Lieutenant Commander are essentially stable except as influenced by Lieutenant Commander Staff Corps Officers, primarily medical. The grades of Lieutenant and Lieutenant (junior grade) respond to procurement and changes in upper grade flow rates. Slight increases for 73 are programmed. Flow rates in the grades of Lieutenant Commander, Commander and Captain are retarding slowly as a result of a decreased strength base.

An area of vital interest to increased readiness and future cost control is retention. The enlisted retention picture is mixed. Chart #15 (upper graph) shows the numbers of first term reenlistments and compares it with our goals for overall Navy. We have established numerical goals for each of 69 ratings in the Navy which equate to approximately a 31% overall retention objective. The upturn since FY 70 is encouraging but still less than satisfactory. We have 29 ratings whose retention rates are less than 10% and severely inhibit our experience mix, stability and readiness improvements. The Variable Reenlistment Bonus (VRB) is our most useful management device. The average reenlistment rate among ratings eligible is 25% which is 12% higher than those ratings not eligible for VRB. The bottom graph presents the reenlistment profile for a single rating, radioman, as a detailed example of our actual versus desired experience.

RETENTION (OFFICERS)

Retention of high quality officers in proper balance by specialty is our objective. This chart provides on percentage scales our experience with officer retention and projects our expectations for the coming year. The percentage goals are also shown. Marked improvement in aviation and submarine retention has occurred in the past year (upper two lines). Aviation successes may be influenced by reduced commercial hiring. We attribute our success in submarines to the nuclear officer continuation pay which Congress provided two years ago and which expires in FY 73. We anticipate requesting extension of that authority and extending it to include nuclear surface officers for whom we currently realize 11% retention. This must be arrested and reversed. The lower two lines show our poor experience with surface and medical officer retention which continue as our severest officer problems.

Chart 17 presents our statistical experiences with early release programs (officer and enlisted) in recent years. We have been required to exercise significant numbers of early releases to meet force reduction objectives and budget constraints. We regard this as debilitating to readiness but necessary to manage the force with a balanced plan of action. We have early released in excess of 260,000 officers and men from two months to one year earlier than their normal expiration of service in the past four years. We plan no enlisted general early releases in FY 73 but will continue a modest officer program.

Turning to Chart 18, concurrently with force reductions, we have increased our quality control standards, and our professional criteria for continued service have been improved. This has resulted in increased separation of ineligible to reenlist personnel (upper graph) compared to pre-Vietnam years. All of these men leave service with honorable discharges. Our projection for FY 73 shows a decrease in numbers of ineligibles anticipated.

In addition, we have experienced increases in separation for cause (lower graph) resulting from adverse attitudes towards military service, increased disciplinary cases and expanded incidents of drug abuse. A significant proportion of these increases are attributable to Project 100,000 New Standard accessions. We anticipate reductions in these trends as a beneficial effect of the All Volunteer Force in the long term, but are not yet confident that the trend will reduce markedly in FY 1973.

Chart 19 presents three breakouts of officer losses. Statutory retirements (solid line) are at high levels due to thirty year service completion of World War II officers. Officers separated with severance pay (center), not retirement eligible, are tapering off and will probably stabilize at about 240 annually. Reserve officers separated with reserve readjustment pay (bottom) are shown.

Finally, as we gain experience in recruiting under essentially zero draft conditions we are finding the resiliency of supply of manpower attracted to the Navy on a voluntary basis is marginal. We are currently experiencing some numerical shortfalls which we hope to overcome in the coming months as our recruiting techniques improve and as we attain full recruiting strength. It is, however, an element of concern at this time. Manpower competition in the marketplace is keen and as we retrench from Vietnam, the Navy appears to be at a disadvantage, particularly because of repeated lengthy deployments at sea and the image of hard work under seagoing habitability conditions. This completes my presentation. Thank you, Mr. Chairman. I am prepared for questions.

COMMITTEE PROCEDURE

The CHAIRMAN. I think your charts are very helpful and we are glad to see you spell it out this way.

Has the Navy made presentations like this before?

Admiral FINNERAN. Not to my knowledge, sir. To the Congress, we have attempted to pull this together so that you could see it in the perspective of the past and the current and future year programs.

The CHAIRMAN. Yes, it is highly valuable to our staff members. We will have this as a starting point next year. You will have it, too, as a starting point for comparison.

Admiral FINNERAN. Yes, sir.

The CHAIRMAN. You gentleman in the Navy-all services-have great personnel problems. I do not see how you handle all of them, particularly the Navy with your offshore duty to complicate the

matter.

Admiral FINNERAN. We have some very difficult problems, Mr. Chairman.

The CHAIRMAN. You apparently do a good job. At least, you know how to stay out of the newspapers rather well, that is a big item in itself.

I would like to make one suggestion here. We are not as familiar with the abbreviations that you use and often stumble over them in reviewing these papers. In view of your public relations expenditures. it would be helpful if these abbreviations could be written out for our understanding.

Admiral FINNERAN. Yes, sir.

The CHAIRMAN. I have just a few questions here and then I will pass on over to Senator Thurmond.

We have before us that there are 13,600 Navy personnel at management headquarters below the departmental level and another 6,100 in intermediate headquarters. Now, can you and will you provide a list of these headquarters, their functions, and the number of men in each?

sir.

Admiral FINNERAN. Yes, sir.

The CHAIRMAN. You cannot do that now, but you will do it? Admiral FINNERAN. I will be pleased to provide that for the record,

The CHAIRMAN. When we say for the record, we mean sometime reasonably soon, so we will not accumulate a great deal of it later.