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INTERNATIONAL WHEAT AGREEMENT FUNDS

WEDNESDAY, SEPTEMBER 21, 1949

UNITED STATES SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON
AGRICULTURE AND FORESTRY,

Washington, D. C. The subcommittee met, pursuant to call, at 2:45 a. m., in the District of Columbia Room, United States Capitol Building, Senator Olin D. Johnston presiding.

Present: Senators Johnston (presiding), Holland, and Young.

Also present: A. J. Borton, Office of Manager, Commodity Credit Corporation.

Senator JOHNSTON. The subcommittee, consisting of Senator Holland, Senator Gillette, Senator Young, Senator Hickenlooper, and myself, was appointed to hold hearings on S. 2287 and S. 2383, and I believe the Secretary has some witnesses at this time to be heard. (S. 2287 and S. 2383 follow.)

(S. 2383, 81st Cong., 1st sess.) A BILL To give effect to the International Wheat Agreement signed by the United States and other coun

tries relating to the stabilization of supplies and prices in the international wheat market Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act shall be known as the “International Wheat Agreement Act of 1949."

SEC. 2. The President is hereby authorized, acting through the Commodity Credit Corporation, to make available or cause to be made available, notwithstanding the provisions of any other law, such quantities of wheat and wheat flour and at such prices as are necessary to exercise the rights, obtain the benefits, and fulfill the obligations of the United States under the International Wheat Agreement of 1949 signed by Australia, Canada, France, the United States, and Uruguay, and certain wheat importing countries (hereinafter called "International Wheat Agreement”). Nothing herein shall be construed to preclude the Secretary of Agriculture, in carrying out programs to encourage the exportation of agricultural commodities and products thereof pursuant to section 32 of Public Law 320, Seventy-fourth Congress, as amended, from utilizing funds available for such programs in such manner as, either separately or jointly with the Commodity Credit Corporation, to exercise the rights, obtain the benefits, and fulfill all or any part of the obligations of the United States under'the International Wheat Agreement or to preclude the Commodity Credit Corporation in otherwise carrying out wheat and wheat flour export programs as authorized by law. Nothing contained herein shall limit the duty of the Commodity Credit Corporation to the maximum extent practicable consistent with the fulfillment of the Corporation's purposes and the effective and efficient conduct of its business to utilize the usual and customary channels, facilities, and arrangements of trade and commerce in making available or causing to be made available wheat and wheat flour hereunder. The pricing provisions of section 112 (e) of the Economic Cooperation Act of 1948 and section 4 of the Act of July 16, 1943 (57 Stat. 586), shall not be applicable to domestic wheat and wheat flour supplied to countries which are parties to the International Wheat Agreement and credited to their guaranteed purchases thereunder.

Sec. 3. (a) The President is hereby further authorized to take such other action, including prohibiting or restricting the importation or exportat ion of wheat

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or wheat flour and to issue such rules or regulations which shall have the force and effect of law, as may be necessary in his judgment in the implementation of the International Wheat Agreement.

(b) All persons exporting or importing wheat or wheat flour or selling wheat or wheat flour for export shall report to the President such information as he may from time to time require and keep such records as he finds to be necessary to enable him to carry out the purposes of this Act. Such information shall be reported and such records shall be kept in accordance with such regulations as the President may prescribe. For the purposes of ascertaining the correctness of any report made or record kept, or of obtaining information required to be furnished in any report, but not so furnished, the President is hereby authorized to examine such books, papers, records, accounts, correspondence, contracts, documents, and memoranda as he has reason to believe are relevant and are within the control of any such person.

(c) Any person failing to make any report or keep any record as required by or pursuant to this section 3, or making any false report or record or knowingly violating any rule or regulation of the President issued pursuant to this section 3 shall be deemed guilty of a misdemeanor and upon conviction thereof shall be subject to a fine of not more than $1,000 for each violation.

(d) Any person who knowingly exports wheat or wheat flour from the United States, or who knowingly imports wheat or wheat flour into the United States for consumption therein, in excess of the quantity of wheat or wheat flour permitted to be exported or imported, as the case may be, under regulations issued by the President, shall forfeit to the United States a sum equal to three times the market value, at the time of the commission of any such act, of the quantity of wheat or wheat flour by which any such exportation or importation exceeds the authorized amount which forfeiture shall be recoverable in a civil suit brought in the name of the United States.

