usable and necessary for such purposes, he shall allocate it for transfer by the Administrator to the appropriate State agency for distribution to such educational activities. If he determines that such property is not usable and necessary for such purposes, it may be disposed of in accordance with any other paragraph of this subsection.

"(3) In the case of surplus property under the control of the Department of Commerce, the Secretary of Commerce shall determine whether such property is usable and necessary for exploratory fishing, the enforcement of State or Federal fishery conservation laws in coastal or international waters, or the propagation and rearing of migratory fish, by State agencies. If he determines that such property is usable and necessary for any such purpose, he shall allocate it for transfer by the Administrator to the appropriate State agency for distribution for use for such purpose. If he determines that such property is not usable and necessary for such purposes, it may be disposed of in accordance with any other paragraph of this subsection.

"(4) Determination whether such surplus property (except surplus property allocated in conformity with paragraph (2) or paragraph (3) of this subsection) is usable and necessary for purposes of education or public health in any State shall be made by the Secretary of Health, Education, and Welfare, who shall allocate such property on the basis of needs and utilization for transfer by the Administrator to the appropriate State agency for distribution to (A) taxsupported medical institutions, hospitals, clinics, health centers, school systems, schools, colleges, and universities, (B) other nonprofit medical institutions, hospitals, clinics, health centers, schools, colleges, and universities which are exempt from taxation under section 501(c)(3) of the Internal Revenue Code of 1954.

"(5) Determination whether such surplus property (except surplus property allocated in conformity with paragraph (2) and paragraph (3) of this subsection) is usable and necessary for civil defense purposes in any State shall be made by the Federal Civil Defense Administrator, who shall allocate such property on the basis of need and utilization for transfer by the Administrator of General Services to the appropriate State agency for distribution to civil defense organizations of such State, or of political subdivisions and instrumentalities thereof, established pursuant to State law. The provisions of sections 201 (b), 401(c), 401 (e), and 405 of the Federal Civil Defense Act of 1950, as amended, shall apply to the performance by the Federal Civil Defense Administrator of his responsibilities under this section.

"(6) The term 'State', as used in this subsection, includes the District of Columbia, the Commonwealth of Puerto Rico, and the territories and possessions of the United States."

Senator GRUENING. This morning the subcommittee is embarking upon a new topic, the disposal of foreign excess property to donees abroad, and also on the terms and conditions under which some of this foreign excess property may be returned to the United States for sale here.

The subcommittee is interested in learning the amount of foreign excess property that is now being generated, how much of such property it is anticipated will be generated in the future, what disposition is now being made of this property, the kinds of property generated, its potential use, alternative methods of disposal, how, if at all, the foreign excess property disposal program would be coordinated with the domestic donable personal property program, and any other information which will enable the subcommittee to arrive at sound conclusions with respect to its action on the bills referred to it.

STATUS OF S. 2442

Last year, in executive session, the subcommittee determined that it had insufficient facts before it to take action on S. 2442, a bill which I, together with Senator Bartlett, introduced to enlarge the categories of eligible donees under the donable property program in Alaska.

Subsequently, pursuant to authority given by the chairman of the Senate Committee on Government Operations, I undertook an investigation of the donable personal property program in Alaska. I have filed a report of that investigation, and printed copies are available to those who are interested.1

I mention this investigation at this time because the findings reached as a result of that investigation have a direct bearing upon some of the bills on which testimony will be taken today relating to the enlargement of the eligible donees under the donable property program in all the States.

In that connection, it should be noted that in my report I recommended, among other things, the following:

The subcommittee immediately undertake a thorough study in depth of the Federal personal property disposal program in other States and abroad, such a study to include a thorough review of all procedures of all departments and agencies involved in the program in sufficient detail so that the subcommittee can fully evaluate the operations of the program. This study should include actual field inspections of Federal and State installations in sufficient number to obtain as comprehensive a review of the program in operation as possible. In addition, a definite attempt should be made to ascertain whether or not there are "slippages" of significant proportions in the donable personal property program, and, whatever the source, whether there is any considerable amount of surplus personal property now being sold which could be used by other donees if the classes of eligible donees under the donable personal property program were enlarged.

Accordingly, in connection with testimony on S. 2605 and S. 3288, the subcommittee will be interested in hearing comments on thisand other recommendations--contained in my report to the chairman. We have a number of witnesses today, and I understand, also, that Senator Hart is here. We shall be very happy to hear him. We are very glad to see you, Senator.

