410 



The major portion of the Soviet fleet threat is its 50 nuclear-powered sub- 

 marines backed by another 300 conventional submarines. It should be remem- 

 bered that Hitler only had a total of 55 conventional submarines at the start of 

 World War II. The Russian surface fleet has become second only to the U.S. in 

 size, and it includes 25 missile ships and over 100 destroyers, many of them gas 

 turbine powered. It also has 300 minesweepers, 230 landing ships and 750 patrol 

 craft. The latest worrisome additions are two 25, 000 ton, 650 foot helicopter 

 carriers, one of which is now based in the Mediterranean. Most of this fleet has 

 been built in the past 20 years, whereas only one-third of American naval vessels 

 are that young. 



Russia's worldwide fleet of intelligence ships is almost as dangerous 

 strategically as its warships, since these are the ones responsible for the sur- 

 veillance of our surface fleet, including our FBM submarines. It is believed 

 that Russia is turning out about 10 nuclear submarines each year. Because of 

 the demonstrated technical capability of the Russians in space, rockets and 

 missile building, it is highly probable that in four or five years, the Soviets can 

 match or exceed our present fleet of 41 Polaris-type submarines with their 656 

 1500-mile range missiles. Such submarines could lie undetected off our coasts 

 and reach any inland city in the United States with this missile. Until recently, 

 our entire ballistic missile warning system has been oriented to the north over 

 the Arctic. (We currently have no actual defense against ICBM's, such as the 

 proposed Sentinel ABM system would provide). We are now becoming rapidly 

 exposed to submarine-based ballistic missiles coming from the east, west and 

 south. We believe this is the major reason why the Navy's oceanography budget, 

 excluding procurement of weapons systems, accounts for slightly over half the 

 present $500 million annual National Oceanographic Program Budget. It is for 

 this reason that many of our investment recommendations in Oceanography in 

 past issues of this report have been the high technology companies found among 

 the aerospace, electronics, shipbuilding, computer and anti-submarine warfare 

 equipment companies. 



A nuclear attack submarine, such as we represented by the ill fated Scorpion 

 which was recently found and photographed lying in 10, 000 feet of water, is one 

 of the most effective anti-submarine weapons ■we now have. Apparently, the Navy 

 has decided to expand significantly its fleet of attack submarines. We would ex- 

 pect to see General Dynamics , for one, begin to see a resurgence in its nuclear 

 submarine building. General Dynamics is already under contract for design 

 work on the new silent submarine mentioned above. The Newport News Ship - 

 building and Dry Dock Company, subsidiary of Tenneco, Inc ., is designing the 

 prototype of the "superfast" nuclear powered attack submarine. 



Nuclear submarines have been developed and designed under the systems 

 concept so highly developed by the aerospace industry. General Dynamics did 

 the primary work. Later, companies such as Litton Industries established 

 themselves in this business because it was a highly developed systems business, 

 demanding advanced, integrated electronic and electro-mechanical equipment, 

 guidance systems, computers and weapons systems. These are also designed 

 and built by other aerospace companies, for example. North American Rockwell, 



