Mr. CLAYTON. The sentence here, which we recommend be deleted, would give us the power after hostilities end to require determination that certain property was surplus. This, of course, is not our proposal. Mr. WOLVERTON. May I read to you the definition of the term "Government agency" as used in this bill?

Mr. CLAYTON. Yes, sir.

Mr. WOLVERTON. It is clause (a) of section 2:

The term "Government agency" means any executive department, board bureau, independent commission, or other agency in the executive branch of the Federal Government, and any corporation wholly owned and controlled by the United States.

Mr. CLAYTON. Yes, sir.

Mr. WOLVERTON. Now, what does that leave out?

Mr. CLAYTON. It leaves out the tpye of corporation of which I spoke, in which the United States Government only owns a portion of the shares of the corporation. I would just like to say that in drawing the bill we followed the Executive order. I think you have raised here a question which requires some consideration and some thought with the probability that we may have to suggest, or someone else may have to suggest, an amendment to cover that kind of property.

Mr. WHITTINGTON. The very question that you raise, Mr. Wolverton, was considered by this committee for days and days, as Mr. Church and Mr. Hale know and we went so far as to eliminate the property of these corporations.

Mr. HALE. As provided in section 263 of H. R. 2795.

Mr. WHITTINGTON. That is right, and we were so bothered about it that when we said Government property we eliminated gold and silver, because the words "Government property" come pretty nearly covering everything the Government owns.

I would like to say, Mr. Clayton, that if you depend upon Government agencies to declare surplus, it is going to be too bad for us. The Administrator must have the final say as to what is surplus, because one thing that has impressed me about surplus property is that Government agencies do not declare surpluses in their agencies.

Mr. WOLVERTON. I have a question or two that I would like to ask with reference to what, if any, policy is fixed in this bill with respect to priorities of purchase and price, but before I do that, Mr. Hope asked if I would yield. I would be very glad to yield to Mr. Hope.

Mr. HOPE. I think that has been pretty well covered. What I intended to point out, as Mr. Clayton has said, is, this definition does not probably cover agencies like the Federal land bank and other corporations of that kind which are not wholly owned by the United States Government, because that is owned by those borrowers, and the same thing is true of other agencies in the Farm Credit Administration. So the Surplus Property Administrator would not have any jurisdiction in the disposal of land which had been foreclosed by the Federal land bank.

Mr. WOLVERTON. What about property taken under foreclosure by the Home Owners' Loan Corporation?

Mr. HOPE. I think that would be a different situation.

Mr. COCHRAN. Unless it had been declared surplus you would have no jurisdiction.

Mr. WOLVERTON. The trouble with our banks is that they have too much property. It may be that this bill has been so drawn as to exclude those cases. I doubt it, and I think it does require some thought to determine whether or not it does include it, and if it does, say it does and under what conditions it should include it.

Mr. COCHRAN. Then how about submitting a proviso on it?
Mr. WOLVERTON. Yes; that may be the way to do it.

The other thought that I had in mind, Mr. Clayton, is under section 8, page 8 of the bill, "Disposition by owning agency," that section, clause (a), states:

Any owning agency may dispose of any property for the purpose of war production or authorize any contractor with such agency or subcontractor thereunder to retain or dispose of any contractor inventories for the purpose of war production, subject only to the regulations of the Administrator with respect to price policies.

Does that mean that if a contractor has some particular material of which there may be a shortage, and which he has in his possession as the result of a priority under W. P. B. in the making of war products that he could hold back to the exclusion of any others who might have need of it in the immediate peace future in their manufacture, or would that other individual have some rights? The reason I raise that question is because we are all aware of the fact that there has been highly critical material that has had to be apportioned by a priority system by those who were using it for war purposes. Now, when the war is ended there may still be a shortage of that particular material that would not enable every manufacturer that has use for it to get it. This would seem to give a priority to the contractor who was fortunate enough during the war to have been doing a construction job that gave him that particular material which he can now use in his peacetime activities. Now, if it does that, would it not seem to give him an advantage over his competitor in peacetime production?

Mr. CLAYTON. This section 8 (a) to which you refer, Mr. Wolverton, would give that contractor the right to retain or dispose of such property only for the purpose of war production, so that when the war is over that section is no longer in force.

