Mr. KIRSCH. Three and one-half million dollars.

Mr. TABER. Three and one-half million. I thought you were going to spend a million and a half for warehousing and $500,000 for

other expenses.

Mr. KIRSCH. A million and a half personal service; $500,000 for other administrative expenses, that totals $2,000,000; and a million and a half for warehousing; that makes the three and one-half million.

Mr. TABER. Three and one-half million, all told.

Mr. KIRSCH. Yes, for the fiscal year 1946.

Mr. WIGGLESWORTH. You anticipate that this thing is going to drag and drag on for a great while?

Mr. KIRSCH. It is quite possible it will. I recall after the last war that this character of material did take some time to dispose of. Mr. TABER. It did; that is right.

Now, have you any break-down of this money, how you are going to spend it?

Mr. KIRSCH. None other than what I have stated.

Mr. TABER. You are just shooting in the air?

Mr. KIRSCH. No, we are using the best estimates we could make in the matter of the numbers of employees that will be required to handle the $200,000,000 worth of declarations, as compared to our present situation in the handling of $25,000,000 worth of declarations.

NUMBER AND SOURCE OF PERSONNEL

Mr. TABER. And how many people do you have on that?

Mr. KIRSCH. We have 75 now in our disposal section, including employees in our field offices, handling $25,000,000 worth of declarations, and we anticipate that $200,000,000, which is about 10 times as great, will need about 6 times our present staff.

Mr. DIRKSEN. Mr. Kirsch, have you been transferring employees from rolls that have heretofore been engaged in your regular contract work?

Mr. KIRSCH. Yes.

Mr. DIRKSEN. To this job?

Mr. KIRSCH. We have been transferring employees from the Procurement Division and from the Production Division, where the work has been reduced to the point where they are not needed. But we have not closed down on personnel connected with shipbuilding; they will be needed for the next 6 months or more, because, as you know, we are still building ships and we are going to keep building ships for the war effort right on up to February or March of next year.

Mr. DIRKSEN. And will this involve the employment of other personnel?

Mr. KIRSCH. To some extent it will; because it calls for specialized employees for disposing of materials in a sales agency that we do not find in our other divisions.

We will have inspectors, we will have material appraisers; we possibly can transfer them over. But section 31 of the act requires the Surplus Property Board to make allotments of funds to a disposal agency that will handle goods certified to it by other governmental agencies.

Mr. DIRKSEN. You will handle that as a separate accounting transaction quite aside from the program for which appropriation was made in the independent offices bill?

Mr. KIRSCH. Yes, we will.

DISPOSAL OF SMALL CRAFTS

Mr. DIRKSEN. In connection with the disposal of small crafts you are testifying now for the War Shipping Administration and the Maritime Commission?

Mr. KIRSCH. That is correct so far as it relates to disposal of maritime material under the Surplus Property Act.

Mr. DIRKSEN. In connection with the disposition of small craft: What kind of an arrangement are you making for the disposal of craft covered under the original act?

Mr. KIRSCH. We must not confuse the term "small craft," as used in this bill, with small powered craft such as trawlers and pleasure boats under Public Law 305, where they were requisitioned for use by the War Shipping Administration for the Navy, for patrol and other purposes.

Mr. DIRKSEN. That is not involved here?

Mr. KIRSCH. That is not involved here.

Mr. DIRKSEN. What I was trying to find out is whether the disposition would be made back to the private owners.

Mr. KIRSCH. That is not involved here. What we have here are landing craft, assault boats, knocked-down barges, which have been built specifically for the Army and Navy for certain war purposes. The launches, tugboats, and motorboats will be disposed of by the War Shipping Administration under Public 305

Mr. DIRKSEN. But you have testified here with reference to pleasure craft, have you not?

Mr. KIRSCH. I have not referred to disposal of pleasure craft under the Surplus Property Act; I have not had that in mind in referring to the materials that we have to dispose of under the Surplus Property Act; it will relate to such items

Mr. DIRKSEN (interposing). What about marine Diesels?

Mr. KIRSCH. Yes. There are a great number of those; the War Department and the Navy Department have a great quantity of these that were to be installed, particularly in the assault craft and the power landing barges. We had quite a number of them; most of them were new engines, and, I am very happy to tell the committee that as to a great portion of our disposals to date, we have recovered from 92 to 100 percent of the original cost of such engines. We have made a rather good record, although I do not expect that record can be kept up. Our total recoveries in all disposals so far have averaged about 84 percent, and that is due to the high recovery we have had on the new marine engines. We do not anticipate that such a percentage of recovery will continue.

