Evening star., 1945-05-13
German Surrender Poses
Crucial Surplus Problem
Task Undertaken by Commerce Department Beset
by Peril of Initiation if Delayed and
Depression if Rushed
Bv Robert J. Leyis

Department of responsibility for dis.
vast, complex and crucial disposa
problem to level of extreme urgency
Now that victory in Europe is com
plete, increased amounts of war good:
in all categories will be declared surplus
by the armed forces. The total de-
clared by the time Japan is defeated
will be astronomical-probably 20 times
the size of all World War leftovers.
How the hazard of liquidation is met
will undoubtedly have vital bearing
on the Nations postwar economy and
the goal of full employment. A badly
managed disposal program naturally
could also influence the worlds eco
nomic well-being and the entire field OF
international cooperation.
The phase of the disposal job in
herited by Secretary of Commerce Wal
lace is one of the most important in the
surplus property picture. Perhaps as
no other aspect, consumer goods sales
may affect economic relationships in
the period of delicate adjustment just
ahead and until long after reconversion
is completed following the conquest of
Japan.
Two-Way Threat.
On the one hand, say economists,
there stands the peril of dumping"
goods on the market and thus discourag-
ing new production; on the other, the
danger of withholding goods in such
quantity as to threaten artificial scarcity
and price imitation, with the later posi-
bility of a severe drop in prices and de-
preston in case a public outcry should
force the surplus on the market in a
flood.
On assuming responsibility May for
disposal of consumer goods, Secretary
Wallace stated he planned no signifl-
cant changes" at present. 1t is evident
from this statement that he intends to
pursue the same caution on institut-
ing administrative and policy shifts in
this new field that has characterized
his first 10 weeks as head of the Com
merce Department.
In the cabinet post to which he was
appointed by the late President RooSe-
welt and confirmed only after historic
congressional battle in which the de-
partment was shorn of jurisdiction over
the multibillion dollar Federal loan
agencies, Secretary Wallace has pro-
ceeded slowly, making few personnel
changes and spending considerable time
on inspection tours of bureaus and
study of departmental functions
The aspect of surplus disposal trans
ferred to the Commerce Department was
handled previously by the Treasury De-
partment's Office of Surplus Property.
That Office is one of dozen disposal
agencies designated so far by the Sur
plus Property Board, overall disposal
agency created by the Surplus Property
Act of october 8, 1914, to direct and
supervise liquidation of leftover war
material.
Ex-senator Gillette Chairman.
The board, Of which former Senator
Guy NJ. Gillette of Iowa is chairman,
took over the functions of. the Surplus
War Property Administration created
by an executive order of February 19,
1914, and formerly headed by Will P.
Clayton, now an Assistant Secretary of
State.
Remaining in direct charge of the
Office of Surplus Property is A. U. Fox,
who first went to the Treasury Depart
ment in 1941 as deputy director of For
eign Funds Control after having been
managing partner of a brokerage firm
operating in the Far East. Undersec-
retary of Commerce Alfred SCHNEIDER, a
businessman who formerly served as
administrative assistant to Mr. Wallace S
predecessor, Jesse Jones, will now have
general supervision of OSP.
The inventory of surplus consumer
goods on hand at the end of March stood
at $106,793 900, and gave the Com
merce Department the second largest
category OF property now available for
disposal. The Reconstruction Finance
Corp, with an inventory of 81 ,255, 1854, 600,
has control over by far the largest share
of the total of s1,399 283 900 in surplus
property. The present comparatively
small remainder is spread among such
agencies as the Maritime Commission,
Foreign Economic Administration, Fed
eral Works Agency and others.
RFC Holds Bulk.
The six largest classes of property now
In the surplus category-aircraft and re-
lated parts, Woodworking machinery,
industrial plants and real estate, real
estate other than industrial, communi-
cations equipment and steel-are held
by the Reconstruction Finance Corp,
Seventh, tenth and thirteenth largest
classes of present surplus-which are
motor vehicles and parts, miscellaneous
end products of manufacturing industry
and construction, mining, excavating
and related machinery, respectively
are held by the Commerce Department.
Bulking as by far the largest class of
all present surplus is the RIGS hard
to-dispose-of aircraft and related equip
ment, which represents, roughly, 10 per
cent of the total.
Though having less than 10th of the
inventory held by the RFC, the Com
merce Departments surplus property
agency disposed of goods valued at only
slightly less than that disposed of by
RFC in the nine-month period ending
February %. In that period OSP dis
posed of surplus valued at $1O3 ,211 900,
In contrast to disposals of $113,949, 900
by the RFC.
The only significance of these COM
parative figures, of course, is that they
show the relative present activity of
the two largest disposal agencies and
indicate the Importance of consumer
goods in the overall operation. As the