General METZGER. No, sir.

Mr. HOLIFIELD. You would not?

General METZGER. No, sir.

Mr. HOLIFIELD. You would retain Government ownership of the material that was in the agents' hands?

General METZGER. Yes, sir.

Mr. HOLIFIELD. Do you have any suggestions as to how accountability could be effected in a simple manner, and not a complicated manner such as we had before? You remember before, the War Assets Administration had its own representatives in each one of these warehouses, and there was a constant screening of material. It put the War Assets inspector or representative in those warehouses in a very powerful position. He could declare millions of dollars scrap or he could declare it salable merchandise. It was necessary to have his approval in order to either scrap material or to sell it at a certain price.

Now, how would you overcome that weakness which I think was in the old system?

General METZGER. I do not feel that the agents should be privileged to sell any merchandise as scrap; if it is determined that it is unsalable and unusable, it should revert physically to a GSA reservoir for sale or disposition.

Mr. HOLIFIELD. Or conversion?

General METZGER. Yes, sir.

Mr. HOLIFIELD. To see that there were no slip-ups such as we had before?

General METZGER. I certainly do.

Mr. HOLIFIELD. There was too much opportunity for fraud in the other program?

General METZGER. That is right.

Mr. HOLIFIELD. Because a dishonest employee could very easily declare a group of materials to be scrap, and then in place of its being melted down, it was diverted through devious means back into the channels of trade, and fortunes were made in many instances in that type of operation.

General METZGER. That is correct.

Mr. HOLIFIELD. And we would have to be protected in any plan against that type of thing.

General METZGER. I thoroughly agree.

Mr. HOLIFIELD. I am glad you testified on the point of declaration of scrap and the responsibility of the Government agency to see that that material goes into scrap.

General METZGER. Yes, sir.

Mr. HOLIFIELD. I think that is an important part of the program. Are there any questions, Mrs. Church?

Mrs. CHURCH. Mr. Chairman, if I may ask the general a question, may I say that I was sorry not to be here to hear your full testimony this morning, but it was unavoidable.

We Members of our Congress in our own constituencies and on the floor of the House are continually hearing about a lag in airplane production. I do not know whether it is pertinent to comment on that fact, but perhaps it would be permissible to ask you whether it was in your jurisdiction. Do you know anything which is aiding that lag, or can you suggest any remedy on our part?

General METZGER. Mrs. Church, I feel that the greatest handicap to the accomplishment of our aircraft program objective in the past has been, as recited by many others before, the lack of machine tools. As to headway which is being made in that area, I would like to say that the Government agencies who are assisting us are most cooperative, and have provided us with great assistance. However, the problem is still with us, but in an ever lesser degree, because improvement has been made and is being made.

I have testified before that I felt that with our present program, most of our machine tool difficulties will be behind us at the close of

this year.

Mrs. CHURCH. That is the end of fiscal 1952?

General METZGER. The end of calendar 1952.

Mrs. CHURCH. Calendar 1952.

General METZGER. But certain machine tools will still be critical. They are critical today and will be critical then, although in a much lesser degree.

Mrs. CHURCH. Are we taking adequate steps to produce enough tools for the future if designs change, and so forth? Are we anticipating a need?

General METZGER. There are many movements under way to do just that. I believe that many have testified in other hearings, and I subscribe completely to the testimony, that the security of the country will demand a healthy machine-tool industry, and that we must, all who are engaged in defense procurement, constantly keep ourselves alert to providing the machine-tool builders with an estimate of our future requirements, and to the extent we are funded, we shall continue to procure long lead time machine tools of the ever latest design, so that we will not be confronted with the situation which has been confronting us in the event of an early rapid mobilization. Mrs. CHURCH. You yourself are satisfied that everything that could be done is being done?

General METZGER. At this point.

Mrs. CHURCH. Thank you.

General METZGER. I am satisfied; yes.

Mrs. CHURCH. Thank you.

Mr. HOLIFIELD. Mr. McVey?

