Mr. FOLSOM. I think probably he could.

The CHAIRMAN. That is the reason I think it is a dangerous provision.

Mr. FOLSOM. It could be limited probably to materials acquired for war purposes.

The CHAIRMAN. This bill, as I interpret it, gives the Surplus Property Administrator the authority to sell any surplus property. It is not confined to war materials, so that he could go into the Department of Interior and say that the national parks have too much land.

Mr. COCHRAN. It seems to me that question is covered in section 7, which states:

For the duration of hostilities in the present war, such determination shall be the exclusive province of the owning agencies, but thereafter the Administrator shall have power to require such a determination upon a finding by him that any property is surplus to the needs and responsibilities of an owning agency.

The CHAIRMAN. I understand that gives authority to the Administrator to go to the Department of Interior and say that the national parks own surplus property above their needs.

Mr. COCHRAN. This concluding provision of that section provides that the Administrator can require that such determination be made. The CHAIRMAN. That makes it mandatory.

Mr. COCHRAN. To make the determination, but it does not authorize him to determine what is surplus.

Mr. COLMER. May I interpose for a moment?

The CHAIRMAN. Yes.

Mr. COLMER. Of course we all agree that during the war the War Department, the Navy Department, and everybody else in like position must have exclusive determination of what they need, and there was no thought to try to interfere with them. But when the war is over, you and I know the tendency of these war agencies to hold on to everything. My idea is that we ought to have a civilian rather than a serviceman to say what was surplus, because of the tendency to hold on to everything. You and I know, regardless of when we may have another war, that it will hardly be within 5 years.

The CHAIRMAN. We hope not.

Mr. COLMER. Most of this stuff will be obsolete, and I know the tendency of these war agencies to hold on to everything, their inclination not to dispose of anything. They do not have the responsibility of pay rolls and so forth, and the thought is we should have somebody else in there.

I think at the proper time, when we go through this bill section by section, we ought to have the fullest debate on that thing and consider any clarifying amendments that are necessary with reference to it, but I do think the idea is fundamentally sound.

The CHAIRMAN. My feeling, Mr. Colmer, with respect to that provision is that we might have some Surplus Property Administrator 2 or 3 years from now who is an extreme pacifist. Of course, none of us like war-but we might have someone who would go so far as to absolutely destroy the effectiveness of the armed forces.

Mr. COCHRAN. If you will refer to the hearing, on page 16, you will find Senator Hawkes asks the very question you have asked of Mr. Clayton, who was the witness. His question was:

Have you anything in this bill further on which would give the Administrator the right to determine what property is surplus property, even though the owning agency does not decide that it is?

Mr. Clayton, responding at the top of page 17:

No; we have not.

The CHAIRMAN. Mr. Colmer, that was not in the draft of the bill that Mr. Clayton prepared?

Mr. COLMER. That was put in subsequently to that.

Mr. GOSSETT. I think there is a great deal to be said for your suggestion, Mr. Chairman, but you will recall as an example, that the C. C. C. was liquidated, its equipment was stored up, and many trucks and surplus property all over the country left to rust out. can anticipate a condition like this, that there will probably be thousands of these trucks that farmers are going to need rather badly, and if we leave it to the War Department they may be stored up in some quartermaster depot. For example, there will probably be many bulldozers and tractors as well as other equipment that is badly needed, and as Mr. Colmer suggests, if some plan is not worked out for their disposition they will simply be stored.

Mr. COLMER. Following your own suggestion, Mr. Chairman, would you rather that a civilian or an Army officer determine whether the property is surplus or not? Somebody has to exercise discretion. The CHAIRMAN. Well, the civilians certainly were not very anxious to prepare this country for war.

Mr. BENDER. I do not know that it could be said the civilian or military men, either, were too anxious. But frankly I can see the need of some civilian determining what is surplus and what is not, because to let an agency determine that of its own volition is not a healthy condition; they all want to hang on.

Mr. GOSSETT. Í suggest, Mr. Chairman, that we let Mr. Folsom complete his statement.

The CHAIRMAN. Yes, Mr. Folsom, will you continue?

Mr. FOLSOM. As I say, that is the principal difference between this bill and the bill Mr. Clayton presented at the joint meeting with the exception of some minor changes.

