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Mr. BATEs. Why is it that you want to say that the Government should operate this rather than a private individual?
Mr. SCHWAB. I guess actually, Mr. Chairman, we all have a little socialism in us.
Mr. BATEs. We are for it if it is our kind ?
Mr. SCHWAB. Well, I do not know how much I have in me or how much I do not have, but, of course, the Government really owns these facilities already. Ít is 'a Government function, I think. I think it is a Government function.
Mr. BATES. Then we all believe in socialism if it is our kind of socialism. That is the point I was making.
Mr. SCHWAB. That may be true. I cannot deny that is probably quite true.
Commissioner John RUSSELL YOUNG. Let me ask a question of Mr. Schwab. If there should be a deficit, we have to produce the money?
Mr. SCHWAB. Well, I cannot see how we can run into a deficit. We will not have any authority to obligate any money. What authority would we have to incur a deficit?
Commissioner John RUSSELL YOUNG. You have a fixed payroll. You have fixed charges of operation.
Mr. SCHWAB. I would say we could not pay them. We would have to shut down. We would have to hand the courses back to the Department of the Interior.
That is why we say the 30-day cancellation is a good thing. We can say, “Gentlemen, we cannot run them. Here they are.” ”
That is our way out. If we come in and ask for money you can say. “No; turn them back to the Department of the Interior."
OPERATIONS BY LEOFFLER
Mr. YATES. Mr. Leoffler has been operating these courses for 20 years?
Mr. Schwab. Twenty-eight years,
Mr. ScHWAB. Up until 1943 we cannot tell for this reason: His lease at that time was based upon a rental to the Government. He paid the Government $10,000 a year, and he ran it as he pleased, more or less.
In 1943 that changed to the present basis. Since that time there were three war years in which he had very small profits. Last year he showed a loss, but in 1947 and 1948, which were normal years, he showed some $56,000 profit, which was split with the Government in each of those years.
In 1949 no one can tell what he did. At least, I do not think the Department or the auditors know.
This might be interesting to know: During the 5 years of that lease there was never an audit made of his books. It was not until we had this investigation last year that they had an audit.
On this 1949 statement I have here, it shows they are still in disagreement as to items which would determine whether he had a profit or a loss. But during that year he spent $26,000 on miniature golf courses, plus $16,000. That is some $42,000 on miniature golf courses which was deducted. That was profit.
EDUCATIONAL AGENCY FOR SURPLUS PROPERTY
LESLIE P. PARMELE, DIRECTOR OF THE DISTRICT OF COLUMBIA EDUCATIONAL AGENCY FOR SURPLUS PROPERTY
Mr. FOWLER. Mr. Chairman, may I present Mr. Leslie Parmele.
Mr. PARMELE. The expenses to operate the educational agency for a period of 1 year.
Mr. BATES. What educational agency?
Mr. PARMELE. This money would be reimbursable to the Treasury by fees charged for handling the property.
Mr. BATES. Mr. Wilding, could you give the committee some explanation of this?
Mr. WILDING. Mr. Chairman, the item pending before the committee is in order to enable us to carry out the provisions of a bill now pending which has been passed by both the House and the Senate. A conference report to straighten out a very minor disagreement between the two Houses is now pending and has not yet been agreed to. There is no disagreement. It is merely that it has been caught in the legislative jam and has not yet gone through.
That bill authorizes the appropriation of $15,000 for a working capital fund in order that the purposes of the bill may be carried out. I do not seem to have that bill.
This bill will work to the advantage of the educational agencies in all States. In many States already it has worked to their advantage.
Mr. PARMELE. Forty-five States out of the 48 have received benefit from the operation of this agency.
Mr. Yates. I still do not know what the bill does.
Mr. WILDING. Mr. Parmele, will you go into detail as to what is sought to be accomplished by this bill, how you have been working in getting this surplus property and distributing it, and how you have been so handicapped by your inability to package and forward this various surplus property?
Mr. Bates. We have already passed the law. It is a mandate now to to it, I guess.
Mr. YATES. I would like to know what the law does.
Mr. Wilson. They used to tell us, Mr. Chairman, “This is only an authorization. Go ahead and vote for it. It does not make any difference. They still have to get the money."
tion” Do you remember, “This is just an authorization”? We passed the buck on to this committee.
PRESENT STATUS OF SURPLUS PROPERTY OFFICE
Mr. Wilding. In our appearances before this committee in many recent years we have been abjured by the chairmen of the respective
committees to see that we get for the District government specifically some of this surplus property that we hear so much about in the millions and billions of surplus property that came from the war activities of what we may now refer to as the last war.
Mr. BATES. Who is doing the work at the present time?
Mr. PARMELE. Two years under the public schools and a year under the District of Columbia.
Mr. Bates. You are being paid out of the public school fund?
Mr. PARMELE. I am being paid by the various District activities that are eligible to receive the property on a prorated basis of what they receive.
Mr. WILDING. A sort of hand-to-mouth existence, so far as he is concerned.
Mr. BATES. Will it help the District? Will it create any saving in purchasing this surplus property?
Mr. PARMELE. The way the thing is set up now the District agencies have to pay all my expenses. The private and parochial schools, colleges, and universities are eligible for the material, but they have no way of paying to help get the property in. The money comes in and goes straight to the Collector of Taxes, so when we go out and do a dollar's worth of work, 50 cents goes to the Collector of Taxes. We cannot use it to secure more property.
