DEPOSITED BY THE

UNITED STATES OF AMERICA

NOV 12

LETTER OF TRANSMITTAL

WAR ASSETS ADMINISTRATION, Washington 25, D. C., October 31, 1947.

The Honorable THE PRESIDENT OF THE SENATE:

The Honorable THE SPEAKER OF THE HOUSE OF REPRESENTATIVES: SIRS: In accordance with section 24 of the Surplus Property Act, there is submitted herewith the progress report for the third quarter of 1947.

Our conception of the size and nature of the remaining surplus disposal problem has changed greatly in recent weeks.

For some time it had been estimated that a total of $34 billion of property would ultimately become surplus for disposal by the War Assets Administration and the other designated selling agencies. About $5 billion of this amount, the owning agencies had informed me, depended upon certain military programs, such as Universal Military Training. But now we have been informed that, because of increased military stock levels, and the possible diversion of matériel from the Universal Military Training Program to other military purposes, the $5 billion will not be forthcoming. The estimated potential disposal problem through June 30, 1948, has therefore been reduced to $29.5 billion. Of this amount $28.2 billion already has been acquired from the owning agencies. The balance to be acquired, $1.3 billion, consists in large part of real property which is already in process of acquisition.

The task ahead is primarily one of disposing of inventories on hand. These totaled $7.6 billion on September 30. Taking into account the small new acquisitions expected, we foresee on June 30, 1948, an inventory of approximately $3.1 billion, nearly three-fourths of which will be real property.

The disposal job now separates into two sharply different types of activity. One is the rapid liquidation during the next 6 to 9 months of the remaining consumer and producer goods, aircraft, aircraft parts, and electronics. The other activity is the disposal of real property, and appurtenant personal property, requiring a program of several years duration.

Respectfully,

Administrator.

A. Joint Understanding with Respect to Machinery and Equipment under Public Law 364, Eightieth Congress (JANMAT)..

B. Digest of Major Changes in War Assets Administration Policy Regu

lations__

C. Operating Statistics__

FOREWORD

The peaks of activity in surplus disposal have been passed. Disposals, acquisitions, and inventories, as described in part I, are continuing to decline. Miscellaneous nonmonetary transactions, such as donations and transfers of machine tools for industrial reserve purposes, represent an increasing proportion of total disposals (part II). The major problem ahead is the liquidation of remaining personal property and the development of a long-run program for the disposal of real property. Changing methods of disposal for personal property, including wider use of competitive bid methods, accelerated warehouse clearance sales, and termination of certain sales through agents, are set forth in part III. Part IV describes some of the current problems being encountered in the disposal of real property.

With the marked reduction in inventories of personal property, field offices of the War Assets Administration are being combined and reductions effected in total operating costs and number of personnel. The ratio of total costs to the dollar recovery on sales is rising, however, as sales diminish and as the volume of donations, transfers, withdrawals, and other nonmonetary transactions increase in relative importance (part V).