Memorandum for the Secretary of Defense: A basic policy of the Administration continues to be to place our financing on a sound, pay as you go basis.1 Because of the size of the defense expenditures, efforts to achieve the above purpose are certain to include constant direct attention toward the desirability of further reductions in those particular appropriations.
We must, of course, continue to seek every kind of saving that is possible in overhead and administration of our defense forces; they must be operated on an austerity basis. There are still substantial sums to be saved through this kind of reform. But in the present state of world affairs, I do not deem it wise to attempt any cutback, beyond that currently planned, in the combat strength of any of the armed forces.2 Slight adjustments can, and of course will naturally, be made. But as of now, it is clear that prudence will not allow any major deletions from presently planned forces.
These same observations apply to:
a. Production of atomic weapons.
b. Civil defense activities.
c. Necessary stockpiling and filling in other gaps in our mobilization base.3
