Under (1), the "other strategic materials" include rubber (a highly controversial item) and various vegetable, animal, and chemical products, many of which are of more or less perishable character. Being subject to deterioration, it would be necessary to arrange for rotating the stocks, acquiring additional supplies, and selling those which have been held for some time. The minerals and metals, on the other hand, are permanent, nondeteriorating materials, readily adapted to stock-piling.

Under (2), there is no occasion for an administrative board to handle the freezing of the Government's strategic mineral and metal stocks. All that is needed is a custodian, the Treasury Procurement Division, to hold them intact for use of the Army and the Navy in the event of a future war.

In the future, Congress may well wish to enact a fully rounded out stock-piling program, providing both for additional acquisition of minerals and metals, and arrangements for handling the nonmineral strategic materials, so many of which are subject to spoilage or deterioration. The immediate problem, however, is to make sure that we do not dissipate the strategic mineral and metal stocks which we now have under the mistaken notion that they are surplus. Considering the future needs of our country and the heavy drain which the war has made on our natural resources, the stocks now held should in no way be considered surplus, and this fact should be fully recognized in any law setting up the standards for disposing of the various types of property accumulated during this war. Without such a provision, not only may these valuable strategic reserves be dissipated, but the immediate threat to our mining industry may be such as to discourage continuance of the production urgently needed for prosecuting the present war.

Section 17 of S. 2065 as it now stands in the bill is a simple, clear-cut provision to accomplish this end. It should not be complicated by additional provisions which, while possibly desirable in a subsequent over-all stock-piling measure, would complicate and overburden this section and might jeopardize its enactment at this time.

MEMORANDUM FROM THE DEPARTMENT OF JUSTICE REGARDING DISPOSAL OF SURPLUS AGRICULTURAL LANDS TO FORMER OWNERS

(Pars. (a), (b), and (c), sec. 19, S. 2065, 78th Cong., 2d sess.)

Insuperable practical and legal difficulties will be encountered by the preferential rights granted "the person from whom such land was acquired by such department or agency, or in the event of his death, his heirs" to reacquire the land at a price fixed in an amount "equal to the price paid for it at the time of its acquisition by the department or agency by which it was acquired," increased or decreased by an amount equal to any increase or decrease in the market value of such lands by reason of any improvements or changes made thereon, or by reason of the use while it was owned by the United States, "or at a price equal to the market price at the time of sale of such surplus land, whichever price is the lower," for the following reasons:

1. Original property lines obliterated.—In all of the Original Thirteen States and in some additional areas there are no Government sectional surveys. In the Western States, property lines were often irregular and did not follow section lines. Ownerships in some of these areas were fixed and determined by the Government only with the greatest difficulty because of natural monuments having been changed or removed in the course of time. Still more sweeping changes followed Government occupation and the original lines are wholly obliterated. For example:

Camp Campbell (more than 100,000 acres): Embracing portions of four counties in Kentucky and Tennessee, Camp Campbell was used for a tank-training area with the result that most all surface lines were completely erased or destroyed and could not again be determined.

Camp A. P. Hill, Va. (80,000 acres): The maneuvers at Camp A. P. Hill, an armored motor division training area, has also eradicated many former lines of ownership.

Camp Stewart, Ga. (360,000 acres): This project and similar training areas, as the artillery ground at Jefferson, Ind. (60,000 acres), Pine Camp, N. Y. (80,000 acres), and others, illustrate the virtual impossibility of reestablishing the lines of former ownership.

2. Surveying expense and delay. In the process of paying property owners when their properties were taken, months of delay and many hundreds of thousands of dollars in surveying expenses were expended on these large landacquisition projects merely to determine the ownership boundary lines so that proper deeds could be given to the Government and consideration based upon the acreage conveyed. At Campt Stewart, Ga., for example, there were at one time 18 to 20 survey crews in the field at one time. However, as soon as this work was completed in many projects, most of the survey lines were abandoned and obliterated. While this expensive procedure was eliminated in many large projects such as Camp A. P. Hill, Va., Wolf Creek ordnance plant, Tenn., Camp Campbell, Tenn. and Ky., Pine Camp, N. Y., and other areas, by the use of aerial photographs as a substitute for field surveys, the reverse process is not practicable as lines cannot generally be refixed by the use of aerial photography where topography has been changed.

The process of making field surveys would have to be repeated in reverse if former owners or their tenants were to have the absolute legal right to repurchase the same property from the Government, except that the difficulties of determining the property lines would in a large proportion of the cases be insuperable because of the disappearance of natural monuments and property lines due to Government use and military maneuvers. Not only would these survey expenses again be incurred, but the time required to reestablish the former boundary lines in view of an absolute right of the former owner or his tenants to purchase his former interest would cause a very considerable delay in disposal of lands.

