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Mr. HOLIFIELD. Qualified operators?
Mr. PRIEST. Yes. Now, then, what I would like to say about that is that I think it behooves the military to join the group of those to determine who is qualified.
Mr. HOLIFIELD. Who determines that?
Mr. PRIEST. What I do recommend is that inspectors from the Navy, inspectors from the Air Force, inspectors from the Army go into the plants that then are going to redistribute this material, if the plan is adopted. They are the ones who determine qualifications. You cannot have umbrella salesmen in this business.
That was the horror of the War Assets Administration, so far as I am concerned.
Mr. HOLIFIELD. That you had men selling materials who knew nothing about them?
Mr. PRIEST. Absolutely, sir.
Mr. HOLIFIELD. Some of them knew nothing about the principles of selling or merchandising? Mr. PRIEST. Well, they were in a different league, a different field.
Mr. HOLIFIELD. Is this field of aircraft materials and component parts and hardware a peculiar field that you think could not be handled by a general merchandiser?
Mr. Priest. It is definitely unique, Mr. Chairman, and cannot be done.
Mr. HOLIFIELD. You feel that it must be handled by specialists?
Mr. PRIEST. Absolutely, sir. It is perhaps the most specialized field in merchandising today.
Mr. HOLIFIELD. How many breakdowns would you make in the disposal?
Mr. PRIEST. About six.
Mr. HOLIFIELD. Will you give us the benefit of your knowledge on that?
Mr. PRIEST. Yes, sir; I will. Engine parts, propeller parts, whole props and propeller parts—we will put that in one classificationlanding gear, hardware, instruments. I do not believe we have to get into armanent. Offhand, I would say there are about six categories that should be in that.
Mr. HOLIFIELD. Are there experienced firms at this time that are in those particular fields!
Mr. PRIEST. Yes, sir.
Mr. HOLIFIELD. Where do they obtain their stocks at the present time?
Mr. PRIEST. Through two methods. One, as agents for the original manufacturer. For instance, you have your hardware people. They get them from the general manufacturers, Lamson & Sessions, and so forth.
And then there are general distributors. They call on Northrup, and so forth, and sell them their line of requirements.
The instrument people do the same thing. They get their stuff from Sperry.
Due to their unique inset in the plane, you will have a representative along with the distributors. So you have a manufacturer representative along with the distributor there.
And then you have the batteries, you have the tires, and you have all of that type of supply aspect.
Mr. HOLIFIELD. Well now, that is just the regular business operation that you speak of there!
Mr. PRIEST. It is until you get the installation aspect, Mr. Chairman.
Mr. HOLIFIELD. You have said there were two methods. What is the other method?
Mr. PRIEST. The other one is in the main from Government surplus.
Mr. HOLIFIELD. Is that a large field of supply at this time? Is there a large quantity of Government surplus being offered by Government agencies? Mr. PRIEST. No, sir; there is not. Mr. HOLIFIELD. It is a very low field at this time?
Mr. Priest. To go back to my original statement, I do not think they are doing a very good job of getting rid of the surplus.
Of course, in all of this, Mr. Chairman, you must appreciate that I am presenting my own personal views, inasmuch as the National Production Authority has not had a chance to review this.
Mr. HOLIFIELD. In other words, they are not declaring?
Mr. HOLIFIELD. Our witnesses before us this morning did not seem to agree with you. They seemed to think that they had teams of excess declaration that were doing a good job.
Mr. PRIEST. Why are they asking you for more space for storage, then? That is something that is rather inconsistent, is it not?
Mr. BURNSIDE. Getting back to the point I just asked you aboutMr. HOLIFIELD. It seems to me that this is a point of fact that needs a little bit of exploration to find out if these agencies do have tremendous stocks of materials stored in their warehouses. I hope there will be some industry representatives here who will give us some direct testimony on that point from their own personal experience in purchasing and investigating in these warehouses.
Mr. PRIEST. I have not had time to explore it, Mr. Chairman, but it can be worked out. You take a look at their procurement, take a look at the end products delivered, and then you know what has to be in warehouses. And the chart will go like this sindicating]. And then you deduct the sales figures.
Mr. HOLIFIELD. Are there any questions, Mr. McVey?
Mr. McVey. I was interested in what you had to say about the steel surplus.
