(b) Real property in foreign countries.-The $2.7 billion investment in real property in friendly foreign countries represents the cost of that real property to the United States. It consists of troop and family housing, storage facilities, airfields, maintenance facilities, hospitals, and various other kinds of real property required by our Armed Forces

overseas.

International agreements which make it possible to station our Armed Forces in friendly countries provide the basis for their occupancy of real property in those countries and United States investment in such real property. In recent years, negotiation of such agreements has provided some recognition of the residual value of United States facilities constructed with appropriated funds. Occupancy, in effect, is on a term basis varying from month-to-month (revocable at the sole discretion of the host government) to a firm term of 99 years. Areas occupied vary from simple privately owned leased space to large holdings of host governments.

In occupied territories, occupancies have been effected through the use of requisitions. These programs are financed by the governments of the occupied countries with their own currency, such as the deutschemark financed properties improved or constructed in West Germany. (Notwithstanding the recently acquired sovereignty of West Germany, these arrangements are still in effect as an interim agreement.) This report includes only the cost, if any, to the United States of properties in occupied territories.

During the past 3 years, a number of properties in Japan, Korea and West Germany have been released by the Department of Defense to the governments of these countries. The evacuation of Austria. by our occupying forces resulted in releasing to the Austrian Government the properties these forces had required.

In certain countries, title to improvements constructed by the Department of Defense is vested in the United States until termination of agreements by which occupancy was established. Upon expiration of such an agreement, disposition of the property is accomplished in accordance with the terms of the agreement. (Title) may pass automatically to the host country or the property may be removed or sold by the United States or its ultimate disposition may be left open for further negotiations.) In other instances, residual value clauses provide that, upon termination of agreements, the host government agrees to pay the residual value of the improvements constructed by the Department of Defense in such amounts as may be jointly agreed upon by the host government and the United States. These facts emphasize the desirability of awareness that our real property in foreign countries is carried on the books of the Department of Defense and in this report at its cost to the United States. The physical facility represented by an investment in a foreign country may be identical with a facility within the United States owned by our Government but it represents a very different type of an investment. It is an investment arising from the world situation at the time it was made and the resulting national commitments of the United States.

The report does not include any investment by the United States for Infrastructure (the NATO common infrastructure program), which is a term used to identify the fixed military facilities needed to support

effective combat operations by the integrated NATO forces. Construction costs for Infrastructure facilities are shared by all NATO nations. Actual construction is the responsibility of the nation in whose territory a project is located.

(c) Ownership and status.-The figures in table 3 show that on a cost basis more than three-fourths (78.5 percent) of the military real property controlled is located within the continental United States. Of the remainder 10.6 percent is in Territories and possessions and 10.9 percent in foreign countries. The increase during the year ending June 1957 from 9.6 to 10.9 percent which properties in foreign countries make up of the worldwide total is partly accounted for by improved coverage in the Air Force oversea total.

Each of the military departments now control about equal amounts, on a dollar basis, of the military real property of the Department of Defense. As of 1 year ago, the properties were indicated as 35 percent for Army, 34 percent for Navy, and 31 percent for the Air Force. Part of the seeming equalization is due to better coverage.

Within the continental United States, Army controls, on a cost basis, nearly 37 percent of the Department of Defense total, while Navy's holdings in the Territories and possessions represent 44 percent of the Department's total, and in foreign countries, Air Force. controls 69 percent of the Defense total.

It should be pointed out that from the standpoint of construction, Air Force installations are generally newer than those of either of the Army or Navy and thus their costs are generally fairer representations, of current value. Some of the facilities transferred to the Air Force, however, would also fall into the category of rather old structures for which original costs are not truly representative of current values.

The cost of properties in nonindustrial installations (training centers, depots, hospitals, command headquarters, ports, housing, etc.) constitute more than three-fourths (76.4 percent) of the cost of all properties on a worldwide basis. Reference to table 6 shows that properties located at installations in an inactive or standby status on a worldwide basis cost $1.5 billion, 6.1 percent of all properties. proportion was the same 1 year ago.

This

(d) Types of properties.-Table 7 shows the military real property costs for the entire Department of Defense by broad geographical locations and by major facility groupings. Approximately one-fourth of the overall total consists of utilities and ground improvements (mainly roads and walks).

Table 8 shows the 10 categories of real property, grouped in order of cost, in which the Department of Defense has the largest dollar investment. These data are presented graphically in chart 4. These 10 categories on a worldwide basis represent a total cost of $15.9 billion or almost two-thirds (63.9 percent) of the cost of all Defensecontrolled real property. Comparable data are presented for each of the military departments in tables 19 (Army), 23 (Navy), and 27 (Air Force). Troop housing continues to be the largest single category followed by airfield pavements and maintenance facilities.

The cost of land controlled by the Department of Defense represents only 3 percent of the total cost of all real property controlled by the Department of Defense.

TABLE 6.-Cost of military real property controlled by status of installation, worldwide, Department of Defense, as of June 30, 1957

TABLE 7.-Cost of military real property, by facility class worldwide, Department of Defense as of June 30, 1957

TABLE 8.-Cost and area of 10 largest categories of real property worldwide, Department of Defense, as of June 30, 1957

TABLE 9.-Cost of buildings worldwide Department of Defense as of June 30, 1957

NOTE. Where applicable, these building cost data are included in all tables show ing costs in this section.

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Cost of buildings, on the other hand, represent 55 percent of the total costs of military real property controlled. Table 9 shows these building costs by broad geographical areas and by military department. In the continental United States total costs of buildings for the Army are highest, whereas within the Territories and possessions and in foreign countries those for the Air Force are highest.

(e) Lease rentals. The rental data in table 11 indicate that rentals received, on a worldwide basis, represent 56 percent of the amount paid in rentals shown in table 10. This situation arises from the substantial rentals paid for property in foreign countries. Within the continental United States rentals received are about 82 percent of the rentals paid for property used by the Department of Defense. During the year ending June 1957 worldwide rentals paid increased from $23 million to $31 million. Rentals received from properties leased to others also increased, from $13.8 million to $17.4 million. That portion of rental income derived from agricultural leases is returned to the States for public-school use.

(f) Acreage controlled.-The Department of Defense through the 3 military departments controlled a total of 35.0 million acres of land throughout the world on June 30, 1957, an increase of 4 percent, 1.4 million acres, over that reported 1 year earlier. Of the increase, 1,076,000 acres were reported by the Air Force and 309,000 acres for the Army. The distribution of worldwide acreage controlled by the Department of Defense is illustrated in chart 5 and in table 12.

Total holdings include land owned, acquired from the public domain, used on temporary permit, leased, and other occupancy rights (easements and foreign rights of different types). Table 13 shows the land tenure, that is, the type of occupancy, on a geographic basis.

TABLE 10.-Annual rental paid for military real property leased by Department of Defense from outside sources, as of June 30, 1957

TABLE 11.-Annual rental received for military real property leased by Department of Defense to outside sources, as of June 30, 1957