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The R. F. C. will accumulate a mass of research data of that type. Their report will be one section only of the entire report which the Board furnishes to the Congress on the iron and steel industry and on the iron and steel categories of plants.

Mr. WIGGLESWORTH. The function of your division is primarily reporting to the Congress periodically on the over-all picture?

Colonel HOWSE. Reporting to the Congress periodically on the over-all picture within these 12 categories of industry that are delineated here, and that are listed in the act. The recommendation to Congress specifically each time a plant costing over $5,000,000—the report on its being subject to sale is made to Congress. I might say, if I may repeat, this has been a matter of nearly 3 months' discussion with Senator O'Mahoney and his subcommittee of the Military Affairs Committee of the Senate, with the Justice Department, with the Colmer Post-War Committee of the House, and there has been a particular type of report agreed upon.

Mr. WIGGLESWORTH. And similar reports are to be made, with reference to each one of the Assistant Directors that are named here?

Colonel Howse. That is correct. Mr. WIGGLESWORTH. As to their respective fields? Colonel Howse. That is correct; yes, sir. That is a requirement of the act.

Mr. WIGGLESWORTH. Does the same financial limitation prevail in respect to all conditions? Under what conditions can the disposal agency proceed to dispose, without further action by the Congress? And under what conditions must it await further action by the Congress?

Colonel HowSE. By the Congress, did you say? Mr. WIGGLESWORTH. Yes. Colonel Howse. Section 19 (a) of the act requires thatThe Board in cooperation with the various disposal agencies shall prepare and submit to the Congress within 3 months after the enactment of this act a report as to each of the following classes of surplus propertyAnd it delineates the different classes, describing the amount, cost, location of the property, outlining the economic problems that may be created by the disposition of the property, and setting forth a plan or program for the care, handling, disposition, and use of the property.

The act further requires that any plant costing more than $5,000,000 be reported to the Congress, prior to the time that such plants are sold and that the Attorney General be notified of the proposed disposition of any plant costing $1,000,000 or more.

Mr. WIGGLESWORTH. I am not as familiar with that section as I should be. Does that contemplate affirmative action by the Congress in respect of every $5,000,000 plant?

Colonel HowSE. It does.
Mr. WIGGLESWORTH. Before it is disposed of?
Colonel Howse. It does.

Mr. WiGGLESWORTH. Does it contemplate similar action in respect to other fields that these Assistant Directors would have charge of?

Colonel HOWSE. In all these fields.

Mr. WIGGLESWORTH. There is a $5,000,000 limitation in each instance?

Colonel Howse. There is.

Mr. WIGGLESWORTH. For instance, I see you have an Assistant Director of Patents, an Assistant Director of Shipyards, and an Assistant Director of Rubber. Would the $5,000,000 limit be the guiding yardstick in all cases?

Colonel Howse. The $5,000,000 limit is the yardstick applied by the act; yes, sir.

Mr. WIGGLESWORTH. In all categories?
Colonel Howse. Yes, sir.

Mr. Case. In this first estimate there was a section on Priorities, Preferences, and Concessions Division, with an estimate of $92,300. In your revised justification I do not find that. Do you contemplate having that Division?

Colonel Howse. It has been eliminated, Mr. Case.

Mr. Case. I am glad to know that, because I noted a question to ask, Why should not the Board itself fix the policies rather than setting up a division to do that?

Colonel Howse. Yes; it has been eliminated.

Mr. Case. And it is contemplated that the Board itself will develop these preferences and other policy matters contemplated by the law; is it?

Colonel Howse. That is correct; yes, sir.


Mr. TABER. Is there any place here where you would be trying to supervise and more or less control the operations of the War Shipping Administration or the Maritime Commission on the sale of either ships or shipyards?

Colonel HowsE. Mr. Taber, first of all the act specifically preserves the Merchant Marine Act of 1936 and provides that the Maritime Commission will dispose of such property covered by the Merchant Marine Act, in accordance with the terms of that act. Those matters, of course, are not within our discretion. The sale of shipvards, however, is within our discretion.

