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concerned, for instance, during the war, that is their job. The Administrator has nothing to do with them. He cannot make them sell anything that they do not want to sell. After the war, however, the Administrator himself, after due consideration and recommendation from these owning agencies, can declare something to be surplus over the heads of the owning agencies, over the heads of the Army and Navy, if you please.

It is provided that a Government agency, which is dissatisfied with that and it says the surplus is necessary to the national security, such agency may appeal from such declaration to the President for a final determination. So it can be blocked, if there is any extreme case, and that would be the restraint put on the Administrator, but that is a conferring of very broad power on the Administrator, and the committee may want to cut it down.

The things I had some doubt about were rather ships, in which case perhaps he might be required to leave that power to the Maritime Commission instead of himself being given the discretion. I assume under this act he would assign it to the Maritime Commission, but some question has been raised as to that and he perhaps should be required to assign it to the Maritime Commission. That is a question of such broad international policy almost that I think the committee should consider whether or not perhaps it may be too broad a grant of power. Senator JOHNSON. May I ask this question, Senator?

Senator TAFT. As a matter of fact, I have finished all I wish to say. I would be glad to answer any questions.

Senator JOHNSON. On that point, suppose the Administrator would want to dispose of 10,000 war planes and the War Department would say, "No; we do not think these 10,000 war planes should be transferred to nation X," and the Administrator would say, "Sure, we want to sell them; we want to transfer them"; and he would take them away from the War Department and dispose of them against the national defense?

Senator TAFT. If they think there is any interference with national defense, they would simply appeal to the President and he would have power to stop it.

Senator JOHNSON. Whereabouts does the President have the power in this bill?

Senator TAFT. On page 10 from lines 12 to 16:

If in the opinion of the owning agency the retention of any property so declared by the Administrator to be surplus is essential to the national security such agency may appeal from such declaration to the President for a final determination.

That, in the first place, would check the Administrator, and, in the second place, make it subject to being held up for the President's determination.

I think, Mr. Chairman, that is all I have to say. There are important questions of policy, and this bill undoubtedly gives the Surplus Property Administrator more power than a number of the other bills do, or more discretion.

Senator STEWART. Since Senator Johnson mentioned one question that I answered, with respect to the intent of congressional control of plants, maybe I did not make myself clear. I was testifying rather hurriedly. Section 20, as Senator Taft pointed out, requires that the Administrator, in cooperation with the appropriate agencies, shall

prepare and submit to the Congress within 6 months after enactment of this act a report as to each of the following classes of Governmentowned property-that includes these iron and steel plants, and all other plants, perhaps. The definitions are set out there. That is, within 6 months after the passage of this act, without respect to the end of the war.

Senator JOHNSON. Does that say he shall not transfer or sell either before that 6 months' period or after that 6 months' period?

Senator STEWART. No, sir; it does not say that. Several other provisions would prevent the sale of it before the war is ended, of course. Senator JOHNSON. Yes; but "report" is so much different from a prohibition, I do not see how they can be compared.

Senator STEWART. It might be at the point of the receipt of the report the Congress would want to impose some prohibition on the sale. I don't know how that would be, but that would be for the Congress to determine.

Senator JOHNSON. Congress has adequate authority always.

Senator STEWART. Sure, Congress has adequate authority, but the matter would be specifically called to their attention by this report. They might not otherwise know it.

I call your attention to another provision here, section 17, page 18, of the act which provides:

Every contract for the sale, or lease for two years or more, of a plant shall be made upon the condition that the purchaser, lessee, or transferee, and their transferees, if any, shall maintain the plant in substantial operation and production for a period of two years next succeeding the effective date of the contract, or, next succeeding the date upon which operations begin after a period of conversion and alteration to be approved by the Administrator.

If it is not operated for a period of 2 years, then the Government, through Congress, may cancel the contract. The contract of sale is made on the condition that it be continued in operation for the period of 2 years.

I would like to call your attention to one other thing, too.
I hate to continually interject here.

Senator TAFT. That is all right.

Senator STEWART. This act also provides for the giving of preferences to veterans of this World War who will want to be rehabilitated and want to return to business.

Senator TAFT. May I add one thing? I said that this gave very wide power to the Administrator of Surplus Property. The bills we are considering in the Senate today, I think both the Kilgore bill and George bill, put the Director of Surplus Property under the over-all Director of War Mobilization and Reconversion, and he is authorized to issue directives to the Director of Surplus Property, so that he has really the final word on what shall be done, except for this one appeal to the President in case of national security.

