Hon. Harold L. Ickes (Secretary of the Interior) on S. 2065- Hon. Harold L. Ickes (Secretary of the Interior) on S. 2045.. Hon. Maury Maverick (Chairman, Smaller War Plants Corporation, and Vice Chairman of the War Production Board)....... Hon. William L. Clayton (Surplus War Property Administrator) Father Edward B. Stanford (American Council on Education). Dr. Gould Wickey (Association of American Colleges)___ Russell Smith (legislative secretary, National Farmers Union). Statements of- Hon. William L. Clayton (resumed). 1079, 1106 Mr. William L. Marbury, representing the War Department_ 1155 1167, 1171 1175 MOBILIZATION AND DEMOBILIZATION PROBLEMS WEDNESDAY, AUGUST 16, 1944 UNITED STATES SENATE, COMMITTEE ON MILITARY AFFAIRS, Washington, D. C. The committee met, pursuant to notice, at 10:30 a. m., in the committee room of the Committee on Military Affairs, United States Capitol, Senator Robert R. Reynolds (chairman) presiding. Present: Senators Reynolds (chairman), Johnson, Hill, Downey, Chandler, Murray, O'Mahoney, Austin, and Gurney. The CHAIRMAN. The meeting will please come to order. We have the honor and pleasure of having with us this morning Mr. Ickes, the Secretary of the Interior, whom we will be delighted to hear in reference to the pending bills relating to the disposition of surplus war property, both real and personal. STATEMENT OF HON. HAROLD L. ICKES, SECRETARY OF THE INTERIOR Secretary ICKES. Mr. Chairman and gentlemen of the committee: At the outset of my statement on surplus war property, I wish to express my real appreciation of your courtesy in permitting me to appear before you. It is a subject in which I have a very keen interest. In the first place, the administration of Government real property has been a major task of the Department of the Interior even since its organization. In the course of performing that task the Department and its component bureaus have disposed of, in accordance with the public land laws, more than 1,000,000,000 acres of land. Today the Department of the Interior is responsible for the administration of more than a quarter billion acres of land in the continental United States, and of an even greater area in the Territories and possessions. In the second place the many surplus property bills that have been introduced in recent months tend, in the main, to assume that real property is susceptible of administration through the same procedures as personal property. This assumption overlooks the very significant legal, economic, and practical differences between real and personal property, and the dissimilar management methods customarily applied to each in both Government and private business. The surplus real property bill introduced yesterday by Senator O'Mahoney, S. 2078, is the only bill now pending before the Congress which, in my opinion, fully recognizes the specialized nature of the real property disposal problem. In the third place, the management of Government surpluses, whether consisting of personal or of real property, is a matter which can either make or break our economy in the post-war years. In this connection I am happy to see in one of the bills you are now considering, S. 2065, introduced by Senators Stewart, Murray, and Taft, provisions directed to the end of assuring that surpluses will be used to promote the greatest good of the greatest number. Among these are provisions requiring the purchasers of war plants to keep them operating for a given period of years or else return them to the Government; provisions for retaining, intact, surplus stocks of strategic and critical materials against the day of a future defense emergency; provisions for preferring veterans in the disposition of property capable of use in agricultural or small business enterprises; provisions imposing various safeguards against the capture of property by the greedy hand of the speculator or the dead hand of monopoly; and provisions directed to the end of promoting economy in Government operations through the utilization of available surpluses in lieu of future purchases at costs probably double the market value of the goods on hand. In the fourth place, the tremendous volume of surpluses that will become available will constitute an equally great temptation to cheats and chiselers. The inspired looters of the past have thought out ways and means to tap the Treasury which have been both original and astounding. They will do so again, unless tight controls on the disposal of surplus property are put into effect and unwaveringly maintained. One sound method of checkmating scoundrels would be to place, insofar as possible, the administration of each type of surplus property in the hands of an agency which has had wide and long experience in the management, protection, and disposition of that type of property. Such an agency will have learned to be wise and waryeven hard-boiled-in its consideration of disposal proposals. The disposition of Government property, of course, is not a new problem or one arising out of the special circumstances of this war. However, the variety and amount of property now requiring consideration is greater by far than at any previous time in our history. The effect upon our people and our future economic life of the policies that you lay down will be commensurately greater. The consequences of the Government's method of handling that third part of our Nation acquired by the Louisiana Purchase may, in historical perspective, become insignificant compared to the consequences of disposing of the present industrial holdings of the Government, which have been reported by a Senate subcommittee as equal to one-third of the total value of all privately owned industrial properties in the Nation. Congress has considered the problems involved in disposing of the people's property again and again. Out of that consideration, and out of trial and error during the past 150 years, there have been formulated some fundamental policies upon which we can rely in our concern for the public interests in this vast and complex problem. These principles are crystal clear: First, it is not sound public policy to consider any offer which may result in monopolistic control, restrictive production, economic depression, or lower tax returns. Second, it is not sound policy to encourage speculation, or restrict the benefits of public sales, when the property we sell can promote investment, production, and sound living levels for our people. Conversely, it is sound public policy-whether we are disposing of Government lands, mineral leases, electric power, or commodities-to assure that the benefits of their disposition will be widely distributed and not confined to limited groups. But this does not mean merely an equal opportunity to everyone for a cut of the pie, a sort of superraffle in which both the corporation and the veteran have a ticket entitling them to an equal opportunity to purchase a Government plant or facility. Sound public policy demands that the people's property be disposed of either to public agencies for care, or to private individuals and institutions for use upon a basis that will further to the utmost possible degree the progressive growth of our economic wellbeing. In order to make fully adequate provision for the application of these broad over-all considerations to the disposition of lands acquired or held in connection with the war program, I believe legislation should be enacted that would embrace the following main features: 1. The creation of a central inventory of all Government-owned lands would be a condition precedent to an efficient system of real property disposition. In the present state of affairs it is virtually impossible to obtain an accurate appraisal of the full extent of Government landholdings. The General Land Office in the Department of the Interior now has records of all public-domain lands. These records should be expanded to cover all other Government lands. 2. Before real property not needed by the agency having custody thereof is disposed of to private parties, it is only good business sense to provide for its transfer to any other Government agency which needs the property for an authorized Government purpose. Property should not be considered surplus until it no longer has a Government use if the Government is to obtain full value from its ownership. 3. Provision should be made for giving veterans appropriate preferences in acquiring surplus lands. A substantial portion of the lands to be disposed of at the end of the war will probably be suitable for small farm, small business, or residential purposes. It would be simply justice to make this type of property available for reestablishing veterans in civilian life. Subordinate preferences should also be considered for former owners of the property involved, and for public agencies such as States and municipalities. 4. Flexible disposition procedures should be included that will facilitate the most practical, inexpensive, and effective disposition of property. However, they should be tight enough to prevent fraud or collusion in sales. Above all, they should be designed to prevent speculation in Government property or the promotion of monopolies. 5. Generally speaking, it would seem advisable to consider as surplus only operating property of an agency which is no longer needed by the agency in the performance of its functions. Property specifically set aside by Congress for a particular purpose, such as a national park, should not be subject to disposal by administrative action as surplus property. Neither should similar property set aside for the purpose of conserving the property, or other special types of property which are not held for operating purposes, be susceptible to determination as surplus. 6. Public domain lands should be disposed of only under the public land laws, except in cases where permanent structures have been constructed on the lands. Under existing laws the public lands which have |