Senator HART. Good morning, and thank you for having me. Senator GRUENING. Come forward and give your testimony in whatever way you prefer, Senator.

STATEMENT OF HON. PHILIP A. HART, U.S. SENATOR FROM THE STATE OF MICHIGAN

Senator HART. Mr. Chairman, for all who will follow, I will say what I know all of them feel, that we are very grateful to you for your willingness to grab hold of what we think is an area requiring not only additional study but immediate action.

We are grateful to you for scheduling hearings on S. 2732 which Senator Bartlett and I introduced in September of last year, which, as you know, would permit the donation of foreign excess property for use in foreign countries for educational and health purposes.

The need for this legislation was called to my attention by a specific incident—which apparently is the way most of us learn. Last summer, a doctor at the Providence Hospital in Detroit wrote me that he hoped to establish a hospital in the Upper Volta region of French West Africa. He asked me if foreign aid was available for such a project and, if not, whether I could help him locate quonset huts for such an undertaking.

1 Committee print entitled "Investigation of Donable Personal Property Program in Alaska," dated May 18, 1960.

Discussion with various Federal agencies confirmed my understanding that our foreign aid program is only on a government-togovernment basis; that there is nothing in present law to authorize the donation of surplus property overseas to nongovernmental groups unless the property is of no commercial value; that surplus U.S. property overseas is sizable in amount and could be put to useful purposes; that the present practice of destroying property which, under a bill such as S. 2732, might be donated is harmful to our foreign relations; that a sound policy for disposing of this property would be welcomed by the Armed Forces, by the agencies responsible for improving our international relations, and by those groups and individuals who concern themselves with their fellow man.

The present law, Public Law 152, 81st Congress, states in section 402 that the head of the executive agency concerned

may authorize the abandonment, destruction, or donation of foreign excess property under his control which has no commercial value or the estimated cost of care and handling of which would exceed the estimated proceeds from its sale. The bill we offer would make it possible for the head of each executive agency having excess foreign property to donate such property for purposes of education or public health, including research for either

purpose.

DISPOSAL OF SURPLUS PROPERTY OVERSEAS

The Department of Defense informs me that it is annually disposing of surplus property abroad, the original acquisition cost of which is $1 billion. Of this, I am told that 55 percent or 60 percent is scrap and of no value. This leaves about $555 million annually. That is on the original acquisition cost basis. If we were to donate the same proportion overseas that we donate of the surplus property within the United States; namely, 10 percent, it would mean an annual potential of $55 million. Although I have been unable to obtain a breakdown of this figure in terms of kinds of property, it is obvious that we are dealing with something that could bring a significant return in good will abroad; and, more tangibly, it would be a promotion of economic development in those areas and an improvement in the living standard in those countries, and at very little expense to the U.S. taxpayer. I think the loss of revenue would be very small, since the Assistant Secretary of Defense for Supply and Logistics has testified that the cost of processing materiel for donation is considerably less than the cost of processing for sale; and, of course, the leadtime is also less.

S. 2732 specifies that the agency heads shall be subject to overall policy control by the Secretary of State in this program, and provides that the determination whether such foreign excess property is usable and necessary for the purposes specified shall be made by the President or his designee. The bill lists as possible recipients of the property the following: Nonprofit or tax-supported medical institutions, hospitals, clinics, health centers, schools, colleges, and universities. Preference is to be given to the organizations directly or indirectly founded, sponsored, or supported by American citizens. Otherwise, no property is to be donated except to an agency designated by the foreign country involved.

57809-60- -2

We realize those whose experience is great in this area-and many of them are to testify before you today-can make helpful suggestions for improvement in the bill and its administrative provisions. We want to see this surplus used to help raise standards of health and education and thus of living in areas where our abundance is evident. I know your committee will look kindly on this idea and I hope will act favorably on legislation to this end before this session of Congress is concluded.

Senator GRUENING. Well, Senator Hart, certainly the objectives of this bill are undeniably worthy, and we will certainly give it the fullest consideration.

I wonder if there are any sections in this bill, either actual or proposed, that will prevent the execution from falling into some of the errors and wastages of our foreign aid program. I think it is quite important that we safeguard this as much as we can, at the same time without delaying the expedition in respect to this usable property if the committee should decide in favor of this bill?

