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Mr. SIKES. The committee is now ready to begin its hearings on "Operation and maintenance, Navy." We will begin these hearings with a summary statement by Vice Adm. John Sylvester. After the statement by Admiral Sylvester, we will have a special statement on the maintenance of facilities which will state how the Navy is progressing with a new system designed to account separately for the cost of maintaining its farflung physical plant. Following this presentation we will have a period of general questions pertaining to the whole of maintenance and operations, and then proceed with the separate presentations by Bureaus.

All right, Admiral Sylvester, will you proceed?

VICE ADM. JOHN SYLVESTER, U.S. NAVY

A native of Wellston, Ohio, John Sylvester graduated from the Naval Academy with the class of 1926. He subsequently had duty afloat in the cruiser Concord, the destroyer Manley and on the staff of commander, destroyer squadrons, Scouting Fleet.

In 1936 he received the degree of master of science from the Massachusetts Institute of Technology and from November of that year until July 1939 served as aide and flag lieutenant to commander, Asiatic Fleet. For administrative work in that assignment during the Sino-Japanese hostilities in 1937, he received a letter of commendation. At the outbreak of World War II he was engineering and research officer at the Naval Torpedo Station, Newport, R.I., and in 1943-41 had duty as executive officer of the cruiser Columbia. He was awarded the Legion of Merit with combat V, for his "exceptionally meritorious conduct ***" during the initial bombardment of Buka-Bonis and the first daylight attack on the Shortland area.

He received a gold star in lieu of a second Legion of Merit with V for meritorious service as operations officer on the staff of commander, Cruiser Division 4, late in 1944 and was awarded the Bronze Star Medal with V for heroic service in connection with operations in the Philippines as assistant operations officer on the staff of commander, Battleship Squadron 2. In April 1945 he joined the staff of commander, destroyers, Pacific Fleet.

Between 1946 and 1948 he had consecutive duty in the Plans and Operations Division at the Armed Forces Staff College and in the Plans Division at the Naval War College. He was in command of Destroyer Squadron 8 for a year, after which he served as operations and plans officer, later chief of staff, on the staff of commander, 2d Fleet. During 1951 and 1952 he commanded the battleship Missouri and in the fall of 1952 became special assistant to the Chief of the Bureau of Ordnance.

Following an assignment, January 1953-November 1954, as special assistant to the Chief of the Armed Forces special weapons project, he became commander, Task Force 7.3, directly responsible for the overall planning, development, and successful completion of Operation Wigwam, an underwater detonation of an atomic device, the first test of its kind. He received a gold star in lieu of a third Legion of Merit for outstanding service in that capacity.

He commanded Amphibious Group 4 for 8 months during 1955 and 1956, next served as deputy chief of staff for operations, joint staff, U.S. commander in chief, Europe, and from April 1958 was commander, amphibious force, Pacific Fleet. In June 1960 he was ordered to duty as Deputy Chief of Naval Operations (Logistics), Navy Department.

Admiral SYLVESTER. Mr. Chairman and gentlemen of the committee, I am Vice Adm. John Sylvester, the Deputy Chief of Naval Operations for Logistics. It is my privilege to present the Navy's request for funds under the appropriation "Operation and maintenance, Navy," for fiscal year 1962. This is my initial appearance before this committee since assuming my present office last July.

First, I will review the nature of the "Operations and maintenance" appropriation, then I shall discuss some of the more significant differences between this request and last year's appropriation, and, finally, touch on some of the more important matters which were considered in formulating our request.

