GENERAL ARTICLES

ASSETS INTO JUNK

Says this writer: War Assets scraps usable material your taxes paid for, sells it as junk. Reason: Policy

J. J. BROWN August 1 1946
GENERAL ARTICLES

ASSETS INTO JUNK

Says this writer: War Assets scraps usable material your taxes paid for, sells it as junk. Reason: Policy

J. J. BROWN August 1 1946

ASSETS INTO JUNK

GENERAL ARTICLES

Says this writer: War Assets scraps usable material your taxes paid for, sells it as junk. Reason: Policy

J. J. BROWN

as fold ie RALPH ALLEN

IF YOU were the heir to an estate which was being liquidated by a trustee, there are a few elementary things you would not expect the trustee to do.

You would not expect your trustee to take an axe to any of your belongings for which there was a demonstrable use. You would not expect him to sell costly furnishings as junk, at junk prices, without first trying to sell them for what they would bring on the open market.

You are the heir to an estate, and your trustee has been liquidating part of it in just this manner. The estate is the vast and variegated store of airplanes and paper clips, factories and thumbtacks, ships and sealing wax which Canada built for war and has decided it does not need for peace. The trustee for you and 12 million other Canadians is a Crown company called War Assets Corporation.

War Assets regularly has sold undamaged and usable state property to junk dealers for a fraction of a cent to a few cents a pound. It has compounded this sin against the taxpayer and the consumer by stipulating that the junk dealers must melt the property down to its basic metal content, even though private buyers seek to rescue it for private use in its original form.

These are serious charges. I don’t make them lightly. To support them, I have the best kind of evidence there is. I’ve got the body.

To be specific, I have a basement filled with instruments, mechanisms, tools and gadgets which I estimate cost the taxpaying public a total of more than $45,000, which War Assets Corporation sold to junk dealers, and which I bought under the counter from the junk dealers before the dealers got around to cutting them up with their power shears or shoving them into their furnaces.

The total cost to me was $900. Total cost to the junk dealers, at a generous estimate of $6 a ton, would be, perhaps, $15.

Some of the material is new. All of it was either serviceable when I bought it or needed only minor repairs to make it serviceable. All of it has a large and practical value for me, a physicist whose hobby shop is also his laboratory. It has an even larger value, potentially, for the millions of Canadians who farm for a living, who operate small boats, who run motors, who teach or study the physical sciences, who own summer cottages, who operate amateur radio equipment, or who maintain home workshops.

Tale of the Transformers

T ET’S start with something whose place in peace A-i economy is as indisputable as its place in war economy. Radio transformers, for instance.

I have 62 power transformers in my basement. The history of each of them is much like the history of any other. At some time during the last two years they were all declared surplus to the requirements of one or other of the Canadian armed services or released to War Assets Corporation direct from the factory. It became the job of War Assets Corporation to dispose of them in whatever manner it believed would best serve the interests of the taxpayer. War Assets Corporation decided to classify them as scrap. It sold them under regular scrap contracts to authorized scrap dealers, sold them like gravel, by the ton.

In turn, I bought them from junk dealers over a period of two years and at prices ranging from a few cents to $2 apiece. Many of them are of types that still haven t returned to the civilian market, but in the latest retail catalogues the cheapest of them is

priced at $4 and the most expensive at $43.

All right, I got a bargain, and what am I hollering about? I’m hollering about two things first that War Assets Corporation operates under a “no-retail” policy which prevented me arid my fellow consumers from bidding on the transformers before they were consigned to the junk yards; second that, even after I found them in the junk yards, War Assets policy still forbade the junk dealer to sell them to me, and forbade me to buy and use them for the purpose for which they were made. The 62 radio transformers, like everything else I have managed to snatch from the jaws of the scrap furnace, owe their reprieve solely to the coincidence that War Assets Corporation’s brand of economics seems as absurd and wasteful to a junkman as it does to a college professor.

Some junk dealers, adhering strictly to their contracts with the Corporation, have refused to sell me anything, but dozens of others have said, in effect: “Make me an offer. If a machine is worth more to you as a machine than it’s worth to me as scrap, we’ve got a right to do business.”

Let’s take a quick and very incomplete inventory of my basement. Everything there came from the same original source, the Canadian armed services or a Government war plant; passed through the same marketing agency, War Assets Corporation; was consigned by War Assets to the same destination, the scrap heap; brought the national treasury roughly the same price, a few dollars a ton; and was saved from a molten grave in contravention of the same rule, the rule that surpluses which War Assets Corporation classifies as scrap must be destroyed.

Through those Continued on page 46

Continued from page 9

channels and on those terms, I have assembled:

Fifty radio tubes, all in working condition, and worth an average of $1.50 each at retail.

Six air compressors suitable for spray painting and garden spraying and each representing an original investment to the taxpayer of several hundred dollars.

Eight electric motors, of types which are priced at from $10 to $50 when dealers have them to sell.

Forty high-voltage condensers for radio transmitters, each worth from $4 to $55 new.

