Mr. CAMPBELL. No.

Mr. BALLINGER. How about those industries that are unionized? Suppose you did get rid of the wage-hour law?

Mr. CAMPBELL. They would not be affected. It would be the nonunion shop that would be affected, but we would get more out of the men than we are getting at the present time, so far as production is concerned. We as an open shop could use our trained men longer hours than we are getting at the present time but our production would be increased. Production is what the country needs.

Chairman PLOESER. We thank you.

(Witness excused.)

The committee will adjourn until 2 o'clock.

(Whereupon the committee adjourned until 2 o'clock.)

AFTERNOON SESSION

(The committee reconvened at 2 o'clock.)

Chairman PLOESER. The committee will come to order.

STATEMENT OF JOSEPH B. GREGG, ON BEHALF OF MORRISONGREGG-MITCHELL GRAIN CO.

Mr. BALLINGER. Give your full name for the record.

Mr. GREGG. Joseph B. Gregg.

Mr. BALLINGER. What is your business?

Mr. GREGG. Grain business.

Mr. BALLINGER. With what company?

Mr. GREGG. Morrison-Gregg-Mitchell Grain Co.

Mr. BALLINGER. Are you president of the company?

Mr. GREGG. I am a member of the partnership.

Mr. BALLINGER. You have a complaint to make to the committee? Mr. GREGG. I have a complaint to make; yes, sir.

Mr. BALLINGER. You may proceed.

Mr. GREGG. My name is Joseph B. Gregg, and I reside in Kansas City, and am engaged in the grain business. For many years I have been a member of the firm of Morrison-Gregg-Mitchell Grain Co., a partnership operating country elevators in various points in Kansas and Nebraska, and with headquarters in Kansas City.

As country grain dealers, we purchase grain from farmers in the country, assemble it in carloads, and sell the grain wherever we can find the best market. We also take in a large quantity of grain from farmers on storage arrangements under which we store the grain in our own elevators or ship it to markets like Kansas City for storage in the large terminal elevators.

Our business is typical of a large number of dealers located throughout Missouri, Kansas, Nebraska, Oklahoma, and other Midwest States. It is a highly competitive business in which the handling margins are small, and alert and aggressive management is necessary if we are to show a profit. We are definitely in the class of enterprise known as "small business" for our capital and our field of operations are decidedly limited. Accordingly, we feel at home before this committee, which we know to be sympathetic to the problems of small business. Given a fair chance to operate, we have, and can make a

fair profit in spite of all of the unfair competition to which we are subjected. I refer principally to the operations of Commodity Credit Corporation, which I shall discuss later. We do not feel, however, that we are being given a fair chance when men in high places in the Government of the United States make unwarranted charges against a legitimate business.

I come before this committee to challenge the recent statement of Charles F. Brannan, Secretary of Agriculture, and J. Howard McGrath, Senator from Rhode Island and chairman of the National Democratic Committee.

Recently Mr. Brannan made the charge, later echoed by Chairman McGrath, that the recent charter granted to the Commodity Credit Corporation by the Congress is calculated to injure or ruin farmers throughout the country because this huge governmental corporation is prohibited from owning real property, such as elevators and warehouses. They then went on to say that this section of the new charter was urged by people in the grain business, like ourselves, in order that storage space might be inadequate and so that farmers unable to store their grain would be forced to sell their grain at a sacrifice in order that the grain men might make "inordinate profits" out of the farmers' plight.

These statements are false and untrue, or, by the most charitable construction, incorrect.

Senator McGrath, in his capacity as a Senator from Rhode Island, presumptively has little knowledge of the grain business or the problems of grain farmers, consequently, his remarks may be brushed aside as mere utterances in his political capacity. Mr. Brannan, on the other hand, is Secretary of Agriculture and is, or must be presumed to be, conversant with the facts concerning which he makes his indefensible statements and should be held to strict account for misleading statements issued in his official capacity. The statements of Messrs. McGrath and Brannan are inaccurate, misleading, and untrue in the following particulars:

(1) The sections of the Commodity Credit Charter to which they direct their complaints are two in number. The first prohibits the Corporation from owning or leasing real property except that which was owned or leased as of July 1, 1948. The second provision, which wrings the bureaucratic heart, is a provision which directs the Corporation in its operations to use private and existing channels of trade to the maximum extent "practicable and consistent with the fulfillment of the Corporation's purposes and the effective and efficient conduct of its business."