Mr. MCVEY. On page 19, General, of your report, you state that financing for GSA will be supplied by the GSA.

Is there any implication there that GSA has some other means of financing itself outside of appropriations by Congress? General METZGER. No, sir; that is not inferred.

Mr. McVEY. An appropriation, then, would be required?

General METZGER. I really am not acquainted, Mr. McVey, with the appropriations that have been made for the GSA, and whether or not appropriations have been made to cover the disposal of surplus property. I do not know. If appropriations have been made, it is possible that they are adequate. This proposal does not encompass, again, as I repeated this morning, a large organization. It encompasses an administrative organization with very few operating responsibilities. Costwise, we have not attempted to analyze the need for personnel or funds within GSA to pick up the load that we are recommending here be accepted by the GSA.

Mr. McVEY. Mr. Chairman, what is the situation in regard to the financing of GSA?

Mr. HOLIFIELD. The funds for the handling of surplus propertyI am speaking now not of real property-were pretty well denied over the past few appropriation bills, and therefore the GSA has had to accomplish that responsibility by delegating back to the separate arms of defense the responsibility of doing their own disposal. Mrs. CHURCH. Without supervision?

Mr. HOLIFIELD. With only the supervision of the defense establishment, I believe.

You have not conferred with the Munitions Board on that responsibility, have you, General?

General METZGER. We have discussed the problem with the Munitions Board informally as the problem is set forth in our thinking here. Those discussions are all we have had with the Munitions Board. If I may comment on that one question as to whether or not our actions are without supervision

Mrs. CHURCH. The question was asked without any attempted impertinence, I assure you, General.

General METZGER. There are certain prescribed procedures, which I may not have outlined this morning-I thought I did, but you were not here wherein we are limited in our present endeavor to move surplus property to satisfy our own needs, our own service stocks, plus the critical shortage of our contractors, and the balance is certified to the Bureau of Supplies and Accounts of the Navy, Surplus Materials Division, for Department of Defense screening to pick up their needs. At that point, everything that may be reported as surplus is certified back to the contracting officer at the plant where the surplus exists, who is privileged to conduct a bid sale.

Mr. McVEY. What does he do with the proceeds from that sale, General?

General METZGER. It goes into the general fund, as far as I know. If anyone here is better qualified on that point than I, I wish he would speak up.

Mr. HOLIFIELD. I think that is right. I think the sale of all Government property has to go into the general fund unless there is a specific law which provides that it goes into a revolving fund, and I believe that is only in the cases of certain Government corporations. General METZGER. That is my understanding.

Mrs. CHURCH. Mr. Chairman, has there ever been any chance to have a miniature uniform catalog made of this surplus material? Mr. HOLIFIELD. I think you handled the cataloging.

do.

General METZGER. We have substantially that. That is what we

Mr. HOLIFIELD. I was going to say, you prepare lists of the material, and those lists are circulated among the defense departments for screening?

General METZGER. That is right.

Mr. HOLIFIELD. Now. I want on that point to ask you two questions. In the first place, is the lack of a uniform property identification a handicap to you in this work?

General METZGER. Identification and quality are always a problem when we attempt to redistribute or sell. We rely entirely upon the

information furnished by our contractors, and to the extent that their records are correct, the identification is correct. The matter of the quality of the material depends largely upon the manner in which it has been warehoused, and how frequently it has been inspected. That is something which deteriorates. The quality deteriorates with the length of storage in most instances, particularly if it is property which is Government-owned and which is being warehoused in every nook and cranny of a contractor's plant, because he does not generally have sufficient room to warehouse surplus stocks. He puts it in whatever space is of least use to him at the moment.

Mr. HOLIFIELD. And is it not true that that very element of property deterioration is an argument in favor of having this material handled by people who are expert in handling the material and who are expert in identifying it, and in inspecting it for aircraft quality? General METZGER. Yes, sir.

Mr. HOLIFIELD. For defense quality?

