Mr. COCHRAN. But they are going to have to pay the price. Mr. STILWELL. We think they should be allowed to buy to the limit of their own use, but not for resale. Mr. COCHRAN. I am certainly in favor of that. I am not in favor of any State or county going in business. Mr. WHITTINGTON. A Government agency has no right to engage in the sale of commodities; they can only buy for their own requirements. So it is just discussing a hypothetical situation. Mr. STILWELL. This is just to make the stipulation more specific. Mr. CHURCH. So you mean, Mr. Stilwell, that some counties would be buying scrapers for road building? Mr. STILWELL. I only offer that as an example. It could be done under this bill, could it not? Mr. CHURCH. Are you a lawyer? Mr. STILWELL. No, sir. Mr. CHURCH. Do you know of anything in the law whereby States or counties could go into the business of buying scrapers, except to scrape their own roads? Mr. STILWELL. No, sir. Mr. CHURCH. Well is it your idea they should not buy scrapers for their own roads? Mr. STILWELL. No, sir; to the limit of their essential needs. Mr. ZIMMERMAN. Did you ever hear of a county or a municipality buying in excess of their own needs? Mr. STILWELL. No. Mr. COCHRAN. Did you ever hear of a State highway commission buying 10 or 20 times as much as they need and reselling at an advanced price what they do not need? Mr. STILWELL. No. Mr. COCHRAN. You do not know of any county or State engaging in anything like that, do you? Mr. STILWELL. I never heard of it. Mr. COCHRAN. My State highway commission would have the right to buy a sufficient amount of highway equipment and have it placed in the counties or in the cities, but as far as the State highway commission buying and reselling such equipment, certainly the State would not stand for that. Mr. STILWELL. I may have used an unfortunate example. Applied to the schools, the schools can do that. Mr. COCHRAN. The bill contains a word that disposes of that argument. It says "legitimate needs." The word "legitimate" is before the word "needs." If you will look at the bill you will see that that is the way it reads. POLICIES GOVERNING DISPOSITION (SEC. 12) Mr. STILWELL. While the committee approves in general the policies set forth in section 12, certain of these policies, in the opinion of the committee, are in need of amplification. Furthermore, the committee feels that several important guides have been omitted. Subsection 12 (d) should be extended to authorize specific collaboration with industry advisory committees. In order to protect private enterprise from unfair competition it is recommended that no class of surplus property be disposed of without receiving the advice of a committee representing the industry or industries most directly affected. Mr. WHITTINGTON. We have a communication from Mr. William Green and he states that labor ought to be represented on those advisory committees. Do you have any objection to that? Mr. STILWELL. No, sir. The CHAIRMAN. If you will read section 2, page 2, of the Manasco bill you will find that that is provided for. I am glad to find that somebody has come to agree with my views on that. That bill was introduced on April 15, 1943. Mr. STILWELL. In addition, it should be specifically stated in subsection 12 (d) that quantities of surplus equipment and supplies released for sale should as far as practicable be in lots which will permit participation by small as well as large manufacturers, wholesalers, and retailers, and any price differentials between large and small lots should be limited to actual differences in cost of handling and distribution. I have also heard a lot of conversation this afternoon on that subject, but it seems to me that the objection that has been raised can be taken care of by an administrative price policy. We offer this suggestion as a means of taking care of this situation. We see no reason why large manufacturers should have any preferment just because they can buy and finance large purchases, against the fellow who wants to buy one or a dozen, or a bushel. The committee recommends for insertion in the list of policies. governing disposition enumerated in section 12 the provision that Government surplus property disposal agencies should not sell new or unused consumer goods direct to the consumer without first offering the property for sale through the established trade channels, or to the original manufacturer. In the case of disposal of war surpluses abroad, it is recommended that such property sold abroad be barred from subsequent import into the United States, its Territories, or possessions. The committee feels that such a restriction is necessary to prevent speculators abroad from returning surplus property to this country to undersell the domestic market. Mr. Chairman, I