(d) Seven small seaplane tenders, a total of eleven thousand five hundred and fifty tons light displacement tonnage; and

(e) Three repair ships, a total of twenty-eight thousand five hundred tons light displacement tonnage.

SEC. 5. There is hereby authorized to be appropriated, out of any money in the Treasury of the United States not otherwise appropriated, such sums as may be necessary to effectuate the purposes of this Act.

SEC. 6. There is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, the sum of $15,000,000 to be expended at the direction of the President of the United States for the construction of experimental vessels, none of which shall exceed three thousand tons standard displacement.

SEC. 7. The allocation and contracts for construction of the vessels herein authorized and the replacement thereof, as well as for the procurement and construction of airplanes and spare parts, snall be in accordance with the terms and conditions provided by the Act of March 27, 1934 (48 Stat. 503), as amended.

SEC. 8. The Act of August 29, 1916, as amended by section 1 of the Act of July 22, 1935 (U. S. C., Supp. II, title 34, sec. 2), is hereby further amended to read as follows:

"That the total authorized number of commissioned officers of the active list of the line of the Navy, exclusive of commissioned warrant officers, shall be equal to 6 per centum of the total authorized enlisted strength of the active list, exclusive of the Hospital Corps, prisoners undergoing sentence of discharge, enlisted men detailed for duty with the Naval Militia."

SEC. 9. For the purposes of this Act, the term "underage" shall be construed in accordance with the terms of the treaty signed at London, March 25, 1936. SEC. 10. That in the event of international agreement for the further limita- `. tions of naval armament to which the United States is signatory, the President is hereby authorized and empowered to suspend so much of its naval construction as has been authorized as may be necessary to bring the naval armament of the United States within the limitation so agreed upon, except that such suspension shall not apply to vessels actually under construction on the date of the passage of his Act.

The CHAIRMAN. Send the bill to the Navy Department and ask for their written report.

I will state to the members of the committee that in accordance with the message of the President on January 28, 1938, asking for a 20-percent increase in the Navy, I introduced the bill that has just been read. At this time, I desire to place in the record the President's message of January 28, 1938.

(The message of the President is as follows:)

To the Congress of the United States:

The Congress knows that for many years this Government has sought in many capitals with the leaders of many governments to find a way to limit and reduce armaments and to establish at least the probability of world peace. The Congress is aware also that while these efforts, supported by the hopes of the American people, continue and will continue, they have nevertheless failed up to the present time.

We, as a peaceful Nation, cannot and will not abandon active search for an agreement among the nations to limit armaments and end aggression. But it is clear that until such agreement is reached-and I have not given up hope of it-we are compelled to think of our own national safety.

It is with the deepest regret that I report to you that armaments increase today at an unprecedented and alarming rate. It is an ominous fact that at least one-fourth of the world's population is involved in merciless devastating conflict in spite of the fact that most people in most countries, including those where conflict rages, wish to live at peace. Armies are fighting in the Far East and in Europe; thousands of civilians are being driven from their homes and bombed from the air. Tension throughout the world is high.

As Commander in Chief of the Army and Navy of the United States it is my constitutional duty to report to the Congress that our national defense is, in

the light of the increasing armaments of other nations, inadequate for purposes of national security and requires increase for that reason.

In spite of the well-known fact that the American standard of living makes our ships, our guns, and our planes cost more for construction than in any other nation and that the maintenance of them and of our Army and Navy personnel is more expensive than in any other nation, it is also true that the proportion of the cost of our military and naval forces to the total income of our citizens or to the total cost of our Government is far lower than in the case of any other great nation.

Specifically and solely because of the piling up of additional land and sea armaments in other countries, in such manner as to involve a threat to world peace and security, I make the following recommendations to the Congress :

(1) That there be authorized for the Army of the United States additions to antiaircraft matériel in the sum of $8,800,000 and that of this sum $6,800,000 be appropriated for the fiscal year 1939.

(2) That there be authorized and appropriated for the better establishment of an Enlisted Reserve for the Army the sum of $450,000.

(3) That there be authorized the expenditure of $6,080,000 for the manufacture of gages, dies, and other aids to manufacture of Army matériel, the sum of $5,000,000 thereof to be expended during the fiscal year 1939.

(4) That the sum of $2,000,000 be authorized and appropriated toward the making up of deficiencies in ammunition for the Army.

(5) That the existing authorized building program for increases and replacements in the Navy be increased by 20 percent.

(6) That this Congress authorize and appropriate for the laying down of two additional battleships and two additional cruisers during the calendar year 1938. This will call for the expenditure of a very small amount of Government funds during the fiscal year 1939.

