forces. Last year I discussed with you briefly the fact that we felt that there are major improvements that should be made in our Reserve program. Following my talk, Mr. Burgess will bring you up to date on the present status of the National Reserve Plan, which is now being considered by the Congress.

The Congress has recently passed the Career Incentive Act of 1955 which we feel will do a great deal to make military service more attractive as a career. We are keenly aware of the importance of attracting and retaining in the armed services the required numbers of career personnel, both in the officer and enlisted grades, because it is most important that we have a high level of capable, long-term personnel within the military establishment. That is why we felt that it was mandatory that we bring their compensation and benefits more into line with what men of equivalent experience, ability and responsibility receive in civilian life. The prompt action of the Congress in passing this legislation should do a great deal toward improving the effectiveness of the entire military establishment.

We are also working hard to provide better housing for our military personnel, for the removal of existing inequities in the provision of medical care for our military families and for the equalization of survivor benefits. We have recommended to the Congress and expect to open hearings shortly on the Department of Defense program for Military Public Works for the next year which involves over two billion dollars for military public works. We are asking for authority this year to spend $365 million for family housing.

The legislative program we have recommended to the Congress has been developed after a great deal of consideration and after carefully considering the views of many interested groups and all of the interested agencies of the government. We have great hopes that all of it will be enacted during the present session and think that it represents real progress in the solution of many of our problems.

Last year in reporting to the Governors on our military program I told you that our estimates of expenditures in the Department of Defense would be approximately 371⁄2 billion dollars, exclusive of the Military Assistance Program. It now appears that our actual expenditures in FY '55, which will end on June 30th, will be approximately 35 billion dollars, or some 22 billion dollars less than we anticipated 1 year ago. I think that the Department of Defense can take credit for some improvement in management and in the efficiency of our operations for this difference in our forecast. For FY '56 the detailed estimates of expenditures for the many individual programs in the Department of Defense totaled up to 35 billion, 750 million dollars. The President and the Budget Director believe that because of our success today in introducing improvements in planning and efficiency in operations and because all elements of our programs do not develop exactly as forecast, that the Department of Defense expenditures in FY '56 will end up at about 34 billion dollars. We are continuing our efforts to increase efficiency and to make economies and to spend the money

properly. However, we are not going to reduce the forces that are programmed in this budget or take actions which would impair their readiness or combat effectiveness in order to reduce expenditures. I might add that this is the first time I have ever been put in ahead of time for a saving of a billion and three-quarters dollars in one year. However, we are going to work at it and I have every reason to think that we can accomplish our objective in this area.

The President, the National Security Council, and the Department of Defense, including the Joint Chiefs of Staff and the military departments, have given a great deal of earnest consideration and study to the problem of developing sound military policies which will best serve the Nation for the years ahead. As a Nation we reject the concept of preventive war. However, a sudden nuclear attack aimed at our population, industrial and military centers could be a threat to our survival as a Nation. Therefore, our primary objective must be to maintain the capability, first to deter an enemy from such an attack; and second, to blunt any such attack if it comes. Both purposes require a combination of effective retaliatory power and a continental defense system of steadily increasing effectiveness. These two tasks logically demand high priority in our security planning.

There are additional military tasks, essential to ultimate victory should general war be thrust upon us, which we must be capable of performing. The sea lanes would have to be protected to enable us to support our forces overseas and those of our Allies. We must be in a position to deal with critical land situations as they arise, and we recognize that the problem of maintaining order and organization under the conditions that might prevail in the major cities of our country could of itself constitute a major challenge. I know that you are very much concerned in connection with this problem and want to assure you of the complete cooperation of the Department of Defense in this matter.

To provide for meeting lesser hostile action, such as local aggression, we must rely primarily on the collective defenses of the free world now in existence and being strengthened in many areas. However, because indigenous forces do not provide a complete defense in themselves, and because our own vital interests and pledged faith might be involved, the United States should be ready to provide timely assistance in certain situations to cope with local aggression.

We must also have ready reserve forces, an adequate mobilization base, appropriate reserves of ammunition and other equipment, and stockpiles of critical materials to meet the needs of an all-out war if such a situation should be forced upon us. This is the kind of defense structure that we must build and maintain to deal with the situation we face in the world today. At the same time we must carefully consider the force levels, composition and the organization of our armed services. The services must be so organized as to permit the maximum utilization of our scientific, technological and production abilities. In addition to the maximum utilization of modern technology we must plan and organize our forces so as to get

maximum combat strength and at the same time minimize the number of men required on full time active duty. To retain excessive numbers of men on active duty not only increases the cost to the country but at the same time it decreases our ability to support the military establishment by removing manpower from more productive civil pursuits.

The lack of reasonable stability in our military programs is a most wasteful and expensive practice. We cannot afford to revert to the "feast or famine" pattern of our past history, not just because of the effect upon our economy but primarily because we cannot take the military risks involved in such a policy. Development of a sound, long-term security requires that we design our forces so as to assure a steadily increasing efficiency, in step with scientific advances, but characterized by a stability that is not materially disturbed by every propaganda effort of unfriendly nations or wishful thinking on the part of ourselves or our Allies.

We believe that efficiency and economy in the operation and management of the defense establishment is essential to the national security. We must have quality as well as quantity and only in this way can we get the maximum defense per dollar spent. A potential source of future savings and increased efficiency, for example, lies in our ability to level off our training costs once we are able to stabilize our forces by attracting and holding the highest type of personnel both in our military and civilian positions.

These are the military policies which have guided the development of our present military program. We believe that we have planned a better balanced program of both offensive and defensive forces and one which fits into the overall pattern of collective allied strength.

