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Mr. WIGGLESWORTH. Those are all things, in your judgment, which are properly classed as surplus?
Mr. W. H. PITTMAN. Those are items hich have been declared to us as surplus and are being handled or have been handled.
Mr. WIGGLESWORTH. What is the explanation of realizing only 59 percent when you disposed of them?
-Mr. W. H. PITTMAN. I do not know how that is computed.
Mr. GARMAN. I think this "realized" figure takes into consideration the condition of the commodities. Many of them were out of condition and other things of that type that go with commodities in these old inventories.
Mr. WIGGLESWORTH. You mean they have been allowed to deteriorate?
Mr. Garman. Let me clarify this word "surplus,” which I think will help us a bit.
Mr. WIGGLESWORTH. Well, “surplus” is anything the owning agency declares to be surplus.
Mr. GARMAN. That is right-stuff no longer needed, because it is going out of condition, or because the program has changed, or for any other reason. They will just say it is surplus and then we have to take hold and do the best we can with it.
Mr. WIGGLESWORTH. Why do we lose 41 percent on foodstuffs that are declared surplus which are in demand by the general public, when it comes to disposing of them?
Mr. W. H. PITTMAN. Could I enumerate some of those?
Mr. GARMAN. I think the answer is that some of them are out of condition. I think Mr. Pittman has some examples that he can cite.
Mr. WIGGLESWORTH. In other words, they were allowed to deteriorate either by the owning agency or W. F. A. after they were turned over to W. F. A.?
Mr. GARMAN. They could not deteriorate after they were turned over to us, because we began to get those things only last May.
Mr. O'NEAL. Could not damaged goods be another example?
Mr. MEEKER. There is another reason. Some of those goods are not standard for civilian use and only a fraction of the cost can be realized. There is included in the report lifeboat rations declared surplus by the Maritime Commission. One of the components of the lifeboat rations was pemmican, which is not a readily salable product.
Mr. WIGGLESWORTH. I wish you would put a table in the record itemizing the foodstuffs disposed of and, where there was a substantial loss, put in a word of explanation in each case.
Mr. GARMAN. Yes, sir.
Sales of surplus property declared by owning agencies May 15, 1944, through Mar. 31, 1945
Declarations which included cost values:
SALARIES AND EXPENSES
Mr. WiGGLESWORTH. You are asking $2,019,000, as I understand it, in terms of personnel and other obligations and you have given us one little justification here for the office of the Solicitor, Department of Agriculture, which requests five people departmental, at $16,620, and two people in the field, at $6,220; “Other obligations,” $960, or s total of $23,800.
Then you have given us another green sheet here for the War Food Administration, in which you are asking for 133 positions, departmental, at $350,612; 127 people in the field, $331,476 and “Other obligations,” amounting to $1,309,200, or a total for War Food of $1,996,000 and a total for both set-ups of $2,019,800.
TRANSPORTATION, WAREHOUSING, INSPECTION, ETC. . Now, the largest item is the item appearing under War Food for transportation, warehousing, inspection, repackaging, brokerage fees. and so forth, $1,134,000. Can you break that down for us?
Mr. GARMAN. Yes. Congressman Taber just inserted a table in the record that shows that.
Mr. WIGGLESWORTH. You have an item in here. of transportation, $501,000. That is over on top of a small item you carry for “Transportation of things." How in the world are you going to spend $501,000 for transportation expenses? On what is that figure based!
Mr. GARMAN. As I indicated earlier, Mr. Wigglesworth, this is estimated as far as we could on the basis of our experience in handling other commodities that we have been handling. But our commodities have been handled in carlots almost entirely, whereas, these commodities come in small odd lots.
The over-all percentage, as you will notice from the table you are looking at, is 1074 percent of the declared value of the commodities.
Mr. WIGGLES WORTH. You mean this $501,000 is 1072 percent?
Mr. GARMAN. No, sir; the total of $1,134,000 at the bottom of the table is 1074 percent of the value of the commodities. The trans. portation item you were reading is 4.6 percent of the value of the commodities.
Mr. WiggLESWORTH. Of the cotton and fiber?
Mr. GARMAN. No, sir; of the $10,800,000 total commodities to be declared surplus according to this estimate. The left-hand table is only to arrive at groups of commodities that are likely to be declared surplus; the right-hand table is a break-down of the estimated nonadministrative expense item. It is based on our experience of what is likely to be incurred in connection with the disposition.
Mr. WIGGLESWORTH. You have over a quarter of a million dollars here for warehousing and handling. On what is that based?
Mr. GARMAN. It is based on our experience with other programs as near as we could use it.
Mr. WIGGLESWORTH. How many square feet of warehousing?
Mr. GARMAN. I was trying to say our experience on our programs. our expenses in connection with handling commodities during the war. have totaled 672 percent of the value of those commodities. That has been done mainly on a carlot basis of handling those commodities.
These commodities that are declared surplus to us are declared in smaller lots and some odd lots, even as small as one package, and the total of those nonadministrative items in connection with their disposal is estimated to be 10% percent.
Mr. WIGGLESWORTH. You have just taken a round figure of 1074 percent and split it up eight ways? In other words, none of those eight items is based on any accurate estimate?
Mr. Garman. We built it up, Mr. Wigglesworth, in the proportion that these items run in our usual program, making due allowance for the different condition of these commodities turned over to us and factors of that kind. That is what it is based on. We are not defending those figures as being exact, but they are the best estimate we can make.
Mr. WIGGLESWORTH. You have $175,000 for repackaging and stenciling. You make the same answer on that, I assume?
Mr. GARMAN. Yes, sir; I make the same answer on all of them.
Mr. WIGGLESWORTH. And brokerage fees, $58,347. Why should we be paying brokerage fees?
Mr. BRENNER. In certain instances we have found it advisable; we have found we can make a sale to better advantage to the Government by using brokers in certain areas, or on certain commodities.
Mr. WIGGLESWORTH. Well, is not the broker going to make his own profit, too, and is not there a demand for these foodstuffs?
Mr. BRENNER. Brokerage fees are paid by the seller, not by the buyer. We have attempted in making our sales to sell at ceiling prices, to use ceiling prices as the basis, and when a broker goes out and represents us and actually makes and confirms the sale and makes the collection
Mr. WIGGLESWORTH. Do you mean to leave the impression on the record that we cannot dispose of foodstuffs under present conditions without the payment of brokerage fees?
Mr. BRENNER. No. We can dispose of them; but in certain instances it is to our advantage to dispose of them by using a broker. That does not apply all across the board, but on specific commodities. It depends entirely upon the conditions at the time and the condition of the commodity and its location.
Mr. WIGGLESWORTH. I think that is all.
Mr. GARMAN. Those commodities are declared surplus everywhere in the country and it would not be very economical for us to have to send a man down to look over three packages of some commodity declared surplus at a certain location where we do not have an office.
Mr. Taber. But you could sell that as, is, and where it was, easy enough. You won't have any such thing as that that could not be done.
BACKGROUND OF PRINCIPAL PERSONNEL HANDLING DISPOSITION OF
(See p. 1293) Now, you have four or five fellows here on this list. Mr. Meeker, what is your background?
Mr. CANNON. Has not the background of every man been given? Mr. TABER. No; just of two of them.