II. RELATIONS WITH GOVERNMENT AGENCIES A. Consultation and Assistance.-Reconstruction Finance Corporation shall request the War Department, the Navy Department, the Department of Justice, the Department of Agriculture, the Department of the Interior, the Public Buildings Administration, the National Housing Agency, the Civil Aeronautics Administration, and such other agencies as Reconstruction Finance Corporation may from time to time select, each to designate a representative to serve on a Surplus Real Estate Advisory Committee to give advice, suggestions, and recommendations to Reconstruction Finance Corporation with reference to the problems of real estate disposal. Reconstruction Finance Corporation may also call upon other Federal agencies for the performance of appropriate functions in connection with a disposal program or for the temporary assignment of technical personnel, on a loan reimbursable basis, for employment under Reconstruction Finance Corporation supervision. Procedures shall be developed for consultation and cooperation of field agencies. B. Transfers to Federal Agenices.-(1) Surplus land which has been used by an owning agency by permit from another Federal agency, shall be returned to the original Federal agency as soon as practicable. Such lands, however, which have Government owned improvements thereon, need not be returned to the original Federal agency until dispostion has been made of the improvements. (2) (a) Surplus land, upon request and proper authorization from another Federal agency, shall be transferred to the requesting agency; arrangements shall be made for suitable notice of the availability of surplus lands to agencies which seem likely to be interested. (b) Submarginal and marginal lands, in certain instances, may be temporarily withheld from the market and called to the attention of the Federal agency which is usually interested or which usually administers such land, in order that it may conduct an investigation and request transfer to it of such land. (c) Surplus lands which are intermingled with, contiguous or proximate to Federal land-use projects and which are of the same general character as the original Federal project and suitable for inclusion therein, may be transferred to the Federal agency administering the primary area upon receipt of request and proper authorization. Such intermingled land further shall be temporarily withheld from sale and called to the attention of the interested Federal agency in order that it may conduct an investigation and request such transfer. (d) Transfers made pursuant to paragraph 2 (a), 2 (b) or 2 (c) above shall be made for a reimbursable amount representing the fair market value, as determined by the Reconstruction Finance Corporation, unless a transfer without reimbursement or transfer of funds is valid under law. (3) In general where restoration of lands, which are to be returned to other Federal agencies, has not been effected by the owning and declaring agencies, the Reconstruction Finance Corporation shall consult with the declaring agency and recommend to the Administration a course of action, when such appears feasible and the cost thereof reasonable, which may enable restoration of the land to be made. C. Transfers to State Agencies.-Cases in which a preference to purchase or lease has been requested by States, counties, municipalities, or political subdivisions thereof, shall be referred by the Reconstruction Finance Corporation with full information and recommendations to the Administration for its decision. A. Disposal Plans.-Reconstruction Finance Corporation shall establish procedures whereby, prior to disposing of any substantial land area, such as a camp site or air field, a general disposal plan for the entire area shall be prepared, with the recommendations of the appropriate field representatives, giving full consideration to views of local individuals, groups or organizations, and approved by Reconstruction Finance Corporation in Washington, D. C. B. Appraisals.-All disposals shall be preceded by appraisals obtained by Reconstruction Finance Corporation Disposing Loan Agencies. Appraisals shall be made only by experienced individuals who are qualified to do such work. Such individuals may be staff appraisers of Reconstruction Finance Corporation Disposing Loan Agencies, individuals employed on a loan reimbursable basis from other Federal agencies or independent appraisers in private business. Individuals making appraisals shall be selected from the local territory in which the land to be appraised is located. In sales projects, where a large number of tracts are to be sold, review spot check appraisals shall be made in the field and all appraisals shall be reviewed by qualified individuals designated as chief appraisers. The basis of appraising shall be the estimation of fair market value which may be defined as the highest price in terms of money which land will bring, if exposed for sale in the open market with reasonable time to find a purchaser, buying with a full knowledge of all the uses and purposes to which it is adapted and for which it is capable of being used. The estimated fair market value of any parcel of real estate shall be for its entirety although the estimated value of land and improvements may be indicated separately as a memorandum. All appraisal reports shall contain the appraiser's certification that he has no interest, direct or indirect, in the property or sale or disposition thereof. Appraisers shall be requested specifically to give full consideration to market values and trends in the territory where the property is located which he is appraising. C. Surveys, Plats, and Lay-outs.-All real estate to be sold shall be ade quately identified by legal description in order that prospective purchasers may know exactly where the property is located and its area. Surveys shall be made, when necessary, and markers or monuments will be placed on the land. While agricultural and other rural land should ordinarily be replotted into family-sized units, it is not contemplated that urban land will be replotted, unless replotting will permit more advantageous sales for the Government. Cooperation shall be maintained with local officials in the matter of providing for roads and other public utilities in replotting land. Orderly and complete disposal, maintenance of market stability and provision of full economic and productive opportunity to purchasers, may necessitate the subdividing of land into economic use or operating unit areas, without regard to the size of the original tracts acquired by the Government. D. Selection of Buyers.