Mr. DREANY. That is correct; yes. However, the thing to remember about that is that if the same item is required in our project, and were not available from excess, we would go out and buy it new. Senator GRUENING. You would buy it out of the funds that are provided by the appropriation.

Mr. DREANY. That is correct; yes, sir.

Senator GRUENING. Do you have a breakdown as to the countries in which this goes and the types that go into these countries?

Mr. DREANY. Yes, sir. I have that breakdown. I could give you— I probably couldn't answer a particular type of breakdown that you wanted, but I could get together any kind of breakdown that you want.

Senator GRUENING. I think the committee would like to know the types of excess which you receive. You don't get surplus at all, do you?

Mr. DREANY. No, sir.

Senator GRUENING. You don't bother with that. You get in on the ground floor before it becomes surplus.

Mr. DREANY. Yes, sir.

Senator GRUENING. We would like to have the type of excess you get and into what country it goes. What countries are the chief beneficiaries, if you can summarize it?

Mr. DREANY. The chief beneficiary I believe to date has been India, although there are others. We have got all the details in here [indicating], and we can break it down in various and sundry

Senator GRUENING. None of this information is classified, I take it. Mr. DREANY. No, sir. None at all.

India seems to be the largest recipient, and possibly next is Vietnam. Those have well, I can go down and give the list of countries which have received over $1 million.

Senator GRUENING. That would be very useful at this point.

Mr. DREANY. Afghanistan, Burma, China

Senator GRUENING. Let me interrupt at this point. Has Burma just recently come into this picture? They have just recently accepted our funds.

Mr. DREANY. Yes, sir.

Senator GRUENING. They were not getting this excess before.

Mr. DREANY. No. They started in calendar 1958.

Senator GRUENING. But they were not taking it.

Mr. DREANY. That is correct.

Senator GRUENING. How much did they take?

Mr. DREANY. The whole amount. $1,300,000.

Senator GRUENING. That was the maximum they were entitled to get.

Mr. DREANY. No. It isn't a question of a maximum they are entitled to.

Senator GRUENING. That is what they asked for.

Mr. DREANY. That is correct. That is what they asked for in lieu of new equipment.

Senator GRUENING. I see.

Mr. DREANY. Guatemala, Honduras, India, I mentioned before, Indonesia, Mexico, Surinam, and Vietnam.

Senator GRUENING. Did any of it go to the Iron Curtain countries? Mr. DREANY. No, sir.

Senator GRUENING. You are not sending any to Yugoslavia?

Mr. DREANY. Yugoslavia is not an Iron Curtain country.
Senator GRUENING. You don't consider it so?

Mr. DREANY. No, sir.

Senator GRUENING. Does it go to Yugoslavia?

Mr. DREANY. Well, they haven't taken any but only because they haven't asked for any.

Senator GRUENING. All they have to do is ask for it and you give it to them, is that it?

Mr. DREANY. If it is available and they have the money in their program, in their ICA program to pay for it.

Senator GRUENING. They have to pay for all of this, do they? Mr. DREANY. Take it out of-yes, the aid funds which are allocated to that particular country.

Senator GRUENING. You mean when you give them this excess property, they in return have to pay for it out of the funds which are appropriated by the Congress? In other words, this is not additional. Mr. DREANY. No. In effect substitutes for an amount of cash.

Senator GRUENING. Do they pay for it in dollars or counterpart funds?

Mr. DREANY. They would in general pay for it in counterpart funds. The dollars would be deductible. The dollars which were involved would either go back to the holding agency or the U.S. Treasury, and are in effect checked off against the amount of money which is available for assistance to this country. They would in most cases also deposit an equivalent amount of counterpart funds.

Senator GRUENING. Does any of this go to Egypt?

Mr. DREANY. They have not requested any; no, sir.
Senator GRUENING. What about Saudi Arabia?

Mr. DREANY. We have no program in Saudi Arabia.

