make sure I have given you the figures without clouding them in terms of the discussion.

We were talking about $6.3 billion of surplus disposal of domestic surplus, of which $4 billion was scrap. Incidentally, on our scrap return, the best market value we can put on it probably is what we get, and we get about 1.5 percent return on scrap.

Senator MUSKIE. That is 1.5 percent of that $4 billion.

Mr. Moor. That is right, sir. That leaves us, therefore, $2.3 billion worth of property at acquisition price that we have sold as usable property. I simply attempted to categorize that $2.3 billion in two ways. The first part was in terms of salvage, or technical military equipment. And that was $900 million. The other piece was that which we classify as commercial-type property, and that was $1.4 billion.

Senator MUSKIE. Now, this $900 million salvage, what was the actual return on that?

Mr. Moor. Well, in terms of the $2.3 billion of usable property, our average return domestically in this past year has been just 5 per

cent.

Senator MUSKIE. That is the percentage you apply to the full $2.3 billion.

Mr. Moor. That is the $2.3 billion. Now, it might be expected that our technical military equipment sale return would be less than our commercial. And in certain areas it is. But there is a wide range and

fluctuation.

For example, there are certain specific technical parts that bring a pretty good return. On the other hand, there is a wide range in the commercial property sale. We can range as high as 50 and 60 percent of our acquisition value if we are talking production equipment, for example, and we can get down to practically 1 percent if we are talking about used clothing or something like that. there is a wide range.

So

Senator MUSKIE. Overall, then, on this $2.3 billion figure, you get 5 percent actual dollar return. But this is not the full measure of its value, of course, because it has a value for these users over and above that.

Mr. Moor. Our actual total proceeds, including our scrap return, and our sale of usable property in the past year, again, with the final report not yet published, will approximate $225 million.

Senator MUSKIE. That is 5 percent

Mr. Moor. That is the 5 percent plus the scrap return. And that includes overseas, I might add, which would be an additional return to be added.

In other words, if we took 1.5 percent of our $4 billion and 5 percent of our $2.3 billion, added them together, we would be somewhat short of the $225 million. The balance is our overseas.

Senator MUSKIE. I think it is well to get those figures in the record. Otherwise you get a disproportionate idea of what this material is worth.

Well, now, on the $1.4 billion, getting back to using the acquisition figures, you testified $260 million went to this surplus property program in the Department of Health, Education, and Welfare and $20 million of it goes into your special interest program. Now, what happens to the other, roughly, $1.1 million?

Mr. Moor. The other $1.1 million is what we sell as usable property of a commercial type. In other words, it goes on the surplus market and receives the best return we can by any one of a multiple method of sale, depending upon what is considered the best method-anywhere from an auction sale to a competitive sealed-bid sale.

Senator MUSKIE. Now, without knowing what kinds of property are involved in this $1.1 million category, would any of it, in your opinion, be useful to the various agencies which are seeking the benefits of the surplus property program under the pending legislation?

Mr. Moor. Senator I do not think I am qualified to answer that. I think maybe I am a little less qualified after listening to the testimony this morning than I might have thought I was before. But I think I can help by telling you the general major categories of material that we would be selling in this $1.1 million. These are generally in descending order of importance, with the first being probably the largest dollar value.

First of all, we would have electronic and electrical equipment and communication equipment and parts. In terms of dollar value, they would probably be the largest.

Senator MUSKIE. May I interrupt you just a moment. I am sorry I have to leave. I would like you to complete this testimony for the record. But I would like to ask this question before I do leave.

After you have finished giving this information, I wish you would comment on this question:

What would be your reaction to a suggestion that some of this, if it is valuable or could be useful to the people whose interests are being served by this pending legislation-what would be your reaction to the suggestion that by appropriate legislation some of this property be made available to them?

Mr. Moor. Yes, sir.

Senator MUSKIE. Would you comment on that later?

Mr. Mooт. Yes, sir.

Senator MUSKIE. I am sorry I do have to leave, but I thank you very much.

Senator GRUENING. Please proceed, Mr. Moot.

Mr. Moor. To continue, in terms of the categories of the material that we are selling as commercial usable property, the second category would include vehicular equipment and parts. The third would include construction equipment and parts. The fourth would include production equipment, including machine tools, and so forth. The fifth would be ground- and materials-handling equipment and parts. The sixth would be clothing and textiles. And then we have several areas which fluctuate in volume, but are fairly consistent in being within the category of commercial property sold as surplus, and these include office equipment and furniture, photographic equipment, and a loose category of general supplies.