3. Title difficulties.---While the Government, in cases of uncertain descriptions on the acuisition of these properties, was able to cure some title defects by accepting quitclaim deeds to the entire area of the project from all vendors where descriptions of an area were in doubt, this process would not work in reverse. On the contrary, the Government would have to have precise descriptions to convey back the land to the former owner or his tenant and innumerable disputes as to what the boundary lines of the former ownership had been would ensue where two owners claimed adjacent properties with conflicting ideas as to the location of the boundaries of the property.

While an attempt is made to limit the rights of former owners and their tenants to "90 days after notice has been given in the method to be determined by the Administrator," there would be disputes as to the adequacy of notice to former owners and tenants and very real legal questions would arise in cases where the former owner had died and an heir might easily assert at a later date that he had inadequate notice of the right to repurchase. Regardless of the provision in section 27 of the bill that a deed, bill of sale, or other instrument purporting to transfer title or interest in surplus property executed by or on behalf of the Administrator or the Government agency shall be "conclusive evidence of the compliance with the provisions of this act so far as the title or other interest of any bona fide purchaser or lessee, as the case may be, is concerned," contests of title would surely ensue in spite of the effort to limit the owners' and tenants' rights.

Moreover, the mandatory character of this statutory provision would constitute a virtual cloud on title to any lands disposed of as surplus by the Government until conclusive disposition of the rights of former owners and tenants, or, if deceased, their heirs. It would be further complicated where the former owner had died and left heirs who were not sui juris.

4. Necessity for approved forms of conveyance.-Section 27 of the bill provides for "a deed, bill of sale, lease, or other instrument" for conveyance of land and interest in property "which is executed by or on behalf of the Administrator, or by the Government agency." If each agency prepared drafts of conveyances without approval of the legality of the forms by a proper central agency, such procedure will result in confusion, additional increased expanse, and possible losses to the United States. Experience has shown that in the volume of disposal work, some deeds and other instruments may be so drafted as to involve obligations on the United States for which Congress has made no appropriation. 5. Issuance of warranty deeds by the Government.-While this subject de mands separate consideration, it must be pointed out here that the Government should be in a position to issue warranty deeds for property sold, but only when in the opinion of the Attorney General the title in the United States Government is of such character as to justify the issuance of a warranty deed. Such discretion should be vested in the Attorney General because (a) he has

examined the title when the property was acquired and given an opinion on its validity; (b) in the Attorney General's office a record has been kept of opinions given, and title evidence on which the opinion is based is available; (c) the Attorney General is charged by law with the conduct of all litigation in respect to disputes over title which may arise. The reasons for issuing warranty deeds (rather than merely quitclaim deeds as in the past) when in the discretion of the Attorney General a warranty deed is justified, may be summarized as follows: 6. Where Government asquired perfect title, it can safely warrant title on disposal. In respect to thousands of tracts acquired in the war effort, the title of the Government is perfect as in all acquisitions of fee interests in realty, where declarations of taking were filed. There is no reason to give merely a quitclaim deed for such tracts. Warranty deeds can be issued with no attendant risk of liability on the part of the Government. On the other hand, many titles were acquired subject to outstanding mineral rights, restrictive covenants, rights of the public in tidelands, water rights, easements, and rights-of-way. Warranty deeds may be given even in such cases, subject to such rights, but obviously this should be done only in the discretion of the Attorney General.

(b) Increased sales prices and savings to purchasers.-A warranty deed from the United States should constitute the greatest obtainable title protection, thus eliminating the necessity for purchasers securing other title evidence or insurance policies. In those instances where the abstracts or other title evidence purchased by the Government on acquiring the property relate only to the parcel being conveyed, such evidence could also be delivered to the purchaser on disposal of the property. In future sales of the particular parcel included in such warranty deed, it should be necessary to search the title back only to such deed, which may be said to be comparable to a patent emanating from the sovereign. With such assurance purchasers will offer the full values of properties, whereas in the past and for the reasons hereinafter noted, purchases from the United States were similar to buying a "pig in a poke." For that reason, purchasers frequently did not offer the full value of properties.

(c) Greater interest of public in sales.-In the past deeds executed by the United States merely quitclaimed title to property to purchasers. Many of the properties sold were acquired through marshals' deeds under executions, levies, and sales in court proceedings during the prohibition era. In such cases the title was not examined for the United States by anyone and purchasers in many instances did not get legal title to lands. Such sales throughout the United States may have caused the general public to believe that safe titles could not be acquired in purchasing lands from the Government. As an example, two properties in Chicago acquired by the United States in this manner were recently sold by the United States for a consideration of $10 each. If advance notice is given that warranty deeds will be issued for properties, many persons who would not otherwise be interested may make offers to buy.

