In respect of the vessels noted in (a) above it is assumed that the determination that the vessels are in salvage condition carries with it the connotation that any sale of these vessels will be made for scrapping purposes only. It is likewise assumed, in connection with all the property listed above, that the screening process has been comprehensive in that it has taken Mutual Defense Assistance requirements into consideration. Subject to the above assumptions being correct the Department concurs in the proposal for disposition of the foreign excess property as outlined in your letter provided that appropriate measures are taken to assure that such of the property as is of a strategic nature will not come into the possession of those whose interests are inimical to the interests of the United States. It is understood that the provisions of the Department's letter of November 28, 1950 will govern in the event that deutschemarks are received for any portion of the property sold. Sincerely yours, CARROLL M. MEIGS, Acting Chief, Lend-Lease and Surplus Property Staff. WASHINGTON, D. C.-BRIEFING EXHIBIT 8 Hon. HERBERT C. BONNER, DEPARTMENT OF STATE, Washington, October 18, 1951. House of Representatives. MY DEAR MR. BONNER: During the course of the testimony given before your committee on Thursday, October 11, 1951, by Mr. Francis T. Murphy, chief of the Department's lend-lease and surplus property staff, and Mr. Carroll M. Meigs, a member of that staff, certain supplementary information was requested by your committee. In discussing the functions of the Department in connection with title IV of Public Law 152 the committee requested examples of the type of clearances given by the Department to other executive agencies disposing of foreign excess property which would indicate the type of control exercised over disposals. Attached are copies of six typical letters to the Department of the Army which illustrate the conditions under which the Department approves disposals of major quantities of foreign excess property. It may be that your committee will wish to insert one or more of these letters in the record. Information was also requested as to the procurement cost to the United States of surplus property sold to Japan under the various contracts for which the return to this Government will be slightly over $14 million. The total procure ment cost of the property sold to Japan was slightly over $511⁄21⁄2 million. Attached is a tabulation giving the detailed breakdown of procurement cost and sales price for the five contracts under which surplus property was sold to Japan. It may be of interest to the committee to note that the return to the United States Government was slightly over 27 percent of the procurement cost. A request was made for the name of the Japanese agency which disposed of the property after it was purchased from the Office of the Foreign Liquidation Commissioner. All of the sales contracts were signed on behalf of the Japanese Government by officials of the board of trade (Boeki Cho), an agency of the Japanese Government which at that time controlled all export and import trade permitted by SCAP. This agency bought and sold in world markets and controlled the distribution of imports to the Japanese population. This function has now been largely returned to private concerns. I trust that the foregoing information will prove useful to your committee in connection with its investigation of surplus property disposal practices. Sincerely yours, JACK K. MCFALL, (For the Secretary of State). (Enclosures: (1) Tabulation, contracts made by the Office of the Foreign Liquidation Commissioner with the Japanese Government; (2) Six letters to the Department of the Army as noted above.) Contracts made by the Office of the Foreign Liquidation Commissioner with the Japanese Government 1 Inasmuch as this material was classed as "salvage," no procurement cost was listed on the declaration; however, sales price was based on 15 percent of known procurement cost. DEPARTMENT OF STATE, Brig. Gen. PATRICK H. TANSEY, CSC, Office of the Assistant Chief of Staff, G-4 Logistics, MY DEAR GENERAL TANSEY: Reference is made to your letter of August 16, 1951, transmitting information concerning the Department of the Army's anticipated sale for dollars of foreign excess property in Germany. The property in question was described as follows: Your letter notes that 700 firms in the United States and foreign countries are prospective bidders. Your letter likewise states your understanding that the High Commissioner for Germany interposes no objection to this sale. The foregoing information was forwarded so that this Department might examine the proposal in relation to the foreign policy of the United States and make any comment which might be appropriate in view of this Department's responsibility under section 401 (a), Public Law 152, Eighty-first Congress. It