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come. Therefore, these privileges should not be limited in terms of time to December 31, 1949, as now provided by H. R. 2781. It is, therefore, respectfully requested that the printed bill be amended as follows:

On page 30, section 302, lines 14 and 15, strike out the words "until 12 o'clock noon, eastern standard time, December 31, 1949”.

In allowing public-benefit allowances permitted under section 13 (a) of the Surplus Property Act of 1944 and to assure the properties transferred being used for the purpose of transfer, most of the leases, deeds, and agreements concerning such property so transferred contain certain conditions governing the use of such properties and generally a reversionary clause providing that upon the violation of any such terms or conditions the title shall revert to the United States. These conditions generally extend over periods from 5 to 25 years and during such periods of time, educational needs will no doubt so change in many instances as to make it uneconomical and impractical to fulfill all of the specific conditions set forth. In most instances it will probably be to the interest of the Federal Government to vary the terms and conditions of such transfers and agreements so as to make them applicable to developing needs. As far as educational use is concerned, it is the opinion of the committee that the United States Office of Education would be the logical agency of the Federal Government to decide on any changes in such conditions.

It is also the opinion of our national committee that the said Office of Education should make recommendations as to the conditions on any future transfers of property for educational use. In order to accomplish the above, and if your committee does agree to the necessity for making provisions which will permit the continued use of these properties for educational purposes, we urge adoption of the following amendment to H. R. 2781 :

On page 15, after line 20, insert the following:

“(j) (1) The United States Commissioner of Education shall make recommendations on the transfer of surplus property appropriate for school, classroom, or other educational use pursuant to section 13 of the Surplus Property Act of 1944, as amended, or on any change in the provisions oï any lease, deed, or agreement concerning such property so transferred, and no transfer or change shall be made except upon recomendation of said Commissioner.

“(2) No provision in any agreement of sale, deed, or lease concerning surplus property transferred for school, classroom, or other educational use pursuant to section 13 of the Surplus Property Act of 1944, as amended, providing for the reversion of title to the United States upon noncompliance with the terms or uses specified in such instrument, shall be invoked except upon recomendation of the Commissioner of Education.”

It will be noted from a review of the above that as I previously stated our committee is not attempting to gain any new privileges for the educational institutions by the above-proposed amendments but merely seeking to assure that they will continue to receive the benefits which have been provided them by the Surplus Property Act of 1944.

Mr. HOLIFIELD. The subcommittee will stand adjourned.

(Thereupon, at 12:20 p. m., the subcommittee recessed subject to the call of the Chair.)

FEDERAL PROPERTY ACT OF 1949

TUESDAY, APRIL 12, 1949

HOUSE OF REPRESENTATIVES,
EXECUTIVE AND LEGISLATIVE REORGANIZATION
SUBCOMMITTEE OF THE COMMITTEE ON EXPENDITURES

IN THE EXECUTIVE DEPARTMENTS,

Washington, D.C. The subcommittee met at 9:30 a. m., Hon. Chet Holifield (chairman of the subcommittee) presiding.

Mr. HOLIFIELD. The committee will come to order, please.

I would like for the record to show the new member, Mr. Heller of New York, is present with us this morning. We certainly welcome him to the subcommittee's ranks, and hope he will be able to attend as regularly as possible.

Mr. HELLER. Thank you, Mr. Chairman.

Mr. HOLIFIELD. We have before us this morning a former chairman of the House Expenditures Committee, Carter Manasco, formerly of Alabama, and who has also served on the so-called Hoover Commission. We feel that we are very lucky to have Mr. Manasco come before us as a witness. We are going to ask you, Mr. Manasco, to proceed in whatever manner you may wish. STATEMENT OF HON. CARTER MANASCO, MEMBER OF THE COM

MISSION ON ORGANIZATION OF THE EXECUTIVE BRANCH OF THE GOVERNMENT

.

Mr. MANASCO. Mr. Chairman, I was made a member of this committee, when first elected to Congress. I think it is one of the most important committees in the House, if not the most important. The responsibility of this committee exceeds he responsibility of any other committee. The question of whether or not any money can be saved in the executive departments rests largely upon the action taken by this committee.