Mr. TABER. You mean that the sale of ships is not within your purview at all?

Colonel Howse. That is correct.

Mr. Taber. All you do about that is hand in the reports that they hand to you?

Colonel HowsE. No; we do not even make any reports on ships.

Mr. Taber. I have one of your reports here that you have handed to us.

Mr. McNAMARA. That is not in the category of ships as defined by the Merchant Marine Act.

Mr. TABER. This has to do with ships and maritime property and small vessels. That is what it says, anyway.

Colonel Howse. May I read you

Mr. TABER. I know; but this is your report here which speaks of the sale of ships.

Mr. McNAMARA. Not merchant vessels.
Colonel Howse. Certain small vessels and odds and ends.
Mr. TABER. It does not cover merchant vessels at all?
Colonel Howse. That is correct.

Mr. TABER. What kind of ships were they that were sold, or were they not ships?

Mr. McNAMARA. Small yachts and motorboats.

Mr. TABER. In this category you have ships and maritime property and small vessels.

Mr. McNAMARA. There were no ships of the category excluded by 10 (b) of the act or defined by 10 (b) of the act. The United States Maritime Commission shall be the sole disposal agency for surplus vessels which the Commission determines to be merchant vessels. None of those ships that were disposed of were determined to be merchant vessels.

Mr. TABER. This report seems to cover the disposal of some $4,000,000 of property. What was that?

Mr. MULLENBACK. Largely marine engines, Mr. Taber, that was the bulk of it.

Mr. TABER. Were they new engines?
Mr. MULLENBACK. New and used.
Mr. TABER. Why were they getting rid of them?

Mr. McNAMARA. Change of models; various reasons which were within the Maritime Commission's purview.

Mr. TABER. That was their job; that had nothing to do with the Board at all?

Mr. McNAMARA. No, sir.
Mr. Taber. You had no control over it, but you do report it.

Mr. McNAMARA. The Maritime Commission declared some of those surplus to their own needs, and in that respect they reported to the Board; others were declared to them as surplus by the War Department.

Mr. TABER. And the Board includes it in its report.
Mr. McNAMARA. That is correct.
Mr. TABER. And that is all you have to do with that?
Mr. McNAMARA. Yes.


Mr. Taber. Except as to shipyards; you do have a supervisory direction over the disposition of shipyards, is that right?

Mr. McNAMARA. To the same extent.

Mr. TABER. That is, you simply report it. I thought you said, Colonel Howse, that they were in the same category as other property and not under the Merchant Marine Act.

Colonel Hows. I do not think I did say that; but if I did, I stated it in error. Shipyards, as long as they are used for the construction of ships, are within the jurisdiction of the Maritime Commission.

Mr. TABER. I understood that.

Colonel Howse. At such time as they are no longer usable for the construction of ships, they are then declared to the Board, who, in turn, declares them to the R. F. C. for disposal as industrial property

Mr. WIGGLESWORTH. As it becomes surplus?

Colonel Howse. There is a further distinction, Mr. Wigglesworth; not only surplus, but the Maritime Commission, as we understand it, under the law, cannot use the shipyards for any other purpose than the construction of ships. If they do, then they become declared by the Board.


Mr. WIGGLESWORTH. If they do

Colonel Howse. If they are used for any other purpose than the construction of ships, then they are declared to the Board.

Mr. McNAMARA. As surplus.

Colonel Howse. The shipyard might or might not be surplus. They might use if for something else besides the building of ships.

Mr. WIGGLESWORTH. Suppose they decide that they have too many yards and they want to dispose of one or two of them.

Colonel Howse. They declare them to the Board as surplus.
Mr. WIGGLESWORTH. Then you would, in fact, dispose of the yards?
Colonel HowsE. That is correct; or the R. F. C. would.

Mr. WIGGLESWORTH. As long as they want to continue to use them for the production of ships, any change of hands would be as a result of Maritime Commission action?

Colonel Howse. Generally speaking, I would think so; yes, sir. I am a little bit fuzzy on that one; but, I think, yes.


