The principal claimant for those stocks is lend-lease. I believe since the beginning of the program around 90 percent of the stocks from our stock pile have gone to lend-lease. The stocks which the Army and those other agencies have obtained have been relatively minor, because we happened to have on hand something they needed in a hurry, or something of that type.

Mr. DIRKSEN. The point is this: It is anticipated that U. N. R. R. A., at least for a time, because of the conditions in Italy, Greece, France, and elsewhere, will continue to purchase surplus food of all kinds, and War Food will buy those for the account of U. N. R. R. A., I expect? Mr. GARMAN. Yes, sir; we get those requests through the Foreign Economic Administration.

Mr. DIRKSEN. And the minute a surplus develops, of course, you will have a customer?

Mr. GARMAN. We hope that is true.

Mr. DIRKSEN. And it should be a 100-percent customer, in the sense that canned fruit, for instance, even though it is not scheduled for that certain country, at least as a bookkeeping transaction can be charged up 100 percent of what you paid for it and transferred to that account, and you will probably not lose any money on it, as against offering it in the open market and having to take a depreciated value?

Mr. GARMAN. We use that outlet to the fullest extent and will continue to do that. But when it comes to some of those commodities that are not packaged for export, or that are not declared in quantities needed for that type of disposal and that sort of thing, it does not lend itself to that type of disposal exactly. For example, we have been buying some supplies for the Red Cross, and one of the things they have got on their hands now to be disposed of is prisoner-of-war packages. I do not know where you would find a market for those. Mr. DIRKSEN. I could show you a big market.

Mr. BRENNER. Before you came in, Mr. Dirksen, I made the statement that we do explore all Government outlets, before we offer anything as surplus.

Mr. DIRKSEN. The whole point of it is, for the purpose of this hearing, that surplus food having been declared surplus can be transferred to U. N. R. R. A.'s account and the bookkeeping transaction entered. There may be some warehousing and repackaging involved, but the point is it ought to be a modest amount, and the question is, Does it take this much money just to make this food disposal?

Mr. GARMAN. If it does not take it, we are not going to use it. Mr. DIRKSEN. If it does not take it, we would rather not appropriate it.

Mr. GARMAN. We realize that, but the appropriation is for the Surplus Property Board, as we understand it, and subject to allocation by the Board, to take care of the needs as they arise. We are as anxious to hold down our expenses of doing this job as anyone.

BREAK-DOWN OF ANTICIPATED SURPLUS FOOD PROPERTY

Mr. TABER. Can you give me a break-down of this $10,800,000 that you anticipate of surplus property, as to what it will be? Do you have a sheet that shows that?

Mr. GARMAN. We have a break-down.

Mr. TABER. Do you have a copy that you could give me?

Mr. GARMAN. We have a break-down here by classes of products. that may or may not be right.

Mr. TABER. It is just a shot in the air, like the estimate for expenses, is it not?

Mr. GARMAN. It is the figures you see on the left-hand side of the sheet you have.

Mr. TABER. Well, you have $100,000 of cotton; $800,000 of dairy and poultry; $324,000 of fats and oils; fruits and vegetables, $5,490,000; grain products, $1,080,000; livestock and meats, $270,000; special commodities, $2,052,000; sugar, $108,000, and tobacco, $108,000.

Now, there is not a single one of those items but what is in present sharp demand, as far as the marketability of the goods goes.

Mr. GARMAN. There is a big item there "special commodities" that covers a lot of different items.

Mr. TABER. What would that be?

Mr. BRENNER. Dry grocery items

Mr. TABER. Like what? Like shredded wheat and corn flakes? Mr. BRENNER. Yes; something like that.

Mr. TABER. There is plenty of market for this stuff that is on this sheet. You do not need to have any surplus of those things piled up. Sugar-there is no occasion for that; tobacco-there is no occasion for that; fats and oils-there is no occasion for that. I just do not see where it makes sense.

