Mr. MINSHALL. All of them? General DUFF. All of them. Mr. MINSHALL. Are you going to need as many NIKE-HERCULES installations as you do NIKE-AJAX because of the increased range and firepower? General DUFF. There will be a net reduction in the number of units, sir. At the end of fiscal year 1961, the number of Active Army battalions in the Army Air Defense Command is battalions. battalions with In addition, the National Guard has batteries located at sites. Some of these sites are dual sites so two fire units are located at the sites. By the end of fiscal year 1962, the budget year, the number of battalions for the Active Army will be reduced. Mr. MINSHALL. Can you relate that in the number of sites to me rather than battalions and batteries? General DUFF. The number of sites will be reduced from Mr. MINSHALL. How many sites do you have in the continental limits of the United States today? I know you have around Cleveland sites. General DUFF. We have- Active Army sites. Mr. MINSHALL. I want to know how much that is going to be reduced, and how many of those sites are going to be disposed of. General DUFF. There are Isites at this time for the Active Army, and for the National Guard. There are 68 sites being phased out in fiscal year 1962. With respect to Cleveland, I will provide that information. General DUFF. I know. I was the New York air defense commander for 3 years. Mr. MINSHALL. If there was any program that was ever balled up and lacked complete public relations, it was that program. The first knowledge the people around the city of Cleveland had that they were going to have NIKE sites in their backyards was when they saw surveyors out in their backyards. Now they are doing the same thing without advising anybody, converting these sites to NIKE-HERCULES and moving some of them without informing anyone about it, the local representatives, or the legislative representatives. General DUFF. I do not know what the public relation policy has been in the area of which you speak. I know as far as other areas with which I am familiar are concerned, in the initial activation of this program, the first units went on site in 1953. The policy of the Department at the time that these sites were first selected and initial negotiations made was that this was to be handled as a confidential matter because of the security aspects involved. As we progressed further with the activation of additional units and the defense of additional cities and other centers, before we would go into any specific area, before we would start the real estate negotiations, we would have a public meeting, and we would inform the local residents with regard to what was intended. This was also true in general with regard to the conversion of these sites from NIKE-AJAX to NIKE-HERCULES, or the proposed acquisition of any new sites. That was the general policy, and if it was not followed, it must have been the fault of a local commander. Mr. MINSHALL. Somebody goofed. I am one of the Congressmen from the Cleveland area, and none were informed. The first thing we knew about it was when we read about it in the newspapers. Not that it is vital, but it seems it would be good public information to let us know what is going on. Would you supply me with a memorandum of what the plans are presently for the Cleveland area as to the number of NIKE sites and if you plan any further reductions? General DUFF. If we may, we will provide this in a memorandum to you. Mr. MINSHALL. Thank you very much. BALLISTIC MISSILE TRAINING Mr. ANDREWS. I wish you would supply for the record at this point some statement with reference to the question that I asked about the Air Force program for 1962, wherein a savings of $4 million is claimed as a result of conversion of ballistic missile training from a contract to an inhouse basis. General DUFF. Yes, sir. (The information to be supplied follows:) The Air Force uses contract support of ballistic missile training to (1) Train instructors, prepare course curriculum, and prepare training aids for use in its inhouse training program; (2) Train cadres for immediate assignment to missile units; and (3) Handle special one-time needs such as up-dating instructors. During the period from fiscal year 1960 to fiscal year 1962, the Air Force has achieved an inhouse capability for certain types of missile training. Total missile training costs during this period therefore are budgeted to decrease from $16.4 million in 1960 to $12.4 million in 1962. INCREASES AT FORT GORDON Mr. ANDREWS. With the average training center load either static or declining in CONARC, why are there increases budgeted at Fort Gordon for the Deputy Chief of Staff, Logistics and for the Provost Marshal General? That is shown on page 20 of the justifications. General DUFF. Several factors contributed toward the increased training load indicated for DCSLOG and the Provost Marshal General. In fiscal year 1961, 9,313 more RFA trainees are authorized and scheduled to be trained than in 1960. A portion of this increase is programed for DCSLOG as well as for other training installations. No increase is programed for the Provost Marshal General in fiscal year 1961 as no additional requirement is foreseen in this area. Based on performance figures for the first 5 months of the fiscal year 1961, the actual DCSLOG training load averaged 2,489, or 11 men under program. In fiscal year 1962 part of the reason for the estimated increase in DCSLOG and Provost Marshal General areas is that fiscal year 1962 is a year of higher cyclic personnel loss in the Active Army. This is primarily due to the discharge of a larger group of Active Army personnel in the fiscal year 1962 than is fiscal year 1961. In addition, the signal requirement is increasing because of activations. The projected loss and replacement of personnel requiring training in the DCSLOG and Provost Marshal areas is particularly heavy and accounts for the increase. DISPOSAL OF SURPLUS MILITARY SUPPLIES Mr. ANDREWS. We will insert in the record at this point the fourth quarter, and final, fiscal year 1960 report of receipts from, and reimbursements to, appropriations from proceeds from the disposal of surplus military supplies. (The information referred to follows:) ASSISTANT SECRETARY OF DEFENSE, DEAR MR. CHAIRMAN: In compliance with the provisions of section 611 of Public Law 86-166, the enclosed report is made of receipts and disbursements in connection with the disposal of surplus military supplies, equipment, and material during the period April 1 through June 30, 1960. Sincerely, FRANKLIN B. LINCOLN, Jr., Comptroller. Department of Defense-Preparation for sale or salvage of military property, as of Gross proceeds from sales.. Total reimbursements to appropriations.. June 30, 1960 Pursuant to the committee's request, the following breakdown of reimburse- 2290 Preparation for and disposal of surplus and foreign excess per- Operation and maintenance, Navy: 1110 Administrative headquarters for naval districts, bases, and 2110 Maintenance of ordnance and ammunition. 