the Chief of Engineers and his alter ego, one deputy, they command these major functions: Supply, military operations, military construction, real estate, civil works, and personnel. All of these problems are extremely important.

Our supply program has been running over a billion dollars a year alone. In connection with our military operations, we have 100,000troops deployed around the world and 10,000 officers, both fighting and constructing. Our casualties are comparable to those of the combat branches. In fact, we receive more casualties than some of the other branches such as the Artillery. Our military construction problem was an enormous one and actually runs about 8 to 10 times the size of our civil-works program.

In our real estate it is not realized we are the greatest managers for the Government in handling real estate, running somewhere in the neighborhood of 8,000 installations either in our operation or in our care and something in the neighborhood of 25 million acres of real estate. Our leases run in the neighborhood of 18,000 per year. We produce a revenue to the Government of $10 million.

Over here on personnel [pointing to chart] I consider that as one of our major functions because at this time, key personnel, is by far our most serious single problem.

It is my opinion that no one man could afford to be in charge of and exercise responsibility over all these functions and at the same time devote his efforts to the details of 1 or 2 of these functions. Some other system had to be devised.

WORKLOAD

Senator KNOWLAND. Before you get away from that part of your statement and your explanation of the chart, you mentioned that the military construction load is about 10 times the civil-works load. Is that also a measure of proportionate effort to these two programs in the Office of Chief of Engineers?

General STURGIS. No, sir. I would say that it is not quite in proportion. I would say, certainly, that our civil-works program requires a great deal of effort in my office. As a matter of fact, we have a different organization for military construction, as indicated, than for civil works. Our civil-works organization has not changed, except to fluctuate with the workload. So the answer to that is, "No, it is not directly proportional."

For instance, compared to before the war in 1939, the Chief of Engineers had very little-in fact, he had no military construction assigned at all. It was during the war that the change occurred. Now we have this tremendous worldwide military construction program and our civil-works organization has been adapted to that program. That is a very important factor which I will bring out in just a minute.

SCOPE OF OPERATION

Senator MCCLELLAN. I understand that the Corps of Engineers actually does the construction for all branches of the service, or only for the Army and Air Force; is that correct?

General STURGIS. Not for the Navy.

Senator MCCLELLAN. But all construction for the Army and the Air Force is done under the supervision of the Corps of Engineers? General STURGIS. All of the Army construction and about 85 percent of the Air Force construction. They do some themselves and some they have been farming out to the Navy. However, of course the Spanish bases which were recently given to the Navy is a very large program, a good deal larger than they had ever had given to them before.

Senator MCCLELLAN. Did I understand you correctly when you state that the construction program, the military construction program, now under the jurisdiction and responsibility of the Corps of Engineers is from 8 to 10 times in volume that of the civil-works program cost wise?

General STURGIS. Yes, sir. Today I would say, measured dollarwise, including the backlog it runs about eight times as large.

Yet civil works, like the other functions on this chart, is an essential part of our national defense. It not only furnishes invaluable training and experience in great responsibility to our officers, but it constitutes a highly decentralized organization-in-being with active construction offices in most States of the Union, all under the Department of Defense and available at an instant's notice to assume a war load. Since construction of air bases, training facilities, hospitals, depots, and the like, are the first prerequisite of mobilization, the importance of our civil works should be evident, particularly in a day and age when the speed of attack and the vulnerability of the North American Continent have terrifyingly increased.

ADDITIONAL DEPUTY CHIEF OF ENGINEERS ASSIGNED

I now ask you to look at the present-day modification in the lower half of chart I which shows the addition of another Deputy Chief of Engineers. I have assigned one deputy responsible for all construction, military and civil, together with the real-estate functions, and I have placed the remaining strongly military functions such as Troop Operations under the second deputy.

Senator MCCLELLAN. This establishing of a second deputy in your office, was that done under the Reorganization Act? Was it authorized under that act?

