this drug depended upon the large body of microbiological data accumulated over a period of years.

Although it is our firm conviction that fundamental research must be pursued vigorously even in critical times such as these, nevertheless it is our hope that in the coming year we may find useful answers to some of the more immediate problems now facing us in our national and civil defense programs. For example, through an accelerated research program involving dogs and subhuman primates, we hope to gain a better understanding of fatigue and nausea which usually follow exposure to radiation, in the hope that by extrapolating these data to man, practical application can be made to troops under combat conditions and to crews of nuclear planes and vessels.

While we do plan to devote substantial effort toward finding answers to specific problems such as described above, we also hope to profit by the lesson learned from the last war when the country's reservoir of scientific talent was, for the most part, devoted to the solution of immediate problems at the expense of long-range fundamental research. We have no reserve of knowledge here, as the atomic field is less than 10 years old. As new production techniques are developed and weapon technology advances, new and novel health problems will be introduced. We can't anticipate the exact nature of these problems. We can, however, reasonably expect that their solution will be dependent upon fundamental knowledge gained from continuing basic studies.

STATEMENT ON COMMUNITY PROGRAM

Maintenance and operations

Cost of operations and maintenance and revenues estimated for fiscal year 1952 for each of the three AEC communities generally continues to reflect the steady progress made by the AEC in reducing subsidy in the municipal, utility, and real-estate functions.

The above table shows a steady decline in gross costs and increase in revenues at Oak Ridge. At Richland, there are some increases in gross costs in fiscal year 1951 and 1952 over fiscal year 1950 and a small decrease in revenue in fiscal year 1951 over fiscal year 1950. Detailed information relative to these fluctuations appears in the budget. Generally, this increase in gross cost at Richland is due to such things as deferred maintenance and having a separate contract whereby the city of Richland now pays for its electric power in accordance with normal municipal practice instead of the charge for energy consumed under the plant power contract. Decrease in revenue in fiscal year 1951 is principally due to placing of doctors and dentists on a private-practice basis with medical fees going directly to the doctors and dentists rather than accruing to the AEC. At Los Alamos, increased costs are directly related to an estimated 26-percent increase in population between fiscal year 1950 and fiscal year 1952. Revenues show substantial increases.

As you know, adjustments in residential rents were made in Oak Ridge and Richland during the summer of 1949 to correct inequities within each community and to move them toward comparability with rents prevailing in surrounding

Announcements have been made at all three AEC communities that effective August 1, 1951, shelter rents will be increased to full comparability with rents charged for comparable housing in surrounding communities.

In accordance with the fiscal year 1951 appropriation act which limited the fees for community management and transportation contractors, the AEC successfully negotiated new contracts where necessary to conform with the law in this matter.

Plant and equipment

Upon assuming control of Oak Ridge, Tenn.; Richland, Wash.; and Los Alamos, N. Mex., in 1947, an immediate program was instituted to replace much of the temporary substandard, costly-to-maintain housing and community facilities with permanent housing and community facilities more economical to maintain. This replacement is a continuing program, reducing in annual scope. In addition to this replacement program, additional housing has been provided only to the extent required to afford adequate housing for workers to supplement that available within commuting distance of the plants. Additional community facilities are provided on the basis of adequate facilities normally provided in American communities of like character and size with due regard for economy.

As can be seen from the following table, costs incurred for housing and community facilities decline considerable in the estimates for fiscal year 1952.

At the hearing before this subcommittee last year, it was indicated that the AEC was appointing a panel of outstanding experts to advise it relative to future operations of the AEC communities. Such a panel was appointed and has been visiting the AEC communities and preparing a report with recommendations on their future operations. We understand that this report will be made shortly. Members of the Community Panel are:

1. Richard Scurry, chairman, senior partner of the law firm of Scurry, Scurry & Pace, Dallas, Tex.

2. Fred Babcock, member, Fred Babcock and Associates, housing consultants, Washington, D. C.

3. George Bean, member, city manager, Grand Rapids, Mich.

4. George Gove, member, vice president for real estate, Metropolitan Life Insurance Co., New York, N. Y.

Mr. DEAN. I thought that you might also like to have as part of this record a brief statement from Mr. McCarthy on the manner in which this budget was organized.

