I assume we will have a suggestion from the Director of the Budget in a day or two, before we report the bill. I wanted to make this

statement.

Mr. ZIMMERMAN. Mr. Chairman, I would like to make a statement as a member of the Post-war Planning Committee. I just want to express my personal appreciation for this invitation to appear with members of the Expenditures Committee of the House, and I also wish to express my appreciation for the very clear and comprehensive statement made about this bill by Mr. Clayton.

Mr. COLMER. Mr. Chairman, I wanted to say something myself along that line. I wish now to say that I concur in what my colleague, Mr. Zimmerman, has said. And, in saying that, I would also like to say that while it is true there has been no legislation enacted by the Congress on the subject, I am of the opinion that, as a result of the experience that Mr. Clayton has had in his capacity as Administrator, we have and will have a much better bill, or have a much better law, than we would have had if we had legislated without the benefit of that experience. So I am not so sure we have lost anything, in the long run.

And I hope, Mr. Clayton, this will be the last time you will have to appear before any of these committees and that we can get some legislation enacted and let you go ahead and perform the duties of your office.

Mr. WHITTINGTON. Before Mr. Clayton leaves and I will not tell him "good-bye", because personally I enjoy having him as a witness down here on a matter as important as this-I would like to have his general counsel give us the language for an amendment to section 7 and have it presented before we report the bill.

The CHAIRMAN. He is going to present that to the committee when we get ready to report the bill.

Mr. WHITTINGTON. I would like to have him give us the exact language. I think we would like to have that.

Mr. CLAYTON. I thank you very much, Mr. Chairman, you and the other gentlemen, for your kind expressions and your patience in listening to me.

I would just like to say one thing for the record in reference to the last point Mr. Folsom brought up about the use of industrial advisory committees. I think, if anything is incorporated in the bill on that subject, provision ought to be made for exempting the activities of such committees and persons serving on them from action under the Sherman antitrust law; because I understand they have a great deal of concern, in acting under a statute of that kind, about that matter. I would think the bill ought to provide for an exemption from the Sherman antitrust law in such activities.

The CHAIRMAN. We will work that out.

(After informal discussion, the committee adjourned until tomorrow, Wednesday, August 9, 1944, at 10 o'clock a. m.).

SURPLUS PROPERTY ACT OF 1944

30

WEDNESDAY, AUGUST 9, 1944

HOUSE OF REPRESENTATIVES COMMITTEE ON

EXPENDITURES IN THE EXECUTIVE DEPARTMENTS,

Washington, D. C.

The committee met at 10 a. m., Hon. Carter Manasco (chairman) presiding.

The CHAIRMAN. The committee will be in order. We have with us this morning Secretary Wickard who desires to make a statement to the committee. We shall be glad to hear you at this time, Mr. Secretary.

STATEMENT OF HON. CLAUDE R. WICKARD, SECRETARY OF AGRICULTURE

Secretary WICKARD. Mr. Chairman and gentlemen of the committee:

First of all I want to make it clear that my remarks on disposition of surplus war property will concern only Government-owned land, facilities, equipment, machinery, and materials which properly can be used for agricultural purposes. The War Food Administration will testify concerning the disposition of food and other agricultural products.

1 think H. R. 5125 is in essence a good bill and should become law. In my opinion the outstanding merit of the bill is that the objectives as stated in the bill reflect the idea that the disposal of surplus Government-owned war property is not to be a mere liquidation but to be an operation in the long-time interest of the whole Nation. In order that these objectives may be attained, I would like to see the bill more explicit in its authorizations and directives to the Surplus Property Administrator. I believe the suggestions I shall make are in conformity with the policies and procedures which have been established by Congress in previous legislation.

Land: A great variety of land, ranging all the way from submarginal areas to some of our very best farm land, was acquired for various war purposes. When an area is declared surplus, a determination should be made immediately as to which parts are agricultural land.