Mr. CANNON. The conditions today are not what they are going to be 6 months from now, or the remainder of this fiscal year; the situation is going to change and change drastically, as it did after the last

war.

Mr. TABER. Not if what we are told is true.

Mr. GARMAN. This estimate is to take care of the handling and disposal of food and agricultural commodities that are declared surplus by the owning agencies, and when they declare them surplus, as I understand, we are obligated to take them, store them, repack, grade, handle and dispose of them.

Mr. CANNON. And they may not be surplus at one point and may be at another; or they may not be surplus in one agency and surplus with another.

Mr. GARMAN. That is right.

Mr. O'NEAL. And another thing is you have to have a different procedure as to where they are offered, to municipalities and all of that. It is a great job. If you just wanted to sell them, you could go out and sell them quickly.

Mr. GARMAN. That is right.

Mr. BRENNER. Some may be surplus only because they have gotten into a condition where it is not good business to ship them abroad. It is true there is a ready market for them, but we have to have an organization actually to sell them, people to ship them, people to follow them, and people to announce them. You have to have the

actual organization to prepare them for sale.

Mr. O'NEAL. You have not the authority just to go out and sell them anywhere you could, but you have to do it according to the act? Mr. GARMAN. According to the act, yes, sir.

ESTIMATE OF DECLARED COST OF ASSIGNED COMMODITIES AND EXPENSES OF DISPOSITION

Mr. TABER. I ask that this table be inserted as a part of the record. Mr. CANNON. The table will be incorporated as a part of the record at the request of Mr. Taber.

(The information requested is as follows:)

Summary report-Estimate of declared cost of commodities assigned and expenses of disposition, fiscal year 1946

Mr. WIGGLESWORTH. The table furnished us for the record shows the disposition of food by W. F. A. in a 10-month period ending March 31, 1945, the original cost of which was $267,000 for $158,000. That is realizing 59.2 percent of the original cost.

What food have you sold that cost $267,000 and on which you realized $158,000?

Mr. W. H. PITTMAN. I do not know that I have identified that document you have there.

Mr. WIGGLESWORTH. You have some figures of food disposed of to date, giving the original cost and what you got for it.

Mr. W. H. PITTMAN. Oh, yes. That is contained in the report to the Surplus Property Board-items declared surplus by other owning agencies and sold, as of March 31, 1945.

Now, your question is what are those items?

Mr. WIGGLESWORTH. Just a general break-down similar to the one you just gave Mr. Taber of your estimated surplus in the fiscal year 1946. I want to see what the actual surplus sold has been to date.

Mr. W. H. PITTMAN. Unfortunately, they are listed according to the standard commodity code in that table. They consist of crud vegetable products

Mr. WIGGLESWORTH. How much of that?

Mr. W. H. PITTMAN. $12. That is, edible crude vegetable products Inedible crude vegetable products, $14,451. Vegetable and animal fiber, $154; crude minerals, $116; food and beverage basic materials $6,557; animal and vegetable fats and oils and derivatives, $20.070; chemicals, $5,238; manufactured and processed foods, $288,059; feed. manufactured, $6,828; tobacco, manufactured, $9,123.

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 us as surplus and are being handled or have been handled.

to

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. WIGGLESWORTH. What is the short answer on that?

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. GARMAN. Yes, sir; damaged goods was another.

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.

Declaring agency

Sales of surplus property declared by owning agencies May 15, 1944, through Mar. 31, 1945

Spices and seeds.
Pectin

Oil of turpentine.
Cream of tartar.
Canned fruit.
Fruit peel.
Chocolate.

Flavoring extract.
Coffee.

Oil of turpentine.

do.
Ration kits.
Pine tar oil.
Linseed oil.

Alfalfa

Timothy
Hay

Straw and oats.
Rock salt.

Bran and wheat.
Linseed meal.
Soybean meal.
Bone meal.

8 pounds.

Subtotals.

Do.

Sold at nearly ceiling price; estimated cost is high.