Senator HART. No one in this Congress has been more eloquent in his illustrations of waste in the foreign aid program than has the chairman of this subcommittee, and I would share with him the hope that safeguards could be provided. Several approaches occur to us immediately: Certification, postaudit, use to which put, basic agreement between the U.S. agency which makes the disposition of the property with the receiving agency of the foreign government, permitting a postaudit.

I think we ought to be careful, in our concern lest there be waste or misuse, not to so formalize the operation that we provide more headaches because of the redtape we build in than we are saving ourselves embarrassment and misuse. I am sure that the ICA, for example, can make some suggestions as to administrative methods. I know that Senator Humphrey has introduced a bill aimed in the same direction as the bill that Senator Bartlett and I have submitted. We have slightly different approaches in our methods of handling this, but it seemed to me-and this would reply directly to your question— that the last four lines of S. 2732, which provide that

The President or his designee may provide for the imposition of reasonable terms, conditions, reservations, and restrictions upon the use of any property donated under this section

give us the handhold with which any conscientious administrator would find the means of insuring against improper use.

Senator GRUENING. I think that is true.

It might be useful, and I am going to ask the subcommittee staff to secure a list of the organizations and institutions abroad which have been sponsored or supported by American citizens. We are all familiar with some of these institutions.

Senator HART. Yes.

Senator GRUENING. If we had a complete list and could estimate their distribution and character, it would further facilitate our action on this bill. I think that should be done, Mr. Shriver.2

Mr. SHRIVER. Yes, sir.

Senator GRUENING. Thank you very much, Senator Hart.

2 This information has been incorporated into the files of the subcommittee.

Senator HART. Thank you again, sir.

Senator GRUENING. We certainly appreciate your remarks.

Senator HART. May I add for the record as a case study in how things happen the correspondence which produced my interest in this? It begins with this letter by Dr. Henry A. Archambault of Providence Hospital in Detroit.

Senator GRUENING. Would you like to have them put in the record at this point?

Senator HART. Or the committee file, whichever you would prefer. Senator GRUENING. Well, if you would like to have them in the record, we will incorporate them at this point. Senator HART. Very well; thank you. (The material referred to follows:)

Hon. PHILIP A. HART,

U.S. Senate,

Washington, D.C.

PROVIDENCE HOSPITAL, Detroit, Mich., June 16, 1959.

DEAR SENATOR HART: As I was formerly a Detroit doctor and now practicing in Ghana, West Africa, I would appreciate help from you on the following matter: There is a great need for a hospital in the Upper Volta region of French West Africa. Already permission has been granted to the bishop for the erection of this hospital. Due to the high cost of erecting permanent buildings our solution at the present time would be to use quonset huts. Is foreign aid available for such a project in undeveloped countries? If not, would you help us to locate (surplus) quonset huts to be shipped over there. I am grateful to you for this information.

Very truly yours,

HENRY A. ARCHAMBAULT, M.D.

JULY 14, 1959.

Dr. HENRY A. ARCHAMBAULT,

Providence Hospital,

Detroit, Mich.

DEAR DR. ARCHAMBAULT: Thank you for letter of June 16, 1959. I am looking into the possibilities for foreign aid for a hospital in Ghana, and you will hear from me as soon as I have something to report.

This is a project to which I would like to give an assist.
Sincerely,

PROVIDENCE HOSPITAL, Detroit, Mich., July 17, 1959.

Senator PHILIP A. HART,

U.S. Senate Building,

Washington, D.C.

DEAR SENATOR HART: Thank you for your letter of July 14, 1959. However I hope that my first letter to you was not misleading. I have spent more than 4 years in Jirapa, Ghana, and will soon be returning there. However, I am presently doing all that I can to help establish a hospital in the Upper Volta region of French West Africa. It is for this purpose that I have asked you to help in locating some quonset huts.

Any help that you can give to me in this matter will be greatly appreciated. Sincerely,

HENRY A. ARCHAMBAULT, M.D.

JULY 21, 1959.

Dr. HENRY A. ARCHAMBAULT,
Providence Hospital,

Detroit, Mich.

DEAR DR. ARCHAMBAULT: You need not worry, I understood your letter and the inquiry was correctly conveyed to the International Cooperation Adminis