STATEMENT OF GEORGE ARNOLD, CIVIL DEFENSE DIRECTOR, COLUMBUS, OHIO

Mr. ARNOLD. Thank you, Mr. Chairman. I welcome the opportunity to be here and speak not only for Columbus, but many of the other cities in Ohio and the directors that I have talked to locally.

I have not found one who is not in favor of this type of legislation. There are two factors outstanding in my mind that I would like to make a statement on.

No. 1 is, if cities and local organizations could receive surplus property, they could divert some of their funds to other channels to employ more personnel and also assure adequate warehousing facilities which we need.

No. 2, in order to obtain volunteers, we have to give them some type of equipment for identification purposes-helmet liners, just mentioned is one of them. I assure you if this equipment could be made available to the cities it would help civil defense and the effort throughout the country.

That is all that I have to say.

Mr. BROOKS. We want to thank you very much for coming down, Mr. Arnold. It has been a pleasure to have you with us.

I would like now to call on Mr. Paul Hartenstein, civil defense director of Philadelphia.

STATEMENT OF PAUL B. HARTENSTEIN, CIVIL DEFENSE
DIRECTOR, PHILADELPHIA, PA.

Mr. HARTENSTEIN. It is a pleasure to be here. I have the privilege of representing the American Municipal Association, which supports this legislation, and of which Mayor Clark serves as vice president.

This legislation is timely and wise, particularly in view of the difficulties that seem to be facing all municipalities in the development of an adequate civil-defense program. One of the reasons these inadequacies exist is that appropriations for civil-defense purposes by local and State legislative bodies are insufficient. It was largely because of this fiscal situation that the Commission on Intergovernmental Relations, headed by Meyer Kestenbaum, of Chicago, in its recent report to President Eisenhower recommended that Congress take the necessary steps to amend the Federal Civil Defense Act so as to liberalize the financial participation of the National Government in civil-defense administration, planning, and training costs, both in the States and in the critical target cities or areas.

Obviously, if this bill is favorably acted upon and Federal surplus property is allocated to cities such as Philadelphia, it will be a tremendous shot in the arm to our civil-defense workers and the whole structure of our civil-defense organizations. It will help to bring to the attention of our State and local legislators the fact that the Federal Government is becoming increasingly aware of the importance of civil defense, at least in this direction. This could be the beginning of a new understanding of this problem and have a wholesome effect on State and local understanding.

It was with considerable foresight that the American Municipal Association, at its congress held last November in Philadelphia, adopted a resolution which I would like to read. I quote:

We recommend that the Congress of the United States enact such laws as may be necessary to give all civil defense agencies a high priority in the program of such Federal surplus properties as are necessary to the organization's maintenance and operation of an effective civil defense and disaster program.

You will note that the American Municipal Association did not necessarily hold the view that Federal surplus properties should be made available to the civil defense organizations on a donation basis. However, that all those who know the nature of our civil-defense problem will support the theory that proper utilization of this surplus property, which is already owned by the Government, is highly important. It follows that because of the national nature of the civil-defense program, the allocation to civil-defense groups is extremely logical and desirable. The section of this bill which provides for the Federal Civil Defense Administrator to make the determination whether such surplus property is usable and necessary for civil-defense purposes is appropriate and wise. We in Philadelphia have confidence that Val Peterson, the Federal Civil Defense Administrator, will make these determinations in an equitable manner.

I believe that out of this bill will come much good. It is definitely a step in the direction of a stronger civil-defense program and this is greatly to be desired. Even a single move in this direction is helpful, particularly when so much still remains to be done by the Federal Government, which alone is in a position to resolve this national problem.

The United States Civil Defense Council, of which Philadelphia is a member, is, as you know, earnestly supporting the adoption of this legislation. The Philadelphia Civil Defense Council joins with the civil-defense officials of hundreds of other American cities in urging this committee to take favorable action on this proposed legislation. Mr. BROOKS. I want to thank you for your appearance. Convey our best wishes to your good mayor; we appreciate his interest in this project.

I would like now to present to you Mr. John Thomas, of the General Services Administration.

