LETTER TO MR CUTLER FROM ALLEN DULLES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01731R000400190004-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 42
• Document Creation Date: December 12, 2016
• Document Release Date: March 18, 2002
• Sequence Number: 4
• Publication Date: April 28, 1959
• Content Type: LETTER

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STAT
Hot Springs, Arkansas
Dear Bobby:
I'm delighted to have your letter of the 24th and the
hope that you will do something for "Studies In Intelligence.
We have an issue which will be passed on by the editorial
board on 15 May, or, if this is too soon, the next deadline
is the first of August. As far as length is concerned, we
suggest to our contributors that it be not more than 5.000
words.
I hope you enjoy your week at Hot Springs. I deeply
appreciate your thoughts about Foster and your sympathy.
Sincerely,
Allen W. Dulles
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OLD COLONY TRUST COMPANY
ROBERT CUTLER
CHAIRMAN
April 24, 1959
The Honorable Allen W. Dulles
Director, Central Intelligence Agency
Washington 25, D. C.
Your letter of 21 April, 1959 about my writing for "Studies in Intelligence" -
your erudite quarterly - on the extent to which intelligence finding help to
shape national policy decisions is here.
One would like to ask a few questions - for what issue? what is the
deadline? how long? I would try to write some pages on this topic, which is
of supreme interest and should be better understood and as to which our views
are quite identical.
I'm off to Hot Springs for a recommended week off, after my first seven
months back at work. I must say that I never supposed I would be as busy as I
now am, ever again. But it seems rather to agree with me, now that I'm better.
My principal bother is increasing arthritis in my hands.
You might drop me a line to they IHot Springs, so that I can see STAT
whether I can fit things in to suit. To please the Commander-in-Chief, I've
just made today my 9th speech on a balanced budget, with 3 more scheduled for
May.
The news about Foster, however anticipated by one with may hospital background,
is'hard to bear. The ways of Providence are inscrutable. That my mother at 52,
and my great brother, Elliott, at 57, should have to go this way, and leave
lesser fry on the stage is hard to grasp. And now Foster, with all he gave and
had to give. As I wrote Janet, we must nevertheless praise the Lord (in Cromwell's
great phrase) for having given to us all so great a'character, integrity, wisdom
and application as Foster has shown forth. My heartfelt sympathy., my dear friend,
to you.
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General Robert Cutler
Not Springs, Arkansas
Dear Bobby:
I'm delighted to have your letter of the Z4tb and the
hope that you will do something for "Studies In Intelligence. "
We have an issue which will be passed on by the editorial
board on 15 May, or, if this is too soon, the next deadline
is the first of August. As far as length is concerned, we
suggest to our contributors that it be not more than 5, 000
words.
I hope You enjoy your week at Hot Springs. I deeply
appreciate your thoughts about Foster and your sympathy.
Sincerely.
Allen W. Dulles
O/IG/LBKirkpatrick:rm (28 Apr 59)
Orig - addressee
l - DCI (w/orig. of basic)
1 - ER (w/cc of basic)
1 -IG
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 5X1
21 APB
Rewritten: IG/LB Ki r kpatr i ck: dr m (21 April 1959)
OTR
Distribution:
Original & 1 - Addressee
1 -DCI
I - ER-4v=-
I -IG
2 - OTR
Honorable Robert Cutler,'
Chairman, Old Colony Trust Co.
One Federal Street
Boston 6, Massachusetts
Dear Bobby:
As you may know, for several years now we have been printing
a professional journal for intelligence personnel, a quarterly called
"Studies in Intelligence. " Classified `-secret, '- it offers among other
advantages a place where thoughtful intelligence professionals can air
some of the larger problems that bother them.
One of these problems is the perennial classic. the extent to
which intelligence findings help to shape national policy decisions. both
spot decisions and longer-range plans. This problem remains a real and
troublesome one for intelligence officers. yet one which they cannot thorn-
salvos discuss either from full knowledge of the facts or with proper
detachment from their own interests.
It would be most helpful if you, out of your rich experience and
from a position where you have had a chance to reflect on it, could give us
for publication in this classified journal your frank appraisal of the impact
of intelligence on U. S. policy. Your views of the limitations, essential
and fortuitous. and the influence of intelligence on policy would be interest-
ing. Your suggestions to the intelligence community on how it could
improve its effectiveness would be of value.
be interested in writing such an article.
I realise you have many commitments, but thought that you x nigh
Sincerely,
SINE
Allen W. Dallas
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1ae-DMe Robert Cuti
19 February 3959
Chairman. Colony Trust Company
One Federal street
Bostoa 6# Massachusetts
Do" Bobby:
It was to" of to send me the article
gig your report of the NSC procedure. I soft
you aver foam to give a hand to the shiare of
the Intelligence Ceanmuaity in the Council's work.
I enjoyed my brief visit to Boston and
most of all seeing you again.
Sincerely.
AWD/ji
1 - DCI
1-ER
1 - DD/I w/basic and encl. -"?
Ot~1~=~t~~~!.; 2 3 S f -
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SIHI'M
.Alien W. Dulles
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I Execui'.vo 2+agi5i. a
OLD COLONY TRUST COMPANY
ROBERT CUTLER
CHAIRMAN
fi A C
L '. t-
/~,, A - - -,
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OLD COLONY TRUST COMPANY
bm"T 10, 1959
Dear r. ?raAdeats
Tho meter or the GAS
a.eked me to enm.r, for it
relative to the op. tic
WARUM
questions
c ont in A'
ing photographs
I trust thbt his
i7
cc: Honorable Allen W. Dulles
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A
FORM NO. Replaces Form 30-4
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U. S. GOVERNMENT PRINTING OFFICE: 1955-0-342531
 ? January-March 1959
Organizing
'or Defense
Views from government,
industry, and the
Armed Forces about the
necessity fora businesslike
approach to defense organizati
SENATOR.
jOHN F. KENNEDY
Democrat, Mass.
Volume 2 ? Number 1
REAR ADMIRAL
,OnN
Die. Fleet Ballistic Missile Pro
pe Program
 w
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`'hole of Contents
Defense Organization: New Realities and Old Concepts
Dr. Peter F. Drucker, Management Consultant ................ 4
How changing needs are forcing a shift from temporary, emotion-based
efforts to a continuing program of stable defense organization.
Defense Organization at the Policy Level
Brigadier General Robert Cutler, former Special Assistant to the
President for National Security Affairs; Chairman of the Board,
Old Colony Trust Company ................................ 8
Answers to questions posed by The Defense Quarterly tell how the National
Security Council functions in its role of adviser to the President on vital
defense decisions.
Industry's Task in Defense Management
Ralph J. Cordiner, Chairman of the Board and Chief Executive
Officer, General Electric Company ........................... 16
A look at the challenges which industrial managers in the defense business
will face during the next ten years.
Congress: How It Works Toward A
More Organized Defense Effort
Senator John F. Kennedy, Massachusetts Democrat............ 19
A penetrating analysis of the five ways in which Congress exercises its
Constitutional control over defense policies.
Organizing For Efficient Defense Procurement
Senator Leverett B. Saltonstall, Massachusetts Republican....... 23
How legislation can and has overcome critical defense problems; and
discussion of a major proposal for modernizing procurement.
Keep It Simple
J. H. Kindelberger, Chairman of the Board and Chief Executive
Officer, North American Aviation, Inc ........................ 26
Why organizational simplicity is vital to successful development and
production of modern weapon systems.
Management of the Navy's Fleet Ballistic Missile Program
Rear Admiral W. F. Raborn, Jr., USN, Director, Fleet Ballistic
Missile Program ......................................... 28
How application of sound organizational theories has yielded concrete results
in the development of a complex weapon system.
THE GENERAL ELECTRIC
DEFENSE QUARTERLY
Ralph J. Cordiner, Chairman of the Board,
570 Lexington Ave., New York, N. Y.
Robert Paxton, President, 570 Lexington Ave., New York, N. Y.
C. W. LaPierre, Vice President and Group Executive,
Electronic, Atomic & Defense Systems Group,
570 Lexington Ave., New York, N. Y.
Ray H. Luebbe, Secretary, 570 Lexington Ave., New York, N. Y.
John D. Lockton, Treasurer, 1 River Road, Schenectady, N. Y.
Dr. George L. Haller, Vice President and General Manager,
Defense Electronics Division, Electronics Park, Syracuse, N. Y.
PUBLISHED BY
GENERAL 0 ELECTRIC
SCHENECTADY, N. Y.
CHAIRMAN EDITORIAL COUNCIL-L. H. Noum
EDITOR -Gene E. Bradley
ASST. EDITOR - K. E. Foll~k~
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tive d t '1 h
authors' own
ini
n
n
h
f
op
o
s o
no necessan y t ose o
t
e Company. Per.
ission to reprint articles is not required provid'~?''~~.* given to The
General Electric Defense Quarterly. !'
 What can the individual American, the citizen
concerned with national security, do to help the
United States organize effectively for defense?
Is he helpless in a power struggle so great that
his contributions don't count? Some believe so.
A recent survey sampled the reader response
to a magazine message on the technological race
between the U. S. and the USSR. Reported the
survey: ". . . a sizeable number of the readers ...
apparently feel that the threat of Russian mili-
tary might is so overwhelming that the indi-
vidual is powerless to counteract it."
A more positive note was sounded by other
readers:
"The United States must bend every effort
to exceed Soviet endeavors."
"We must handle Research and Development
in a businesslike manner. We are not doing as
well as we might in the R&D field. As a citizen,
I should recognize and support efforts of R&D."
"If we all join in a cooperative effort to further
Research and Development, we can emerge vic-
torious. We as a group must join in a supreme
effort to combat this rationally and intelligently."
Certainly the U. S. answer to the massive Com-
munist threat must center on the individual-
just as our entire basic philosophy of government
is founded on the rights and freedom of the
individual-including his ability to design, pro-
duce, create, manage within the free-enterprise
climate. The question must become: how to or-
ganize the literally millions of individual efforts
related to defense? to organize them so effectively
that U. S. progress will exceed the progress now
programmed and predicted by the slave states.
To put in perspective the task of organizing
for defense, we have asked a number of authori-
ties to analyze the total subject as well as "side
issues" facing the specific individuals: members
of Congress, the military, industry, thought lead-
ers, private citizens.
Introducing the discussion is Dr. Peter Drucker,
eminently qualified on business organization and
management. While not concerned with the de-
fense business per se, he is recognized for an
extremely clear understanding of the long-range
problems to be solved in the effective manage-
ment of defense.
But no management effort is of value without
first defining a national policy to guide our de-
fense strategy, and the starting point for organiz-
ing policy is the National Security Council.