-Every effort shall be made to find buyers who will purchase surplus real estate for use and not for speculation. Surplus land shall be sold only in usable units and shall not be sold in large blocks for speculation or to buyers who may wish to assemble large areas of land for speculative future use. When a land unit of sale approximates the original tract, the former owner shall ordinarily be granted a preference to buy at the fair market value as determined by the Reconstruction Finance Corporation. In other cases a preference shall usually be granted to former owners in the area being sold, to purchase any available tract at the fair market value as determined by the Reconstruction Finance Corporation. Such preferences shall be for a reasonable period following publication and written notice to the former owner at his last known address. Preferences referred to herein shall not be extended beyond actual former owners or surviving spouses. E. Sales Methods and Prices-(1) Prices.-Surplus war real estate shall be sold at fair market values or at prices representing a reasonable departure therefrom, regardless of its original cost. (2) Procedures.-Wide publicity and advertising shall be given to all sales. Advertising shall be through local newspapers and publications and sale signs shall be posted on lands to be sold. Sales may be made by informal bids, sealed bids, or by negotiation. Negotiated sales are considered preferable and should be used more extensively than other methods. Bids shall be subject to rejection, if offers are not considered satisfactory. Adequate cash deposits will be required with each bid. Sufficient time shall be allowed, in the terms of bids or offers from purchasers, to permit adequate consideration and for determinations by the Reconstruction Finance Corporation Board of Directors. In the event it is determined that surplus real estate cannot be sold within a reasonable period, it may be leased by short-term leases in order to obtain the maximum return pending such time as it may be sold. (3) Brokers.--Where, in its judgment, disposals will thereby be made to the better advantage of the Government, Reconstruction Finance Corporation is authorized to utilize the services of approved and established real estate brokers. No exclusive listings of real estate shall, however, be made with brokers. Brokers shall not be paid a commission for leasing or selling real estate to another Government agency or to an individual, firm or corporation sponsored by another Government agency. Commissions not to exceed established conventional rates, ordinarily paid in a particular community, may be paid to brokers who perform the service of producing buyers and negotiating sales to them. Such commissions shall be paid only after sales transactions have been consummated and a further requirement shall be that the buyer will execute. an affidavit to the effect that the broker to whom the commission is to be paid is the only broker whom he recognizes or had any dealings with in connection with the sale and that the broker did perform such services as are ordinarily performed by a broker in bringing buyer and seller together. (4) Salesmen.-Sales managers and salesmen may be individuals in the employ of the Reconstruction Finance Corporation Loan Agencies, individuals employed on a loan reimbursable basis from other Federal agencies or independent brokers. Salesmen shall be thoroughly instructed as to their duties and manner of performance before entering upon such duties. F. Financing.-The Reconstruction Finance Corporation shall assist in the financing and extending of credit terms to purchasers, calling to their attention the availability of the loan facilities of other Federal agencies, as well as life insurance companies, mortgage loan institutions and other private financing sources, and making such use of its own loan facilities as are consistent with its lending policies and needed to facilitate the disposal program. The amount of such financing and terms in each case, of course, will depend upon the loan policies of the agency or institution providing such accommodations. All sales, however, shall be firm and not speculative and adequate cash payments shall be required. Purchasers shall be required to provide insurance coverage to protect the interest of any mortgagee. G. Conveyances.-All conveyances of surplus real estate shall be by the usual quitclaim deed or by other appropriate conveyance without representation or warranty. Purchasers may be permitted to copy or inspect any title papers which are in the possession of the Government, at their own expense and at a place designated by the Reconstruction Finance Corporation. Every facility now available to the Government shall be made available to purchasers to minimize the cost of title examination to them. Deeds may provide for a recapture clause in the event that land being conveyed may be required again by the Government in a future national emergency. Decisions as to whether conveyances will contain recapture clauses, shall be made after recommendations have been requested and received from the interested Government agencies such as War Department, Navy Department, Civil Aeronautics Authority, etc. In general, conveyance instruments shall be of such nature as to vest title in private ownership in order that real estate may be put back on a taxpaying status. Sales contracts, in which the Government retains title, may be made in exceptional cases when such procedure may be absolutely necessary. Such cases, however, shall be kept at a minimum. II. Records and Publicity.-The Reconstruction Finance Corporation shall assemble and maintain adequate and comprehensive records which will indicate clearly the extent of investigation and analysis which it has made in developing disposal plans and in testing out the market prior to making sales. It shall also adopt procedures for keeping the public fully advised of its progress and plans with reference to the disposal of surplus real estate. I. Relations with Administration.