(4) Salesmen. Sales managers and salesmen may be individuals in the employ of the Reconstruction Finance Corporation Loan Agencies, individuals employed on a loan reimbursable basis from other Federal agencies or independent brokers. Salesmen shall be thoroughly instructed as to their duties and manner of performance before entering upon such duties.

F. Financing. The Reconstruction Finance Corporation shall assist in the financing and extending of credit terms to purchasers, calling to their attention the availability of the loan facilities of other Federal agencies, as well as life insurance companies, mortgage loan institutions and other private financing sources, and making such use of its own loan facilities as are consistent with its lending policies and needed to facilitate the disposal program. The amount of such financing and terms in each case, of course, will depend upon the loan policies of the agency or institution providing such accommodations. All sales, however, shall be firm and not speculative and adequate cash payments shall be required. Purchasers shall be required to provide insurance coverage to protect the interest of any mortgagee.

G. Conveyances. All conveyances of surplus real estate shall be by the usual quit claim deed or by other appropriate conveyance without representation or warranty. Purchasers may be permitted to copy or inspect any title papers which are in the possession of the Government, at their own expense and at a place designated by the Reconstruction Finance Corporation. Every facility now available to the Government shall be made available to purchasers to minimize the cost of title examination to them. Deeds may provide for a recapture clause in the event that land being conveyed may be required again by the Government in a future National emergency. Decisions as to whether conveyances will contain recapture clauses, shall be made after recommendations have been requested and received from the interested Government agencies such as War Department, Navy Department, Civil Aeronautics Authority, etc. In general, conveyance instruments shall be of such nature as to vest title in private ownership in order that real estate may be put back on a tax paying status. Sales contracts, in which the Government retains title may be made in exceptional cases when such procedure may be absolutely necessary. Such

cases, however, shall be kept at a mini

mum.

H. Records and publicity. The Reconstruction Finance Corporation shall assemble and maintain adequate and comprehensive records which will indicate clearly the extent of investigation and analysis which it has made in developing disposal plans and in testing out the market prior to making sales. It shall also adopt procedures for keeping the public fully advised of its progress and plans with reference to the disposal of surplus real estate.

I. Relations with Administration. The Administration shall be consulted prior to the making of any major changes in the organization of Reconstruction Finance Corporation for the handling of real estate disposal, or in its mechanics, policies or procedures for such disposal, and also prior to the making of any major disposals which may involve questions of policy or the establishment of a precedent. [Reg. 2, July 26, 1944, 9 F.R. 9183]

STANDARD GENERAL-PURPOSE MACHINE TOOLS

PRICING POLICY FOR SALE BY RFC

Scope of regulation. By Regulation No. 1, Reconstruction Finance Corporation was designated as the disposal agency for surplus war property of the type generally described as capital and producers' goods. Property so assigned includes machine tools.

The purpose of this regulation is to establish a pricing policy for the sale by Reconstruction Finance Corporation of standard general-purpose machine tools which have been used and which it has available for disposal as surplus.

The policy has been established on a fixed price basis so that prospective purchasers will be able to make current plans with reasonable certainty involving the purchase of surplus machine tools. The prices fixed are based on the original price of the machine tool at the plant of its manufacturer, depreciated over the period of its active use at rates which take into account, among other things, the usage which most such tools are undergoing in war production.

This regulation does not apply to special types of machine tools or to other production equipment.

This regulation shall become effective August 15, 1944. It is recommended that any arrangements made prior to that

Small arms ammunition machinery. Special military tank manufacturing machine tools.

Special aircraft manufacturing machine tools.

Special shipbuilding tools.

Other special war production machine tools.

Price policy. All sales of used standard general-purpose machine tools, which have been declared surplus to Reconstruction Finance Corporation as disposal agency, shall be made at prices computed as follows: Provided, That all sales shall be made in conformity with all applicable War Production Board and Office of Price Administration regulations.

