Mr. BECKER. And he says they will not need them?

Mr. PEARL. He cannot make the flat statement that they will not need them, but he said he is willing to take the chance that they will not be diverted to another use.

Mr. BECKER. Now, let me ask you this question

Mr. PEARL. So, in the event that they do need them, then they will be there.

Mr. BECKER. Now, taking the line of questioning from my right over here, assuming the extreme, that they will not be continued as piers, that they will be turned to warehousing and other facilities that will make them not available, I think that is what we have to look at.

Mr. PEARL. I think the answer to that is really this: We have spent in the last 50 years, roughly, about $100 million on channel improvement in the Delaware River to the port of Philadelphia. Certainly, we haven't spent $100 million for 3 piers. So that the future of the port of Philadelphia, I think, is such that if these particular piers aren't there, there will be other piers that can be used for shipment through this very fine port which the city of Philadelphia deserves a lot of credit for having improved recently and is doing a very fine improvement job right now on two piers.

This channel is there, the port is there, and if by chance these particular piers should be diverted to some other use, there will be other port facilities there. It is the concept of the Department's thinking.

Mr. BECKER. Your speaking for the Secretary now and the Division of Transportation of the Army, is that, in the extreme, that these piers are diverted to entirely other use and are no longer used as piers, you will have necessary facilities in Philadelphia for mobilization purposes?

Mr. PEARL. That is the calculated risk that is implicit in the determination that has been made.

Mr. BECKER. And you are satisfied entirely to take that risk?
Mr. PEARL. Yes.

Mr. DURHAM. The thing that disturbs me on this point-yesterday the ICC Mobilization Branch Chief testified differently. I don't remember his testimony in detail, but there was a meeting held by the Mobilization Planning Group-isn't that correct?

Mr. KELLEHER. Yes.

Mr. DURHAM. And nobody dissented in this except the Army. Mr. PEARL. If I understand Mr. Silver's testimony, he represented the Interagency Port Utilization Committee.

Mr. DURHAM. That is correct.

Mr. PEARL. That is a coordinating group, if I may interject that, a coordinating group established under the Interstate Commerce Commission and the transportation-defense mobilization theory, and it is, as I say, a coordinating group. They have no jurisdiction or authority to designate facilities. Their function is to see to it that if, in the event of conflicting interests or conflicting requirements of different agencies, that these are settled by this Interagency Committee so that if the Army has a requirement and the Department of Commerce has a requirement, the Maritime Commission, this Interagency Committee can see to it that the facilities are spread around so that both the Army requirement and the Maritime Commission

requirement are taken care of, and the Coast Guard requirements, and everybody else's.

Now, if I understood his testimony correctly, his Interagency Committee approved, and concurred in the previous Army determination, that there was a mobilization requirement for this property. Mr. DURHAM. That is correct.

Mr. PEARL. In other words, he doesn't get this in his committee. until the Department of the Army has made a determination. It then goes to his committee and his committee, which has representatives of all the agencies, approves this particular allocation.

And there, their jurisdiction ends. They have no authority, I am informed, to make any decisions or determinations as to what facilities should be placed in a mobilization reserve.

Mr. DURHAM. Are they not supposed to report directly to the Mobilization Director, who is set up and has authority in these matters?

I may be wrong, but I think he reports directly.

Mr. PEARL. I believe they report through the Interstate Commerce Committee.

Mr. DURHAM. He is the Director of Mobilization?

Mr. PEARL. I couldn't say, Mr. Chairman. I tried to find out a little more about their channels

Mr. DURHAM. I think it is important because we have a conflict here. If he had no authority, as you say-evidently he does not sit down there and make decisions without reporting to somebody.

Mr. PEARL. Yes, but their reports are on coordination of requirements that are submitted to them by the component departments. So that in this case they would have nothing to report to anybody unless the Army comes in and says that it has a mobilization require

ment.

Mr. DURHAM. I think with the world situation being what it is today, with the submarine menace which we have reviewed recently, it disturbs me quite a bit.

If anybody has gone through that as we have, and knowing the necessity, and the ports not being taken into this position of need in the case of emergency, it is just not proper planning.

