PART IV

REORGANIZING SUPPLY AND SERVICE FUNCTIONS IN THE ARMY

Contrary to common belief, the Army does not have a supply system nor only one for each of the seven technical services.

It has several groupings of supply systems, including the Continental United States depots (CONUS), single managers, oversea depots, retail inventory control points and station supply systems. Control of these groups is scattered.

Supply responsibility (determining how much to buy, where to store it, etc.) is also widely diffused. Basic decisions are scattered among 21 stock fund inventory control points, CONUS depots, oversea commands, other military departments, and various CONUS Army commands.

In the final report of the Army Service Forces on July 1, 1947,10 it is stated:

At the time of Pearl Harbor, the internal organization of the War Department was antiquated and cumbersome. Its form was not suited for the waging of a major war. Thoughtful military men knew this and for years had worried about it.

Logistic activities were especially diffused and uncoordinated. They were spread through six supply and eight administrative services.

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correct the situation, the President by Executive order reorganized the War Department on March 9, 1942, and created three major commands, air, ground, and service, defense commands and oversea forces. The Army Service Forces, at first called the Service of Supply, was made responsible for administrative, supply (including procurement), and service activities of the War Department as a whole.

The Army Service Forces rendered outstanding service but at the end of the war it was found expedient to inactivate it and to restore to the Army Technical Corps their prewar status.

General of the Army, Dwight D. Eisenhower, Chief of Staff of the U.S. Army at the time of the inactivation ceremonies of the Army Service Forces on June 10, 1946 stated:

It is true, gentlemen, that I was in command of the organization that was your principal customer overseas, and because of that relationship to this ASF I am tempted to roam around a little bit, in my time allotted me here, both in the war and through what has happened since, so if you find my remarks a bit incoherent, at least as far as sequence is concerned, don't take it too seriously. I will try to connect it up in some form or another.

In the first place, I think that too often the ASF in providing some index by which we could measure its own accomplishment has stopped far short of the truth, I have seen its accomplishments measured in the tons of supplies laid

10 "Logistics in World War II," final report of the Army Service Forces, p. 22.

down in England and Africa, and it is true that that accomplishment alone was something close to the miraculous-the bombs, the shells, the guns, everything that he could think of we had. The only question we were ever asked was, "What do you want, and when do you want it? Don't confuse us, because when we start it's surely coming." It did.

As one special example of the efficiency of your organization in meeting an urgent emergency request for supplies I quote or cite that of the 5,400 trucks you shipped me almost out of the clear sky somewhere about February 1943. The only comment that I later heard with respect to your achievement, and which by the way won the African campaign, was that if I was going to ask next for the Pentagon Building, please give a week's notice. Then Ge. eral Eisenhower added after making these commendations: Now, I can well understand the sense of disappointment, or even deeper emotion, as you see your establishment partially disbanded-let's say at least in name. But don't forget this, it is impossible in a democracy to keep always in time of peace an Army that merely has to expand in war in its form of command, and everything else; it cannot be done. Economy becomes the watchword, not only in dollars, but in men. Men have to carry dual loads. Moreover, the territorial organization of your country is not necessarily the same for war as it is for peace. In war you have one job to get men together to train them and send them out of the country and supply them all at the same time, but you have an entirely different one in peace.

After long study the consensus of opinion is that the organization toward which we are now going will preserve the lessons you have taught us, obtain for us the more in economy, and I should like to point out, under this new system, be more quickly capable of being transformed again into an Army Service Forces in time of an emergency than was the case in 1942.

It was much easier in 1946 to inactivate the Army Service Forces than to reorganize it for the next emergency. The history of the Army Service Forces illustrates the difficulty in reorganizing institutions of great strength which have strong organizations, industries, and constituencies interested in their continuation. Necessary reorganization may be as painful as "backing into a buzz saw" but deferral until an emergency arises may lead to critical injury.