2515 Operation and maintenance of shore establishments. 781, 653 1,806, 211 209, 108 Mr. ANDREWS. Although this report is for the entire Department of Defense, nearly 60 percent of the reimbursements were credited to O. & M. Army. What effect will the recent establishment of centralized surplus sales offices have on Army reimbursements? If any change is anticipated, has it been reflected in your programs and financing schedules? Colonel TOLLIVER. The reimbursement picture will not change as between services. The net return to the Treasury as the result of this, we anticipate, will continue at approximately a $26 million per year rate. Mr. ANDREWs. $26 million? Colonel TOLLIVER. Yes, sir. Mr. ANDREWS. Is that just Army receipts? Colonel TOLLIVER. That is the result of the sale of Army property, sir. That is the net return to the Treasury, miscellaneous receipts, as a result of the sale of Army property after the expenses of property disposal have been paid. Mr. ANDREWS. What were the expenses? Colonel TOLLIVER. We estimate the total cost in 1962 to be $46 million. Mr. ANDREWS. How much was credited to the Treasury? Mr. ANDREWS. What was the expense? Colonel TOLLIVER. The expense was $46 million, sir. Mr. ANDREWS. What do you mean by that? Was that the original cost of the property? Colonel TOLLIVER. No, sir. Mr. ANDREWS. You mean the expense of disposing? What do you mean by that, $46 million and $26 million? Colonel TOLLIVER. $46 million would be the cost. The total acquisition value of property which we expect to sell will be approximately $1,430 million. Mr. ANDREWS. How much do you expect to get for that property that originally cost $1,400 million. Colonel TOLLIVER. $103 million gross. Mr. ANDREWS. What will the cost of disposing of that property amount to? Colonel TOLLIVER. $46 million. General DUFF. That is $46 million with certain expenses included such as the operation and maintenance of facilities, demilitarization, consolidated surplus sales offices, and certain other disposal expenses. Mr. ANDREWS. The original cost was $1.4 billion? Colonel TOLLIVER. The acquisition cost of the items sold. Colonel TOLLIVER. Yes. Mr. ANDREWS. And that cost $46 million to sell it? Mr. ANDREWS. According to my figure, that leaves $57 million net. There will be $57 million returned to the Government, but a good portion of this will go back into the stock fund which lost the item. In other words, if we dispose of an item through surplus sale which is owned by a stock fund, the stock fund recoups in its capital what we get for selling that item. That is in order to keep the corpus of the stock fund more or less intact. After we reimburse the stock fund for that portion of the property which belonged to them, the Treasury of the United States will get as a net profit, so to speak, $24 million. Mr. ANDREWS. You said $26 million a few minutes ago. Colonel TOLLIVER. I mean $26 million. Mr. ANDREWS. So we start off with an original cost of $1,400 million and wind up with $26 million-you say "profit"? Colonel TOLLIVER. Return to miscellaneous receipts of the Treasury. Now, the Government of the United States will have been benefited by the $57 million figure which you calculated. Mr. ANDREWS. The $26 million is part of the $57 million? Mr. ANDREWS. Why did it cost $46 million to sell $103 million worth of equipment? Colonel TOLLIVER. A good portion of that, specifically $18 million, will be required for demilitarization, particularly of shells and other things which we would not want to fall into the hands of certain people in usable form as munitions. Mr. ANDREWs. Break down the $46 million further. Colonel TOLLIVER. $18 million demilitarization, $8 million disposal. Mr. ANDREWS. What do you mean by that? Colonel TOLLIVER. That is general expenses of disposal typically at the yard in which the property is located. Miscellaneous demilitarization and disposal activities, which also take place at the station level, is another $5 million. Operation of these new Army consolidated surplus sales offices which the Department of Defense has recently established, $2 million. Mr. ANDREWS. How many employees do you have? Colonel TOLLIVER. I will have to furnish that figure for the record, sir. (The information to be supplied follows:) There are approximately 285 civilian employees in the Department of Army consolidated surplus sales offices engaged in the sale of surplus personal property for the Navy, Air Force, Marine Corps and Army. Mr. SIKES. Are there any instances where the cost of selling, including preparation for sale, of items is greater than the return from the disposal? Colonel TOLLIVER. Sir, I would have to cite specific examples, furnish specific examples for the record, but I would judge such would be the case, especially with regard to small items of ammunition where the cost of taking the powder out, making them suitable for sale as scrap metal, would be greater than the scrap metal cost. Mr. SIKES. Would it be more economical to dump that particular lot of ammunition in the ocean than to prepare it for sale? Colonel TOLLIVER. This, in fact, is done in some instances where this would be to the advantage of the Government. Mr. SIKES. Why not in all instances if it is costing you more to dispose of it than you get from it? Colonel TOLLIVER. The transportation of getting the item to shipside and taking it out and dumping it is very considerable. |