about 6 weeks or 2 months ago, and the bid was 11 cents each. We didn't sell them, thought it wasn't sufficient, so we bid them again. We didn't get a bid at all on the last one. Now, we think that those should go on something like an auction sale where a private party would be interested in buying one, but wouldn't be interested in the entire lot. Mr. HOLIFIELD. Is there any reason why you shouldn't experiment a little bit along that line?

Colonel RAMME. No, sir; we plan to do that.

Mr. HOLIFIELD. We had a pretty good briefing the other afternoon about someone who picked up a few of these stoves from the service, and knew where to place them, and really did an excellent job in making a very nice return on the few dollars that he spent in buying those stoves.

Our committee has given a lot of study to, and thought to, the merchandising methods on that type of an item. Now, I don't suppose this base is going to be confronted with a lot of that type of material. Colonel RAMME. We don't have a lot of that, sir, but we have some Mr. RIEHLMAN. No, but there are some bases that have. And someone has to be schooled in the art of merchandising that type of equipment into the civilian economy and deriving the best return from it. I think a lot of study should be given to it. That is one of the reasons we feel that, in some of these areas, it would be well for the services to try either the auction or the spot bid program.

Colonel RAMME. We are going to try the auction, sir. Regulations provide that we will go to AMC for approval on each individual auction, and we plan to go in and ask for the authority.

Mr. RIEHLMAN. We had that brought to our attention on cots and also on the stoves. A certain person stepped in and bid very low on them, a sealed bid proposition, and turned right around, knew the channels in which to move them, and moved them out in the economy and made himself a splendid return on his investment-far more than we would like to see anyone derive from their investment in that type of equipment, if we could handle it through the services and get that money back into the Treasury.

Mr. MORRIS. How many addressees do you have on the bidders' list, do you know?

Colonel RAMME. We have 800, approximately, on the bidders' list, and the average number of invitations we send out runs from 300 to 700; 300 when we advertise vehicles and 700 when we advertise general salvage.

Mr. BALWAN. How do you build up your list?

Colonel RAMME. Well, we do a lot of letter writing, of course, to try to find out who is interested, and there is a circularization between AMC activities. If another depot finds someone who is interested, and they indicate there is no limit on the area they are going to go, they are added to the list.

Mr. BALWAN. Mr. Secretary, let me mention our experience getting into this study of surplus.

We asked the Navy how to get on the mailing list, and they gave us the names of all the individual bases to whom you wrote. They said we would have to get the information from them.

The Air Force said we couldn't write, that we ought not to write to the bases, but it should be done through headquarters. We did

that at about the same time, and we still are not on the mailing list for all the bases. We are having a hard time getting the Air Force catalogs in to us. I notice on their catalog they say that if you do not respond or acknowledge the receipt of this catalog, they'll drop you from the list.

I can't conceive, in advertising, that you should be concerned about the paperwork in advertising. The idea, it seems to me, is to get as many possible people, and make sure they get the thing; and not be worried about the paperwork involved or the loss of a catalog to a particular party. And that seems to be the kind of thinking we are involved in. We are extraefficient in the paperwork that goes out in these catalogs; the number of pages we use up; and not so much in terms of advertising and merchandising.

Colonel RAMME. We have prepared for the committee a complete list of our bidders to make available to you. We also have copies of our invitations to bid which we will make available to you and the bids that were returned and who bid on what, and what was sold. We also have material which has been sold and not yet delivered. And if you are interested, we can give you a copy of volume 13, AF Manual 67-1.

Mr. RIEHLMAN. We have that.

Mr. BALWAN. The question that comes in my mind is this: When we go to Warner-Robíns, we find that they sell nearly everything except scrap on spot bids, which requires no deposit, and they feel they get a much better return and much more interest since there is very little money tied up.

At Maywood, nearly everything is sold on a spot bid. Not nearly everything, but everything except scrap which must be put on a sealed bid.

And at this base, we don't have that.

We have all these diverse selling agencies which represent the bases and the depots throughout the country for the Air Force; and I am wondering what kind of an analysis has been made by Headquarters, AMC, of the success of these various merchandising methods. Or, are we going to depend upon Colonel Ramme for any ideas how they should sell here?

Colonel PACKARD. In the past we haven't compared depots or bases, but we are in the process now of working on a depot-by-depot analysis on percent return against acquisition costs, which will give us a comparison and/or a rating system. Then we can delve into the methods that they use in merchandising-spot, seals, or auction-and determine, for example, if this base is not doing as well as the others, and we will recommend that we try a spot sale bid or an auction whereas the returns have been greater from that. In line with our WarnerRobins meeting, we have invited in one of the national auction companies and have asked them to talk to our disposal people, no later than last week. We are going to attempt an auction. In the past we have not been too aggressive in this, but we are doing it now.

Mr. HOLIFIELD. The committee, of course, wants you to understand that we are not advocating any one method. We are advocating a flexible program of disposal to take advantage of every method of disposal which is considered to be the best for certain types of merchandise within certain areas.

Now, are you considering at all the agency type of disposal, which we had so much experience with in War Assets days? I am speaking now particularly of specialized lines of material which would not have an appeal to the general public.

Colonel PACKARD. Yes, Mr. Holifield, we have furnished you a staff study in accordance with Mr. Riehlman's request on the proposal by the National Aircraft Service Corp., and I could go into it at this time, but we feel the staff study is complete in its backup data. Generally, we do not recommend this system. We feel that the return to the Government, considering the cost involved, would not be worth while. I have a copy of the staff study which we will furnish to you. Mr. RIEHLMAN. Have you finished your presentation?

