We are able to hold people against competition of several hundred dollars a year more because of the importance of the work, their interest of the work, the nature of it, but a thousand to twelve hundred dollars is just too much for a young man out of school to put up with. We try to tell him it is like an intern in a hospital, he gets a lower salary, and he is a better doctor when he gets out. This prospective action of the Civil Service Commission we think will relieve this particular situation.

Mr. PRICE. Has the NACA in these recommendations been able to pick up any of the projects that it has been forced to defer?

Dr. DRYDEN. We have been at a fixed budget level for about 3 years. We have changed emphasis somewhat. If we get the higher level we certainly will be able to make it.

Mr. PRICE. Dr. Hunsaker said you have been forced to defer many of these projects indefinitely, and he describes them as important research opportunities.

Dr. DRYDEN. Yes.

Mr. PRICE. Even this will not permit you to pick those up; is that correct, this program?

Dr. DRYDEN. Our 1956 budget will go a long way toward picking them up. This is a matter for the Appropriations Committee. We discuss that with them this Thursday.

Mr. PRICE. This is the main part of it, the operating budget? Dr. DRYDEN. The operating budget is the acute situation.

Mr. DURHAM. Doctor, thank you very much. If we leave out the nuclear powered project it will be all right with you providing we authorize it for you?

Dr. DRYDEN. Do you wish us to seek a hearing before the other committee?

Mr. DURHAM. We will advise you. If the committee will stay a few minutes I would like to have an executive session.

Doctor, I believe the industry also backed this unitary plan 100 percent in the beginning?

Dr. DRYDEN. Yes.

Mr. DURHAM. When do you have to go before the Appropriations Committee?

Dr. DRYDEN. Thursday morning.

Mr. DURHAM. It is necessary that he have this authorization before he goes before the subcommittee or it will be subject to a point of order. We will go into executive session. Sometime this committee would like to visit some of your facilities. The new members would like to do it. It is a very interesting thing.

Also, I would like to say I would want the committee sometime to review the nuclear-powered engine development as it is at Cincinnati. Thank you very much.

We are taking up next H. R. 2123. This bill was passed last year in the 83d Congress, and I do not think it is necessary to go into any lengthy hearing here.

You have a statement, do you not, Mr. Nestel?

Mr. NESTEL. I do, Mr. Chairman.

Mr. DURHAM. If you will just file your statement, and if counsel will explain the action on this bill, I think we can act on it in a hurry here, and not have to take up much time. Please take up H. R. 2123, (The bill is as follows:)

[H. R. 2123, 84th Cong., 1st sess.]

A BILL To repeal Public Law 820, Eightieth Congress (62 Stat. 1098), entitled “An Act to provide s revolving fund for the purchase of agricultural commodities and raw materials to be processed in occupied areas and sold"

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That Public Law 820, Eightieth Congress (62 Stat. 1098), entitled "An Act to provide a revolving fund for the purchase of agricultural commodities and raw materials to be processed in occupied areas and sold", is hereby repealed.

SEC. 2. This Act shall take effect on June 30, 1955.

STATEMENT OF ARNOLD NESTEL, OFFICE OF THE CHIEF OF CIVIL AFFAIRS AND MILITARY GOVERNMENT, DEPARTMENT OF THE ARMY

Mr. NESTEL. Mr. Chairman and members of the committee, my name is Arnold Nestel. I am an international economist, Economics Division, Office of the Chief of Civil Affairs and Military Government, Office, Chief of Staff, Department of the Army.

Public Law 820, 80th Congress, provided for a revolving fund for the purpose of (a) purchasing natural fibers (including cotton waste) produced in the United States, and such other materials, including starch, dyestuff, roller leather, and card clothing as may be used in processing and finishing such fibers; (b) transporting such fibers and other materials to occupied areas, making them available for processing, and having such fibers processed in such area; (c) insuring such fibers and materials and the products obtained from such processing; and (d) selling products obtained from such processing.

The basic objective of this law was to assist in the industrial rehabiliation and economic recovery of occupied areas. It was felt that until these countries could be restored to a basis of self-support, the American taxpayers would have to continue to foot a large bill for feeding and clothing the people of these areas. Proceeds from the sale of products of commodities purchased with money from the fund were utilized to repay, with interest, outlays from the fund.

Although other areas were in a position to benefit from the provisions of this act, Japan was the only area to take advantage of this opportunity. The Secretary of the Army was authorized to issue notes for purchase by the Secretary of the Treasury in an aggregate amount not to exceed $150 million to cover payments of costs specified in the act. Under this authority, a note for $100 million was issued to finance shipments of raw cotton to Japan and the total expenditures made for this purpose during 1948-49 amounted to $57,554,227. Complete repayment of the borrowings was effected on June 13, 1950. Since that date no further purchases have been made with moneys from that fund.