(1) The original price of the manufacturer of the machine tool, inclusive of electrical equipment and standard accessories shall be computed f. o. b. the plant of such manufacturer. If special tooling is to be sold with the machine tool, its original price shall be included, on the same basis.

(2) The period of active use of the machine tool shall be computed on the basis of the best information reasonably available. This period shall run from the estimated date the machine tool was

625507-45-SUPP. VII-BK. 2. -95

originally put in use to the date of sale, if the machine tool is then still in use. If the machine tool is not in use at the time of sale, the period shall run to the estimated date when the machine tool became idle.

(3) The price computed pursuant to paragraph (1) above shall be used as a base. The price at which the machine tool shall be offered for sale shall be computed by applying to that base the percentage appearing in Exhibit I to this regulation opposite the period of active use of the machine tool computed pursuant to paragraph (2) above. The percentage appearing in column B of Exhibit I shall be applied where the buyer is the person who is using the machine tool at the time of sale or, if the machine tool is then idle, the person who last used it, and the percentage appearing in column A shall be applied where the sale is to any other buyer.

(4) The price computed pursuant to paragraph (3) above shall be the sale price f. o. b. cars or trucks at the location of the machine tool at the time of sale. [Reg. 3, Aug. 9, 1944, 9 F.R. 9870] EXHIBIT I

SURPLUS AIRCRAFT AND RELATED PROPERTY

ESTABLISHMENT OF PRICING POLICY FOR

DISPOSAL

Scope of regulation. By Regulation No. 1, the Reconstruction Finance Corporation was designated as the disposal agency for aircraft and property peculiar to aircraft in the United States, U. S. Territories and Possessions. The Foreign Economic Administration was designated as the disposal agency for property located in the foreign territory.

The purpose of this regulation is to establish a pricing policy for the disposal, by the Reconstruction Finance Corporation and the Foreign Economic Administration, of surplus aircraft and property peculiar to aircraft.

In order to provide for the widest possible use of aircraft, disposal by lease, terminable installment sale or cash sale is authorized in certain instances as set forth in this regulation.

For pricing purposes, all property will be classified as belonging in one of the following categories:

Class A.

Tactical aircraft, or planes useful only for military purposes.

Group 1. Aircraft designed and built to perform bombing, combat, reconnaissance and other tactical and military missions. Group 2. Basic and advanced trainers. Class B. Transport aircraft.

Group 1. Multi-engined aircraft of 17,500 lbs. gross weight and over, primarily suitable for transportation of passengers and/or cargoes over principal commercial or military air routes.

Group 2. Single and multi-engined aircraft of less than 17,500 lbs. but more than 5,000 lbs. gross weight, primarily suitable for feeder lines and executive transport uses. Class C. Personal aircraft.

Group 1. Single and multi-engined aircraft, other than those in Class B, primarily suitable for private flying.

as

Group 2. Primary training aircraft. Group 3. Miscellaneous types, such gliders and rotary wing aircraft which cannot be classified in any other category. Class D. Aircraft equipment and component parts.

Aircraft

Class E. Unabsorbed surplus. and equipment deemed to have no substantial commercial aviation market, to be disposed of for educational and memorial purposes, or for non-aviation purposes, salvage or scrap.

Price policy. Class A. Class A aircraft are not generally suitable for public sale and will, for the most part, be placed in Class E.

Those Class A aircraft which are convertible to Class B types will be priced under the pricing policies established for Class B aircraft.

A limited number of Class A aircraft may be sought by friendly foreign nations. Prices should be established by government-to-government negotiation. All such negotiations must have the approval of the Department of State and the War and Navy Departments.

Class A aircraft which are sold for private or industrial flight purposes in the United States will be sold at prices which are not lower than the estimated sales value of salvageable component parts plus the estimated scrap value of unsalvageable residue.