General Robert Cutler, for a number of years the
President's Special Assistant for National Se-
curity Affairs, analyzes the NSC: why it exists,
how it operates, how it can become a more effec-
tive organization and instrument for peace in
the future.
The role of Congress in helping to implement
national policy is paramount, immediate and con-
tinuing. Here, legislative responsibilities and needs
are examined by the able Senatorial team from
Massachusetts-Leverett B. Saltonstall and John
F. Kennedy.
With policy set and machinery established, the
job of providing defense tools goes largely to
industry. Describing challenges to industry (as
well as challenges that apply to organizational
efficiency in all phases of our defense efforts) are
North American Aviation's J. H. Kindelberger
and General Electric's Ralph J. Cordiner.
Finally, a success story on organizational effi-
ciency: Rear Admiral W. F. Raborn, Jr., presents
a progress report on how a fantastically-diverse,
high-priority weapon system is being managed.
It is fitting that these authors be drawn from
government, industry, the Armed Forces and
professional management consultation. For these
are the specialized groups which must present
their cases to the citizen-taxpayer who is most
concerned with national security.
And, in the end, it is the citizen-taxpayer who
must evaluate the facts and, through the demo-
cratic process, assure our national security. The
importance of individual vigilance and concern
has been accurately summarized by Jean Jacques
Rousseau, who said:
"Good laws lead to the making of better ones;
bad ones bring about worse. As soon as any
man says of the affairs of State, `what does it
matter to me?' the State may be given up
for lost."
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In his recent book, AMERICA'S
NEXT TWENTY YEARS, Dr. Peter F.
Drucker says: "The most important
requirement of rapid industrial
growth is people." Since he is
noted for his work with people as
an educator, management con-
sultant and writer, such a comment
is not surprising.
Dr. Drucker was born in Vienna,
Austria and received his LL.D.
Degree from the University of
Frankfurt in 1931. Prior to coming to
the United States in 1937, he was
economist for a London banking
Defense Organization:
house. In this country, Dr. Drucker
served as American advisor for
British banking firms and as corre-
spondent for several British news-
papers. A former professor of
philosophy and politics, he has
been a leading management con-
sultant to many of America's larger
business corporations for 18 years.
A broader discussion of the points
raised in this article can be found
in Dr. Drucker's newest book, THE
LANDMARKS OF TOMORROW,
which has just been published by
Harper's.
by Dr. Peter F. Drucker, Management Consultant
? Qualitative change is more important than
cost in the relationship between defense
needs and the economy.
? Rapid technological advancement has made
planned obsolescence a foundation of our
defensive strength.
? Our organizational approach must be guided
by the fact that defense is now a "normal"
rather than an "emergency" business.
A layman who has never designed a jet engine,
never re-negotiated a defense contract, never
worked on a defense budget, is hardly competent
to discuss as difficult and many-sided a subject
as organization for defense. But organization is,
after all, not an end in itself. It is a means to
satisfy needs and demands. And I wonder how
fully it is realized-by public opinion, by the
Congress, by businessmen, or even by the Armed
Services- how completely the demands defense
organization has to satisfy have changed, and
how different they have become from those that
had to be met as recently as World War II, or
even the Korean War.
Specifically, I wonder whether the changes in
three areas are fully understood and whether
they have been taken into account in our ap-
proach to the organization of defense production.
Cost vs. Qualitative Change
I. In defense economics, that is in the relation-
ship between defense needs and national econ-
omy, we tend to focus on the size of the defense
burden, and it is certainly a staggering one. But
even more important than the amount of the bill
is the qualitative change in the relationship be-
tween defense needs and national economy.
The armies that took the field at the outbreak
of World War I in 1914 were the largest and most
highly equipped armies the world had ever seen
up to that time. But 80% or more of the material
equipment of these armies still consisted of
standard peace-time goods, produced in ordinary
peace-time productive facilities. And most of the
rest, while specially produced for military pur-
poses, could be turned out in normal peace-time
facilities after a speedy and relatively easy con-
version. Very little, in other words, of the defense
needs of 1914 required special defense-production
facilities equipped to turn out nothing but spe-
cial-purpose defense goods. By 1941, when we
got into World War II, almost one-half of the
total material needs of a fighting war consisted
of special-purpose equipment. But the bulk of
this was still material that could be turned out
by diverting and converting ordinary peace-time
facilities. Only a very small proportion-though
a bigger one than in 1914-required special-
purpose facilities, especially built for defense pro-
duction and usable for nothing else.
`Production Miracle' Cannot Be Repeated
Today something like 90% of the material
needs of defense consists of special-purpose
equipment which cannot be produced except in
special facilities, built for that purpose and usable
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for very little else. There is no more possibility of
conversion. Nor can the "production miracle"
of 1942/3 ever be repeated again. Defense pro-
duction today means production exclusively for
defense in exclusive defense facilities. This means
that defense today requires a permanent defense
economy and a defense economy that is built and
maintained in peace-time. And like any economy,
this must be a healthy, a thriving and an expand-
ing one, if it is to function at all. At the same
time, however, this defense economy is a means
to an end of national policy. Care must therefore
be taken that it remain subordinate to the needs
and objectives of national policy. Above all, we
must take care that we do not allow ourselves to
make national policy and defense needs sub-
ordinate to the needs of the defense economy. I
believe, for instance, that it is very questionable
policy to encourage the growth of a substantial
number of businesses which have no other busi-
ness than defense production, or that it is good
long-range policy to allow the development of
"defense production regions" in which defense
business is the mainstay of the regional economy.
We do not want, in fact, we can hardly afford, a
"defense interest"; and yet we have to make sure
that the defense economy is a healthy, a thriving
and an expanding one.
Here seems to me to lie the first new demand
on the organization of defense production.
II. A similar major change has occurred in de-
fense technology. Again public discussion seems
to see only part of the change. It sees the new
weapons. But equally important is the fact that
the new defense technology is based on the very
rapid obsolescence of existing weapons. In fact,
we all know today that a new weapon is likely to
be obsolete by the time it reaches the production
stage. At the very least we know that we are
likely to be outstripped technologically unless
the next weapon, which will obsolete the new
one, is already on the drawing board when the
"new weapon" reaches the production stage.
This is perhaps the most radical change, as one
illustration will show. All through the 19th
century the cavalry was the most highly trained
and most "professional" branch of any of the
large armies. It was almost exclusively manned
by long-serving soldiers, even in the countries of
universal military service. The cavalry soldier
had three pieces of special cavalry equipment:
his horse, his sabre and his carbine. The horse
was considered to have the same service life as
the individual trooper, that is twelve to fifteen
years; and both sabre and carbine were con-
sidered to outlive the individual trooper and to
serve three or four troopers before being dis-
carded. As for technological changes, they oc-
curred only once every fifty years or so-and
then, of course, only in respect to the carbine.
Planned Obsolescence Means Strength
Today we obsolete before we produce. And a
long-serving soldier is almost certain to have to
learn to use new weapons practically every year
during his enlistment. In other words, obso-
lescence, planned, deliberate and speedy obso-
lescence is the foundation of defense strength
today. It is not the capacity to produce weapons
that already exist, but the capacity to make us
capable of producing weapons that do not yet
exist, which is crucial.
One implication of this is that Research and
Development rather than Production might be
considered the "production area" of a defense
economy. R&D might be the area in which
defense-competition between powers is actually
decided. Production, of course, must remain im-
portant since one cannot fight a war with to-
morrow's weapons. But production might very
well appear to become an auxiliary-at least in
the organization of defense production, in its
measurements, in its incentives and its rewards.
And the area in which we have to mobilize the
full strength of a free society and of a free
economy might very well be the area of R&D-
the area in which there is need for the fullest call
for initiative, competition and imagination, and
accordingly, the greatest need for incentives,
motivations and rewards. Modern defense pro-
duction-basically unlike that of World War II
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rrr ' thinking still ... dominate
-depends less on the productive genius than on
the innovating genius of a country.
III. Finally, defense business has become
permanent rather than temporary, and "normal"
rather than "emergency" business. This may
very well be the biggest change from the concept
we have been familiar with, the concept which
still so largely dominates our thinking, our ap-
proach to defense production, and perhaps even
its actual organization.
Defense business has become a permanent and
normal rather than a "temporary emergency"
business not only because of international ten-
sions, not only because we are up against a
vigorous, unscrupulous adversary bent on world
domination; it has become a permanent and
normal business not only because of the changed
role of the United States as the only power
capable of withstanding the threat of total ag-
gression and subversion. Equally important are
the changes in defense economics and defense
technology which require permanent diversion in
peace time of a large share of the country's pro-
ductive resources to defense production, and
permanent attention, in peace time, to constant
defense innovation. In fact, the changes in de-
fense economics and defense technology have
been such that only the two "super powers" are
at all capable any longer to maintain the kind
of defense effort that is needed-and despite its
tremendous size and burden, the defense effort in
either one of the great powers today may well be
below what, in earlier times, would have been
considered a minimum defense standard.
Implications For Society, Economy
I am not happy about this; in fact, I know no
one who is. The implications of this change are
very great indeed. In international affairs they
mean that it is quite possible that it is defense
technology which is causing the basic inter-
national tension rather than that the tension is
responsible for our defense efforts. And this
would have very serious implications for any
attempt toward disarmament, for instance.
Equally serious are the implications for domestic
society and domestic economy; the constant in-
flationary pressure is only one. Most ominous,
An "E" pennant goes up-a recognition of the tre-
mendous exertion which American workers poured
into war production efforts. An appeal to patriotism
was the emotional basis on which the tremendous
"temporary" wartime effort hinged.
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nost of. ? our defense organization. "
especially for a free society, is the growing mili-
tarization which this constant defense need
creates in public and private life throughout the
world.
But whether I am happy or not: the fact that
defense production is of necessity permanent
business and must be considered "normal busi-
ness" is a fact.
A temporary emergency has its own policies
and its own economics, primarily those of emo-
tion. Its effort is based on a sudden exertion
rather than on deliberate organization for the
long pull. In the case of defense production, this
sudden exertion was the appeal to patriotism. A
temporary emergency also has its own problems
such as the well-publicized one of the danger of
the unscrupulous who, knowing full well that
they need not worry about standing and repu-
tation in a "market" that won't be there anyhow
the day after tomorrow, exploit and profiteer.
Less publicized, but perhaps a good deal more
important is the problem of the well-intentioned
but inexperienced, both among the defense pro-
ducers and among the procurement agencies in
the Armed Forces.