The Congress wisely wrote these provisions into the new charter in order that this gigantic Government-owned Corporation might be required to interfere with private business to the least extent practicable. Since when has it been a crime, except in the bureaucratic eye, to protect the rights of private business rather than to turn over our whole economic system to governmental monopolies? What Messrs. McGrath and Brannan were really complaining of was the long-overdue action of the Congress in starting to take the Government out of business.

(2) There is no evidence of a substantial lack of permanent storage space in this country. As a matter of fact, farmers have, over the last 10 years, greatly increased their farm-storage facilities. A re

cent report released by the United States Department of Agriculture on July 9, 1948, states that from a survey of the farms in our neighboring State of Kansas, it appears that there is an aggregate farmstorage capacity for small grains in that State of 307,541,000 bushels. The estimated production of wheat in the State of Kansas is 215,688,000. Consequently, when the Department of Agriculture's own figures show a surplus of private storage capacity, plus commercial facilities available at country elevator points and at city terminals, it is hard to believe that there is any material shortage of storage space in the typical farm State, Kansas, at this time.

Secretary Brannan's statement is at variance with the report issued by his own Department of Agriculture on September 4, which indicates that stocks of grain in public elevators over the United States was, as of that date, filled only to the following percentages:

The truth of the matter is that the bottlenecks and storage shortages which have appeared are local in nature and have been caused to a large extent by the bungling operations of the Commodity Credit Corporation, which is, to a large extent, under Mr. Brannan's supervision.

To be specific, in Kansas City, the warehouse and elevator walls are bulging as of today. In Chicago, on the other hand, there is a great deal of available space, as any elevator operator in that city will sadly testify. This situation comes about because the Commodity Credity Corporation has offered a loan on wheat in Chicago of $2.29 per bushel, and $2.24 a bushel in Kansas City. However, the freight differential between the two cities is 14 cents. In other words, it costs 9 cents more per bushel to ship grain to Chicago rather than to Kansas City. Consequently, grain which should be flowing into empty elevators in Chicago, Buffalo, and elsewhere. is held in Kansas City because of the unrealistic loan price of the Commodity Credit Corporation.

It would be interesting and informative to have a statement from Mr. Brannan as to the reasoning back of Commodity Credit Corporation's decision to fix loan rates in such a way that grain cannot and will not flow from crowded storage areas to other points where adequate facilities exist.

We call the committee's attention to the report of the Department under date of September 4, which shows that the west central and southwestern region, which includes Kansas City, is 83.3 percent full, while the facilities in other areas are only being employed to aproximately one-third of their capacity.

(3) Mr. Brannan's charge that the grain men secured the passage of the new Commodity Credit Act in order to make "inordinate profits" out of the distressed grain of farmers is not only untrue, as will be demonstrated, but brings up the interesting situation which convicts Mr. Brannan's own Department of this very practice.

The operators of grain elevators and warehouses derive their income from two sources: First, they store grain and commodities owned by other people for the profit derived from the storage charges; second, they buy commodities and store them in their warehouses, likewise to make a merchandising profit, and these commodities they buy and sell and change and exchange from time to time. However, when an elevator operator buys 100,000 bushels of wheat, he immediately hedges that purchase, so that it is immaterial to him whether the market goes up or down.

Let me explain what I mean. You have heard from men in high places, from some very high sources, that a grain man is a speculator. Any elevator operator who buys grain and makes a purchase of it, at the time he buys it is perfectly willing to operate on a small margin of profit. So there is no such thing as a gamble in the elevator business, because they could not last 15 minutes. These men buy this grain and hedge it. It is a sale and purchase at the same time, merely for a small handling profit. They get what we feel any private enterprise is entitled to have. His profit comes from the storage or the merchandising of the grain.