The agricultural land which was owned by Government agencies before its utilization for war purposes should be returned to such agencies.

The remaining agricultural land should then be surveyed by agricultural technicians to determine its proper use on a long-term basis.

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Submarginal land should be assigned to the proper State or Federal Government agency depending upon location and the use to which it might be put. For example, some of the land might be included in soil-conservation, erosion-control, and forestry programs of the Department of Agriculture or of appropriate programs of the Department of the Interior.

Such disposition of submarginal land not only would be wise from the standpoint of good land use, but would be economical in the long run even though the land might be sold for a few dollars per acre. This is true because it is very probable that sooner or later submarginal land which goes into private ownership will have to be taken over by public agencies at a time when its restoration or reforestation will be more difficult and costly.

The land which is determined to be suitable for ranching or farming should be divided into family-sized units by persons experienced in such matters. It should be offered for sale only to those who do not now own a family-sized farm and who intend to live on the unit and operate it for a livelihood. No family should be permitted to buy more than one unit.

Subject to the conditions above mentioned, first preference should be given former owners and second preference to war veterans. The disposition of these units should be in accordance with the principles of the farm-tenancy program authorized by the Bankhead-Jones Act. It would be inconsistent with sound public policy to permit this land to fall into the hands of those who do not need it for homes and a living when so many former owners and servicemen will find it impossible to get a farm at reasonable prices and terms.

This land should be sold on the basis of long-time earning capacity, taking into account the damage to the land, and to the buildings, fences and other permanent improvements. From a strictly dollarsand-cents standpoint, I do not believe that the Government would gain by selling this land at the inflated values which current market prices reflect. Because of the Government's obligations to veterans to see that they have an opportunity to make a good living, any apparent gain from sale of farm land at high prices would be much more than offset by more costly and perhaps less effective methods of helping war veterans get back on their feet. Further, should the Government, by act and by example, accelerate the vicious land boom now getting under way, the Nation will have that much greater outlay when it attempts to restore the financial foundations of rural America, as it had to do after the land boom of the last war.

It is my earnest hope that Congress will make sure that the good farm land to be released by the Government is used for encouraging the family-sized, family-operated farm ideal of America, which has been the foundation rock not only of our agriculture but our entire Nation. Plant facilities; A wide range of plant facilities have been constructed for war purposes, the disposition of which are of direct concern to agriculture. These plants range all the way from food and fiber processing and storage facilities to war plants which could profitably be converted to agricultural uses.

Wartime food processing facilities owned or financed by the Government include dried milk plants, concentrated citrus juice plants, dehydrated vegetable plants, and dehydrated raisin plants. Falling in a related category are the grain alcohol facilities now operating at

several locations as well as hemp processing plants in the Middle West. Government-financed cold storage facilities also have been constructed in widely dispersed sections of the country.

Since it is upon the Department of Agriculture that responsibility falls for price support and other farm programs enacted by Congress, none of these plants which might be useful in carrying out those programs should be dismantled or used for new purposes without Agriculture's approval.

Furthermore, there are certain industrial plants capable of conversion to agricultural uses, the disposition of which should reflect that possibility. For instance, the Department of Agriculture already has recommended that 40 percent of our wartime synthetic nitrogen plant capacity be converted to the production of nitrogen fertilizer.

Machinery and tools: Already a small number of trucks suitable for farm production are moving through regular commercial channels, and with the aid of the Department facilities, going to farmers or haulers of farm products in critical need of transportation facilities. Insofar as adequate price and service guarantees go with this equipment, Agriculture's interests are well served by this arrangement. Preliminary arrangements have already been made to sell surplus tractors and farm machinery and supplies in a similar manner.

In addition, there will be vast quantities of heavy equipment such as trucks, tractors, earth-moving equipment, road-building tools, and many types of supplies which can be used effectively and economically, and with great public benefit, in erosion control, irrigation, drainage and flood-control work, and in furthering programs in the field of soil, water, forest, and range conservation, and other public activities already recognized and sponsored by Congress.