Class B. A type price shall be established for each Class B passenger or cargo model. Type prices shall be determined in accordance with the following principles:

One model in Group 1 and one model in Group 2, currently in production, and in broadest general use will be selected as the "base model" for type price determination. The approximate average manufacturing cost of the "base model" during the first six months of 1944, will be established as the type price of the model selected as "base model." Type prices of other models in the same group will be established on a basis which, for the purpose of fixing reasonably competitive prices on all models in the same group, will give due consideration to the differences in (a) earning capacity, (b) latest date of manufacture, (c) cost of operation, and (d) estimated cost of manufacture, if manufactured during the first six months of 1944 in volume equal to that achieved in the case of "base model" during that period.

A schedule of type prices shall be filed with the Surplus War Property Administration.

Individual prices of Class B aircraft offered for sale or lease will be the type prices, less reasonable allowances for (a) cost of necessary repairs, (b) general wear and tear, and (c) cost of conversion.1

At the option of the purchaser, disposal may be made either by lease or

1 When the cost of conversion is allowed, type price will be that established for the converted airplane.

terminable installment sale or cash sale. A principal difference between lease and terminable installment sale is that title passes in the case of the latter, but not in the case of the former. The right to terminate the lease or installment sale contract at any time, without penalty shall be vested only in the purchaser, except that the Government may reserve the right to terminate for failure of the lessee or purchaser to carry out the terms of the lease or the contract.

Annual rentals or installments should be based on type price and may be spread over a period not to exceed five years. Reasonable initial cost of repairs, general wear and tear and conversion incurred by lessee or installment purchaser shall be credited to rental or installment payments in equal amounts during the period of the lease or installment purchase. At any time the lessee

or purchaser should be permitted to acquire full title by paying the difference between individual aircraft price and rental or installments paid.

The foregoing pricing policy for Class B aircraft is provisional, and is designed to meet present conditions of short supply under which transport aircraft are allocated among applicants. The disposal agencies shall so notify each applicant for Class B aircraft, indicating the possibility of downward revision in future prices.

Class C. Ceiling prices will be established for all aircraft in Group 1 in accordance with the provisions of OPA regulations currently in effect. Aircraft in this group shall be offered, in the continental United States, for competitive bidding "where is," "as is" or at ceiling prices. Group 1 aircraft located in the United States which are offered for sale outside of the continental United States may be sold at prices approximating those currently being received in the United States for similar aircraft in comparable condition. Group 1 aircraft located outside the United States may be offered for competitive bidding or sold at prices approximating those currently being received in the United States for similar aircraft in comparable condition.

Aircraft in Group 2 may be offered for competitive bidding or at uniform model

1 When the cost of conversion is allowed, type price will be that established for the converted airplane.

prices established from time to time and appropriately adjusted to reflect the relative condition of the individual aircraft. Group 2 aircraft will not be sold at prices lower than the estimated sales value of salvageable component parts plus the estimated scrap value of unsalvageable residue.

Aircraft in Group 3 may be offered for competitive bidding or sold at fixed prices established by the disposal agencies. In no event shall the sale price be lower than the estimated sales value of salvageable component parts plus the estimated scrap value of the unsalvageable residue.

Class D. Aircraft equipment and component parts shall, whenever practicable, be priced in accordance with normal trade practices, and shall, as a general rule, be distributed through normal trade channels.

Class E. Aircraft and property peculiar to aircraft in Class E, which are considered to have little or no commercial value, may be leased, loaned, donated or sold at nominal prices by the disposal agencies to non-profit educational institutions if the powers of the original owning agency permit such disposal, or if lease, loan or donation by the disposal agency concerned is authorized by Congress.

Aircraft and property peculiar to aircraft in Class E, which are considered to have some commercial value, may be leased to non-profit educational institutions at nominal rentals, or sold for non-aviation purposes or scrap at the best prices obtainable under warranties that the property sold will not again be utilized for flight purposes.

Commissions to manufacturers, dealers, et cetera. Disposal agencies are authorized to allow reasonable commissions to manufacturers and dealers when such commissions are justified by the services performed.

