advanced Army schools like the War College, the Army Logistics Management School, and professional medical courses were excluded. At this same time, CONARC's practical control over technical and administrative service schools remained very limited.95

The organizational changes discussed in this chapter were internal ones within the Department of the Army and the continental armies. The Palmer reorganizations of the Army staff represented a swing of the pendulum away from the effort made in 1950 to centralize control over the department and the Army under the three-deputy system. General Palmer sought instead to centralize control at the next lower level under the several General Staff divisions, vesting them with greater authority over the technical services and special staff agencies.

Despite General Palmer's efforts, control over Army logistics and the technical services remained necessarily fragmented among the General Staff divisions. The addition of the Office of the Chief of Research and Development, created as the result of pressure from the scientific community both within and outside the Army, complicated the problem further.

The establishment of CONARC as a unified field command represented a return to the wartime concept of Army Ground Forces. In this change the fragmented control over the continental armies among the General Staff divisions was abandoned for centralized control in a single command. At the same time the divided authority exercised by the continental Army commanders and the chiefs of the technical services over housekeeping functions performed at technical service installations, a constant headache for all concerned after World War II, was abolished. The technical services were made responsible for the bulk of their own housekeeping functions.

The same technological developments which led to creation of the Office of the Chief of Research and Development and a separate Assistant Secretary for Research and Development resulted at the level of CONARC in efforts to set up an effective combat developments program which would combine new weapons and equipment with new tactical doctrines. The pro

*(1) CONARC Annual Summary, FY 1957, pp. 1-11. (2) Introductory Narrative, Summary of Major Events and Problems, Headquarters, U.S. Continental Army Command, Fiscal Year 1960, p. 1. (3) Ibid., 1961, p. 3.

gram was still in its infancy at the end of the decade, plagued by the same fragmented control over its operations that bedeviled Army logistics generally.

These internal changes within the Department of the Army took place within the framework of organizational changes at the Department of Defense level that not only influenced Army structure but also changed the position of the Department of the Army within the Department of Defense. Particularly important were changes in the fields of financial management, common supply activities, and control over military operations.

CHAPTER VII

The Defense Environment of the 1950s

The Secretary of Defense under the National Security Act of 1947 had little authority over the three armed services. The first Secretary of Defense, James V. Forrestal, in fact, had been hoist by his own pétard. As Secretary of the Navy he had helped convince Congress that the new Secretary should have a bare minimum of authority over the services and only a very small staff. As the first Secretary of Defense, Forrestal found himself embarrassed and harassed by open interservice rivalries which he lacked the authority to settle. Twice, in conferences with the Joint Chiefs at Key West in March 1948 and at Newport in September of the same year, he thought he had negotiated an armistice only to discover that the services interpreted these agreements in terms of their own parochial interests. Another discovery was that he had little effective control over defense budgets either.1

Forrestal in 1948 recommended to the President amending the National Security Act of 1947 to provide the Secretary of Defense with greater authority and control over the military services. The Commission on the Organization of the Executive Branch of the Government established by Congress in July 1947 under former President Herbert C. Hoover agreed with the Secretary in its report. Acting on these recommendations Congress passed the National Security Act amendments of 1949 (Public Law 216 of 10 August 1949) which redesignated the National Military Establishment as the Department of Defense, provided the Secretary of Defense with a deputy and three assistant secretaries, including a Comptroller, and created a nonvoting chairman of the Joint Chiefs of Staff. The service secretaries lost their seats on the National Security Council,

1 Paul Y. Hammond, "Super Carriers and B-36 Bombers: Appropriations, Strategy, and Politics," in Harold Stein, ed., American Civil-Military Decisions (University. Ala.: University of Alabama Press, 1963), pp. 467-89.

their cabinet status, and their direct access to the President but not to Congress.2

