we cannot afford to provide ourselves with an effective air defense. To do so would cost us scores of billions of dollars, and even then enemy bombers would get through. In short, we are told that there is no complete defense against air attack. If our industrial colossus and the manpower strength here at home cannot fully protect the United States against the Red striking air force, by what miracle can we hope to defend little Nigeria or the Belgian Congo, or India, or Malaya against the identical threat by the identical force? To give each spot even a semblance of defense would require the same gigantic effort that must be exerted for our own continental defense-scores of billions of dollars multiplied by scores of places, a project too gargantuan even to contemplate. Furthermore, this indefensibility of our strategic sources applies equally to our distant airbases, whether fixed on land or floating aircraft carriers. By now, it must be apparent to the reader that the ability of our Navy to keep the sealanes open "has nothing to do with the case." We can possess the most powerful Navy in the world, the greatest merchant marine, we can keep all the sealanes open, and we will still face economic strangulation. With not an ounce of strategic material available to us, our ships will ply the seas with empty holds. And yet, what are we doing? In spite of the fact that our power at sea is irrelevant to this vital problem we blithely continue to build more aircraft carriers, more battle cruisers, more guided missile battleships, more cargo vessels, more destroyers, more assault barges-at a cost of billions of dollars-absorbing onethird of our limited industrial manpower and capacity, as though their mere existence could protect us from industrial strangulation. The answer, therefore, is not in the Navy but in the United States Air Force. Only a long-range Strategic Air Command of proper size and striking power can, be destroying the enemy's air might, keep the sources of our strategic materials unmolested and guarantee an uninterrupted flow of these vital ingredients to our industries. In the face of these realities our foreign policy and the military strategy by which it is buttressed must be revised. We must assume a more realistic and practical attitude toward South America. Hemispheric solidarity, the backbone of our common defense, must become more than a slogan. Because of our foreign policy and preoccupation with our allies across the ocean and the seeming neglect of the needs of our own hemisphere, the United States has been largely regarded with suspicion and animosity by our neighbors to the South. Dr. Milton Eisenhower's recent goodwill trip, and the manner of his approach, accomplished a great deal toward allaying those anxieties and creating a better understanding between the Americas. Let us hope that the policy of sterile political amenities will give way to a dynamic policy of economic and industrial development of the natural resources of this hemisphere. We must create with all possible speed a second set of sources for all the strategic materials we now derive from the other side of the globe. Arrangements should be made now, in peacetime, while we hold the bargaining power-and not under the duress of war. In the meantime, we must step up the stockpiling of strategic goods to bridge us over until this hemisphere is truly self-sufficient. The congressional hearings on the subject, headed by Senator George W. Malone, are proving of great importance. They have already uncovered some critical military shortages, thus giving us a chance to correct them in time. We must intensify our research for substitute materials and give preference to those weapons forged from the substances of our own hemisphere. Above all, we must rouse ourselves from the illusion that we have abandoned the unrealistic strategy of balanced forces. It may well startle the reader to learn that today, in spite of all the lip service to air power, deliberately or unconsciously, we are being groomed primarily for ground warfare, for fighting a war on Russia's terms, where she has all the advantages of manpower and geography. This shocking fact was betrayed by the manner in which our defense money is to be spent in the fiscal year 1954. On June 11, 1953, in answering Senator Margaret Chase Smith's criticism of the military appropriations, Secretary of Defense Wilson disclosed that, including the unspent balances from previous appropriations, the respective services will have the following sums available to them: Army, $30.7 billion; Navy, $26.5 billion; and Air Force, $40.2 billion. At first glance, it looks as though the Air Force is getting the lion's share. But this is an optical illusion-the same old numbers racket. On $40 billion the Department of Air not only has to build an Air Force to fulfill its primary mission to destroy the enemy and to protect the continental United States, but it also has to build an enormous tactical air force, and transport and cargo planes in