Senator MURRAY. Senator Taft, I think that this problem of the disposal of surplus property is recognized in this country as probably one of the most important problems in connection with reconversion. There has been considerable comment in some sections of the country, and in the newspapers to the effect that we have been slow in having this legislation brought before the Congress and having it enacted. I would like to have your statement on that as to whether or not there has been any neglect. Is it not a fact that the Congress has been

constantly studying this problem and that it is of such a complicated and extensive character that it would have been impossible to rush through legislation of this character sooner than the present time? Senator TAFT. I think that is true, Senator. Also, there is this to be said about the disposition of surplus property:

Today, there is unlimited power in the Government to dispose of surplus property, only it rests in each individual agency so that there seems to be no tremendous rush about getting this bill through, because if the President sees fit to interfere, at least, and tell the agencies what to do, he can do so. He has, to a certain extent, interfered by creating a Surplus Property Administrator already and giving him certain powers over the agencies. We are not here, as I see it, granting additional powers. What we are trying to do is to concentrate the thing so there will be a united policy on the disposition of surplus property, and an over-all power rather than a power resting in some 50 different agencies, each one of which today has power to sell everything, or to sell nothing.

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Senator REVERCOMB. And also to lay down the plan of regulation. Senator TAFT. To lay down the plan of what?

Senator REVERCOMB. Lay down the plan of regulation for the disposal of goods.

Senator TAFT. Well, we do not lay down a plan. We expressed some general views as to the policy. That is the general thing we do. But today, as I say, the War Plants, the Defense Plants Corporation could go out and sell every plant that the Government owned to anybody without any of the restrictions that we impose here. The power is wide open.

So there wasn't a tremendous hurry in order to give people the right to get rid of the property. The Termination of Contract bill which we passed before this session, had to be passed because contracts could not be terminated and money paid without about a 2-year delay under the existing statute. That had to be changed. It is rather a matter of trying to improve the general over-all policy of the Government.

Senator MURRAY. Thank you, gentlemen, for your appearance here this morning. The committee will now take a recess. (Whereupon, at 11 a. m., the committee adjourned.)

TEXT OF A LETTER ON EDUCATIONAL USES OF SURPLUS WAR PROPERTY, WHICH IS BEING ADDRESSED BY THE WAR CONTRACTS SUBCOMMITTEE TO EDUCATIONAL ORGANIZATIONS

AUGUST 1944.

When the war is over the Government will own a vast amount of property originally acquired for war needs but no longer needed for such purposes. Among this property will be large quantities of office equipment, motor vehicles, aeronautical supplies, electronic devices, special educational apparatus, land, buildings, and many other items that might be useful for educational activities. In fact, as a result of shifting war requirements and of curtailments in war production, an increasing volume of such property is already in the hands of the Government. The War Contracts Subcommittee, which now has before it a number of bills dealing with the utilization and disposition of war surpluses, is vitally interested in the procedures and policies which should govern the utilization and commercial disposition of this property. Accordingly, I should greatly appreciate any suggestions that you may have to offer concerning the educational uses to which such property could be advantageously put. It would be particularly helpful if you could give me your views, or those of your organization, on the following specific questions:

(1) Which, in your opinion, are the types of surplus property that are most likely to be useful in educational activities? What Federal Government agencies will be in possession of those classes of property?

(2), To what extent can the Federal agencies in possession of such surplus property participate in programs involving the utilization of such property for educational purposes?

(3) Should unified responsibility for the disposal of surplus property to educational uses be vested in a single Federal agency, such as the Office of Education? Should Congress authorize the transfer to such an agency of the surplus property that could be devoted to educational activities?

(4) If a single Federal agency is authorized to hold surplus property susceptible of educational uses:

(a) To what extent should that agency use the property directly in its own operations?

(b) To what extent should that agency distribute the property among educational agencies and institutions?

(5) What policies should be followed by the Federal agency in distributing surplus property among educational institutions?

(a) What should be the purposes of such distribution: To assist in developing educational activities in "backward areas"? To promote research, etc.

(b) To what extent should distribution be handled through State government agencies? Which ones?

(c) On what terms should the property be distributed?

Should educational

users pay current market prices for such property? If not, what will be the basis for and character of the price policy with respect to such property?

(d) Under what conditions and terms should educational institutions acquire equipment which has been changed in design or is obsolete?

(e) What conditions should be laid down with regard to maintenance or use? With regard to resale? With regard to recapture by the Government?

(6) Property which is susceptible of educational use can also be sold commercially, or can be utilized in connection with other public programs. How shall the determination be made as to the volume and type of property which will be acquired for educational use, as contrasted with those which will be devoted to other public uses or disposed of commercially?

