term "agricultural commodities" as it is used in the bill also includes products of such commodities, foods, feeds, and fibers.

To effectuate these purposes, the Corporation would be granted by section 5 of S. 1322 certain specific authority-namely, to support the prices of agricultural commodities through loans, purchases, payments, ano other operations; to make available materials and facilities required in connection with the production and marketing of agricultural commodities; to procure agricultural commodities for sale to other Government agencies, foreign governments, and domestic, foreign, or international relief or rehabilitation agencies, and to meet domestic requirements; to remove and dispose of or aid in the removal or disposition of surplus agricultural commodities; to increase the domestic consumption of agricultural commodities by expanding or aiding in the expansion of domestic markets or by developing or aiding in the development of new and additional markets, marketing facilities, and uses for such commodities; to export or cause to be exported, or aid in the development of foreign markets for agricultural commodities, and to carry out such other operations as the Congress may authorize it to carry out or otherwise provide for.

These specific powers could be used only in fulfilling the purposes of the Corporation pursuant to annual budget programs approved by the Congress in accordance with the Government Corporation Control Act.

To carry out its specific powers, the Corporation would, by section. 4 of the proposed Senate bill, be granted certain general powers. Some of these general powers are those necessary and customary to the corporate form of organization, such as the right to sue and be sued, to adopt bylaws, to enter into contracts, and so forth. The other general powers are those appropriate to the Corporation as a Government agency, such as the use of the mails upon the same conditions governing their use by executive departments and the exercise of certain immunities of the Government.

Section 6 of the proposed Senate bill makes Federal statutes which are now applicable to the Commodity Credit Corporation under its Delaware charter also applicable to it under its Federal charter.

The proposed Senate bill continues the capitalization of the Corporation at $100,000,000, and provides for management of the Corporation by a board of directors of not less than 3 nor more than 11 employees of the Department of Agriculture, subject to the general direction of the Secretary of Agriculture, who would be a member and the Chairman of the Board.

At the time the proposed bill was introduced, we furnished the Congress a statement in connection with the bill. This statement was in two parts. Part I reviewed the creation, purpose, financial structure, management, and operations of the Delaware corporation and the laws directing or limiting its operations in order to serve as background material for Congress in considering the proposed Federal charter. Part II of the statement contained a section-by-section analysis of the proposed Federal charter. Since this statement was included in Senate Committee Report 1022 we thought it was unnecessary to have additional copies made up for the use of this committee.

In view of the inclusion of this material in the Senate report, I think it unnecessary for me to review the proposed act in detail. However,

I wish to point out one or two ways in which I think the proposed Federal charter differs materially from the present Delaware charter under which the Commodity Credit Corporation operates. The Delaware charter grants authority such as to borrow and make loans, to buy, sell, and otherwise deal in commodities but does not clearly define over-all purposes for which these powers are to be exercised as does section 2 of the charter bill. That, I think, is important and desirable for these purposes serve to confine and direct the Corporation in its activities.

Another difference is found in those general powers granted to the Corporation which are peculiar to its status as a Government agency. These aid the Corporation in carrying out its programs and protects the Government's interest in the Corporation.

In its entirety, the proposed Senate bill provides Agriculture with an agency having that degree of flexibility necessary to meet the changing economic conditions. The Department recommends its passage.

Since we prepared that statement yesterday afternoon, Mr. Chairman, I notice that you introduced a bill yesterday of which we did not have a copy until this morning, which differs slightly from the Senate version.

The CHAIRMAN. You are not in a position now, Mr. Dodd, to discuss the differences between the House bill and the Senate version, are you? However, we will develop them as we go along.

Mr. DODD. I think there are three changes. In section 4 (g), the Senate bill grants authority to the Corporation to change contracts. I notice that has been omitted from your bill.

In section 9, the Board of Directors: Your proposed bill sets up the Board of Directors subject to appointment by the President and approval of the Senate. It sets up the Board and states that the Board will consist of five members.

Mr. BROWN. What is the difference between that section and the appropriate Senate section?

Mr. DODD. The appropriate Senate section allows the Board to be composed of employees of the Department of Agriculture.

Mr. BROWN. And the Wolcott bill eliminates that?

Mr. DODD. It eliminates that, except that the Wolcott bill, lines 12 and 13, page 8, says that

Federal employees, if also directors, shall not constitute, in the aggregate, more than 50 percent of the Board.

The CHAIRMAN. Under the House bill, not more than two of the five could be employees of the Department of Agriculture?

Mr. DODD. That is right.

The CHAIRMAN. Three would have to be outside the Department? Mr. DODD. That is right. The greatest difference, Mr. Chairman, I think, is the fact that under your proposed bill, the Secretary or his nominee would be a member of the Board. The other members to be appointed by the President, with the consent of the Senate, and they would select their own chairman.

