ment-in-business. State trading carries with it such vast economic power that inevitably the time comes when private citizens are frightened into political submission; no longer do they dare to criticize or to raise their voices.

We believe this is the reason that Congress has started writing "private handling" clauses into legislation involving Government in business. We respectfully petition the committee to provide this common safeguard in the Commodity Credit Corporation charter. I should like to add a word or two about section 9 of your bill, which has to do with directors.

Mr. NICHOLSON. Mr. Chairman, may I ask a question? May I ask which bill we are considering?

Mr. SANFORD. H. R. 6214.

The CHAIRMAN. I think perhaps the committee's attention and the witness' attention should be called to the fact that the bill was reintroduced yesterday, H. R. 6263. The language of the new bill is identical with the language of H. R. 6214.

Mr. SANFORD. I had not seen that.

The CHAIRMAN. Well, the provisions of 6214 became title I of the new bill. We have merely added another title in respect to support prices.

Mr. SANFORD. In respect to support prices?

The CHAIRMAN. Yes.

Mr. SANFORD. Would I be able to get a copy of that bill before I leave?

The CHAIRMAN. Certainly.

In substance, it continues the support-price program for 4 years. Mr. SANFORD. Well, I did not come prepared to discuss that, Mr. Chairman. I might have a lot of thoughts on the subject, but there is no reference to it in my statement, of course. However, if you or any members of the committee have questions you want to ask about that subject, I will try to answer.

Mr. NICHOLSON. You were going to say something about section 9. Mr. SANFORD. I was going to say that our subsitute bill has a somewhat similar provision to section 9 of H. R. 6214. It is different in its set-up, as to the Board of Directors, but the effect is the same and we are quite satisfied with the provisions you have made for the Board of Directors of the Commodity Credit Corporation.

I think those were our only comments, Mr. Chairman, on H. R. 6214.

The CHAIRMAN. Are there further questions of Mr. Sanford? Mr. SMITH. Mr. Chairman.

The CHAIRMAN. Mr. Smith.

Mr. SMITH. Mr. Sanford, you seem to be concerned with the matter of State trading. How can the Commodity Credit Corporation operate without engaging in State trading?

Mr. SANFORD. We take it for granted that they are engaging in State trading. That is what it is when they buy or sell commodities. However, it has been the policy of Congress that farm relief shall be provided in that way. Unless Congress changes its mind on the subject, we must have a Commodity Credit Corporation or something like it. Therefore, we think it is very important that with mandatory State trading of that kind, every possible safeguard be provided to the private citizens who are affected by such State trading.

Mr. SMITH. I do not quite understand you. Do you mean by State trading, trading within our domestic economy, or do you have reference to foreign shipments a a State trading procedure?

Mr. SANFORD. Well, I had reference to both. Perhaps the term is not that broad. But Commodity Credit certainly is Government in business. Perhaps it is only in the export field that it would be called State trading.

Mr. SMITH. Well, do you think it is possible to institute an agency like the Commodity Credit Corporation without it ultimately becoming totalitarian in its operations?

Mr. SANFORD. We fear that danger. That is why we ask Congress to put every possible restraint on the activities of whatever agency they create for the purpose of supporting agriculture.

Mr. SMITH. Do you ultimately hope to attain your objective? Do you think it is possible to attain such an objective?

Mr. SANFORD. I think that while you have Government in business, and State trading, there is that constant danger. It is a thing we fear. We are not here asking for these things because we are dissatisfied with the particular method of operation which Commodity Credit Corporation has used in our business. We are not talking about that. We are talking about the dangers of a powerful corporation of this kind, and the political effect that, in the long run, it is so apt to have. Therefore, Congress has provided that there shall be such a thing, and that it shall do so-and-so. There is nothing our industry can do about that.

We ask, however, that this agency you have set up by congressional action be controlled just as strictly as possible by the Congress of the United States.

Mr. SMITH. What is the history of institutions of this kind? Have you ever known of them stopping before they attained complete power?

