should be stopped. That corporation shall likewise, at the earliest possible moment, provide a system of local or regional consultants upon whom the representatives of the owning agencies can call for advice and assistance on questions concerning the scrapping of property and the marketing of scrap.

(4) Property located outside the United States-(a) In active theaters of operation. Military and naval commanders in active theaters of operation may sell or otherwise dispose of any surplus property within their control.

(b) General. Owning agencies, pending further regulations, may sell surplus property in localities outside the continental United States, its territories and possessions where the Foreign Economic Administration has no local representative, and in localities in the territories and possessions of the United States where the appropriate disposal agency has no local representative.

(5) Advance clearance. Where special circumstances, such as danger of deterioration or sanitary or other hazard, make immediate sales by owning agencies desirable without surplus declaration, advance clearance may be obtained from the Administration or such agency as it may designate for the purpose.

(6) Miscellaneous. Owning agencies may dispose of property produced as a result of industrial, research, agricultural or livestock operations, or residual to any public works construction or maintenance project, carried on by them, to the extent authorized by existing law, under established procedures and methods of the agency, if such procedures or methods have been filed with the Administration. Such sales shall be reported to the appropriate disposal agency in such manner and at such times as such disposal agency shall direct. [Paragraph (6) added by Supp. 1, July 26, 1944, 9 F.R. 9183]

D. Reports to disposal agencies—(1) Regional basis of reporting. Owning agencies will establish and maintain such organizations and procedures as are necessary to enable them to make reports of surplus property to the disposal agencies on a regional basis, in accordance with the procedures established in part II of this regulation.

(2) Withdrawal of property reported. After reporting property to a disposal agency, the owning agency will hold the property subject to disposition instruc

tions from the disposal agency. When property has been reported as surplus, the disposal agency shall thereupon have the exclusive right and obligation to make disposition thereof for the United States. Where unforeseen circumstances arise, however, the owning agency may, with the consent of the disposal agency, withdraw such property for its own use or other disposition prior to its disposition by the disposal agency.

(3) Limitations on power of disposal. Owning agencies will accompany each report of surplus with a statement clearly indicating what, if any, legal restrictions exist as to their power to dispose of the property in question. In the absence of any such statement, disposal agencies shall conclusively assume that they have unrestricted power to dispose of the property for the United States, subject to the applicable regulations of the Administration.

E. Storage, packing and shipping— (1) Future policy. The Administration recognizes the desirability of having a single responsibility for both the sale and the storage, packing and shipping of each class of surplus property. Manpower and facilities shortages prevent this from being effected at the present time. Every effort will be made, however, to provide for the requisite transfer from owning to disposal agencies as soon as these conditions permit, and certainly at some stage between the ending of the first phase of the war and conclusion of the war.

(2) Present operations. (a) The owning agency will provide storage for property reported to the disposal agency pending removal or disposal by the disposal agency. At the request of the disposal agency the owning agency will permit reasonable inspection of the property. Upon receipt of shipping instructions from the disposal agency, the owning agency will prepare the property for shipment and will ship in accordance with such instructions.

(b) Pending further regulations, accountability for surplus property will pass to the Procurement Division of the Treasury Department, as to property assigned to it under part I of this regulation, to the same extent and in the same manner as has heretofore been the case under Executive Order 9235, but accountability for all other surplus property will remain in the owning agency

until the property is delivered upon the order of the disposal agency.

(c) In the case of surplus real property the owning agency will protect and maintain the property until disposed of by the disposal agency, unless the disposal agency shall theretofore assume responsibility for such protection and maintenance. Accountability for such property will remain in the owning agency until such disposition or assumption of responsibility by the disposal agency. [Paragraph (c) added by Supp. 1, July 26, 1944, 9 F.R. 9183]

IV. Responsibility of disposal agencies-A. Disposal. Disposal agencies shall have the exclusive right and obligation to make disposition, subject to the regulations of the Administration, of all property declared to them as surplus. They shall conclusively assume, unless otherwise notified by the owning agency, that property declared as surplus by an owning agency is property of the United States and that they have unrestricted power to dispose thereof for the United States, subject to the applicable regulations of the Administration. The exclusive responsibilities of disposal agencies shall include determining methods of sale, identity of purchasers and price, execution of all necessary documents in connection with disposal, including any necessary documents of title, and the collection and proper treatment of all proceeds. The military agencies, if they so request in conjunction with the report of surplus, I will be consulted prior to the sale of any tactical equipment reported by them.

B. Inventories. Disposal agencies will establish and maintain, in each region in which they receive reports of surplus, inventories of all surplus war property reported to them. Such inventories will be maintained in accordance with the Standard Commodity Classification described in Exhibit I.

agencies which can assist them in their task, and will in turn, through the organization of regional consultants and coordinating and advisory committees and otherwise, render all possible assistance to owning agencies in connection with dispositions made by or under the authority of the owning agencies. Conversely other agencies will make available to the disposal agencies all assistance and facilities which the disposal agencies may reasonably request.

