three or four groups. I do not think we can pass adequately on these projects as quickly as we did last year. I think they ought to be more carefully analyzed and that the consideration of them should be broken up into several groups.

The CHAIRMAN. I think that is a good point. We will take that matter up when these bills come before us.

Now I would like Mr. Smart to give the members very briefly a statement of some of the matters that we will have to consider, some of them pretty soon, because time will be running out. There are three or four rather urgent pieces of legislation that are rather complex and difficult, particularly with reference to exceeding the limit of our reserve, the doctors' draft, and perhaps survivors' benefits.

Will you proceed, Mr. Smart?

Mr. SMART. Mr. Chairman, there are several matters which the committee, should dispose of before it can properly launch itself on its legislative program.

No. 1: The Armed Forces Reserve Act restricts the Ready Reserve to 1,500,000. The Defense Department has previously notified the committee that they are in violation of that ceiling. 1,750,000, or thereabouts, in the Ready Reserve.

There are

The committee will recall that this limitation of 1,500,000 was not in the House bill. It was written in on the Senate side and our conferees got into a position over there of having to do something to get the bill out. They accepted the Senate amendment and it became part of the law. The limitation is not realistic at the moment and it seems to me that it could be resolved, as a matter of policy, in one morning's session with appropriate representatives of the services present.

The Defense Department admits that they are in violation; not willfully at all, but that is the situation.

No. 2: The staff, before the new Congress met, held 3 days of hearings with representatives of the Army, Navy, Marine Corps, and Air Force with reference to the effect of the so-called Davis amendment restricting promotions in the services. This is very harmful, particularly in the case of the Navy. It is less harmful in the case of the Army, generally speaking. It provides sufficient distribution in grade to man about a 95- to 97-wing Air Force. We are at approximately 100 wings now. It would not allow sufficient new billets for the expansion to 143 wings. So that this will become increasingly binding on the Air Force unless some relief is had.

While I have not discussed this yet with Mr. Davis, I understand his position to be that he feels that some percentage limitation, such as now applies to the Navy in the Officer Personnel Act, should be extended in the law to cover grade distribution for the Army and Air Force as well. But the full effect of the Davis amendment strikes on the 1st day of April. Obviously the departments cannot pull a trigger overnight and get down to the level that would be required under the Davis amendment. They must start now if the indications are that they are going to have to live with it.

The CHAIRMAN. The purpose of the Davis amendment is all right and I think we are rather sympathetic to the aim. But it is high time that we watched closely these riders on appropriation bills. We have got to put a stop to that. This is a question that falls distinctly

by this, the legislative committee of the House. Those of us who were in the Pacific last fall and talked to these young officers in the Navy know what the situation is. It is just destroying their morale.

Mr. VINSON. Mr. Chairman, what effect has the Van Zandt amendment had, which was put in on the appropriation bill by Mr. Scrivner? Mr. SMART. The Van Zandt amendment has largely served its purpose and did so more than a year ago. I feel that it was aimed at a situation where you were involuntarily extending enlistments, for a year. I repeat involuntarily. It did not seem to be too onerous to subject high-ranking officers to the necessity of continuing on for an additional year. I think Mr. Van Zandt will confirm that that was the philosophy back of his amendment. Last year, when the appropriation bill came out, and without the knowledge of Mr. Van Zandt, some of the appropriations people had adopted it as their own and reported it out as an organic part of the bill and the House adopted it. Frankly I cannot see the validity of a further extension of the socalled Van Zandt amendment, unless the authority to extend enlistments involuntarily, is continued.

Mr. VINSON. Mr. Chairman, I am glad you made the observation with reference to limitations on appropriation bills. If it is the policy of the Appropriations Committee to continue to put riders on appropriation bills, there will have to be a showdown on the floor of the House, because it takes away the jurisdiction of the legislative committees, which are legislating on subject matters after long and careful hearings. The theory, the idea behind the Holman rule was to reduce expenditures. But oftentimes it plays havoc with the services. The CHAIRMAN. It certainly does.

Mr. VINSON. And I am glad to hear the chairman say that he does not look with favor upon that type of practice.

Mr. DURHAM. Last year we compromised ourselves about that. I think we should have raised a point of order. In my opinion this committee should adopt a rule that we shall object to everything that is subject ot a point of order in these bills.

