mission. This section, further, would continue in effect other existing laws with the proviso that the Administrator may prescribe regulations to govern operations thereunder. It also would permit the President to make special exemptions within 1 year after the effective date of the act.

Section 303 would contain a general authorization for appropriations and also would continue the availability of funds appropriated for procurement, utilization, or disposal purposes.

The proposed bill concludes with its effective date, which would be July 1 of this year.

Necessarily, I have touched only upon the high lights of the proposed legislation. When you gentlemen have had opportunity to read the proposed bill itself and to study it, I hope you will agree that its intent and purpose are to provide for the general public property of the taxpayers the same businesslike system which the taxpayers individually use in connection with their private property.

That concludes my prepared statement, Mr. Chairman. There are numerous people here who have had a hand in drafting this piece of legislation, my general counsel. Mr. Johnstone, his assistant, Mr. Elliott, representatives from other bureaus in my agency. The War Assets Administration is represented here, and the Bureau of Federal Supply; all of these people are prepared to testify.

The CHAIRMAN. Thank you, General Fleming. The subject is now open for questioning. The Chair has a few questions he would like to ask at this time, but it is expected that before these hearings are concluded there may be many more questions that will arise in the minds of the committee members. We assume that there will be someone available from the Federal Works Agency at these hearings to answer any questions that may arise.

General FLEMING. Yes, Mr. Chairman; we will always have someone here.

The CHAIRMAN. The committee would appreciate that. The questions that have occurred to the Chair as you were making your statement, General, are: First, would the Federal Works Agency under this bill take over the purchases for the armed services which are now being made by the Commodity Credit Corporation?

General FLEMING. We would take over the purchases, except those purchases which the Secretary of Defense wants to maintain in his own power. He can ask for those exemptions which must have Presidential approval.

The CHAIRMAN. Then if the Secretary of National Defense decided that he wished to continue the purchase of grain, of supplies for occupied areas, and for the Army itself through the Commodity Credit Corporation, he could do so with the approval of the President? General FLEMING. That is correct.

The CHAIRMAN. That is question No. 1. The next question: In the disposal of agricultural surpluses by the Federal Works Agency, what surpluses would be covered there?"

Mr. JOHNSTONE. That is raw materials generally.

The CHAIRMAN. What would the surpluses embrace? Would they include, say, surplus rubber?

Mr. JOHNSTONE. No; I do not think they would. For instaince, the Army bought a tremendous quantity of raw flax which is now in warehouses. They bought, I think, some raw cotton-though I am

not quite clear about that-and they bought wool. Whether or not all that has been disposed of I do not know. Mr. Larson might know. But there might develop in the conduct of the Government generally cases where a department, aside from the Department of Agriculture, has made purchases for price support and would accumulate some raw agricultural products. The bill provides that before they can be disposed of there must be conferences with the Department of Agriculture to determine that their disposal will not disturb the market, and in the event the Secretary of Agriculture determines that it would be better for him to take over these surpluses and dispose of them in connection with other surplus property that he has, the bill so provides.

The CHAIRMAN. And as I understand it, the bill specifically exempts surplus commodities which are acquired by the Secretary of Agriculture in maintaining support prices.

Mr. JOHNSTONE. Yes; it exempts not only the disposal of the surplus, it also exempts the purchase of such commodities. For instance, the Federal Works Agency would not be authorized here to supersede the Secretary of Agriculture in the purchase of any commodity under the Price Support Act. I might say generally therefore, Senator, that the activities of the Commodity Credit Corporation would not be affected by this bill at all.

The CHAIRMAN. And under this bill priorities relating to the purchase of personal property would expire on the 1st of July.

Mr. JOHNSTONE. Yes, sir.

General FLEMING. That in itself is a considerable economy.

The CHAIRMAN. Would you state for the record what the Federal Works Agency has been handling in the way of surplus property up to this time? Have you handled anything other than supplies which you have been authorized to handle under the Disaster Act?

General FLEMING. We have had that in personal property, Mr. Chairman, but we originally were a disposal agency under War Assets for real property, and continued that operation up until about a year ago, when they ceased to refer any further real property to us. We had real property other than industrial and farm property.