STATEMENT OF JOHN THOMAS, DIRECTOR OF PERSONAL PROPERTY UTILIZATION, GENERAL SERVICES ADMINISTRATION; ACCOMPANIED BY PAUL A. BARRON, GENERAL SERVICES ADMINISTRATION

Mr. THOMAS. Mr. Chairman and members of the committee, the bill would authorize donations of Government surplus personal property for civil-defense purposes the same as is now authorized for education and health.

A number of proposals have been made from time to time to extend the class of eligible donees for Government surplus property to various special activities, or organizations of a public or quasi-public nature. Civil defense, appears to us to stand on a footing different from that of the other proposed objects of surplus donation.

Accordingly, the General Services Administration interposes no objection to the objectives of H. R. 4660.

While the bill has been drawn in such manner as to present a generally workable procedure consistent with the pattern presently in effect for the disposal of surplus property, we are of the opinion that the measure could be improved in respect to certain details as outlined in our report that will be coming to you. I do not believe it has been signed yet, but we have had clearance from the Bureau of the Budget. Some of our suggested amendments are rather lengthy. We could present them at this time or later if you like.

Mr. BROOKS. At this point, if I may interrupt, we have just today received a copy of that. You say that this represents the GSA opinion with the approval of the Bureau of the Budget?

Mr. THOMAS. As I understand it, the Bureau has no objection to us submitting the report.

Mr. BROOKS. Was there any change in the opinion of the General Services Administration prior to the approval by the Bureau of the Budget, or did they agree?

Mr. THOMAS. We had our report in to the Bureau of the Budget for some time but with the enactment of Public Law 61 we had to make some changes in it before presenting it to your committee. If you would like to go into those technical points, we could do so. There were no substantial changes.

Mr. BROOKS. It may be that the committee staff can go over that this afternoon and when we convene in the morning we can take technical changes.

up those Mr. THOMAS. I have also reviewed the requirements pamphlet that one of the earlier speakers spoke to, FCDA M-25, which lists all the items that the Federal Civil Defense feels are required for each of the local or State groups to try to develop equipment for their operations. I would say that about 50 percent of those items listed could be located and would be available out of surplus. I believe that they would be available in quantities that they are interested in. We went over that rather hurriedly. There might be some items that we could add because the picture is constantly changing as to the property reported. As I said in the beginning, we do not interpose any objection to the bill.

As to the other bill, 7227, that was mentioned earlier, there are some technical points on that that we can discuss later on too. We likewise would not oppose the broad objectives of the bill.

Mr. BROOKS. Generally, the General Services Administration is in favor of the objectives of this type of legislation?

Mr. THOMAS. That is correct.

Mr. BROOKS. I wonder if you could give us an estimate on the dollar amount of surplus property generated during the year 1955 or 1954? Mr. THOMAS. It is going to run somewhere over $2 billion that will be generated, during fiscal 1956.

Mr. BROOKS. Personal property?

Mr. THOMAS. Personal property. I might add for the committee's benefit that to date FCDA has taken excess propery by transfer as we would transfer to any other Federal agency in the amount of approximately $5 million, which covers everything from blankets to waterpurifying tablets, and for which FCDA transferred funds to the holding agency equivalent to the fair value.

Mr. BROOKS. Only $5 million out of $2 billion surplus property generated in 1954 has gone to the FCDA?

Mr. THOMAS. That goes further back than 1954 from the inception of FCDA.

Mr. BROOKS. That is the total that they have received out of this over several years, since 1950 when it was created?

Mr. THOMAS. That is right. One of their problems has been that they have had difficulty in qualifying for certain types of transfers when they did not have funds. I think the $5 million figure is about right.

Donations for education and public health purposes for fiscal 1955 will run somewhere in the neighborhood of $130 million.

Mr. BROOKS. While we are on the question of the total volume of personal property generated as surplus in the year 1954 being $2 billion, what percentage of that property was disposed of by sale? I realize that you do not have the figure to the penny right now.

Mr. THOMAS. I would say approximately 90 percent of it.

Mr. BROOKS. Ninety percent of it was disposed of by sale $1,800 million?

Mr. THOMAS. That will be about right for fiscal 1955.

Mr. BROOKS. What percentage of the acquisition cost do you figure that we got out of it?