Mr. CHURCH. Before you continue, Mr. Folsom, may I say I have read part 1 of the hearings. I am anxious to have you point out to us wherein the bill now differs from the bill considered in those hearings. Mr. FOLSOM. That is the only difference.

Mr. CHURCH. Would you mind stating for the record just what the difference is.

Mr. BENDER. He has just stated that.

Mr. CHURCH. There is an amendment to H. R. 5125 that has been made since June 16-June 20?

Mr. FOLSOM. The change that we have been talking about is the only change.

The CHAIRMAN. On page 7, line 21, beginning after the comma? Mr. FOLSOM. Section 7 (a). That contains the only change, except two or three other slight changes, in language.

Mr. CHURCH. There is part 1 of the hearings of June 16-June 20, 1944. I have here before me parts 2 and 3. Now what other hearings, other than part 1, should this committee be familiar with in order

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to know all about this bill? Should it also go to part 2, the hearings of May 18-23?

Mr. FOLSOM. Those are the hearings of the Post-war Planning Committee?

Mr. CHURCH. Yes.

Mr. FOLSOM. If you wish me to do so I can mark up the part of the hearings so that you will not find it necessary to go through all of them. Mr. CHURCH. How much of part 3?

Mr. FOLSOM. I can furnish you a marked copy if you would like for me to do so, which I think might be helpful.

Mr. CHURCH. Mr. Chairman, I suggest that Mr. Folsom furnish the committee with marked copies of part 2 and part 3 of these hearings, and this committee will then have before it a lot of material that has already been gone over by way of hearings that relate to this bill, both in part 2 and part 3.

Mr. FOLSOM. I will be very glad to give you marked copies of those hearings.

Mr. BENDER. I have already read part 1.

Mr. CHURCH. I have reference also to parts 2 and 3.

Mr. FOLSOM. Parts 2 and 3 do not refer to this.

Mr. CHURCH. No. Mr. Chairman, I want to hear Mr. Folsom, but 1 am disturbed about one other thing.

Perhaps it was public opinion that once led up to the scrapping our Navy, and some influence might arise that would result in declaring a lot of ships as surplus. Some of us are going to be very certain that we keep a big Navy, and this Congress, I do not believe, wants to leave too much power in any one man's hand to declare ships as surplus, and I am not talking now of the Merchant Marine. I am talking about war ships of the Navy.

Mr. FOLSOM. We are concerned more with the commercial than with the war equipment.

Mr. CHURCH. It is this provision in the bill that I am concerned about.

Mr. FOLSOM. You could restrict that, of course.

Mr. CHURCH. I am not suggesting anything except but that I should be considered.

The CHAIRMAN. I have broken into your statement, Mr. Folsom, but I think it would be wise for you to make a complete statement and then we may interrogate you about any part of it.

Mr. FOLSOM. Mr. Colmer introduced this bill just before Congress recessed. We have not had a chance to have any hearings on this bill, but I have had copies of it sent to a number of organizations and persons interested in the distribution of property. We have received suggestions both from the National Association of Manufacturers and the United States Chamber of Commerce, and I will go into them when we consider the sections of the bill.

The principal change suggested relates to the organization; they recommend that instead of an Administrator in charge there should be a Commission of seven men, with business experience. There are two or three other suggestions which have been made which I think we can take up as we go through the bill.

There are several problems that are difficult to meet in framing this legislation. There is no question but that legislation is needed. Mr. Clayton, the Administrator, is now operating under an Executive

order of the President, and is making good progress, but there is general agreement that Congress itself determine the policy under which he should operate rather than leave it to the Administrator alone.

While the problems are not acute right now because there is not a great deal of surplus property to be disposed of, at the same time property is being disposed of every day and, of course, as soon as the war comes to an end there is going to be a tremendous amount of surplus property. Its disposition will have considerable effect on the economy of the country for many years to come. That is why the Post-war Committee thinks it is very important that legislation of this kind be enacted now and why it is necessary to have proper principles and policies laid down by the Congress.