Six aircraft generators ranging from 600 to 1,500 watts, worth originally $120 to $180 each, and still useful for charging batteries or powering home lighting units.

Fifteen variable output transformers (Variaos), all valuable in physics laboratories and radio service shops, and normally priced at $14 to $26 apiece.

Thirty-five different types of new electric wiring worth from 12 cents to $1.20 a foot on the regular market.

Quantities of Plexiglas and bakelite.

Six electric meters catalogued at from $14 to $21 each.

An unclassifiable but substantial miscellany of nuts and bolts, soldering irons, fire extinguishers, toolboxes, grinding stones, rotary wire brushes, storage batteries, radio tank coils, resisters and earphones, gear trains and bevel gears, gauges, microphone cable, searchlights, dial and panel lights, fuel filters, fuel pumps, projection lamps, electric rectifiers, and other industrial fixtures whose detailed listing would only confuse the layman and break the taxpayer’s heart.

Deliberate Smashing

These inanimate survivors of a process which War Assets Corporation calls salvage weren’t easily obtained. The Corporation is fairly thorough. Usually when it designates machines and instruments as scrap, it makes sure that the scrapping has already begun before the material reaches the junk dealer. For every dollar’s worth of usable equipment that I’ve seen in the junk yards, I’ve seen at least a hundred dollars worth of the same kind of equipment which was either smashed or damaged beyond repair at some point between its release to War Assets Corporation and its eventual sale.

Most of the surpluses declared to the Corporation by the three armed services originally belonged to the Royal Canadian Air Force, which has declared or will declare material that cost the taxpayer more than $600 millions. From February to July of last year the Air Force was under specific instructions from War Assets Corporation to destroy certain types of surpluses, including one type that was officially classed by the Air Force as repairable.

In these instructions War Assets Corporation used a paragraph which became a stock formula. “It is requested,” the Corporation repeatedly wrote the RCAF, “that definite instructions be given that the spares being scrapped and placed in RCAF scrap bins be mutilated to such an extent that they cannot be used for aircraft

use, and that mutilation be under the supervision of an officer or senior NCO.”

A parliamentary committee has recently been hearing about the most spectacular ramifications of this policy —about the bonfires that burned last year in RCAF disposal centres, about the bulldozers that smashed precision instruments and wireless and ground equipment to a metallic pulp in the name of national economy. Any junk dealer can testify that even without the help of bulldozers and bonfires, the Corporation’s campaign of industrial mayhem has been quietly effective.

I can testify to that too. The 50 radio tubes I bought on the outdoor bargain counters of the junk yards were picked out of barrels of broken glass that had once been tubes. When I found the most valuable of my eight electric motors, it bore unmistakable signs of having been hit twice with a heavy instrument, once at each end, hard enough to break the end bells, but not hard enough to knock the motor out of alignment.

From one junk dealer I bought for $5 an $80 storage battery, one of a batch of several hundred on each of which the end filler cap was smashed. The caps were protected from casual damage by the outer battery cases. I examined every battery I could reach on the surface of the pile, at least 50 altogether. They were all in the same condition as the one I took away for repair. They were brand-new, and the manufacturers’ attached card of instructions was stapled to an RCAF “produce” card, directing that the battery be converted to scrap.

In another junk yard last fall I saw a carload of bomb-sight compasses each with the centre of its protective glass cover bashed in.

Nor does War Assets Corporation specialize exclusively in the destruction of Air Force surpluses. As recently as

last April 29, when the shortage ot building materials was anything but a state secret, I saw a large pile of used two by fours, four by sixes, lumber sidings and plywood being burned at Research Enterprises Limited, a Toronto war plant then in the process of being liquidated by War Assets. At about the same time, in a Toronto junk lot, I saw several hundred one-quart Army fire extinguishers, all wrecked b> hand in identically the same way. I’ve seen other piles of artificial debris in other junk yards in Hamilton, Kingston, Montreal, Ottawa. London and Brantford.

It isn’t necessary to labor the point that this kind of damage is official damage—damage which has been regularly done to public property as a matter of policy. The evidence of no one pair of eyes is half so conclusive as War Assets Corporation’s own records.

Those records include a document dated as recently as last April, and signed by the Corporation’s vicepresident in charge of supply. It is headed “Supply Department Procedure.” The relevant part reads:

“Subject: Scrap Disposal Section,

Plant Clearance Division.

“1. When surpluses are sold as scrap it will be the responsibility of the Plant Clearance Division to reduce such surpluses to a condition where they cannot be reworked and resold in their original form.

“2. Such surpluses are to be reduced to scrap condition with the minimum effective effort. The Scrap Disposal Section, Plant Clearance Division, is responsible for proper directions to the Regions to ensure that surpluses are reduced effectively to scrap.”

A Firm Offer to WAC

In my hopeful advances to War Assets Corporation, I haven’t always played the role of a human magpie,

nor have my contacts been limited to the fortunate middlemen who buy and sell its flotsam. I have sought earnestly and often to deal directly with the Corporation, frequently at the highest levels, and usually with no other outcome but another brush-off.