support of and for use by our Army. My estimates show that about $15 billion of the Air Force's money is being spent on aviation that is utterly irrelevant to war in the air. It is part and parcel of ground forces and represents a frozen asset unless we fight a ground war. Just aviation-an amorphous mass of aircraft, no matter how large, no matter how useful it may be to the Army, Navy, and Marine Corps-if it is not designed to win and maintain command of the air, does not constitute air power. Logically, those $15 billion should be reflected in the appropriations to the Army. Considered in this light, our Nation is actually going to spend on the Army, $46 billion; on the Navy, $26 billion; and on the Air Force, $25 billionor, roughly, half the total appropriation for the Army, one-quarter for the Navy, and one-quarter for the Air Force. But if our Army cannot win a ground war against insurmountable odds and if our naval power, including its air component, as I have already pointed out, is irrelevant against a self-contained continent, then it must be grimly apparent to everyone that we are rearming for defeat unless the process is arrested and reversed without delay. We were told that in the new budget "the air power of our Navy and Air Force is receiving heavy emphasis." From this, and from the analysis I have presented above as to how money is being spent on military aviation, it is clear that such emphasis, no matter how heavy, will again buy us more airplanes but not necessarily more air power. This conclusion is further justified by the official statement that "no material changes in force were recommended for fiscal year 1955," and thereafter, at best, would come about gradually through "a process of evolution." All of this parallels too closely for comfort the historic reluctance of the entrenched military hierarchy to accept fundamental change in warmaking until it is forced upon them by the enemy. The trouble with a gradual process of evolution in strategy, as history indicates, is that in the meantime we may be attacked and destroyed. The inescapable fact is that a fundamental change in our military strategy is long overdue, and that only a complete and immediate repudiation of our current concepts can stave off disaster. With both sides now in possession of atomic and hydrogen weapons and therefore the potential capability of destroying each other's industrial power to make war, the superior means of delivery is the crux of defense. We may have atomic bombs that today are more than 25 times as powerful as the weapons with which the atomic age dawned, and we may have hydrogen weapons that are in the ranges of millions of tons of TNT equivalent; but unless we have the power to deliver them when we want to, where we want to-in total disregard of the enemy's defensive capabilities, the stockpile by itself is meaningless and no threat to the enemy. Therefore, I must repeat that it is not the stockpile of atomic and hydrogen bombs that will decide the issue of peace or war, but, as always, the superior means of delivery-and that means airpower. Yet, today our Air Force is so small that it is doubtful whether it can deliver on a decisive scale the nuclear weapons we already have. The Strategic Air Command is superbly led and manned. General LeMay and his staff have done miracles, considering the inadequate resources at their disposal. But because the offensive is always costly and requires superior numbers, I am afraid that in light of the rapid growth of electronic defenses, if called upon to perform its mission today, our strategic Air Force would be overwhelmed. Under the circumstances, we have no alternative but to divert at least twothirds of our national effort into a supreme Air Force. To preserve our economy, the other forces must be pared down proportionately. Army and Navy men themselves concede that their services, with our limited manpower, cannot fight under hostile skies. Yet to achieve global command of the air will without question take the major portion of our national effort.1 1 AUTHOR'S NOTE.-Today, in the new budget obligational authority for the fiscal year 1955, the Army gets $8.2 billion, the Navy $9.8 billion, and the Air Force $11.2 billion. But, again, at least $3 billions of the Air Force appropriation will be spent on aviation in support of the Army. Thus, during the 2 fiscal years ending June 30, 1956, we will have spent for the Army approximately $57 billion, for the Navy $36 billion, and for the Air Force $33 billion. Therefore, with the bulk of the money still going into surface forces, it is clear that no fundamental change has been made in our strategic concept. We are still being groomed primarily for ground warfare. We must adopt a strategy that will make America strong in her own right. Such an America can raise morale and provide a core of strength for all freedomloving people. If we are strong, our diplomacy will not have to beg, cajole, or buy with dollars the loyalty of other nations, large or small. Strength