(e) The several district courts of the United States are hereby vested with jurisdiction specifically to enforce, and to prevent and restrain any persons from violating, the provisions of this Act or of any rule or regulation made or issued pursuant to this Act. The remedies, fines, and forfeitures provided for in this Act shall be in addition to, and not exclusive of, any of the remedies, fines, and forfeitures under existing law.

(f) Any power, authority, or discretion conferred on the President by this Act may be exercised through such department, agency, or officer of the Government as the President may direct, and shall be exercised in conformity with such rules or regulations as he may prescribe.

(g) There are hereby authorized to be appropriated such sums as may be necessary to carry out the provisions of this section, including the necessary expenses and contributions of the United States in connection with the administration of the International Wheat Agreement.

(h) Funds appropriated under authority of this Act may be used for the purchase or hire of passenger motor vehicles, for printing and binding, for rent and personal services in the District of Columbia and elsewhere without regard to the limitation contained in section 607 (g) of the Federal Employees Pay Act of 1945, as amended, and for the employment of experts or consultants or organization thereof, on a temporary basis, by contract or otherwise, without regard to the Classification Act, at rates not in excess of $50 per diem.

(i) The functions exercised under authority of this Act shall be excluded from the operation of the Administrative Procedure Act (60 Stat. 237) except as to the requirements of sections 3 and 10 thereof.

(S. 2287, 81st Cong., 1st sess.) A BILL To give effect to the International Wheat Agreement entered into by the United States and other

countries relating to the stabilization of supplies and prices in the international wheat market Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act shall be known as the “International Wheat Agreement Act of 1949.”

SEC. 2. The Secretary of Agriculture is hereby authorized, acting through the Commodity Credit Corporation, to make available or cause to be made available, notwithstanding the provisions of any other law, such quantities of wheat and wheat flour and at such prices as are necessary to exercise the rights, obtain the benefits, and fulfill the obligations of the United States under the International Wheat Agreement of 1949 between Australia, Canada, France, the United States, and Uruguay, and certain wheat-importing countries (hereinafter called "International Wheat Agreement”). The Commodity Credit Corporation shall not be required to provide for its operations in connection with the International Wheat Agreement in its budget programs submitted to Congress pursuant to the Government Corporation Control Act prior to the budget program submitted for the fiscal year 1951. In the case of domestic wheat and wheat flour supplied through grants under the Economic Cooperation Act of 1948 to countries which are parties to the International Wheat Agreement and credited to their respective guaranteed purchases thereunder, the commensurate amount required to be deposited in special accounts pursuant to section 115 (b) (6) of the Economic Cooperation Act of 1948 shall be based upon the applicable minimum price specified in the International Wheat Agreement and transfer of any quantities of such commodities by the Commodity Credit Corporation to the Economic Cooperation Administration shall be made at prices applicable by law to other transfers of wheat and wheat flour between such agencies. Nothing herein shall be construed to preclude the Secretary of Agriculture, in carrying out programs to encourage the exportation of agricultural commodities and products thereof pursuant to section 32 of Public Law 320, Seventy-fourth Congress, as amended, from utilizing funds available for such programs in such manner as, either separately or jointly with the Commodity Credit Corporation, to exercise the rights, obtain the benefits, and fulfill all or any part of the obligations of the United States under the International Wheat Agreement or to preclude the Commodity Credit Corporation in otherwise carrying out wheat and wheat flour export programs as authorized by law.

SEC. 3. (a) The Secretary of Agriculture is hereby further authorized to take such other action, including prohibiting or restricting the importation or exportation of wheat or wheat flour, and to issue such rules or regulations which shall have the force and effect of law, as may be necessary in the implementation of the International Wheat Agreement.

(b) All persons exporting or importing wheat or wheat flour or selling wheat or wheat flour for export shall, from time to time as required by the Secretary of Agriculture, report to him such information and keep such records as he finds to be necessary to enable him to carry out the purposes of this Act. Such information shall be reported and such records shall be kept in accordance with such regulations as the Secretary of Agriculture may prescribe. For the purposes of ascertaining the correctness of any report made or record kept, or of obtaining information required to be furnished in any report, but not so furnished, the Secretary of Agriculture is hereby authorized to examine such books, papers, records, accounts, correspondence, contracts, documents, and memoranda as he has reason to believe are relevant and are within the control of any such person.

