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reported as 98.7 percent domestic and only 1.3 percent foreign. Air Force reports that 93.6 percent of their surplus and foreign excess inventories was domestic and 6.4 percent foreign.

Section E National Industrial Reserve

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Public Law 883, 80th Congress, the "National Industrial Reserve Act of 1948," provides for establishing "adequate measures whereby an essential nucleus of Government-owned industrial plants and a national reserve of machine tools and industrial manufacturing equipment may be assured for immediate use to supply the needs of the Armed Forces in time of national emergency or in anticipation thereof."

The properties still owned by the Government are managed by the General Services Administration (as successor to the Federal Works Agency) under general policies established by the Secretary of Defense. Since the Department of Defense has a contingent claim and production priority rights in all the National Industrial Reserve plants, including those which GSA has disposed of or leased with a National Security Clause, data on these are included in this section of this report. However, none of the properties in this Reserve has been included in the totals for real property (Part I) or metalworking equipment (Part II, Section B) of this report because they are held by GSA.

2. Plant Reserve

The National Industrial Plant Reserve contained 24 facilities as of 30 June 1959. This was a reduction of 59 facilities, 49 of which were Air Force sponsored plants, since the end of last year.

The spon

soring military department and status of these plants at the end of

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In keeping with Department of Defense policy to release as many Reserve Plants as possible to private corporations, 21 of the 24 plants have been sold subject to appropriate restrictions and recapture clauses, and three are being operated under lease or contract agreement. The net residual acquisition cost (original cost of construction and acquisition of entire plant less portions previously disposed of) of the 21 plants in the Reserve which have been sold was $420 million. The original cost of the three plants still owned by the Government was $34 million.

The status of the 24 plants by category of product is shown in Table 45. Of the three plants still owned by the Government, one produces tank components, one produces gun components, and one pro

duces jewel bearings.

3. Equipment Reserve

The total number of items of production equipment in the National Industrial Equipment Reserve on 30 June 1959 was 4,021 as compared with 4,900 one year ago. The original acquisition cost of the 4,021 items

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vas $31.1 million.

Of the total of 4,021 items in the Reserve, 3,753 were carried in the central inventory of the Production Equipment Redistribution Group. These are available for lease to overcome production shortages of qualified contractors engaged in defense-supporting production. The remaining 268 equipment items were held in reserve for additional defense support and essential civilian production in the event of

mobilization.

PART III PROGRESS IN RECORDING AND REPORTING PROPERTIES

Section A - Office of the Secretary of Defense Published Directives and Instructions and Current Projects Pertaining to Property Accounting and Reporting.

A digest of the principal regulations, directives, and instructions which provide for the recording or reporting of inventory data which have been issued by the Office of the Secretary of Defense since the enactment of Title IV of the National Security Act and were in effect as of 30 June 1959 is presented in this part of the report. These current directives and instructions, in some instances, supersede or revise earlier directives and instructions on the subject of property accounting and

reporting.

1. Military Assistance Program Supply Performance Report (DOD Instruction 2110.27), issued 10 June 1958.

This Instruction prescribes procedures for the preparation of summary quantitative data which will serve as the basis for official reports of the Department of Defense under the Military Assistance Program. The summary data show the value of current month deliveries, approved programs, undelivered balances, and the redistribution of materiel between recipient countries under the MAP Grant Aid Program.

2. Method of Financing, Funding, Accounting and Reporting for Mutual Security Military Sales to Eligible Foreign Governments or International Organizations (DOD Instruction 2110.29), issued 7 April 1959.

The purpose of this Instruction is to prescribe uniform procedures to be followed in financing, funding, accounting and reporting with respect to all sales of military equipment, materials, and services made under the authority of the Mutual Security Act of 1954, as amended.

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