A few days ago I was looking over a chart in the Bureau of the Budget showing where the taxpayers' dollar goes. I was impressed by the fact that there are only a few places that economies can be practiced that will result in savings of the taxpayers' money. You cannot reduce the interest on the public debt without destroying our economy. That is fixed charge.

I do not think any Members of Congress will dare reduce the expenditures for veterans' benefits.

As long as the international situation is as touchy as it is now I doubt if we reduce—and I think there is some probability that we will in. crease the appropriations for national defense.

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We have other commitments. We do not want to do like we did when we took the lead in organizing the League of Nations and then ran out. We are now taking the lead in the Atlantic Charter, and there are certain commitments that go along, and if we do not carry through on those commitments we might be responsible for World War III if it ever happens.

When you add up all of the figures showing the expenditures of the taxpayers' dollar, and you eliminate those expenditures that I doubt very seriously can be reduced at the present time, there are only a very few places that money can be saved and economies practiced.

No one would suggest that we abolish the Department of Agriculture, the Department of Justice, the Department of Labor, the Department of Commerce, or the Interior Department, but if they were all abolished, and we were to abolish all of the functions of those several departments which I have enumerated, we would save less than $6,000,000,000. That is something I think that the average taxpayer does not take into consideration, when he says we can reduce the cost of the Government by 25 or 50 percent.

I remember a few years when we eliminated from an appropriation an item for gathering statistics for certain business organizationsand I have forgotten now what they were. I had quite a few telegrams about reducing the cost of the Government, in cutting down on our sprawling bureaucracies, and yet when we recommended cutting down about $500,000 for this organization, for gathering statistics, practically every businessman in the United States wired the Congress that the item must be restored.

There are a lot of people who say that we should reduce the expenditures for the Department of Agriculture, but we immediately run into strong opposition, as all of you members of Congress know. We all want to reorganize and reduce the expenditures as long as it does not put out of existence or affect our own pet agency. I have decided, after

I battling this reorganization question for several years, that about the only thing that everybody agrees could be reorganized, without destroying the necessary functions of Government, would be the operations of the Washington Monument.

The field that you are discussing here today has been neglected for years. When the Government first started out we had few employees, no typewriters, no telephones, and the men used to keep the files in their own pockets. They did not have the problem of storage, of filing facilities. The Members of Congress had no offices, and no office help; they kept their files in their own pockets. As I recall the first office building was opened for Members of Congress in 1909.

The Government has multiplied, billions and billions of dollars in cost since the turn of the century. That has taken place in the memory of every member of this committee. It is not going back. But there are fields where some economies can be practiced. The field of procurement and management of property is one of those fields.

You have three bills before you today. Frankly. I have not made a careful study of these three bills, but from a hasty reading of them I do not think there is much difference in the proposed legislation. I dare say that 90 percent of the provisions of each of the three bills appears in each individual bill.

We had before this committee, in 1943, H. R. 1610; I believe it was one of the first bills presented to the Congress, prepared by the Bureau

of the Budget, dealing with the problem of Federal supply. Most of the supply activities had been allowed to build themselves up in each agency. You have already had the history of the old Procurement Division that was set up by an Executive order. H. R. 1610 made an attempt to coordinate the procurement activities of the Federal Government, and also for the first time to try to bring into one piece of legislation the management and disposal of surplus property. We held extensive hearings in the House. Of course, the war was on at that time, and we thought that it possibly would be over that year, but, unfortunately, it continued for two more years, and we built up a tremendous surplus as a result of the war effort, that it was decided to abandon, for the time being, the organization of an agency to dispose of surplus on a permanent basis and set up a Surplus Property Administrator to deal with the problem.

Everyone realized that we needed permanent legislation, but everyone was so busy they did not take the time to try to work it out.

When the so-called task force of the Hoover Commission started to make suggestions—the task force was headed by Mr. Russell Forbes, a very able man-it went into the field of Federal supply in cooperation with the Bureau of the Budget and the other executive departments affected, and made many recommendations to change our supply system. Some of the recommendations are rather harsh, but on the whole most of them are excellent. The Commission did not accept all of its recommendations. Some of the findings were rather startling

For instance, they found out that it cost over $10 to process the purchase of a $10 item.