(c) Any person failing to make any report or keep any record as required by or pursuant to this section 3, or making any false report or record or knowingly violating any rule or regulation of the Secretary of Agriculture issued pursuant to this section 3 shall be deemed guilty of a misdemeanor and upon conviction thereof shall be subject to a fine of not more than $1,000 for each violation.

(d) Any person who knowingly exports wheat or wheat flour from the United States, or who knowingly imports wheat or wheat flour into the United States for consumption therein, in excess of the quantity of wheat or wheat flour permitted to be exported or imported, as the case may be, under regulations issued by the Secretary of Agriculture shall forfeit to the United States a sum equal to three times the market value, at the time of the commission of any such act, of the quantity of wheat or wheat flour by which any such exportation or importation exceeds the authorized amount, which forfeiture shall be recoverable in a civil suit brought in the name of the United States.

(e) The several district courts of the United States are hereby vested with jurisdiction specifically to enforce, and to prevent and restrain any persons from violating, the provisions of this Act or of any rule or regulation made or issued pursuant to this Act. If and when the Secretary of Agriculture shall so request, it shall be the duty of the several district attorneys of the United States, in their respective districts, to institute proceedings to enforce the remedies and to collect the penalties and forfeitures provided for in this Act. The remedies provided for in this Act shall be in addition to, and not exclusive of, any of the remedies or penalties under existing law.

(f) The Secretary of Agriculture may exercise any power, authority, or discretion conferred on him by this section through any officer or agency within the Department of Agriculture, or with the consent of the agency concerned through any department or agency, of the Government, and in conformity with such rules or regulations as the Secretary of Agriculture may prescribe.

(g) There are hereby authorized to be appropriated such sums as may be necessary to carry out the provisions of this section, including the necessary expenses and contributions of the United States in connection with the administration of the International Wheat Agreement.

(h) Funds appropriated under authority of this Act may be used for the purchase or hire of passenger motor vehicles, for printing nad binding, for rent and personal services in the District of Columbia and elsewhere without regard to the limitation contained in section 607 (g) of the Federal Employees Pay Act of 1945, as amended, and for the employment of experts or consultants or organizations thereof, on a temporary basis, by contract or otherwise, without regard to the Classification Act, at rates not in excess of $50 per diem.

(i) The functions exercised under authority of this Act shall be excluded from the operation of the Administrative Procedure Act (60 Stat. 237) except as to the requirements of sections 3 and 10 thereof.

(j) This Act shall take effect upon the ratification of the International Wheat Agreement.

Senator JOHNSTON. I have here a copy of a letter dated July 18, 1949, from Secretary of Agriculture Charles F. Brannan, requesting enactment of S. 2383.

I also have a copy of an adverse report dated August 8, 1949, from Acting Secretary of Agriculture A. J. Loveland on s. 2287, which I insert in the record at this time. (The letters above referred to are as follows:)

DEPARTMENT OF AGRICULTURE,

Washington, July 18, 1949. The honorable the PRESIDENT OF THE SENATE.

DEAR MR. PRESIDENT: There is transmitted herewith for consideration by the Congress a draft of legislation which would authorize the President, acting through the Commodity Credit Corporation and such other epartment, agency, or officer of the Government as the President may designate, to take certain action necessary in the implementation of the international wheat agreement.

The basic objective of the international wheat agreement is to assure wheat supplies to importing countries and a wheat market to the exporting countries at equitable and stable prices. The agreement provides, among other things, that during the period covered thereby the United States will export annually 168,000,000 bushels of wheat at specified prices.

The Secretary of Agriculture has in the past carried out programs to encourage the exportation of surplus wheat and wheat products pursuant to section 32, Public Law 320, Seventy-fourth Congress, as amended (7 U. S. C. 612 (c)). In view of the need of section-32 funds in connection with the price support of perishable and other agricultural commodities and the limitation which prevents more than 25 percent of such funds from being spent on any one commodity, section-32 funds, standing alone, would not be sufficient to discharge the obligations of the United States under the agreement. Therefore, the draft bill directs the President, acting through the Commodity Credit Corporation, to make purchases and sales of wheat and wheat flour, or otherwise to cause to be made available such quantities of wheat and wheat flour at such prices as may be necessary to exercise the rights, obtain the benefits, and fulfill the commitments of the United States under the agreement. This direction to the Corporation, however, does not prohibit the Secretary from utilizing section-32 funds, to the extent that such funds may otherwise be available, to encourage the exportation of wheat, coordinating such program with those of the Commodity Credit Corporation.

