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I wish to ask you this question in regard to the veto by both Houses. An Attorney General said that such a thing would be unconstitutional He based that on the fact that if you are going to delegate that power then the veto power would have to be accomplished by a legislative act and you would not have a legislative act unless both Houses acted on it; because unless both Houses acted you would have not given the President anything; the Constitution itself has already given him the power to recommend.

If you are going to give him the power to legislate, then the veto ought to be by a legislative act and à legislative act is consummated only when both Houses will have passed upon it and agreed to it; and that is why the veto power by one House would be unconstitutional. According to a former Attorney General who so ruled, that was in the days when our party was not in power, if I remember correctly. I think that was good reasoning and I think that is good law. I think to put the veto power in one House after giving the President the power to legislate, is a vain act because you have not given him anything that he does not possess now. You have not been able to do the job in the past under a one House veto, because if I read the papers accurately, President Hoover had it and was unable to effect reorganization under it.

We either have to give him the power to legislate and, after he will have legislated, let that be vetoed by legislative act and not by veto of the House.

Mr. Brown. Of course, where this legislation was before the House I set aside my personal feeling and opinion because of the importance of giving the President power to reorganize it. But far be it from me to debate that point because it is a good many years since I left law school and I reformed and did not practice law but went into the newspaper business and politics where a man could be honest.

I would not want to set up my opinion and I would not want you to follow my opinion but I am not at all certain, Mr. Dawson, that the Congress of the United States under the Constitution can give the President the power to legislate and I do not think we are giving him the power.

Mr. HOFFMAN. Of course it cannot. Section 7 says that you have to have action of both Houses. Mr. Chairman, that is not before us this morning. And if we get into that, we will be here for 3 weeks.

Mr. HOLIFIELD. I thought we should allow our colleague the courtesy of replying to the learned opinion of our chairman.

Mr. BROWN. I am used to that.

Mr. HOFFMAN. We will have it up when the conferees make their reports. I am anxious to hear Mr. Brown when he comes back.

The CHAIRMAX. What about transportation?

Mr. Brown. I think it has been done. Of course we have a report on transportation and regulatory agencies whereby I dissented.

Mr. HOLIFIELD. Thank you, Mr. Brown. We will have you back again, I am sure. Mr. HOFFMAN. These other witnesses, are they on this bill?

Mr. HOLIFIELD. Yes. Mr. Gray, do you wish to make a statement on behalf of the Military Establishment ?

Mr. GRAY. I have a statement to make if you wish to hear it.

Mr. HOLIFIELD. I have three people listed for the Military Establishment, Mr. Carpenter, Mr. Niederlehner, and Mr. Gray. Which order would you gentlemen prefer!

Mr. GRAY. May I suggest that you hear Mr. Carpenter, Chairman of the Munitions Board, first, Mr. Chairman?

Mr. HOLIFIELD. Thank you.

Mr. Carpenter, will you please come over to this side of the table? STATEMENT OF DONALD F. CARPENTER, CHAIRMAN, MUNITIONS

BOARD, WASHINGTON, D. C. Mr. HOLIFIELD. You may proceed, Mr. Carpenter.

Mr. CARPENTER. Mr. Chairman, in accordance with the legislative procedures in the Military Establishment, the Munitions Board has been designated by the Secretary of Defense to furnish your committee the views of the Military Establishment with reference to the bill, H. R. 2781. This bill has been presented in accordance with an administration program to coordinate procedures within the executive branch of the Government relating to the procurement, use, and disposal of property. This program contemplates certain wise exceptions to over-all coordination which are of particular interest to the Military Establishment and to which Mr. Gordon Gray, the Assistant Secretary of the Army, will address himself in some detail.

The problems of procurement and distribution of property in the Military Establishment itself are sizable and, in fact, represent the greatest portion of the over-all Government problem in these fields. The Congress has considered these problems recently in connection with the National Security Act and the Armed Services Procurement Act, and under these statutes substantial progress has been made toward the desired objectives within the Military Establishment itself. The exceptions to which I have adverted recognize the vastness of the problem within the Military Establishment and the fact that a separate mean's has been provided to reach the desired results consistently with the peculiar responsibilities of the armed services.