"Temporary emergency" thinking still, it
seems to me, dominates most of our defense
thinking and our defense organization: the way
we make defense budgets and allocate the
money; or the way we procure defense. It is
certainly largely responsible for the legal jungle
in which defense production and defense pro-
curement find themselves entangled at every
step. But it also seems to me that a good many
of our businesses, in their approach to defense
production, still think in terms of "temporary
emergency."
Special Organization Required
But defense production as a permanent busi-
ness requires organization as such. It needs long-
range objectives and a basic organization to carry
out these objectives. It needs its own relations
based on mutual confidence and proven per-
formance. It needs its own resources of people
and capital. And as in any permanent business
the basic question arises: can the business attract
the people and the capital it needs, that is, does
it offer enough in the way of opportunities and
rewards?
I can only ask questions. What they mean for
the organization of defense production I am not
competent to discuss. But I am convinced that
no organization of defense production will be
found adequate unless it is consciously developed
to satisfy the new demands which the new
realities make on us. And I am not, unfor-
tunately, convinced so far that we have even
made the effort to find the organization that will
answer these demands.
Today, special facilities are required for defense
production. This jet engine production line, together
with the other facilities throughout G.E.'s Electronic,
Atomic and Defense Systems Group, typifies the
vast investment which must be made to satisfy
today's highly specialized defense requirements.
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The board room of the Boston Old Colony
Trust Company and the meeting room of the
National Security Council might not seem to
have much in common. But they both have
played an important role in the colorful
career of General Robert Cutler.
General Cutler graduated from Harvard
University and from Harvard Law School.
He served in both World Wars, and was ap-
pointed to the rank of Brigadier General in
1945. Following diverse assignments with the
Army in World War II, and later with Office
of the Secretary of War, General Cutler re-
turned to Boston and served as President and
Director of the Old Colony Trust Company.
In 1953, he was appointed to the post of
Administrative Assistant to President Eisen-
hower. In Washington, he served as Chair-
man of the National Security Council Plan-
ning Board for more than 31/2 years and was
Special Assistant to President Eisenhower for
National Security Affairs.
During his tenure, General Cutler helped to
conduct 179 National Security Council meet-
ings (being 48% of all meetings held during
the Council's 103/4 years of existence) and
presided over 504 NSC Planning Board meet-
ings of a total of 903 held during the above-
mentioned period.
General Cutler has received the Distinguished
Service Medal and the Legion of Merit. He
has also been awarded the civilian Medal of
Freedom. Recently retiring from his National
Security Council posts, he is still associated
with the Old Colony Trust Company as its
Chairman and Director.
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by Brig. Gen. Robert Cutler,
Former Special Assistant
to the President for
National Security Affairs
How does the National Security Council help
the nation plan and organize for defense? Here
is an authoritative "inside" view of the Council
in its vital role as a policy influencing organ-
ization.
Question 1. How does the United States formulate
national security policies?
This question can best be answered by giving
some historical background as well as stating
current procedures.
Since the Congress enacted the National
Security Act in 1947, the principal mechanisms
through which national policies have been for-
mulated have been: (1) the Cabinet, for matters
not directly and primarily affecting national se-
curity such as the Post Office, Interior, Health
Education & Welfare, Agriculture, Commerce
(except foreign commerce), Justice (except in-
ternal security), Civil Service, domestic politics,
and (2) the National Security Council, for
national security issues. The complexity of
modern times often makes it difficult to draw a
clear line between the two categories; but in
practice a rational accommodation has invari-
ably been worked out between the Secretary of
the Cabinet and the Special Assistant for
National Security Affairs.
of the Government to cooperate more effectively
in matters involving the national security."
The statute is sufficiently flexible so that each
President may use the Council mechanism as he
wishes. President Truman and President Eisen-
hower have used it in quite different ways. Dur-
ing the 5% years of the Truman Administra-
tions, 128 Council meetings were held. During
the first 5% years of the Eisenhower Adminis-
trations, 253 meetings were held.
The President is Chairman of the Council. In
his absence, which has been very rare in Presi-
dent Eisenhower's case, the Vice President pre-
sides. Attendance at National Security Council
meetings is in part fixed by statute and in part
by the direction of the President.
A Personal, Advisory Mechanism
The National Security Council is a personal,
advisory mechanism for the President. Its prin-
cipal statutory function is "to advise the Presi-
dent with respect to the integration of domestic,
foreign, and military policies relating to the
national security, so as to enable the military
services and the other departments and agencies
Statutory Membership
The statutory members are the President, Vice
President, Secretary of State, Secretary of De-
fense, and Director of the Office of Civil and
Defense Mobilization. President Eisenhower also
expects the Secretary of the Treasury and the
Director of the Budget to attend all Council
meetings as participants. In addition, the Attor-
ney General and the Chairman of the Atomic
Energy Commission normally attend. Other
officials may be invited to participate for agenda
items which concern their particular Govern-
ment responsibilities.
The Chairman of the Joint Chiefs of Staff and
the Director of Central Intelligence regularly sit
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at the Council table as statutory advisers on
military and intelligence matters. The Special
Assistant for National Security Affairs and the
Council's Executive Secretary and Deputy Exe-
cutive Secretary attend in Staff capacities. Thus,
about 15 persons are normally seated at the
Council table. This figure is augmented from
time to time by the presence of the Service Secre-
taries and the Service Chiefs of Staff, or by
experts or non-governmental consultants on
particular subjects who appear to state their
views and be questioned.
The Assistant to the President, the Director
United States Information Agency, the Director
International Cooperation Administration, the
Special Assistants to the President for Foreign
Economic Policy, for Science and Technology,
and for Security Operations Coordination, and
the White House Staff Secretary usually attend
NSC meetings as observers.
A Forum for Vigorous Discussion
President Eisenhower regards the Council as
a corporate body of qualified top-level officials.
He seeks advice from members on the basis of
their broad personal experience and knowledge.
He does not look upon the Council as a group
of agency heads presenting "parochial" views.
Since the President uses the Council as a forum
for vigorous discussion of issues of the gravest
national consequence, it is essential to restrict
Council attendance.
The priceless ingredient in this Council opera-
tion is integration. The views of all affected ele-
ments in the Executive Branch are sounded out
in the formulation of policy recommendations;
these views are discussed before and with the
President for his final decision. The National
Security Act created a workable mechanism for
such integration.
In order to win victory in World War II, all
kinds of integrative mechanisms were developed
within and without our Armed Forces. It was
their abandonment after the war that led to the
creation of the National Security Council. It
was soon recognized that the Chief Executive
required some mechanism to integrate all re-
sponsible views in the policy recommendations
submitted to him, and to assure that all per-
tinent arguments be presented to him and his
advisers,
Current operation of the Council mechanism
is designed to afford maximum help to the
President.
To this end, exact written statements and
recommendations are prepared through the NSC
Planning Board, utilizing the resources of the
Executive Branch departments and agencies
(from time to time augmented by non-govern-
mental consultants), and are circulated to Coun-
cil members well in advance of the Council
meeting for which scheduled. At such Council
meetings, discussion is focused upon these writ-
ten statements and recommendations. While im-
portant matters coming before the Council have
been usually based on carefully-prepared draft
policy statements and recommendations, there
has been, and there should always be, oppor-
tunity for oral Council discussion of urgent
issues or questions.
The Special Assistant for National Security
Affairs is Chairman of the NSC Planning Board.
The Planning Board consists of representatives
of the departments and agencies having an in-
terest in the subject matter to be discussed.
Planning Board members possess the rank of
Assistant Secretary, or its equivalent, and are
appointed by the President on recommendation
of the department or agency head. Normally, the
Planning Board meets twice a week for sessions
that last three or four hours, with special meet-
ings as necessary. The Planning Board met 640
times during the first five years of the Eisen-
hower Administration.
Handling of New Issues
When the Planning Board takes up a new
issue, or begins a fresh review of an older issue,
the Central Intelligence Agency is asked to sup-
ply an assessment of the latest intelligence on
the issue. The Board also receives a comprehen-
sive study of the basic facts, prepared by either
the Department or Agency principally inter-
ested, by an inter-departmental committee, or
by an ad hoc committee combining Government
and non-Government experts. Where appro-
priate, the material transmitted by the Planning
Board to the Council includes a financial appen-
dix and military and economic annexes.
The number of times a particular subject
comes before a Planning Board meeting depends
upon its importance and complexity. A dozen
meetings or more may be necessary before the
final version of a particular statement is accept-
able to the Board. Often, the Planning Board is
unable to resolve all differences of opinion on a
given subject. These differences are explicitly
set forth in the material submitted to the Coun-
cil. The Planning Board's finished product is
circulated ten days in advance of the Council
meeting. The Joint Chiefs of Staff in turn, then
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circulate-also in advance-their military views
on the proposals.
The National Security Council normally meets
on Thursdays at 9:00 a.m. Each meeting lasts
two hours or more. The President is frequently
a vigorous participant in NSC discussions. The
agenda may include a single item or as many as
four or five. The Council does not vote, the sense
of the meeting being taken on the various issues.
A Written Record Prepared
The Special Assistant prepares a written rec-
ord of the action taken at each Council meeting.
As a further step in the integrative process, his
draft is circulated, to those who were present at
the meeting for comment before being submitted
to the President for his consideration, change if
necessary, and final approval. These Records of
Action are formal evidence of the President's
decisions on national security policies developed
through the Council mechanism. Of course, the
President may, and does, make policy decisions
in other ways which his convenience may dictate.
The recommendations of the National
Security Council are advisory only. It is the
final approval by the President that creates the
policy.
The operation of NSC mechanism is democ-
racy in action. Democracy draws great strength
from the participation in policy-making by those
who are charged with responsibility for execut-
ing that policy. Participation by departments
and agencies brings them toward, rather than
separates them from, the hub of the wheel.
Therefore, when the wheel must bear its burden,
the spokes are stronger because they have been
fashioned by the participation of the depart-
ments and agencies.
All who have an interest in the matter under
consideration have an opportunity to be heard.
Conflicts at lower levels are not swept under
the rug or disguised in bland language. The con-
cept of integration rests, not on the acceptance
of all views which may be advanced, but on the
opportunity that such views shall be clearly
heard throughout the entire formulative process
until the Presidential decision is made. Such a
procedure eliminates insofar as possible a most
serious threat to the rational and orderly con-
duct of government: ex parte decisions by the
highest authority. To assure the proper working
of this integrative procedure is the responsibility
of the Special Assistant for National Security
Affairs.
Question 2. How is the agenda for National Se-
curity Council meetings established?
World conditions are fluid and constantly chang-
ing. A policy is not made to be put in a museum
showcase, but to be a useful tool. So to be useful
it requires continuing review.
The statement of our basic national security pol-
icy, to which all our other security policies are
subsidiary, is reviewed annually in the Council.