The CHAIRMAN. What would that real property consist of that you handled up to a year ago?

General FLEMING. It was largely abandoned landing fields and Army posts, camps that were built up during the war.

The CHAIRMAN. What was the reason for your not continuing to handle them after a year ago?

General FLEMING. I think somebody from War Assets could answer that better than I. They set up an organization in War Assets itself to handle them, and having that, they did not refer anything further to us.

Mr. JOHNSTONE. May I interpose to say that prior to the passage of the Surplus Property Act of 1944 the Public Buildings Administration, under the Federal Works Agency, was chargeable with the disposal of most surplus real estate, exclusive of Army and Navy reservations, that was generated in the Government. That largely consisted of abandoned post offices, customhouses, lighthouses, and whatever. That was a function that had been performed by the Department of the Treasury for a long time, the Procurement Division of the De

partment of the Treasury, which was divided into two parts-the Buildings Branch and the Procurement Branch-under those statutes which still exist but which were superseded by the Surplus Property Act. The theory behind those was that if a department of the Government had a piece of real estate which it no longer needed, it might be that the Procurement Division of the Treasury Department would require that precise property for the development of some other facility for some other department, and so it was transferred to them. If they did not need it, it was then disposed of.

The CHAIRMAN. Has any estimate been made as to the cost or the number of personnel required to handle this work of supply and disposition of surplus through the Federal Works Agency, as compared with the manner in which it is now being handled? I doubt if your agency would be the one to make that estimate.

General FLEMING. We have been working with the War Assets Administration and the Budget generally, trying to prepare two estimates for the next fiscal year; one an estimate as things are now run, and another one as they would be if this bill is passed. It is a little difficult to know, until we get hold of things, just what can be done. The CHAIRMAN. Do you believe that definite economies can be effected?

General FLEMING. I think so; yes. I am sure of it. Because we have also been disposing of surplus property, Mr. Chairman, which we own under the Lanham Act. We built schools and hospitals and water supply systems and sewage disposal systems during the war, and are now engaged in disposing of them.

The CHAIRMAN. I have just one more question that I think should be directed to Mr. Johnstone, and that is: Is any authority granted to the Federal Works Agency under this bill relating to the disposal of surplus property which is not now granted to the War Assets Administration? Is any additional authority granted, except for doing away with priorities?

Mr. JOHNSTONE. Limited to the disposal of surplus, I would think, generally speaking, except for doing away with priorities, no. However, the bill does confer on the Federal Works Administrator certain supervisory activities with respect to the utilization of properties by other Government agencies, which are not now exercised by the War Assets Administration. I do not mean to say that he may require a department to declare some property excess to their needs. That function still resides in the heads of the departments, but he is authorized and directed here to make constant and continual surveys of the inventory of the property of the various agencies, with a view to uncovering property which is excess to their needs, and calling that to their attention and to the attention of the President, and perhaps to the attention of Congress, in his report. That function, I understand, is not now exercised by the War Assets Administrator. They have not, as I understand it-Mr. Larson can tell you about that better than I-but they simply wait for declarations and do not undertake to stimulate declarations of excess property.

Senator HOEY. Mr. Johnstone, does this bill contemplate that the Federal Works Agency is to be a general procurement agency for the Government?

Mr. JOHNSTONE. Yes, sir.

Senator HOEY. For both the military and other agencies?
Mr. JOHNSTONE. Yes, sir.

Senator HOEY. Does that mean that this Agency would make purchases for the Department of the Army of all the things that it might require?

Mr. JOHNSTONE. In the first place, the Secretary of Defense, with the approval of the President, may exempt procurement of military items and purchase them himself. As to the items not exempted, it would seem that those purchases are accomplished, Senator Hoey, in three ways. First, the Bureau of Federal Supply might make the purchase directly itself for the account of a department, and direct that the bill for it be sent to that Department and the goods delivered there.

Second, it might purchase property to the extent that the supply of funds would permit, in anticipation of the needs of all of the departments, and store them in warehouses and then distribute them as they are needed.

