the Air Force's warehousing clearance problem, thereby making available the warehousing space required for new materials.

With approximately 1 million square feet of available warehousing, this group is confident that a very large percentage of this material can be held in readiness in the event of an emergency requiring the recall of older type aircraft. The preservation of some of the more valuable material declared in excess to the need of the Air Force after the war made it possible for the aircraft industry throughout the world to continue the operation of many of our present aircraft.

In addition, the Air Force has found it necessary to recall very large amounts of this material in order to continue its operation of older aircraft, particularly since the Korean operation. With the present international situation, consideration should be given to the conservation of any material that still has a value in any aircraft operation.

In view of the above and potential advantages based on past experience, it is suggested that the United States Air Force enter into a service test contract with the National Aircraft Service Corp. to perform the following functions:

1. Technically and commercially qualified personnel will assist the United States Air Force at the source of the material to inspect and segregate that which is considered salable and required within the aircraft industry both here and abroad from that which is considered of scrap value only.

2. The material considered to have a commercial or emergency value will be shipped by the Government to the nearest available warehouse facility of the National Aircraft Service Corp. on Government bill of lading.

3. National Aircraft Service Corp. will receive, inspect, record, and preserve in conformance with the United States Air Force technical requirements and practices now followed in this industry.

4. The material will then be offered for sale to the aircraft industry here and abroad, as well as to friendly foreign defense establishments, through regular aircraft industry channels.

5. Sales will be made at the highest prices obtainable consistent with practical market values, such prices to be agreed upon between National Aircraft Service Corp. and the Government.

6. All packing, crating, and shipping costs on sales will be the responsibility of National Aircraft Service Corp.

7. When the material is sold, the National Aircraft Service Corp. will retain for its services, as outlined above, 40 percent of the sales price and pay to the Government the balance of 60 percent. Settlement with the Government will be made monthly.

8. All records of National Aircraft Service Corp. shall be open to Government inspection and maintained in accordance with General Accounting Office practices and directives.

9. The material remaining in the inventory of National Aircraft Service Corp. will at all times be subject to recall by the United States Air Force.

DEAR MR. DWIGHT: With reference to your letter of May 6, 1953, which was hand carried to this headquarters by Mr. A. E. R. Peterka and Mr. Wilbur Wyrant on May 19, this matter of a service test contract with your company for the handling of surplus aircraft material has been given considerable study at this headquarters and has been discussed with Mr. Roger Lewis, Assistant Secretary of the Air Force. The results of our findings indicate that such a contract as you propose would not be possible as it is in conflict with the armed services procurement regulations and it is felt that such a proposal might be considered a violation of the antitrust laws of the United States. The plan as presented would result in duplication of effort in that present property disposal personnel would have to be maintained to handle such property as your company did not consider salable. The presently constituted disposal setup has proven to be highly effective and it is not felt that any change in this system is desirable.

I appreciate your interest in this matter for your suggestion of a means to handle surplus Air Force property, but in considering the foregoing facts, such a contract as you suggested cannot be entered into.

Sincerely,

E. W. RAWLINGS,

Lieutenant General, U. S. A. F., Commanding.

(For staff study furnishing basis for General Rawlings' letter, see appendix 2, p. 786.)

Mr. IKARD. Could we be furnished with the reports as they come along on this Springclean, showing what there actually is against the situation now? Not on this base, but all over.

Colonel PACKARD. Yes, sir; and we will furnish the other information.

Projected versus actual excesses restuling from project "Spring Clean"

1 From: Final Summary-Project Spring Clean.

2 Recapitulation of reports received from depots and bases indicating actual quantities transferred to excess account.

The Air Force classes reflected on this report are those on which recapitulation of actual excesses has been completed. Other classes are being completed as rapidly as possible.-(Excerpt from letter of January 29, 1954, from Brig. Gen. Joe W. Kelly, USAF, Director, Legislative Liaison, Department of the Air Force, to Hon. R. Walter Riehlman, chairman, Military Operations Subcommittee.)

Mr. COTTON. You will remember a moment ago I said that at the time the items are circularized they also go to the services, educational activities, the CAP, and the Boy Scouts. If the CAP indicates a desire for that property, they cannot get it at that moment. It must go through the General Services Administration. However, whatever is left after the circularization through the General Services Administration still may be available and those are then released. The General Services Administration circularizes the residue to the Department of Health, Education, and Welfare, and in Atlanta they circularize for 15 days.

The property not accepted by the Department of Health, Education, and Welfare is released by the General Services Administration to the holding activity as surplus property, and the base disposal officer disposes of it in the normal method by sale.

Mr. COTTER. Did you cover State donable property?

Mr. COTTON. This property which is released by the General Services Administration after it goes through the gauntlet of Government Services, is then released to the Department of Health, Education,