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RIGHTS OF VETERANS UNDER THE SURPLUS PROPERTY ACT

Mr. WOODRUM. I was interested in your reply to Mr. Ludlow about the rights of veterans. Section 16 of the act provides:

The Board shall prescribe regulations to effectuate the objectives of this Act to aid veterans to establish and maintain their own small businesses, professional or agricultural enterprises, by affording veterans suitable preferences, to the extent feasible and consistent with the policies of this Act, and the acquisition of the types of surplus property useful in such enterprises.

Mr. LUDLOW. What act is that?

Mr. WOODRUM. The Surplus Property Act.

That would seem to contemplate that the congressional intent was that the veterans should have a preference.

Mr. MCNAMARA. In establishing and maintaining a business. It is confined to that, Congressman.

Mr. LUDLOW. Suppose the purchases were essential to the establishment of the business, would that put him in a preferential class?

Mr. WOODRUM. It is to aid veterans to establish and maintain their own small businesses, professional or agricultural enterprises. Likely a farmer could either get farm machinery, a truck or an automobile or whatever he needed.

I was surprised to hear that there was any doubt about veterans having a pretty definite preferential right.

Colonel HowSE. I might delineate further in my remarks, if I may. I think I stated that the veteran was not regarded as having a prior right of purchase in the same manner that the Federal, State, and municipal governmental agencies are accorded prior rights of purchase. He may be accorded preferential treatment which probably will be a price preference. The question then immediately arises whether a veteran should be given a discount specifically, or a lower price than the average purchaser, in the purchase of surplus goods, and, if so, then the question arises as to the legal authority of this Board within the construction of the act to make price concessions.

Mr. WOODRUM. Suitable preference in the acquisition of types of surplus property would indicate to me that the veteran should have preferential treatment in being able to buy this stuff under more favorable circumstances than other people could buy it, both as to the right to buy under more favorable circumstances and as to their right of preference, and certainly it would seem to me that is something the Board would want to clarify and take action on at a very early date, because those questions are going to arise.

Colonel HowSE. Mr. Woodrum, the question has arisen. We have under discussion a veterans' policy, and it is a matter that has occasioned a great deal of discussion in our office. I think there is no question but that the Congress is quite anxious to accommodate veterans. It would be foolish to quibble that point. There seems to be some question in the legislative history of the act as to whether Congress meant to accommodate them with a bonus of some kind, or whether they meant to accommodate them with price preferences in the purchase of surplus property. The determination of that question legally has not yet been made. It is an extremely difficult one to determine.

Further there is this problem: There are 12,000,000 men in the services, and perhaps 1,000,000 women.

Mr. O'NEAL. The veterans of the last war would be included in that, too, and you would have to increase that number..

Colonel HowSE. The act does not specifically provide for them, but if they are to be included the number would be increased. Mr. O'NEAL. It says, "veterans."

Colonel HowSE. Yes, and "veterans" is further defined in the act as follows: "The term 'veteran' means any person in the active military or naval service of the United States during the present war, or any person who served in the active military, or naval service of the United States on or after September 16, 1940, and prior to the termination of the present war, and who has been discharged or released therefrom under honorable conditions." The question arises as to whether the veteran of the last war is entitled to the same privileges as the veteran of this war.

Mr. CANNON. Of course, the pertinent thing, as far as you and the Board are concerned, is the direction, whether mandatory or permissive, that the Board shall issue regulations.

Colonel HowSE. That is correct.

Mr. CANNON. Now, have you issued any such regulation?
Colonel HowSE. We have, Mr. Cannon.

I stated them for the

record on Friday, and we have filed with the committee a list of the regulations we have issued.

Mr. LUDLOW. But they do not go to the point of veterans' preferences, do they?

Colonel HowSE. No.

Mr. CANNON. Just one more question. You designated the regulations, did you not?

Colonel HowSE. I did; yes, sir.

Mr. CANNON. But did any of those regulations contain preferences for veterans?

Colonel HowSE. They do not; no, sir.

Mr. CANNON. In the end the question of drawing up the regulations governing the preference of veterans is for the Board. Have you drawn up such regulations?

Colonel HowSE. We have not; no.