Exceptions. Cases for which no provision is made in the foregoing pricing regulations should be referred to the Surplus War Property Administration, which, by direct action without amendment to this Regulation, may authorize exceptions when, in its opinion, the public interest requires. [Reg. 4, Sept. 21, 1944, 9 F.R. 11727]

NOTE: Memorandum of understanding between Reconstruction Finance Corporation and the Foreign Economic Administration, approved Dec. 1, 1944, 9 F.R. 14472, provides as follows:

The undersigned disposal agencies are authorized by Surplus War Property Administration Regulation No. 1 (9 F.R. 5096) and Regulation No. 4 (9 F.R. 11727) to dispose of Class B (transport) aircraft by various methods, including lease and instalment sale. Arrangements presently authorized include the following features applicable to leases and instalment sales respectively: (1) The lessee (a) may terminate the lease at any time without penalty and (b) may acquire full title to the leased airplane at any time by paying the difference between the individual aircraft price and the rental theretofore paid, and (2) the right to terminate the instalment sale contract at any time, without penalty, is vested in the purchaser.

The desirability of these features was discussed at a meeting of the Interdepartmental Working Committee on Surplus Aircraft Disposal, held 3 November 1944, at which meeting there were present, among others, representatives of the undersigned disposal agencies and of the Surplus War Property Administration. It was agreed that, for the present, the features above referred to should be modified or eliminated because present conditions do not appear to require the use of all of them. The working Committee accordingly unanimously agreed that for the present it should be the policy of the disposal agencies not to permit termination of leases during the first year of their term and to limit the use of the other features in question.

This memorandum of understanding accordingly evidences the agreement of the undersigned disposal agencies, acting under Surplus War Property Administration Regulation No. 1 and Regulation No. 4, that for the present:

(1) They will not provide in leases of Class B aircraft for termination thereof at the option of the lessee until the end of the first year of the term, and;

(2) They will not grant options to purchase in connection with leases which are terminable as aforesaid, and;

(3) They will not include in contracts for instalment sales of Class B aircraft a provision permitting the purchaser to terminate the same at his option, except that a purchaser may obtain a contract giving him title, with termination and payment provisions equivalent to those which are available to lessees, if in such contract the Government has the right to reacquire title at the end of the term, or upon termination or default by the purchaser.

This agreement shall be effective upon its approval by the Surplus War Property Administrator.

ALUMINUM SCRAP ESTABLISHMENT OF PRICES AND PROVISIONS FOR STORAGE AND HANDLING

The purpose of this regulation is to establish prices below which various grades of aluminum scrap will not be sold, and to provide for the storage and handling of aluminum scrap so withheld from sale.

This regulation applies to (1) aluminum scrap which is available for sale in this country and which is owned by the War Department or the Navy Department (including aluminum scrap held under cost-plus-fixed-fee contracts), and contractor-owned aluminum scrap which constitutes termination inventory under terminated prime contracts with the War Department or the Navy Department, or subcontracts under such prime contracts, and (2) aluminum scrap held by Reconstruction Finance Corporation (or any of its subsidiaries) as a disposal agency, or by any other government agency which may be designated as a disposal agency for aluminum scrap under applicable law or regulations.

Whenever aluminum scrap is referred to in this regulation it means the aluminum scrap described in the preceding sentence. Because of the small quantities involved, this regulation does not cover any aluminum scrap held by or under the control of any other government agency.

When the statement of policies to be followed by Government agencies in the sale of contract termination inventories was issued under date of April 21, 1944 (9 F.R. 4559), it was recognized that subsequent regulations might have to be issued to provide a mechanism for stopping of sales in any area where prices dropped to unsatisfactory levels (Part IV B (2) (e))、 Such is the condition of the scrap aluminum market today.

It has now become apparent that the amount of aluminum scrap arising from current production is already in excess of the capacity of the industry to absorb in an orderly fashion. This situation is becoming increasingly aggravated by the very large quantities of aluminum scrap arising from contract terminations. The result is that prices for aluminum scrap have already been depressed below any reasonable or intrinsic value. The basic purpose of this regulation is therefore to prevent a com