-The Administration shall be consulted prior to the making of any major changes in the organization of Reconstruction Finance Corporation for the handling of real estate disposal, or in its mechanics, policies or procedures for such disposal, and also prior to the making of any major disposals which may involve questions of policy or the establishment of a precedent. W. L. CLAYTON, Administrator. WASHINGTON, D. C., July 26, 1944. SURPLUS WAR PROPERTY ADMINISTRATION REGULATION NO. 3 SCOPE OF REGULATION By Regulation No. 1, Reconstruction Finance Corporation was designated as the disposal agency for surplus war property of the type generally described as capital and producers' goods. Property so assigned includes machine tools. The purpose of this regulation is to establish a pricing policy for the sale by Reconstruction Finance Corporation of standard general-purpose machine tools which have been used and which it has available for disposal as surplus. 98534-44-pt. 15--10 The policy has been established on a fixed price basis so that prospective purchasers will be able to make current plans with reasonable certainty involv ing the purchase of surplus machine tools. The prices fixed are based on the original price of the machine tool at the plant of its manufacturer, depreciated over the period of its active use at rates which take into account, among other things, the usage which most such tools are undergoing in war production. This regulation does not apply to special types of machine tools or to other production equipment. This regulation shall become effective August 15, 1944. It is recommended that any arrangements made prior to that date for the sale of used standard general-purpose machine tools at prices differing from those set forth herein, be revised to conform to the prices herein set forth if they have not theretofore become contractually binding. While this regulation applies only to sales of surplus machine tools, the Administration has been advised by the principal owning agencies that, in such sales of machine tools which have not been declared surplus as may be made by them, they intend to adhere to the prices herein set forth. DEFINITION "Standard general-purpose machine tools" are machine tools being currently produced and are types used in civilian production; they consist of those listed in the Standard Commodity Classification, Vol. I, Major Group 34, Code Number 34 11000 to 34 19900, inclusive, with the exception of Special Machine Tools designed for and used exclusively in the production of war material, such as: Special gun reaming, rifling and chambering machines. Gun boring and turning lathes. Shell turning lathes. Shell tappers. Small arms ammunition machinery. Special military tank manufacturing machine tools. Special aircraft manufacturing machine tools. Special shipbuilding machine tools. Other special war production machine tools. PRICE POLICY All sales of used standard general-purpose machine tools, which have been declared surplus to Reconstruction Finance Corporation as disposal agency, shall be made at prices computed as follows, provided that all sales shall be made in conformity with all applicable War Production Board and Office of Price Administration regulations: (1) The original price of the manufacturer of the machine tool, inclusive of electric equipment and standard accessories, shall be computed f. o. b. the plant of such manufacturer. If special tooling is to be sold with the machine tool, its original price shall be included, on the same basis. (2) The period of active use of the machine tool shall be computed on the basis of the best information reasonably available. This period shall run from the estimated date the machine tool was originally put in use to the date of sale, if the machine tool is then still in use. If the machine tool is not in use at the time of sale, the period shall run to the estimated date when the machine tool became idle. (3) The price computed pursuant to paragraph (1) above shall be used as a base. The price at which the machine tool shall be offered for sale shall be computed by applying to that base the percentage appearing in Exhibit I to this regulation opposite the period of active use of the machine tool computed pursuant to paragraph (2) above. The percentage appearing in column B of Exhibit I shall be applied where the buyer is the person who is using the machine tool at the time of sale or, if the machine tool is then idle, the person who last used it, and the percentage appearing in column A shall be applied where the sale is to any other buyer. (4) The price computed pursuant to paragraph (3) above shall be the sale price f. o. b. cars or trucks at the location of the machine tool at the time of sale. WASHINGTON, D. C., August 9, 1944. W. L. CLAYTON, Administrator. The CHAIRMAN. We are very much obliged to you, Mr. Clayton. Mr. CLAYTON. Thank you, Mr. Chairman and gentlemen. I am sorry to have taken so long. The CHAIRMAN. We have a representative from the War Department who wishes to be heard for 10 minutes. Senator O'MAHONEY. Excluding questions? STATEMENT OF WILLIAM L. MARBURY, WAR DEPARTMENT Mr. MARBURY. Mr. Chairman and gentleman; in the absence of Judge Patterson, who is overseas, and of General Clay, who is obliged to be out of town today, I have been assigned the duty of briefly stating to the committee the views of the War Department on S. 2065, which we first saw in its present form about 48 hours ago. We fully endorse all of the proposed amendments which Mr. Clayton has offered here. We think that they will improve the bill, that they will make it more workable, and that they will make our task as the principal owning agency-if you exclude plant facilities-and the agency with the largest responsibility in the matter of the disposal of contractor inventory much easier than if the amendments were not adopted. We collaborated with Mr. Clayton in the preparation of the bill which was introduced in the House as the Colmer bill, and which is now under debate on the floor there in substantially the form in which it was introduced, and we have in every respect endorsed that bill, and I think that it is an excellent and workable piece of legislation. We believe that as amended, in accordance with the suggestions of Mr. Clayton, that this bill would likewise be an excellent and workable piece of legislation. There are some provisions which particularly pleased us in the War Department, because of the problems which we are going to have to face in connection with the disposal of surplus property, and of property, some of which is not declared surplus, but which comes on the |