Mr. Bates. We are in favor of the Collector getting all he can get.
Mr. YATES. I would like to know what your activities are.
ACTIVITIES OF SURPLUS-PROPERTY ACQUISITION
Mr. PARMELE. I go to the military and the governmental bases in the District of Columbia, in the Military District of Washington, which goes as far as thé Patuxent River Naval Air Station and Quantico, Va., and the other stations, plus Government agencies, in the Washington area, and I screen the surplus property and select property usable by educational institutions.
Mr. YATES. Surplus property of the Federal Government?
Mr. PARMELE. Yes, sir. It is authorized under Public Law 152, sections J and K.
That property is brought in on a list and turned over to the United States Office of Education. They allocate it according to need and utilization to the 48 States and the District of Columbia and possessions.
Here is an example of a list of surplus property from Bolling Field that I have secured. This will be turned over to the Office of Education and they will send that property wherever it is needed. It may be a small amount. It might come to the District of Columbia, or might go to Virginia or Maryland. If it is a short-line item it will go to all the 48 States.
Mr. YATES. Are you acting in the nature of an agent for the United States Office of Education?
Mr. PARMELE. I have to act as accredited assistant for the United States Office of Education to screen the property.
Mr. YATES. You screen the property for use throughout the country?
Mr. PARMELE. That is right.
Mr. PARMELE. Yes. I come in and draw my share of the property out of the pool for the District of Columbia.
Mr. FOWLER. They do the same thing in the other States for us. Mr. PARMELE. They do the same thing in the other States.
Here in the District of Columbia there is more property than I am actually authorized to take, due to pupil population.
Believe it or not, there are 11 States that have smaller pupil enrollment than the District of Columbia, but we have a very small enrollment compared to New York State, Pennsylvania, or some other States.
It is all apportioned according to a chart. I can show you in this book a chart to show you what the population of each State is, and how they divide this property up according to utilization.
Mr. YATES. Is this all property that came out of the last war, or is it surplus to the Department's needs today?
Mr. PARMELE. That is correct. We are getting out of the war surplus now into what we call the operational surplus.
Mr. YATES. I see.
Mr. PARMELE. Many times an item is picked up which it would not pay to repair in the Federal Government because of the labor that would be involved.
Mr. YATEs. Yes.
Mr. PARMELE. It goes into a school and the pupils can repair it and put it in operation at a great saving to the schools.
This book gives you a chart showing the breakdown of the property and the percentage basis of how it is distributed among all the 48 States and the District of Columbia.
Mr. Yates. I notice that this is out of the military, is it not?
Mr. PARMELE. It is military, and we are getting it now from the Federal Bureau of Supply, also.
Mr. Yates. Does the Office of Education get first priority on this material?
Mr. PARMELE. After the Federal agencies have been taken care of. In other words, let us say that the Army has some property and the Navy wants it. They have first crack at it. Any one of the Government activities is first. We come first after the Government activities, just before it goes on sale to the public.
Mr. YATES. I see.
Mr. PARMELE. There is a little figure bere that might be of interest to you people.
It costs approximately 8 percent of the acquisition cost of the property to put it up for sale. "To date they are only getting 7 percent return. When you sell a piece of property it is costing 1 percent.
Mr. YATES. What do they sell it at-the book cost?
Mr. PARMELE. No. It is on a sealed-bid sale. We get it free of charge.
Mr. FOWLER. The purpose of this act is that we had no basic legislation. This gives us basic legislation.
We did not have a revolving fund. This man had to spend money out of his own pocket, and spent many a dollar to send things to the other States, out of his own pocket.
Mr. Bates. How much of a saving is there in this?
Mr. FOWLER. Plenty of saving in this, because we get a considerable amount of surplus property.
Mr. Bates. I am going to get that sales tax repealed yet on these savings.
AMOUNT OF PROPERTY
Mr. PARMELE. It is $380,000 worth of property. That is the fair value that I place on it, $380,000 worth in the last year.
Mr. YATES. You handled it yourself?
Mr. PARMELE. They did not pay anything for that. All they had to do was to pay the expenses of operating my agency.
It goes to private and parochial and to all educational institutions that are tax exempt.
Mr. Yates. I see. I thought it went to District agencies.
$12,575.63 was paid into the Collector of Taxes by the colleges, universities, parochial schools, and other than District agencies in the District of Columbia last year, because their money could not be used to go and get more property. So the District agencies had to pay all the expenses of getting all the property in. It is unfair to the District agencies to have to pay it all, although it is still a good deal for them. For approximately $15,000 they get $260,000 worth of property.
Mr. WILSON. What are these scarves you have listed here used for?
Mr. PARMELE. These are lists that come in to us. It goes over to the Office of Education. If they cannot find an educational purpose for the item it is deleted.
As to these silk scarves, the only thing I could think would be that the material could be of good use for home economics, for sewing. It would be very fine material.
We use parachutes that are outdated for the material content. It gives the home economics classes material that they never had before, which they are able to use.
Mr. Wilson. Where do they come from, the PX's or some other place?
Mr. PARMELE. We very seldom would get anything from a PX. Mr. Wilson. I mean, where did Bolling Field get 470 silk scarves?
Mr. PARMELE. They probably have been turned in as used clothing and are being disposed of in that manner. Their pilots wore them in the last war, I think. They are probably made of parachute material. Parachute material is a very desirable material for home economics. classes for sewing.