General Eisenhower's statement to the effect that the experience learned through the operation of the Army Service Forces was great and that it would be possible to more quickly reorganize in case of another emergency is very interesting but at variance with the statement he made on June 2, 1945, when he indicated that

* * * In a serious war the quicker the maximum potential can be converted into tactical power the surer the victory and the less the cost. The whole purpose of military preparation-and this is in consonance with every commendable effort to devise a workable organization for world peace is to develop this maximum, properly balanced and fully efficient, at the earliest possible moment.

He also stated:

*** Always remembering that speed in full mobilization after the war starts is the surest way of minimizing cost, it is obvious that as much as possible of this task must be accomplished in peace.

This statement consistent with the military adage, “We should provide in peace what we need in war" and applicable in 1945 when the speed of attack was a few hundred miles per hour, would be many times more so today when the speed of destruction is measured as so-many times the speed of sound. The flight of a missile doesn't permit much time for compromise and reconciliation of prejudiced points of view on organization and logistics. The protective cushion of space which bought us time in 1917 and again in 1941 has been

demolished by a fast-moving technology. If we are not ready should the gong sound again, we likely never will be.

SECRETARY LOVETT'S BUZZ SAW LETTER

On November 18, 1952, Secretary Lovett, in a letter to President Truman, indicated the diffused and disorganized nature of the Army Technical Corps as follows:

As an indication of one area in which modernization and improvement appears to be needed, consider the technical services organization in the Army. There are seven technical services in the Army-Corps of Engineers, Signal Corps, Quartermaster Corps, Medical Corps, Chemical Corps, Transportation Corps, and Ordnance Corps. Of these seven technical services, all are in one degree or another in the business of design, procurement, production, supply distribution warehousing, and issue. Their functions overlap in a number of items, thus adding substantial complications to the difficult problem of administration and control.

It has always amazed me that the system worked at all and the fact that it works rather well is a tribute to the inborn capacity of teamwork in the average American.

One result of this type of organization is to form a service on the basis of profession rather than on the basis of its function. In other words, let us say that civil engineers in the Signal Corps; mechanical, industrial, hydraulic, ballistic engineers are in Ordnance, etc.

A reorganization of the technical services would be no more painful than backing into a buzz saw, but I believe that it is long overdue. I have a memorandum outlining one method of reorganization which looks promising. The study is recent and was completed in September 1952."

SECRETARY OF THE ARMY ON REORGANIZATION

The Secretary of the Army's 1954 plan for reorganization contained a significant statement about the insufficient recognition of logistics, or support, in the actual test of war:

"For both major wars fought in this century, the Army has had to change its organizational structure radically in order to perform under wartime conditions. Each time the primary weeakness was in the logistics area.'

GENERAL CONCLUSION

12

It is evident that the Army supply systems continue to be diffused and disorganized within themselves to say nothing of the overall disorganization that exists among the Army, Navy, and the Air Force.

REORGANIZING SUPPLY AND SERVICE FUNCTIONS IN THE NAVY

There is a close parallel in the situation which prevailed among the eight bureaus of the Navy at the time of the establishment of the Bureau of Supplies and Accounts and that existing among the numerous military supply agencies at the present time.

Excerpts from pertinent reports made in 1894 and 1896 illustrate the point.

11 For full text see hearings of House Committee on Expenditures in the Executive Departments of Dec. 3, 4, and 5, 1952, on "Federal Supply Management (Implementation of Military Supply Regulations)" pp. 348-355.

12 Secretary of the Army's Plan for Army Organization, June 14, 1954."

Commission on Organization of the Executive Branch of the Government, "Business Organization of the Department of Defense, a Report to the Congress," June 1955, p. 8.

The following extracts from a report made by Secretary of the Navy Herbert in 1896 indicates the confused state of the Navy in matters of supply responsibilities before purchase, care, and issuance of Navy supplies were charged to the Bureau of Supplies and Accounts: 13

The general-storekeeper system was established in the Navy 10 years ago. Prior to that time the eight bureaus (of the Navy Department) acted independently of each other in the matter of purchases, and had different methods of purchasing, keeping accounts, caring for and issuing articles under their cognizance. This resulted in many differing systems of accounts, and also, as each bureau necessarily kept many articles in stock, in large and unnecessary accumulations of stores, bureaus often purchasing for their own use articles, large stocks of which were at the time lying idle in the storehouses of other bureaus. Secretary Whitney concentrated the entire system of purchasing for the Navy under the Paymaster General, and established the general-storekeeper system, whereby all articles on hand, no matter under what bureaus, were consolidated for general use and placed under the control of the Bureau of Supplies and Accounts, which was held responsible for their purchase, care, and issuance. This order naturally encountered much resistance and may be expected to be more or less opposed as long as the bureau system obtains. Each chief is tempted to insist upon his right to purchase, upon the plea that he knows better than any other just what he needs.