Mr. SANFORD. Well, I heard a witness, a couple of months ago, before the Joint Committee on the Economic Report. He said that he had made a study of operations of this kind covering a period of 5,000 years, and he said every one of them had been a complete failure.

Somebody spoke up and, after thinking a minute, said, "What about Joseph and the 7 years of plenty and the 7 lean years?"

He said, "I am glad you asked that question. You will not find it in the Bible. It is in the Book of Josephus. But the result of that program was that the Pharaoh had to take over all the land and make slaves of the farmers.

Mr. SMITH. Certainly, and that is exactly where this program is headed. This whole program cannot result in anything else, and that will be the eventual outcome, in my opinion.

You speak about the exchanges being driven out of business.

Mr. SANFORD. I did not say exchanges.

Mr. SMITH. Foreign shipping business, I mean.

Mr. SANFORD. Exporters.

Mr. SMITH. Yes. How do you expect to maintain that business? You would be in competition with the Commodity Credit Corporation, would you not?

Mr. SANFORD. We are asking that that business be given back to us. We think there is no reason why we should not have it back. About the same arguments were used against turning the exporting of coal back to private industry. Someone made a statement that the ship

ments of coal would drop to 40 percent of what they then were if it were turned back to private industry. The fact is that the coal business was turned back to private exporters and Capt. Granville Conway, who was the Coordinator of that export movement for the Government, said that it has been completely successful. It was turned back to private industry principally on his own recommendation. Similarly he recommended, when testifying in connection with the Second Decontrol Act, that the exporting of grain should be turned back to private industry also. That was about last May.

Mr. SMITH. I agree with you, of course, and I would like to see you, by all means, retain that business, but I am just wondering whether it is ultimately going to be possible, because of the nature of the institution.

Mr. SANFORD. It may be possible under this provision I read from the Foreign Assistance Act. We are quite hopeful that the Administrator of ECA will see fit to use private procurement for the exportation of wheat after July 1.

The CHAIRMAN. Are there further questions of Mr. Sanford?
Mr. NICHOLSON. Mr. Chairman.

The CHAIRMAN. Mr. Nicholson.

Mr. NICHOLSON. I am a little at sea on this AAA and this bill before us.

Mr. SANFORD. So am I.

Mr. NICHOLSON. I cannot seem to understand. If you try to do something under this bill, you run into AAA. Of course, I want to do what I think is right about this thing, but I am very much confused about those two things.

Mr. SANFORD. Sir, I do not think there is a single item in the recommendations we have made which will affect the way in which Commodity Credit Corporation has been operating the AAA program. Our provision for private handling would affect themMr. NICHOLSON. You cannot do it under this bill, can you?

Mr. SANFORD. Our provision for private handling would affect principally the export movement, so far as grain is concerned. Commodity Credit Corporation has been using private channels of trade in their domestic operation, under the AAA program, to a very large extent. There have been a few occasions where they have encroached on private handling, principally in connection with a program such as the subsidization of feed grains.

Mr. NICHOLSON. Could you tell me why they do this? Why the people in the country cannot handle the business of the country without Government interference?

Mr. SANFORD. Do you mean export business or domestic business? Mr. NICHOLSON. Either the export or the domestic business.

Mr. SANFORD. We think we can handle the export business but Commodity Credit Corporation thinks we cannot.

Mr. NICHOLSON. That is the only answer I want. Thank you.
The CHAIRMAN. Are there further questions of Mr. Sanford?

Mr. SANFORD. By the way, I would just as soon not discuss the export business in too much detail. I am an immigrant from Oregon, and you will have a very competent witness here on Monday who is going to talk about very little else but the export situation insofar as it affects grain.

Mr. SPENCE. Mr. Sanford, I did not quite catch what you said about the Commodity Credit Corporation owning elevators. Does the Com

modity Credit Corporation own any real estate except that which is incidental to its corporate activities, namely, to be used for the storage of commodities? Do they own anything beyond storage facilities?

Mr. SANFORD. I said, Mr. Spence, that to my knowledge they did not own or lease any elevators or real property of that kind, that they had never found it necessary to do so, and we do not think they should have the power to do so, because some time the administrative policy might change.

