If upon chemical analysis, forfeited spirits prove fit for human consumption, they are reported to the Procurement Division, circularization being made to appropriate Government agencies and eleemosynary institutions. Requisitions for spirits are processed like those for other property, except that Government departments' requisitions are favored.

Assignment of spirits to eleemosynary institutions is based on statements of annual requirements appearing in notarized affidavits kept on file by the Procurement Division. These affidavits contain information as to type of institution, nature of its income, number of patients treated annually (charity patients, patients treated for a nominal fee, and those charged standard rates).

Firearms seized in violation of the National Fire Arms Act become surplus property and are turned over to the Procurement Division:

SEC. 7 (b). In the case of the forfeiture of any firearm by reason of a violation of this Act: No notice of Public sale shall be required; no such firearm shall be sold at public sale; if such firearm is in the possession of any officer of the United States except the Secretary, such officer shall deliver the firearm to the Secretary; and the Secretary may order such firearm destroyed or may sell such firearm to any State, Territory, or possession (including the Philippine Islands), or political subdivision thereof, or the District of Columbia, or retain it for the use of the Treasury Department or transfer it without charge to any Executive department or independent establishment of the Government for use by it.

Firearms are accumulated in Washington, examined by representatives from the ordnance and other eligible Government units for possible transfer and use. Unusable firearms are recommended for destruction, transferred weapons reverting to the Procurement Division after having served their purpose.

Abandoned or condemned tobacco, snuff, cigars, or cigarettes reported to the Procurement Division by the obtaining agency are offered for sale; not bringing a price equal to the Internal Revenue Tax due and payable thereon, stocks are donated to hospitals maintained by the United States for consumption by members or ex-members of the Military or Naval forces of the United States; if not usable, they are cleared for destruction.

Not only does the Surplus Property Division reallocate property in the District of Columbia but it attempts by sale to reclaim investments made by the Government. Those items which accrue in equitable lots or quantities are offered to interested and qualified prospects under sealed bids, use being made of Procurement Division Form No. 215 (SP). Minimum deposits of 20 percent of the total bid must be submitted and, in the case of successful bidders who must take delivery within 15 days, held as security for payment of balance of the purchase price. "Instructions to Bidders" cautions that property offered for

sale is "as is" and "where is"; failure to inspect property constitutes no ground for relief after awards.

Quotations, submitted in triplicate, are publicly opened. Based on proper estimates, term contracts are made by the Surplus Property Division for salvage material (including paper, paper products, and such waste material as canvass cuts), removal to be effected by the successful contractor. The waste paper contract, for example, requires removal from more than 170 locations within the Washington metropolitan area alone. Current scarcity of metal has developed a special contract to salvage such items as typewriter spools, staple machine spools, and photocopy spools.

Another program of the District of Columbia Section of the Surplus Property Division is the public auction sale of various otherwise unsalable items. In conduct it is much like a private auction; regulations require immediate cash payment for purchases. For the convenience of a regular clientele, however, a unique "paddle" system obtains. By this arrangement, the customer deposits $100 before the sale begins and is given a numbered piece of wood called a "paddle." After successfully bidding for a particular lot or item, he merely raises his paddle and the auctioneer records the number. At the close of the auction, the customer withdraws the unused balance of his collateral. A customer may purchase up to $500 on his deposit, providing he settles his bill immediately after the sale. Outside of a professional auctioneer under regular contract, employees of the Procurement Division conduct the sales.

Strange wares have been sold at Government auction, such as stuffed horses declared surplus by the Smithsonian Institution. Two stone eagles, each weighing 30 tons, originally designed as embellishments for a Government building, were sold at an auction sale. Antiquated furniture, fixtures, lots containing broken motor parts, leather gear, and boxes of sockets have all gone under the auctioneer's hammer.

Proceeds from auction sales, negligible alongside of other Government revenue, nevertheless represent gain from property which, before the advent of the Procurement Division, was of little or no benefit to the Government. The following table shows returns in recent years:

AUCTION SALES

Under sealed bid sale, money realized was comparable:

The impact of war accelerated the functions of the Surplus Property Division. The Second War Powers Act, dated March 27, 1942, stated under section II:

TITLE XI-ACCEPTANCE OF CONDITIONAL GIFTS TO FURTHER THE WAR PROGRAM

SEC. 1101. To further the war program of the United States, the Secretary of the Treasury is authorized to accept or reject on behalf of the United States any gift of money or other property, real or personal, or services, made on condition that it be used for a particular war purpose.

SEC. 1102. The Secretary of the Treasury may convert into money, at the best terms available, any such gift of property other than money.

SEC. 1103. There shall be established on the books of the Treasury a special deposit account to be designated as the "War Contributions Fund," into which shall be deposited all money received as a result of such gifts.

SEC. 1104. The Secretary of the Treasury, in order to effectuate the purposes for which gifts accepted under this title are made, shall from time to time allocate the money in such special deposit account to such of the various appropriations available for the purchase of war material and the furtherance of the war program of the United States as in his judgment will best effectuate the intent of the donors, and such money is hereby appropriated and shall be available for expenditure for the purposes of the appropriations to which allocated.

SEC. 1105. The Secretary of the Treasury shall include in his Annual Report to the Congress a summary of the gifts made and accepted under this title. SEC. 1106. Whoever shall solicit any gift of money or other property, and represent that such gift is being solicited for the use of the United States, with the intention of embezzling, stealing, or purloining such gift, or converting the same to any other use or purpose, or whoever, having come into possession of any money or property which has been donated by the owner thereof for the use of the United States, shall embezzle, steal, or purloin such money or property, or convert the same to any other use or purpose, shall be guilty of a felony and upon conviction thereof shall be fined not more than $5,000 or imprisoned for not more than five years, or both.