is assumed that the screening process has taken mutual defense assistance requirements into consideration or that the deteriorated condition of the rations has precluded their use by the military forces of any nation receiving mutual defense assistance. It is likewise assumed that a sale will be made under safeguards adequate to insure that the property will not be used in a manner contrary to the best interests of the United States. Subject to the above assumptions being correct the Department concurs in the proposal of disposition of foreign excess property as outlined in your letter. Sincerely yours, CARROLL M. MEIGS, Acting Chief, Lend-Lease and Surplus Property Stuff. Col. JACK H. WESKE, GSC, DEPARTMENT OF STATE, Acting Chief, Distribution Branch, Supply Division, Department of the Army, Washington 25, D. C. MY DEAR COLONEL WESKE: Reference is made to your letter of June 27, 1951, transmitting information concerning the Department of the Army's anticipated sale of foreign excess property located on Guam. The property is stated as having an estimated acquisition cost of $3 million and is likewise stated to bave been determined salvage by a board of officers. The property is further described as consisting of 8,000 long tons of mixed light and heavy iron and steel; 350 long tons of lumber; 700 long tons of rubber tires and 200 long tons of roofing paper. Your letter states that bids will be solicited from scrap dealers and construction firms in the United States, Hawaii, Japan, and the Philippines. It further states that the iron and steel scrap is being reported for allocation in accordance with National Production Authority regulations. The information was forwarded so that this Department might examine the proposed disposal in relation to the foreign policy of the United States and make any comment which might be appropriate in view of this Department's responsibility under section 401 (a), Public Law 152, Eightyfirst Congress. This Department concurs in the proposal for disposition of the foreign excess property as outlined in your letter under reference subject to National Production Authority allocation of the iron and steel scrap and on the understanding that the sale of the balance of the property, particularly the rubber tires, will be made to a responsible customer under adequate guaranties and controls to insure that the property will be utilized in the manner consistent with the best interests of the United States. It is assumed that the currency to be received will be United States dollars or that, in the event that payment is contemplated in other than United States dollars, this Department and the Treasury Department will be consulted prior to the completion of disposal action as required by NAC Action No. 357, October 4, 1949. Very truly yours, F. T. MURPHY, Chief, Lend-Lease and Surplus Property Staff. DEPARTMENT OF STATE, Washington, January 17, 1951. Brig. Gen. PATRICK H. TANSEY, GSC, Chief, Supply Division, Office of the Assistant Chief of Staff, G-4 Logistics, MY DEAR GENERAL TANSEY: Reference is made to your letter of January 8, 1951, transmitting information concerning the Department of the Army's anticipated sale of foreign excess property in Guam, The property in question is a vessel, QS-12, having a length of 104 feet, beam 18 feet and displacement of 119 long tons. The estimated acquisition cost is given as $250,000. It was stated that a technical inspection and a board of officers' action revealed the vessel to be in salvage condition. Prospective bidders are noted as miscellaneous dealers in the United States and local areas. The information was forwarded so that this Department might examine the proposed disposal in relation to the foreign policy of the United States and make any comment which might be appropriate in view of this Department's responsibility under section 401 (a), Public Law 152, Eighty-first Congress. This Department concurs in the proposal for disposition of the foreign excess property as outlined in your letter under reference subject, however, to the inclusion in the contract of sale of a provision either (1) requiring the scrapping of the vessels and the disposal of the resulting scrap in markets where it will not fall into the hands of those whose interests are inimical to the interests of the United States or (2) governing the resale and ultimate disposition of the vessels under like restrictions. Sincerely yours, F. T. MURPHY, Chief, Lend-Lease and Surplus Property Staff. Brig. Gen. PATRICK H. TANSEY, DEPARTMENT OF STATE, Washington, September 24, 1950. Department of the Army. MY DEAR GENERAL TANSEY: Reference is made to your letter of January 6, 1950, transmitting information concerning the Department of the Army's anticipated sale of excess property in Japan which you listed as follows: The information was forwarded so that this Department might examine the proposed disposal