(a) Should the surplus property acquired by the Federal agency in charge of the educational program be limited by the amount of appropriated funds available to that agency for such acquisition?

(b) Should the transfer of surplus property to that agency without a charge against appropriated funds be authorized by Congress?

(c) In either event, should the Federal educational agency be given the opportunity to satisfy the full needs of the federal educational program before the property is allocated to commercial disposition?

(d) Should an over-all Federal administrator be given authority to determine the allocation of surplus properties as between (i) educational uses, (ii) other public uses, and (iii) commercial disposition?

It would facilitate the subcommittee's consideration of this subject if your views could be submitted within the next two weeks.

Sincerely yours,

JAMES E. MURRAY,

Chairman, War Contracts Subcommittee.

Hon. JAMES E. MURRAY,

CONFERENCE OF EXECUTIVES OF
AMERICAN SCHOOLS FOR THE DEAF,
August 8, 1944.

United States Senate, Washington, D. C. DEAR SENATOR MURRAY: In reply to your letter of August 4 in regard to the disposal of various war supplies no longer needed by the Government, including special educational apparatus, land, buildings, etc., I can say that in connection with our institution the following types of surplus property would be useful to us, though some of them might not be directly connected with educational work. First, surplus lumber of various types which might be on hand or the taking down of temporary buildings. This need would not be very great in our institution, but we have had for some time a very great difficulty in obtaining all types

of lumber to keep our institution in proper repair and to construct the new facilities needed. Second, though not directly for educational purposes, supplies of blankets and linen for our dormitories would be very desirable; as also plain furniture for bedrooms and folding chairs (steel) for use in our auditorium would be useful. Third, typewriters and typewriter tables would be a great help. We have classes in typing that are using machines now becoming out of date and getting into bad repair. It is difficult to obtain repair work, and the machines are steadily deteriorating. Fourth, portable moving-picture machines. While our institution is equipped with two very good portable machines, they are, of course, getting older every day and do not fill our entire need even when they are in first-class condition. Together with such equipment, films showing various educational processes would be very desirable to supply visual educational needs in our institution. The next item that might be of great value to us would be athletic equipment such as basketballs, baseballs, tennis balls and tennis nets, volley balls, etc., for the use of our physical-education work. In reply to the second part of his question, I believe that the Army and the Navy are both equipped with such material as I have mentioned.

(2) In reply to your second question, I would say that our institution is doing unique work in teaching not only our own deaf people, but in teaching the deaf people from all parts of the country, and such equipment and material as I have mentioned can be very well used to the advantage of these students.

(3) Apparently the distribution of such material might in general be best handled by some one governmental agency to which various State and other agencies might apply. It might avoid confusion and help keep complete lists. of all property available if all material of educational use were placed in the hands of some one authority.

(4) (a) I think that the agency handling this property should be allowed the use of office equipment and material with which to aid in the distribution of property, but I doubt if it should be put in possession of a very great amount of this material.

(b) If such an agency is selected for distributing the property I believe that the distribution should be made on some general basis of need as shown by the various applicants.

(5) (a) I think that a considerable amount of such material can well be used to promote educational facilities in backward areas and to promote research. (b) Apparently State educational departments can be the assistants to the Federal agency in making applications and distributing material.

(c) It seems to me that the material might be placed on sale rather than on free distribution at not more than the wholesale prices and with regard to the fact that much of it might be in second-hand condition.

(d) In the case of obsolete material which still might be used to some advantage, I believe a very much reduced price should be placed on it.

(e) With such wide distribution as would no doubt occur and with the actual sale of this property, it seems to me that the title should be passed to the purchaser and that no idea of recapture should be considered. Otherwise there would be very great difficulty involved in the whole matter.

(6) This is a very difficult question to answer. It seems to me that the endeavor should be made first, to cause the distribution of the surplus property through proper offices to all types of educational institutions at moderate prices; and, second, the remainder should be gradually placed on the market commercially in such quantities as not to glut the market.

(a) If the property is to be sold by a Federal agency in charge, it seems to me that a bookkeeping arrangement might be made by which credits and debits can be arranged without necessarily limiting the amount of property in the hands of the agency to funds available for purchase.

(b) Such an arrangement, I believe, should be properly authorized by Congress. (c) I believe I have already answered this-that educational needs should be met first probably, if it is possible, through general distribution at reasonable prices before the material is sold commercially.

(c) It would seem to me that someone in high authority should be in charge of all decisions in connection with the allocation of this property.

Yours very truly,

Those pupils from the District of Columbia.

PERCIVAL HALL, President.

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