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TO AMEND THE FEDERAL FARM BOARD ACT APPROVED

JUNE 15, 1929

WEDNESDAY, JUNE 15, 1932

HOUSE OF REPRESENTATIVES,
COMMITTEE ON RULES,

Washington, D. C. The eommittee met at 10.30 o'clock a. m., Hon. William B. Bankhead presiding.

[H. R. 12617, Seventy-second Congress, first session]

A BILL To amend the Federal Farm Board act, approved June 15, 1929 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the agricultural marketing act (Public, Numbered 10, approved June 15, 1929) is amended by adding after section 10 five new sections, as follows:

“Sec. 11. (a) From time to time, upon request of the advisory committee for any agricultural commodity, or upon request of leading cooperative associations or other organizations of producers of any agricultural commodity, or upon its own motion, the board shall investigate the supply and marketing situation in respect of such agricultural commodity:

(b) Whenever upon such investigation the board finds

"First. That there is or may be during the ensuing year a seasonal or year's total surplus, produced in the United States and national in extent, that is in excess of the requirements for the orderly marketing of any agricultural commodity or in excess of the domestic requirements for the commodity;

""Second. That the operation of the provisions of section 5 (relating to loans to cooperative associations or corporations created and controlled by one or more cooperative associations) will not be effective to control such surplus because of the inability or unwillingness of the cooperative associations engaged in handling the commodity, or corporations created and controlled by one or more such cooperative associations, to control such surplus with the assistance of such loans;

“Third. That the cost of production of any agricultural commodity has been ascertained to be in excess of the prevailing market price secured by growers for such commodity and an estimate has been made for such agricultural commodity as to the part of its domestic production which is needed for consumption; and

"Fourth. That the durability and conditions of preparation, processing, and preserving and the methods of marketing of the commodity are such that the commodity is adapted to marketing as authorized by this section, then the board, after publicly declaring the condition existing relative to one or more of its findings, shall arrange to secure cost of production for that portion of the crop sold in the domestic market by marketing any part of the commodity by means of one or more of the plans hereinafter authorized in Title 1, Title II, Title III; and shall continue until such time as the board finds that the conditions existing relative to one or more of its findings have been corrected and that such arrangements are no longer necessary or advisable for carrying out the policy declared by section 1.

"TITLE I “Sec. 12. (a) A marketing agreement with cooperative associations engaged in handling the commodity or corporations created and controlled by one or more cooperative associations shall provide either

"(1) For the withholding by a cooperative association, or corporation created and controlled by one or more cooperative associations, during such period as shall be provided in the agreement, of any part of the commodity delivered to

such cooperative association or associations by its members. Any such agreement shall provide for the payment from the stabilization fund for the commodity of the cost arising out of such withholding; or

" (2) For the purchase by a cooperative association, or corporation created and controlled by one or more cooperative associations, of any part of the commodity not delivered to such cooperative association or associations by its members, and for the withholding and disposal of the commodity so purchased. Any such marketing agreement shall provide for the payment from the stabilization fund for the commodity of the amount of the losses, costs, and charges arising out of the purchase, withholding, and disposal or out of contracts therefor, and for the payment into the stabilization fund for the commodity of profits (after repaying all advances from the stabilization fund and deducting all costs and charges provided for in the agreement) arising out of the purchase, withholding, and disposal or out of contracts therefor.

“The board shall provide in any such marketing agreement for financing any withholding, purchase, or disposal under such

agreement through advances from the stabilization fund for the commodity. Such financing shall be upon such terms as the board may prescribe, but no such advance shall bear interest.

“If the board is of the opinion that there are two or more cooperative associations or corporations created and controlled by one or more cooperative associations capable of carrying out any marketing agreement, the board in entering into the agreement shall not unreasonably discriminate against any such association or corporation in favor of any other such association or corporation. If the board is of the opinion that there is no such cooperative association or corporation created and controlled by one or more cooperative associations capable of carrying out any marketing agreement for purchase, withholding, and disposal, then the board may enter into the agreement with other agencies, but shall not unreasonably discriminate between such other agencies.

During a marketing period fixed by the board for any commodity, the board may enter into marketing agreements for the purchase, withholding, and disposal of the food products of such commodity, and all provisions of this section applicable to marketing agreements for the purchase, withholding, and disposal of the commodity shall apply to the agreements in respect of its food products.