Mr. THOMAS. Somewhere between 7 and 8 percent, and in some localities we are now running some surveys on some particular sales that we have had occasion to look over. There has been a drop in that. I would say that the percentages are fairly safe-7 and 8 per

cent return.

Mr. BROOKS. I wonder what the GSA's projection is as to the total amount of surplus property to be generated in 1956.

Mr. THOMAS. From the information that we have received I think it is going to run pretty close to $2.8 billion. I believe that the $2 billion figure will continue for the next few years. For 1956 it will be somewhere near $2.8 billion, if our information is correct.

Mr. BROOKS. I wonder if you would take time just briefly to outline for the people here, and for the subcommittee, the method of disposal of the property that you sell-the 90 percent that we got 7 or 8 percent for.

Mr. THOMAS. To begin with, the General Services Administration does not dispose of all surplus property. Each holding agency sells its own property, through a delegation of authority from GSA. The property is offered for sale by various means-spot bid, the sealed-bid method, auction sale, and negotiated sale. Those are the main methods of disposal.

Each agency, as I said, sells its own property. The Atomic Energy Commission sells its property; the Department of Defense sells its property, and so forth.

Property is advertised on a sealed-bid basis by notice going out to different groups of buyers from the holding agencies and generally they have allowed a 15 to 18 day inspection period. At the end of that period the bids are opened and the high bids are taken.

On a spot bid, there is a notice that goes out with adequate information in it as to the type of property being offered for sale. That property is generally sold in 1 day. The people come in, inspect it and buy it and take it away that day. There are different conditions of sale used in each method of sale. The auction sales are normally held by the larger agencies, the ones which generate the most prop

erty, such as the Army, the Navy, the Marine Corps and the Air Force and the Atomic Energy Commission, and that property is put up for sale and sold by private auctioneers through contract. The sales are generally well advertised, anywhere from 30 to 45 days in advance. Wide publicity is given to it, both by mailing, radio, television, and so forth.

Mr. BROOKS. Mr. Thomas, in view of the fact that there is some difference in procedure that the various agencies use to dispose of their property, under this delegated authority of the General Services Administration, has the General Services Administration made any effort to establish a uniform policy with regard to these sales?

Mr. THOMAS. We have issued a disposal regulation which is very broad as to the method of sales that agencies are to follow in conducting their sales. In the past 3 months we have put out additional information as to auction sales and spot-bid sales and how they should be handled, which are actually in much more detail. They are put out on a circular basis. They are not mandatory but they are informational and directive.

We are now in the process of completely revising our regulations so that there will be more on the procedural side in line with the Hoover Commission's reports and recommendations.

Mr. BROOKS. You supervise the sales that are made by the various agencies under this delegation of authority, or do you wash your hands of it when you delegate that authority?

Mr. THOMAS. To a limited degree we in the last year have gotten into supervision of sales, with the limited personnel we have. We do this by attending the sales being handled by the agencies. We coordinate with the agency before the sale in order to recommend the best method of sale to be used and so forth. We are in that now.

Mr. BROOKS. I want to thank you very much for your courtesy. You have given us very helpful testimony and we will go into the other questions a little further. It is not directly pertinent to this.

Mr. RIEHLMAN. I think that you were pursuing a very interesting point there when you were trying to develop what the acquisition cost really was of surplus property, and what the Federal Government really received after the sales.

I think there is another point further that we might go into, and that is, as I understand it, about 50 percent of the items that FCDA is purchasing would be available to surplus property, and if it were turned over to them it would certainly be some savings in the expense to the Federal Government in the disposal program, because in the auction field-and we have had a lot of experience with that-you pay the auctioneer a considerable amount to carry on the sale and then the publicity that goes with it costs and all the bookwork costs a lot. So when you get to the final analysis as to what the amount is that the Federal Government actually receives, you can cut that percentage down to some degree. I do not know how much it would be, but it would certainly be cut down somewhat.

Mr. THOMAS. I think that it would be sizable.

Mr. RIEHLMAN. I expect that it would because of the additional work that goes into setting up of spot sales or auction sales, or any type of sale. That would all be eliminated, and of course then when we look at the overall return to the Federal Government it would be equally as much, probably it would go up instead of down, because,.