production equipment was within Continental United States.

Included in the Navy production equipment totals (apart from any production equipment in the Supply System data) are 78,257 machine tools, costing $816 million, and 66,972 other items of production equipment such as railroad transportation, electrical distribution, materials handling, and construction and excavating equipment. The 66,972 items of production equipment other than metal working had an acquisition cost of $365 million. In addition to 66,297 machine tools, totaling slightly over one billion dollars, the Air Force had 28,996 other production equipment items such as welding, materials handling, and heat treating equipment. These latter items cost at acquisition $185 million. The Air Force also reports 38,547 items of capital plant equipment with an acquisition cost of $185 million. None of the above are included in the Air Force Supply System data.

Section C Inventories Held in Industrial Funds

Working capital funds are authorized by Section 405 of Title IV of

the National Security Act, as amended. The use of industrial funds permits the financing of industrial or commercial type activities and the development of production costs to be used as a basis for charging the appropriations of customers for the products or services furnished to them by the activity financed by the Fund.

As of 30 June 1959, 58 activities in the Department of Defense were operated under industrial fund charters. The Army had 25; the Navy 30, one of which is a printing activity located in 19 separate plants; the Air Force three (one of which is a printing activity located in nine different plants, another is a laundry and dry cleaning activity

operated at 48 installations, and the third is the newly chartered Military Air Transport Service).

The total inventories, consisting of raw materials, supplies, and work-in-process, held in all industrial funds in the Department of Defense amounted to $371 million on 30 June 1959. This is an increase of $18 million during the year.

The industrial fund inventories for each group of activities within each Department are shown in Table 43.

Section D

Officers

Surplus Personal Property in Hands of Property Disposal

As of 30 June 1959 the value of the world-wide surplus and foreign excess personal property inventory of the Department of Defense amounted to $4,027 million of which $3,533 million, or 87.7 percent was domestic (covering Continental United States, Alaska, Hawaii, Puerto Rico and Virgin Islands) and $494 million, or 12.3 percent was foreign excess (Table 4). This total of $4,027 was approximately $175 million less than the total a year earlier.

Of the total amount of surplus and foreign excess property inventories held by property disposal officers the Army reported $1,356 million or 33.7 percent; Navy (including Marine Corps) $1,334 million or 33.1 percent; Air Force $1,337 million or 33.2 percent.

The Army reported that 71.1 percent of their total surplus and foreign excess inventories held by property disposal officers was domestic while 28.9 percent was in foreign countries. The Navy surplus and foreign excess inventories held by property disposal officers were

Table 44.--Surplus and Foreign Excess Property Inventories
Held by Property Disposal Officers