Frequently this searching review will extend, as
it did in the 1958 calendar year, over a period of
several months. It may require a dozen Planning
Board meetings and appear on the agenda of sev-
eral meetings of the National Security Council.
The agenda of almost every Council meeting will
include areporton the progress made bytherespon-
sible departments and agencies in carrying out each
national security policy delegated by the President
to the NSC's Operations Coordinating Board for
coordination. Also, at periodic intervals, the Plan-
ning Board re-examines, country, regional, and
other security policies and recommends modifica-
tions thereof.
New Policies Required.
Changing circumstances or historical happen-
ings also require the development of new policies.
"New occasions teach new duties." For example,
during the last few years, the Council has been
concerned with such novel subjects as the Earth
Satellite, Outer Space, Exchanges of Personnel
and Information with Communist Countries.
The Special Assistant for National Security Af-
fairs is responsible for developing the forward agen-
da for meetings of the National Security Council
and of its Planning Board. Suggestions for consid-
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ffToday,
the climate of opinion
has become one of the
significant factors affecting
the practice of governing: '
eration by the Council come from a multitude of
sources: from the President, from the heads of de-
partments and agencies, from the urgency of world
events, from developing scientific and technolog-
ical techniques, from the Planning Board, from
the periodic reports of the Operations Coordina-
ting Board, and from the annual "status of pro-
grams" reports to the Council by the departments
and agencies.
Question 3. Are there opportunities for improving
and strengthening the effectiveness of the National
Security Council mechanism in the future?
I hope that nothing which I have said in answer
to the earlier questions will give the impression
that I think the National Security Council mech-
anism cannot be further strengthened, fortified,
and improved. On the contrary, though much has
been done, much remains to do. The permanent
thing in life is change. The continuing validity of
the Council operation will depend on its ability
to change in order to accommodate to changing
circumstances.
Changes that facilitate the use of the Council
by the President in resolving his will, that increase
the opportunities further to integrate the views
of Presidential advisers, or that minimize the
chances of Presidential decisions being made on
an ex parte basis, will tend to improve the Council's
effectiveness.
NSC Freedom of Operation
To that end, the Council mechanism should
freely operate upon the entire area of national
security policy-making. The exclusion of any seg-
ments of the area should be minimized. From time
to time in the past, certain segments have been
so excluded, for varying reasons: their highly
technical nature, or their extreme sensitivity, or
the fluidity of the current situation. In my opin-
ion, the policy situation has been improved when-
ever the excluded segment was returned to nor-
mal course of operation. It is axiomatic in
government that the removal of a certain area
from consideration by the agency capable of
handling that area tends to weaken and prejudice
the effective capability of the agency in the entire
area.
Whereas it is difficult, it is not impossible, to
handle the development of short-range policies
through the National Security Council mecha-
nism. It can and should be used in critical times
when action must be quickly taken. In the first
Eisenhower Administration, the Council was able
to act with great rapidity during critical times in
Indo-China, in Guatemala, and in the NATO area.
Are Policies Too Broad?
Are the security policies adopted by the Presi-
dent upon recommendation of the Council too
broadly expressed? It seems obvious to me that
policies adopted by the President, at the very apex
of Government, cannot be stated in specific detail.
Plans and programs for implementation must be
left to the responsible departments and agencies
to hammer out within the broad guidance given
by the President. Complaint that national security
policies are too generally expressed to give suffi-
cient guidance sometimes betrays the complain-
ant's disagreement with the policy guidance re-
ceived.
General and broad presentation and discussion
of the annual Defense Budget through the NSC
mechanism is a wholesome development in the
right direction. Similarly, great studies which the
Council has authorized, like those of Dr. Killian's
Technological Capabilities Panel in 1954-55 and
of the Security Resources Panel (the so-called
"Gaither Committee") in 1957-58, have been a
material stimulation and help to all concerned.
Again, since Dr. Killian's appointment as Special
Assistant, the focusing of Council attention on
scientific and technological matters within his
competence, has been of great assistance to the
President.
A Deep Interest in Security
Preserving the security of Council deliberations
is a difficult problem in a democracy which rightly
prizes free speech and free press. There is natu-
rally a deep interest in the advice given to the
President in the sensitive area of national security,
and in the action which the President subsequently
takes. But whereas the President's decisions on
national policy may at appropriate times and in
appropriate ways be publicized, it has been an
invariable rule since the founding of the Republic
that confidential advice given to the President
should remain privileged to him. Such a rule of
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"... the President's decisions on national policy
may at appropriate times and in appropriate ways
be publicized ..."
privilege must prevail if the President is to feel
free to call upon intimate advisers for candid
advice. Moreover, Council discussions by nature
involve military and State secrets which should
not be spread before the eyes of powers dedicated
to our destruction.
The unfortunate hullabaloo over the "Gaither
Committee" report and the demands for its pub-
lic release, which followed press accounts of what
it purported to contain, was a dis-service to the
President and raised a question as to whether the
use of such valuable consultant groups is worth
the political and press controversy which may
sometimes arise. Nevertheless, I think on balance
that the use of consultant groups from time to
time is of inestimable value in the policy-making
process.
Question 4. Do you believe that some additional
"policy organization" could or should be formed
within the Government?
My answer to this question is a strong negative.
At the apex of the Executive Branch today we
have an elaborate policy-making structure. The
Cabinet operates in fields not directly affected by
the national security. The National Security Coun-
cil mechanism operates in national security fields.
Almost every year, the President receives recom-
mendations for reforming the existing NSC mech-
anism, or adding thereto some further body, in
order to deal with a particular segment of national
security. We have found in the past that these
recommendations did not comprehend or take into
account the full stature of the Council mechanism
or its existing operating procedures.
The National Security Council structure in-
cludes much more than the Council itself. Sup-
porting and fertilizing the Council, in its weekly
deliberations, are its two subsidiary bodies, the
Planning Board which formulates security policy
recommendations, and the Operations Coordina-
ting Board, which assists departmental planning
in carrying out security policies and following up
on departmental performance. Through these
two top-level bodies, with membership drawn
from the Assistant Secretary and Under Secre-
tary levels, all the resources of the departments
and agencies of the Executive Branch are mar-
shalled and made available. Furthermore, the
Central Intelligence Agency and the Joint Chiefs
of Staff participate in all deliberations of the
Council and its subsidiary bodies.
NSC Mechanism Appears Adequate
This mechanism for the integration of policy
appears to me fully adequate. It does not need to
be expanded. Like all hdrnan mechanisms, it is
subject to improvements and adjustments to suit
changing conditions. The real problem, however,
is how to make the most effective use of the mech-
anisms which now exist. The solution of this.prob-
lem depends on the quality, competence, devotion,
hard work, imaginative foresight, and compre-
hensive knowledge of the persons responsible for
the operation of the mechanism.
The world is full of fallacies, among which is
man's tendency to avoid hard and unpalatable
decisions. Washington is no exception. A pet fal-
lacy of big government is the bureaucratic con-
cept that the way to settle a difficult problem is
to create some new body to deal with it.
Question 5. What impact should public opinion
have on national security policies?
A national security policy is not created in a
vacuum. In all policy formulation there is need to
consider the climate of opinion throughout the
world, as well as in the United States. Today, the
climate of opinion has become one of the signifi-
cant factors affecting the practice of governing.
On the other hand, neither public opinion
abroad nor public opinion at home can be the
controlling factor. You will recall the story re-
lated to the fighting at the barricades of Paris
in the mid-Nineteenth Century. A man running
after the crowd toward a barricade was asked by
an onlooker why he was following those in front.
He replied: "I have to follow-I am their leader."
The role of the leader in making policy is to lead,
not to follow.
A Mortal Struggle
The Free World is in a mortal struggle with
World Communism. In this suffocating tension,
it is Communist technique through falsehood and
threat and blandishment to bring democracy again
and again to the brink. At such times - we had
several examples during 1958 - it is not feasible
to make public all of the cards we hold or fail to
hold, without at the same time betraying our
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strengths and weaknesses to a remorseless oppo-
nent. Diplomacy cannot be conducted in a show-
case. If there is a place for "open covenants, openly
arrived at," there are also many times when the
success of a desired negotiation or the avoidance
of armed conflict will depend upon the private
exercise of skillful diplomacy.
The successful conduct of foreign affairs can-
not be rigidly categorized. There are times to give
way, and times to stand firm. There are times to
be fully frank; there are times when such frank-
ness would inevitably cost the desired objective.
For these reasons, public opinion is an important
but never a controlling factor in policy formu-
lation.
Question 6. What are the most effective ways in
which private industry can contribute to the formu-
lation and carrying into effect the national security
policies?
This question does not relate to the perform-
ance of our free enterprise system in implementing
national policies. The contribution of private
American industry to the victorious conclusion
of World War II will always be remembered.
Similarly impressive has been the cooperation
and performance of private industry in assuring
our national defense in the post-war years.
The contribution of private industry to the
formulation of national security policy can be best
made, I think, by supplying leadership in the
Executive Branch of Government; by readiness
to respond to governmental calls for special assist-
ance; by volunteering policy views which have
been soundly thought out; and by service on ad
hoc committees and consultant groups in the for-
mulation of security policy.
Industry Supplies Many Leaders
In recent years, private industry has supplied
outstanding Cabinet and National Security Coun-
cil leaders: George M. Humphrey, Charles Wilson,
Roger Kyes, Marion B. Folsom, Neil McElroy,
Sinclair Weeks, DonaldA. Quarles, James Mitchell,
to name a few. To a greater extent than in prior
administrations, private industry has filled top
postsintheExecutiveBranch, matchingtheleader-
ship drawn from the fields of education, finance,
the law, and science.
U. S. Marines implement a policy decision with last year's landings in Lebanon.
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Individuals in private industry have also been
of assistance in connection with the making and
reviewing of security policies. During the 3 % years
that I was Special Assistant for National Security
Affairs, we drew from resources outside of Gov-
ernment, in many instances from private industry,
as many as 15 different consultant groups to assist
the NSC mechanism in formulating and review-
ing policies. Some of these groups worked over
long periods of time and their services became
known to the public, such as the Technological
Capabilities Panel headed by Dr. Killian in 1954-
55, and the Security Resources Panel (the "Gai-
ther Committee") in 1957-58. And there were
other such groups, happily not so well publicized,
who gave the benefit of their time and judgment
in a stimulating and most helpful way.