General STURGIS. No, sir. It was not authorized under any act, but the Army has the administrative authority to do that, sir.

Senator MCCLELLAN. It is just under administrative order? General STURGIS. Yes, sir. I was authorized that deputy by the Army.

Senator MCCLELLAN. I wondered whether that is a part of the program of unification and reorganization.

General STURGIS. No, sir. This is purely a change in organization that I instituted myself in order to handle this situation. I therefore have made Major General Robinson responsible for all construction, military and civil, together with the real-estate functions which is very important. The same organization used for civil works over the years is exactly the organization used for military construction, except our offshore construction where we have separate divisionsone, the Mediterranean Division with headquarters at Casablanca and the other our Eastern Ocean Division with headquarters at Richmond,

Va. Otherwise, the organization is the same. But of course many of the key people in these offshore organizations were drawn from experienced people whom we knew in our civil works organization and who will go back into that organization.

PERSONNEL TAKEN FROM CIVIL-WORKS PROGRAM

Senator MCCLELLAN. Let me ask this: You spoke of, in your military operations, the expanded construction program we now have. It has been necesesary for you to draw from the civil-works program the experienced men that are now needed to do the military construction?

General STURGIS. I cannot emphasize that too strongly in answering "Yes" to that question.

Senator MCCLELLAN. In other words, if we did not have the opportunity to train and provide the experience in the civil-works program, you would find it difficult in times of emergency or in time of largely expanded military construction to find the trained personnel that would be needed to do it?

General STURGIS. That is exactly true. You might say we could never undertake with speed, dispatch, and efficiency the construction of the great Northern Air Force Base at Thule, Greenland, had it not been for our Civil Works Division.

Senator MCCLELLAN. I have frequently argued that the civil-functions development of our water resources under the Corps of Engineers did provide a training field and opportunity to develop experienced and competent people who could be called on in time of war and whose experience would be of inestimable value in time of emergency. Whereas, if the construction of rivers and harbors and flood control and other such civil works were under some other agency, then the Corps of Engineers would be stripped of the opportunity now provided under our present system to train its personnel and have it ready and available for emergency service.

General STURGIS. I cannot overemphasize the factual correctness of that statement, Senator. I might say that these individuals are experienced in governmental procedures so that the war load can be assumed immediately; tomorrow, if necesesary. Furthermore, many of them are trusted people who have top secret clearance and secret clearance as far as classification is concerned and work on plans that otherwise they could not do if in another department of Government. We undertook in World War II projects before Pearl Harbor to supply to the Pacific, through Christmas Island, all those airbases. That made our tenuous supply line to the Pacific finally stand up before the Japanese attack. That was construction done by the Corps of Engineers, Civil Works, before Pearl Harbor occurred. That same thing is true today.

Senator MCCLELLAN. Thank you.

DECENTRALIZATION OF AUTHORITY

General STURGIS. At the same time, I decentralized a high degree of authority to my deputies fully commensurate with their responsibilities. For myself I retained the decisive power in all vital issues, and the general management of the corps with respect to economy and efficient administration, including long-range planning and the im

portant function of determining policies. While this has naturally operated to remove the chief from a detailed knowledge of daily operations in Civil Works, major civil-works matters are constantly brought to my attention by the Deputy for Construction or the Assistant Chief for Civil Works, and I follow through personally on matters brought to my attention by Members of Congress and civil leaders. Under this new organization, important advantages have accrued. I am freer to assist the Secretary of the Army and to contact the Secretaries of other Departments associated in the development of water resources; I can devote my attention to the evolvement of sounder water resources policies at a time when they are under public scrutiny; and I am much more at liberty to visit our field activities and go over our enginering problems on the ground. Above all, I am able more readily to obtain the thinking of, and maintain contact with, local people and civic leaders in all parts of the country.

Complementary to the streamling of the top-command echelon, we have sought to streamline our entire system of control. We recognized the natural trends of a big governmental organization, such as the Corps of Engineers, to seek to avoid repetition of mistakes by field offices through concentrating more and more authority in Washington, thus laying the basis for an inflexible bureaucracy.