Mr. DIRKSEN. Because you have had a good market.

Mr. KIRSCH. That is right.

Mr. DIRKSEN. And that probably will not continue long.

AGENCIES DECLARING SURPLUS PROPERTY TO MARITIME COMMISSION

Mr. WIGGLESWORTH. What agencies have declared surplus property to you?

Mr. KIRSCH. The War Department and the Navy Department, primarily; the War Shipping Administration, some little items, very few items, and there have been one or two other agencies that have declared some small amounts of material surplus-I think principally the Rubber Development Corporation.

Mr. WIGGLESWORTH. Does the Maritime Commission as an owning agency declare property surplus to the Maritime Commission as a disposal agency?

Mr. KIRSCH. Yes.

Mr. WIGGLESWORTH. Does the War Shipping Administration as an owning agency declare property surplus to the Maritime Commission as a disposal agency?

Mr. KIRSCH. Yes.

Mr. WIGGLESWORTH. Have you any estimate as to how much in this year those agencies are likely to declare surplus?

Mr. KIRSCH. Well, as I explained, we estimate something like $200,000,000 will be declared surplus in the year 1946; and we anticipate fully 90 percent of that will be from the Army and the Navy. Mr. WIGGLESWORTH. You do not anticipate any substantial declarations of surplus property by either the Maritime Commission or the War Shipping Administration in the next fiscal year?

Mr. KIRSCH. No. Certainly very little, if any, from the War Shipping Administration, as long as the war is going on.

PERCENTAGE OF COST RECOVERED ON SALE OF SMALL VESSELS AND MARITIME PROPERTY

Mr. WIGGLESWORTH. Here is a break-down which the surplus property set-up gave us under the heading "Small vessels W. S. A. disposed of to date," vessels costing originally $6,650,000, disposed of for $2,693,000, or 40.5 percent of the original cost.

Mr. KIRSCH. We have been talking about assault boats, knockdown barges, and life floats, and craft of that character; they are not the powered boats similar to those requisitioned by the War Shipping Administration.

Mr. WIGGLESWORTH. You have realized only 40.5 percent of the original cost of some of these vessels?

Mr. KIRSCH. You are referring to the trawlers, launches, and the like disposed of by the War Shipping Administration under Public Law 305. What I have been referring to are small craft being disposed of under the Surplus Property Act, where we have recovered better than 50 percent of cost. Take the small assault boats, and I have a picture of that here [indicating] about 13% feet in length and 5 feet 4 inch beam, with a flat bottom, with no oarlocks, no fittings. Those boats cost originally $75. We have received them in four conditions: 1. In new condition; 2. used boats that have been reconditioned, and in good serviceable condition; 3. boats used that have not been reconditioned but usable; and 4. boats used and needing repairs before usable. We have established various prices for the sale of those boats.

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The ones that are in good condition we are asking and we have received up to the $75 cost value; but they run all the way down to $30 for the class 4 that need repairs.

Mr. WIGGLESWORTH. Are those the only types of boats you have disposed of?

Mr. KIRSCH. Oh, no.

Mr. WIGGLESWORTH. How large boats have you disposed of to date? Mr. KIRSCH. In this category the largest boat we have disposed of is the 60-foot knock-down barge, which costs about $3,600 apiece new and we have disposed of them for $1,995.

Mr. WIGGLESWORTH. How old are they?
Mr. KIRSCH. They were not old.

Mr. WIGGLESWORTH. How many years?

Mr. KIRSCH. I should imagine those were built within the last 2 years.

Mr. WIGGLESWORTH. You got only 40 percent on them?

Mr. KIRSCH. No; better than 50 percent.

Mr. DIRKSEN. Were these steel boats?

Mr. KIRSCH. No, they are wooden barges.
Mr. DIRKSEN. Wooden?

Mr. KIRSCH. Yes, they are wooden barges.

Mr. DIRKSEN. They use them mostly on the inland waterways? Mr. KIRSCH. They were designed for use by military forces for the landing of supplies on shores in shallow water.

Mr. CANNON. Are there any further questions, gentlemen?