Outside Consultants Used
The use of consultants drawn from outside Gov-
ernment is sometimes opposed on the grounds of
the time which must be consumed in educating
them to the problem they are to consider; of the
press controversies which have sometimes attend-
ed their work; of their occasional inability to
see the whole forest of national security for the
particular trees upon which their attention is
focused; and of the inevitable burden which their
questioning imposed upon the hard-pressed
skilled operating personnel in the Departments
and Agencies. But, in my opinion, the use from
time to time of consultants with expert qualifi-
cations is a valuable, if not necessary, adjunct to
the successful operation of the NSC mechanism,
because it introduces new, imaginative ideas and
differing areas of experience which may not be
as readily drawn from the internal resources of
Government.
Question 7. Can you measure the success of
national security policies developed to date through
the National Security Council mechanism?
The performance of the NSC mechanism and
the quality of its policy product depends, as is
the case in every human instrumentality, upon
the capabilities, the intellectual fibre, and the
continuous application to work of the personnel
involved in its operation. The policy-making pro-
cess is always susceptible of improvement and
strengthening. And it is the lifeblood of Freedom
not to be satisfied with current models.
The only way to measure the success of the
policies which have been developed to date is by
an objective judgment, based upon a comprehen-
sive understanding of the kind of world in which
we live and will continue to live for many years.
Measurement also requires a relative, rather than
a finite, appraisal. The criterion by which to mea-
sure success or failure is not the ideal, but rather
a fusion of the ideal, the practical, and whatever
may be required at the moment of decision. The
fact that Soviet and Chinese Communist military
and economic power and technological skills have
grown greatly in the last decade cannot by itself
measure the merit of American security policy.
It is necessary to consider what policy, other than
that which was adopted, would have been ac-
cepted and implemented by the American people.
U. S. Leads Free World
Under the security policies developed during
the Eisenhower Administration, the United States
has not been embroiled in nuclear war. The United
States has led the Free World in vigorous oppo-
sition to Communism. The United States has
stood firm in the face of incredible pressures and
risks created by the truthless techniques and ruth-
less conduct of the Communist tyranny. The vi-
tality of the United States economy - recognized
as a prerequisite to Free World survival through
a long period of years - has been maintained
and developed. Our free enterprise system has
been allowed to operate, without fictitious Gov-
ernment interference, in times of upswing and
downswing. An annual rate of defense expendi-
tures sufficient to maintain a reasonable posture
of defense has been sustained, without crippling
extravagance or parsimony.
In a world poisoned by Communist threats,
falsehoods, and propaganda, our policies have
constantly sought out a path away from war, and
toward a world at honorable peace. I believe that
the judgment of history will be that in these diffi-
cult years, now and to come, these realistic policies
have helped to keep the world from involving it-
self in the unthinkable chaos of nuclear war. They
have helped our personal freedoms, as we received
them from prior generations, to pass unenslaved
over the bridge of time into the new age that lies
ahead.
15
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 Mr. Ralph J. Cordiner's qualifications for writing on the subject
of industrial management are twofold. He serves as Chairman
of the Board and Chief Executive Officer of the General Electric
Company, and he is widely recognized as a leader in the
concepts of decentralization of business structure, professional
management, and personnel development.
Mr. Cordiner joined General Electric in 1923. He has been Chief
Executive Officer of the Company since 1950, when he became
its President. In 1958, he was elected Chairman of the Board.
Mr. Cordiner's familiarity with defense problems stems not only
from his General Electric experience, but also from his World
War II work as Director General of war production scheduling,
and later as Vice Chairman of the War Production Board. He
was Chairman of the Defense Advisory Committee whose recom-
mendations formed the basis of the recent modernization of
military pay structures and personnel management.
Three urgent management problems are mani-
festing themselves in our defense effort:
? Our long-range planning ability must be
improved.
? Increasing complexity of weapon systems
demands further decentralization in their
management.
? Basic economic, political, and psychological
changes are necessary for continuing suc-
cessful defense activity within our free
enterprise economy.
by Ralph J. Cordiner,
Chairman of the Board and Chief Executive,
General Electric Company
General Cutler's article in this issue discusses
how policies relating to the national security are
formulated in the United States. What is the role
of industry in the attainment of the nation's
security goals?
The material needs of defense in the United
States are largely met by the joint efforts of
Industry and the Department of Defense. These
needs are changing very rapidly. The rate of
change, which is one measure of our technological
progress, has reached a point at which an aircraft
or missile may be technically obsolete by the time
it is ready for volume production. In effect, pro-
duction maneuver is being replaced in first im-
portance by technological maneuver.
Defense Requirements Altered
Accelerating technological change, coupled
with the increased complexity and wider variety
of choice of weapons and weapon systems, has
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profoundly altered the defense requirements on
industry:
... Where the need was once for production
of existing designs, the prime need now is
for designs that afford large increments of
technical and military advantage over the
weapons and systems they replace.
... Where the need was once for facilities that
could readily be converted to military pro-
The answer must be a continual flow of
technological, political, economic and military
information. The military must be aware of the
possibilities and capabilities of industry, particu-
larly in research and development; and industry
must be informed as far as possible about military
long-range planning.
duction, the need is now for special facili-
ties which are essentially non-convertible.
... Where the need was once for a large num-
ber of general purpose components and
sub-systems, the demand is increasingly
for complete systems and even super-
systems. The need for components of very
high reliability and advanced design re-
mains, but they must more and more be
planned in context with the concept and
design of the system of which they are to
be a part.
Scientific knowledge and advice is a re-
source which industry is supplying the
services, the Department of Defense, and
other agencies on an increasing scale.
In meeting these new requirements-above and
beyond the production miracles performed in the
nation's defense-the managers of American in-
dustry face new responsibilities, and new and
deeper challenges to their managerial skills. Look-
ing at defense broadly, and from the standpoint
of how industry can organize to meet these needs
most effectively, these would seem to be some of
the most urgent challenges of the coming decade:
(1) The Challenge of long-range planning. It is
not easy to anticipate the military weapons of
the next ten to twenty years. In addition to the
hazards of a technological break-through which
could obsolete existing weapons or concepts over-
night, there are the possibilities of a sudden shift
in the strategy or the strength of the communist
world, or economic or political changes at home.
Yet it is more than ever necessary that those en-
trusted with the nation's security do an effective
job of long-range planning-ten, and even
twenty years out in the future.
At General Electric, in order to remain sensi-
tive to the over-all needs of the military, we
make a continuous appraisal of three kinds:
A long-range look at military requirements,
based on forecasts of needs up to ten years
ahead.
Long-range technical forecasts-the impli-
cations of new technology, and related
developments,. for weapons.
Sensing the future-through participation
in, and continuous appraisal of, scientific
progress in our research and engineering
laboratories.
There will be time to achieve the unimagined
weapons of the future, if we use time to best
advantage. The first step in saving time-and
tax money-is effective long-range planning.
(2) The second challenge to managerial skill is
increasing complexity. These problems of com-
plexity are aggravated by the need for very high
reliability in the systems and super-systems upon
which the national security depends.
Complexity is solved not by centralization, but
by decentralization-by so classifying, structur-
ing, and characterizing the job that it can
become understandable and manageable by all
who participate. The basic problem of complex-
ity is to accelerate our decision-making processes.
Decisions are made only by individuals, not by
groups. And all individuals-not merely mana-
gers-make decisions and need to do so respon-
sibly. In this day of multiplied, ramified, and yet
interrelated knowledge, the man who has some
specialized kind of knowledge has just that kind
of individual responsibility to apply it in his
own work and decision-making. The responsi-
bility and authority should be placed where the
needed skills, competence, and information can
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New techniques are emerging
in response to the need."
be brought to bear in choosing among possible
alternatives or risks. This is particularly impor-
tant in innovation, for otherwise the inevitable
mistakes may be frozen-in-long past the time
they can be economically corrected.
But even with maximum decentralization, the
size, scope, and complexity of modern weapons
development are placing increasingly heavy de-
mands on our managerial skills. New techniques
are emerging in response to the need for people
capable of integrating these vast and complicated
programs.
People Can Be Developed
Fortunately, we have a number of people who
have demonstrated this kind of competence on
both sides of the military-industry team. Even
more fortunately, in view of the expanding need,
such people can also be developed. One stimulus
to their self-development is the urgency, pace,
and scope of defense business.
One response of industry to this challenge has
been to bring together in one, integrated group
the best available talent for management of de-
fense systems projects. Their defense manage-
ment organizations are thus well-matched to the
ways in which the military goes about its systems
procurement.
(3) The third challenge, I believe, is partly psy-
chological-though also economic and political.
Americans are a peace-loving, non-militaristic
people, who have traditionally met their national
emergencies by rising to them with overwhelming
resourcefulness-and then returning to their
homes and jobs. Planning for long-term defense
does not come naturally or easily to this nation.
Our political and economic institutions are ori-
ented toward peace. The greatest rewards for
innovation have customarily gone to those who
were successful in meeting the peacetime needs
and aspirations of the American people.
Large Defense Effort Required
Now we must learn to keep ourselves armed,
respecting the power and destructiveness of the
weapons we are creating, without succumbing to
panic or fear. We must sustain a very large
defense effort, year after year, for as long as we
can see into the future, without letting it under-
mine the strength of our economy by inflation,
or deficit spending, or excessive taxation. And
we must do these things without destroying the
incentives. to venture and grow that are distin-
guishing marks of our dynamic private enterprise
system.
These things, of course, are challenges that
confront the entire nation, and not just defense
industry. But in those areas in which Industry
shares in this vitally important task I believe it
is the business man's particular responsibility to
keep the public informed.
Defense a Part of Other Businesses
Industry has made a great deal of progress in
a comparatively short time in organizing to meet
the new needs of defense. Many companies are
now organized for long-term defense business as
an integral part of their other business. Tech-
nologies and facilities have been integrated, and
where new managerial skills were needed they
are being developed in depth. In these, and other
areas, General Electric and other companies are
constantly re-examining their responsibilities
and trying to respond creatively to the changing
needs of defense.
What we will ultimately be able to do, of
course, will be as part of a science, industry, and
military team. From what I have learned of the
men and the women in the armed services, I am
confident that any constructive proposals from
industry will receive their thoughtful considera-
tion.
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 On November 4, 1952, he was
elected to the Senate and only
'I several months ago was re-elected
Brookline, Massachusetts in 1917,
Senator Kennedy graduated from
Harvard University in 1940 with
Cum Laude honors. He attended the
London School of Economics and in
1941, joined the United States
Navy. Following his retirement from
active duty in 1945 and a stint as
a reporter, Senator Kennedy was
elected to the House of Representa-
tives, where he served during the
80th, 81st and 82nd Congresses.
to another term of office.