To avoid this we took two steps. First, we established a policy of greater decentralization of authority to division engineers and we are constantly looking for more ways of decentralizing authority commensurate with their responsibility. Secondly, we increased the frequency of division engineer conferences in Washington and have encouraged the most open and frank discussion of policies and procedures by these field officials.

We acknowledge that they may make mistakes, and we have recognized that we must be prepared to accept them. But if they become too gross or too many, we propose to change the man who makes them rather than our new system. We are gratified with the efficiency thus far obtained and by the enthusiasm and unity derived and apparent throughout our entire organization from this more flexible and responsive system of control.

Senator KNOWLAND. You just stated that you established a policy of greater decentralization of authority to division engineers looking for ways of decentralizing authority commensurate with their responsibility. Could you tell the committee what overall economies in personnel have been effected?

You also said you increased the frequency of division engineers' conferences in Washington. How often do you hold such conferences, and are they limited to division engineers or do they include civilian members of the staff?

General STURGIS. Might I answer the second question first? Formerly, the division engineers met once a year to receive instructions. Now we have been meeting about every 3 or 4 months. We propose to average out at about 4 months, and they are encouraged to bring their senior civilian assistants with them.

The thing I would like to emphasize is that we open the discussion and then instead of taking the ball and telling them, we hear their views and get their reactions. Then we adjust our methods in accordance with what we think is the sound recommendation after having openly and freely arrived at them. It has had a healthy influence throughout the field.

As to the question of economies, I do not think that they can be measured in dollars and cents. I believe that economies cannot help but result indirectly; but the main thing I would say is that the effect has been in the greater efficiency, and the length of time of accomplishing things has been reduced, the greater flexibility to adjust to a local situation by giving the local man authority.

I would say it has been in the realm of more efficiency rather than spelling out in so many dollars, but I am sure that it will in the end result in the saving of dollars. I think that has been evident, overall, by the fact that more of our money has gone into construction this year-it has increased from 92 percent to 93.4 percent, showing that our overhead costs have somewhat reduced.

II. RESPONSIVENESS OF CORPS

I would like next to speak about the responsiveness of the corps to public trends and requirements.

It is essential that the corps be responsive to Congress and to the people, and that to them we appear so. In traveling some 130,000 miles during the past year, I made an especial effort not only to learn from local groups themselves their problems and views, but I checked that my division and district engineers were also sensitive to public opinions. However, the corps must be equally able to relate the viewpoint of local proposals to the Federal interest.

Also, we have made particular effort during 1953 to determine and execute the guidance given us over the last few years by Congress, particularly as a result of the hearings last year and by the Bureau of the Budget. At this point I should like to recount these efforts.

III. MAJOR IMPROVEMENT MEASURES ACCOMPLISHED WITHIN SCOPE OF CORPS AUTHORITY

The reports of this committee and of the House committee on our 1954 appropriation indicated the committees' desire regarding a number of general matters and specific projects. I shall indicate briefly what we have done on each of the general matters. General Chorpening will tell you about the individual projects as the hearing proceeds, and, if you wish, he will go into greater detail on the general matters also.

We have adopted for general use throughout the corps the separable cost-remaining benefit method of cost allocation on our multiplepurpose projects. This method was devised by the Benefits and Costs Subcommittee of the Federal Inter-Agency River Basin Committee after careful study of the numerous cost allocation methods. in use by the engineering profession. This method provides a means for sharing the savings from multipurpose development equitably among the several functions of the project. This is a condition which we consider a prime requisite of a proper cost allocation.

I contemplate that survey reports currently coming in from the field will include tentative allocation by this method. We are applying this method to projects already authorized and those under construction, even though in some instances earlier reports used some other method. We are also making the allocations based on actual costs wherever possible rather than on estimates that are subject to change.