Senator MAYBANK. We would like very much to have that. I understood you to say, Mr. Dean, building costs or construction costs have gone up 13 percent since August of 1950.

Mr. DEAN. I think that that is an accurate figure.

Senator MAYBANK. But this budget is based on June 30, 1950.
Mr. DEAN. That is correct.

Senator MAYBANK. That would be July and August, and there was an increase even then?

Mr. DEAN. There was an increase before August.

Senator MAYBANK. It is more than 13 percent?

Mr. DEAN. I think it will be.

RECAPITULATION OF APPROPRIATIONS FOR ATOMIC ENERGY

Mr. MCCARTHY. Mr. Chairman and members of the committee, we have presented in our budget some summary tables, the first of which appears on page 1 of volume 1-A of the justifications. We have set out here the appropriations made to the Atomic Energy Commission since its taking over the atomic energy project at the beginning of fiscal year 1947. Across the top line we show that for the first half of fiscal year 1947, there was transferred to the Atomic Energy Commission from the War Department $604.9 million.

I might point out here that prior to the Commission taking over, expenditures by the Manhattan District during the period which they ran the atomic energy project, amounted to $2.2 billion. Coming across that top line, we show the various appropriations which have been made to the Commission: In 1948, $175 million; in 1949, $621.9 million; in 1950, $702.9 million; and in 1951, $1,972.8 million.

I might point out here that aproximately $1.1 billion of appropriations in 1951 were provided for the Savannah construction and the Paducah construction, namely, in the vicinity of $600 million for Savannah, and approximately $500 million for the Paducah construction. So that, excluding these two, 1951 would have been more comparable to 1950.

In 1952, our estimate, as the chairman has pointed out, is $1.210 billion of appropriations, and we should point out here, of course, that in 1952 this is all appropriations being requested, and there has been no contract authority included here, as has been the case in years past.

CONTRACT AUTHORITY NOT REQUESTED

Senator MAYBANK. Do you expect to ask for any contract authority? Mr. MCCARTHY. We do not, sir. Our estimate has been forwarded by the Bureau of the Budget in the form of appropriations solely, and no contract authority.

Senator MAYBANK. You will have to ask for a deficiency to take care of this 13 percent increase in your construction cost which we all know has happened since that time?

Mr. McCARTHY. For construction, and increases in operating costs. Senator ELLENDER. Why make that in the form of a deficiency, Senator, if we know about it now?

Senator MAYBANK. They could either add it now or make it a deficiency.

Senator ELLENDER. This amount that you are asking for 1951, as well as 1952, includes items for the construction of the Paducah project. as well as the Savannah project, you say?

Mr. MCCARTHY. That is true for 1951.

Senator ELLENDER. Are those amounts in sufficient size to complete the projects?

Mr. MCCARTHY. No. sir.

Senator ELLENDER. That is just for what can be done at the end of the fiscal 1952 period?

Mr. MCCARTHY. Yes. I think that on the Savannah River, the

ent that additional funds will have to be available to complete the project, and as Mr. Dean pointed out

SUPPLEMENTAL REQUEST FOR 1951

Senator MAYBANK. I understand the third supplemental request for the fiscal year 1951, is $51,300,000.

Mr. MCCARTHY. That is right.

Senator MAYBANK. Do you think that you could figure-you have not cleared it through the Budget what this should be?

Mr. MCCARTHY. We have not.

Senator MAYBANK. How long would that take?

Mr. MCCARTHY. I believe it would take some time, in terms of trying to determine from our various field agencies the exact amount required.

Senator MAYBANK. Senator Ellender raised the point as to why wait for a deficiency when we know we owe it right now. However, I can understand the delay if you have to go through all of that process in the field and here, and then through the Bureau of the Budget.