(7) That the Congress authorize and appropriate a sum not to exceed $15,000,000 for the construction of a number of new types of small vessels, such construction to be regarded as experimental in the light of new developments among navies; and to include the preparation of plans for other types of ships in the event that it may be necessary to construct such ships in the future.

I believe also that the time has come for the Congress to enact legislation aimed at the prevention of profiteering in time of war and the equalization of the burdens of possible war. Such legislation has been the subject for many years of full study in this and previous Congresses.

It is necessary for all of us to realize that the unfortunate world conditions of today have resulted too often in the discarding of those principles and treaties which underlie international law and order, and in the entrance of many new factors into the actual conduct of war.

Adequate defense means that for the protection not only of our coasts but also of our communities far removed from the coast we must keep any potential enemy many hundred miles away from our continental limits.

We cannot assume that our defense would be limited to one ocean and one coast and that the other ocean and the other coast would with certainty be safe. We cannot be certain that the connecting link-the Panama Canalwould be safe. Adequate defense affects, therefore, the simultaneous defense of every part of the United States of America.

It is our clear duty to further every effort toward peace but at the same time to protect our Nation. That is the purpose of these recommendations. Such protection is and will be based not on aggression but on defense.

FRANKLIN D. ROOSEVELT.

THE WHITE HOUSE, January 28, 1938. STATEMENT OF ADMIRAL WILLIAM D. LEAHY, UNITED STATES NAVY, CHIEF OF NAVAL OPERATIONS

The CHAIRMAN. Admiral Leahy, as Chief of Naval Operations, have you any statement you desire to submit to the committee with reference to H. R. 9218?

Admiral LEAHY. I have prepared some notes from which to make

a statement.

The CHAIRMAN. The committee will be glad to hear from you, without interruption, in your own way, and at the end of your statement the committee will ask you questions.

Admiral LEAHY. Before discussing the specific items of the bill I wish to present briefly the broad aspects of the situation on which the needs of the Navy are based.

The reasons for maintaining a Navy are well known, but I will emphasize a few primary considerations which, together with the facts presented by political conditions in the world today, justify the provisions of this bill.

The Navy of the United States is maintained for two general reasons. One is the prevention of war. The other is readiness to wage war effectively so that, if forced upon us, war may be brought to a close as quickly as possible with a minimum loss of men and economic resources.

The Navy insures our national integrity, supports our national policies, guards the continental United States and our overseas possessions, and gives protection to our citizens abroad. The Navy can do this effectively only if it is maintained at a strength which will prevent a serious challenge by any nation or nations to any of America's vital national policies which will insure respect by foreign states and their people for our citizens abroad, and which will make an attack on any part of our territory too costly and too hazardous for any foreign nation or nations to attempt.

When statesmanship has failed to preserve peace, and when the citizens of our country, through their elected Representatives in Congress, have decided that war is necessary as a last resort and have declared war, then the responsibility for bringing the war to a close, so far as it can be done by fighting, rests with the armed forces of the Nation. It is needless to say that if war is declared by the Congress, the Nation will expect the armed forces to be victorious in order that the ends for which we went to war may be attained, and will expect the armed forces to be in a state of readiness to insure that victory.

In defending our territory in war, we cannot assume an attitude of passive defense and simply beat off an attack at one place and later at another. In such a case we would see our coasts blockaded, our outlying possessions seized, our commerce, both coastwise and foreign, driven off the seas, and we would undergo the costly experience of finding the war lasting just as long as the enemy willed it; that is, until he had attained every objective and everything he wanted. The only way that war, once begun, can be brought to a successful conclusion is by making the enemy want to stop fightingby injuring him before he reaches our shores so badly that he will be anxious to make peace. Prompt and effective injury to an enemy, at a distance from our shores, is the only correct strategy to be employed.

We have outlying possessions in Alaska, the Hawaiian Islands, Guam, Samoa, Panama, Canal Zone, Puerto Rico, and the Virgin Islands. The Philippine Islands are still United States territory and will remain so until complete independence is attained. All of these outlying island possessions are more or less vulnerable, and their defense depends upon two factors. One is a local defense by

mobile forces and fortification. The other, and the dominant factor, is sea power. A superior Navy can prevent powerful attacks being made on all those island possessions that lie closer to our home territory than they do to those of an enemy or enemies. A sufficient Navy can keep open the lines of supply to the defenders of such possessions, and, if they are secure in their own local defenses against minor attacks, the Navy can use them as bases from which to operate against the enemy or enemies. Defense of those possessions-Guam, the Philippines, and Alaska-which lie nearer to the home territory of another power or powers than they do to the continental United States, is dependent solely upon sea power and the ability of sea power to support forces in those areas.

