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Another major step in the field of organization is now under consideration, viz, the modification of the infantry division. A new organization proposed tentatively by the General Staff has been subjected to theoretical tests in the service schools during the past year, and will be given a practical field test in the Eighth Corps Area during the fall of 1937. The results of these tests should indicate whether it is advisable to effect a radical change in strength and organization, or whether only minor changes should be made to bring about a better utilization of modern equipment.

Studies of the organization of the corps and army are in progress. They will be completed and subjected to test only after final conclusions have been reached on the results of the test of the new infantry division.

TRAINING

Maneuvers and field exercises constitute the most effective known peacetime means of preparing troops to fulfill their battle role. Future efforts should bend toward perfecting our exercises and extending their scope. The major exercises held during the year were the Second Army maneuvers at Fort Knox, Ky., and Camp Custer, Mich., and the Third Army command post exercises at Fort Sam Houston, Tex. These involved the use of all components of the Army. These exercises were successful. They resulted in increased proficiency in command and staff, and closer unity in the functioning of the Regular Army and the civil components.

Through careful use of normal training and field exercise funds, it was possible to assemble the mobile troops of each corps area and overseas departments for maneuvers of the combined arms.

The combined air force and antiaircraft exercises held in the Muroc Lake area of California showed the attainment of a high state of training.

ARMAMENT, MOTORIZATION, MECHANIZATION, EQUIPMENT While marked progress has been made in the past 4 years in rearmament and reequipment, the Army is still far short of the minimum requirements in certain critical items. These, discussed below, are a vital need of our first-line forces.

a. Antiaircraft.-The supply of our antiaircraft armament is not satisfactory. Major shortages include 3-inch antiaircraft guns, firecontrol directors, height finders, and .50 caliber machine guns. Immediate objectives are the completion of the equipment for the five active regiments of the Regular Army, the provision of training equipment for the 10 active regiments of the National Guard, and the accumulation of stocks of the more critical items in war reserve for use in an emergency.

b. There is urgent need of the provision of an effective antitank weapon of a type such that it can be given a distribution down to and including the regiment.

c. Tanks. The lessons of the current operations abroad confirm the conclusions drawn from tests made by the War Department that in the provision of tanks emphasis should be laid upon a type suitable for close support of the Infantry.

d. Aircraft weapon.-There is need for a rifle of greater than .50 caliber for use on airplanes.

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e. Field Artillery matériel. The program of supplying active units of the Regular Army with the modernized 75-mm gun is progressing. A project for the rearmament of divisional artillery with the 105-mm howitzer has been inaugurated.

f. Airplane procurement.-The appropriations by Congress for the fiscal year 1938 will allow marked progress to be made toward the attainment of the program of the Baker Board. The machines delivered during the past year are of greater speed, endurance, and prospective life.

9. Mechanized brigade.-One brigade of mechanized cavalry, comprising two regiments with a field artillery complement of two batteries, is now virtually equipped. During the fiscal year 1938 the two-battery battalion will be expanded into one of four batteries.

h. Motorization.-With the funds made available during the fiscal year 1938 the motorization program will become approximately 66 percent complete for the Regular Army and 45 percent for the National Guard.

i. Miscellaneous equipment.-Funds were made available for a continuation of the manufacture of the .30-caliber semiautomatic rifle, for .50-caliber machine guns for the Infantry and the Cavalry, radio equipment, gas masks, 81-mm mortars for the Infantry, and mobile searchlights for the Coast Artillery.

j. Seacoast defenses.-A program for the substantial improvement of our seacoast defenses was inaugurated in 1937. While the progress last year was not as great as in the previous year, improvement was made possible on the west coast and in the oversea possessions. It is hoped that further funds can be made available during the next fiscal year for additional augmentation in those localities.

In general it should be said that items which are not of a commercial character are those that constitute our most serious deficiencies in equipment.