Mr. WOLVERTON. I would like to have you, before making a very definite answer to that question, look at the provisions that are contained in the war contracts termination bill. I am a bit fearful that there may be a priority given to the contractors or the subcontractors that will give them an advantage in peacetime production.

Mr. CLAYTON. I hardly see how such an advantage could accrue under this section for peacetime production, because the section specifically relates to war production, and I would like to call your attention to section 22 (b) on page 22.

Mr. COCHRAN. Before you get to that, Mr. Clayton, does not paragraph (c) there leave the final determination in your hands? That is at the bottom of page 8.

Mr. CLAYTON. Paragraph (c) does not apply to (a).

Mr. COCHRAN. But it applies to (b).

Mr. CLAYTON. Yes; it applies to (b); (b) does not deal with the point jus discussed in (a).

Mr. WOLVERTON. Now, you have referred to section (b) in section 8. Mr. CLAYTON. Section 8 (b) merely gives the owning agency the right to dispose of any property which is damaged or worn beyond economical repair, any waste or scrap, and so forth, any products of

industrial, research, agricultural, or livestock operations, or of any public works construction or maintenance project, carried on by such agency, any contractor inventory in its control; that is, under the control of the agency, and any other class or type of surplus property designated by the Administrator. But I would like to call your attention to the fact that every provision of this act, as stated in section 22 (b) on page 22, is subject to the provisions of section 301 of the Second War Powers Act of 1942, or the act of March 11, 1941, that is lend-lease, or acts supplemental thereto, or of any law regulating the exportation of property from the United States.

Section 301 of the Second War Powers Act of 1942 is the priorities authority of the War Production Board, so that every provision of this act is subject to the priorities authority of the War Production Board. The CHAIRMAN. But does not that come under the Second War Powers Act, that priority provision of the War Production Board, and when the War Powers Act ceases the problem that Mr. Wolverton suggests might arise.

Mr. CLAYTON. Then, of course, the provision in section 8 (a) ceases also because when the war is over you cannot be producing anything for the war, and section 8 (a) relates specifically to war production.

The CHAIRMAN. As I understand Mr. Wolverton, I think what he is fearful of is this: say General Motors has on hand certain critical material that is very difficult for other manufacturers to get for war production, which is owned by the Defense Plant Corporation or some Government agency. Then he fears, as I understand his question, that General Motors gets that property under the provisions of section 8 to the exclusion of all other manufacturers.

Mr. CLAYTON. But they cannot retain it, Mr. Chairman, except for war production under this section 8 (a).

Mr. COCHRAN. Yes; that is right.

Mr. CLAYTON. You are thinking about the power of original acquisition. That was for war production also, but under the provisions of section 8 (a) they can only retain it for war production.

Mr. WOLVERTON. That may be the result of it, Mr. Clayton, but I hope that somebody in the legal fraternity will give that a little more consideration. In view of the other act that has already been passed I am inclined to think it will need some clarification

The other question I would like to ask, Mr. Clayton, is this: You spoke of a competitive sale of property, and I have in mind the cases of where large military reservations have been built by the taking over of many individual farms, and it has been determined that they do not need this reservation any longer, and therefore they can sell that land. Would that land be sold competitively, or would the farmers from whom it was taken, maybe by condemnation proceedings, have the first priority to take back their property at the price that they received for it?

Mr. CLAYTON. Well, I do not understand that we or any Government agency would have the right to sell Government property at less than its value, and I do not understand that under this act we would have the right, or the Administrator would have the right, to sell Government land to a former owner at the price at which the owner sold it to the Government if that price were less than the market value of the land at the time.

Mr. WOLVERTON. Well, now, let us narrow the question down, Mr. Clayton: Would that farmer be given any rights to take back that farm at its value?

Mr. CLAYTON. I can tell you of the policy which we have adopted in respect to the disposal of three-thousand-six-hundred-odd acres in Sangamon County, Ill., which I have previously explained, and that policy is this: We had the land appraised by competent independent appraisers. We sent registered letters to the former owners around the 20th of July, and told them that until the 15th of August they would have the right to reacquire that land from the Government at the appraised value. I am informed that several of them have indicated that they will reacquire it at the appraised value.

Mr. WOLVERTON. Well, I am inclined to think that is true, that a great many would be glad of the opportunity to do so. Now, that is not a fixed policy under the bill, that a priority will be given to the former owner to purchase the land?