Mr. PRIEST. Did I say steel, sir?
Mr. BURNSIDE. You have no evidence that there is any nickel being stored?
Mr. PRIEST. No, sir.
Mr. HOLIFIELD. Are there any further questions?
Mr. NICHOLS. Do you wish an expression from the National Production Authority itself?
Mr. HOLIFIELD. Yes.
Mr. HOLIFIELD. Yes. We are planning to have hearings tomorrow morning and possibly on Wednesday morning. We have some requests from several people who want to appear on Wednesday. I do not know whether we can move them ahead to Tuesday, or not. Is there anyone in the room at this time from industry who would like to give the committee the benefit of his information on this matter. If so,
we shall be glad to hear from you. You would like to defer, then i
Mr. NICHOLS. Yes. I believe that if you wished an expression on the plan we would like to look it over and see how it might affect the National Production Authority.
Mr. HOLIFIELD. We will not have long hearings on this subject, because of the imminent adjournment of Congress.
Mr. NICHOLS. We desired to know your wishes.
Mr. HOLIFIELD. We will excuse you, then, Mr. Priest and Mr. Nichols. Thank you for your appearance here today.
Mr. PRIEST. Thank you.
(Subsequently the Administrator of the National Production Authority submitted the following letter and statement:)
DEPARTMENT OF COMMERCE,
Washington, July 3, 1952. Hon. CHET HOLIFIELD,
House of Representatives, Washington, D. C. DEAR CONGRESSMAN HOLIFIELD: During the recent hearings held by your Subcommittee on Executive and Legislative Reorganization of the House Committee on Expenditures in the Executive Departments, your committee expressed a desire to have this agency's comments on the proposed plan presented by the United States Air Force to accomplish the redistribution of excess material. Accordingly I am submitting herewith a statement containing our comments with respect to this plan.
The National Production Authority is very much interested in and in sympathy with such a proposal because of its obvious assistance in carrying out the objectives of the Defense Production Act of 1950, as amended. If your committee desires further information from us in connection with this proposal, we will be glad to hear from you. Sincerely yours,
HENRY H. FOWLER, Administrator. STATEMENT OF THE NATIONAL PRODUCTION AUTHORITY AS TO AIR FORCE PRESENTA
'TION ON REDISTRIBUTION OF IDLE AND EXCESS MATERIAL The National Production Authority has received a copy of the Air Force presentation on the redistribution of idle and excess material and of the proposal for the reestablishment of the World War II redistribution program. The following is submitted by the National Production Authority as comments upon the proposal :
1. In principle, this agency will concur in any proposal of a method and system which will make available “idle” or “excess” or “surplus” material or mill products or hardware, bearings, fittings, and components which have been acquired in connection with the aircraft program.but which for any reason are unusable by a recipient under the program. The National Production Authority has an obligation, pursuant to the Defense Production Act of 1950, as amended, to assist in developing and maintaining the military and economic strength of this
country. It is entirely conceivable that among the materials to be the subject of the redistribution program will be items of steel, copper, and aluminum in such shapes and forms that they are subject to the controlled materials plan of NPA. It is quite probable that many of the items of hardware, bearings, fittings, and components which have been the subject of manufacture and delivery under the aircraft program and which will be the subject of redistribution pursuant to the proposal may be usable by others in connection with the aircraft or other phases of the defense program.
If that proves to be the situation, their early availability to other potential users will tend to minimize the requirements for scarce materials or items to be manufactured therefrom. Any such result will assist the defense program and the objectives of this agency. Even if any of such articles cannot be used in the defense program, nevertheless their availability for the civilian economy, under the ultimate redistribution operation, might tend to meet some of the requirements of production for the civilian economy, and thereby prevent further disruption than that necessarily occasioned by the defense program. As a last resort, in the event that any of the materials or items, the subject of such redistribution, turn out to have no usefulness either for the defense program or the civilian economy, their early conversion to scrap for regeneration into basic materials would assist not only the defense program but the civilian economy. For the above reasons, the National Production Authority helieves that a method of redistribution and returning to productive use of “frozen” materials or products is of great importance to the objectives of the Defense Production Act. It is felt that this agencv should support this proposal.