Mr. CANNON. Have you not been rather dilatory in that respect? Colonel HowSE. Mr. Cannon, we may have been. It is a question as to which you are going to do first.

Mr. CANNON. When do you expect to reach that question and take some action with regard to it?

Colonel HowSE. We have the veterans regulations presently, included as one of the three regulations that have been up for discussion. Just which one of them will be completed first I do not know, but the veterans regulation is one of the three top-priority regulations that we have to complete.

Mr. CANNON. It seems to me that is a matter that you should determine. A million and a half veterans have already come back and they are returning at the rate of something like 200,000 a month, and if you are going to issue regulations I think now is the time it should be done.

Colonel HowSE. It is a very pressing matter.
Mr. CANNON. You expect to do it very soon?
Colonel HowSE. We do expect to do so very soon.

Mr. LUDLOW. I was intensely interested in Judge Woodrum's question. To take a concrete illustration, because I have had many inquiries about jeeps: Is there any preference contemplated that will enable the veteran to go direct to the procurement agency and buy a jeep on his own?

Colonel HowSE. Mr. Ludlow, there is this contemplation: That the veterans will be able to go to a dealer and buy a repaired and rehabilitated jeep at a discount. I can assure you that if that arrangement does not work out satisfactorily we will distribute jeeps direct to veterans or others, the disposal agencies will be instructed to distribute them directly. But I think I must point out to you that the sale of 500 jeeps at any one distributing point prejudices the rights of veterans who live 250 miles away, who cannot come in, who must buy sight unseen. If a veteran can go to a local dealer and make arrangements to get his jeep at a discount we perhaps may have done a greater service to the veteran than if we were selling directly to him.

Mr. LUDLOW. That would give him a preferred status so far as the dealer is concerned, but would there be a preferential status in regard to the right to secure the jeep itself?

Colonel HowSE. If I may go back to the statement I made earlier, that there are about 12,000,000 men and about 1,000,000 women in the services. There are no surpluses of this particular kind today except those that are badly needed in agricultural areas and under certification of the A. A. A. and the War Food Administration as being essential to farm production. Several questions arise in connection with items in short supply: First, should we sell for essential use today, or sell to a veteran that might not have an essential use for the item; or should we sell to veterans today and not keep some back for veterans who are going to be back at the end of the war? It s an extremely difficult question to determine.

Mr. O'NEAL. The provisions of the act providing for veterans preference, runs as an arrangement for assisting the veteran who wants to get into business or in agriculture, and it is not just for personal use entirely.

Colonel HowSE. I think that generally is the interpretation.

Mr. O'NEAL. There seems to have been something written into the law confining it to some purpose-needs for setting up a business or agricultural uses-or for some use that is meant to tie in with reestablishing him in business?

Colonel HowSE. I think that is generally the interpretation of the act at the present time.

Mr. WOODRUM. There ought to be some kind of a policy announced so there will not be confusion, because tremendous repercussions will no doubt be felt if you do not establish or declare a policy on it very

soon.

Colonel HowSE. Under the general interpretation of the act at the present time there is a very well defined desire to give veterans whatever preference it may be possible to give to them. The ques tion arises as to whether or not we give a general price preference for personal use, right across the board, to any veteran, whether he is going to enter agriculture or business, or other occupation, and it is a question as to whether or not we would be contravening the act That is a question, as I stated, that we have not yet decided upon.

Mr. CASE. If you interpret that matter of veterans' preference as a matter of price preference rather than price priority, will you not make every veteran a broker?

Colonel HowSE. That is one of the next questions that arises, Mr. Case. I think perhaps reasonably some restrictions would have to be considered, and that is one of the difficulties we have had to pass on in this whole problem. If a veteran purchases for his personal use there must necessarily, I think, be a limitation as to the amount he can purchase. If a veteran wants to go into the business of disposing of surplus property we think we should assist him to get established in business under the terms of the act, but he should not, probably, be given preferred treatment as against a nonveteran who is in the same type of business.

Mr. CASE. That is, to become a dealer, adding to the existing priority as to service, the price priority, on the purchase of surpluses for resale. Colonel HowSE. That is correct. You see, you would have assisted a preferred buyer with a system of preferred prices, and you would have the difficulty of determining the end of it. I might say for the record, if I can discuss this question of the jeep a little further

Mr. LUDLOW. I think every soldier feels, since he has devoted his service to the country, that he has a sort of interest in a jeep.