Mr. BOYER. May I comment right there, Senator? You will recall that we informed you of the certification of an over-run on the Savannah project, and at that time we advised you that as soon as the definitive estimate was prepared, we would come in with a supplemental to provide for additional funds.

Senator MAYBANK. The committee was informed, and I do not think the committee is going to quarrel with you gentlemen about increased construction costs. The thought Senator Ellender had was that if we owe the money, why not pay it now rather than wait until next year.

You informed us of these things, and it was the committee's wish that these plants like Denver and Cincinnati should be duplicated. The committee is glad to get that information, and congratulates you on that because we have all agreed in here that the chain is no stronger than its weakest link. But I thought your idea was merely to find out what we really need.

Mr. BOYER. It would be difficult to do that at this time, to do it with any accuracy.

AMOUNT FOR LIQUIDATION OF PRIOR YEAR CONTRACT AUTHORITY

Mr. MCCARTHY. Of the $1,210 million which the Commission is requesting in 1952, Mr. Chairman, $340 million is required for cash to liquidate prior year contract authority, the bills of which will fall

due in 1952.

Senator ELLENDER. Which projects are those?

Mr. MCCARTHY. Those are various projects, those which are presently under contract and on which some of the bills will fall due in 1952; and it is also for operation costs, for which we use contract authority in the current fiscal year. The remaining amount for new obligations in 1952 is shown here as $870 million.

Senator MAYBANK. What are those new obligations?

Mr. McCARTHY. For both operations and plant and equipment; new projects and continuing projects.

Mr. McCARTHY. Yes, sir. On page 10-A of this same volume, Mr. Chairman, we show there, for the comparative years 1950, 1951, and 1952, the operating costs of our various programs; coming down through reconciling items such as our increase or decreases in stores inventories, and the various other items, to a total obligation for operations of $580,404,000.

On plant and equipment, the new obligations shown in the bottom half of the table, will amount to $289 million.

That comes out to $870 million for obligations in 1952. These represent the various programs for which we are requesting funds in

1952.

COMMUNITY MANAGEMENT

Senator ELLENDER. May I ask a question with reference to community management? I notice that you are decreasing a little over $2 million from 1950 to 1952. What is the cause of that?

Mr. WILLIAMS. We have made some economies in operation. We have also increased some of our revenues from rents, and we get certain fees from concessionnaires, and so on, and it is a combination of charging for services which the tenants had before on a lump-sum basis, and trying to bring rents somewhere within comparability with the surrounding field.

Senator ELLENDER. Why can you not put that into effect for 1951, and make it the same as you have for 1952?

Mr. WILLIAMS. We expect, of course, in 1951, that the total net cost for all of the community operations would be $5,014,317; and in 1952, we have $3,311,000. So we are reducing still more. There will be some economies, but we have notified the occupants of these towns that we intend to raise rents again, because the rents are still not comparable with the rents in the surrounding communities.

Senator MAYBANK. Gentlemen, we will have to be excussed, because we have to go to the Senate Chamber to vote.

(A brief recess was taken.)

Senator ELLENDER. I understand that there is a saving in community services there.

Senator MAYBANK. Will you go ahead, Mr. Williams?

Mr. WILLIAMS. The savings there are due, at Oak Ridge and at Hanford-there will be a reduction in the gross cost of operation. Now, at Los Alamos, the town has expanded, and there has been additional housing, and there has been additional population, so that we run just a little more there; and at Sandia, just slightly more. But on the revenue, we pick up about $900,000 in revenue, which accounts for the difference in our net costs between 1951 and 1952.

Senator ELLENDER. What becomes of these collections you make? Do they find their way into the Treasury?

Mr. WILLIAMS. They don't find their way into the Treasury, because we operate with contractors, and the revenue goes to defray the costs of the operation. That is why we give to the Congress here only the net. We ask for only the net, taking credit for the revenue which we will take in.

Senator ELLENDER. You mean the net amount that you need in order to operate?