at the present time about the content of the various zones underlying Standard's surface to be able to estimate with any assurance what it would cost to condemn Standard's lands in the reserve. I am told that it would require 60 to 90 days to make the studies which would be necessary to secure the required information. Even then, the information might be inadequate without drilling additional test wells. Another aspect of condemnation which ought to be considered is the withdrawal of Standard's lands from production, unless Congress grants authority to produce. Specifically, this raises the question whether 15,000 barrels a day which Standard has been producing out of its own share should be withdrawn from current production. When we turn to a unit agreement, other uncertainties arise. The fairness of the plan depends, of course, on confidence in the percentage participations which the engineers are to establish and adjust from time to time. Slight differences in the estimate of commercially productive sand would result in substantial changes in the participations allotted to the parties. It should be remembered that for purposes of the unit agreement it is necessary to do more than estimate the content underlying Standard's lands, as in the case of condemnation. For purposes of the contract it is necessary to estimate also the content under Navy's lands, which comprise a much greater area and which have been less developed than Standard's. For the most part, it would be necessary under the contract to determine only the relative amounts of oil content, and not the absolute amounts. But the contract does require a determination of the absolute amount of Standard's oil to the extent that Standard would be limited to producing one-third of its ultimate share in each zone without securing the approval of the Navy for further production. To state it just as fairly as I can: Condemnation would give us definite ownership and control over all the oil in the reserve, at a cost which is necessarily uncertain until resolved by the verdict of a jury. The unit-plan agreement would give us substantial control over the oil in the reserve after a maximum of 25,000,000 barrels had been taken by Standard out of its share, the shares of ownership, however, necessarily remaining uncertain during the life of the reserve except as they are resolved by the engineers' committee (and in case of disagreement, by the Secretary of the Navy). Whatever may be the final choice between condemnation and a unit agreement, our immediate problem requires a temporary extension of the interim operating agreement. Condemnation itself could be instituted and possession of the property taken at any time, without an appropriation, under the Second War Powers Act. But by deferring this step an opportunity is provided, first, for additional cost studies bearing on condemnation, which studies would require about $50,000; second, for consideration of the question whether some production should be authorized by Congress even if condemnation is in fact decided upon; and third, for consideration of the unit-plan agreement, subject to termination at a later date if condemnation should eventually be decided upon, as an alternative to immediate condemnation. Under the temporary operating agreement oil from the reserve is being produced and sold. The agreement is a stop-gap measure, and therefore an early choice by the Congress between condemnation and a permanent agreement would be in the public interest. о 2d Session LEND-LEASE AID No. 190 PRELIMINARY REPORT OF COMMITTEE INVESTIGATORS TO THE COMMITTEE ON APPROPRIATIONS ON LEND-LEASE AID AND GOVERNMENT MAY 1, 1944 PRESENTED BY MR. MCKELLAR MAY 4 (legislative day, APRIL 12), 1944.-Ordered to be printed UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1944 PRELIMINARY REPORT ON LEND-LEASE AID AND GOVERNMENT EXPENDITURES ABROAD The CHAIRMAN, SUBCOMMITTEE ON DEFICIENCIES, United States Senate. DEAR MR. CHAIRMAN: Under date of November 22, 1943, the Subcommittee on Deficiencies directed that the following data be secured: 1. By countries, all lend-lease aid given by the United States. 2. By countries, all lend-lease aid furnished the United States. May 1, 1944. 3. We will want to know in reasonable detail what the aid contained in proposition 1 and 2 consist of. 4. We want to know the extent of purchases and for which made, by countries, of the Bureau of Economic Warfare. 5. We want to know the expenditures and purposes for which made, by the coordinator of Inter-American Affairs. 6. We want to know the expenditures and the purposes by countries made by the Reconstruction Finance Corporation and all branches thereof. 7. We want to know what the purchases of loans were by foreign countries made by the Export and Import Bank. 8. We want to know the expenditures made by the Army and by the Navy in foreign countries and the purposes for which expended. 9. We want to know the expenditures by foreign countries made to our Army or Navy other than by lend-lease in reverse for use of our Army and Navy. 10. Finally, we want a master set of books showing by countries what each has received under any agency of our Government and we want to know by countries what we have received from any agency of any other government. Finally, again we ant a super-balance sheet which shows these totals by countries in dealings direct and indirect of our expenditures and theirs in any and all foreign fields. It will be seen from the very nature thereof that the assignment is a continuing one, the ultimate aim of which is to develop a record of lend-lease aid and expenditures abroad that will be of material benefit to the Committee on Appropriations and to the Congress at the time hostilities have ceased and settlements between the nations are undertaken. It is felt advisable, however, at this time to submit a preliminary report to the committee setting forth the progress that has been made, the difficulties that have been encountered and the steps that are being taken ultimately to furnish the information desired. GENERAL After a study of the Lend-Lease Act and the various appropriations made thereunder, a letter was addressed to the various departments and agencies of the Government involved calling for the submission of reports setting forth the following information: 1. Lend-lease aid to be shown under the various heads of the Lend-Lease Act, namely: ordnance and ordnance stores; aircraft and aeronautical material; tanks and other vehicles; vessels and other watercraft; miscellaneous military equipment; facilities and equipment; agricultural, industrial, and other commodities; testing, reconditioning, etc., of defense articles; services and expenses; administrative expenses. 2. Loans. 3. Grants 4. Investments. 5. Construction of facilities. 6. Purchases. 7. Current expenses of United States Government agencies. 8. Any other aid furnished to or expenditures made in or for the benefit of a foreign country, but not included in any of the above categories. 9. The amounts of aid, expenditures, contributions, etc., made by other countries for the benefit of the United States or for the joint benefit of the United States and the foreign country, in the prosecution of the war, this report to cover the same period and be set up in the same manner and detail as the one showing the aid, etc., furnished by the United States. Shortly after sending out this letter, in contacting the Foreign Economic Administration and other agencies it was learned that there was in existence an "Interdepartmental Committee to Study Recording and Reporting of Lend-Lease Transactions and Government Expenditures Abroad." This interdepartmental committee was the outgrowth of the suggestion by Senator Tydings, made during the hearings before the Senate Committee on Appropriations in May 1943, to Mr. Stettinius, then Administrator of Lend-Lease, of the necessity and advisability for having some central agency through which all aid and expenditures abroad could be coordinated and from which records periodic statements for the benefit of the Congress could be prepared. At the suggestion of Mr. Stettinius the study was undertaken by the Bureau of the Budget, with representatives from the State Department, Treasury Department, War Department, Navy Department, and Foreign Economic Administration comprising the committee. The function of the interdepartmental committee was to appraise the methods of accounting and reporting, and to make recommendations for desirable improvements therein; it was not called upon to produce dollar figures or even estimates of foreign transactions. When the representatives of the appropriations committee learned of the existence of the interdepartmental committee, it was realized that there would be duplication of effort to the extent of the study of the methods of accounting and reporting. Accordingly, to avoid this duplication of effort, and at the same time to take advantage of the work accomplished and time spent by the interdepartmental committee comprised of men thoroughly familiar with all phases of aid being rendered and expenditures made contact was made with the chairman of the committee. It was learned that the interdepartmental committee had completed its work and was in the process of writing its report and, in a fine spirit of cooperation, your representatives were invited to sit in on several of its meetings. As a result of the discussions at these meetings, and others with the chairman of the committee, the report of the interdepartmental committee was submitted to the Appropriations Committee by letter of the Director of |