2. The National Production Authority, however, wishes to make the following obeservations:
(a) It is essential that a redistribution program does not so operate as to disturb the system and pattern of allocations made by this agency pursuant to its controlled materials plan or in accordance with its various allocation orders. Appropriate provisions should specifically appear in the framework of any redistribution procedure or in the various appropriate NPA regulations or orders, or both, to assure that one having a production or construction schedule will not, by the operation of the redistribution program, receive quantities of materials in short supply in excess of those allotted under the NPA regulations and orders.
(6) Since some of the materials to be the subject of redistribution presumably will be in the shape and forms classed as controlled materials, some provisions must be made as to their disposition and delivery within the framework of CMP. In addition, certain other materials in very short supply, for example columium, are subject to NPA orders controlling their disposition, delivery, and use. Therefore, adequate provision must be made either in the proposal or in appropriate NPA regulations and orders, or both, to assure that delivery and use of such
terials will conform to the control patter established by the National Production Authority.
(c) Reference is made in section 5F (c) to consultation with industry advisory committees. It is not clear whether the proposal contemplates the use of the industry advisory committees established by the National Production Authority pursuant to section 709 of the Defense Production Act, as amended. It is believed that the use of those committees is inadvisable, but we suggest that other arrangements be made for consultation with representatives of industry groups affected by the proposed action.
(d) It is suggested that the National Production Authority be given the opportunity of examination of any final proposals for such redistribution which may be prepared prior to their adoption, in order that this agency will be able to remain in a position which will make it possible for it to be able to carry out its responsibilities under the Defense Production Act.
(e) It is probable that many of the items which will be the subject of the list provided for in the proposal will bear nomenclature which, while meaningful to the Air Force, will be nondescriptive to the other services or other possible users under the defense program or users under the civilian economy. It is suggested therefore, that when lists are prepared pursuant to this proposal, that items so listed also be so described by commercial nomenclature that they can be more effectively identified.
Subject to the above comments and suggestions, the National Production Authority is in favor of adoption of an effective working system which will accomplish the redistribution and returning to productive use of materials and items which, for one reason or another are not in fact being used, not only in the aircraft program but in any other phases of the defense effort.
Mr. HOLIFIELD. Will you come forward and identify yourself for the record ?
STATEMENT OF REG WOOD, CONSERVATION ENGINEERS, INC.,
Mr. Wood. Mr. Chairman and gentlemen, my name is Reg Wood. I represent Conservation Engineers, Inc., Compton, Calif.
So far as an opening statement is concerned, I would like to identify our operation in this manner, by referring to a proposal that we have made, after making a survey and an analysis and a study of the redistribution program,
We got into this thing sometime last November or December, as a natural addition to our present activity. Our present activity is located in Compton, Calif., and has to do with the firm of industrial aids, which is an operation engaged in the processing of aircraft hardware.
To the extent that we take from the aircraft companies in our locale, Los Angeles and San Diego, that material that is known to them as stockroom mixes of aircraft hardware, we, also, take from them contaminated material and floor sweeps. In that operation we bring this material back to specifications and on a quality control basis, and we return it to the aircraft companies.
Also, in addition to that, we have been requested by the aircraft companies to get into another field.
No. 1, they use an aircraft part that is called a Cleco or a skin fastener. It is a little item that holds the skin in place before they put the rivets in. These items cost from 8 cents to 45 cents each to the aircraft manufacturer.
Our program is one of conservation, in that we feel that conservation is a keynote and will become more of a keynote in the industry today.
They have asked us to see what we can do about the Clecos, and consequently we have a plan in operation that has been in existence since last August in which we take these parts, sort them, rework them, and bring them back to their original good usage.
Of course, our cost on the operation is a minimum. We also have a program where we reclaim or rework C clamps which are used by the tons in the various aircraft plants. Those we take apart, disassemble, and put back into new condition and send them back to the aircraft plant.
To give you some idea of what our operation consists of on the industrial aids plane, we have sorted for the aircraft industry in the Los Angeles area alone for the past 10-month period, understanding, of course, that our operation was new—we started out as of around about July 1, 1951.
In this particular category we sorted 289,043 pounds of aircraft hardware in all kinds and conditions.
Of that amount, we returned to the aircraft industry 121,345 pounds, or a percentage of 55 percent.
The dollar value of material recovered, at an average price of $2.02 a pound, was $245,116.90.