Senator Kennedy has written two
books entitled WHY ENGLAND
SLEPT and PROFILES IN COURAGE
and numerous articles. PROFILES
IN COURAGE won the Pulitzer Prize
for Biography in 1957. On the
Washington scene, Senator Ken-
nedy has received national notice
for his active part in recent hear-
ings before the Senate Select Com-
mittee on Labor-Management Rela-
tions, of which he is a member, and
for leading the fight for labor-
management reform legislation.
Senator Kennedy is also a member
of the Senate Foreign Relations
Committee and Chairman of the
Labor Subcommittee of the Labor
and Public Welfare Committee.
Congress: ,6
by Senator John F. Kennedy, Massachusetts Democrat
Defense is a public responsibility. Representing
the people, Congress exercises its Constitu-
tional control over defense policies five ways:
? by fund appropriation
? by legislation
? by investigation and supervision
? by specifying the size and composition of
armed forces
? by approval of key appointments
Of over-riding importance today to the people
of the United States and to the entire world is
the defense posture of the United States, for
upon the state of our defense effort may rest the
issue of war or peace. This promises to be, in the
86th Congress as it has been in the 85th Con-
gress, a fertile field for proposals, debate and
legislation.
Basically, there are five ways in which the
Congress exercises its Constitutional control over
defense policies. First and perhaps most impor-
tant, it must appropriate the funds for the
operation of the various departments with execu-
tive responsibility for our defense effort. Before
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19
 "Laws such as the
Defense Reorganization Act
.tighten responsibilities
. and eliminate
duplicatory functions ."
an appropriation is made there are committee
hearings at which all interested persons may ap-
pear and testify or file written statements, there
is a report by the sub-committee and there is a
vote by the full committee sending the particular
appropriation to the Senate floor. Again, on the
Senate floor the appropriation is critically ex-
amined and may be increased, decreased or
eliminated.
Defense Costs Top $40 Billion
With budgets that hover around 80 billion
dollars, and a defense bill in excess of 40 billions,
it is a Herculean task to become familiar with the
details of each appropriation. This task is ren-
dered even more difficult by the former system
under which appropriations made in one year
could be spent many years in the future. Thus,
in the fiscal year ending in June 1958 there were
appropriations totalling 70 billion dollars which
had been made in prior years but had not yet
been exhausted. It was therefore theoretically
possible to spend 150 billion dollars in fiscal year
1959. Of course, as a practical matter, this was
not done because the appropriations being car-
ried over usually involved long lead time con-
tracts and the money was spent over many years.
However, Congress lost control over the 70
billion dollar carryover as soon as the money was
appropriated.
Carryovers Can Be Eliminated
This anomalous situation which could, and-
it was charged in one instance-did lead to the
purchase of propeller driven aircraft in a jet age,
was a source of both confusion and irritation to
those interested in economical and efficient govern-
ment. The second Hoover Commission recom-
mended that an accrued annual expenditures
system of budgeting be adopted which would
eliminate these carryovers, and estimated that
this might save as much as 4 billion dollars per
year. The Kennedy-Byrd-Payne bill which was
passed in the closing days of the 85th Congress
authorizes the executive to adopt this new
method of budgeting and it is hoped that future
budgets will adopt this improved system.
The second method of exercising control over
the defense effort is through legislation. Laws
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such as the Defense Reorganization Act adopted
by the 85th Congress tighten the responsibilities
of the various services and eliminate duplicatory
functions. Prior to the adoption of that law there
was a thorough and exhaustive debate before
Congressional committees, on the floor of the
Senate and the House of Representatives, and in
the public press. Functions were scrutinized and
chain of command delineated. The wisdom of the
law has already been demonstrated.
Investigation Results in Action
Third, Congress exercises its authority by
means of its investigatory and supervisory arms.
The appropriations committees carry on a con-
tinuous investigation of the use of funds and may
be sharply critical when there is waste. The
Armed Services Committees deal with substan-
tive legislation. Although they exercise contin-
uous authority their activity is dramatized when-
ever there is a new development. For instance,
the Preparedness Sub-committee of the Senate
Armed Services Committee began issuing a series
of reports dealing with the posture of the defense
effort prior to the Korean War which has been
continued to the present. However, when the
world was shocked by the twin Soviet develop-
ments during the fall of 1957 which showed they
could fire an intercontinental ballistic missile and
could launch an earth satellite, a special investi-
gation was launched. It was apparent to the
most undiscerning eye that we needed a re-
evaluation of our scientific progress, our educa-
tional standards, our atomic development activi-
ties, our defense program and our space research.
Although we had been working for many years
on the development of both an intercontinental
ballistic missile and an earth satellite, Russia's
two-fold triumph showed that we no longer held
undisputed military and scientific pre-eminence
over the other nations of the world.
The Preparedness Sub-committee heard cur-
rent and former military leaders, government
officials, scientists, educators and industrialists.
A similar investigation was also conducted by
the House Armed Services Committee. As a re-
sult, the nation entered into an expanded and
accelerated missile-satellite program.
Direct products of this investigation were in-
creased appropriations for national defense, a
Defense Education Act which established the
federal program to aid students interested in
scientific and mathematical training and, the
establishment of space committees in both
branches of Congress and a Space Agency in the
Executive branch.
Congress Controls Size
Fourth, the size and composition of the armed
forces are subject to Congressional control. Al-
though the President, as Commander-in-Chief,
directs the specific utilization of the funds voted
by Congress, the broad division of the funds
between the Army, the Navy, the Air Force and
the Marine Corps is specified in Congressional
legislation. It has, upon occasion, directed that a
specific component not be reduced dispropor-
tionately.
Fifth, all appointments to the position of
Secretary or Assistant Secretary of Defense,
Army, Navy and Air Force are subject to Senate
confirmation. Appointments and promotions of
commissioned officers are also subject to Senate
confirmation. This provides a means whereby
the Senate may review the qualifications of
civilian and military officials for their posts.
Defense A Public Responsibility
Through these five channels Congress meets its
obligation to assure this nation a vigorous mili-
tary establishment. From the larger view, how-
ever, defense is a public responsibility. Nothing
touches the American family more intimately
and nothing plays as large a part in our plans for
ourselves and our children than the problems of
war and peace. Thomas Jefferson once said:
"Enlighten the people generally, and tyranny and
oppression of body and mind will vanish like
evil spirits at the dawn of day." The process of
enlightenment is carried on by means of the
many legislative processes which, in turn, are re-
ported by the press. Participation by the
members of the public should follow such en-
lightenment and their views should guide your
representatives in Congress.
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A veteran U. S. Senator looks at needed legislative changes
in the context of U. S. Defense requirements.
by Senator Leverett B. Saltonstall, Massachusetts Republican
Why and how our whole defense effort must
be geared for "lightning fast response."
After concluding a reorganization study of a
military department a few years ago, the noted
defense authority, Ferdinand Eberstadt remark-
ed that "reorganizing a military service is like
kicking a 200-ft. sponge around". Considering
the enormity of the Defense Establishment his
remark aptly describes the frustration Congress
sometimes experiences in prescribing regulations
for the Defense Department's operation.
President Eisenhower gave a mighty lift to that
same sponge in the last session. He guided through
Congress a vital reorganization measure which I
sponsored in the Senate.
Once implemented, the President's bill will help
to clear channels of command and will enable the
Secretary of Defense to handle much more effi-
ciently and effectively the enormous operations
of the Defense Department.
But Congress has concluded only part of the"
job - an even more vital area of reorganization
lies ahead.
Congress Assumes Responsibility
Traditionally Congress has assumed respon-
sibility for setting forth the processes by which
the military agencies procure supplies and ser-
vices. In 1947 and 1948, extended hearings were
held from which the Armed Services Procure-
ment Act emerged. It was thought at the time to
be a good, workable Act which fully protected
the government's interest. Much of our expe-
rience under the Act has borne out its wisdom.
But it was written in the climate of a world at
peace - in days after World War II.
Since the writing of the Act, military technol-
ogy has dramatically changed. Military concepts
and requirements have been drastically revised,
and the climate is one of uncertain peace, of ten-
sion, and crisis.
Thus in the Space Age-the era of the ballistic
missiles and the brush wars - the capability for
lightning-fast response, perhaps on twenty min-
utes' warning time, is essential for our security
The B-52, U. S. long-range bomber, required 81/2 Bison, Soviet counterpart of the B-52, required only
years to move from drawing board to runway. 41/2 years lead time to reach operational status.
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17 M_
forces. Our whole defense effort must be geared
to a comparable time table.
Procurement Statutes Studied
Following the Preparedness Investigating Sub-
committee hearings last fall, I began to study
our procurement statutes to determine if they
were, in fact, geared to the needs of our defense
effort.
An experienced student of defense operations,
Dr. J. Sterling Livingston of the Harvard Busi-
ness School had testified before the Subcom-
mittee that the Russians have been able to cut
lead time to one-half that of the United States.
The Soviet Bison, for example, moved from
drawing board to runway in 4% years; the B-52
took 8Y2 years.
Lead time, that is the time required to trans-
form ideas into hardware, is one of the nation's
most critical military problems. It involves Cong-
ress, the Defense Department, and American in-
dustry. The decision-making process must accel-
erate for a life-and-death competition.
In short, Congress needs to bring up-to-date
its prescription for defense procurement and pro-
duction.
Restrictive Provisions Breed Difficulties
Innumerable examples can be cited of the diffi-
culties encountered by government and industry
in operating under some of the highly restrictive
provisions of the Procurement Act and subse-
quent amendments.
One example has been offered by Professor
Livingston of the contractor who wanted to change
from a one-day to an eight-day aircraft clock in
the cockpit of an aircraft he was building. He had
to submit elaborate justification through a mul-
titude of Pentagon committees. The approval
was finally received months later, but an impor-
tant piece of military equipment was substan-
tially delayed.
Simply consider government specifications. For
some relatively uncomplicated equipment,
sheaves of paper are required for detailed de-
scription-for everything from simple glass ash-
trays (8 pages) to fuel tanks (a paper mountain,
1 foot high). Detailed specs are required by Pro-
curement Act amendments.
After studying the procurement statutes and
conferring with Pentagon officials, I filed in Au-
gust a major proposal for modernizing our pro-
curement process. Among its other provisions, it
calls for the elimination of detailed specifications
and the use, whenever possible, of performance
requirements.
United States Senator Leverett
Saltonstall of Dover, Massachu-
setts, began his career in Wash-
ington in 1944 after having served
three consecutive terms as State
Governor. Since his election to
Congress, Senator Saltonstall has
been closely associated with de-
fense and military legislation. He
is the ranking Republican member
of both the Senate Armed Services
Committee and the Defense Sub-
committee of the Senate Appro-
priations Committee. For the past
several years, Senator Saltonstall
has been a member of the Senate
Republican Leadership, as Whip and
as Chairman of the Conference.