In this connection I would like to invite the committee's attention to the fact that the Munitions Board has been established under the National Security Act as a successor agency to the Joint Army-Navy Munitions Board, and it is the duty of the Board to coordinate activities within the National Military Establishment in respect to all industrial matters including the procurement, production, and distribution plans of the departments and agencies; to assign procurement responsibilities among the military services, and to allocate purchase authority on the basis of single-service procurement, joint procurement, or collaborated procurement; to plan standardization of specifications; and, perhaps most significant, to plan for the military aspects of industrial mobilization. This latter duty requires the implementation of planning in peacetime in order that it may be effective in time of possible future emergency.

The Munitions Board, through its cataloging agency, is presently engaged, in cooperation with the Bureau of Federal Supply, in a longterm plan to create a single catalog for the armed services and the civilian Government agencies.

The problems of the Military Establishment are not only unique, but involve the greatest amount of activity, so far as the Government is concerned, in the fields which are covered by this bill. At the same time, the importance of national defense is such that these problems must be met with a minimum of intervention. With this in mind, specific provisions have been made in pending legislation to recognize these problems, and I should like the committee to hear Mr. Gray in some detail on the specific exemptions covered in the bill.

Mr. HOFFMAN. I would suggest, Mr. Chairman, that we go along and then when the period for questioning comes along Mr. Anderson be allowed to speak.

Mr. ANDERSON. Mr. Chairman, I do not wish to impose on the committee because I will be here to testify next week.

Mr. HOLIFIELD. I think that the suggestion is very good that if you wish to participate in the questioning you may do so. We do want to have you come back before the committee next week.

Mr. HOLIFIELD. We will hear from Mr. Gray at this time.



Mr. GRAY. Mr. Chairman, my name is Gordon Gray and I am Assistant Secretary of the Army. I appreciate the opportunity of appearing before this subcommittee to state the position of the National Military Establishment on the pending bill. My views represent the coordinated position of the Departments of the Army, Navy, and Air Force.

I can also say that the Director of the Bureau of the Budget, with one exception to which I will advert as I go along, advises that there is no objection to the presentation of this statement.

Last year a thorough consideration was given in the Senate committee to certain portions of this type of bill relating to the Military Establishment and I should like to indicate briefly this morning some of the reasons for the position which the Military Establishment took in regard to that bill before the Senate last year.

The report of the Hoover Commission has been referred to previously in the course of your subcommittee's hearings. We would be in general accord with these recommendations also, although there are differences in approach, in that the present H. R. 2781 takes an over-all approach to the Government problem with what we interpret to be a very broad exemption for the Military Establishment on the basis of national defense, whereas the Hoover Commission proposes to centralize the system of general procurement among the civilian agencies of the Government with coordination of military and civilian activities at the level of the Administrator of General Services.

In connection with the bill H. R. 2781, I would like to turn first to the problem relating to the disposition of surplus property. The armed services must, of necessity, be looking forward; and we think that the consideration of the many factors which must be made in connection with the disposition of surplus property is well vested in a single agency.

In addition to provision for a central system of control, the military establishment would be in favor of providing an agency for actually effecting sales of surplus property, to take the place of the War Assets Administration, which it is proposed to liquidate.

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The treatment of foreign excess property presents somewhat of a different problem, since the responsibility for its disposition is vested by the bill in the owning agencies, but the disposal of foreign excesses is so thoroughly affected by the Nation's foreign policy that numerous controls

upon the activities of the owning agencies must be exercised

Department of State to insure compliance with the foreign policy.

Mr. HOLIFIELD. Mr. Gray, may I ask you to pause for a moment there?

Mr. GRAY. Yes.

Mr. HOLIFIELD. Would you prefer to complete your statement or would you like to have questions as you go along?

Mr. GRAY. As you wish.

Mr. HOLIFIELD. Would you answer this question? You in effect approve the Hoover Commission report which gave no control at all on the part of the civilian procurement over items of common use in the Military Establishment. You therefore disapprove of section 107 of H. R. 2781 because it does provide that with certain exemptions requested by the Secretary of the National Defense that the agency we are setting up here, or the correlation of agencies, will be authorized to buy articles of common use for both civilian and military use?