As the name implies, the appropriation "Operation and maintenance, Navy," is that portion of the Navy budget that pays the everyday expenses. When you hear of our fleet operating in the Mediterranean or in the Far East, the Red Sea, Antarctica, or in any of the other areas throughout the entire world, you are aware of the Navy's role in carrying out our national policies. These operations are funded by the O. & M. appropriation. Ship and aircraft crews must be trained in the delivery of today's complex weapons-must shoot at targets and fire missiles in order that they will know how to perform in earnest with weapons we know are reliable if the need arises. Ships

and men tire and men rightfully expect to have some of the pleasures of life such as homelife, recreation, and cultural opportunities, so these forces must be rotated to and from distant operating areas. The supply and resupply of these forces proceeds day in and day out. The fleet also must be supported by a shore establishment capable, among other things, of repairing ships and aircraft, training men and ministering to their medical needs. The fleet must be served by communication facilities that are responsive, reliable, and secure under all conditions in order that commanders may execute their responsibilities for command and administration. These are just some examples of the activities funded by this appropriation. They are not glamorous, neither is the air we breathe, but it's what keeps us going.

Last year when we brought our request to you we likened the O. & M. appropriation to Neptune's trident. Each one of the three basic purposes served by this appropriation-fleet operations, fleet maintenance, and fleet base support-can be thought of as one of the trident's prongs. As I talk further it will be quite apparent to you that our fundamental plan is to provide for the best combination of operations, maintenance, and support that we can. This appropriation is truly our life's blood.

BUDGET PROCESS

Now, a few comments on the budget process. There are eight parts to this appropriation referred to as "major activities." Each is managed by a separate bureau or office chief who works in consonance with a sponsor within the Office of the Chief of Naval Operations. Within this Office I am the appropriations sponsor for operations and maintenance with the job of coordinating the work of the managers and sponsors of the eight major activities of this particular appropriation. The requests for funds within this appropriation are based upon approved program objectives and the basic Naval Establishment plan for the budget year. Within established guidelines they represent the best professional opinion of the sponsors working with their corresponding major activity managers to achieve the best possible defense program. The motivation to obtain the best military posture for the least money must finally result in some programs receiving higher priorities than others in the various budget reviews, and the many reviews also insure that the Navy's programs are in consonance with those of the Department of Defense and the administration.

COMPARISON OF ESTIMATE, 1962, AND APPROPRIATION, 1961

Now, to a comparison of this request with last year's appropriation. Between 1961 and 1962 certain financial responsibilities have been shifted between appropriations. These shifts have resulted in a net $17.4 million increase in financial responsibility for the O. & M. appropriation. Therefore, to establish a basis for comparability, the total direct obligations reported for fiscal 1961 should be increased by this net of $17.4 million. When this adjustment has been made, our present request of $2,624 million is approximately $47 million more than last year; this increase is partly due to new programs, partly due to expanded programs in the growth stage, and partly due to rising costs. More POLARIS submarines will have entered the active fleet, and this will require $23 million more in operating funds than in fiscal

year 1961. Modernizing shipboard electronic equipments, purchased with prior year procurement funds, must be installed at an increased cost of $14 million. The Navy is taking over the facilities at Keflavik, Iceland, from the Air Force, and this will add $10 million to the Navy O. & M. account in 1962. More ships will have nuclear powerplants, and replacement cores for some of the first of them will add $14 million to the fuel account. The Navy's space surveillance stations, having become operational, were transferred from the "Research and development" appropriation to this one at a cost of $4 million. The Military Industrial Supply Agency, a new single-manager assignment to the Navy, will be in its second year of buildup providing industrial supplies to the entire Defense Establishment at an additional cost to this appropriation of just under $6 million. The new Naval Air Station at Lemoore, Calif., and the new Naval Auxiliary Air Station at Meridian, Miss., will both be operational in 1962 and will require funds amounting to approximately $6 million. The Fleet Computer Programing Center at San Diego, Calif., will require funds amounting to $1.7 million. This activity represents an important advance in our ability to cope with current complex tactical warfare problems that manual methods can no longer handle. There is also a small but important increase requested in the operation of the naval petroleum reserves, principally to prevent oil drainage from reserve No. 3 by independent wells along its outside boundary. As in previous years, it is expected that the operation of the reserves will return much more money directly to the U.S. Treasury than is expended on their operation. The new expanded programs just mentioned and other necessary increases which did not appear in the comparable fiscal year 1961 O. & M. appropriation amount to a total of $83 million. The previously mentioned $47 million increase in NOA will fund approximately half of these required new programs in fiscal 1962.