Senator GRUENING. How do your procedures operate so that you can satisfy a request within the 90 days between the time the property is declared excess and it becomes surplus? You must have some very efficient organization to do that.

Mr. DREANY. Not as efficient as we would like to be. That 90 days is a handicap because by the time we can get the lists out to our nations and they review the lists and match them against the requirements, both immediate and potential, circularize them to all the technicians in our health and education and industry projects and get the request back to us, in many cases it is too late for us to acquire the material. Senator GRUENING. What control does the ICA exercise over this property once it is turned over to another country? Is there accountability?

Mr. DREANY. Yes. There is accountability in that we, of course, turn the title over to the other country and then under whatever property accountability regulations they have, they are accountable for its proper use. Then, of course, we do have attached to the controller's office in each of our missions people whose sole function is end-use check, in effect to go around and see if this material is being used for the purposes for which it was acquired.

Senator GRUENING. Are there any instances where you found it was not being used properly for the purpose for which it was given? Mr. DREANY. Yes. I am certain there were. I don't personally recall any, but I am sure that our Controller's Office could vertify that there were some.

Senator GRUENING. Could you produce for the record any examples of that kind where improper use was found, and a statement as to what action was followed?

Mr. DREANY. Well, the action that would be followed would be that a demand would be made upon the other country for a refund of the dollars involved.

Senator GRUENING. Well, I would be interested to know whether the demand was made and whether the demand was complied with. We have here a very voluminous pamphlet of the DOD, personal property, alphabetically, for the month of January.

it?

Do you send this to every mission?

Mr. DREANY. Yes, sir.

Senator GRUENING. How many thousands of items are contained in

Mr. DREANY. There are a lot of them.

Senator GRUENING. Tremendous.

Mr. DREANY. Some months are bigger than others.

Senator GRUENING. Here is one of 204 pages, and I would estimate there were at least 200 items on a page. That would mean 40,000 items each month. A very considerable number.

Mr. DREANY. Of course, some of those are carried over from one month into the succeeding one.

Senator GRUENING. Well, then, will you submit for the record a list of the amounts year by year, to date, that have been given to each country, and what this consists of? That is quite an order, but I think it is necessary.

Mr. DREANY. Yes, sir.25

Mr. SHRIVER. Mr. Dreany, in connection with those statements, could you separate the property that was issued for the mobilization and long-term supply from the excess property that went into the other programs as referred to in your statement?

Mr. DREANY. Yes.

Mr. SHRIVER. And another question, if I may ask it, Mr. Chairman. What problem do you have in connection with reimbursement by the Department of Defense when they carry property in the stock fund or working capital account?

Mr. DREANY. Well, I would say no particular problems. They tell us how much money they have-what fair value they have to have in order for us to acquire the title, and then we either accept that or we say it is too much money.

Mr. SHRIVER. Or go out and buy new equipment.

Mr. DREANY. Yes, sir.

Mr. SHRIVER. This percentage figure you use in the statement here, 5 percent, that is an average figure.

Mr. DREANY. That is the price for domestic excess material which is not from the stock fund.

Mr. SHRIVER. That is carried in a specific account-what they call annual appropriation account.

Mr. DREANY. That is correct.

Senator GRUENING. Have you a set of regulations governing the disposal of this excess property?

25 Material referred to on file with the subcommittee.

The

Mr. DREANY. Well, actually we don't have the regulations. regulations are those of the General Services Administration and of the Department of Defense.

Senator GRUENING. Well, but there must be some particular regulations that apply to the ICA part of the program.

Mr. DREANY. Well, no. In other words, so far as we are concerned-I mean, it is the same as new equipment, except at a depreciated price.

Senator GRUENING. Let us say that a given country, Burma, makes a request for a certain amount. Now, what is the procedure under which that is handled? Don't you have some regulations? You receive a request. Is this a blanket request: send us whatever you can spare, or we want so many bulldozers or so many adding machines?

Mr. DREANY. Yes. It takes that form, a specific request for specific items of equipment.

Senator GRUENING. Do you scrutinize that and determine whether it is a valid request or not?