Mr. PEARL. As you know, the Department of the Army is concerned about this, and we have been just as much concerned about keeping certain terminals which others want us to give up as we are in giving up those which we feel we have no need for.

Mr. BECKER. Mr. Chairman, I have 1 or 2 questions and then I will be finished.

I just want it clearly understood here that I have absolutely no position in this thing at all. I regret that I wasn't here yesterday. I didn't get the notice soon enough and had other plans. I would have liked to have heard all the testimony.

However, I have no position, but it seems to me it comes down to one thing, always: When the Government goes to dispose of some property in any area, they either oppose it or they want to get rid of it. In other words, they take one position or the other. And the same thing applies anytime anything comes before this committee, disposing of property.

get back to one question, again. In 1954, I understand, this was declared or someone along the line said at that time they realized this property was surplus or that it was no longer needed. Is that right?

Mr. PEARL. It was determined to be excess in 1954.

Mr. BECKER. It was determined to be

Mr. PEARL. Excess to the needs of the military requirements. Mr. BECKER. It was in 1954 and it was around that time when you came to the committees of Congress.

Mr. PEARL. In 1954 we had asked originally for a leasing arrangement, and then that was rejected, disapproved, and in 1955 we came up to the committees of Congress with the proposal to dispose of the property through the normal Federal Services Act, the Federal Property Act procedures of General Services Administration.

Mr. GREEN. With restrictions.

Mr. PEARL. In 1955 there were no-this, too, has been a change from time to time, Mr. Green. In the original submission of disposal project No. 56, May 5, 1955, there were no restrictions included. Mr. BECKER. You had not restrictions?

Mr. PEARL. That is correct.

Mr. BECKER. In the disposal project of 1955?

Mr. PEARL. That is correct.

Mr. BECKER. How many times since 1955, now, until this present moment, has this picture changed?

Mr. PEARL. We changed it once, and now it is back again with no restrictions.

Mr. BECKER. Six months ago you changed it to where you didn't want to dispose of it?

Mr. PEARL. Dispose of it subject to restrictions.

Mr. GREEN. In 1956, the 1955 disposal project was amended in certain respects.

Mr. PEARL. Disposal project 56 was amended 6 months ago, Mr. Green, at the time that the report you refer to was submitted. At that time, the disposal project was amended to indicate the new position as of that date.

Mr. BECKER. Requiring restrictions?

Mr. PEARL. Yes, sir.

Mr. BECKER. So, actually, now, you have made a change to the point where you are willing to dispose of it and take a risk?

Mr. PEARL. Yes, sir.

Mr. BECKER. Whether or not this is maintained as piers, there will be other available facilities?

Mr. PEARL. Yes.

Mr. BECKER. Let me ask this question: If we should have a national emergency and the port of Philadelphia is needed for mobilization or any other purpose, there will be little need for any civilian shipping anyway in the event of national emergency, and we need this for mobilization, and that you will have available other facilities. You are assuming that, are you not, in your plans?

Mr. PEARL. Yes.

Mr. BECKER. They are assuming that they will have other facilities. They assume civilian shipping will be reduced to the point where they will be able to take over anything they want.

Mr. PRICE. We just want to be sure they have buildings available. Mr. BECKER. I want the statement in the record that it is their position they are willing to take the calculated risk that they will be able to seize or take over any other facilities they need in the port of Philadelphia.

They will be adequate if you are able to take them over; is that right?

Mr. PEARL. That is implicit in this determination because nobody can assure, if the property is disposed of, nobody can guarantee an assurance in that sense

Mr. BECKER. My last point is, as you had an appraiser develop the price of this property-an estimated price of this property, I assume in the selection of these appraisers it is done in the same manner it would be done in any part of the country?

Mr. PEARL. That is right.

Mr. BECKER. You seek to the best of your ability the best qualified appraisers in that field, and you are willing that their report stand up in court anywhere else on the basis of their qualifications?

Mr. PEARL. That is correct.

Mr. BECKER. I don't think you put yourself in the position of taking nonqualified appraisers.

Mr. PEARL. That is correct, Mr. Becker.