General METZGER. Yes, sir. And one more point

Mr. HOLIFIELD. And you do not have the means of taking ball bearings, for instance, that have been pitted by rust and refinishing those? General METZGER. NO.

Mr. HOLIFIELD. You must automatically declare them as scrap, whereas if they are turned over, as I know the Navy is turning over a great deal of work now to private firms to have them inspected and refinished, in many instances the Government gets the use of that article at, let us say, approximately 20 percent of its original cost, rather than losing the complete value of it almost in the scrap declaration?

General METZGER. That is very true. That is very important.

Mr. HOLIFIELD. And that is important to the contractor in all types of engine parts and hardware?

General METZER. That is very important. And the timely and expeditious movement of that surplus is highly important, because it reduces, naturally, the time that it is being improperly warehoused, and so forth.

Mr. HOLIFIELD. Yes. Now, on the element of time involved, does your screening process take up quite a bit of time, say 90 days, before these lists are finished? That is, you issue the list of materials. How long does it take for all of the Government agencies to inspect those lists and draw from them that which they need?

General METZGER. I believe at present, before the residue actually reaches a bid sale condition, 6 to 8 months elapse.

Mr. HOLIFIELD. It would seem to me that that would be so long a lag in time that you would lose a lot of the efficiency of your redistribution.

General METZER. That is correct.

Mr. HOLIFIELD. Because of the incompleteness of the original lists at the time the individual contractor tried to use them and draw from them?

General METZGER. That is correct.

Mr. HOLIFIELD. They might be up to date when you originally declare them, but very shortly thereafter they would be incomplete? General METZGER. That is true, sir. That is one recognition we have given in this presentation here. Some central agency maintains

these records, so that, as the material is drawn off, the record clearly indicates that it is no longer available, and we do not get back into the situation we were in at the first step in World War II, wherein the contractors lost complete faith in the redistribution plan, because very often, more often than not, by the time they requested shipment of the material, it had already been shipped somewhere else, and you had hundreds of people, perhaps, all looking at these lists at the same time, with mail going in all directions, and it became quite a confused undertaking.

We have given recognition, we hope, in this presentation to the elimination of that and the unworkability of such a scheme.

Mr. HOLIFIELD. There are two questions that I would like to ask you before you leave, and one is: Was this so-called APRA plan which you propose submitted to the Secretary of Defense's Office, or is it a plan that has more or less been brought together within the services down at the operating level?

General METZGER. Mr. Chairman, again I would like to differentiate between the APRA plan which you are referring to and the Air Force thinking which I discussed with you this morning.

Mr. HOLIFIELD. I see. Then you would not call this plan the APRA plan?

General METZGER. No, sir.

Mr. HOLIFIELD. You would call it the Air Force approach to a plan?

General METZGER. That is correct, sir.

Mr. HOLIFIELD. I see. And it is commonly called the APRA plan because you folks have evolved it?

General METZGER. As was explained, I believe, in introducing me this morning, I am not only the Chief of the Production and Resources Division of the Air Force but I am also the Air Force member of APRA.

Mr. HOLIFIELD. I see. Now, who are the other members? May we have them at this time?

General METZGER. The Navy member is Capt. Roy Jackson, and the Army member is Col. Richard Danek.

Mr. HOLIFIELD. Now, what is the attitude of these two gentlemen and their departments toward the Air Force plan?

General METZGER. The Air Force plan has not been discussed with those representatives. The APRA plan was discussed at length, but no resolution——

Mr. HOLIFIELD. This is a different plan, then, from the original APRA plan?

General METZGER. It differs in one principal concept-very few others-one principal concept, and that is that there is no corporation X in the Air Force plan. We in the Air Force plan proposed GSA as corporation X. If you would care to have me, for the benefit of the balance of the subcommittee who may not have read that, go into it in detail, I will.

Mr. HOLIFIELD. You might comment on it briefly. The original plan, as I remember, had a corporation X, which was a private corporation, to do the job of clearing and allocating materials. Is that not right?