Mr. WYLIE. A lot depends on his record, sir. If this officer has a ood record, he can probably designate the time when he wants to etire. It could be June, December, or any date; but if he is a nontegular officer, who is just par and does not have an outstanding ecord, he probably would be forced into retirement.

Mr. FORD. I am not talking about the man who would be forced, am talking about the man who thinks

Mr. WYLIE. Who has the option of an election?

Mr. FORD. Who wants to stay to a certain time, and then a month iter or 6 months later he changes his mind. He can do it any time fter 20 years.

Mr. WYLIE. Any time he wants to; provided, that he complies with he administrative policies and procedures governing retirements.

SURVIVORS' BENEFITS

Mr. FORD. In your prepared statement, and in response to interroation from some of the members of the committee, you talked about his survivors' benefits situation.

Mr. WYLIE. Yes, sir.

Mr. FORD. In one case you pointed out that $56 million had been educted, and only $15.4 million had been paid out. That tends to reate the impression that this is a good program for the Government, ut it is not so good for the people who made the selection, or the hoice.

I am sure you did not really mean to create that impression because he payoff from the Government comes later on.

Mr. WYLIE. That is true, sir.

This is a question the committee asked me about 4 or 5 years ago, nd I have made it a point to furnish the information each time there ; a hearing on the retired pay appropriation.

Mr. FORD. It looks like Uncle Sam is making a "fast buck" now, ut in the long haul, Uncle Sam will probably be the loser?

Mr. WYLIE. That is correct, sir. If we did not have this program, ur aggregate retired pay costs to date would have been $56 million

reater.

Mr. FORD. It looks good now, but if any of us are around 15 years om now, the picture may well change.

Mr. WYLIE. It could be reversed.

UNDERESTIMATION OF RETIREMENTS FOR 1962

Mr. ANDREWS. You told Mr. Ford that you underestimated the gures for 1962 for the average number retiring and the amount of w obligational authority needed. That was due to the fact that so any more World War II officers were retiring?

Mr. WYLIE. That is right, sir.

Mr. ANDREWs. Does that mean since you underestimated for 1962 at you have possibly overestimated the number for 1963, 1964, and 165 in that table on page 723?

Mr. WYLIE. No, sir. Our estimates may be high in 1965, but with e present heavy influx of World War II retirement- stimates r 1963 and 1964 may be understated.

66865-61-pt. 1-56

Mr. ANDREWS. I notice you estimate for 1965, the average number who will retire to be 412,000 which is considerably more than your estimate for 1962.

If the figures are greater than your 1962 estimate were, could it be in 1964 and 1965 you have overestimated?

Mr. WYLIE. No, we are just getting them on the retired rolls sooner Mr. OSTERTAG. Mr. Wylie, if I figure correctly the cost increased from 1960 to 1962 about $203 million.

Mr. WYLIE. Yes, sir.

Mr. OSTERTAG. That is about $100 million a year. Is that abort the rate, or will that take a sharp rise upward as we move along before we reach the top level?

Mr. WYLIE. For the next 5 years, that rate could increase, based on the increasing number of World War II retirements that are taking place now.

Mr. OSTERTAG. Our military retirement costs have reached near $1 billion annually?

Mr. WYLIE. We will probably reach $1 billion soon.

Mr. OSTERTAG. By 1963?

Mr. WYLIE. 1963 or 1964 at the latest; yes, sir.

Mr. ANDREWS. Thank you very much. It has been a pleasure ta have you.

APPENDIX

(The following was submitted in response to a question by Mr Flood on p. 257.)

RESPONSIBILITY WITHIN DOD FOR TRANSPORTATION

Within the Office of the Assistant Secretary of Defense (Installations Logistics), the Office of Transportation and Warehousing Policy is respons!! for the development of overall transportation policy governing the Departmen of Defense. The Chief of this Office, Mr. Vincent F. Caputo, is a princ member of the staff of the Assistant Secretary of Defense (Installations Logistics). In the performance of this function, Mr. Caputo coordinates actio with and between the military departments. The position and general stateme of functions of the Director for Transportation and Warehousing Policy £* indicated on the attached organizational chart.

Within the Department of Defense, there are three single manager operat agencies for transportation, the Military Traffic Management Agency (MTM the Military Sea Transportation Service (MSTS), and the Military Air Tra port Service (MATS). They operate in accordance with the general poliz of the Director for Transportation and Warehousing Policy. A brief descr tion of these agencies follows.

MILITARY TRAFFIC MANAGEMENT AGENCY

The Secretary of the Army is the single manager for traffic management !i the Department of Defense within the United States, excluding Alaska n Hawaii. The single manager for traffic management also is assigned res sibility for through bill of lading household goods traffic between the Tr States and oversea areas including Alaska and Hawaii. In this capacity 1 is responsible to assure efficiency and economy within the DOD under al ditions in the procurement, use, cost, and control of commercial transp tion services and the emergency control of the use of military-owned sur transportation resources. This responsibility includes the direction, cor and supervision of all functions incident to the effective and economical i curement and use of freight and passenger transportation service from mercial for-hire transportation companies (within the continental Cy

States), including rail, highway, air, pipeline, inland waterway. In addition, he manages and controls the operation of the DOD Rail Interchange Fleet. The Secretary of the Army discharges his traffic management responsibilities through the Military Traffic Management Agency which reports to him through the Assistant Secretary of the Army (Logistics).

