For the purpose of clarification it is suggested that the language designed to correct the above-mentioned anomalous situation be not included in the proviso of paragraph 2 of section 10 of the Pay Readjustment Act of 1942, as proposed by the bill, but that it be incorporated in such paragraph 2 in accordance with the attached draft of substitute bill.

I am informed that the Department of the Navy concurs in the proposed draft of substitute bill.

No accurate estimate of the fiscal effect of the proposed legislation can be made. The Bureau of the Budget advises that there is no objection to the submission of this report.

Sincerely yours,

HENRY L. STIMSON,
Secretary of War.

CHANGES IN EXISTING LAW

In compliance with paragraph 2a of rule XIII of the Rules of the House of Representatives, changes in existing law (56 Stat. 364; 37 U. S. C. 110) made by the bill as passed by the Senate are shown as follows (matter in which no change is proposed is shown in roman; matter proposed to be omitted is shown in black brackets; new matter is printed in italics):

Provided, That such enlisted men shall [continue to] be entitled to this allowance at the general rate provided for the continental United States although receiving the allowances provided in the first paragraph of this section if by reason of orders of competent authority his dependent is prevented from dwelling with him.

For the information of the Members of the House of Representatives, changes in existing law (56 Stat. 364; 37 U. S. C. 110) proposed by the committee amendment to the bill are shown as follows (matter in which no change is proposed is shown in roman; new matter is printed in italics):

Each enlisted man of the first, second, or third grade, in the active military, naval, or Coast Guard service of the United States having a dependent as defined in section 4 of this Act, shall, under such regulations as the President may prescribe, be entitled to receive, for any period during which public quarters are not provided and available for his dependent, the monthly allowance for quarters authorized by law to be granted to each enlisted man not furnished quarters in kind at the general rate provided for the continental United States: Provided, That such enlisted men shall continue to be entitled to this allowance although receiving the allowance provided in the first paragraph of this section if by reason of orders of competent authority his dependent is prevented from dwelling with him.

о

FOREIGN SERVICE BUILDINGS AND GROUNDS

MAY 5, 1944.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. BLOOM, from the Committee on Foreign Affairs, submitted the following

REPORT

[To accompany H. R. 4282]

The Committee on Foreign Affairs, to whom was referred the bill (H. R. 4282) to amend the act entitled "An act for the acquisition of buildings and grounds in foreign countries for use of the Government of the United States of America," approved May 7, 1926, as amended, to permit of the sale of buildings and grounds and the utilization of proceeds of such sale in the Government interest, having considered the same, report favorably thereon without amendment and recommend that the bill do pass.

This bill amends an act for the acquisition of buildings and grounds in foreign countries for use of the Government of the United States of America, approved May 7, 1926, as amended, by adding a new paragraph at the end thereof numbered 9. In accordance with clause 2-A, rule 13, there is inserted in this report the provisions of the act of May 7, 1926, as amended (the amendatory language being shown in italics).

PUBLIC LAW No. 186-SIXTY-NINTH CONGRESS, Approved May 7, 1926, ENTITLED "AN ACT FOR THE ACQUISITION OF BUILDINGS AND GROUNDS IN FOREIGN COUNTRIES FOR USE OF THE GOVERNMENT OF THE UNITED STATES OF AMERICA Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of State is empowered, subject to the direction of the commission hereinafter established, to acquire by purchase or construction in the manner hereinafter provided, within the limits of appropriations made pursuant to this Act, or by exchange, in whole or in part, under such terms and conditions as in the judgment of the commission may best protect the interests of the United States, of any building or grounds of the United States in foreign countries, and under the jurisdiction and control of the Secretary of State, sites and buildings in foreign capitals and in other foreign cities, and to alter, repair, and furnish such buildings for the use of the diplomatic and consular establishments of the United States, or for the purpose of consolidating, to the extent deemed advisable by the commission, within one or more buildings, the

embassies, legation, consulates, and other agencies of the United States Government there maintained, which buildings shall be appropriately designated by the commission, and the space in which shall be allotted by the Secretary of State under the direction of the commission among the several agencies of the United States Government.

SEC. 2. (a) There is hereby established a joint commission, to be known as the Foreign Service Buildings Commission, and to be composed of the Secretary of State, the Secretary of the Treasury, the Secretary of Commerce, the chairman and the ranking minority member of the Committee on Foreign Relations of the Senate, and the chairman and the ranking minority member of the Committee on Foreign Affairs of the House of Representatives. A member of the commission may continue to serve as a member thereof until his successor has qualified.

(b) It shall be the duty of the commission to consider, formulate, and approve plans and proposals for the acquisition and utilization of the sites and buildings authorized by section 1, and of sites and buildings heretofore acquired or authorized for the use of the diplomatic and consular establishments in foreign countries, including the initial furnishings of such buildings and the initial alteration and repair of purchased buildings and grounds. The commission established by the Act entitled "An Act making appropriations for the Diplomatic and Consular Service for the fiscal year ending June 30, 1922." approved March 2, 1921, is hereby abolished.

(c) The commission shall prescribe rules and regulations for carrying into effect the provisions of this Act, and shall make an annual report to the Congress. (d) The commission may appoint, without regard to the civil service laws or regulations, and fix compensation of, without regard to the Classification Act of 1923, as amended, such clerical and other assistants at the seat of government as the commission deems necessary. The total amount authorized to be expended under this subdivision shall not exceed $5,000 for any one year.