Colonel RAMME. I was finished, sir, because of the time limitation. We had on the tail end here just some other things we were doing outside the disposal field, but I thought because of the time limitation

Mr. RIEHLMAN. I think we'd just as soon skip that. Now, Mr. Balwan, do you have any other questions you would like to ask?

Mr. BALWAN. I think that covers everything. I wanted to go into the invitation 54-10.

Colonel RAMME. 54-10 is the one that is currently on bid.

Mr. BALWAN. Can you show us the lots when we go on this inspection trip and identify the items with the catalogs? Since I noticed one item there-item No. 73 is 38,260 pounds of food-rations, I presume. Is that right?

Mr. PECK. Yes, sir.

Mr. BALWAN. On sale, 54-6 which is an old one, item 15 included wire fence, and I was wondering whether that was part of the wire fence that our committee had looked into.

Colonel RAMME. No, sir; it definitely was not.

Mr. BALWAN. That wire fence was listed merely as assorted hardware at 4,110 pounds. I don't think it necessary to take any more time to find that out now, but if we can, in going around, identify the lots with these catalogs so that the members of the committee can see how they are advertising the material they have to sell. Another thing is that I hope we can get the two gentlemen we have with us to accompany us on this tour.

Mr. THOMAS. I think that is possible.

Mr. RIEHLMAN. I think, because of the lack of time, I have discussed with the general the possibility, when we conclude this discussion here, that we go immediately and have our lunch, after which we are to take a tour of the base and go directly to our plane. If, however, there is information that we are not able to pick up at that time, I am sure that the colonel can furnish us with it at a later date.

Before we close this portion of our visit here, I want to have on the record our appreciation, General, to you and your staff for the courtesies extended to use and the way your staff has been able to respond to the questions that our committee has asked, and the information that you have furnished us.

Also, I want to express my appreciation to John Moss, your local Congressman, for being able to join us here this morning. John, we are happy to have you with us. We are sorry that you aren't a member of our subcommittee so that you could travel around and get a

good smattering of this problem. I know that it is a bit new to you and I am sure your interest in this program is as great as any other Member of Congress.

I am also very happy that we have with us today Assistant Secretary Thomas. Do you have something you would like to say?

Mr. THOMAS. No, I don't think so, except I have enjoyed being on this trip and have learned a great deal from it. When we get back we can coordinate all these different ideas and suggestions and probably help you by giving you the benefit of the experience of other services in the other areas. It will be our job to properly coordinate and hope it will be helpful. I found this a very interesting trip and have learned a great deal from it.

Mr. RIEHLMAN. Of, course, I couldn't close without expressing my very deep appreciation to my good friend Chet here, with whom I have traveled considerably and who is one of our hard-working members of the subcommittee and who has had, for many years, a great interest in this surplus property program. Chet, do you want

to say anything before we go?

Mr. HOLIFIELD. No, Mr. Chairman, thank you. After that very fine compliment, I think we should let it stand just like it is.

Colonel RAMME. This afternoon, on the trip, now, do you want to go through the warehouses and see some property there?

Mr. RIEHLMAN. We would like to see, yes, several spots. We will line it up so we can go from one to the other so we will not take too much time,

SURVEY OF MILITARY SUPPLY MANAGEMENT AND SURPLUS PROPERTY DISPOSAL PRACTICES

FRIDAY, NOVEMBER 9, 1953

HOUSE OF REPRESENTATIVES,

MILITARY OPERATIONS SUBCOMMITTEE OF THE
COMMITTEE OF GOVERNMENT OPERATIONS,

Sharpe General Depot,
United States Army, Lathrop, Calif.

The subcommittee met at Sharpe Army General Depot, Lathrop, Present: Hon. R. Walter Riehlman, chairman of the subcommitpresiding.

Present: Hon. R. Walter Hiehlman, chairman of the subcommittee, and Hon. Chet Holifield, member of the subcommittee.

Also present: Michael P. Balwan, staff director, and Robert T. Morris, staff member.

Present from the Department of Defense, Washington, D. C.: Hon. Charles S. Thomas, Assistant Secretary of Defense (Supply and Logistics); Col. W. Hightower Smith, Deputy Chief, Investigations Division, Directorate of Legislation and Liaison, Office of Secretary of the Air Force (Special Department of Defense representative accompanying subcommittee).

Present from Sharpe Army General Depot, Lathrop, Calif.: Col. James B. Clearwater, QMC, Commanding; Col. William T. Brown, QMC, executive officer; Lt. Col. Gordon W. Cook, QMC, Quartermaster Supply officer; Lt. Col. Herbert B. Murnan, CE Engineer Supply officer; Lt. Col. Karl Robinson, TC, Transportation Supply officer; Lt. Col. Stanley K. Carter, QMC, Comptroller; E. F. Barron, Deputy Comptroller; Lt. Col. Edward F. Wilson, QMC, Chief, Miscellaneous Services Office; Maj. Julius D. Mellom, TC, executive officer, TSS; and Capt. Ivan M. de Garmo, QMC, Chief, Salvage Branch, MSO.

STATEMENT OF COL. JAMES B. CLEARWATER, COMMANDING OFFICER, SHARPE ARMY GENERAL DEPOT, LATHROP, CALIF.

Colonel CLEARWATER. Gentlemen, I am Col. James B. Clearwater, commanding officer, Sharpe General Depot.

I have assembled here the members of my staff who are ready and qualified to answer your questions. Should however your inquiries touch on matters for which we do not now have suitable information I will see to it that such data are made available later this afternoon or, if a longer time is required, be forwarded to you promptly.

I shall now ask the members of my staff to arise as I name them so that they may be identified (Colonel Clearwater introduces the officials named above).

To begin, Mr. Barron, the deputy comptroller, will give you a brief, topical description of the nature and work of this installation.