Senator Saltonstall received his
undergraduate and graduate de-
grees from Harvard University and
served as a First Lieutenant in the
First World War. He started his
career in public service at the age-
of 28.
Senator Saltonstall has received
more than 20 honorary degrees. He
is a member of the Board of Regents
of the Smithsonian Institution and
is associated with several national
fraternal organizations. With all
of these interests and commitments,
Senator Saltonstall still tries to
find time to pursue his favorite
hobby, which is working on his
family farm in Dover.
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r rWe must free the resources, ingenuity and talents
A principal provision calls for the use of so-
called weapon system procurement for major
military systems.
The Weapon System Concept
Briefly the weapon system concept assigns
over-all weapon responsibility in the hands of one
contractor (or a group of contractors), who super-
vises, subcontracts and coordinates. The govern-
ment does not attempt to contract for and control
every detailed component, which commonly du-
plicates the efforts of the prime. It involves bring-
ing together, in accordance with a central man-
agement plan, various lines of development in
order to achieve an integrated, self-sufficient in-
strument of combat. As described by a leading
industry executive "the objective is simply to
achieve operational availability of the most ad-
vanced equipment at the earliest possible date
and at minimum cost".
Professor Livingston described as W necessary
"management breakthrough" the coupling of au-
thority with industry responsibility. We must free
the resources, ingenuity, and talents of private
industry to develop every technological oppor-
tunity.
The weapon system has been occasionally crit-
icized for failing to give smaller bidders a full
opportunity to supply components and sub-
assemblies. But we must recognize that as weap-
ons become larger and more complex, opportuni-
ties are lessened for the large direct contracts with
the government. In recognition of this very crit-
ical problem, the bill calls for a widening of our
industrial mobilization base by requiring maxi-
mum small business participation at a sub-
contractor level in major weapon system pro-
duction. This is essential; continued economic
opportunity for small business through govern-
ment procurement goes to the essence of our free
enterprise system.
Two Contractual Types Encouraged
The legislation further encourages the use of
incentive and fixed-price contracts whereby in-
dustry, given the authority and responsibility to
perform a certain military obligation, is, in addi-
tion, given the inducements to produce efficiently.
An incentive contract offers a contractor an
opportunity if he can reduce costs below contract
targets to keep a small percentage of the savings
achieved and return the bulk to the government.
wry ys' ; Kt
I V__ 0 W& T
Aw=M" Mil
Senate's Preparedness subcommittee heard Harvard
University's Professor J. Sterling Livingston testify
that the Russians have been able to cut lead time
to one-half that of the U. S.
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of private i try!
The wisdom of our economic system, which is
motivated by a variety of free incentive factors,
has been borne out over the years. No other nation
has achieved a comparable rate of industrial
growth. To fail to recognize and utilize the best
inherent in this system, particularly in an area
upon which our security depends, is sheer folly.
Thus the bill further calls for the exemption
from renegotiation of those contracts in which we
deliberately attempt to create profit incentives
and thus achieve savings to the taxpayer. Under
existing statute, a contractor who establishes an
improved profit through savings to the govern-
ment is required some years later to account for
these profits and probably to return a substantial
share. The administrative procedure involved is
long and costly and appeal to the Tax Court is
frequently necessary.
Government Interests Fully Protected
If our contracts are properly executed in the
first instance, the government's interests are fully
protected. Involved administrative procedures
later are both costly and unnecessary; further-
more, they defeat one of the principal methods
for encouraging savings to the taxpayer.
For many years Congress has been voicing con-
cern over the preponderance of government con-
tracts that are negotiated rather than awarded
by advertised procurement. Much of the concern
arises from the assumption that advertised pro-
curement best protects the government's interest.
Yet negotiation is necessarily used in the vast
majority of all contracts.
It is time to recognize that perhaps the excep-
tion should be the rule - that in many situations
properly negotiated contracts can best protect
the government's interests. One Pentagon official
has estimated that 85% of advertised bid con-
tracts bog down with some kind of snag in pro-
duction and are costlier in the long run than the
negotiated procurement. In addition, they take
much longer to prepare for and execute.
Competition Possible in Negotiation
And in most instances every element of com-
petition is possible in negotiation. This bill recog-
nizes the meeting ground between the two forms
of procurement and places on an equal plane all
procurement, negotiated or advertised, so long as
elements of competition are present.
In brief summary, Congress can consider these
potential benefits:
a) A reduction in detailed supervision of gov-
ernment contracts;
b) The establishment of incentives for the full-
est utilization of industrial ingenuity:
c) Management responsibility for weapons
development coordinated by industry;
d) Speed and efficiency in weapons develop-
ment and production;
e) Reduction of paper-work and ultimate
savings to the taxpayer.
The response to this legislation from both in-
dustry and government has been heartening. Im-
portant industrial organizations have held dis-
cussion meetings on the proposal. Several indus-
tries have turned counsels and research staffs to
work on the proposal. Top executive manage-
ment of the Defense Department has expressed
great interest and there has been a strong expres-
sion of approval from the public at large.
Modernizing our procurement effort is an enor-
mous undertaking. It will require all the wise
counsel we can muster from Congress, industry,
the Pentagon and interested students of defense
organization. Before hearings are held, sugges-
tions and recommendations will be earnestly so-
licited from every source.
We Have Strength to Deter Aggression
Undeniably the United States has maintained
over-all military superiority in the great power
struggle of the cold war. We have today the nec-
essary military strength to deter aggression - to
discourage any nation from attacking us because
of the knowledge that we could return upon him
complete devastation.
It is this strength that we must maintain in the
years ahead. If we were to presume that our fu-
ture security - and this is a sound assumption
-depended upon our ability to maintain ade-
quate military strength for deterrent capability,
then lead time, the development of weapons from
ideas to hardware, is all critical. We can ill afford
a month's or even a week's delay in vital procure-
ment.
Our Pentagon planners can meet the challenge
of the future. Industry has the ingenuity and
resourcefulness. Congress must now remove the -
restrictions on both.
For upon the speed and efficiency of our pro-
curement procedures and upon our military-
industrial strength may well depend the peace
and security of the free world.
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An industry spokesman gives his organizational formula for
economy, efficiency, and rapid results in defense work.
KEEP ii
26
~""41ALT_",PLE
by J. H. Kindelberger, Chairman of the Board, North American Aviation, Inc.
From the viewpoint of a defense contractor,
one of the primary objectives of both Govern-
ment and industry in the organization of defense
procurement should be simplicity. I emphasize
this aspect because so many factors are working
in the opposite direction, yet simplicity is essen-
tial from the standpoints of economy, the best
utilization of resources, and rapid attainment of
performance objectives.
In urging simplicity I refer not so much to
equipment concept and design, which are the
provinces of scientists and engineers, but rather
to policies, procedures, organization, and other
parts of the machinery and methods devised by
the Government and industry as a basis for the
procurement relationship.
Working against simplicity in this procure-
ment relationship are such factors as the tremen-
dous importance and cost of defense equipment,
which impose very heavy responsibilities upon
those charged with procurement, development,
and manufacturing decisions; the intricacy of the
equipment and of the development and manu-
f acturing processes necessary to bring it to opera-
tional status; and of course the complex operat-
ing rules that exist and that are constantly
being amended and expanded in vain attempts
to codify common sense and meet the pressures
of various kinds generated in our democratic soci-
ety. I have observed that even the most elemen-
tary operation can become complicated over a
period of time if you get enough people thinking
about it and working on it. A lot of people have
been working a long time on the principles and
practices of defense procurement, and it is not an
elementary operation.
Determined Effort Needed
What is needed, therefore, is a constant and
determined effort to "keep it simple." If this effort
is vigorous enough we can perhaps hold our own
in the fight to save the nation from conquest by
red tape. Still greater effort may produce a net
gain, although often the apparent gain is promptly
offset by more rules, more reports, and increas-
ingly complex procedures.
The present trend in weapon system manage-
ment, wherein the Government is attempting to
rely to a greater degree upon industry for develop-
mental coordination and decision-making, is an
example of an encouraging step in the right direc-
tion. Industry welcomes the challenge and will
strive very hard to apply effectively the talents
and advantages that are claimed for independent
business management-including fast communi-
cation and decision-making, close identification
with the daily operating problems, procedural
freedom and flexibility, and abhorrence of red
tape. As one Air Force officer stated the case in
explaining why private industry had been enlisted
to manage weapon system development, "Only
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James H. Kindelberger, Chairman of the Board and
Chief Executive Officer of North American Aviation,
Inc., has been associated with the aviation industry
for over 40 years.
Born in Wheeling, W. Va., Mr. Kindelberger left
Carnegie Institute of Technology in 1917 to enter the
aviation section of the Army Signal Corps. Upon his
discharge from active duty, he joined the Glenn L.
Martin Co. and, in 1925, was named Vice President of
the Douglas Aircraft Co. In 1934, he was named
President of the General Aviation Manufacturing Corp.
and the following year became President, Director and
General Manager of North American Aviation, Inc. In
1948, Mr. Kindelberger was made Chairman of the
Board of Directors and Chief Executive Officer of
North American.
industry possessed the skills, know-how, manage-
ment strength and freedom of action to do this
job."
Effectiveness Can Be Compromised
It is too early to form any final judgments con-
cerning the success of industry's increased role in
weapon system management, but it should be
emphasized that effectiveness of the technique
can be compromised through unwillingness of
the Government to yield sufficient freedom and
authority to match the delegated responsibility
and make the system pay off in terms of speed,
economy, and simplicity. To make it work as
effectively as we believe it can will require a high
order of courage and conviction by procurement
officials, close teamwork between Government
and industry at all levels, and adherence to the
highest principles and standards by industry.
Still another area in which encouraging prog-
ress toward simplicity is being made is that of
incentives. There has been a great tendency in
this country to develop a lot of confusion and com-
plicated rules having to do with the primary busi-
ness incentive known as profit. The obvious thing
to do about defense industry profit is to utilize it
in the nation's interest to evoke optimum effort
by the nation's most competent development and
production organizations, in which event the net
cost to the taxpayer per unit of defense capability
will be substantially less than if we have a lot of
would-be experts studying the pennies of profit
and ignoring the dollars of cost.
Some Rewards Confiscated
As a result of the carnal concept of profit that
still exists in many quarters, we now have the
situation of. Government procurement agencies
,negotiating contracts which provide increased
financial rewards to firms that do an outstanding
job of reducing the total cost to the Government, and
another branch of the Government in effect con-
fiscating these same rewards as "excessive."