Under the Senate version, the Secretary of Agriculture would automatically act as the Chairman of the Board.

The CHAIRMAN. Under the present law, the Secretary of Agriculture is the President of the Board and he appoints the whole Board. Mr. DODD. That is correct.

Mr. BROWN. Are they presently limited to employees of the Agriculture Department?

Mr. DODD. Not by law.

The CHAIRMAN. But they are all in the Department?

Mr. DODD. That is correct. The people who are working particularly on the price-support and procurement fields are designated by the Secretary under the bylaws as approved by the Board, as members of the Board.

Under the Senate bill there is no limitation on the length of time they can serve. It is at the will of the Secretary. Under Mr. Wolcott's bill they are appointed for a 5-year period, I believe, with the proviso for staggering the terms, as I interpret it. I have just had an opportunity to glance at the bill briefly and may not have caught all the changes.

The CHAIRMAN. And under both bills they may be removed from the Board by the President.

Mr. DODD. That is correct.

The CHAIRMAN. The difference between this Corporation and other corporations which we have set up in years past, notably the Reconstruction Finance Corporation, is that the other corporations, most of them, were set up as independent agencies of the Government? Mr. DODD. That is correct.

The CHAIRMAN. And not within the executive establishment. And, therefore, could not be removed at will by the President?

Mr. DODD. That is correct.

The CHAIRMAN. Under this bill, we establish the Corporation within the executive establishment, and it naturally follows that the President may remove them at will.

The first change relating to contracts was under the theory that the Congress, under the Constitution, may abrogate contracts, and may impair the validity of contracts, but Congress cannot constitutionally delegate that authority to a Government corporation?

Mr. DODD. During some of the support operations, as well as some of the procurement operations, requiring storage, it has been necessary in the past for the Corporation to agree to amend a contract, or the holder of the contract would probably have suffered pretty heavy damage-not through any fault of his own, but through a combination of circumstances which just made it impossible for him to deliver under the contract.

The CHAIRMAN. I might say that that was eliminated from the House bill for the purpose of focusing the discussion of the committee on it, and we may be able to harmonize the differences in such a manner as to accomplish the desired purposes.

Mr. DODD. I might mention, Mr. Chairman, just one example of when it is necessary to change contracts. We enter into long-term storage contracts with warehousemen for the storage of certain commodities. The example I had in mind was that of cotton.

Twice, to my knowledge-and it might have occurred oftenercertain warehousemen had agreed to store cotton in acceptable warehouses so that farmers could obtain a loan on the cotton, expecting to move the cotton through their warehouse to some terminal or to some permanent storage. Because of shortages of boxcars or other reasons, cotton was received by the warehouseman faster than he could store it

in the warehouse. We either had to change the contract, and allow him to store the cotton outside temporarily, until he could ship out some of the stock in his warehouse, or we would have denied the farmers an opportunity to get a loan on their cotton. In those cases we did amend the contract to provide for temporary storage outside of the warehouse.

It is things of that nature which come up quite often where the man would suffer a loss if he carried out the operations on his own, or where the farmers would suffer a loss if being deprived of the opportunity to change the contract.

The CHAIRMAN. We might see, Mr. Dodd, if we cannot find some language which would give you as broad authority in that respect as the Senate bill apparently does and still carry out what our intent undoubtedly would be if we reported the bill out in its present form. Mr. DODD. I will be glad to give that some attention, Mr. Chairman. The CHAIRMAN. Mr. Dodd, for the record, and preliminary to your testimony, we have received a letter from Secretary Anderson, which is identical, I understand, with the letter which was included in the Senate report, addressed to the President pro tempore of the Senate. It will be included in the record.

(The letter referred to is as follows:)

DEPARTMENT OF AGRICULTURE,
Washington, April 16, 1947.

Hon. ARTHUR H. VANDENBERG,

President pro tempore, United States Senate. DEAR MR. PRESIDENT: Section 304 (b) of the Government Corporation Control Act (Public Law 248, 79th Cong.) provides that no wholly owned Government corporation, created by or under the laws of any State, shall continue after June 30, 1948, as an agency or instrumentality of the United States. That section further provides that prior to June 30, 1948, any such State-chartered wholly owned corporation may be reincorporated by act of the Congress. The Senate and House Committees on Appropriations, in reporting on the Government corporation appropriation bill, 1947, requested, if it were proposed that any wholly owned Government State-chartered corporation be continued after June 30, 1948, that recommendations with respect to the necessary legislation to accomplish that purpose be transmitted to the Congress at the time the 1948 budget is submitted (S. Rept. 1617, 79th Cong., 2d sess., p. 3; H. Rept. 2269, 79th Cong., 2d sess., pp. 3 and 4).

