be sold, review spot check appraisals shall be made in the field and all appraisals shall be reviewed by qualified individuals designated as chief appraisers. The basis of appraising shall be the estimation of fair market value which may be defined as the highest price in terms of money which land will bring, if exposed for sale in the open market with reasonable time to find a purchaser, buying with a full knowledge of all the uses and purposes to which it is adapted and for which it is capable of being used. The estimated fair market value of any parcel of real estate shall be for its entirety although the estimated value of land and improvements may be indicated separately as a memorandum. All appraisal reports shall contain the appraiser's certification that he has no interest, direct or indirect, in the property or sale or disposition thereof. Appraisers shall be requested specifically to give full consideration to markt values and trends in the territory where the property is located which he is appraising.

C. Surveys, plats, and lay-outs.—All real estate to be sold shall be adequately identified by legal description in order that prospective purchasers may know exactly where the property is located and its area. Surveys shall be made, when necessary, and markers or monuments will be placed on the land. While agricultural and other rural land should ordinarily be replotted into family-sized units, it is not contemplated that urban land will be replotted, unless replotting will permit more advantageous sales for the Government. Cooperation shall be maintained with local officials in the matter of providing for roads and other public utilities in replotting land. Orderly and complete disposal, maintenance of market stability, and provision of full economic and productive opportunity to purchasers, may necessitate the subdividing of land into economic use or operating unit areas, without regard to the size of the original tracts acquired by the Government.

D. Selection of buyers. Every effort shall be made to find buyers who will purchase surplus real estate for use and not for speculation. Surplus land shall be sold only in useable units and shall not be sold in large blocks for speculation or to buyers who may wish to assemble large areas of land for speculative future use. When a land unit of sale approximates the original tract, the former owner shall ordinarily be granted a preference to buy at the fair market value as determined by the Reconstruction Finance Corporation. In other cases a preference shall usually be granted to former owners in the area being sold, to purchase any available tract at the fair market value as determined by the Reconstruction Finance Corporation. Such preferences shall be for a reasonable period following publication and written notice to the former owner at his last known address. Preferences referred to herein shall not be extended beyond actual former owners or surviving spouses.

E. Sales methods and prices.-(1) Prices: Surplus war real estate shall be sold at fair market values or at prices representing a reasonable departure therefrom, regardless of its original cost.

(2) Procedures: Wide publicity and advertising shall be given to all sales. Advertising shall be through local newspapers and publications and sale signs shall be posted on lands to be sold. Sales may be made by informal bids, sealed bids, or by negotiation. Negotiated sales are considered preferable and should be used more extensively than other methods. Bids shall be subject to rejection, if offers are not considered satisfactory. Adequate cash deposits will be required with each bid. Sufficient time shall be allowed, in the terms of bids or offers from purchasers, to permit adequate consideration and for determinations by the Reconstruction Finance Corporation board of directors. In the event it is determined that surplus real estate cannot be sold within a reasonable period, it may be leased by short-term leases in order to obtain the maximum return pending such time as it may be sold.

(3) Brokers: Where, in its judgment, disposals will thereby be made to the better advantage of the Government, Reconstruction Finance Corporation is authorized to utilize the services of approved and established real-estate brokers. No exclusive listings of real estate shall, however, be made with brokers. Brokers shall not be paid a commission for leasing or selling real estate to another Government agency or to an individual, firm, or corporation sponsored by another Government agency. Commissions not to exceed established conventional rates, ordinarily paid in a particular community, may be paid to brokers who perform the service of producing buyers and negotiating sales to them. Such commissions shall be paid only after sales transactions have been consummated and a further requirement shall be that the buyer will execute an affidavit to the effect that the broker to whom the commission is to be paid is the only broker whom he recognizes or had any dealings with in connection with the sale and that the broker did perform such services as are ordinarily performed by a broker in bringing r and seller together.

(4) Salesmen: Sales managers and salesmen may be individuals in the employ of the Reconstruction Finance Corporation Loan Agencies, individuals employed on a loan reimbursable basis from other Federal gencies or independent brokers. Salesmen shall be thoroughly instructed as to their duties and manner of performance before entering upon such duties.