Third, it might make a contract with suppliers for a fixed price for a particular article to be delivered during a specified period to any agency of the Government that desired that type of property, and they would buy directly from those schedules.

In those three ways the Federal Works Administrator would therefore control the procurement of all personal property of all kinds, except exempted military items, and except real estate-he would not procure real estate-for all of the agencies of the Government.

Senator HOEY. I was thinking about this in connection with the last war. There has been a good deal of complaint about Government agencies obtaining such vast supplies, some of which were not needed, and having such a large accumulation of items on hand. I wonder if this bill would give the Federal Works Agency any authority to supervise the requirements of Federal departments, or would it merely execute the orders given to it by the various departments to purchase what they asked for.

Mr. JOHNSTONE. I would think the bill provides the machinery by which the President could issue a policy directive providing for some surveillance over the affairs of the department in its purchases. It has been our experience in all wars, however, generally with respect to military material that is, specialized material that the Military Establishment is given almost unlimited power. But in modern days I should say, Senator Hoey, when the conduct of a war is total war, which requires all classes and types of property, which requires the fixing of prices and all that sort of business, I would think that this statute does confer sufficient authority so that the President could utilize the powers here conferred so as to prevent excessive purchases. Senator HOEY. I have noticed in reports some things that have been purchased, one item in particular, colored glass. The Navy secured such a tremendous supply that it probably never would be used under any conditions. That is just one item. I am just wondering how those things arose. Who passed on the ultimate amount or the ultimate number to be acquired?

Mr. JOHNSTONE. Those excess purchases may have resulted because some department thought that if they did not buy enough they would not be able to get what they wanted when they needed it. If you concentrate in one agency the requisitions of all the departments, so they

will know the total requirements of the Government, then I expect the purchases could be scaled down so as to meet those total requirements.

Senator HOEY. Does this bill provide for that-that the Federal Works Agency shall have supervision to check the extent of all the purchases of all the departments combined?

Mr. JOHNSTONE. It does, except as to the items exempted by the Secretary of Defense in the interests of national security.

Senator HOEY. The Federal Works Agency might call to the attention of the different departments at least how much is being acquired and question whether all of it will be needed?

Mr. JOHNSTONE. I think undoubtedly that is true.

The CHAIRMAN. It was recently called to the attention of one of the committees of Congress that for every typist employed by the Government, there are 3.6 typewriters available. In other words, they must get their machines hot pretty fast and have to use another. Like they do up in New England-General Fleming knows about this-where they take two axes into the woods, and when one gets hot they put it into the brook to cool while they use the other one. But it does not seem reasonable that the typewriters of the Government, assuming that there are almost four typewriters available for every typist, should get hot with such a supply as that. Under this proposed law, what authority would you have to control situations like that? And Senator Hoey just asked about another commodity.

Mr. JOHNSTONE. I think this statute would give ample authority to control that situation. To the extent that such a surplus may exist, I think that it probably arose, Mr. Chairman, by reason of the fact that at the time the typewriters were purchased, the number of persons who used typewriters in the employ of the Government vastly exceeded the number now using typewriters. The personnel has been reduced but the typewriters have not been sold. This statute, of course, would give complete authority for the survey of the supply of typewriters or the supply of anything else, and would provide an expeditious means for the disposal of the surplus.

The CHAIRMAN. And could you require, under the authority conferred in this bill, that the departments employ slightly used typewriters?

Mr. JOHNSTONE. We could.

The CHAIRMAN. Rather than requisition brand-new ones?

Mr. JOHNSTONE. Yes, we could take over those typewriters, have them reconditioned, and fill the requirements of a department with reconditioned typewriters instead of new ones.

The CHAIRMAN. You would also have the reverse of that situation, a subject that has been raised in and out of Congress during the last few months, where departments declare as surplus property which, to the public and some Members of Congress, looks as if it might be required again by the Government in a short period of time. Under this proposed bill, if a department declares property surplus, do you have the right to hold that surplus if it appears that it probably may be needed by the same department or some other department in a reasonable length of time?

General FLEMING. The department, the owning agency, has authority only to declare the property excess. It is only the Federal Works Administrator who can declare it surplus.