of the Government. I know that there is going to be, as you do, protest against disposal. Right now, as we know, the metal industry wants us to be pretty slow about disposing of the metals.

I would like to ask you finally if, when you testified before the Post War Economic Policy and Planning Committee on June 16 to June 20 1944, the substance of this bill was available to that committee at that time, and at the time the representatives from the Army, particularly the Director of Matériel of the Armed Services, and other witnesses testified before that committee?

Mr. CLAYTON. Yes; the bill was before them. It was practically the same bill we have here.

Mr. WHITTINGTON. In other words, the details of this particular bill, the substance of it, was available to the Economic Bureau, the Armed Service Forces, and the Federal Works Agency, and the other witnesses who testified before that committee?

Mr. CLAYTON. They helped us write it.

Mr. WHITTINGTON. That is to say, the Army, the Navy, and the Maritime Commission had representatives that sat in as you wrote this bill?

Mr. CLAYTON. They had representatives on our legislative committee. There were 11 agencies that were represented on that committee.

Mr. WHITTINGTON. Who represented the War Department?
Mr. CLAYTON. I think the representative was Mr. Marbury.

Mr. WHITTINGTON. He is general counsel and a very capable man. He is a lawyer. What I would like to know is what representative of the War Department knew about material and requirements of both war and peace sat in with you as you drafted this bill.

Mr. CLAYTON. General Clay. General Clay represents the War Department on our policy board, and he testified for this bill.

Mr. WHITTINGTON. I know he did, and that is the reason I asked you the question. I have a high regard for that lawyer, Mr. Marbury, and I have a high regard for General Clay. They are both capable

men.

Mr. CLAYTON. I think so, too.

Mr. WHITTINGTON. What about the Navy? Who represented the battleships and the crews?

Mr. CLAYTON. Captain Strauss represents the Navy on our policy board. Commander Linder and John Kenney served on the committee on legislation. Mr. Kenney is a lawyer.

Mr. WHITTINGTON. I recall Mr. Kenney. As I understand the terms of this bill, it expires 3 years after the termination of hostilities. Mr. CLAYTON. Yes. The Administrator's term is only 2 years. Mr. WHITTINGTON. I think that we are very fortunate to have you as the Administrator.

Mr. CLAYTON. Thank you very much.

Mr. WOLVERTON. First, to clarify my own mind as to how broad this act is, do I correctly understand from the answers that you have made to Mr. Whittington's questions that it includes all the departments? In other words, would it include real estate that had been taken by this, that, or the other agencies of the Government under foreclosure proceedings and is now held by them?

Mr. CLAYTON. If they declare it surplus to their needs and responsibilities, it does include that property.

Mr. WOLVERTON. I would assume it would follow that it would be surplus property when a loaning agency finds it necessary to take property because a loan had been defaulted, and they are not in the real-estate business to the extent of wanting to hold that particular property. So am I right in the conclusion then that this will would cover all that property as well?

Mr. CLAYTON. It certainly should not cover real property that some Government agency would be under the necessity of disposing of for a debt. If it does cover it, I think it should be amended.

Mr. WOLVERTON. You say disposing of it for a debt. They dispose of it by a foreclosure proceeding and buy the property in. Therefore, it becomes their property. The Farm Credit, for example, or the Home Owners' Loan, in its liquidation program, they have properties on their hands. Is this bill broad enough to include your jurisdiction over the sale of that property?

Mr. CLAYTON. Technically it is.

Mr. WOLVERTON. If it technically is, it does.
Mr. CLAYTON. That is right.

Mr. WOLVERTON. It would seem to me from a reading of the definition that it very clearly does.

Mr. CLAYTON. I think you are right.

Mr. WOLVERTON. Was it intended to be that way?

Mr. CLAYTON. I do not think it should be that way.

Mr. WOLVERTON. It seems to me that is a pretty big question. Mr. ZIMMERMAN. The Farm Credit Administration operates under a law set up by Congress. I doubt if that law authorizes the disposition of property taken in because of foreclosure. I doubt if this would affect that type of property.

Mr. CLAYTON. I doubt if it would.

Mr. HOPE. Will you yield to me?

Mr. WOLVERTON. May I just say this first: That a reading of this bill, particularly the definitions, would indicate to me-whether you intend to do so or not is another matter-it does include just that sort of property that Mr. Zimmerman has said is subject already under law to disposal by the particular agency that takes it. Now, of course, that being a law does not prevent the Congress from changing it, and I am concerned to know whether this law changes the disposal sections of these laws that are already in existence with repect to these particular organizations.

Mr. CLAYTON. Under this proposed bill we could not take over any authority or responsibility with respect to any property that might be acquired or might be owned by any corporation that is not wholly owned by the United States Government, and there are a number of corporations under the Farm Credit Administration which are not. wholly owned by the United States Government. So this bill must not cover any property of that character.

Mr. WOLVERTON. I am not prepared to go into an explanation of what comes within one class or the other. I am merely asking the general question; does this bill give you authority to sell property of any kind in any agency of the Government?

Mr. CLAYTON. Only if they declare it to be surplus. It does in that case, if they declare it surplus, yes.

Mr. WOLVERTON. Under certain conditions you could declare it to be surplus, unless you want to make the change that you have suggested.

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.