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Mr. THOMPSON. Then from him your recommendations or communications go to the President?

Governor NEWCOMER. As a rule through the Bureau of the Budget. Mr. THOMPSON. Well, after all, that is a part of his executive staff. Governor NEWCOMER. That is correct.

Mr. THOMPSON. I am very curious to know how the Defense Department got into the act on this particular piece of legislation. It went, and very properly, to you from the Bureau of the Budget for your comment, and your comments involve the rather complicated changes that you feel are necessary and that the Bureau of the Budget does not. It is not for the purpose of trying to compose this differentiation that I ask you these questions now, but the very definite understanding is that after your recommendations came back here and went to the Secretary of the Army they went to the Defense Department where they remained for nearly a month, and they were not finding favor within the Department of Defense. Finally, however, your recommendations went forward to the Congress, through channels, which included the Department of Defense.

Now, speaking purely for myself-I have not even discussed this with the chairman of the committee, and everything that I say now is subject to his approval-I think this committee is entitled to a frank statement by the Department of Defense as to whether they favor or whether they do not favor this legislation. If they do not there may still be a means by which they can block it, and we suspect that perhaps someone who is unfriendly to the legislation could load it down with a great mass of details which could not be handled either by the committee or by the Congress. If the committee now has to spend its good hours trying to work this legislation out, we can do it only with the finest kind of cooperation from all concerned.

So now let me ask you, if you can tell us, who in the Department of Defense we might call upon to give us a direct and positive answer to that question?

Governor NEWCOMER. In answer to your first question as to whether I know of anyone in the Department of Defense who is opposed to this legislation

Mr. THOMPSON (interposing). Governor, may I interrupt you? If I asked that question I did not intend to because I realize that is not a proper question to ask you, and so if I asked it I withdraw it.

Governor NEWCOMER. Possibly the question was whether the Department of Defense does oppose this legislation. So far as I am aware, they do not.

You, of course, have a letter from the Secretary of the Army favoring the passage of this legislation, and it is my understanding, although I have not seen that letter, that you have also received some communication from the Secretary of Defense transmitting the proposed legislation and, so far as I am aware, not opposing it.

As I understand the situation with respect to this bill and the Department of Defense, there is a rule in the Department of Defense that whenever any legislation is considered by any of the three Secretaries under the Secretary of Defense, that legislation must be coordinated with the other two branches of the Department of Defense. It follows, therefore, that this bill, being referred to the Office of the Secretary of the Army, went through this coordinating process in

the Department of Defense and was finally released from that Department to the Bureau of the Budget for its clearance for submission. by the Secretary of the Army.

Now, presumably, they would have indicated some opposition to the bill during that process, and so far as I am aware they have not. Mr. THOMPSON. Well, Governor, that answers the question that I asked you primarily as to just how the Defense Department got into the act. I can see that now. Of course, for the Defense Department now to superimpose itself on the Secretary of the Army, an individual who is assigned to keep his eye on the Panama Canal, may or may not be proper. I think that is not for this committee to decide.

There could easily be a difference of opinion within the Defense Department that did not reflect either your views, or the views of the Secretary of the Army. For example, the special committee on the tolls question took the liberty of recommending that the Army relinquish its control over the Panama Canal, a wartime measure, which had no business in there, so we thought, in time of peace. That recommendation did not meet with favor of the Department of Defense, and I have a little apprehension that, perhaps, the Department of Defense does not want to relinquish any part of the Canal, and through their opposition to this measure they would seek to keep all possible control. I think the answer to that question should come from them.

Governor NEWCOMER. So far as I know they are not opposed to the bill. I have had no indication of that, and I think that, possibly, in this particular case it was a good procedure to have it coordinated in the Department of Defense, particularly because of the provision as to military and naval vessels paying tolls when transiting the Canal. That is a subject of interest to them. What their opinion of the merits of the bill is I do not know, but I have heard of no opposition from them to it.

Mr. THOMPSON. I do hope that you are right, Governor. Of course, this went far beyond any coordination. This was approval or disapproval in the hands of the Secretary of Defense. However, as I say, that is neither here nor there.

Mr. Chairman, may I make the request that somebody from the Department of Defense be requested to be here tomorrow morning to give a positive answer to that question?

Mr. O'TOOLE. The clerk will take the necessary steps to see that someone from the Department of Defense is here to testify on that point.

Mr. THOMPSON. Thank you.

Mr. O'TOOLE. Our difficulty is that we can always trace the chain of command, but we have difficulty tracing the chain of responsibility. Governor NEWCOMER. Yes, sir; that is frequently a problem. Mr. THOMPSON. Thank you very much, Governor.

Mr. O'TOOLE. Governor, I do not know just what your plans are, but as far as the committee is concerned, it will not be necessary, unless you so desire, to return to the hearings. You may leave now if you wish.

Governor NEWCOMER. Thank you.

Mr. O'TOOLE. We will adjourn until 10 o'clock tomorrow morning.. (Thereupon, at 11:43 a. m., the subcommittee adjourned until tomorrow, Wednesday, June 28, 1950, at 10 a. m.)





Washington, D. C.

The subcommittee met at 10 a. m., Hon. Donald L. O'Toole (subcommittee chairman) presiding, for further consideration of H. R. 8677.

Mr. O'TOOLE. The committee will come to order.

In view of the fact that there have been rumors and hints in the paper that there might be some difficulty in Korea, I have decided to call the witness from the Department of Defense out of regular order, in order that he may get back to the Pentagon Building.

Mr. Felix E. Larkin, General Counsel, Department of Defense.


Mr. LARKIN. Mr. Chairman, I have no prepared statement. I was informed yesterday afternoon that the committee desired a representative from the Office of the Secretary of Defense here, that there were some problems in connection with this bill, H. R. 8677, which were troubling the committee, and that we might clarify them for you, perhaps.