On Sept. 13, 1945, I offered to buy anything declared surplus to the Corporation’s radio division. I had set up a registered company and had obtained enough financial backing to guarantee that, given a chance, I could pay a far better price for junked wireless components than the junk dealers were paying for them.

Over-all Offer Spurned

My letter to A. G. Daemen, head of the Corporation’s radio division, was as follows:

“Dear Sir:

“A news item in the Toronto Globe and Mail reports the smashing and bunting of $60,000 worth of radio equipment in Alberta, and quotes an RCAF man named Tackaberry as saying that the cost of salvaging parts front the equipment is greater than the cost of the parts obtained. We have had access to some of this equipment, such as TM1119 and R1120, and have developed efficient and cheap methods of salvage.

“We are willing to buy all the radio equipment coming into the possession of War Assets or being declared surplus by the RCAF, and thus save the Air Force the cost of breaking it up. Please let us have a quotation on the price per pound, and the number of pounds expected as surplus as soon as possible, as useful material is being destroyed every day.”

To my letter I added a note that a copy had gone to my member of Parliament. Within six days I received a reply from the president of the corporation himself, J. H. Berry.

Mr. Berry’s letter made no reference to my charges that serviceable material was being wasted. His letter said: “I am sorry we are not able to give you a quotation on the price per pound for obsolete radio equipment, as the type and quantity of material varies considerably, and prices will have to be established for each parcel and type as it comes along.”

His letter also said: “You will

appreciate that I am not able to advise you as to the number of pounds of equipment expected as surplus, as the quantity is entirely dependent on day-to-day operations of the custodian departments.”

The letter ended: “Your request to be given opportunity to purchase this type of surplus, however, is very interesting, and a proper record has been made of your request, so that offerings can be made to you as and when opportunity affords.”

One of the Corporation’s self-expressed objects is “to recover for the taxpayers, the original investors in these (surplus war) goods, the largest possible cash return upon their investment.” But its interest in my offer was not so acute that it made any attempt to investigate, much less to capitalize, the offer’s possibilities. I never heard from Mr. Berry again. I never heard from any of his subordinates on the subject of my blanket bid. On Nov. 21

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Iwrote Mr. Berry once more, reminding him of and renewing my original offer, and telling him about some further instances of the destruction of usable radio equipment. The letter is still unanswered eight months after it was written.

In December, however, in response to a letter to a lesser official, asking for price lists on two specific kinds of surplus—batteries and aircraft generators—I did receive a price list on generators. I was offered various types at $40 new, and from $10 to $25 used. Not long afterward, at a Kingston junk yard, I found a garage full of generators which the dealer said he had bought from War Assets as scrap. Many of them were new, in their original packing cases, and carefully sealed in moistureproof paper, and were of the same models that War Assets had offered me at $10 to $40. The Kingston junk dealer told me he had bought them for $2 a ton. He sold me four at $3 each.

How does War Assets Corporation defend its stubborn pursuit of waste economy? The stock apology falls into three parts. The Corporation and the Government under which it operates jointly contend:

1. That by controlling the flow of surplus goods into the consumer market it protects manufacturers, and through them employees.

2. That by doing the bulk of its marketing through established private wholesale and retail outlets it avoids the danger of a general disruption of business.

3. That many articles manufactured for war have no use in peace.

I believe that all of these claims, however convenient they are for a busy bureaucracy, and however welcome they are to the middleman, are opposed to the best interests of the average Canadian worker and the average Canadian consumer. I don’t believe it’s true that when a radio “ham” buys an expensive radio condenser for a few dollars secondhand, or when a farmer buys an expensive electric generator for the price of a few bushels of wheat, the manufacturer of condensers or the manufacturer of generators automatically loses a sale. Many Canadians can’t afford new generators and condensers. I believe that is a valid argument against destroying old ones.

Imagination Needed

It’s perfectly true that many things manufactured for war have no immediately apparent use in peace. Nevertheless, I contend that War Assets Corporation hasn’t been sufficiently interested in discovering and encouraging imaginative methods of salvage.

One of the most fearsome gadgets in my basement is a sighting station originally salvaged from a bomber. It is one of a truckload which came from the RCAF’s No. One Equipment Depot at Toronto to a Toronto junk yard. I paid the junk dealer $5 for it, and the mechanisms I salvaged from it included electrical connector blocks, spring-loaded gears and clutches, precision microswitches, Amphenol input plugs, and four Selsyn generators. The Selsyn generators alone are selling j secondhand for $8 each in New York.

War Assets Corporation has often used a fourth, or alternative, defense against charges such as I’ve made here.

It has denied the charges or minimized their importance. To you, the jury, I can only repeat: Gentlemen, I’ve got the body.

This is the second of two articles by Mr. Brown on the operations of War Assets Corporation. The first appeared in duly 15 Maclean's.