attracts allies. They will join the legion of freedom not only because our side is right but because our side has might. America can be that strong. It can win a war against any nation or combination of nations, except no longer can it win a war in any old way. No longer can we promiscuously squander our resources and manpower in all directions as we did in the past. Our immediate task is to create an invincible long-range Air Force that can rise directly from our own shores, from bases inaccessible to the Communists' insuperable army and their massive tactical air force, and destroy the enemy's ability to wage war. Only such an Air Force can save American civilization from atomic destruction. Only such an Air Force can ignore the overwhelming manpower superiority of the enemy. Only the deterrent of such an Air Force-a sword of Damocles-can provide the shield behind which the European nations can arm and revitalize themselves. Only such an Air Force can guarantee us friendly skies under which our Navy can carry out its mission. Only an Air Force that can dominate the air clear around the globe can prevent the destruction of our sources of strategic materials and guarantee our access to them. Our aim is to prevent war. In these days when force is still the final arbiter among nations and when, as Korea and Indochina have demonstrated, raw force is on the loose, peace can be kept only through strength. The deterrent of instantaneous and overwhelming retaliation is the answer. Deliberately to place our head in an economic noose by making ourselves dependent on strategic sources in the Communists' backyard is not the way to deter the enemy. The aggressor must clearly understand that not only do we have the strength, bere in the New World, to strike back with finality in defense of freedom and our friends in the Old World, but that this strength cannot be impaired no matter what may happen anywhere on the surface of the globe. Major DE SEVERSKY. Of course, my last book, Air Power, Key to Survival, that was published in 1950, discusses this particular question, as well as the possibilities of rearming Europe, and whether we will obtain any military advantage by that. It also discusses our relationship to the sources of strategic material, but I imagine the book cannot be made a part of this record. Senator MALONE. Do you have an extra copy of it with you? Major DE SEVERSKY. No; I haven't got it with me, but I can furnish it. Senator MALONE. Will you send it down? We will accept it as exhibit A, though not a part of your testimony. (Air Power, Key to Survival, by Maj. Alexander P. de Seversky, published by Simon & Schuster of New York, 1950, was furnished the committee and is made a part of the committee files.) Senator MALONE. Major, we appreciate very much your appearance here, and we will send you a copy of the transcript of your testimony, and if you will round it out, it will be published as part of our hearings. And I hope, if you think of anything in the future that would be helpful, you will furnish it to the committee. Thank you very much for your appearance. (Whereupon, at 12:15 p. m., the hearing was recessed, subject to the call of the Chair.) APPENDIXES APPENDIX A [S. Res. 143, 83d Cong., 1st sess.] RESOLUTION Resolved, That the Senate Committee on Interior and Insular Affairs, or any duly authorized subcommittee thereof, is authorized and directed (1) to make a full and complete investigation and study of the accessibility of critical raw materials to the United States during a time of war; (2) to study and recommend methods of encouraging developments to assure the availability of supplies of such critical raw materials adequate for the expanding economy and the security of the United States; and (3) to report to the Senate at the earliest possible date, not later than January 31, 1954, the results of its investigation and study, to gether with its recommendations. SEC. 2. For the purposes of this resolution, the committee, or any duly authorized subcommittee thereof, is authorized to employ upon a temporary basis such technical, clerical, and other assistants as it deems advisable, and is authorized, with the consent of the head of the departments or agency concerned, to utilize the reimbursable services, information, facilities, and personnel of any of the departments or agencies of the Government, or of qualified private organizations and individuals. The expenses of the committee under this resolution, which shall not exceed $37,500, shall be paid from the contingent fund of the Senate upon vouchers approved by the chairman of the committee. APPENDIX B DEFENSE MATERIALS PROCUREMENT AGENCY ANNUAL REPORT OF FINANCIAL CONDITION AND OPERATIONS-JUNE 30, 1953 Prepared by General Services Administration, Office of the Comptroller COMMENTS Prior to the establishment of the Defense Materials Procurement Agency, the activities covered in the attached statements were performed by the General Services Administration pursuant to Executive Orders Nos. 