Mr. CLAYTON. Well, Mr. Wolverton, I would like to call your attention to section 12 (e) on page 13, which reads as follows, and this is one of the policies to govern the disposition of property:

To afford former owners of surplus real property acquired by the Government by the exercise of its war powers an opportunity to reacquire such property.

Mr. WOLVERTON. You take that, then, as a definite instruction that they shall be given the first opportunity?

Mr. CLAYTON. That is the policy which I would adopt; yes, sir. Mr. WOLVERTON. Suppose the appraised value of the land was $100 an acre, and suppose you put it up to competitive bidding, and it brought $125 an acre, would you give the first priority to that former owner to purchase at the highest bid price or whatever was the assessed valuation, according to which would be greater?

Mr. CLAYTON. The policy which we have adopted, as I explained in the case of the Illinois land, is first, to have the land appraised by competent appraisers, and then to offer the land to the former owner at the appraised value and to give him a reasonable length of time in which to make up his mind as to whether he wishes to reacquire it at that value.

Now, it may interest you to know that, in the case of the Illinois land, the highest appraisal on the land was that one tract was appraised at $25 an acre more than the Government paid for it, and the average on the 3,600 acres was only $4 an acre more. In one case a tract of land was appraised at $34 an acre less than the Government paid for it. Now, we are offering all of those people an opportunity to reacquire their land at its present appraised value.

Mr. WOLVERTON. Suppose that the former owner is of the opinion that it does not have the value that you have appraised it at, and therefore he does not accept your proposition of purchasing it at the appraised value, and then you put it up to competitive bidding, and his judgment is justified by the fact that the highest competitive price was $34 an acre less than you had appraised it at; would he still have the right to take it at that price?

Mr. CLAYTON. I do not think so.

Mr. WOLVERTON. You do not?

Mr. CLAYTON. No, sir. I think if we let it be known that a man who puts in the highest bid for land may not get it because somebody

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else is going to have an opportunity of taking it at his bid, I think it would greatly restrict the number of bidders and adversely affect the Government on the price that would be bid for this land.

Mr. WOLVERTON. Well, that may be true, and yet, on the other hand, there is danger that when it is put up to competitive bidding that absentee purchasers would buy it, you would have an absentee lordship over the land, and they would probably buy it up in great quantities. I think we have all agreed that our national welfare would be much stronger if we had individual owners of the land rather than large out-of-town-absentee landowners.

Mr. GOSSETT. That is a problem that has been giving me grave concern. To be specific, each time I have gone home the chamber of commerce and the farmers have summoned me to come to Cooke County in my district where the Government acquired some 80,000 acres of the best farm land in the county for Camp Howze. It is generally thought that it will be closed shortly. The entire county is greatly concerned lest some land syndicate or some big company come in there and buy up the entire tract of land. The entire community feels that as a matter of fairness and justice the original owners ought to have priority in repurchasing those farm tracts. They are very much concerned that this land be returned to familysized farms to which it was adaptable, and through which it was a great contribution to the economy of the entire community, and it just seems a matter of fairness that it ought to be handled for the benefit and interest of the local communities and the people from whom it was taken originally.

Mr. WOLVERTON. You have expressed my thought, Mr. Gossett, that the original owners ought to be given priority in repurchasing those lands.

The CHAIRMAN. If we make it mandatory in this bill that the Surplus Property Administrator must offer to the original owners the purchase of this land will we not run into a lot of title difficulties? A lot of the people have moved out, some of the original owners have died, and their heirs are scattered to the four corners of the earth. Mr. WOLVERTON. I assume any matter of that kind would be properly taken care of in the bill by regulations which can be made. That all can be taken care of the same as notices are given to absentee defendants.

Mr. GOSSETT. The other thought I have in this matter, which I believe to be sound, and I realize the Administrator's difficulties, is that these priorities or options should extend to the original owners who in a great many instances are individual farmers who had their land taken by condemnation, or they were told that it was unpatriotic not to sign a deed over to the Government and they feel that that land was taken too cheaply, that they got cheated in the bargain, so to speak. If this land is to be returned to its original owner, maybe this man has left to reside over in town, and he wants to move back on his farm, and should he not have the right to take it back at the price at which it was taken from him rather than some increased appraisal value?

The CHAIRMAN. Mr. Gossett, if that right be given, would not the farmers who owned the land where the Willow Run plant was built have the right to take the land back with that enormous plant on there?