MUNITIONS

A recent contraction of our initial mobilization plan to the very minimum consistent with national safety has resulted in a reduction in war reserve requirements. Nevertheless, considerable quantities of reserve munitions are needed to bridge the gap until industry can begin quantity production. Some improvement in this respect was effected during the last fiscal year. This matter is one that necessarily involves close and continuing attention.

Industrial preparedness must go hand in hand with military effort. To this end the War Department must not only maintain constantly accurate estimates of the items necessary for our forces at the various stages of the mobilization, but it must also keep our great industrial plants informed in detail of approved specifications and plans in order that they may be prepared to change quickly from a peace to a war effort.

CONSTRUCTION AND HOUSING

The act, Public 394, Seventy-fifth Congress, approved August 26, 1937, authorized the expenditure of $25,587,456 to meet the most urgent needs in Army housing. This is but a small beginning toward the total of about 162 millions needed for such construction, but it will do much to alleviate the crowded conditions at several posts, and will permit the removal of many temporary buildings built during the

World War. These buildings were constructed to last for only 2 or 3 years. They are in a dilapidated condition and maintenance costs are excessive. One of the most urgent needs is that of rectifying the critical situation which has existed with respect to the Air Corps Technical School.

Provisions made in the Appropriation Act for the fiscal year 1938 included the purchase of land at West Point, N. Y.; and at Mitchel Field, Long Island, N. Y.; and for the Northwest Air Base near Tacoma, Wash.; the Ordnance Depot at Camp Stanley, Tex., and the Muroc bombing range in California. During the fiscal year 1938 the Air Base Depot at Sacramento, Calif., will be completed and additional facilities will be constructed at Albrook Field, Panama; Bolling Field, D. C.; and Hickan Field, Hawaii.

WAR DEPARTMENT BUILDING

Attention is again asked to the urgent need of a new building to house the War Department. At present the War Department activities are housed in 20 different buildings, widely separated in the District of Columbia, Virginia, and Maryland. These buildings vary in character from permanent structures to apartment houses, and temporary buildings of war-time construction. Some are Government-owned, others leased. Some are scheduled to be razed. The handicap thus imposed upon administration results in unavoidable delays and difficulties in coordination that could not be expected to have other than the most serious consequences in the event of war. In that event the intimate articulation of all activities will become immediately imperative, for in no other Federal department will there be a greater need to insure unity in purpose and effort.

FLOOD RELIEF WORK

In the past year the Army added another chapter to its long history of relief work in times of national emergency. In January of this year, the Ohio River Valley was inundated by the greatest flood in our history. The valley of the lower Mississippi similarly was threatened. Hundreds of thousands of people became homeless. Property damage amounted to millions. While the flood waters were still rising, the Army moved to the scene and cooperated with other branches of the Government as a member of the great rescue team organized by the President under the flag of the Red Cross. The enlisted men, officers, and employees of the War Department sped ahead of the raging waters to save life, to feed, to clothe, and to relieve the unfortunate, and to aid in the restoration of order among the stricken communities.

Army engineers directed 150,000 workers along the lower Mississippi, strengthened levees, guarded against breaks and diverted mounting torrents to available floodways. Army doctors established emergency hospitals and directed the prevention of disease. Army aviators dropped needed medicines and serums to isolated communities, and Army radio men established communications for them with the outside world. Following this great emergency the facilities of the War Department were made available for the speedy restoration of the stricken areas.

MORALE

The morale of all ranks of the Army is excellent. There are, however, several measures the adoption of which should further improve morale and increase efficiency. Such measures include:

(1) For enlisted men. (a) The restoration of the reenlistment allowance, eliminated by the Economy Act; and (b), the provision of more equitable pension benefits for enlisted men of the peace-time establishment discharged on account of physical disability.

(2) For officers.-Adoption of a measure to correct prospective over-age in field grades and among senior captains.

In closing this report I wish to express, as I did last year, my very deep appreciation of the unfailing loyalty and support given me by the entire Military Establishment. And I wish to record again my conviction that that Establishment-in respect of each of its components and in its entirety-merits the full confidence of our Government and our people.

MALIN CRAIG,
Chief of Staff.

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