SEC. 3. Buildings and grounds acquired under this Act or heretofore acquired or authorized for the use of the diplomatic and consular establishments in foreign countries may, subject to the direction of the commission, be used, in the case of buildings and grounds for the diplomatic establishment, as Government offices or residences or as such offices and residences; or, in the case of other buildings and grounds, as such offices or such offices and residences. The contracts for all work of construction, alteration, and repair under this Act are authorized to be negotiated, the terms of the contracts to be prescribed, and the work to be performed, where necessary, in the judgment of the commission, without regard to such statutory provisions as relate to the negotiation, making, and performance of contracts and performance of work in the United States.

SEC. 4. For the purpose of carrying into effect the provisions of this Act there is hereby authorized to be appropriated an amount not exceeding $10,000,000, and the appropriations made pursuant to this authorization shall constitute a fund to be known as the Foreign Service Building Fund, to remain available until expended. Under this authorization, not more than $2,000,000 shall be appropriated for any one year, but within the total authorization provided in this Act the Secretary of State, subject to the direction of the commission, may enter into contracts for the acquisition of the buildings and grounds authorized by this Act. In the case of the buildings and grounds authorized by this Act, after the initial alterations, repairs, and furnishing have been completed, subsequent expenditures for such purposes shall not be made out of the appropriations authorized by this Act.

SEC. 5. The Secretary of State is empowered, subject to the direction of the Commission, to collect information and to formulate plans for the use of the Commission and to supervise and preserve the diplomatic and consular properties of the United States in foreign countries and the properties acquired under this Act. In the collection of such information and in the formulation of such plans he may, subject to the direction of the Commission, obtain such special architectural or other expert technical services as may be necessary and pay therefor, not exceeding in any case 5 per centum of the cost of construction or remodeling of the properties in respect to which said special services are rendered, from such appropriations as Congress may make under this Act, without regard to civil-service laws or regulations and the provisions of the Classification Act of 1923.

SEC. 6. The authority granted to acquire sites and buildings by purchase shall, in cases where it is impossible to acquire title, be construed as authority to acquire the property by lease for a term sufficiently long, in the judgment of the Commission, to be practically equivalent to the acquisition of title.

SEC. 7. The Act entitled "An Act providing for the purchase or erection, within certain limits of cost, of embassy, legation, and consular buildings, abroad," approved February 17, 1911, is repealed, but such repeal shall not invalidate appropriations already made under the authority of such Act.

SEC. 8. This Act may be cited as the "Foreign Service Buildings Act, 1926." SEC. 9. The Secretary of State, when he finds it to be in the interest of the Government, with the concurrence of the Foreign Service Buildings Commission, is authorized to sell buildings and grounds acquired for the use of diplomatic and consular establishments in foreign countries, and notwithstanding the provisions of any other law, to apply the proceeds of such sales toward the purchase and construction and preservation of other properties as in the judgment of the Commission may best serve the Government's interest: Provided, however, That the Secretary of State shall report all such transactions annually to the Congress with the Budget estimates of the Department of State.

Public hearings were held on this bill by the Committee on Foreign Affairs on May 2, 1944, during which testimony was given by Mr. G. Howland Shaw, Assistant Secretary of State, and Mr. Leland W. King, Acting Chief of the Foreign Buildings Office, Department of State.

The act of May 7, 1926, and subsequent amendments, providing for a Foreign Service Buildings Commission for the the acquisition of buildings and grounds in foreign countries for the use of the Government of the United States of America, established a very large realestate business, and Government-owned buildings and grounds abroad located all over the world now represent an investment of upwards of $10,000,000.

The Foreign Service Buildings Commission and its functions were transferred to the Department of State by the President's Reorganization Plan II, with a provision that the

Commission shall exercise advisory functions and all other functions (including administrative functions) shall be exercised under the direction and supervision of the Secretary of State by such division, bureau, or office of the Department of State as the Secretary shall determine.

(At the present time, the Foreign Service Buildings Commission is composed of the following members: Sol Bloom, chairman; Cordell Hull; Henry Morgenthau; Jesse Jones; Tom Connally; Hiram Johnson; Charles A. Eaton.)

Effectively to protect this property, particularly to conserve the investment, it is important that the Secretary of State now be delegated authority to dispose, with the concurrence of the Foreign Service Buildings Commission, of the property by sale when it is in the Government's interest and to utilize the proceeds of such sale for the purchase and construction and preservation of other properties acquired, or authorized to be acquired, agreeable to the Foreign Buildings Act and appropriations made by the Congress under the authorization of the organic law.

A delegation of the congressional power to dispose of the property acquired, a precedent for which is found in the delegation of power to the War and Navy Departments to dispose of public property by auction, will round out the existing legislation and enable handling the very large responsibility incident to the acquisition, preservation, exchange, and disposal of buildings and grounds to the best interests of the Government. Property values diminish because of continuing conditions and the public need for property for diplomatic and consular establishments abroad is affected adversely by encroachments and restrictions which would not necessarily affect the value of such property for other purposes but, for one reason or another, does render

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