United States by the Interallied Reparations Agency. This activity will probably extend through fiscal 1949.

A general conclusion, Mr. Chairman. While the full advantages of the realignment of function under the proposed legislation will not be immediately felt, we believe that working in close concert with the owning agencies, plans can be developed and effected which will provide for an orderly completion of the function of foreign surplus disposal and will, I would like to add, expedite the motion toward completion. It is expected that the Military Establishments will continue to make available to the Department of State such military personnel and services on a nonreimbursable basis as are needed to permit of the earliest possible discharge of the Department's remaining responsibilities.

The ultimate relief of the State Department from operating responsibilities for foreign surplus disposal is an objective of self-evident desirability and it appears to us that the proposed legislation is an important move toward the accomplishment of this objective.

If I may add just this word, I would like to point out that this operation has been going on for a period of only about 30 months. We got our first volume of surplus late in 1945, so that our agency is only 212 years old, and at this moment 90 percent of the disposals are completed.

We have never been a large organization. Our peak personnel reached about 2,400 persons in the fall of 1946. It is now down to a little over 600.

Our operating budget in this year was $2,650,000 and we can complete the things which we feel the State Department should complete with an appropriation of approximately half that amount for fiscal 1949. We have steadily liquidated organization as well as the surplus through these 30 months.

May I add just this, Mr. Chairman?

The CHAIRMAN. Yes, Mr. Ramsey.

Mr. RAMSEY. We find one or two ambiguities, you might call them, in the bill that we want to call attention to in regard to language.

With respect to the proposed bill itself, I would like to state our understanding of the intent of various portions of the bill. We will not propose any revisions unless this committee feels that the present language fails to give adequate support to this interpretation. The following summarizes our interpretation of certain provisions:

1. Title I places responsibility for the disposition of "excess property" in the Federal Works Administrator and although the definition of "excess property" includes foreign as well as domestic property, dispositions of "foreign excess property" are governed entirely by title II. We assume, therefore, that no provision of title I is applicable to the disposal of "foreign excess property." It is somewhat a matter of confusion of terms. As you no doubt understand, "excess property" is a term for property which becomes excess to any particular agency of government but isn't necessarily surplus to the entire needs of government, whereas "surplus property" is that for which there is no use anywhere.

2. Many of our commitments, in fact all major bulk sales under which deliveries have not yet been completed, contemplate the transfer of all property surplus to the needs of the United States in the area covered by the sale as evidenced by a declaration of surplus to the

Foreign Liquidation Commissioner. Section 201 of the bill refers only to "foreign excess property" and makes no reference to "surplus" or declarations to the Foreign Liquidation Commissioner. It is our understanding, however, that despite the omission of any reference to foreign surplus property, it is the intent of the bill, and particularly section 201 (c), that "foreign excess property" previously committed by bulk sale or other agreements by the Office of the Foreign Liquidation Commissioner with foreign governments shall be turned over to the Department of State for disposal in conformity with these agreements.

I think neither of these points presents any formidable difficulty. The CHAIRMAN. Those points will be taken into consideration by the committee in the preparation of the final bill, Mr. Ramsey. Are there any questions?

Senator McClellan,

Senator MCCLELLAN. As a matter of fact, just one thing. Senator Hoey asked you a while ago regarding the amount of property that had come into your agency for disposal. What figure did you give? Mr. RAMSEY. I gave the figure of approximately $11,000,000,000. Senator MCCLELLAN. And you stated that you have disposed of 90 percent of it.

Mr. RAMSEY. Yes, sir; better than 90 percent. It is approaching 95 percent.

Senator MCCLELLAN. How much did you realize for the Federal Government on the disposal of that 95 percent?

Mr. RAMSEY. The total realization is approximately $2,000,000,000, or just under 20 percent.

Senator MCCLELLAN. Let me ask one other question: I think I understood you to say your cost of operation is some two million a year, two million what?

Mr. RAMSAY. Well, our cost of operation in this fiscal year ending June 30 will be under $2,500,000. Our appropriatio nwas $2,650,000, and we will be a hundred thousand dollars, at least, under that. About 212 million dollars this year, and I am saying completion of the work in the State Department can be managed at about one-half that figure next year, which ought to wind up the Office of Foreign Liquidation Commissioner as a separate entity.

Senator MCCLELLAN. I just want to comment that it seems to me quite a good record as compared to other agencies of the Government. The CHAIRMAN. Can you give an estimate as to what percent of the $11,000,000,000, or the 95 percent of the $11,000,000,000 has been sold to foreign governments?