Mr. VINSON. These matters arise within the rule. Under the Holman rule, they are limitations and therefore are not subject to a point of order. I will say this, that whenever one has been subject to a point of order, we have made the point of order.

Mr. SHAFER. The trouble is that we waive points of order when we adopt the rule under which the bill is considered. I think we would have to make our fight before the Rules Committee.

Mr. JOHNSON. This type of amendment has had serious repercussions in other matters. I think they are very serious.

Mr. VAN ZANDT. I think immediate action in this committee is needed in order to protect a great many junior officers. The Davis amendment was not really designed for that purpose. I do not think that was the purpose in the mind of Congressman Davis.

The CHAIRMAN. He was shooting at the top brass, but he hit the junior officers.

Mr. VINSON. No. Congress was in a frame of mind to bring about economy and every one of these amendments had that objective in view. If we objected to that we would have been butting our head against a wall. I did compromise with the Davis amendment to make it applicable to the last quarter of the fiscal year, because you could

of the Congress at that time. They had made up their mind they were going to economize. It did not make a great deal of difference with the regular career officers.

Mr. VAN ZANDT. We called the attention of the House to the fact that this amendment would injure the junior officers rather than the senior officers.

Mr. BLANDFORD. May I interject here that we had extensive hearings, the four of us, with the Defense people and the deleterious effect upon the Navy was not Mr. Davis' fault. The demotions themselves were the fault of the Navy and the record should show that. It was an unfortunate thing that the amendment came up in a hurry, and the Navy gathered some figures which now, in retrospect, have proved to be wrong. But it was not Mr. Davis' fault that these demotions took place. Had the Navy given him the correct figures at the time, there would have been no need for demotions. I say that because there have been criticisms of Mr. Davis' amendment. He was given certain figures which unfortunately proved to be incorrect.

Mr. BROOKS. I think there is nothing that has brought more repercussions, as we saw when we were in the far Pacific, than the Davis amendment. It seems to me that this committee has caught more than its full share of the responsibility, when that amendment was adopted without proper hearings and without proper discussion.

Mr. VINSON. Mr. Chairman, let me make this observation. In the set-up of the Appropriations Committee, there will be three groups consisting of three men each who will be sitting on the Defense Department appropriations. There will be a three-man group handling the Army appropriations, a three-man group handling the Navy appropriations and a three-man group considering the Air Force appropriations. There may be, of course, some general hearings before the nine-member committee, but when they write the bill, it will be written by three men for each of the services.

Now, when those bills are reported to the floor of the House, that will be the first time that we will have an opportunity to see what has been done. I think we should try to work out something with the chairman so that when they are going to suggest certain limitations at least they should notify the chairman of the Armed Services Committee so that he may have an opportunity to have the matter studied by our staff and know all about it before it comes to the floor of the House.

The CHAIRMAN. We must have a closer liaison between our committee and the Appropriations Committee. That has been our weak spot for all these years.

Mr. JOHNSON. I think we should also have a liaison with the Rules Committee on the granting of these special rules.

Mr. VINSON. Mr. Chairman, I do not recall where a rule has been granted making in order the Defense Department appropriation bill. The Appropriations Committee comes in within the rule on a limitation. There are other committees of the Congress that have to get a rule, but the Appropriations Committee handling the armed services bill never gets a special rule to consider such a bill, because it can bring about its limitations within the Holman rule.

Mr. SMART. There are several real estate projects to which objec

The committee must resolve them. They are not urgent, but it is unfinished business.

The fourth thing is that the Navy has requested the authority to do some protective drilling at Elk Hills, Calif. This question involves a matter of policy, it seems to me, in that at the present time under the readiness program the Navy is producing, together with its reluctant partner, the Standard Oil Co. of California, 6,100 barrels of oil daily to keep the field in a state of readiness in case of a national emergency. On the north and east flank of the field, water encroachment has set in.

For instance, certain wells on the lower part of the structure, which were oil wells, are now water wells. Other wells are producing, out of every 4 barrels of production, 3 barrels of water. That seems to indicate rather conclusively, in the minds of the engineers of both the Navy and Standard, that there is very harmful water encroachment in that particular part of the field.