On the other hand, the Commodity Credit Corporation is the largest outright buyer of grain. Most of the grain which it purchases is acquired for export requirements. The export business is the primary influence on the level of grain values. The CCC has, by governmental action, monopolized this field by excluding the private export trade from the export business.

In other words, in years past there have been a very large number of big companies who have handled a great deal of the export business of this country. They have been completely obliterated from the picture by the Government, and I mean the Commodity Credit Corporation, in that they are not allowed to handle any grain for export. It is all handled by the Commodity Credit Corporation direct.

Contrary to Mr. Brannan's charge that the grain bought on the market by the dealer was held by them for an "inordinate profit," most of it was sold to none other than Mr. Brannan's own Commodity Credit Corporation. On September 13, it was reported that the Kansas City office of CCC had, since June 30, purchased a total of 45,384,000 bushels of wheat. Practically all of this wheat was bought by the Corporation at prices under the loan level, and recent purchases by the Coporation have been made at approximately 6 cents under the loan price.

We suggest that instead of charging grain dealers with buying this wheat at subnormal prices and making a terrific profit thereby, the Secretary should inquire into and explain to this committee or to the farmers of the country, whose interests he professes to safeguard, the policy of the Corporation in establishing buying prices at less than the support level contemplated and provided for by existing laws. Had Mr. Brannan's Corporation maintained the buying price at the loan level, it would not have been possible for the market to fall below the loan price. Accordingly, it would seem in order for Mr. Brannan to come forward and tell the country why he persists in buying wheat at subloan prices, which he considers a heinous offense if done by private purchasers.

Small grain dealers like ourselves have succeeded in making a living over a long period of time. We own plants and facilities throughout

the country, and when materials are available and if the demand continues, we shall build some more, which, incidentally, any private dealer will do if he is assured freedom from Government competition as now provided by the new CCC charter granted by the Eightieth Congress.

We pay our taxes at the same time we are competing with the Commodity Credit Corporation, which pays no taxes and whose losses every year are made good by the Federal Treasury. In spite of all of the handicaps and restrictions with which private business is confronted, American business will carry on.

We submit, however, Mr. Chairman and members of this committee, that it is bad enough to have inaccurate and irresponsible charges made by Senator McGrath in his political capacity; even worse, we feel that for the Secretary of Agriculture, a Cabinet officer and one charged with the knowledge of the problems of the entire agricultural economy, including farmers, distributors, shippers, merchants, and so forth, that the charges which he knew, or should have known, to be false, is a misuse of power which ill becomes the dignity of the high office which he holds.

Mr. BALLINGER. I have no questions.

Mr. GREGG. That is my statement to the committee.

Chairman PLOESER. Anything you would like to add?

Mr. GREGG. No. I think I have covered everything I need to say unless you have some questions.

Chairman PLOESER. I do not have any particular questions. The Chair would like to say that the outgrowth of thinking which has been expressed obviously by the Secretary of Agriculture and by the Senator is the result of certain thinking during the past two decades in which too many in government look upon those in business as whipping posts. They do not really think they are criminals; they think they are something to be used as targets for their social planning

schemes.

Mr. GREGG. That is exactly the way I feel.

Chairman PLOESER. America must rise above that and the only group in America that has the courage and the power to rise above it and save the Nation is the small-business men and the farmers.

Mr. GREGG. That is right.

Chairman PLOESER. In anything they can do and will do. I have confidence they will do it. I appreciate what you have had to say and I thank you for your comments.

Mr. GREGG. I thank you gentlemen. (Witness excused.)

STATEMENT OF LOUIS M. SOSNA

Mr. BALLINGER. State your name.

Mr. SOSNA. Louis M. Sosna.

Mr. BALLINGER. What is your business?

Mr. SOSNA. I am an independent exhibitor owning a theater.

Mr. BALLINGER. Are you a member of the Allied Motion Picture group?

Mr. SOSNA. Yes. I am in opposition to a circuit like Fox, which is an affiliated circuit; also in opposition to an independent circuit. I am an exhibitor who has two oppositions.