It must be remembered that the Department of Defense carries in inventory some 3.2 million items of supply, and it would be impossible to give any accurate overall framework of the many types, thousands of types of items that become surplus.

In terms of Senator Muskie's request for comment as to the advantage or disadvantage of including or broadening the scope of eligible recipients in the donable property program, Mr. Chairman, again, I

think the past and present position of the Department of Defense is this.

Wherever the national interest can be served, the Department of Defense believes that a sound donable property program is an advantage in its administration and management of its material inventory.

I

say this because of two reasons.

Assuming that the national interest is such that the gross proceeds that we might get by sale, which approximate currently 5 percent, assuming that the national interest does equate, with those gross proceeds, then in its internal management, the Department of Defense finds that the administrative procedure to make a donation is less in time than the administrative procedure necessary to sell the property, simply because we eliminate the preparation for sale, the cataloging, and the invitation for bid lead time, and then subsequent pickup time.

Secondly, for the same reason, the Department of Defense finds it is less costly administratively to make property available for the program than it is to go through the preparation for sale, the advertising, and the necessary administrative costs of selling material.

So if the national interest is served equally as well through the donable property program as a comparable measure to the gross proceeds which might be returned to the Treasury, then the Department of Defense believes that a sound donable property program is a valid inventory management tool.

The question here presumably would be as stated by the previous witnesses-if the significant broadening of the donable property program would complicate the administrative procedures of the donable property program, and because of the need to make priority determinations and allocations in the program, would tend to slow up the program, then what we think is an advantage would prove to be a disadvantage-we would find ourselves holding material with so-called freeze periods for donation inspection, which might very well take longer than we could have disposed of the material by sale.

So I think it is a question which would not be ours to answer in terms of administrative complexities.

But if there is a very real danger of significant administrative complexities, then whatever advantage the Department of Defense would see in its internal administration would probably disappear.

Senator GRUENING. Well, now, with respect to the 30 percent of defense property which is not in actual use, could you detail a little more fully how you store it, how you dispose of it temporarily while waiting for another disposition of it.

Mr. Moor. Well, the property not in use is, of course, the type of property that is support material primarily. It is the repair parts, the petroleum in store, the food in store, the clothing in store.

Now, the total of our inventory in storage, as contrasted to our equipment in use, at the present time approximates $50 billion. Now, in a used condition, of this $50 billion, is a considerable portion of repair parts that have been taken out of operating equipment, repaired, and put back into store to be used on the next overhaul cycle. The material that we carry in store and account for on a continuing basis is scattered, of course, through our depot system throughout the world.

Mr. SHRIVER. Mr. Moot, you referred a while ago to the fact that there are certain educational institutions of special interest to the armed services. In that connection, would you explain for the record how the Boy Scouts, Girl Scouts, and other similar groups receive the property allocated to them?

Mr. Moor. I will try to, Mr. Shriver.

The determination as to which activity or installations or organizations would be considered of special interest to the Department of Defense is a determination of the Secretary of Defense. Because of the training aspects, the Secretary has delegated this determination to the Assistant Secretary of Defense for Manpower and Reserve Forces. The Boy Scout determination was made-and I am going to ask Colonel Rey to correct me if I am wrong on this-during Secretary Marshall's administration as the Secretary of the Department of Defense, and was based on his specific decision. It was his authority to make the decision, and based on the facts as he then, and as has been consistently looked at since, determined the Boy Scouts to be of special interest to the Department of Defense.

Mr. SHRIVER. Thank you.

Senator GRUENING. Thank you very much, Mr. Moot, Mr. Bishop, and Colonel Rey.

The next witness will be Mr. Maurice K. Goddard, secretary of forests and waters, Commonwealth of Pennsylvania.

Mr. Goddard, do you have a prepared statement?
Mr. GODDARD. Yes, sir.

STATEMENT OF MAURICE K. GODDARD, SECRETARY OF FORESTS AND WATERS, COMMONWEALTH OF PENNSYLVANIA, ACCOMPANIED BY JOSEPH A. BLATT, CHIEF, DIVISION OF STATE PARKS, COMMONWEALTH OF PENNSYLVANIA

Senator GRUENING. In the interests of saving time, we will reproduce your statement in full in the record at this point. But we would like to have you highlight it.