Mr. WIGGLESWORTH. What about this other item in this break-down. "Ships and maritime property, "that was disposed of? The property cost $4,227,000 and sold for $3,443,000, or roughly 81 percent of its original cost.

Mr. KIRSCH. Those are figures of some previous month.

Mr. WIGGLESWORTH. I am talking about the item "Ships and maritime property, Maritime Commission."

Mr. KIRSCH. If I may, I would like to read you all the classifications of the disposals that we have made to April 30, by items, and then I can break that down as to percentages, if you wish.

We have disposed of boilers, winches, windlasses, capstans, small craft, ship equipment, maritime engines, spare parts, life floats. navigation instruments, miscellaneous wire end products, bells, and railway cars. The last is a special item, involving some railways cars that we purchased from the old Sixth Avenue Railway in New York which we had at a shipyard and later disposed of to the Southern Pacific Railway at 100 percent of what we paid the Sixth Avenue Railway for them.

Those are the items we have disposed of. The total disposal amounts to $6,091,210, as at April 30, 1945.

Mr. WIGGLESWORTH. Exclusive of the ships, of the small ships Mr. KIRSCH. Yes; that includes the small craft but not those disposed of by the W. S. A. under Public, 305.

Mr. WIGGLESWORTH. This shows $10,877,000.

Mr. KIRSCH. That is a combination of items. I am afraid th figure you have is a combination of what has been disposed of by th War Shipping Administration, under Public, 305, plus surplus materials disposed of by the Maritime Commission under the Surplus Property Act, Public, 457.

Mr. WIGGLESWORTH. That is $6,650,000?

Mr. KIRSCH. I do not know what that figure is. I do not have it but I imagine what you have is the combination figure.

Mr. WIGGLESWORTH. I got $4,237,000 under various items.

Mr. KIRSCH. What date is that?

Mr. WIGGLESWORTH. This was furnished us this morning. The date is in March, I believe.

Mr. KIRSCH. The figures I have been reading to you, Mr. Wigglesworth, are as of April 30.

Mr. WIGGLESWORTH. This is as of March 31.

Mr. MCNAMARA. The difference is due to the distinction between the small vessels and ships. The small vessels are disposed of by the War Shipping Administration under Public Law 305, and not under the Surplus Property Act. There are no funds requested in this estimate for that function. That is another regular administrative function of the War Shipping Administration. The statistical tables, however, include disposals of this nature, even though no part of the requested consolidated fund will be used for the expenses of such disposals.

Mr. DIRKSEN. Mr. Kirsch, if I remember correctly, you said you anticipated about $200,000,000 worth of surplus property would be declared to you this year.

Mr. KIRSCH. In the fiscal year 1946.

Mr. DIRKSEN. What would be the most difficult item to sell in that category?

Mr. KIRSCH. All these items are marine equipment, and when ships are not being built in large numbers, it will be difficult to find uses for items such as anchor windlasses, propellers, and so forth, except over a comparatively long period of time.

Mr. DIRKSEN. So you anticipate that the percentage of recovery will go down very materially and you will have more difficulty finding a market?

Mr. KIRSCH. We anticipate that of the $200,000,000 declaration we will sell $100,000,000 in the fiscal year 1946, and that our recovery on that $100,000,000 worth of material will be down to about $40,000,000; we anticipate about 40 percent.

Mr. WIGGLESWORTH. You will get about $140,000,000 for the $200,000,000?

Mr. KIRSCH. We will get about $40,000,000 for the $100,000,000. Mr. WIGGLESWORTH. In other words, you are going to sell $100,000,000 worth of property and expect to get $40,000,000?

Mr. KIRSCH. That is right.

Mr. WIGGLESWORTH. How much is it going to cost you to make that sale?

Mr. KIRSCH. The material that was declared surplus

Mr. WIGGLESWORTH. No; you have got it set up here at $3,500,000Mr. KIRSCH. $3,500,000 for handling declarations in the amount of $200,000,000, which includes the disposal of $100,000,000 of that $200,000,000.

Mr. WIGGLESWORTH. You hope to net about $40,000,000?

Mr. KIRSCH. Yes.

Mr. WIGGLESWORTH. Have you any green sheets of the personnel for your part of the Surplus Property break-down?

Mr. KIRSCH. No; I do not.