I know that you are particularly interested in our program for continental defense, and General Chidlaw will cover that in more detail later.

We have recently established the new Continental Air Defense Command with headquarters at Colorado Springs and which is commanded by General Chidlaw, to be responsible for the control of the combat elements and the coordination of the early warning systems. I feel that this is a great forward step in this area and will make this entire program more effective as well as enabling us to cooperate more closely with our Canadian allies who have been so cooperative already in this protection of the North American continent.

I would now like to discuss briefly our retaliatory capabilities. We have provided in our military program very powerful retaliatory forces in the Strategic Air Command of the Air Force. In addition, a great retaliatory capability exists in the Carrier Striking Forces of the Navy, and in the tactical air units of the Air Force and the Marine Corps. Our policy calls for flexibility and versatility in the employment of existing forces. We are prepared to use our total resources in the most effective manner appropriate to the particular situation.

The build-up of the Strategic Air Command of the Air Force is continuing. This part of our retaliatory force will increase in numbers, but more importantly in quality as the remaining reciprocating engine bombers are

replaced by modern jet aircraft. The B-36, long the mainstay of the longrange strategic forces, will be replaced by the B-52, the new long-range jet bomber. The long-range strategic fighter units in the SAC forces are scheduled to be re-equipped with supersonic fighters possessing a nuclear capability. These forces are being maintained in a high degree of readiness. Some of these forces are capable of operating directly from the continental United States; all are capable of operating from bases scattered around the globe. Local air defense for bases in areas outside the continental air defense system is being improved.

The carrier striking forces will be augmented by one additional carrier and one carrier air group this year. More importantly, both the carriers and the aircraft are being rapidly modernized, the carriers both through the conversion of existing carriers and the construction of new carriers, and the aircraft through the replacement of old models with the new aircraft now in production.

I am sure you are all familiar with the new Forrestal class carrier, the first of which was launched about 4 months ago. These new carriers, as well as other carriers that are being modernized, will be equipped with newly developed aircraft with improved nuclear capabilities. Our carrierbased airpower increases the flexibility and dispersion of our retaliatory

power.

The Army has also been improving its capabilities. Atomic artillery and HONEST JOHN unguided rockets, both capable of delivering atomic warheads, are now included in Army units in the continental United States and overseas.

The capability of our retaliatory force is dependent upon its quality as well as its size. The tremendous destructive power of nuclear weapons has put a premium on certainty of delivery. A single aircraft may now accomplish what would have required thousands of aircraft during World War II. Consequently, the quality of our retaliatory force is now becoming increasingly more important than its size. We feel fully confident that the retaliatory forces provided in our program are equal to the tasks they must perform. I would now like to summarize the force objectives for the next fiscal year in terms of the individual services.

Under the budget program for FY 1956 approved by the President, the Army will have an active duty strength of approximately 1,027,000 on 30 June 1956 and will be supporting 13 mobile divisions, 11 regiments, and 136 antiaircraft battalions. In addition, the Army will have 2 divisions termed "static" divisions indicating that their mission is fixed and that not all troops will be stationed in one area, and 3 additional training divisons which will be organized to enable the Army to carry out its divisional rotation program announced by the Army early last year.

The Navy program for FY 1956 will provide for the operation of over -1,000 active ships, including 405 warships. Active duty military strength will be approximately 664,000 on 30 June 1956. The number of carrier air groups will be increased from the present 16 to 17, and an additional

attack carrier equipped with modern aircraft will be added to the fleet. The program will continue to maintain 15 antisubmarine warfare squadrons.

The Marine Corps will have an active duty strength of approximately 193,000 on 30 June 1956 and will continue to maintain 3 combat-ready divisions and 3 airwings and essential supporting elements. At the same time certain redeployments of Marine Corps forces now in progress will increase their effectiveness and readiness for emergency employment.

The Navy will continue to maintain an active aircraft inventory of 13,000 planes, of which 10,000 will be operating aircraft in Naval, Marine, and their Air reserve units. In addition to conversion and modernization of older types, a significant number of new ships will be added to the fleet during the current and succeeding fiscal year. The FY 1956 budget provides over $1.3 billion for the construction of new type ships and the modernization of older types.

The Air Force will continue its build-up toward the 137 wing goal and the 975,000 manpower target established over a year ago. The objective for 30 June 1956 is now 131 wings-4 more combat wings than the Air Force planned 1 year ago. The active aircraft inventory of the Air Force will increase to over 23,000 by 30 June 1956 and will continue to increase in FY 1957. Continuing modernization of the inventory is being accomplished simultaneously, and by 30 June 1956 the combat units of the Air Force will be almost one hundred percent jet equipped. Over $6 billion in new appropriations are requested in the 1956 budget for Air Force aircraft and guided missiles. Another substantial increment of military construction funds has been requested to push forward the construction of air bases and other military installations required by the expanding Air Force Program. Long-range studies by the Department of Defense have been made to determine the best balanced and the most effective use and deployment of our Armed Forces. Our analysis of this problem included an examination of:

(a) strategic concepts and implementing plans,

(b) roles and missions of the services,

(c) composition and readiness of our forces,

(d) development of new weapons and weapons systems and the resulting new advances in military techniques, and

(e) our Military Assistance Programs.

We are continuing to eliminate any overlapping of operations or administration and at all times have in mind the devolopment of our forces on an economical basis.

At all times we have kept in mind the necessity for providing forces which are adequate for our nation's security and have attempted to the best of our ability to determine the size of these forces in the light of:

(1) the need to maintain these forces in a qualitatively improved state of readiness.

(2) the importance of assisting our allies in their own military security programs.