The most expeditious way to get ahead would be for you to ask me the different things you have in mind, and I will attempt to answer. Mr. O'TOOLE. I believe Mr. Thompson has some questions.

Mr. THOMPSON. Mr. Larkin, we are interested, fundamentally, inwhether or not you approve of this legislation, speaking for the Department of Defense.

Mr. LARKIN. There is no equivocation or dispute whatever, Mr. Thompson. We approve of the legislation.

Mr. THOMPSON. Do you know when it was first brought forward to the attention of the Department?

Mr. LARKIN. The basic study, upon which this bill is drawn, was under consideration for some time. I just do not know when it originally came to our attention. In January of this year, however, the basic study, which had been transmitted to the Congress by the

President along with a draft of legislation, was sent to the Department of the Army. They were asked for comment.

Mr. THOMPSON. It came from the Bureau of the Budget?

Mr. LARKIN. That is right; yes, sir.

Mr. THOMPSON. They drafted it, I think, and it went to the Army. Mr. LARKIN. That is right.

Mr. THOMPSON. I was wondering when and why it got over to the Defense Department.

Mr. LARKIN. Well, in accordance with the legislative procedures of the Department of Defense, the Department of the Army studied the entire proposal, as they had been requested to, and they, thereafter, solicited the views of the Air Force, the Navy, and the Office of the Secretary of Defense, which is in accordance with the legislative procedures of the Department of Defense.

Mr. THOMPSON. It went over to you, I think you will find, on the first of May.

Mr. LARKIN. It came up to our office from the Army for comment and coordination the 1st or 2d, I think it was, of May, that is right.

Mr. THOMPSON. And it cleared, I think, the 24th or possibly the 25th.

Mr. LARKIN. That is right. On the 23d it was transmitted by Secretary Johnson to the Bureau of the Budget for specific clearance from them.

Mr. THOMPSON. There have been some rather pointed rumors to the effect that the Department of Defense did not approve of the legislation.

Mr. LARKIN. That is not so, Mr. Thompson.

Mr. THOMPSON. I am very glad to have that most positive statement, because certainly, had you not been in favor of it, the surest way to keep it from passing would be to load the bill down with a lot of details which anyone with legislative experience would know would throw almost an insurmountable barrier in the face of any committee trying to put it through at the end of the session.

Mr. LARKIN. The detail, to the extent that it is in it, was not put in by the Department of Defense.

The bill you have before you was sent to us. Naturally it is a complicated bill and a complicated subject. It is the fruit of a lot of careful study. The study took a considerable amount of time.

The very fact-I would like to emphasize this-the very fact that the bill was transmitted to the Congress by Secretary Johnson is evidence in and of itself that the Department of Defense supports and sponsors it. We do not send up bills here which do not have the approval of our Department. I reiterate here again today we support the bill. A part of the process of our own legislative procedures which did consume time, naturally enough, was a study of the bill which had been sent to Army. After consideration by the other two services and their advice, we placed the bill on the official Department of Defense legislative program, and we made it an item on that program. We only do that, of course, with bills that we ourselves either initiate and approve or a bill of this character, which it is felt we would be the most logical agency to sponsor and foster, so that rather than just view it as an individual bill of the Department of the Army, or a bill which did not have the official sanction of our normal legislative

procedures and a position on our legislative program we took the time to go over it, and we affirmatively placed it on that program and it was sent here, and we are still in that position, we sponsor and favor the bill. Mr. THOMPSON. Well, I am very glad to know it. Not all of the subordinate elements of the Department of Defense have been anywhere nearly that positive in their favorable attitude toward the


I am a little bit puzzled. This is the Panama Canal Subcommittee, and we are involved in all of the ramifications of the Canal as it concerns Congress. I am just wondering what the Department of Defense feels is its function in the peacetime management of the Canal. Ever since the beginning of it there have been serious crises of one kind or another in connection with the Canal. It has almost invariably rested on the shoulders of the President of the United States to step in, and by the issuance, generally, of a very emphatic Executive order straighten out these troubles.

I find as late as January 31 of this year that he reaffirmed the position that the Secretary of the Army shall be the representative of the President for such purpose, such purpose being the administration of the Canal. He does not say the Secretary of Defense. Now, is it to be considered that the Secretary of the Army means, in effect via the Secretary of Defense?

Mr. LARKIN. Well, I think it does have policy considerations involved. I would say it is in exactly the same position as the Secretary of the Army finds himself, or is, in relation to the Secretary of Defense and all his other executive and administrative duties.

Under the Security Act, you will recall the Departments of the Army, the Navy, and the Air Force were reduced from executive departments, and were made military departments within the Department of Defense. They were not merged as such, and their individual Secretaries were charged with the responsibilities for the administration as such of the individual Departments, but the Secretary of Defense was further charged with the direction and control and authority over the entire activities of the whole Department of Defense. So that, while they will administer their own Departments, to the extent that there is a policy question of their Department or a policy question common to the whole three, why, the Secretary of Defense, of course, is very clearly the head and is in charge and has control and is responsible for direction.

So that, this function, like administrative functions, will be administered by the Secretary of the Army, but will be subject to the ultimate policy decisions of the Secretary of Defense. I think it is clear that the administration of the Panama Canal is in exectly the same position as all other administrative functions of the Secretary of the Army.

Mr. THOMPSON. Then, you regard the management of the Panama Canal as distinctly a function of the Defense Department under peacetime administration?

Mr. LARKIN. Well, I do not know the distinction at this minute of management as such, whether that is just an oversimplification of what goes on down there.

The Governor, obviously, has responsibilities. He operates under the supervision of the Secretary of the Army who, in turn, operates in certain aspects under the control, direction, and authority of the


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