Mr. TABER. I know. You have got a State office. I mean that there is a State office under the State in each one of the States. Why is it that we have to have these regional set-ups? Can we not get along without those regional set-ups and have the whole thing operated directly from Washington to the State set-ups and save, well-it would run something close to $2,000,000. Mr. LANDIS. I do not think so, because, you see, you would have to have some kind of field personnel. Colorado, for example, if they had to come to Washington, it would mean a terrific centralization here in Washington, and I think that it would be very undesirable. Mr. TABER. How much contact do you have to have with that kind of set-up? Your set-up all through that part of the country is on what basis? It is not on the basis of black-outs, is it? Now, in the Middle West, for instance, west of the Alleghenies, is it set up generally on a black-out basis. How far do they extend? Mr. LANDIS. We treat the territory around the Great Lakes as being a critical territory, and going as far north as Duluth, and also certain spots like Kansas City and St. Louis we treat as critical. Mr. TABER. There are black-outs in that territory? Mr. LANDIS. There has been a black-out there throughout the entire Middle West, just one, in order to familiarize them with what the problem is. The CHAIRMAN. Why are Kansas City and St. Louis situated in the critical area when they are situated in geographical center of the United States? Mr. LANDIS. Because of the terrific concentration of industry there, and in Kansas City you have surrounding that city aviation factories of tremendous significance, and you have a great deal of industry right in St. Louis. Now, the distance, the air-line distances even from a place like Kiska, we will say, to Duluth and to Kansas City are about the same. There is not much difference. Mr. TABER. Off the record. (Discussion off the record.) DATA ON EQUIPMENT FUND ESTIMATES AND PROCUREMENT Mr. TABER. I rather believe that this tabulation that I have should be in the record. Mr. LANDIS. That is all right. Reconciliation of proposed Budget with procurement orders, at at Apr. 5, 1943 517, 409. 24 This figure wholly unrepresentative; see note below. 48,000, 531.96 NOTES.-The recorded obligations may not include the cost of all items to be procured; however, based on available information, this disparity will not exceed 5 percent of recorded obligations. The original Budget estimate included the amount of $3,928,112.75 for storage and maintenance facilities, transportation, administration, and overhead. This estimate was wholly untenable. The total amount involved would not, in the light of experience, cover the single item of transportation. Congress appropriated $3,000,000 for administration, and the Comptroller General ruled that transportation from point of origin to point of ultimate destination was a proper cost element of property and therefore payable from the property appropriation. Storage and maintenance facilities as they relate to the warehouse operation have been paid from the $3,000,000 administrative appropriation. It has been held by this office, however, that maintenance of production facilities as contrasted with maintenance of physical properties is an expense of the facilities themselves and must be paid from the property appropriation. The cost of production facilities maintenance is such that the dministrative appropriation could neat bear the expense. 86664-43-27 Mr. TABER. Now, this break-down in the first column indicates your present allocations as between different items of expenditures on that $100,000,000. Mr. LANDIS. That is right. Mr. TABER. Some of it, perhaps, has changed from time to time. Mr. LANDIS. The first column just indicates estimates. Mr. TABER. Yes. Mr. LANDIS. The second column indicates procurements. Mr. TABER. The orders that have already been placed; is that right? Mr. LANDIS. The last column indicates orders that have been placed, and the cost of those orders. That totals up to $48,000,000. Mr. TABER. That is the part that has actually been placed on order? Mr. LANDIS. Yes. Mr. TABER. Now, the procurement orders, that represents what? Mr. LANDIS. That represents the sum of money turned over to the particular branch of the War Department in order to permit them to go out and let contracts with reference to the items that are mentioned. Now, when they let the contracts, then it turns up as an obligation, and it turns up, you will notice in the last column. The procurement authorizations are in excess of obligations themselves. In other words, our estimates as to the cost of these items were in excess of what we have had to pay for the items. Mr. TABER. Do you mean the reason for this excess is that you have figured the things would cost a good deal more than they actually have