For example, there are now more than 1,100 soil-conservation districts organized under the laws of the various States receiving Federal assistance. The availability of certain types of mechanical equipment would enable these districts to perhaps double their effectiveness in serving farmers all over the country and conserving the irreplacable soil resources of the Nation by the construction of terraces, diversion ditches, drainage ditches, farm dykes, farm irrigation ditches and structures, stock water ponds, contour furrows, and similar soil- and water-conservation developments. Furthermore, the people of the United States own over 175,000,000 acres of land in the national forests. A large quantity of supplies and equipment of many types could be used to increase tremendously the effectiveness of the protection, development, and use of this public resource. Equipment is needed for telephone and radio communications, construction and maintenance of forest roads and trails, firebreaks, reforestation, erosion control, range fencing, and so forth. There are also widespread agricultural research, pest control and similar activities that need many miscellaneous types of equipment.

I believe that any legislation dealing with surplus war property should provide definitely and specifically for meeting the needs of these programs while this surplus is still in Government ownership. This could be done by legislative authorization or such other type of legislative sanction as will assure the transfer of adequate amounts of this equipment directly to the Government agencies charged with carrying forward these programs.

Rural electrification equipment: Only slightly more than 40 percent of America's farm homes are electrified, in spite of the rapid gains which the rural-electrification program has made during the last decade. During the war period extension of rural lines has been brought almost to a standstill. Now, with improved farm incomes, a large part of the 5,000,000 rural families in unelectrified areas are anxiously awaiting the extension of electrical energy to their farms and homes. Completion of the Nation's rural-electrification program in the post-war period offers one of the really great opportunities for providing employment and creating vast demands for consumer goods. At the present time, the Rural Electrification Administration has $110,000,000 already allotted to co-ops which await only the availability of materials to begin construction. Also on file with the Rural Electrification Administration are applications for funds totaling an additional $100,000,000. These two sums represent only the beginning on the post-war rural electrification job.

Among the supplies of war materials which will be declared surplus sooner or later, are large quantities of electrical equipment and materials, including some power-generating plants, which R. E. A. cooperatives could use to a splendid advantage. I hope that Congress will direct that a large share of these items be reserved for R. E. A. cooperatives, 800 of which are already in existence.

Cooperatives: Section I of the bill states, among other objectives, that it is the purpose of the bill to discourage monopolistic practices, preserve and strengthen the competitive position of small business, and to effect broad and equitable disposition of surplus property. I know of no more effective means of attaining these objectives than giving preference to farmer-owned and farmer-operated cooperatives in the disposition of equipment and materials which can be used for agricultural purposes. Such preference also would be in accord with the long-standing policy of Congress to aid in the establishment and operation of farmer-owned and farmer-operated cooperatives.

In conclusion I want at least to mention a subject somewhat outside the principal field of my discussion, but of great interest to farm people. That is the disposition of surplus medical and dental equipment. Details of handling this type of equipment lie far beyond the scope of the Department of Agriculture. But as Secretary of Agriculture, it is my responsibility to point out that selective-service records and other information indicate that the health needs of rural America are relatively greater than those of urban areas. I trust that Congress will bear them in mind when it lays down principles for disposition of medical and dental equipment.

The CHAIRMAN. Mr. Secretary, how would you dispose of surplus farm lands? Through what agencies would you dispose of them to meet the objectives outlined in your statement?

Secretary WICKARD. I think I would ask the same organization that has had the experience in the administration of the farm-tenancy program, under the Bankhead-Jones Act; that is the Farm Security Administration.

The CHAIRMAN. Have you made a survey of the number of farm units that will be declared surplus?

Secretary WICKARD. I think there are about 7,000,000 acres, and if those were divided up into family-size units, there would be perhaps eight or ten thousand, with good land.