Mr. DREANY. Yes. The agency does. My particular division does not, but the program people, particularly in ICA and in our missions, in effect certify to us that it is a valid request of equipment for a specific purpose, and upon that, if the request is for new equipment and we know of the availability of excess which is comparable to that new equipment, we would go back and offer the excess property to the cooperating country in lieu of the new property which they have requested.

If they are willing to accept it, we ship them-we arrange the acquisition of the excess and ship it instead of going out and buying

new.

Senator GRUENING. Well, do you have any check as to whether their demands are reasonable? Supposing they make a request for a quantity that obviously is in excess of what they might be able to use? Do you check on that at all, or do you just accede to whatever the request might be?

Mr. DREANY. As I say, by the time it gets to us, it has been pretty well screened down, and it is a justifiable request.

Senator GRUENING. Who has screened it? Who besides you knows the needs of a foreign country?

Mr. DREANY. Well, our missions. Our mission in that country. They know a whole lot more about each individual country than I could hope to know about 60 or 65.

Senator GRUENING. The screening takes place on the ground in the local mission?

Mr. DREANY. That is correct.

Senator GRUENING. There is a representative there who appraises the local needs and judges whether requests are reasonable, and then transmits them?

Mr. DREANY. That is right. And whether it is in effect in one of our approved projects or programs.

Senator GRUENING. Do you know whether the local ICA representative in the mission always approves a request, or does he screen it and modify it if he thinks it is advisable?

Mr. DREANY. Well, I think that they are screened. The programs and projects are presented to Congress when we request appropriations. While they are in effect illustrative, they are pretty much in line with the particular program which we want to carry out in that country during a particular year. Whether they are emphasizing industrial development or whether they are concentrating on the improvement of health or the eradication of malaria or the upgrading of their school systems, all of those things are planned in the program before we actually ever even request the money from Congress.

Senator GRUENING. Well, thank you very much, Mr. Dreany. We appreciate your coming in to testify.

Let me ask you one more question:

Is this excess mostly for economic aid, or is it some military aid? Mr. DREANY. I am talking only of economic aid. Military aid would not be I am not concerned with that.

Mr. SHRIVER. Mr. Dreany, just one more question I want to ask you:

Can you distinguish in the figures that you are going to supply for the record what percentage represents foreign excess and what percentage represents domestic excess? Or is most of this foreign excess?

Mr. DREANY. I can give you that exact breakdown for calendar year 1959. I am not sure I can for 1958 and 1957. I will try. Mr. SHRIVER. Give us the best you can.

Mr. DREANY. I am not sure I can identify the source of each particular piece.

Senator GRUENING. Well, it is getting to be toward 1 o'clock. I think we had better adjourn until 2.

(Whereupon, at 12:40 p.m., the special subcommittee recessed, to reconvene at 2 p.m., this same day.)

AFTERNOON SESSION

Senator GRUENING. The meeting will come to order, please.

I have a letter from the Secretary of the Department of Health, Education, and Welfare, on the subject of including libraries (S. 155) and proposing an amendment which I will ask the Department to draft, on real estate.

That will go in the record at this point.

(Copy of letter of August 10, 1959, from Secretary, Department of Health, Education, and Welfare, follows:)

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,

Hon. JOHN L. MCCLELLAN,

Chairman, Committee on Government Operations,
U.S. Senate, Washington, D.C.

August 10, 1959.

DEAR MR. CHAIRMAN: As you know, your Special Subcommittee on Donable Property has been holding hearings on a series of bills proposing the extension of the surplus property donation program, and in certain cases also the surplus real property disposal program, to certain types of organizations and activities (secs. 203 (j) and 203(k) of the Federal Property and Administrative Services Act).

We have, so far, reported only on four of the bills involved, i.e., S. 1018, S. 1210, S. 1265, and S. 1766. These were the only bills on which we had received requests for reports, and, for the reasons stated in our report of July 17, we were unable to recommend their enactment.