Later in the report, Mr. Herbert quoted part of a similar report made in 1894: 14

There is still a tendency on the part of some at least of the many sources of authority still existent in the Department to reassert their lost dominion over supplies and accounts, but it is not believed that any Secretary will ever find it advisable to yield to such demands.

The situation which exists today among the numerous supply services in the Army, Navy, Marine Corps, and Air Force is a great magnification of that described by Secretary Herbert in 1896 among the eight Navy bureaus.

13 Annual Report of the Secretary of the Navy for the Year 1896, pp. 30-31. 14 Ibid., p. 31.

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APPENDIXES

APPENDIX 1

QUOTATIONS FROM JOINT ECONOMIC COMMITTEE REPORTS RELATING TO THE EFFECT OF MILITARY PROCUREMENT ON THE ECONOMY

*The inescapable fact is that more than 76 percent of the huge Federal budget of $42 billion for the coming fiscal year is being expended for wars, past, present, and future, and for foreign aid. Moreover, over 92 percent of the increase in Government expenditures since 1941 has been thus generated. * * * Naturally, some economies in the military budget are possible, but the totals, even with maximum efficiency, may not be large enough to pay off, at the present tax rates, the 3 or 4 billion dollars of Federal Government debt imperatively necessary at high levels of national income.

Thus one may well agree with the Hoover Commission's findings as reported in the National City Bank letter of February 1949, that:

The military services "are far too prodigal with Government funds." They lack "a sense of cost consciousness or a general realization of the vital importance to our national security of utmost conservation of our resources." The military budget needs "a major overhaul," with adequate means for checking, auditing, and control.

Congress, however, has already tried to introduce greater economy and efficiency in the Military Establishment; that was the purpose of the law which merged the military departments. There is no evidence that any reduction of national expenditure sufficient to achieve a surplus can be accomplished by reorganization or by any of the economies which everybody advocates. The outlay is kept high because, unfortunately, the need for national defense cannot be neglected. (Source: Joint Economic Report. Report on the January 1949 Economic Report (81st Cong., 1st sess., S. Rept. No. 88), p. 9.)

The facts before us, however, the high war expenditure and war output, the accumulated purchasing power after reconversion, and the continuing high level of demand for the near future described by economists-serve but to emphasize the central economic problem. It is this: We have an extraordinary national debt created by Government expenditures for war, the interest upon which and the liquidation of which must be met by a continued high level of production and economic activity. If there should be no substitute market for the products of field and factory in the years following 1950 to supplement the market created by the extraordinary Federal outlay for war and the extraordinary private outlay to satisfy the accumulated demand for civilian goods, the Government would be face to face with a serious problem of finding the revenues with which to pay the interest upon the national debt and carry on its normal functions. (Source: Joint Economic Report. Report on the January 1950 Economic Report (81st Cong., 2d sess., S. Rept. 1843), p. 4.)

The important facts are that there can be no letup in the necessary strengthening of our defenses against aggression, that the Government has been operating at a budget deficit since April, and that prices are today threatening to resume their upward trend. The committee believes that the avoidance of inflation is essential to the long-run strength of this Nation; to the preservation of the free-enterprise system and the liberties which it permits.

The committee believes that fundamental inflationary pressures will continue to mount in the months to come as the presently scheduled defense effort diverts larger portions of national production from civilian use.

The committee is consequently convinced of the urgent need (1) for renewed efforts to reduce and postpone less essential Government expenditures, and (2) for promptly providing tax revenues sufficient to balance a carefully planned administrative budget this fiscal year.

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