The $100 million note was kept open in the event of any critical need for the further financing for United States raw cotton shipments to Japan during the balance of the occupation. Such a need did not arise in light of favorable trade developments and the acquisition of substantial foreign exchange balances by Japan.

On May 22, 1952, the Department of the Treasury notified the Department of the Army that the $100 million note would expire as of June 1, 1952, and that in view of the termination of the occupation arrangements should be made for the cancellation of this note. Accordingly, the Secretary of the Army requested the Secretary of

the Treasury, on June 2, 1952, to transfer the $100 million note in full repayment to the general fund of the Treasury.

Repeal of Public Law 820 is desired because with ratification and confirmation of the treaty of peace with Japan, and with no anticipated requirement for outlays of money from this fund by the remaining occupied areas, no further need seems to exist for the fund; and repeal, if enacted, would remove from the statute books a law no longer required.

Further, although the authority granted in Public Law 820 is not utilized, the retention of the act on the statute books imposes a requirement on the Secretary of the Army annually to make a complete report to Congress with respect to the status of the fund. Preparation of this report by the Department of the Army and review by the Bureau of the Budget and the Congress cause unnecessary utilization of personnel and material.

For the foregoing reasons, the Department of the Army, acting for the Department of Defense, urges you to consider favorably the proposed legislation which will result in a saving of United States funds to the taxpayer, relieve the Government of unnecessary administrative action, and rescission of a law no longer needed.

Mr. KELLEHER. Public Law 820 of the 80th Congress provided for a revolving fund for the purpose of purchasing natural fibers in the United States and sending them to occupied areas where they would be processed into various fabrics. In the case we are involved in here cotton was the fabric that was made. Japan was the only occupied country that participated in the program, and at the present time some $57 million $57%1⁄2 million-was spent. All of that money has been returned to the Treasury, but there is a requirement today that since the law still exists which created this fund the Department must make a report each year to the Congress. That involves a certain amount of expenditure in the field of accounting, and the processing of reports, and so forth. The program is now done and the money has been returned to the Treasury.

The Government neither made nor lost any money in the process. It is merely a mechanical detail now to repeal the law so the reporting procedure won't be necessary in the future.

Mr. Hess. I move the bill be reported favorably.

Mr. DOYLE. I second the motion.

Mr. DURHAM. H. R. 2321 has been moved favorably reported to the full committee. Without objection, the bill is reported to the full committee.

Thank you very much.

(Whereupon, at 11:50 a. m., the subcommittee adjourned.)

FULL COMMITTEE HEARING ON MISCELLANEOUS REAL ESTATE PROJECTS, H. R. 2123 AND H. R. 2581

HOUSE OF REPRESENTATIVES,

COMMITTEE ON ARMED SERVICES,

Washington, D. C., Tuesday, February 15, 1955.

The committee met at 10 a. m., the Honorable Carl Vinson, chairman, presiding.

The CHAIRMAN. Let the committee come to order.

A quorum is present.

The first business before the committee this morning is consideration of the report received in response to a resolution introduced by the gentleman from Michigan, Mr. Hoffman, House Resolution 136. Under the rules these resolutions must be reported back to the House within 7 days from the date of their introduction.

Have you a report from the Department, Mr. Smart?

Mr. SMART. I have, Mr. Chairman.

The CHAIRMAN. Read what the report says.

Mr. SMART. The report is responsive, by paragraph, to the resolution, a copy of which is before each of you, House Resolution 136. Paragraph No. 1 requests:

Approximately how many military installations employing five or more individuals who receive compensation or maintenance from Federal funds are now maintained by the Department of Defense outside the continental limits of the United States of America?

The answer is 950 military installations.
Paragraph 1 (b):

(1) Approximately how many individuals are employed in such installations and (2) at approximately what cost?

The answer is approximately 167,000 civilian employees outside the United States, plus approximately 218,000 civilians who are employees of foreign governments engaged under contract with the United States. The 218,000 does not include 124,000 Germans paid from deutschemarks.

Paragraph 2 (a):

Approximately how many individuals eligible to be assigned to combat service and who are compensated from Federal funds are in the service outside of the continental limits of the United States of America?

Approximately 1,370,000 military personnel. This figure excludes female military personnel.

Paragraph 2 (b):

Approximately how many individuals eligible to be assigned to combat service and who are compensated from Federal funds are in the service within the continental limits of the United States of America?

Approximately 1,602,000 military personnel. This figure excludes trainees with less than 4 months' service, seriously hospitalized personnel, female military personnel, and conscientious objectors.