Mr. HOLIFIELD. Approximately $14, I believe.

Mr. MANASCO. About $14. That is not all due to the so-called bureaucratic red tape. A lot of it is the responsibility of the Congress itself, in passing restrictive laws, forcing the agencies to keep records and make records in order to prevent fraud.

A lot of people think that every person who is employed by the Federal Government has his hand in the Federal Treasury, and that if he is not carefully guarded by two or three armed men he will get away with the Treasury of the United States.

If I thought for 1 moment that were true I would say that the time has come for us to throw up our hands and let our Government collapse. I know that is not true. I think that you will find as many, if

I not more, sincere and honest men working in the Federal Government, doing comparable jobs with men in private industry, as you will find in private industry. Yet, practically every law governing the procurement and disposal of property is based on the assumption that the Government employees are crooks.

About 3,000,000 items are purchased annually, according to the survey, that cost $10 or less. Well, just assume, for the sake of argument, that each one of those items cost $10 to process; that is $30,000,000 that could be saved. I have confidence in the law-enforcement officers, the accounting officers of this country, and I think that if this so-called dishonesty is practiced by a few that the Department of Justice and the General Accounting Office can find those few, and it will not cost near so much of the taxpayers' money to protect us from the few frauds that would arise from time to time as it will cost

to carry on this cumbersome system of records and safeguards that we have at the present time.

Mr. HOLIFIELD. You believe it is possible to raise the limit then from $100 to some higher figure, possibly $1,000, as recommended in the report, under which you can allow contracts and purchases to be made without going through the burdensome procedure, regulation and red tape involved in the steps for the purpose of protecting the Government from fraud in the 47 percent of the purchases which double the cost.

Mr. MANASCO. I certainly do, Mr. Chairman. The Army is procuring between 5 and 6 billion dollars worth of materials annually. In 1947, I believe it was, we enacted a law, permitting the armed forces to make purchases of $1,000 or less without advertising. The civilian agencies purchase less than a billion dollars annually. If there is going to be any great deal of fraud, it looks to me like the armed forces would have the opportunity to have five times more fraud than the civilian encies. And if it is not efficient and not good for the civilian agencies, certainly it would not be good for the armed forces.

Mr. Chairman, I will not go into the report, and the findings of the so-called Hoover Commission. One of the former members of this committee, Mr. Clarence Brown, now a member of the House Rules Committee, covered that subject very thoroughly the other day.

You are considering, I assume, all of the bills that are before the committee on this particular subject. There is the so-called admin

istration bill, H. R. 2781, which is almost like Mr. Riehlman's bill, and almost like the bill that was drafted to attempt to carry out the recommendations of the Hoover Commission.

I notice in this bill, H. R. 2781, section 102, dealing with procurement, warehousing, and related activities, but there does not seem to be included in the bill authority—and if I am wrong please correct me—for the Administrator to assign to the different departments the authority and responsibility of making purchases.

Mr. WARD. Section 106 covers that point.
Section 106—but as I say. I have not carefully studied this bill--

Mr. HOLIFIELD. Subsection (c) of section 106 is the provision under which the Administrator may redelegate his authority.

Mr. MANASCO. Yes.

Mr. HOLIFIELD (reading): Except for the authority to issue regulations on matters of policy having application to executive agencies and the authority to make reorganization within the Federal Works Igency.

Mr. MIXASCO. I think that covers the subject. It also authorizes the Administrator to delegate to the heads of agencies the purchases of materials and equipment that are peculiar to the needs of that department.

Mr. HOLIFIELD. In fact, it continues the present practice. At the present time, as you know, the procurement of certain items are furnished to the civilian agencies.

Mr. MAXASCO. Mr. Chairman, what I am about to say now in no war is a criticism of General Fleming nor anyone connected with the Federal Works Agency. Personally I think General Fleming is one of the most capable administrators that I have known in the Federal

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