10,161 and 10,200, dated September 9, 1950, and January 3, 1951, respectively. The Comptroller of the General Services Administration is responsible for financial management operations of the Defense Materials Procurement Agency pursuant to delegation No. 5, dated November 7, 1951. The attached financial statements, identified by exhibit reflect the financial condition and operations of the Defense Materials Procurement Agency under title III of the Defense Production Act of 1950, as amended, for the period December 29, 1950, through June 30, 1953, and for the 1953 fiscal year. The accounts, from which the attached statements have been prepared, have been audited through June 30, 1951. An audit of the activities up to and including June 30, 1952, has been completed but the audit report has not been rendered. Therefore, the data reported herein may be modified by adjustments upon submission of the audit report now in preparation and by the audit for fiscal year 1953. Reports covering activities of contractors operating Government-owned industrial plants have been consolidated and included in the attached financial statements. 608 Borrowing authority The total authorized borrowing authority as of June 30, 1953, was $951,292,000. Exhibit A-6 reflects a distribution of borrowing authority authorized, borrowing authority obligated, gross transactions authorized and gross transactions recorded, by commodity. Assets transferred from other agencies The balance of $32,644,287.33 reflected on the statement of financial condition (exhibit A) consists of the following assets: Appropriated funds Advances__. Supplies and materials_ Other assets___ Total----- $11, 913, 064. 00 18, 003, 243. 26 2,714, 299. 59 13, 680. 48 32, 644, 287. 33 Appropriated funds and advances, amounting to $29,401,307.26 were transferred by the Mutual Security Agency (now Foreign Operations Administration) in accordance with the memorandum of understanding between that Agency and the Defense Materials Procurement Agency, dated November 30, 1951. Under this agreement the Defense Materials Procurement Agency performs the basic material development program formerly carried on by the former Mutual Security Agency. In addition to the United States dollars transferred to the Defense Materials Procurement Agency to cover program costs related to activities transferred from the Mutual Security Agency to the Defense Materials Procurement Agency in accordance with said memorandum of understanding, the following items representing United States dollar equivalent of local currency counterpart funds have also been transferred to this Agency: 1. Cash transferred from the Mutual Security Agency to the Defense Materials Procurement Agency---. 2. Advances made by the Mutual Security Agency to contractors_ $116, 059, 978. 37 36, 822, 812. 72 Since the financial statements rendered herewith have been prepared to reflect activity in United States dollar funds, borrowed or appropriated, the above amounts are not reflected therein. Loan-guaranty program The Defense Materials Procurement Agency has guaranteed loans under section 301 of the Defense Production Act of 1950, as amended. As of June 30, 1953, the guaranty on loans outstanding covered 16 loans amounting to $88,402,374.22. This item is not reflected on the statement of financial condition (exhibit A). Machine-tool program 1. Pool order.-Under authority contained in section 303 (e) of the Defense Production Act of 1950, as amended, the Defense Materials Procurement Agency has entered into pool order agreements with machine-tool producers, guaranteeing the sale of the completed tools. In the event the tools are not sold, the Government is committed to buy at a price which excludes the contractor's profit and selling expenses. As of June 30, 1953, the Government's potential commitment to purchase under these pool orders amounted to $207,933,750.86. This item is not reflected on the statement of financial condition (exhibit A). As of that date, 389 machines and related parts and accessories at a cost of $3,035,814.16 had been acquired and placed in storage by the Defense Materials Procurement Agency under this commitment. Seventeen of these machines at an original cost of $67,967.58 and parts and accessories acquired at an original cost of $126,794.03 have been sold for $173,533.84 and two machines valued at $27,280.25 have been returned to the lease program. Details of this program are reflected in exhibits A-5 and F. Of the 138 pool orders totaling $1,490,929,309.54 offered as of June 30, 1953, 114 contracts in the amount of $1,286,269,679,14 have been accepted by the contractors. Twenty-three contracts in the amount of $137,157,549.40 have been rejected and one contract in the amount of $68,590,256 has been canceled. Downward revisions of $1,088,175 have been offered on two of the accepted contracts. 2. Lease program.-Under the leasing phase of this program, machine tools are purchased and installed by the Government under a lease agreement with private |