heard a few minutes ago a question asked by somebody as to the practicality of that. I do not know whether that can be controlled 100 percent or not. I do not know whether you can legislate the possibility of preventing that 100 percent, but we think it should be covered by the law, so far as practicable. The CHAIRMAN. I asked Mr. Clayton that question yesterday. I asked him if he thought it can be done in this legislation, and if so, to submit an amendment to us covering that point. He has a corps of experts at his disposal to draft legislation. Mr. STILWELL. Another guiding policy should be the rapid elimination, after they are no longer required for national defense purposes, of all interests acquired by the Government in equipment, facilities and other property situated in private plants so that reconversion of industrial plants may be facilitated and expedited. DISPOSITION OF PLANTS (SEC. 13) The committee recommends three major policies to guide the disposition of Government-owned plants: 1. Since there is no relation between the wartime cost of constructing plants and their future value as a post-war facility, a reasonably determined value for such plants should be made by some measure other than the dollar expenditure of building costs. The committee feels that the wartime cost, including wartime rates and construction costs in inclement weather and at great speed, is an inflated cost, which should not be demanded of industry in negotiating for the sale of plants. The CHAIRMAN. As I understand Mr. Clayton's proposal, he would have the value of a building fixed as of the day when it is offered for sale, and that would do away with time-and-a-half and overtime and the inflated cost for materials going into the cost of the building. Mr. STILWELL. 2. In the event of failure by the Government to dispose of plants and facilities to private industry, the Government should refrain from operating such plants in competition with private industry. Mr. Chairman, I am bringing to you the deliberations of a committee. My personal observation is that it probably would be difficult to insert such a stipulation in law, but we believe in it. Mr. COCHRAN. In other words, if we sold a plant and the purchaser of that plant was going to engage in the manufacture of articles that are now made, say, at arsenals and navy yards, and we sold that plant for somebody to operate, do you feel that we should dispose of the arsenals and navy yards? Mr. STILWELL. No, sir; we just mean that surplus plants should not be retained and operated by the Government in competition with private industry. Mr. COCHRAN. I am in agreement with you there. Surplus plants should not be retained. Mr. STILWELL. Only surplus plants. Mr. COCHRAN. What would you do with a plant which will undoubtedly be declared surplus, that cost $130,000,000? Mr. STILWELL. It depends on its location. Mr. COCHRAN. It is right in the city of St. Louis, one of the largest plants for the manufacture of small-arms ammunition in the world. It is operated by the United States Cartridge Co. making small-arms ammunition. What use could a plant of that character be put to? Of course, the $130,000,000 undoubtedly comes in the classification of what you term inflated value. Mr. STILWELL. Probably it is inflated value and probably it is of an inflated size for ordinary peacetime operation, but I think the disposal board, over a period of time, can find tenants who will occupy or purchase that plant in whole or in part for peacetime operation. The CHAIRMAN. Not necessarily for the manufacture of ammunition. Mr. STILWELL. No; but for the making of medical supplies, or half a dozen other products. Mr. COCHRAN. In other words, 50 or 100 different types of industry might contract to buy the place and occupy so much space? Mr. STILWELL. 50 or 100 is pretty steep, but perhaps 8 or 10. Mr. STILWELL. I am familiar with it. Mr. COCHRAN. It is in my district, but unfortunately, due to my illness I have not been able to see it. Mr. McCONNELL. I know of a plant erected to make certain war products. It is a high-cost plant, air-conditioned, and with special features. The treasurer of the company operating that plant informed me that if it was given to them they could not afford to accept it because the overhead would make it impossible for them to compete in private industry. What are you going to do with such a plant? Mr. STILLWELL. First of all, suppose the armed services say they need it. I do not know whether it is a stand-by plant or not, but they may say that they think it should be held as a stand-by plant for an emergency. I do not know whether that is their idea or not. I do not know the specific answer to that. I could also give you the instance of one plant in the city of Cleveland to which I do not know