VI. Sales policies. All sales of surplus war property, whether made by disposal agencies or by or under the authority of owning agencies, will be made in accordance with the policies, regulations or directions of the Administration or, with its authority, of the disposal agencies. In the absence of specific directions, such as those heretofore issued with respect to sales of termination inventories, sales may be made in such manner as the selling agency shall deem advisable, adhering to the primary principle that a reasonable test of the market, having due regard for the nature, condition, quantity and location of the property, is a necessary prerequisite to any sale.

VII. Accounting procedures. Pending specific regulations on the subject, accounting and fiscal procedures and practices of the disposal agencies shall be conducted by the disposal agencies in such manner as they deem appropriate in order to conform to existing laws and regulations.

VIII. Redistribution within Government. Disposal agencies will so organize their activities that information as to the availability of surplus war property will at all times be readily obtainable by all agencies. Information as to stocks will be interchanged between offices of the disposal agencies in order that large quantities of scarce items reported in one region may be made available to other regions for distribution, where appropriate. Pending the issuance of more specific instructions, both the procuring agencies and the disposal agencies will take all practical steps to assure as full utilization within Government of available surplus property as is consistent with (a) the nature of the item, (b) timely procurement by the procuring agencies, and (c) prompt disposal by the disposal agencies. Except in cases of withdrawal of property by the owning agency pursuant to

part III D (2) hereof, disposal agencies shall transfer surplus war property to acquiring agencies at the fair value thereof as fixed by the disposal agency, unless transfer without reimbursement or transfer of funds is specifically authorized by law. [Reg. 1, May 8, 1944, 9 F.R. 5096, as amended by Supp. 1, July 26, 1944, 9 F.R. 9182 and Supp. 2, Sept. 29, 1944, 9 F.R. 12069]

NOTE: The last sentence was added to Part VIII by Supp. 1, July 26, 1944, 9 F.R. 9183.

Exhibit I, filed with the Division of the Federal Register, was amended by Supp. 1, July 26, 1944, 9 F.R. 9183.

NOTE: Regulation No. 1, as hereby amended, is hereby made effective with respect to surplus war property of all agencies, with the following exceptions and qualifications which are subject to change by further regulations:

(1) The Administration does not deem it feasible to assign to the disposal agencies herein named surplus war property of the Tennessee Valley Authority with respect to which that corporation has a statutory power and duty of disposal. That corporation, however, (a) shall coordinate its disposal policies and procedures with those of the disposal agencies hereunder so as to avoid competitive sales, (b) shall report surplus war property to the appropriate disposal agency for disposition whenever it deems such reporting consistent with its statutory duties and desirable in the interests of coordinated disposal, and (c) shall report to the appropriate office of the appropriate disposal agency, in such manner and at such times as each such disposal agency shall direct, all dispositions which would be under the jurisdiction of such disposal agency, or would be reported to such disposal agency, if this regulation were fully effective with respect to Tennessee Valley Authority.

(2) The Administration does not deem it feasible to assign to the disposal agencies herein named surplus war property in the possession or control of the foreign establishments of the State Department, when disposed of abroad in accordance with section IV-5 of the Foreign Service Regulations of the State Department. (See Title 27, Chapter I)

(3) By direct action without formal amendment to this regulation, the Administration may exempt surplus war property, or any type or class thereof, in the control of any agency from the operation of some or all of the provisions hereof. [Reg. 1, Supp. 1, July 26, 1944, 9 F.R. 9182] POLICIES FOR DISPOSAL BY RECONSTRUCTION FINANCE CORPORATION OF CERTAIN REAL ESTATE

Scope of regulation. This regulation establishes policies to be carried out by

Reconstruction Finance Corporation in the disposal of surplus real estate, other than industrial real estate, assigned to it for disposal by the Administration's Regulation No. 1 as supplemented effective August 1, 1944.

The policies here stated are thus not made applicable to disposals of surplus industrial plants, housing property or community facilities. Such disposals present special problems with which the appropriate disposal agencies are familiar, and in some instances are governed by special statutory provisions.

The principles embodied in this regulation are nevertheless believed to be basically sound in connection with disposals of all types of surplus real estate, and it is recommended that they be observed in the disposal of industrial plants, housing property and community facilities to the extent consistent with the special problems and statutory requirements governing such disposals.

I. Basic principles-A. Objectives. In disposing of surplus war property consisting of real estate other than industrial, Reconstruction Finance Corporation shall seek to achieve the following objectives:

(1) To sell as promptly as possible at current values without undue disruption of the market.

(2) To sell outright, using leases only as temporary measures and reserving the right of Government recapture only if national defense so requires.

(3) To sell in family-sized parcels and to purchasers who will themselves put the land to productive use.

(4) To give former owners an opportunity to repurchase their land at current market value.

(5) To avoid sales to speculators or persons planning to combine small tracts into large ones for speculative purposes.

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.

(1)

B. Transfers to Federal agencies. 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 disposition 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. Transfer 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.

III. Commercial Sales-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 layouts. All real estate to be sold shall be adequately 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 useable 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. Pref

erences 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.