This authority, which included the Treasury Department, was delegated by the Secretary of the Treasury to the Procurement Division, under date of July 9, 1942. A memorandum from the Secretary of the Treasury said in pertinent part:

(b) "Unconditional donations" include gifts of money or property, real or personal, or services, made without the stipulation that they be used for particular

518532-43- -6

war or other purposes. Donations of funds or other property "for defense,” "to aid the war effort," etc., are treated as unconditional donations.

Handling of unconditional donations.-Unconditional donations of property (other than cash, securities or real estate) which have not been delivered to the Treasury will be handled as follows:

After receipt and acknowledgment by the Division of Bookkeeping and Warrants, the initial letter from the donor will be referred to the Procurement Division, which Division will then promptly arrange for the inspection of the property with a view to its appraisal and disposition, in this connection availing itself of the following facilities:

(a) State Procurement Officers.
(b) Lend-Lease Field Inspectors.

(c) Federal Business Associations.

(d) Enforcement agencies of the Treasury:

Alcohol Tax Unit (Bureau of Internal Revenue).

Secret Service.

Bureau of Narcotics.

Customs Agency Service.

In cases where the cooperation of a Treasury enforcement agency is desired in connection with the inspection of donated property, a request should be addressed to Mr. Irey, Chief Coordinator, Treasury Enforcement Agencies, Room 104, Treasury Building, describing the property upon which an inspection report is desired, the name and address of the donor, and the location of the property.

Except in cases where the donated property is contemplated to be used by one of the Treasury's enforcement agencies, such agencies should not be called upon by the Procurement Division to make inspections of such property located in cities where the services of a procurement official or a member of the Federal Business Association are available.

If the inspection report discloses the probable market value of the property as being sufficient to justify the Government's proceeding with the sale, the Procurement Division will make arrangements for accepting delivery of the property from the donor, and will dispose of it to the highest bidder, transmitting the net proceeds to the Division of Bookkeeping and Warrants. Such proceeds, if a check, should be drawn to the order of "The Treasurer of the United States," and accompanied by a letter requesting that the proceeds be deposited to the account "Donations to the United States for War Activities."

Unconditional donations of miscellaneous articles will be turned over to the Procurement Division against appropriate receipt for sale or disposal, the proceeds, less expenses of sale, if converted into cash, transmitted to the Division of Bookkeeping and Warrants for proper disposition. In this connection, your attention is directed to the miscellaneous articles which have been donated in recent years. This accumulated collection is now stored in a vault in the Division of Bookkeeping and Warrants, and includes precious stones, diamond brooches and bracelets, and other jewelry, needlework, watches, etc. The Procurement Division will no doubt desire to dispose of those articles in due course, either by sale or, in the case of the precious stones, by transfer to some other Government activity. A report showing in detail the disposition of all articles turned over to the Procurement Division shall be furnished to the Division of Bookkeeping and Warrants from time to time. Bureau of the Mint regulations should be observed in the disposal of gold.

Donations of property required in the war effort.-Cases may arise where the property donated represents critical or strategic materials or other items of equipment or supply generally recognized as vitally essential to the war effort

and which should not, therefore, be permitted to return to private ownership. In any such case, where the Director of Procurement has determined that the property, being essential to the war effort, should not be sold, the matter should be brought to the attention of the War Production Board in a formal communication by the Director of Procurement, describing the property and its location, and requesting information as to the proper disposition thereof.

Defective or otherwise unsaleable property.—In instances where inspection discloses the property offered as a donation to the Government to be defective, obsolete, or otherwise unsaleable, or where it appears that the proceeds of the sale would not exceed substantially the expenses involved, the Procurement Division will communicate such fact to the Secretary of the Treasury with the recommendation that the donor be persuaded to dispose of the property on his own account, sending a check for the proceeds payable to the Treasurer of the United States. Such letters must be very tactfully drafted, in order to avoid any implication that the Government is disparaging or belittling the donation. Automobiles.-Except in instances where there is known to be an acute demand by the Government for vehicles of the particular type represented by the donation, automobiles will be disposed of by sale.

If a Federal agency requests that a donated automobile be placed at its disposal and such agency has authority to maintain and operate such automobile, arrangements shall be made whereby such agency, rather than the Procurement Division, will take possession and transport the car to the place where it is ultimately to be operated. The procedure in such cases will be that the Secretary of the Treasury (Division of Bookkeeping and Warrants) will advise the agency as to the location of the automobile, and furnish the name and address of the donor and at the same time advise the donor of such action with the request that steps be taken to transfer title to the United States Government. *

*

Directly after Pearl Harbor, Americans began offering real property and personal goods to the Government. Offers definable by the Secretary of the Treasury's memorandum as "unconditional" are handled in a prescribed manner. Acknowledgment of the offer of an automobile, for instance, is accepted by the Division of Bookkeeping and Warrants of the Treasury Department. The offering letter is then referred to the Procurement Division which arranges for inspection of the property by one of the several Treasury agencies, usually the agency nearest to the property. If usable, the item is transferred where it can be of most service. No exchange of funds is involved. If not useful to the Government it is scrapped, or if sold, "Miscellaneous receipts of the Treasury" accounts for the proceeds.

Conventional handling of surplus property has been materially affected by the war tempo. War agencies have been permitted to take custody of goods needed immediately, prior to their legal transfer subsequently accomplished. Exemplary was the instance of 5,000 sacks of cracked wheat on hand undeliverable to the Indo-Chinese peninsula. Inasmuch as the Army needed the pier on which the shipment was stored, telephonic circularization was resorted to for locating a Government user who arranged for immediate removal.