1 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? DISPOSITION OF SHIPYARDS 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 HowSE. 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 that 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. 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. FUNCTIONS OF DEPUTY ADMINISTRATOR FOR CONSUMER GOODS 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 Medical 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 72467-45- -77 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 investigative procedures. The consumer goods people will be the best merchandising 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 in the boot" that you were speaking about the other day; to get the dis posal agency to take action on disposing of the property and get the owning agency to declare it surplus, so that it flows into the disposa agency. Mr. TABER. Do you need all those people to do that sort of thing? Mr. MCNAMARA. There will be a terrific variety and volume of property declared surplus. DEPUTY ADMINISTRATOR OF AVIATION Mr. TABER. You have another set-up on aviation materials. policy on that is not determined, I assume or is it? Your Colonel HowSE. No, it is not, Mr. Taber. Of course, the policy there is a continuing one. I might suggest, if I may, that aviation is the first subject with which we will deal when we consider the disposal agencies' requirements. After you have heard their story, I think it might be clearer to you. Your asked me early in the day whether I thought we were getting the cart before the horse, and that is one case where we may be. Mr. TABER. I do not believe I will try to go any further with this, except I may want to ask Colonel Howse some questions after we get through with the agencies. DEPUTY ADMINISTRATOR FOR REAL ESTATE Mr. WIGGLESWORTH. I wish you would say a word, Colonel, about your real estate set-up. I notice that you have got not only a Director at $8,000, but about seven Assistant Directors at $6,500. That is under the general Real Property Division. Then you have another set-up under the Classification Division where you have a Director at $8,000 and seven assistants at $6,500. Why do you need all of that organization for surplus real estate? Colonel HowSE. Mr. Wigglesworth, at the risk of being repetitious I might point out that the act requires, as I stated on Friday, the classification of all surplus real estate by this Board. The act further prohibits the delegation of this function by the Board, meaning that the job has to be done by the Board. Mr. WIGGLESWORTH. You mean that in this instance the Board is the disposal agency? Colonel HowSE. No. I mean in this instance the Board is the classification agency, if you might call it that. The Board has to write the general policies governing the disposal of all real estate by the disposal agency. I would like to read to you, if I may, from the justification that has been submitted. Up to March 10 the United States had acquired for war purposes approximately 9,000,000 acres and 26,250 parcels of land not measured in acres, at a cost of some $577,000,000. Mr. WIGGLESWORTH. But here, again, you are not actually going to move that property or such portion of it as is surplus. You are simply going to classify and make some general regulations for the guidance of the disposal agency; is that correct? Colonel HowSE. That is correct; yes, sir. Mr. WIGGLESWORTH. Offhand it would seem that you have rather a large set-up to perform those functions. Colonel HowSE. I might point out, Mr. Wigglesworth, that in my personal opinion-of course, we have to be governed by the light of experience but I think we have not 10 percent of the people here that we will need to do the classification job. This is land of which nearly 7,000,000 acres must be entirely reclassified. There will be that much land declared surplus when the war is over. Mr. WIGGLESWORTH. Why must it be entirely reclassified? Colonel HowSE. The uses of it have entirely changed in character A piece of land that was formerly farm land, now has a tank arsena in the middle of it and some war housing on the side of it. It is covered with roads, testing grounds. It is ruined as farm land by perhaps, putting oil preparations on it to keep the dust down. Another piece of farm land has air strips and a landing field on it We also have property that will not be susceptible of division as farm land. The land may have had other uses prior to its acquisition We have a further admonition under the act to prevent certain types of monopolistic accumulation of land and to keep the land family-size holdings. Mr. WIGGLESWORTH. How much of this real estate has been declared surplus up to date? Colonel HowSE. About 200,000 acres so far has been sold. Very little of it has been classified. Mr. WIGGLESWORTH. You do not need a big force to classify it, do you? Colonel HowSE. We have not done that because we have not had the people. My own personal opinion is that it will take a tremendous force to do the job. It will require an analysis and survey of each individual tract. Mr. WIGGLESWORTH. Does not each department have a record of their real estate that they own? Colonel HowSE. I think for the most part, yes. But we have thousands of acres of land that are in use and have been acquired by condemnation proceedings, some of which has been declared surplus already, and the condemnation proceeding is still in the courts. Until that routine is gone through we do not know where they are in the classification. Mr. CASE. On those lands where it has gone to condemnation, ir most cases the owner did not want to dispose of it. Why not stop the process and let him keep the land? Colonel HowSE. In many of the condemnation cases the owners did not want to dispose of it. In some others the owner did want to dispose of it, but did not want to be in the position of setting a price to the Government, and the condemnation proceeding was used. Mr. CASE. But in most cases condemnation resulted where the property owner did not want to accept the price offered, so he let !! go to condemnation, taking the offered price as a temporary payment Colonel HowSE. Yes. There is a further category of cases where the title was not clear and condemnation proceedings were necesSAN. Mr. CASE. What about cases where the prior owner wants re recapture his property, and under the act you are directed to giv him some preference. In those cases it should not be necessary to classify the land. Colonel HowSE. The act requires that we give the goverments groups a prior chance to acquire the land. Mr. CASE. Where they do, why should you bother to reclassify "* Colonel HowSE. Where they do we would not bother to reclassify But where they do not, it is then made available to the former own r It is a relatively simple matter, if the use of the land has not altered |