It is proposed that this authority be exercised through the Commodity Credit Corporation. We believe that utilization of this Corporation, long experienced in the type of operations required, would assure the exercise of our rights and the performance of our obligations under the agreement in an efficient and economical manner and would permit better coordination of such operations with the other operations of the Corporation as authorized by law. The Corporation carries out a price-support program under which it acquires wheat. It also has authority under its charter to procure agricultural commodities to supply requirements of foreign governments to remove and dispose of or aid in the removal or disposition of surplus agricultural commodities, and to export or cause to be exported or aid in the development of foreign markets for agricultural commodities. The Corporation in making wheat and wheat flour available or causing them to be made

available pursuant to the agreement could utilize wheat acquired under its pricesupport program or procure the commodities upon the open market or make subsidy payments to exporters who would make sales to the designated countries in the quantities and at the price required.

Commodity Credit Corporation supplies wheat which moves under the Economic Cooperation Act of 1948. Wheat purchased for the purpose of supplying the needs of the Economic Cooperation Administration is sold to that Administration at a price which fully reimburses the Commodity Credit Corporation for its costs as required by section 4 of the act of July 16, 1943 (15 U. S. C. secs. 713 (a)19). It appears likely that in the future the principal source of wheat to supply the needs of the Economic Cooperation Administration will be wheat acquired by the Commodity Credit Corporation under its price-support program. Section 112 (e) of the Economic Cooperation Act of 1948 requires the Economic Cooperation Administration to meet its needs for wheat moving by grant from stocks acquired by Commodity Credit Corporation under its price-support program and determined by the Secretary to be surplus and available for use in furnishing assistance to foreign countries. Section 112 (e) also provides that the sales price paid as reimbursement to Commodity Credit Corporation for such wheat shall be the cost of such wheat or, if lower, the domestic market price of the wheat, subject to the authority in the Secretary of Agriculture to use section-32 funds to pay not to exceed 50 percent of such sales price. The proposed bill contemplates that wheat supplied under the Economic Cooperation Act of 1948 to countries parties to the agreement will be credited to their guaranteed purchases whenever the conditions of the agreement are satisfied. In this connection, it will be noted that the proposed bill contains a provision which would exempt from the pricing requirements of section 4 of the act of July 16, 1943, and section 112 (e) of the Economic Cooperation Act transactions in wheat and wheat flour credited to the respective guaranteed purchases of countries which are parties to the agreement. Thus, any such wheat or wheat flour would be priced by the Corporation on the basis established by the agreement rather than pursuant to section_4 or section 112 (e). This will mean a saving in the cost of such wheat to the Economic Cooperation Administration in an amount equal to the difference between the domestic market price of such wheat and the agreement price. On the other hand, this saving to the Economic Cooperation Administration will represent an increase in the cost to the Commodity Credit Corporation of implementing the agreement. A similar saving in the purchase of wheat and wheat flour for consumption in Germany and Japan will not inure to the Department of the Army, however, since those countries are not participating in the agreement.

This draft bill would also empower the President, acting through such department, agency, or officer of the Government as he may designate, to regulate wheat exports and imports and to issue such rules and regulations relating thereto as he may deem necessary to the accomplishment of the purposes of the legislation. The authority to regulate the movement of wheat into and out of the United States is considered essential to the proper fulfillment of our responsibilities under the agreement.

Other provisions of the proposed bill would authorize the issuance of regulations requiring persons engaged in exporting and importing wheat and wheat flour, or selling wheat or wheat flour for export, to keep records of such transactions and to permit the inspection of such records. The President would also be authorized to issue such rules and regulations as may be necessary to carry out the power vested in him by the act. Appropriate penalties are prescribed to assure compliance with the proposed legislation or the regulations issued thereunder.

We are also submitting this proposed legislation to the Speaker of the House.

The Bureau of the Budget advises that, from the standpoint of the President's program, there is no objection to the submission of this proposed legislation and explanatory letter to the ress for its consideration. Sincerely yours,

CHARLES F. BRANNAN, Secretary. Enclosure.

DEPARTMENT OF AGRICULTURE,

Washington, August 8, 1949. Hon. ELMER THOMAS, Chairman, Committee on Agriculture and Forestry,

United States Senate. DEAR SENATOR THOMAS: This is in reply to your request of July 21, 1949, for a report on S. 2287, a bill to give effect to the international wheat agreement

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