F. Financing.-The Reconstruction Finance Corporation shall assist in the financing and extending of credit terms to purchasers, calling to their attention the availability of the loan facilities of other Federal agencies, as well as lifeinsurance companies, mortgage-loan institutions, and other private financing sources, and making such use of its own loan facilities as are consistent with its lending policies and needed to facilitate the disposal program. The amount of such financing and terms in each case, of course, will depend upon the loan policies of the agency or institution providing such accommodations. All sales, however, shall be firm and not speculative and adequate cash payments shall be required. Purchasers shall be require to provide insurance coverage to protect the interest of any mortgagee.

G. Conveyances. All conveyances of surplus real estate shall be by the usual quitclaim deed or by other appropriate conveyance without representation or warranty. Purchasers may be permitted to copy or inspect any title papers which are in the possession of the Government, at their own expense and at a place designated by the Reconstruction Finance Corporation. Every facility now available to the Government shall be made available to purchasers to minimize the cost of title examination to them. Deeds may provide for a recapture clause in the event that land being conveyed may be required again by the Government in a future national emergency. Decisions as to whether conveyances will contain recapture clauses, shall be made after recommendations have been requested and received from the interested Government agencies such as War Department, Navy Department, Civil Aeronautics Authority, etc., general, conveyance instruments shall be of such nature as to vest title in private ownership in order that real estate may be put back on a taxpaying status. Sales contracts in which the Government retains title may be made in exceptional cases when such procedure may be absolutely necessary. Such cases, however, shall be kept at a minimum.

In

H. Records and publicity. The Reconstruction Finance Corporation shall assemble and maintain adequate and comprehensive records which will indicate clearly the extent of investigation and analysis which it has made in developing disposal plans and in testing out the market prior to making sales. It shall also adopt procedures for keeping the public fully advised of its progress and plans with reference to the disposal of surplus real estate.

I. Relations with Administration.-The Administration shall be consulted prior to the making of any major changes in the organization of Reconstruction Finance Corporation for the handling of real-estate disposal, or in its mechanics, policies, or procedures for such disposal, and also prior to the making of any major disposals which may involve questions of policy or the establishment of a precedent. Washington, D. C., July 26, 1944.

W. L. CLAYTON, Administrator.

Mr. CLAYTON. Now, coming to your question about the Illinois land, that land has been replotted in family-sized parcels of 100, 120, or 160 acres, whichever seemed to be the right size, and is being offered or will be offered in tracts of that size.

Mr. HOPE. It has been appraised, has it; an appraisal has been made in tracts of that size?

Mr. CLAYTON. Yes, sir; appraisals have been made of those tracts as replotted and, as I recall, the replotting of the land certainly conforms, as nearly as possible, to the original boundary of the original farms.

I would just like to say a word about this matter of giving the original owner an opportunity to reacquire his property at the price at which he sold to the Government. I want to say, first of all, I have the greatest sympathy for that idea; but, when you come to try to put it into practice administratively, it has many, many very diffiuclt aspects. For example, how far back will you go from the point of view

of acquisition of the property by the Government, to say that the original owner shall have a right to reacquire at it the price at which he sold to the Government? Will we go back to property acquired by the Government in the First World War? If not, at what time will we start? The next question is how far forward will you go to give him that right. Will you say you will go 2 years from now, 3 years from now, or 10 years from now?

The next thing is that in many cases, as has been mentioned, improvements have been taken from the land and other improvements have been added to the land. How do we arrive at an adjustment of values in those circumstances? I know of cases, and they will be quite frequent, where land has been taken for an Army camp where water has been made available to the land, running water, waterworks, sewage, and things of that kind; where roads have been laid, concrete roads have been laid thereon. How do you arrive at an adjustment of matters of that sort?

Then there is, of course, the over-all broad principle that as soon as you say that former owners should have the right to reacquire their land at the price at which they sold it should have the opportunity, I should say you introduce at once the element of adverse selection against the Government.

I have just given you an example of Sangamon County land where one farm is valued at $25 an acre more than the Government paid for it. That was the extreme on the up side. Another farm is valued at $34 less than the Government paid for it. That is the extreme on the down side. The average is $4 an acre appraised value over what the Government paid for it.

Mr. HOPE. Is this difference in appraised value due in any degree to the use which has been made of the land by the Government?