Mr. RAMSEY. Mr. Chairman, the larger part of it is covered under credits with the foreign Governments rising on $1,100,000,000 out of the $2,000,000,000 realization.

The CHAIRMAN. That is, sales to individuals have been what proportion?

Mr. RAMSEY. It has been the lesser amount.

The CHAIRMAN. That is, not minor but decidedly lesser.

Mr. RAMSEY. It has been very important but we have gotten ready dollars from it.

The CHAIRMAN. Most of the property has been in the European theater?

Mr. RAMSEY. No, sir; by no means. There have been vast quantities in the European theater, in the United Kingdom and its possessions, and vast quantities in the Pacific theater.

The CHAIRMAN. Where is most of the remaining property located? Mr. RAMSEY. It is a scattered picture, Mr. Chairman. I have a sheet here which I think discloses where most of it lies. We had up to a total of about $650,000,000 worth. It lies largely at the moment in the Manila area of the Pacific, $336,000,000. The next highest figure is in Europe, in ETO, $131,000,000. In Tokyo presently about $55,000,000 but that is an unpredictable position depending upon how long we have to mantain high-supply levels in Japan to support our occupation. That may rise $100,000,000 any time if our stay in Japan is cut down.

In the Middle East theater, it is down to a very low figure now, about $20,000,000. A considerable part of that, I think, is lend-lease return property.

Down in Australia, with our office at Sydney, we recently came into $22,000,000 worth of aircraft supply and parts on a lend-lease return from the British, which we are trying to dispose of, together with other things.

The CHAIRMAN. You took this $22,000,000 aircraft supplies and parts back and credited them to Great Britain against lend-lease contributions?

Mr. RAMSEY. Well, I think the general over-all United Kingdom settlement on lend-lease conveyed all lend-lease property to them so far as they could employ it and use it for the purposes and needs of their own armed forces, but where they elected to sell any of it commercially in any volume or to sell to third countries, we come in and exercise our right of recovery of the proceeds over and above the costs of selling and handling of any such property.

The CHAIRMAN. Then you give credit for the full original cost on the lend-lease property returned?

Mr. RAMSEY. Mr. Hoff, can you answer that question?

Mr. HOFF. The total amount was included in the UK settlement, which was made long past, and when property is returned, that was merely contemplated in the settlement-it was contemplated there would be a certain amount returned-it does not affect the balance. When we take property back now under the agreement we just get it back and there is no adjustment in the balance. Where it is sold to a third party with our consent we get the proceeds less a small percentage figure for handling in some instances.

Mr. RAMSEY. In other words, we get the full advantage of the net

return.

The CHAIRMAN. We get so much more than nothing.

Mr. RAMSEY. So much more than we would otherwise get.

The CHAIRMAN. I think that is all we need from you this morning, Mr. Wood and Mr. Ramsey, but we may require more a little later. Thank you both for your testimony.

Mr. WOOD. Thank you.

Mr. RAMSEY. Thank you.

The CHAIRMAN. The next witness this morning is Mr. Harry V. Hayden, Jr., legislative representative of the American Legion. Mr. Hayden, will you proceed with your statement?

STATEMENT OF HARRY V. HAYDEN, JR., NATIONAL LEGISLATIVE REPRESENTATIVE OF THE AMERICAN LEGION, WASHINGTON,

D. C.

Mr. HAYDEN. Mr. Chairman and members of the committee, I am Harry V. Hayden, national legislative representative of the American Legion, and I am accompanied by Mr. Robert Dinger, who is executive secretary of our national housing committee. The committee, which is composed of World War II veterans, has devoted much time, study, and effort to the very serious problem of housing veterans. My statement will be very brief, Mr. Chairman. We are primarily interested in the disposition of the housing.

The CHAIRMAN. You may proceed with your statement.

Mr. HAYDEN. First, I wish to take this opportunity to express my appreciation of the privilege of appearing before your committee on behalf of the American Legion.

The American Legion in national convention assembled August 28 to 31, 1947, at New York, N. Y., resolved that first priority in sale or rental of all Government housing projects, individual or multiple units, be given to veterans of World War II and the surviving widows of veterans-this to include both those who are present occupants and those who are not-to purchase or rent such housing at a normal value considering original cost, income from. rent, and depreciation; that second priority to purchase at a normal value be given to organizations of veterans, and that third priority on multiple units be given to municipalities.