We must continue to maintain a dynamic Navy which will meet the demands of changing conditions in the methods and means of warfare, in the international situation, and within our national environment here at home. It is quite natural to expect numerous shifts of emphasis within the dollar totals of an appropriation from 1 year to the next. Accordingly, certain programs have received increased support totaling $18 million. For example, increased funding of $4.6 million is requested to provide communication facilities necessary for command control of fleet units and weapons systems designed for missile warfare. Increased emphasis of $1 million has been placed upon equipment and instructors for our midshipmen at the Naval Academy to meet the needs of the exploding naval technology. This is in keeping with increasing demands for education and training in general throughout the Naval Establishment. An increase in funds of $2.8 million is requested for medical services to provide for additional personnel and for the greater number of dependents. It is a matter of considerable pride that our naval medical facilities, among those of the military services are operated with the lowest ratio of hospital staff personnel per patient; however, it is a matter of concern to us that Navy hospital corpsmen and women and Navy nurses have been working 50 and even 55 hours week after week. A few additional civilian jobs will be set up in hospitals partially to correct this undesirable situation. Vigorous efforts are continuing to re

duce travel expenses; however, we request that these funds be freed of the restrictions of the current fiscal year. Admiral Smedberg has already spoken to this subject in the military personnel appropriation hearing, and the major activity sponsors also will speak to it.

The complete budget story can't even be told in a recital of the programs that it covers. The worth of items in the budget can be realized best by looking at some of the "all wool, yard wide" items that could not be squeezed in. It has been necessary for us to omit some programs and to accept a lower level in the operation of others. Examples of this are in spite of increasing funds devoted to the maintenance and repair of real property, the backlog of essential maintenance will remain substantially unchanged. Although this budget provides for an increase in flying hours for our Naval Reserve pilots, our famous "weekend warriors," we feel that their optimum training limit will not yet be achieved. Our estimated backlog of about 750 aircraft flying on an extension beyond their normal rework period in 1961 will increase to a level of about 1,200 to 1,300 in fiscal 1962. Thirty-seven regular ship's overhauls scheduled for the latter part of fiscal 1962 will have to be deferred until early fiscal 1963. Also, this fiscal year there are 27 ships which will be put through our fleet rehabilitation and modernization program known as FRAM II; in fiscal 1962 we will put 21 ships through the FRAM II program under this appropriation. We are constantly reviewing the need for our shore stations and take action to close or reduce any that can possibly be spared and for which we cannot assign sufficient funds. These facts have been cited to illustrate the degree of competition among programs for places in the budget and to give an indication of the importance of the programs which have been included in the budget. First consideration has been given to support of 625,000 naval personnel, an active fleet of 817 ships and 6,280 average operating aircraft, to training our Naval Reserves personnel with 88 ships and 715 average operating aircraft, and to that portion of the Shore Establishment engaged in direct support of the fleet. In the O. & M. trident of fleet operations, fleet maintenance, and direct fleet support these are our priority programs. I reiterate, this apppropriation funds today's readiness of our ships, our aircraft, and our personnel. It's a hard budget, perhaps too hard. I have been with it step by step from the beginning and I assure you that this budget is completely justified.

Mindful of the need to conserve public funds to the maximum extent possible, the past year has been one of "soul searching" for the Navy. You will be told of many steps taken by our technical directors and you may note that many of these have been responsive to suggestions from this committee and other Members of the Congress. You will learn from other witnesses of some dramatic technical results already experienced, but this is by no means the end of our efforts. For example, we have set in motion a comprehensive planning system for our Shore Establishment and it is already evident that future savings of significant proportions are possible. We are taking a hard look at every function we perform in order to satisfy ourselves that each is really needed and worth the price we pay. We have

1 The 6,280 average operating aircraft includes 82 drone aircraft, but excludes the 715 average operating aircraft for Reserve training.

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