Mr. TABER. You say you have a set-up in here for Consumer Goods; you have, as a matter of fact, seven set-ups with eight or nine in each, with about $40,000 assigned for each set-up: perhaps a little less than that. It might get down to $30,000 in one of them. Just why do you think all of that organization is necessary? Is it because of the volume that might be available for distribution? This would seem to be divided into six divisions, with none of them having anything to do except a certain amount of checking and the matter of over-all policy. I am wondering why you need that set-up at all.

Colonel HOWSE. Mr. Taber, we might take the Apparel Division. That will be responsible for the development of policies governing the disposal of textiles, wearing apparel, house furnishings, footwear, and miscellaneous textile items.

The General Products Division would be responsible for the development of policies governing the disposal of miscellaneous hardware and a variety of general products, such as appliances, fixtures, containers, and related commercial products.

The Food Division would be responsible for collaborating with the W. F. A. on the development of policies governing the disposal of surplus food products.

The Automotive Division would be responsible for the development of policies governing the disposal of motor vehicles, related automotive products, equipment, and accessories, and construction and related equipment.

The sedical Supplies Division would be responsible for the development of policies governing the disposal of medical and surgical equipment, educational equipment, drugs and medicines, and related products; and would develop pricing and priority policies affecting publichealth, educational, and nonprofit institutions.

The Office Supplies Division would be responsible for the development of policies governing the disposal of furniture, paper, office supplies, and related products.

You might ask-and, I think, perhaps a part of your question did refer, at least by inference---as to why we had, shall we say, 60 peopleI do not know the exact number—to handle the consumer goods that

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probably will not exceed $8,000,000,000 altogether, and why we have half that many people to handle the aviation program that will be five times that $8,000,000,000 in size. Of course, the answer is that the price or the amount of surpluses has little, if any, relation to the problems of their disposal. You might dispose of one B-24 bomber; that is a $100,000 item. If you dispose of $100,000 worth of consumer goods, you will be concerned with monkey wrenches and a used truck or two and some shirts and some socks-categories clear across the board. So that there is no relation, so far as we have been able to establish it, between the volume of surpluses and the problems in connection with the surplus. I do not know whether I got your question exactly, but that is the answer.

Mr. TABER. I appreciate that there is not any relation as to the dollar volume. But, on the other hand, it would look to me that these people had just the same job as this Compliance Division, practically, only that it was detailed; is not that so?

Colonel Howse. I think that is correct; yes, sir.

Mr. TABER. Then why cannot the Compliance Division take care of this problem without having this other set-up?

Colonel Howse. Excuse me; I did not understand your question, Mr. Taber.

Mr. TABER. I do not understand why you need this set-up when you have another one already.

Colonel Howse. The consumer goods people would determine the policies under which consumer goods would be sold. They would have to determine in a declining market the establishment of price levels; and in a rising market the establishment of different price levels. They would determine what quantities were to be dumped on the market, or whether they should be fed in gradually, in various categories of goods. That is one of the requirements of the act.

The compliance people operate solely, as the name might imply, in the checking of the operations of the disposal agencies, to see whether or not they comply with the directives that are written by this Board: to see whether or not they have adequate protection organized within their own operations to prevent fraud, collusion, and other types of misconduct that might be attendant on this kind of a program.

Mr. TABER. I join with you in wanting to do those things, but it would seem that with this whole set-up, with your Compliance Division, you ought to be able to cover that operation. Perhaps I am out of line on that, but it would seem so offhand.

Colonel Howse. Perhaps I might explain the nature of the personnel. That may give you some assistance, Mr. Taber. The compliance people will be investigative people, trained in investigativ procedures. The consumer goods people will be the best merchandis ing people we can find in the country. They are two different breeds of cat and two different kinds of job.

Mr. Taber. It would seem that the men who are in these seven groups were to do the same thing that the individual sales agency was to do. That is what rather bothers me. I do not see what there is for these folks to do.

Mr. McNAMARA. One thing they will do is to supply the “toe is the boot" that you were speaking about the other day; to get the disposal agency to take action on disposing of the property and get the owning agency to declare it surplus, so that it flows into the disposal agency.

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