Through the machinery of this statutory renego-
tiation process, those defense contractors who re-
ject the allegation that their contracted-for incen-
tives are excessive find themselves in the position
of having to go to court in the hope that, more
than five years after earning the reward, they
may finally be sure that it is theirs to keep. This
is the antithesis of simple, direct, and useful in-
centive.
Today, however, there is encouraging evidence
that the current Congress may remove or so
modify the renegotiation statute as to permit the
nation to utilize profit incentives effectively in
the defense program. At the same time there are
intensive efforts by the services to develop new
direct incentives not only for economy but for
delivery and optimum quality. These areas are
often difficult to define in mutually acceptable
terms, but the potential advantages to be gained
through these techniques justify a continuing
effort to solve the problems. Clearly defined ob-
jectives, full recognition of risks, and positive,
direct rewards will go a long way in improvement
of the nation's defense effort. Organizations both
large and small respond best to simple stimuli,
just as a mule will pull a plow faster and farther
in pursuit of a carrot than in response to a lecture
on the virtues of hard work.
Principle of Simplicity Endorsed
Interest in and effort toward simplicity is not,
of course, exclusive with defense contractors. Un-
doubtedly all military and civilian personnel con-
cerned with defense procurement wholeheartedly
endorse the principle, and many recognize the
contrary trend and are working actively to op-
pose it.
Continued joint efforts along this line by Gov-
ernment and industry will become even more es-
sential with each increment of progress in the
technology of defense. The tougher the job, the
greater the payoff for efficient application. It is
also time to recognize that defense development
and production can no longer be regarded as
undertakings for intermittent emergencies. The
problem will be with us for may years and it is
desirable that we solve it in the best traditions
of American enterprise.
Approved For Release 2002/04/30 : CIA-RDP80R01731 R000400190004-8
27
 0: CIA-RDP80RO1731 R00#0190004-8
Rear Admiral William F. Raborn, Jr., is the Navy's Fleet
Ballistic Missile Program Director. A 1928 graduate of
the U.S. Naval Academy, he spent 12 of his early
Navy years in a variety of fleet assignments. In 1940,
he established the U.S. Naval Aviation Gunnery School
at Pearl Harbor.
From 1945 to 1947, Admiral Raborn served as Chief of
Staff to the Commander, Task Force 58, and as
Commander, Carrier Division 2, Western Pacific. In
1952, he was appointed Deputy Director, Guided
Missile Division, Chief of Naval Operations. In 1955,
after one year as Commanding Officer, USS Benning-
ton, he was appointed Assistant Chief of Staff, Com-
mander, U.S. Atlantic Fleet. Later that same year he
was named to his present position of Director, Fleet
Ballistic Missile Program.
Management
of the Navy's
Fleet Ballistic Missile
Program
How a businesslike approach to defense organization can result in on-time,
on-budget progress for a highly sophisticated weapon system; a system
which will combine two of the world's most versatile and powerful weapons-
the nuclear submarine and IRBM, Polaris.
by Rear Admiral W. F. Raborn, Jr., -USN, Director, Fleet Ballistic Missile Program
 Approveeor Release 2002/04/30: CIA-RDP80W 31 R000400190004-8
The Fleet Ballistic Missile (FBM) Program
is aimed at combining two of the world's most
versatile and powerful weapons, namely the long-
range, nuclear-powered submarine and the fast,
hard-hitting, intermediate-range ballistic missile,
POLARIS. As the FBM Program is fundamen-
tally and uniquely based upon taking full advan-
tage of today's state of art and also upon the
best technical judgment of the state of art in
1963-1965, a new and unprecedented role was
called for in the assignment of a service weapon
system manager.
Technical development of the FBM System
with top priority had to be related to the very
practical problem of utilizing and supplementing
existing research, facilities, and other resources
with a minimum of interference to the Navy's
other essential activities and without duplicative
effort. Management approach had to provide the
flexibility needed for research and development
of the missile and the shipboard weapon system
without impeding or delaying the design and
construction of the nuclear-powered submarine
which is the assigned responsibility of the Chief,
Bureau of Ships. An effective management sys-
tem had to be developed for the FBM System
under which detailed plans could be formulated
and dovetailed, responsibilities of all contribut-
ing Naval agencies and contractors delineated
and coordinated, numerous projects within the
program justified, budgeted, and funded, and
finally, performance accomplishments gauged.
Required Pace Maintained
To insure that such a broad, complex, and dif-
ficult program maintained required pace in a
narrow time scale, the weapon system manager
had to report directly to the Secretary of the
Navy and exercise his responsibilities within an
over-all policy and program review framework
established by the Navy Ballistics Missile Com-
mittee, of which the Secretary of the Navy is
Chairman.
The Director, Special Projects, received the
assignment as weapon system manager and es-
tablished the technical parameters of the FBM
Program and his necessary management system.
The principal objectives of the FBM manage-
ment system are to organize facts for complete
decisions and staff actions, to provide a basis for
accountability of performance on approved proj-
ects and a "need-to-know" reporting system, and
to provide a framework for responsible and ob-
jective evaluation of progress. Before a project
is undertaken, the staff is required to think ahead
in terms of both the interim and ultimate opera-
tional requirements and development character-
istics. This is done first by the development of a
technical proposal which outlines and justifies
the features of the project, funds, action mile-
stones, and supporting requirements requested
in relation to the predetermined system param-
eters and the expected results and performance
levels to be achieved. These proposals are then
reviewed and a decision made by the Special
Projects "Board of Directors" consisting of the
Director, his Deputy, and the heads of his Plans
and Programs and Technical Divisions. Once
approved, the second step is to incorporate the
proposal into a program management plan which
defines the job to be done, its major components
the relative responsibilities of government agen-
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 Approved For Rele6 2002/04/30: CIA-RDP80RO1731 R00N0190004-8
r? , . any management system... must have
unqualified support from all persons associat
From: Sp_ Form A (5050-1)
MILESTONE SIGNALS AND CHANGES TO MANAGEMENT CENTER CHARTS
FOR WEEK ENDING
Chart
Mile-
stone N
Signs,
G O R
Change or
B reschedule
data to:
Remarks (include reason for signal, other than green and
rescheduled date.)
Formal reports on all phases of FBM progress are
submitted bi-weekly.
PROGRAM
REQUIREMENTS
Evaluation of
What Has
Been Done
TECHNICAL
FEASIBILITY
THE
MANAGEMENT
CYCLE
STATUS
REPORTS
PROGRAM
PROGRESS
REPORTS
TECHNICAL
PERFORMANCE
, REPORTS ,
FBM
Program
Objectives
rtM,,sxs
vt
TECHNICAL
PROPOSALS
' THE
"PROGRAM
Fleet Ballistic Missile System's management cycle
is structured to insure constant orientation toward
over-all program objectives. Changing technical sit-
uations result in constant new input for the cycle.
cies and private contractors for the tasks, and
the action milestones to be completed with tar-
get dates for completion. These plans are then
printed and distributed to the Special Projects
Office staff, interested Naval agencies, and cog-
nizant contractor personnel. These plans are
revised often to reflect completion or revision
of milestones and changes in the time schedule.
Need for Progress Reports
Government agencies and private contractors
are required to report progress against the mile-
stones included in the program management
plans. Formal reports are required normally on
a bi-weekly basis. Milestone reporting, as well
as recurring technical progress reports, are speci-
fied in a clause in the contractor's contract with
the Navy. Of course, this system is supplemented
by frequent conferences of Special Projects staff
and contractor representatives either at the
Special Projects Office or the contractor's plants
for on-the-job review and discussion of the de-
velopmental progress, and at the shipyards
where the construction or conversion work is
underway. In instances where problems arise
which could endanger completion of critical
program dates, Special Projects has strongly
urged the prime contractors and their key sub-
contractors to employ the "line-of-balance" pro-
duction analysis. This technique requires the
scheduling of material and component flow in
relation to end items schedules. It provides as-
surance of orderly scheduling of the production
process and effective control over material de-
liveries. The results of the "need-to-know" re-
porting system, the "line-of-balance" analysis,
and conference reports are used to provide a
comprehensive and current record of planning
effort, performance facts, and program evalua-
tion in the Special Projects Management Center.
This system enables the Director and his staff to
keep informed of progress and enables prompt
decisions or, if necessary, referral to higher author-
ity for resolution. Internal balance, integration,
and coordination of the entire research and de-
velopment effort is assured.
Program Nerve Center
The Management Center of Special Projects
serves as the nerve center for the entire program
and frequent presentations are made for the
benefit of higher authority, other government
agencies, and Congressional groups concerned
with military affairs and appropriations. In addi-
Approved For Release 2002/04/30 : CIA-RDP80R01731 R000400190004-8
MANAGEMENT
PROPOSALS
Decisions
To Do
MANAGEMENT
SUPPORTING
PLANS
 Approve or Release 2002/04/
vith the program."
tion, each Monday morning the professional and
management staff and contractor representatives
get together in the Management Center to re-
view performance facts within the context of the
total FBM program. Division Directors and
Branch Heads make oral presentations using
visual-aid reproductions of the plans, plan struc-
tures, and evaluation charts. These presentations
give summary evaluation of progress in relation
to approved plans and bring to the attention of
the Director the problems of immediate concern,
such as, failures to meet schedules and proposed
remedial action, impending material shortages
and causes, and labor situations. In the course of
these reviews, the Director may request special
reports on particular problems for further study
or may make an on-the-spot decision. The Direc-
tor's decisions and observations are then pub-
lished and distributed to the Division Heads
for action.
It is of importance to understand that the
Director of Special Projects, in his unprece-
dented role, was given broad discretion to specify
and co-ordinate requirements, areas of work, and
funds essential to the effective development of a
complex FBM system. Throughout the entire
program, the cooperation of all Naval activities
has been fully consistent with the demands of the
high priority assigned to this program. The
planning system, including contractor reporting
and application of the "line-of-balance" pro-
duction analysis technique, has been endorsed
by both government and contractor personnel as
means for "ferreting out" potential problem
areas or "bottlenecks." In conclusion, any man-
agement system, to be effective, regardless of its
quality and efficiency, must have unqualified sup-
port from all persons associated with the program.
The FBM program, by its very nature and posi-
tion in the national defense, has undoubtedly
evoked an unusual loyalty and dedication from
all concerned.
Difficulties inherent in underwater launching of
POLARIS are being attacked through extensive pro-
totype testing. Similar work is carried on simulta-
neously in the areas of guidance, missile handling,
fire control, submarine technology and personnel
procurement and training. Ultimate objective is a
true "package deal" when FBM becomes operational.
Approved For Release 2002/04/
 00190004-8
mean--of preserving e
4GEOR4~-ASST G ~1V
st Annual Address to Congress la..r^y 8,` , 790.