Mr. CLAYTON. No, sir; it is not due at all to the use that has been made of it. As a matter of fact, not very much use has been made of it, except much of it has been leased by the Government and has been in cultivation. And in the case of the land valued at $25 an acre more than the Government paid for it, there has been no change in its character whatever; that is, the same improvements are there that were there when the Government bought it. I am sorry I did not look up more in detail the case of the land valued at $34 an acre less than the Government paid for it. Undoubtedly some of that less value will be due to the removal of some improvements, maybe the house and the barn. But you can see at once that every former owner whose land is worth more than what he sold it for will be interested in reacquiring it; but everyone whose land is worth less-and there will be a good deal-will not be so interested. So that you have at once the factor of adverse selection against the Government. I just mention that, because it is important. So that while I think we all deeply sympathize with the principle involved in this idea, when you try to put it into a statute and when an administrator tries to administer it fairly and equitably, both to the Government and the former owner, you can see, I believe, from a few of the cases I have cited, that there are great difficulties involved.

Mr. HOPE. I would like to ask one more question or, rather, make an observation. I doubt if it is going to be of such great importance as to whether former owners have the right to reacquire this land; because my observation has been that in most cases if they still

wanted to farm they went out and bought other land where the Government took their land. Of course, some of them might have gone to war plants and decided to follow that during the war and resume farming afterward, but I think in a great many cases, and particularly those that have come under my observation, former owners have acquired other land and probably would not be interested. In the second place, it is very seldom that the use of land for military purposes has added anything to its value for agricultural purposes and in almost every case, if it has been used for military purposes, it has less value now for agricultural purposes that it had previously. So that there will be many cases where the former owners would not want to go back and buy the land at what its value was at the time they sold it.

I do not think that is so important, but I do think it is very important that these sales be made on the basis of acquisition as small farms. I think that is much more important than the matter of letting former owners have the opportunity to reacquire and I am glad to note, in your regulations which you read a while ago, that you do make that very clear-that they are to be sold that way.

Mr. WHITTINGTON. When Mr. Wolverton originally asked the question, without any desire to interrupt you, I desire to call attention to section E on page 13, and it strikes me it is difficult to improve on this language, for is it not true, Mr. Clayton, that the amount paid, either by agreement or by condemnation, for Government-acquired property, depends very largely upon the date it was acquired?

I have in mind land acquired in 1940. Take the Home Owners' Loan Corporation: Its assets were nothing like in 1940 what they are in 1943. There have been increases in land values. Our Government has to take less in some cases, you say, and certainly it ought to have the right to acquire more in other cases, but in every case give the former owner an opportunity to reacquire his property. Mr. CLAYTON. Yes, sir.

Mr. WHITTINGTON. That language is pretty difficult to improve. Mr. GOSSETT. I think that is a very excellent directive that the Administrator has read, with certain exceptions. Now granting the administrative difficulties of going back or going forward, could not you just arbitrarily set both the back and forward dates? There ought to be some provision in there, within some time, at the same price, that the original owner would have the option to repurchase. Then if he does not exercise his option in time, he does not have a right to complain. The land could then be sold to some other purchaser at any reasonable price.

The CHAIRMAN. But suppose he has a minor child?

Mr. GOSSETT. Well, you cannot take care of all those things.

The CHAIRMAN. But you cannot cut off the minor child's right to acquire.

Mr. GOSSETT. You have cut off everybody's right to acquire, under this language here. But to come back to my specific case-and I am sure it is no different from other cases in the county I have mentioned the original owners were compelled to surrender their land to the Government. Many of them wanted to retain their mineral right, because that country all has great mineral possibilities, and while there has been some exploration on neighboring owners' land and land adjoining has been leasing for $10 or $15 an acre, they were not permitted to keep their mineral rights.

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The Convernment bus no right to have land for nothing w To Jones to citizens of this country, and those things will have Taken into comderation It seems to me it is a matter of wolministration, protecting the individual as well as not losing of the food that we are supposed to protect the Government Hot we have to be fair

The CHATICALAN Mr. Clayton, there has been a suggestion Host them farm lands be turned over to the Secretary of Agricu the Farm Tecurity Administration, to be disposed of by the to be held and leased to farmers, with the Farm Security Admin Thom retaining the management of the property like they do now What are your views on that?

M CAVION Well, Me Chairman, we had to make a decis We appointed a committee, of which Colonel O'Brien. War Department who at the head of the Real Estate Division Vac Pepartment which acquired practically all of these lan v on which all the interested agencies of the Gomer the Department of Agriculture, Departmen