Mr. Gray. Well, I think, Mr. Chairman, I will probably answer that question later on in my statement, but let me say this that I am not here opposing this bill. This bill simply follows a different approach, and that followed by the Hoover Commission would have been just as satisfactory. We are not opposing it, although I have a couple of technical amendments.

Mr. HOLIFIELD. Thank you.
Mr. GRAY. Your point will be covered as I proceed, sir.

The possible diversion of military personnel from their primary missions, for the handling of surplus which continues to be generated in overseas areas, presents some difficulties. In other words, our mission is not primarily that of disposing of property.

Mr. HOLIFIELD. May I ask you to pause for a minute there?
Mr. GRAY. Right.

Mr. HOLIFIELD. Is this property being generated in appreciable quantities at this time and is there a large residue of this property? What is the magnitude of the job?

Mr. GRAY. I might say, Mr. Chairman, that I regret that I learned of my expected appearance before this committee on such short notice, 10 minutes before 9 this morning, that I did not have time to develop those figures, but to give you an indication of the magnitude of the problem, perhaps I can give you some figures which I used a year ago.

Mr. HOLIFIELD. Now, unless those figures are up-to-date they would be useless to this committee unless they are brought up-to-date because we have had testimony from the State Department that the supply of surplus property under this control is down to a minimum.

Mr. GRAY. That is correct, there is not very much to be generated. One of our problems is dealing with perhaps negotiations relating to certain contracts that have already been entered into by the Foreign Iiquidation Commission such as bulk sales to Chinese and Philippines for which, speaking very frankly, we would prefer not to have the responsibility. Negotiation was carried on in the past by the

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F. L. C. As far as future generation is concerned, there remains perhaps very little unless there should come a great change in the international situation where there might be substantial surpluses and excesses.

The figure I was about to quote was one that would indicate how much of the total has been declared and how relatively little at the moment seems to be involved. You already have those figures in the record so I will not bother with them.

Mr. HOLIFIELD. I do not think it will be necessary because I believe that the State Department furnished us those figures in their testimony the other day.

Mr. GRAY. Well, Mr. Chairman, I indicated at the outset that with one exception this statement had been cleared with the Bureau of the Budget. I have no reason to believe that the Bureau of the Budget would have reason to object to this statement but they have not had opportunity to read it. With your permission I would like to read a statement which I read before the Senate committee which states the principles under which we would like to operate in the foreign excess property field.

Last year we had arrangements with the Bureau of the Budget after conferences with the President and other military services which established the following principles (reading]:

One, surplus property generated after June 30, 1948, not included under sales contract or negotiations in process shall be the responsibility of the owning agencies for disposal.

I might say that these dates would have to be changed to bring them up-to-date.

In other words, that is property to be generated in the future, would be the responsibility of the owning agency. [Continues reading:]

Two, surplus property generated prior to June 30, 1948, which is not included under sales contract or negotiations in process on June 30, 1948, will be the responsibility of the owning agencies for disposal.

Three, the State Department will not, after June 30, 1948, initiate any new negotiations for the sale of surplus property.

Four, negotiations initiated by the State Department and in process on June 30, 1948, will be concluded either by reduction to contracts or cancellation by December 31, 1948.

In other words, if the State Department was in June engaged in negotiations and had not concluded them by December by contract then the negotiations would be canceled.

Five, the State Department will expedite the completion of all contracts under its jurisdiction with a view that the maximum number of such contracts will be advanced to such a stage that they can be turned over to the Treasury Department for billing and collection.

Six, the State Department will administer any contracts entered into by the State Department prior to December 31, 1948. However, contracts which have not been turned over to the Treasury Department and which require continuing administration will be subject to review by the interested parties on or before December 31, 1948, to determine whether responsibility for the continued administration of these contracts should be continued by the State Department.

Then I also said at that time, and I would like to read it into the record here, if I may, as follows:

It is our hope that the Department of the Army, and of course the Navy and the Air Force, will never find itself in the position, as a result of this legislation, of having to deal with foreign governments in connection with the administration or renegotiation of bulk sales contracts already entered into by the FLC. We

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