On the southern flank of the field two wells which were formerly water wells are now oil wells. The oil is migrating down structure and the engineers are again of the firm opinion that it is migrating completely away from the structure and is being lost forever. The rate of loss is estimated to be about 1,500,000 barrels a year.

The proposed cure for that by the engineers is to drill 2 or 3 additional wells on the south flank where the oil is being lost and some 32 wells on the north and east flank where the water is encroaching. The net effect of this is that it would increase the daily production from about 6,100 to about 31,000 barrels, projected over a 5-year period. The CHAIRMAN. If we do not get it now we will lose it forever? Mr. SMART. That is the point. Under the law the Secretary of the Navy has a dual obligation; one, to maintain the field in a state of readiness, and, second, to maintain it in such condition as to assure maximum ultimate recovery. Well, if the purpose is to hold the maximum amount of oil in the ground for a petroleum reserve, that produces an apparent conflict with any plan to increase the production in a naval reserve from 6,000 barrels a day to 31,000 barrels a day. Projected over a 5-year period, that is about 45 million barrels of oil. That is all confined to the shallow zone. The Stephen zone, the deeper zone, is still in excellent condition. It has not been harmed so far as the reserve is concerned. In addition, a new productive zone has been discovered now, the Carneros zone. At any rate, this committee is faced with resolving the problem-shall the Standard and Navy, under the unit plan contract, be permitted to go ahead with this expansion plan, or shall the decision be-let the migration continue and let the water contamination continue. That is a continuing problem and the committee must resolve it.

Mr. VINSON. During the summer Mr. Smart acquainted me with the information he has just submitted to the committee. I wrote him that I thought it was a matter that should be laid before the new Congress. That was along in August. I did not know what kind of Congress we would have, but I had a suspicion. I think that we should have a full public hearing on the matter.

I might say this for the benefit of the members who are not conversant with the unit contract, the period known as the secondary period has occurred in the contract and under the secondary period

ard Oil Co. gets one-ninth of the oil. They reduced the fiell down from 15,000 barrels a day to some 6,000 barrels a day, so therefore you see Standard only takes out in the secondary period some 600 barrels per day.

The secondary period was sanctioned by the engineers under the terms of the contract. After we have gone into the secondary period and the field is kept in a state of readiness by some 300 wells, pumping only so much, the engineers now come in and say that there is a migration of oil out of the reserve in the southern part and a flooding of the reserve in the northern part, and to preserve it there must be 32,000 barrels of oil pumped a day, which will permit Standard to get back what it had been denied when it went into the secondary period of the contract. So it is such an important question that I do hope this committee, when the time comes, will have a public hearing on the matter, and that the committee and the Congress will determine it. It must be done by the Congress. Under the law the Navy cannot do anything with that except what Congress says. Let the Congress decide it.

I wrote Mr. Smart that we should lay it before the next committee and the Congress.

Mr. JOHNSON. Several years ago a subcommittee that I was a member of, considered this Elk Hills matter. Is this the same thing now? Mr. SMART. The same one.

Mr. JOHNSON. We resolved something. I do not remember what it We took the advice of the admiral, as I remember it.

was.

Mr. SMART. At that time the matter under consideration was a revision of the unit plan contract. That was the situation that you had under consideration at that time.

Mr. JOHNSON. Did anything come of it?

Mr. SMART. Of, yes. The contract is all right. This is just a geological situation that they have, over a period of time, discovered, and they want to ask the advice of the committee-what shall we do now, either lose the oil or drill the wells?

Mr. JOHNSON. I am for drilling the wells myself.

Mr. Gavit. And while we are on this subject I think that a very complete investigation should be made of this Alaskan situation at Barrows Point. We have spent $40 million or more up there since 1945, and I think this project is questionable, whether or not this continued exploration should be carried on or terminated immediately. Mr. VINSON. The Appropriations Committee might refuse to make an appropriation to carry on any further, because no commercial oil has been discovered in that area.

The CHAIRMAN. Even if we did discover it, what could we do with it?

Mr. GAVIN. That is right. There is no market for the oil and no justification for it. There is subzero weather up there and there is the question of how to transport it. The project should be discontinued.

The CHAIRMAN. I am glad that the gentleman from Pennsylvania has brought that out. I think it is a matter that we should consider in conjunction with the Elk Hills project.

Mr. GAVIN. I have considerable information on that that I will be glad to lay before the committee at any time that you are ready to