A Navy cannot be created upon the outbreak of war. If it is inadequate upon the outbreak of war it cannot be increased to adequate strength in a short time. The largest ships require at least 3 years to build. Smaller vessels, particularly those that can be put in quantity production, can be built in much less time. Trained personnel for combatant ships cannot be quickly created.

Should war be forced upon us, the only combatant ships we shall have to begin that war will be those that are completed when war breaks out and those under construction and nearing completion. The first year or two of a war will have to be fought with the ships and men that we have when the war starts.

The political conditions in the world at this moment, both in Europe and in the Far East, are far more threatening than at any time since 1918, and no improvement is in sight. The major conflict in progress in China has resulted in many grave incidents involving the sovereign rights and interests of the United States and other third powers. The civil war in Spain continues unabated and the threat of a general European conflict is ever present. At our own doors nothing stands in the way of the possible exploitation of seizure of the republics of Central and South America except the Monroe Doctrine, backed by such naval forces as the United States may have and the use of that force if the necessity should arise.

The Treaty of London of 1930 marked the beginning of the breakdown of the principle of limitation of naval armament by agreement, as initiated by the United States and established by the Treaty of Washington of 1922. The next 6 years, 1930 to 1936, witnessed the violation of treaties and the invasion of weak nations by those with aggressive policies. It is not surprising that the British Commonwealth of Nations and the Republic of France refused at the London Naval Conference in 1935 to be bound by any quantitative limitation of naval armaments, particularly as Japan refused to participate further in the conference after her demand for parity was rejected. Italy has so far not acceded to the London Treaty of 1936. Great Britain, as soon as she was freed from the limitations of the treaties of 1922 and 1930, immediately embarked on a prodigious rearmament program which includes not only the armed forces but industry as well. Japan, since December 31, 1936, has not been bound by any form of naval limitations and would not even enter into an agreement to exchange information regarding her naval program, as is now being exchanged under the London Treaty of 1936 among the United States, the British Commonwealth of Nations, and France.

Italy, whose delegates helped frame the treaty of 1936, is still withholding information regarding her naval construction. Germany and Russia both exchange information with Great Britain, in accordance with bilateral treaties. The recently concluded Italo-GermanJapanese anti-Communist protocol provides "The competent government agencies of the signatory states shall operate together in reporting to each other the activities of the Comintern, as well as to communicate instruction and defense measures to one another." The complete break-down of international agreement as to the limitation of armament, and the initiation of at least one powerful armament bloc of three nations cannot be questioned.

In the face of international political conditions and our naval needs, the relative strength of the United States Navy, as compared with the naval strength of other naval powers, must be considered. Naval strength does not consist of war vessels alone. It comprises adequate personnel to man the ships; the actual material readiness of the ships; an efficient and adequate aviation component; reserves of men, munitions, and supplies; a sufficient number of suitable auxiliary vessels and an efficient merchant marine manned by a loyal personnel; as well as suitable bases located at strategic positions for the repair, docking, and maintenance of the vessels and planes. No one factor can be neglected, as all are essential to real naval strength.

The strength of the United States Navy is determined by law. The Vinson-Trammell Act, Public, No. 135, Seventy-third Congress, states "That the composition of the United States Navy with respect to the categories of vessels limited by treaties signed at Washington, February 6, 1922, and at London, April 22, 1930, is hereby established at the limit prescribed by those treaties."

The so-called treaty Navy established by the Treaties of Washington, 1922, and London, 1930, and authorized by the Vinson-Trammell Act, was at that time considered to be sufficient in strength to provide adequate defense against attack by any single naval power, and not sufficient in strength to carry an attack to their shores. The navies of Great Britain, the United States, and Japan were by these treaties fixed at a strength ratio of 5-5-3.

These ratios were assumed to provide a correct and adequate provision for defense against attack by any one of the treaty powers against any other.

It is my opinion that the proportion, 5-5-3, did at that time accomplish this safety precaution against attack and that if the treaties had been adhered to there would now be no occasion for increases in the navies.

Subsequent to the failure of the London Conference of 1935 both Great Britain and Japan have commenced enormous increases in their naval power which have completely upset the 5-5-3 ratio; and unless the United States commences without delay a comparable increase in its Navy we will in a short time have insufficient security against attack from overseas.

In addition to the rapidly growing naval power of Great Britain and Japan, Italy and Germany are also engaged in an extravagant naval building program, particularly in battleships which are the backbone of naval power; and there is now in existence an Italio-German-Japanese "Anti-Communist Protocol" which must be taken into consideration by America's sea defense.