The Commodity Credit Corporation is a State-chartered corporation wholly owned by the United States. The President, in his budget message to the Congress this year, recommended that the Commodity Credit Corporation be rechartered by act of the Congress and that its present borrowing authority of $4,750,000,000 be renewed (H. Doc. No. 19, 80th Cong., 1st sess., p. M 36). In conformity, therefore, with the request of the Senate and House Committees on Appropriations, there is herewith transmitted a draft of legislation to provide a Federal charter for the Commodity Credit Corporation which we recommend for enactment.

There is also enclosed a statement which analyzes the provisions of the proposed legislation and, as background for its consideration, reviews the creation, purpose, financial structure, management, and operations of the State-chartered Commodity Credit Corporation which would be replaced by the federally chartered Corporation. Since the enclosed statement is comprehensive, it is unnecessary to discuss further the details of the proposed legislation. I do wish to emphasize, however, the extreme importance of the legislation. The Commodity Credit Corporation has, during the more than 13 years that it has been in existence, played a vital role in stabilizing, supporting, and protecting farm income and prices, assisting in the maintenance of balanced and adequate supplies of agricultural commodities, foods, feeds, and fibers, and facilitating their orderly distribution. The Corporation is the agency through which the Government's price-support commitments to farmers are carried out. It is, in my opinion, essential to the welfare of American agriculture in the uncertain periods ahead

R

that it have available a Federal agency with the flexible authority in the field of agriculture which is vested by the enclosed charter in the Commodity Credit Corporation.

Your attention is called to the fact that the status of the Commodity Credit Corporation, a Delaware corporation, as an agency of the United States, expires as of the close of business June 30, 1947. Therefore, in order that Commodity Credit Corporation may continue as an agency of the United States beyond June 30, 1947, it will be necessary that legislation be enacted prior to June 30, 1947, providing a Federal charter for the Corporation, or that legislation be enacted prior to June 30, 1947, authorizing the existing Corporation to continue as an agency of the United States.

The Bureau of the Budget advises that it has no objection to this submission. Sincerely yours,

CLINTON P. ANDERSON, Secretary.

The CHAIRMAN. Also the statements which you referred to, and which are a part of that report, will be made a part of the record. (The information referred to is as follows:)

STATEMENT IN CONNECTION WITH THE COMMODITY CREDIT CORPORATION
CHARTER BILL

This statement is prepared in two parts.

Part I reviews the creation, purpose, financial structure, management, and operations of the Delaware corporation, and the laws directing or limiting its operations, in order that the Congress may have an adequate background for consideration of the proposed Federal charter.

Part II contains a section-by-section analysis of the proposed Commodity Credit Corporation Charter Act which creates a Federal corporation to be known as the Commodity Credit Corporation. This Corporation will replace the existing Commodity Credit Corporation, which is a Delaware corporation. Section 304 (b) of the Government Corporation Control Act (31 U. S. C., 1940 ed., Sup. V, 869) requires that wholly owned Government corporations incorporated under State law be reincorporated by act of the Congress in order to continue as agencies or instrumentalities of the United States after June 30, 1948.

Creation and purposes

PART I. THE DELAWARE CORPORATION

Commodity Credit Corporation was created under the laws of the State of Delaware pursuant to Executive Order No. 6340, dated October 16, 1933, issued by virtue of the authority vested in the President by section 2 (a) of the National Industrial Recovery Act of June 16, 1933 (48 Stat. 195). The act of January 31, 1935 (49 Stat. 1), directed that the Corporation should "continue until April 1, 1937, or such earlier date as may be fixed by the President by Executive order, to be an agency of the United States." The Corporation has been continued as an agency of the United States until June 30, 1948, by successive amendments to the act of January 31, 1935 (50 Stat. 5, 53 Stat. 510, 55 Stat. 498, 57 Stat. 566, 57 Stat. 643, 58 Stat. 105, 59 Stat. 50, 61 Stat. 201; 15 U. S. C., 1940 ed., Sup. V, 713). By section 401 of the President's Reorganization Plan No. 1 (5 U. S. C., 1940 ed., 133t, note) and section 501 of the President's Reorganization Plan No. 3 of 1946, the Corporation was made a part of the United States Department of Agriculture, and the Secretary of Agriculture was given the responsibility of general direction, supervision, and administration of its operations.

The charter of the Commodity Credit Corporation authorizes the Corporation, among other things, to engage in buying, selling, lending, and other activities with respect to agricultural commodities, products thereof, and related facilities. These charter powers have enabled the Corporation to engage in extensive operations for the purpose of stabilizing, supporting, and protecting farm income and prices, and assisting in the maintenance of balanced and adequate supplies, and facilitating the orderly distribution of agricultural commodities, products thereof, foods, feeds, and fibers. During the war emergency the operations of the Commodity Credit Corporation have played a vital role in increasing production, stabilizing prices, assuring adequate supplies, and facilitating the efficient distribution of agricultural commodities, products thereof, foods, feeds, and fibers.