It scarcely need be stated that if the legal functions attendant upon approval of deeds of conveyance, and upon the issuance of warranty deeds were scattered among the several disposal agencies of Government, the following results would soon be apparent: (1) There would be no standardization and equality of policy in the approval of titles and the issuing of title evidence; (2) several agencies rather than one would have to be supervised in respect to the type of warranties issued by the Government, such warranties representing outstanding potential liabilities; (3) there would necessarily be duplications of legal staffs to the extent that legal counsel would have to be employed for title examinations; (4) there would be great delays for the rapid handling of title work requires considerable organizing and background of experience; (5) the staffs of the several agencies would not be famiilar with the policies followed by the Attorney General in the consideration and approval of the titles and they would not have the accumulated data and files of the Department of Justices relating to the particular property under consideration; (6) the legal staffs of the separate agencies might be subject to administrative pressure to approve titles and recommend warranty deeds where the condition of the title would not justify such action. Recommendaion.-It is recommended that instead of giving to former owners an absolute legal right of repurchase of their former properties-which would obstruct the disposal program for the reasons stated above-the objectives can be accomplished by expressing in the policy section of the act a desire that owners, insofar as practicable, be permitted to repurchase their properties, or, if it is not practicable or advisable to reestablish the old property lines, then they might have preferential rights to purchase the farm tract in that area.

Thus, in many cases where property lines have not been obliterated, it will be possible for the Administrator to permit the former owners to repurchase the same farms they formerly occupied, but in a preponderance of the areas to be disposed of, where the property lines have been obliterated, or where the area had best be divided up into economic farm units, the owner may be permitted preferential rights in buying a farm in that same area. Others can thus be given a preference for resettlement in that area, even though they be not on the same farm where they formerly were located, but this should be an administrative matter and not a matter of legal right fixed by statute.

It is also recommended that all conveyances be made subject to the approval of the Attorney General and that warranty deeds be authorized when, in the discretion of the Attorney General, they can be issued in the best interest of the United States Government.

This memorandum has not been submitted to the Bureau of the Budget in the usual way, because of the speed with which the above bill is being considered in the Senate, and therefore the foregoing views are not related to the President's program but are the views of the writer emanating from experience as Assistant Attorney General in charge of the Lands Division, Department of Justice. Respectfully,

NORMAN M. LITTELL, Assistant Attorney General.

The CHAIRMAN. The public hearings are closed.

(Whereupon, at 4: 10 p. m., the committee went into executive session, after which the committee adjourned.)

APPENDIX

(Letter and Memorandum from the Coordinator of Inter-American Affairs follow :)

COORDINATOR OF INTER-AMERICAN AFFAIRS,

August 16, 1944.

Hon. JAMES E. MURRAY,

United States Senate, Washington, D. C.

DEAR SENATOR MURRAY: I am sending you a revised draft of the memorandum prepared by this office entitled, "Latin America as a Market for Government Stocks of Machinery and Equipment." The revision includes estimates of the value of equipment likely to be required as replacements for existing facilities, in addition to the estimates in the original memorandum concerning the equipment for the development of new plant capacity.

Although the memorandum is necessarily based on estimates, I trust that the data it contains may be of some assistance to you.

Sincerely,

NELSON A. ROCKEFELLER,

Coordinator.

LATIN AMERICA AS A MARKET FOR GOVERNMENT STOCKS OF MACHINERY AND

EQUIPMENT

(Washington, August 1944)

INTRODUCTION

To estimate the value of used equipment that may profitably be utilized in the other American republics in the 10 years following the cessation of hostilities, it has been necessary to estimate the total investment in the form of land, labor, buildings, machinery, and equipment that can profitably be made in that period. Incomplete information indicates that the value of productive machinery and equipment currently in use in the other American republics may approximate $7,000,000,000. It appears reasonable to suppose that this amount could be doubled in the 10 years following the war. During the war existing capital goods have been subjected to heavy usage, frequently without adequate repair. Depreciation and obsolescence have reduced the effectiveness of such equipment. It may be assumed, therefore, that, within the first 4 years after the war, 40 percent of the existing capital equipment will require replacement. Thus, industrial expansion and replacement combined may amount to as much as 9.8 billion dollars (expansion 7 billion, and replacement 2.8 billion). Such suppositions, however, are based upon the further assumption of the prevalence of favorable economic and political conditions not only in the other American republics and the United States but also in the other nations of the world. These conditions would include a high level of employment in large industrial countries, a reduction in trade barriers, the pursuance of sound fiscal policies, the maintenance of stable currencies, and the adoption of a cordial attitude toward foreign capital, and foreign technicians and entrepreneurs.

Value of used equipment.

Inasmuch as the United States will be the major capital-exporting country after the war, it has been assumed that this country will provide most of the equipment obtained by the other American republics from abroad, at least in the first 10 years after the cessation of hostilities. It remains, however, to estimate what proportion of the total will be supplied from abroad, and what proportion

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