the answer. Those questions have to be studied by the disposal board. Mr. McCONNELL. That is a difficult problem. Mr. STILLWELL. It is, and undoubtedly there will be some loss somewhere along the line. The Government cannot continue to keep those plants, paint them and keep them in condition forever. The proportionate increase over pre-war years in Governmentowned plants-and I mean plants which are retained by the United States Government-and equipment and direct Government production should not be greater than the corresponding proportionate increase in the size of the military forces. Inventory records (sec. 16 (e)): We are completely in accord with subsection 16 (e) providing for the maintenance of adequate inventory records by the disposal agencies. However, the committee recommends that effective immediately all departments or agencies of the Government which possess property acquired for the defense or war efforts should establish plant, facilities, and inventory records of such property. Mr. Chairman, I realize that is reiterating what has been said before, but we are coming closer to the time when we want to know what this surplus is. Mr. COCHRAN. Do you not think we should first win the war before we let the people engaged in the prosecution of this war spend too much time doing something else when they should be manufacturing various commodities that we need in the prosecution of the war? Mr. STILWELL. The people in the plants should not be interfered with at all. But this is inventory that should be made by the purchasing and owning agencies. The CHAIRMAN. It would be impossible to determine what the surplus really is until the war is over. Mr. STILWELL. We are asking for inventories. Mr. ZIMMERMAN. Do you think we ought to spend time making inventories and not making war? The CHAIRMAN. You cannot make inventories on the battle fronts. Mr. STILWELL. We are asking for inventories only of plant facilities, such inventory records as are used in manufacture. The CHAIRMAN. Of course, the War Production Board has inventories of all plants now, which are not made public for security reasons. Mr. STILWELL. That is fine. Mr. WOLVERTON. Mr. Chairman, it might be informative for you to know of the conversation that Mr. Zimmerman and I had last evening with an individual whose name I will not mention, but whose standing is above reproach. He informed us that the War Department is doing that very thing, in other words, making an inventory of every conceivable item, manpower, and what not, as we will say, of October 1 and January 1 next, if the war is not over then. They keep that current every 3 months, and I was astounded to know the detail with which they report or survey in making that inventory. Such an inventory is being made by the War Department now. I do not know anything about the Navy Department. Mr. STILWELL. In conclusion, the committee wishes to urge Congress to lend every effort toward securing prompt passage of equitable legislation setting up organization and defining policies and procedures for the disposal of war surpluses. It is felt that Congress provided the country with an exceptionally good law in the Contract Settlement Act. It is hoped that surplus property legislation will be equally as deserving of praise. As I say, Mr. Chairman, I think Congress has given us a fine termination law and we would like to get an equally good law for the disposal of surplus property, and we feel that that is very urgent; not that industry for a moment intends to let up in its war effort, but we think we are rapidly approaching the time when we will need such a law for guidance in the matter of this disposal, and industry will need some guide in connection with going from war to peace production and reemployment. Mr. COCHRAN. You have no objection to the Government selling this surplus property, no matter in what quantity, that cannot be purchased in the general, open market now? Mr. STILLWELL. Certainly not, sir. It ought to be sold as rapidly as it can be. Mr. COCHRAN. That includes everything, to get rid of it; is that the idea? Mr. STILWELL. Anything. Mr. COCHRAN. You have no objection to that at all? Mr. STILWELL. None whatever. The CHAIRMAN. As I understand it, you, or your organization, has two main objections to H. R. 5125; that is, the Ñ. A. M. has two main objections to the bill. One is that the Surplus Property Administrator is a Government agency and does not represent industry and the public. Mr. STILWELL. That is right. The CHAIRMAN. And also that there is no provision for industry advisory committees in reference to the dumping of surplus. Those are your two main objections? Mr. STILWELL. We think if we had industry advisory committees specifically provided for in legislation so that they would be established |