(The information referred to is as follows:) ALASKA DISPOSAL DATA, FISCAL YEAR 1958 Sales of usable property (acquisition cost). Total surplus disposal. Receipts: Proceeds from sale of usable property (approximately) -- Total----- $15, 072, 000 18, 100, 000 393, 827 33, 565, 827 750,000 271, 471 1,021, 471 Senator GRUENING. Mr. Gray, would you come forward, please? STATEMENT OF J. WENDELL GRAY, CHIEF, DIVISION OF SURPLUS PROPERTY UTILIZATION, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE Senator GRUENING. Mr. Gray, have items of surplus property, which are usable for education, health, and civil defense services, been sold to surplus property dealers, other persons, or have they gone to agencies? Mr. GRAY. Well, Senator, I am not sure that I would be able to speak factually on that. I can only point out that Alaska does have a State agency for surplus property which distributes property to the eligible institutions under Public Law 152. I was just noticing here from our reports that in fiscal year 1958 they distributed personal property with an acquisition cost of $394,019. In other words, we have a functioning surplus property program in Alaska. And they are entitled to screen and select and distribute this property to the extent that they have need for it, and I assume that they have been doing so. Senator GRUENING. Well, would you say that all the surplus property which could be used for health, education, and civil defense has been selected for donation for those purposes, not necessarily in Alaska, but anywhere? Mr. GRAY. We doubt that that would be true. As a matter of fact, we have not had good information on that. We had a representative from our San Francisco regional office visit the territory a short time ago, and he found considerable amounts of property that were not being utilized. The problem, in his mind, was the one that has been noted earlier here would be it be feasible to return any of that property to the United States for health Senator GRUENING. You mean to the 48 smaller States, don't you? Mr. GRAY. Yes. 44978-59-9 Senator GRUENING. We are part of the United States. Mr. GRAY. Yes, correct. As a matter of fact, a representative is going up there shortly to again look at this property, to consult with the transportation companies, and to determine whether it would be at all feasible to move any of this property to other States, or whether the costs of moving it would be prohibitive. Senator GRUENING. Well, I think the investigation might be useful, but quite unnecessary. We can answer that question for you without any difficulty. Having lived with the highest transportation costs, not only under the flag, but anywhere on earth, we know it would be very expensive. Mr. GRAY. Surely. Senator GRUENING. Have there been any cases in which surplus property which is usable for the purposes for which it may be donated has not been selected for donation and thus left available for sale rather than donation? Mr. GRAY. Well, I think I have already answered that, actually. Our representative did find a good deal of property up there that, were it located elsewhere, could have gone into the donation program, yes, sir. Senator GRUENING. Have you any experience with the action of Federal and State officials in getting rid of this property properly? Do you check on that at all? Mr. GRAY. In the donation program? Senator GRUENING. Yes. Mr. GRAY. Yes, sir. We check on it quite closely. Senator GRUENING. Do you find it uniformly satisfactory? Mr. GRAY. I would say the situation today is quite satisfactory in the health and education side of it, for which we have the responsibility. We do, as in any program, find violations. We find property getting into the hands of ineligible groups. But we try very hard to police it. And I might say that we have had very good cooperation from the State agencies in that respect. Senator GRUENING. Well, when you find that there has been improper use of surplus property, what action do you take? Mr. GRAY. Well, first, recover the property, and put it to eligible use. If the property is not recoverable, then to collect the fair value of the property at the time it was acquired and return the receipts to the Federal Treasury. We Senator GRUENING. Has that procedure been actually tried out? Mr. GRAY. Yes, sir, it has been done in many, many cases. have even gone further than that, as a matter of fact. Where property has been diverted to use for private profit, we have collected and returned to the Treasury the fair rental value for the use of that property, as well as recovering the property. Senator GRUENING. Have there been any cases of criminal procedure? Mr. GRAY. Yes, there have been, sir. Senator GRUENING. Successfully prosecuted? Mr. GRAY. Yes, sir. Senator GRUENING. Is the present staff available to your Department for administering the property program sufficient and adequate to insure the effectiveness of the program? Mr. GRAY. Well, that would be a matter of opinion. Certainly in a program such as this, you are inclined to have the feeling that if you had more staff, you could do a better job. But that would be a very difficult Senator GRUENING. But the Department has made no such requests of the Budget. Mr. GRAY. Not at the present time. In our budget this year, the increase was very nominal and mainly sufficient to sustain our present. staff. Senator GRUENING. The Department considers the staff satisfactory in size. Mr. GRAY. For the moment, and in the preparation of our budget reqeusts for the present fiscal year, that was true. However, I must point out that this is a rapidly growing program, and we may at a future date be asking for additional staff. That is a determination that has not been made yet for the next fiscal year. Senator GRUENING. Do you find, as you go along with this program, that you have reason to modify your procedures in the light of experience? Mr. GRAY. Yes, we do. I might point out that there is action under consideration now, not just by our Division, but by all of the folks concerned with the disposal of Federal excess property, to modify all of the procedures in a way that it is hoped will speed up the total disposal program and make it more effective. Senator GRUENING. You listened to these hearings, did you not? Mr. GRAY. Yes, sir. Senator GRUENING. Do you see any ways in which your procedures might be modified, administratively, in view of some of the testimony that you have heard, to extend the spirit of the present legislation, perhaps? Mr. GRAY. Frankly, sir, I do not. We are limited, or I am limited, as the chief of the program, by the determinations of our counsel. They interpret the law for me, and they tell me how far I can extend my interpretations and how far I cannot. I have tried to administer the program