in the light of its possible effect on the foreign policy of the United States and make any comment which might be appropriate in view of this Department's responsibilities under section 401 (a), Public Law 152, Eighty-first Congress. As a result of supplemental conversations with Lt. Col. C. O. Frake it is understood that instructions will be issued to consult with the appropriate political and economic officers on the Supreme Command and obtain concurrence in this proposed disposal if such consultation has not already taken place. It is further understood that instructions now in effect assure that adequate precautions will be taken when making an award to insure that the items listed will not find their way into uses which might adversely affect the interests of the United States. If the disposal of the listed property results in the acquisition of foreign currency or dollar credits, as provided in section 402 (b) of Public Law 152, in amounts exceeding the equivalent of $50,000, this Department desires to be informed in order that consideration may be given to the possibility of using the benefits received for educational or building programs and other governmental expenses pursuant to section 401 (b). Subject to the foregoing comments the Department of State concurs in the proposal for disposition of the subject foreign excess property as outlined in your letter under reference. Sincerely yours, F. T. MURPHY, Chief, Lend-Lease and Surplus Property Staff. Col. F. W. ELLERY, DEPARTMENT OF STATE, Washington, September 7, 1951. Executive Supply Division, Office of the Assistant Chief of Staff, G-4, Logistics, Department of the Army, Washington, D. C. MY DEAR COLONEL ELLERY: Reference is made to your letter of August 25, 1951, transmitting information concerning the Department of the Army's anticipated sale for United States dollars of foreign excess property located in Japan, bidders to include miscellaneous dealers in Japan and the United States, and described as follows: 324 motor vehicles; sedans, 1941 and 1942 models, Fords, Plymouths and Chevrolets, uneconomically repairable for Army use, total acquisition cost$372,924. The information was forwarded so that this Department might examine the proposed disposal in relation to the foreign policy of the United States and to make any comment which might be appropriate in view of this Department's responsibility under Public Law 152, 81st Congress. Subject to appropriate precautions being taken to assure that this property does not fall into the hands of interests inimical to the United States and that sales of the property for use in Japan be in accordance with existing Japanese law and exchange control and import licensing regulations, this Department concurs in the disposition of the property as outlined in your letter under reference. Sincerely yours, WASHINGTON, D. C.-BRIEFING EXHIBIT 9 OFFICE MEMORANDUM UNITED STATES GOVERNMENT To: H-Mr. Moreland. From: WE-Mr. Williamson. Subject: Sources of Italian steel scrap imports. OCTOBER 12, 1951. Mr. Bonner asked for a breakdown of the figures for Italian steel scrap imports. In the first 5 months of 1951, Italy imported 306,000 tons of iron and steel scrap. The imports were obtained from the following areas: YOKOSUKA, HONSHU, JAPAN-BRIEF HISTORY OF NAVAL ACTIVITIES Com FleAct Yokosuka is located at the entrance to Tokyo Bay in what for all practical purposes is a continuation of the cities of Tokyo and Yokohama. The harbor is divided into two parts by Azuma Island. The northern portion (Nagaura) is open to commercial shipping while the southern part consisting of the major portion of the former Japanese naval base is under the control of the United States naval activity. Before the end of World War II the port was entirely military. It is an extensive installation developed by the Japanese over a period of many years. The estimated current value of the plant account is approximately $250,000,000. * * * Upon the surrender of the Japanese, the United States Navy was assigned Yokosuka as its zone of authority. The initial landings were made on August 30, 1945. The base was piled high with junk and debris. Over 106,000 tons of iron scrap have since been removed. Thousands of tons of materials have been returned to local civil economy and local civil relief. The harbor was filled with wrecks and driftwood. Over 377 hulks have since been raised. Sanitary conditions presented a comparable problem. A year after the surrender, the Yokosuka base was drydocking and repairing ships supporting the occupation. The base in conjunction with other facilities furnishes logistics for the United States Navy ashore and afloat in Japan. The United States Naval Fleet activities Yokosuka consist of the following major activities: Ship repair facility Naval ordnance facility Naval hospital Harbor defense unit Naval air facility Naval communication facility |