The Introduction of Functional Budgets

The National Security Act amendments of 1949 had also granted the Secretary of Defense greater control over financial management which he used to reorganize the military budgets along functional lines. The impetus for the reform came from industrialists outside the military establishment, in particular the Hoover Commission Task Force on National Security Organization headed by Ferdinand Eberstadt, a New York investment broker who had assisted Mr. Forrestal earlier in developing the Navy's unification proposals.3

The Hoover Commission in its recommendations for reforming federal administrative management to provide greater executive control over operations had taken up where President Roosevelt's Committee on Administrative Management had left off ten years earlier. Before then the traditional focus of administration generally and of budgets in particular was honesty, efficiency, and economy epitomized in the Army's doctrine of accountability. The Roosevelt Committee, opposed at the time by traditionalists, had inaugurated a new period of administration where the emphasis was on executive control over operations through vertical integration along functional lines, management engineering techniques for work measurement, and functional budgets. The Bureau of the Budget took the lead in this movement. In the Army the leadership had come from General Somervell and his Control Division. The demise of Army Service Forces at the hands of the traditionalists

2(1) Hammond, Organizing for Defense, pp. 236-44. (2) Schilling, "The Politics of National Defense: Fiscal Year 1950," pp. 98-109. (3) Samuel P. Huntington, The Common Defense: Strategic Programs in National Politics (New York: Columbia University Press, 1961), pp. 149–50. (4) Timothy W. Stanley, American Defense and National Security (Washington: Public Affairs Press, 1956), pp. 84-94.

3

3 (1) Mosher, Program Budgeting, pp. 32–37. (2) 81st Cong., 1st sess., House Document 86, The National Security Organization—Letter from the Chairman, Commission on Organization of the Executive Branch of the Government . . . 28 February 1949 (Washington, 1949), pages 23-24 list fourteen members of the Eberstadt Task Force, plus a nine-member Military Advisory Committee, and nine consultants of whom six were military officers, one an investment banker, another a journalist, and one an industrialist. Of the task force committee besides Mr. Eberstadt, six were industrialists, three were university presidents, two journalists, one a member of the AEC, and former Secretary of War Patterson.

stalled the movement within the Army until the Hoover Commission sparked its renewal, this time under the leadership of the Comptroller of the Department of Defense.*

The Army's budget reflected its fragmented organization. There were twenty-five major "projects" or appropriations classifications based upon the technical services, each with its own individual budget, which accounted for 80 percent of the funds spent by the Army. (Table 1) Neither the Secretary of the Army nor the General Staff possessed any effective control over these funds. Congressionally oriented procedures for spending and accounting for appropriated funds also made financial control difficult. The Army's various accounting systems only told Congress how much of the funds in any appropriation had been committed or obligated, not how much had been actually spent or when. They contained no information on what happened to matériel or supplies after their purchase. The existence at all levels of command of unfunded obligations, principally military pay, and expendable items were added impediments to rational financial control.

Congress emphasized the independence of the technical services in its traditional restrictions on transferring funds among major appropriations categories. Technical service chiefs could and did transfer funds freely among their various activities, functions, and installations, but neither the Secretary nor the General Staff could legally transfer funds among the several technical services or other staff agencies without going to Congress for approval.

Given these conditions there was no rational means of determining how much the Army's operations cost, no means of distinguishing between capital and operating expenses in most instances, and no means of determining inventory supplies on hand. Repeated requests for deficiency appropriations each year made even control by Congress over spending difficult.

Finally it was not possible to correlate budgets and appro

(1) Barry Dean Karl, Executive Reorganization and Reform in the New Deal. (2) Allen Schick, "The Road to PPB: The Stages of Budget Reform," Public Administration Review, XVI, No. 4, December 1966, 243-53. (3) Arthur Smithies, "Conceptual Framework for the Program Budget," in David Novick, ed., Program Budgeting: Programming and Analysis and the Federal Budget (Cambridge, Mass.: Harvard University Press, 1965), pp. 29–34.