You might be interested in some estimates we have obtained of the size of this problem that will have to be faced after the war. It is very difficult, of course, to get any accurate facts as to how much surplus property there is going to be when the war is over. Very careful estimates have been made by Dr. Kaplan, which are given in his book recently published.' He estimates the total amount will be somewhere around $60,000,000,000. That is a tremendously large amount but there are many things involved that will not find their way into commercial channels.

About half of the supplies will be aircraft and ships, and about onefourth ordnance, and guns, tanks, and various things of that sort. So that those three items alone, ships, aircraft, and ordnance, amount to about three-fourths of that total. That leaves about $15,000,000,000 of materials which ordinarily might go into commercial channels. It is estimated that about half of that will be abroad and it is a question of whether much of that material abroad will find its way back to this country.

Mr. BENDER. That is half of that figure?

Mr. FOLSOM. Half of the $15,000,000,000.

The principal groups included in this estimated $15,000,000,000 of miscellaneous stocks are clothing, textiles, and other soft goods; motor vehicles; foodstuffs; stock piles of raw materials; machinery, tools, and equipment of wide variety.

In this

He estimates that the amount of these supplies which could be. merchandised in the domestic market would probably be about $6,000,000,000. This total which would include raw material as well as finished goods compares with the normal monthly retail sales of $4,000,000,000 in the country as a whole before the war. great variety of commodities left over at the end of the war there will, however, be many items in quantities representing a number of months' supply. The disposal of these items offers many difficulties and great care must be taken to prevent disastrous effects upon employment and industry.

I have much more detailed figures which I will submit to the committee later, but that in general gives you the picture, Mr. Chairman, in connection with the over-all problem as to surplus supplies.

Mr. BENDER. Do you not think it would be a good idea for us to invest a little money in that book?

Mr. FOLSOM. I will see if I cannot get some copies for the committee. I think you will find it is a very worth-while book.

The Liquidation of War Production.

Mr. RANDOLPH. Mr. Chairman, I might add that the August 4 issue of the United States News has a very splendid article, which I think will be helpful, on this very subject matter.

It is a publication that comes to our desks and I mention that because some of you may have overlooked the article in the August 4 issue of the United States News.

Mr. FOLSOM. When it comes to surplus plants, it is estimated the cost of the Government-owned plants is about $15,000,000,000, in the following broad classifications:

5. Nonferrous metals (mainly aluminum and magnesium).

6. Chemical operations: Synthetic rubber, high octane gas and other petroleum products, other chemicals

7. Ordnance other than explosives: Ammunition, shells, bomb cases, etc., guns..

8. Machinery: Motor vehicles, combat and other; metal-working equipment; machinery and electrical equipment; miscellaneous manufacturing equipment...

Total

Original cost $2, 850, 000, 000 2, 000, 000, 000 3, 110, 000, 000 1, 200, 000, 000 1, 350, 000, 000

1, 400, 000, 000

1, 900, 000, 000

1, 290, 000, 000

15, 100, 000, 000

Mr. HOPE. Do you know whether consideration has been given as to whether it could be used for the manufacture of fertilizer?

Mr. FOLSOM. They are perhaps located in places that would make it very difficult to operate them economically: there might be some, but as a whole we cannot expect to realize great deal out of them. Mr. COTTON. Mr. Chairman, I think we will all agree that Mr. Folsom is making a very interesting statement in reference to the situation that is going to confront us, but, in the interest of saving time, I feel the situation that confronts us now is not the question of how much surplus property we are going to have on hand, but the method to be used in disposing of that property.

Mr. FOLSOM. I wanted to give the committee some idea of the problem it is going to be confronted with before you undertake to pass legislation to dispose of it.

Mr. BENDER. This record will be made available immediately, as I understand, and I wonder if you cannot include the figures you have in mind in the record.

The CHAIRMAN. Without objection he may include any statement he wishes.

Mr. FOLSOM. The aircraft plants represent the biggest single item: We know we are going to have those plants, and the disposition of those plants will involve a considerable problem.

Under this bill, general authority is given to an administrator and he in turn will depend upon the individual agencies to dispose of the materials. He, as administrator, will not actually dispose of them. Under present regulations, issued by the Administrator, certain agencies, such as the Treasury Procurement, are now disposing of the consumer goods instead of having each of them dispose of their surplus supplies in competition with other agencies. This bill gives the Administrator the authority to continue that practice.