To show you how easily it can change, after all, Henry Wallace was Secretary of Agriculture not so very long ago-he was almost President and his theories about these things are somewhat different from those entertained by a great many of the rest of us. We do not know

who may be in there 4 years from now or 8 years from now. Mr. SPENCE. I do not think that the operation of an elevator should be within the corporate powers of Commodity Credit Corporation. Mr. SANFORD. The way this is written, it certainly is.

Mr. SPENCE. The operation of storage facilities would, of course. Mr. SANFORD. They can say it is in connection with the operation of their business. That is all you stipulate. If a Government corporation is handling wheat, they could very easily argue that providing elevator facilities to handle the wheat was in line with the operation of their business.

Mr. SPENCE. That would not be storage, however. That would not be confined to storage.

Mr. SANFORD. It is storage and handling, sir, under the act as proposed. Private industry has these facilities. We want to keep them. We want to operate them. And we do not want to have to compete with a Government agency with unlimited money in that same

business.

Mr. BROWN. Suppose the Government buys certain commodities and cannot obtain storage facilities in that area. They should be permitted to secure facilities in some way in that area.

Mr. SANFORD. Sir, they went through the period of 1941 and 1942, when, as Secretary Wallace testified the other day, they had six hundred-some-odd-million bushels of corn, 632 million bushels of wheat. They did not have to buy any facilities then. I cannot foresee that we would ever run into such a surplus situation again as we did at that time.

Under Secretary Dodd put that in the light of being a rather fortunate piece of foresight. The fact is that at the time everybody in the country who knew anything about it was terrifically worried about those surpluses of grain. It has been said by very authoritative economists that probably the Commodity Credit Corporation would have followed the Federal Farm Board out the window if the war had not come along just then.

The CHAIRMAN. Are there further questions of Mr. Sanford? (No response.)

The CHAIRMAN. If not, thank you very much, Mr. Sanford.

Mr. SANFORD. Thank you, sir.

The CHAIRMAN. We will continue with the hearings on the Commodity Credit Corporation on Monday.

(Whereupon the committee adjourned to other business, to reconvene on Monday, April 19, 1948, at 10 a. m.)

FEDERAL REINCORPORATION OF COMMODITY CREDIT

CORPORATION

MONDAY, APRIL 19, 1948

HOUSE OF REPRESENTATIVES,

COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C.

The committee reconvened at 10 a. m., Hon. Jesse P. Wolcott, chairman, presiding.

Present: Messrs. Wolcott, Smith, Talle, McMillen, Hull, Banta, Fletcher, Nicholson, Spence, Brown, Patman, Folger, Hays, and Boggs.

The CHAIRMAN. The committee will be in order.

We will proceed with the hearings on H. R. 6262.

We have with us this morning Dr. Sanders, legislative counsel for the National Grange.

We are very glad to have you, Dr. Sanders.

STATEMENT OF J. T. SANDERS, LEGISLATIVE COUNSEL,
NATIONAL GRANGE

Dr. SANDERS. My name is J. T. Sanders and I appear before you in behalf of the National Grange.

Mr. Chairman, I listened to the questions asked by the committee last Friday, I believe it was, and made a considerable revision in the testimony I am about to present. Rather than just confine my statement entirely to a statement of opinion about the bill, I have undertaken to include some information which would justify a farm program. In other words, I have tried to write into this statement the philosophy of the National Grange in justification of a request for a farm program.

I appear before you in behalf of the National Grange, a farm organization with approximately 800,000 members, in favor of the general purposes provided in H. R. 6214.

We look upon the Commodity Credit Corporation as one of the most important means of implementing a desirable flexible farm program. We also consider it a valuable agency for rendering services to other Government agencies.

The Grange considers the reasonably effective solution of the instability of farm income as not only vital to farmers but to the general welfare. The Commodity Credit Corporation has been one of the most important means of supporting farm prices, of reducing burdensome surplus farm commodities, and of obtaining maximum individual and social use values out of excessive supplies that are seasonal in nature. It has greatly facilitated a more desirable consumption and minimized wastes of food and other farm products.

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