After the end of World War II, President Harry S. Truman proposed creation of a unified department of national defense. In a special message to Congress on 19 December 1945, the President cited both wasteful military spending and inter-departmental conflicts. Deliberations in Congress went on for months focusing heavily on the role of the military in society and the threat of granting too much military power to the executive.
On 26 July 1947, Truman signed the National Security Act of 1947, which set up a unified military command known as the "National Military Establishment", as well as creating the Central Intelligence Agency, the National Security Council, National Security Resources Board, United States Air Force (formerly the Army Air Forces) and the Joint Chiefs of Staff. The act placed the National Military Establishment under the control of a single Secretary of Defense. The National Military Establishment formally began operations on 18 September, the day after the Senate confirmed James V. Forrestal as the first Secretary of Defense. The National Military Establishment was renamed the "Department of Defense" on 10 August 1949, in an amendment to the original 1947 law.
Under the Department of Defense Reorganization Act of 1958 (Pub.L. 85–899), channels of authority within the department were streamlined, while still maintaining the authority of the Military Departments. Also provided in this legislation was a centralized research authority, the Advanced Research Projects Agency, eventually known as DARPA. The Act moved decision-making authority from the Military Departments to the Joint Chiefs of Staff and the Secretary of Defense. It also strengthened the command channel of the military over U.S. forces from the President to the Secretary of Defense. Written and promoted by the Eisenhower administration, it was signed into law 6 August 1958.
U.S. Military Order of Precedence: Title 10, USC 113(b), 133(b); DOD Directive 1005.8 dated 31 OCT 1977, certified as current on 21 NOV 2003 or until further notice. FOR USE WHEN IN PARADE OR INSPECTION FORMATION AND FOR DISPLAY OF FLAGS, SEALS, EMBLEMS, INSIGNIA, ETC.
According to the Department of Defense Directive 1005.8, the prescribed precedence of military flags is determined by service birthdays. The appropriate order is given below:
Army Birthday – 14 June 1775
Marine Corps Birthday – 10 November 1775
Navy Birthday – 13 October 1775 (Abolished February 1781 - Reinstated 7 September 1781)
Air Force Birthday – 18 September 1947
* Coast Guard Birthday – 4 August 1790
* According to the Institute of Heraldry, and in keeping with the order in which troops are listed in Department of Defense Directive 1005.8, during peacetime the Coast Guard falls under the Department of Homeland Security. If, during wartime, the Coast Guard is called into service under the control of the Department of Defense, then the Coast Guard flag would come before the Air Force flag in order of precedence.
The Merchant Marine, Vietnam Veterans, and POW/MIA flags can be displayed (not required) following the primary military service flags. There is some latitude in the order of display regarding these three flags.