Mr. BECKER. I happen to have been one myself for a great many years in the State of New York, so I wouldn't want to see you in the position of taking on maritime property on the basis of warehouse or residential property, or something like that.

It is your opinion the appraisers are qualified?

Mr. PEARL. Yes, sir.

Mr. PRICE. When was the last set of piers built in Philadelphia Harbor?

Mr. PEARL. Do you mean other than Government?

Mr. PRICE. Anything; Government, or otherwise.

Mr. PEARL. I don't know how many new piers were built, Mr. Price, but I know the city of Philadelphia is right now engaged in a program of improving port facilities. I have a note on the number of piers upon which they are working. I am sure they can give you better information.

Mr. PRICE. You made a statement a moment ago there would be other facilities available, but the history has been that there is less and less building of substantial piers in large harbors as the years go by and the old ones are deteriorating.

Isn't that about the fact of the matter?

Mr. PEARL. On January 5, 1958, there appeared an article in the Philadelphia Inquirer indicating that the city had the day before announced the purchase of 32 acres of vacant riverfront land near the Walt Whitman Bridge as part of a site for a new $15 million selfsustaining general cargo marine terminal.

Mr. PRICE. Is that under construction now?

Mr. PEARL. I don't know how far it has gone.

Mr. PRICE. This would indicate that the city is the interested party in developing that harbor.

Mr. PEARL. There is no question but what they are interested. Mr. PRICE. And you should give encouragement to the city.

Mr. GREEN. There is no other facility in Philadelphia anywhere near this capacity.

Mr. PRICE. Is anyone able to indicate when the last set of piers were built in the Philadelphia area?

Mr. GREEN. Mr. Schauffler represents the city of Philadelphia.

Mr. SCHAUFFLER. Mr. Price, the last pier was built in Philadelphia in 1951. It is a pier tiwth only about a quarter of the capacity of the facilities that we are talking about here today.

Mr. GREEN. On what basis do the appraisers arrive at $4.5 million? Mr. PEARL. In using the conventional approaches to value, he considered first the cost; he first considered the cost approach, and through the cost approach he came up with this value.

As you know, in the cost approach you figure the approximate replacement cost, or depreciated value of the improvements and add to it the value of the land.

In that connection, I would like to point out for the committee's information on the record that this 25 acres that everybody has been talking about across the road from the piers, itself, is vacant land, to which has been attached a value of $750,000 for this vacant land alone, and from my own analysis of the price paid by the city of Philadelphia for the other property and of the analysis of this report, there is no doubt in my mind but that this piece of vacant land by itself has a value of $750,000.

This really leaves us then, considering the remaining 30 acres. roughly, of land and piers that are on the waterfront, and the question of what their value is.

Mr. GREEN. And what their use is intended for.

Mr. PEARL. In addition to the cost appraisal, it went then into the income approach, determining the income or investment approach, with the idea of how much an investor would be warranted in putting in the property and how much he could take out of it, and in this, incidentally, I might point out that he did figure right in his appraisal that real estate taxes would have to be paid on the property just as on any other property, as one of the expenses, and again he came up with a $4.5 million appraisal.

Now, if it is the desire of the committee, we are prepared to bring the appraiser down and let the appraiser himself testify as to his value and his judgment if the committee should desire it.

I would certainly prefer that to merely giving a copy of the appraisal for the record.

Mr. DURHAM. I think that is important, of course, because this whole thing involves a disagreement on the value of the property.

We, of course, as a committee must have some advice from somebody before we act on a matter as important as this.

The other thing I would like to also have before the committee, and I think the counsel can secure that, is a letter from the Mobilization Director as to their position in this matter.

As I say, it concerns me a little bit because some of us have to sit on this other committee and have seen some of the things that are going on today on our east coast which is not well to look at and know about.

When we face matters like this which might happen overnight, I think for the safety of our own country we have to take in the whole picture.

I would prefer that the committee, if there are no further questions this morning, at its convenience, secure your appraiser who made this determination of cost, or of value, and also secure a letter from the Mobilization Director and clear up these points of disagreement.

If that is agreeable to the committee, I think we should do that before we take further action.