cost? Mr. LANDIS. That is right. Mr. TABER. Because you were able to buy something that would do just as well at a less price; is that the idea?" Mr. LANDIS. Sometimes the saving has been made that way by the substitution of materials. Sometimes it has been made as the result of quantity purchases at a substantially reduced cost. Mr. TABER. Now, I wonder if you would add one more column indicating the amount of money actually paid out in connection with this. Mr. LANDIS. Yes. The CHAIRMAN. From the beginning. Mr. TABER. Yes, from the beginning to now, that is, to whatever date you can give us. You can give us whatever date you have available, and I would like to have a statement indicating the number of things that have been delivered, if it is possible. Mr. LANDIS. I think that is very difficult to get. Mr. TABER. You think it is impossible. Do you think it is impossible or not? Mr. LANDIS. We can give shipping directives. Mr. TABER. What do you mean by "shipping directives"? Mr. LANDIS. Orders to the factory to ship so many articles to a certain place. Mr. TABER. Would that mean, as I understand it, that the factory actually had made delivery on those things? It would not, would it? Mr. LANDIS. Not necessarily. There may be a lag of 2 or 3 weeks in there. Mr. DITTER. That would not give you the information that you are seeking at all. Mr. TABER. No. What are your arrangements with the factories? Mr. LANDIS. The manufacturer informs us of the quantities he has. We then send shipping directives to them to ship those quantities out. Mr. TABER. I guess maybe that it would give what I have in mind if that is the picture because that would mean that you had ordered something shipped in inventory available for shipment. Colonel WHITE. Not entirely. The way is this: They give us their estimated production for the next 6 weeks, and they want us to give them shipping instructions, take that away from them. Now, if we go back 6 weeks, we could consider that all of those had been delivered, but in the meantime we may have a couple of weeks left over of that directive. We do not want to hold the manufacturers up by having them put the stuff in warehouses so we do not wait until the material is actually manufactured before we direct shipment on it. Mr. TABER. That would mean that there was no accumulation of inventory in the hands of either the O. C. D. out of this program or the manufacturers, of a substantial character. Colonel WHITE. We have a large reserve of some items in our warehouses. Mr. TABER. I wonder if you would be able to give us a picture of that. Colonel WHITE. Oh, yes. DATA ON EQUIPMENT HELD IN WAREHOUSES Mr. TABER. I would like to have in the record, if we could, a memorandum of the quantities of things that are in warehouses, that have been manufactured but have not been delivered in the field: Mr. LANDIS. We can give you that. We can get that report for you. Estimated cost of property shipped or directed to be shipped, less property issued by depots as at Apr. 21, 1943 1 The cost of gas masks does not include the cost of the erection of the plants. Estimated cost of property shipped or directed to be shipped, less property issued by depots as at Apr. 21, 1943-Continued Cost estimates based partly on procurement estimates instead of obligations estimate because obligations data are not available. NOTE.-Shipping directives have been issued for 54,359 pairs of rubber boots, but for priority reasons no procurement has been undertaken; the directives will be canceled unless procurement is initiated. Mr. TABER. By article and by dollar value, both, if I could. Whether you can do that last, I do not know; but I would like it, if I could have it. Mr. DENIT. We cannot give you the true dollar value for these inventories, Congressman. Mr. LANDIS. You will find in the warehouses, I might explain, a considerable amount of this medical equipment is small things gauze, needles, surgical instruments, and the like-which is being assembled in the warehouses, which we procure from a number of manufacturers and then assemble those things for shipment out. Mr. DITTER. Are these warehouses Army warehouses or are they leased warehouses by O. C. D.? Mr. LANDIS. They are leased warehouses of ours. Mr. DITTER. How many of those do we have? Colonel WHITE. Fitchburg, Hanover, Birmingham, Chicago, Newcastle, and Salt Lake City. RENTAL OF WAREHOUSES FOR STORAGE OF EQUIPMENT Mr. DITTER. What is the annual rental for warehouses? Mr. LANDIS. I could not give you that offhand. Mr. DITTER. What is the number of cubic feet in the warehouses? Mr. LANDIS. I could not give you that offhand, either. Mr. TABER. You can supply that for the record? Mr. LANDIS. Yes, in terms of square feet, the lease basis. Report of annual, quarterly, and monthly rental of warehouse space occupied by Office of Civilian Defense supply depots |