(The statement referred to follows:)

STATEMENT OF MAURICE K. GODDARD, SECRETARY OF FORESTS AND WATERS,

COMMONWEALTH OF PENNSYLVANIA

Mr. Chairman, may I first express my thanks to you and to the members of this committee for giving me the opportunity to testify on Senate bill 1766. The point in question-the extension of the list of eligible recipients of Federal surplus to include tax-supported public recreation agencies-may not seem to be of significance when viewed from the Federal level. However, from the position in which I find myself as secretary of Pennsylvania's Department of Forests and Waters, which administers Pennsylvania's State park system, the passage of this bill achieves a degree of considerable importance.

Reviewing the history of various similar pieces of legislation introduced in Congress in the past, I note two comments that have been made time and time again by those who testified in opposition.

First, it was admitted by the witnesses that the basic purpose for which the particular bill was introduced was praiseworthy.

Then, it was stressed that any increase in the number of eligible recipients of Federal surplus would definitely have an adverse effect upon the administration of the distribution program.

That both of these statements are true and correct is plainly evident.

The only questions, therefore, that must be answered are:

First, whether the beneficial effects of this bill as they will be realized by the taxpayers are of enough value to offset the increased administrative burden which will be placed upon the distributing agency; and

Second, and perhaps most important, whether the intent of Congress is being fulfilled by the act of 1949, as amended.

Reviewing for just a moment the provisions of the Federal Property and Administrative Services Act of 1949, I note that eligible recipients of Federal surplus property are placed in one of the following two classes:

1. Tax-supported agencies providing facilities or services in the fields of education, health, Armed Forces training, or civilian defense.

2. In the case of surplus real estate, tax-supported agencies providing facilities classified as public parks, recreation areas, or historic monuments.

The theme of my plea for the passage of bill No. 1766 is, therefore, that the State park system of the Commonwealth is, on the basis of the services rendered and the facilities provided, clearly an integral part of the Commonwealth's program in the fields of education, health, and civil defense; and also that our State park system is an integral part of the Federal program in the fields of Armed Forces training and civilian defense; and that, in spite of these facts, we are denied the privileges afforded other tax-supported agencies in obtaining surplus equipment. We are, of course, eligible to receive surplus real estate. In Pennsylvania, and in most other States, I am sure, our State parks provide vital services in education, in health, in Armed Forces training, and in civilian defense.

In the field of education, I would like to quote from the recreation manual of the Pennsylvania Department of Forests and Waters, where it says:

"The purpose of the Pennsylvania State park system: to promote healthful outdoor recreation and education."

Our park officials are constantly playing host to all types of school, church, and other groups that come to them primarily for educational purposes. This relatively new and somewhat novel use of State parks is having a considerable impact, particularly upon those parks located close to our large metropolitan

areas.

Our camps are filled to capacity by youth organizations such as the Boy Scouts, the Girl Scouts, the Grange, and a wide variety of agencies which receive support from the Community Chest. The officials of these organizations, to a man, emphasize the fact that theirs is an educational program and that the camping period is an integral and important part of their program. They place additional emphasis on the fact that most of their campers live within the large metropolitan areas, and that the week or two that they are able to spend in our State parks is indeed a time of learning and education.

If I may, Mr. Chairman, I would like to digress a moment from the type of education that you and I would commonly picture when the benefits of State parks are under discussion.

Several years ago-on September 7, 1956, to be exact-I was present and witnessed the initial flag-raising ceremony at Pennsylvania's first youth forestry camp in Raccoon Creek State Park. This camp, truly an educational institution, was set up under legislative direction as a step in the rehabilitation of delinquent male youths.

Since that time another similar camp has been established at Hickory Run State Park and a third camp is now contingent upon the action of our legislature. I mention these camps not only because they are definitely a part of an educational program for which the department of forests and waters is partly responsible, but also because of a statement made by our former Governor, George M. Leader, during the flag-raising ceremony. Quoting from memory, Governor Leader said that it was indeed fitting that a State park had been chosen as the site for this first camp, for it was his belief that, if more of our young people, particularly those from the teeming metropolitan areas, could be brought to our State parks, their lives could not help but reflect the benefits of the experience. He stressed the intangible benefits that would be gained by our children and mentioned the fact that our parks and recreational facilities are reputed to have considerable bearing on the Commonwealth's mental health program. In brief, he stated that the opportunity for the State park type of recreation is now considered to be of extreme importance in the development of good, well-balanced citizens.