liberally, but I must depend on what my counsel tell me they believe to be the intent of the law. Senator GRUENING. Do you object to the enactment of S. 2442, extend the previous Surplus Property Act that was available to Alaska? to Mr. GRAY. Well, I want to state at this point that in my statement yesterday, I hope it was perfectly clear that I said that we were opposing all of the bills which would extend eligibility under the program which we administer. We in actuality have not, the Secretary has not, commented on this particular bill, up to this point. And so we are not on record either for or against it at the moment. Senator GRUENING. Thank you very much, Mr. Gray. I would like to ask Mr. Davis and Mr. Garvey to come forward, please. What is the General Services Administration's attitude toward S. 2442? STATEMENT OF JAMES A. GARVEY, ASSISTANT COMMISSIONER, UTILIZATION AND SALES, FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION; ACCOMPANIED BY ROBERT T. DAVIS, LEGISLATIVE LIAISON OFFICE Mr. GARVEY. Mr. Chairman, like the Department of Health, Education, and Welfare, the General Services Administration has not been asked to comment formally on the bill. So for the purposes of being able to give you a picture of our position, I went back to the action taken by GSA in connection with H.R. 13070, which had a similar objective with respect to the Alaskan surplus situation. On the basis of the position taken with respect to that particular piece of legislation, I would have to say that the General Services Administration is opposed to the enactment of S. 2442. Senator GRUENING. You were opposed to the enactment of the bill when it was applied to the Territory? Mr. GARVEY. No, sir. H.R. 13070 would have applied to Alaska in statehood status. Senator GRUENING. You mean that is the House bill? Mr. GARVEY. Yes, sir. Senator GRUENING. Which is a corresponding bill to this one? Mr. GARVEY. It is a predecessor of this particular piece of legislation. Senator GRUENING. Well, the record does not indicate that when this legislation was enacted originally that the GSA opposed it. Mr. GARVEY. Are you speaking, sir, of the original enactment of the legislation which at that time related to Alaska as a Territory? Senator GRUENING. Yes. Mr. GARVEY. That is correct. Our opposition to H.R. 13070 stemmed from the subsequent assumption of statehood by Alaska. That bill was directed toward Alaska as a State, and not as a Territory. Senator GRUENING. Well, why do you think it makes any difference in the matter of surplus property? Mr. GARVEY. Well, the position which GSA took on H.R. 13070 had several particular points that I would like to refer to, sir, if I may. Senator GRUENING. Yes. Mr. GARVEY. The first was that the Administrator felt that Alaska as a State, if singled out for special preferential treatment, would open the door for further preferential treatment in this same area. He felt also that this might be to the detriment of the acknowledged needs of education, public health, and civil defense in the State of Alaska. Secondly, GSA believed that the program as contemplated by that legislation would lack the beneficial surveillance of the Department of Health, Education, and Welfare in the administration of its programs for education, public health, and civil defense, and that, in fact, two separate programs in the handling of surplus property in Alaska might well be generated by enactment of such legislation. I would like to speak, sir, for just a moment, to our belief that the Federal Property and Administrative Services Act of 1949, as amended, offers a suitable program for the use of surplus personal property in the State of Alaska. Our information indicates that the State currently has a State agency for surplus property. That agency, however, at this particular time, has not extended its interests to the extent offered it under the Federal Property and Administrative Services Act. We believe that an aggressive program for the use of surplus property for purposes of education, public health, and civil defense would mean that the donation program in Alaska would increase immeasurably over that which has been described to you in previous testimony. You have also heard that the movement of Alaskan generated surplus property stateside for donation is being considered. I have no personal experience in Alaska. I do have some with faraway places. And I know the difficulty of transportation and the excessive cost of handling property under difficult conditions. Before I came into the hearing room this morning I met with Mr. Wendell Gray, of the Department of Health, Education, and Welfare, to clarify my thinking on one point, and that was that should Alaska need this property for its authorized donable purposes, there would be no intent on the part of HEW, nor in GSA certainly, to ship such property to the mainland for use on the west coast. So, in addition to facing the prospect of costly transfer, we also must face up to this situation, that with aggressive donable programs in Alaska, the property needed in Alaska, by its eligible donees, will go to those donees as the first course of action. Now, also, under the Federal Property and Administrative Services Act of 1949, Alaska is entitled to receive property for other programs which claim available property while it is in excess status-that is before it becomes in fact surplus to Government needs. I am speaking here of the fact that we have, in most of the States, a program through the Bureau of Public Roads for assistance to State Roads Commissions. We have a program through the Department of Agriculture for assistance to State Forest Service organizations and to soil conservation services districts. In all of these programs, which are provided for under current legislation, there is ample room for Alaska to ultimately benefit from the receipt of excess Federal property, and she has both the prospect and, apparently, from Mr. Moot's earlier testimony, the property there as well. Our feeling is, therefore, that the current legislation properly interpreted and aggressively applied, will make much property available to Alaska. I would like to say that in our discussion of this matter this morning, we understand the objective behind S. 2442 and we are most sympathetic with the importance of this property to Alaska in its current state of development. We do believe, however, that the need for preferential treatment, with its complications, is not fully required in view of the flexibility and the possibilities under current law. And so we would like to suggest that consideration be given to that particular aspect of the problem. Now, we conclude that property which is available for sale in Alaska, after all Federal and donable needs have been met, will prob |