MTMA is a jointly staffed agency consisting of a headquarters, located in Washington, and five regional offices located in Pittsburgh, Pa., Atlanta, Ga., St. Louis, Mo., Dallas, Tex., and Oakland, Calif. The Agency is headed by an Executive Director, major general, U.S. Army, and employs 83 military and 904 civilian personnel. This compares to 5 headquarters and 16 field agencies when the responsibility was divided among the military services.

This organization—

1. Acts as the central point of contact between DOD and the U.S. domestic commercial transportation industry.

2. Represents DOD in its relationships with governmental agencies charged with domestic transportation regulatory functions.

3. Advises and assists all DOD shipping agencies by furnishing cost, rate, and routing information.

4. Conducts negotiations with domestic commercial carriers and governmental regulatory agencies to obtain the most advantageous rates, fares, charges, rules, classifications, and service charges for DOD traffic.

MILITARY SEA TRANSPORTATION SERVICE

The Secretary of the Navy is the single manager for ocean transportation for the Department of Defense. The operating agency is the Military Sea Transportation Service whose commander, a vice admiral, reports to the Assistant Secretary of the Navy (Installations and Logistics) for procurement matters and to the Chief of Naval Operations for operational matters. MSTS headquarters is in Washington with a worldwide chain of offices.

The general functions of MSTS include providing or procuring sea transportation for Department of Defense personnel and cargo, and mobilization planning and readiness.

In providing transportation, MSTS uses both its own nucleus fleet and commercial shipping. For dry-cargo service, about 76 percent of the ton-miles are accomplished in common and contract commercial ships; for bulk petroleum, about 68 percent is commercial contract carriage. With no troop-type accommodations on commercial ships, the MSTS nucleus fleet has carried most of the ocean troop movements.

The MSTS nucleus fleet is composed of 101 active and 9 inactive ships as of January 1, 1961. Although many of the MSTS nucleus ships are counterparts of standard commercial vessels, the MSTS nucleus fleet is notable for specialpurpose ships which have no equivalents in American commercial merchant marine such as roll-on roll-off ships, heavy-lift ships, ice-strengthened freighters and tankers, survey- and missile-type ships. Cargo and troop ships of the combat naval forces (service forces and amphibious forces) are not under MSTS control.

MSTS nucleus fleet ships fall into three crewing categories. Four of the MSTS passenger ships are commissioned ships of the U.S. Navy (USS) and are manned by military crews. The remaining 10 passenger ships and the 51 cargo and miscellaneous ships are manned by civil service crews and are known as U.S. naval ships (USNS). The MSTS tankers and a group of 17 LST's in the Far East are contract operated, that is, operated by regular commercial carriers under cost-plus-fixed-fee contracts with crews hired by the contractors.

MILITARY AIR TRANSPORT SERVICE

The Secretary of the Air Force has been designated by the Secretary of Defense as the single manager for airlift. Through the agency of the Military Air Transport Service, airlift is provided on a common basis to all elements of the Department of Defense. MATS is responsible for maintaining and operating in airlift system that is adequate to meet the approved D-day and wartime airift requirements of the Department of Defense.

A considerable volume of the traffic moved under the ausipces of MATS is lown in commercial aircraft under contract to MATS. In wartime, it is also lanned that MATS capability be augmented by the civil airlines. To provide for the most effective support by these airlines, a program has been established

which provides a Civil Reserve Air Fleet (CRAF) which will be available in wartime for the exclusive use of the DOD under contract with the carriers. In addition to its transport functions, MATS has service activities such as the Air Weather Service, the Airways and Air Communication Service, and the Air Rescue Service. Assignment of the nonairlift functions to MATS was per mitted for administrative convenience. There is also the Special Air Mission Force at National Airport to provide special mission transportation for the President and other high ranking Government officials. The MATS Aeromedical Evacuation Service provides airlift to sick and injured members of our Armed Forces from areas all over the world and within the United States to specialized medical centers.

The size and complexities of the Department of Defense transportation mission gives rise to numerous problems. The following are examples:

(a) Adequacy of existing transportation organizations.

(b) Procurement of household goods transportation.

(c) Proper procurement relationship between air and ocean transportation.

(d) Size of the nucleus fleets of the Military Sea Transportation Service and the Military Air Transport Service.

(e) Modernization of the Military Sea Transportation Service and the Military Air Transport Service nucleus fleets.

(f) Reorientation of the Military Air Transport Service to the hard-core mission.

(g) Extent of use of commercial carriers.

(h) Determination of land, sea, and air transportation requirements stemming from latest strategic guidance.

The transportation problems of the Department of Defense do not arise solely from the size and complexity of operations. These operations must be executed in accordance with various statutory, administrative or economic requirements such as

(a) Mandatory procurement of a specific dollar volume of commercial airlift.

(b) Prudent peacetime utilization of military transportation capability. (c) Procurement of transportation service at lowest overall cost.

(d) Competitive forces within the commercial transportation industry. (e) Desirability to support common carriers.