Evening star., 1946-08-26
'Jusfice0fficiiaI
WAA in
Surplus Gifts
Ruling Holds New
Nonprofit Schools,
Also Eligible

The Justice Department today
approved the War Assets Admin
istration practice of giving sur
plus property to nonprofit edu-
cational institutions.
The ruling. prepared by Acting
Attorney General J. Howard Nc
Grath at the request of War Assets
Administrator Robert M. Littlejohn,
also said newly formed nonprofit
institutions were eligible to receive
gifts of surplus property under the
Surplus Property Act.
While the Justice Department
said 1t was not ruling on specific
transactions, the gift which has at
tracted most public attention was
the 100 per cent discount sale" OF
Thunderbird Field No. l. near Glen
dale, Ariz., to the newly formed
American Institute for Foreign
Trade, headed by 1t Gen. Barton
K. Yount, U. S. A, retired.
Reply to Two Questions.
The Justice Department an
nouncement said the opinion was
in answer to two questions sub
mitted in general terms to the De-
partment of Justice In connection
with the disposition of surplus prop
erty to States and nonprofit edu-
catlonal institutions" The Justice
Department, according to the state
ment, was not asked and did not
give opinions of the merits of any
particular transaction.
WAA' last Thursday halted the
proposed transfer of So surplus
camps and war plants to educational
and health institutions as a direct
result of House Surplus Property
Committee disclosures on the out
right grant of Thunderbird Field
No. to Gen. Yount, the first trans
fer to be halted.
In asking the Justice Department
opinion, WAA officials indicated
they were considering abandonment
of such gifts.
Mr.. McGrath said:
| Section l3A (of the Surplus
Property Acb contemplates the
granting of discounts to nonprofit
institutions in cases where benefit Is
TO be received by the United States
from the proposed use. Once the
validity of the discount principal is
] admitted, it is impossible to con-
clude as a matter of. law that such
discounts must always and without
exception be less than 100 per cent.
regardless of the magnitude of the
benefit to be received by the United
States in the particular case.
New Institutions Not Included.
I can not, of course, make anv
statement as to how frequently this
SITUATION arises or to state that it
mas In fact arisen in any particular
case. 1t is enough for me to saw
tnat, under the law, the possibility
does exist that the situation under
reference will in fact occur and that
II and when it does occur, YOU are
authorized to grant an appropriate
discount.
The other question by Mr.. Little
John related to the grant of special
terms to new nonproflt institutions,
In answering this. Mr. McGrath
said the benefits of the act "were
not confined to institutions estab-
llshed prior to October 3. 1914. the
date of passage of the act"
He added that newly formed insti-
tutlons, certified by the Bureau OF
Internal Revenue as nonprofit edu-
cational institutions exempt from
taxation, were not excluded from the
benefits of the act by reason of
their recent creation.
] Special Attention Urged.
He stated. however, that the fact
an institution is newly formed
would undoubtedly lead the WAA to
give special attention to the good
faith of its founders and the merits
OF its general program"
4 Thunderbird Field was put up for
sale at $407,00 and the only bid. ac-
cordlng to WAA, was filed by Gen.
Yount. then on active duty, and 1t.
Col. Finley Peter Dunno, jr. SUBJ
seouently, WAA approved the 100
per cent discount. Gen. Yount and
Col. Dunno are president and secre-
Itary-treasurer respectively of the
school which had been scheduled to
open in September.
! Of the properties in addition to
i Thunderbird affected by the freeze
order, II had been recommended for
disposal as gifts and the other IS
were to have been transferred by
lease for nominal rentals as low as
Isl year. Estimated market value
lof the properties to be transferred
lby outright gift was $13,850,000.