Colonel HowSE. I might add that the jeep is the most popular item of demand at the present time. On the other hand we feel that we have some sort of a responsibility to the veterans in another direction. We are setting up a committee to work with various governmental agencies to determine not only the possible use for surplus property in newer fields-as an example I mention the airplane engine preheaters that might be used as hay driers; but we have a very definite responsibility to determine that the misuse of articles also be pointed out to the veterans. There is for example, a great deal of talk about the use of jeeps for plowing. The Department of Agriculture has furnished some good information on such use.

Mr. CANNON. Suppose you elaborate on your answer in the record, because we have already spent some time on this item and have not reached the estimate yet.

INVENTORIES OF SURPLUS PROPERTY

Mr. WIGGLESWORTH. Let me ask you a question concerning the table you have set up. You show $265,181,000 as the cost of property disposed of. Is that over and above the inventory that you report as of the end of April 1, in the monthly report; is that included? Colonel HowSE. That does not include the inventory.

Mr. WIGGLESWORTH. That is over and above the inventory?
Colonel HowSE. Yes.

Mr. WIGGLESWORTH. So that in effect you have had $1,400,000,000 that you report as the probable cost, $1,400,000,000 plus $265,000,000 or a total of $1,665,000,000, roughly, and of that you have disposed of $265,000,000 worth, and you have received $164,000,000 worth in terms of cash.

Colonel HowSE. I think that is correct, Mr. Wigglesworth, if I did not get lost some place.

Mr. TABER. There seems to be a discrepancy in that table on page 11 of this monthly progress report, which indicates a declaration of

$1,574,000,000; the inventory is $1,399,000,000, or a difference of $275,000,000, and a disposal of $265,000,000; and if you add $89,000,000 of inventory at the beginning of that period you would have instead of a discrepancy of $10,000,000, a discrepancy of $99,000,000. Am I wrong in that?

Mr. MULLENBACH. The inventory is about $90,000,000.

Mr. TABER. That is $90,000,000.

Mr. MULLENBACH. $89,000,000, plus.

Mr. WIGGLESWORTH. The table that I requested has already been inserted in the record?

DISPOSAL OF JEEPS

Colonel HowSE. Yes. Now if I may discuss the jeep for a moment: The Department of Agriculture is prepared to advise veterans who want to buy jeeps and expect to use them on the farm, that they are not going to get their money's worth; that it is going to cost them considerable money for repairs and equipment, I think there will be a good many situations of that kind which will play a very definite part in the use of equipment and in the disposal of surplus.

Mr. LUDLOW. What would you say about the deterioration status of the jeep; are they very much deteriorated?

Mr. MCNAMARA. If there are any good jeeps the Army is using them; they do not declare them surplus.

Mr. CANNON. We will take up the estimates. I might say in this connection that this is the fifth week we have been on these investigations. I have attended hearings for many years and this has been the most inquisitorial committee I think I have ever worked with, and that is as it should be. We want to get full information and I think every member of the committee can say to the House that if the Members I will read the hearings, and I trust that every Member of the House will read every word, I have no doubt they will get full information on any phase of any question that is going to rise in connection with these agencies.

DISCUSSION OF INCREASE FOR PERSONNEL FOR 1946

For personal services, on page 2, your original estimate as submitted to the committee, had in it about the same personnel, about the same number of positions, and about the same organization set-up for 1946 as for 1945.

Colonel HowSE. Yes.

Mr. CANNON. But in your revised estimate which came down to us in the last few days I notice you have more than doubled your staff for personnel. That must have been brought about by some radical change in your policy. How do you account for this tre mendous increase in personnel in your supplemental estimate which was not contemplated in your original estimate?

Colonel HowSE. Mr. Cannon, I can give you a very brief explanation for that and elaborate on it as far as you may wish to have me do so.

Mr. CANNON. Yes.

Colonel HowSE. It was simply that the original estimate was prepared before the Board was even completely formed, before there had been any operating experience whatsoever, before there had been any

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