We are all aware of the tremendous shortage of housing that exists in this country today and of the vast number of veterans of World War II and their families who are inadequately housed. The Legion believes that these veterans should have first priority in sale or rental of surplus Government housing projects and therefore offers the following amendment to the draft bill being considered at this time:

That section 302 (d) of said draft bill is amended by striking therefrom the entire subparagraph (8) and by appropriately renumbering subsequent subparagraphs (8), (10), (11), and (12) as (8), (9), (10), and (11), respectively.

That section 104 of said draft bill is amended by adding at the end thereof the following new subsection:

(j) (1) Any provisions of this or any other law to the contrary notwithstanding, whenever any real property classified as suitable for residential purposes is to be disposed of, veterans, organizations of veterans, and municipalities shall be granted preferences over all others in the purchase of such property, in the following order:

(i) In the case of any building forming part of such property and containing one to four family dwelling units, first, to a veteran who occupies a dwelling unit in such building; second, to a veteran who does not occupy a dwelling unit in such building but intends to do so; and, third, to a nonveteran who occupies a dwelling unit in such building;

(ii) In the case of any building forming part of such property and containing more than four dwelling units, first, to any private corporation, association, or cooperative society which is owned, in whole or in major part, by veterans, which veterans intend to occupy 50 per centum or more of the dwelling units in such building; and, second, to any city, village, town, county, or other political subdivision within whose geographical boundaries such building is situated, upon condition only that such political subdivision will provide priorities to veterans in the occupancy of such building.

(2) The price to be paid for real property disposed of under this subsection shall be a fair price not less than the reasonable value thereof at the time of the offer for sale as determined by appraisal made by appraisers approved by the Administrator.

(3) The Administrator shall, by regulation, prescribe the manner and times for the exercise of preference rights under this subsection.

(4) As used in this subsection (j), the term "veteran" shall mean (i) any person who shall have served in the active military or naval service of the United States at any time after September 16, 1940, and prior to the termination of the present war, and who shall have been discharged or released from active service under conditions other than dishonorable, after active service of ninety days or more.

The provisions outlined in the above amendment are similar to those outlined in bills introduced in the House by Mr. Manasco (H. R. 4886) and Mr. Snyder (H. R. 5507). We believe that these bills can be expeditiously consolidated through this amendment to the draft bill which you now have before you for consideration. Certainly there is justification for extending a preference to veterans in the operation or sale of real property by the Government which they honorably served in the recent national emergency. Of all kinds of real property veterans need housing the most. This proposed legislation before the committee will in effect reenact the present priorities for veterans on all types of real property except housing; yet, as previously expressed, housing is what the veteran needs the most.

On behalf of the American Legion, Mr. Chairman, I strongly urge the adoption of this amendment to assist veterans in their task of readjustment.

The CHAIRMAN. Thank you, Mr. Hayden.

I understand that you feel the time has come when the priorities in regard to personal property could be dispensed with without injustice to the veterans?

Mr. HAYDEN. Precisely.

(The following letter relative to the above answer was subsequently received and is inserted at this point, since it in effect changes the testimony and hence is not deemed to be within the scope of the privilege accorded to witnesses of "editing" their statements:)

Hon. GEORGE D. AIKEN,

THE AMERICAN LEGION, NATIONAL LEGISLATIVE COMMISSION, Washington 6, D. C., May 14, 1948.

Chairman, Committee on Expenditures in the Executive Departments,

United States Senate, Washington, D. C.

DEAR SENATOR AIKEN: On page 102, line 4, of the typewritten transcript of hearings before your committee on Thursday, April 1, 1948, the following appears: "I understand that you feel the time has come when the priorities in regard to personal property needs could be dispensed without injustice or injustice to the veterans.

"Mr. HAYDEN. Precisely."

My testimony at the time was directed exclusively to the disposal of Government housing and recommending priorities for veterans to purchase such housing. If the question and answer quoted above are correctly recorded, my affirmative answer was due altogether to a complete misunderstanding of the question.

For some time the American Legion, by virtue of official mandates of our national conventions, has advocated priority for veterans in the purchase of surplus property, such priority to be second only to priorities for Federal agencies. All official mandates establishing policy of the Legion remain in force unless repealed by subsequent national conventions. No action has been taken repealing the Legion's position on priorities for veterans to purchase surplus property. I have been well aware of this Legion policy and could not, therefore, have knowingly given an affirmative answer to your question.