“Any decision of the board relating to the commencement, extension, or termination of a marketing period shall require the affirmative vote of a majority of the appointed members in office.

“The powers of the board under this section in respect of any agricultural commodity shall be exercised in such manner, and the marketing agreements entered into by the board during any marketing period shall be upon such terms, as will, in the judgment of the board, carry out the policy declared by section 1.

“The United States shall not be liable, directly or indirectly, upon agreements under this title in respect of agricultural commodities, in excess of the amounts available in the stabilization,

premium insurance, and revolving funds. “(b) In order to carry out marketing and price insurance agreements in respect of any agricultural commodity without loss to the revolving fund, each marketed unit of such agricultural commodity produced in the United States shall, throughout any marketing period in respect of such commodity, contribute ratably its equitable share of the losses, costs, and charges arising out of such agreements. Such contributions shall be made by means of an equalization fee apportioned and paid as a regulation of interstate and foreign commerce in the commodity: It shall be the duty of the board to apportion and collect such fee in respect of such commodity as hereinafter provided.

“Prior to the commencement of any marketing period in respect of any agricultural commodity, and thereafter from time to time during such marketing period, the board shall estimate the probable losses, costs, and charges to be paid under marketing agreements in respect of such commodity and under price insurance agreements in respect of such commodity as hereinafter provided. Upon the basis of such estimates, the board shall from time to time determine and publish the amount of the equalization fee (if any is required under such estimates) for each unit of weight, measure, or value designated by the board, to be collected upon such unit of such agricultural commodity during any part of the marketing period for the commodity. Such amount is referred to in this title as the "equalization fee." At the time of determining and publishing any equalization fee the board shall specify the time during which the particular fee shall remain in effect and the place and manner of its payment and collection.

“Under such regulations as the board may prescribe any equalization fee determined upon by the board shall be paid, in respect of each marketed unit of

such commodity, upon one of the following: The transportation, processing, or sale of such unit. The equalization fee shall not be collected more than once in respect of any unit. The board shall determine, in the case of each class of transactions in the commodity, whether the equalization fee shall be paid upon transportation, processing, or sale. The board shall make such determination upon the basis of the most effective and economical means of collecting the fee with respect to each unit of the commodity marketed during the marketing period.

“When any equalization fee is collected with respect to cattle or swine an equalization fee equivalent in amount, as nearly as may be, shall be collected, under such regulations as the board may prescribe, upon the first sale or other disposition of any food product derived in whole or in part from cattle or swine, respectively, if the food product was on hand and owned at the time of the commencement of the marketing period: Provided, That any food product owned in good faith by retail dealers at the time of the commencement of the marketing period shall be exempt from the operation of this subdivision.

"Under such regulations as the board may prescribe the equalization fee determined under this section for any agricultural commodity produced in the United States shall in addition be collected upon the importation of each designated unit of the agricultural commodity imported into the United States for consumption therein and an equalization fee, in an amount equivalent as nearly as may be, shall be collected upon the importation of any food product derived in whole or in part from the agricultural commodity and imported into the United States for consumption therein.

“The board may by regulation require any person engaged in the transportation processing, or acquisition by purchase of any agricultural commodity produced in the United States, or in the importation of any agricultural commodity or food product thereof

“(1) To file returns under oath and to report, in respect of his transportation, processing, or acquisition of such commodity produced in the United States or in respect of his importation of the commodity or food product thereof, the amount of equalization fees payable thereon and such other facts as may be necessary for their payment or collection.

“(2) To collect the equalization fee as directed by the board and to account therefor.

“(a) The board, under regulations prescribed by it, is authorized to pay to any such person required to collect such fees a reasonable charge for his services.

*(b) Every person who, in violation of the regulations prescribed by the board, fails to collect or account for any equalization fees shall be liable for its amount and to a penalty equal to one-half its amount. Such amount and penalty may be recovered together in a civil suit brought by the board in the name of the United States.

"(c) For each agricultural commodity as to which marketing agreements are made by the board, there shall be established in accordance with regulations prescribed by the board, a stabilization fund. Such fund shall be administered by and exclusively under the control of the board, and the board shall have the exclusive power of expending the moneys in such fund.

“(d) In case of the transfer of title in pursuance of a contract entered into after the commencement of a marketing period under Title I of this act, in respect of the agricultural commodity, but entered into at a time when, and at a specified price determined at a time during which a particular equalization fee is in effect, then the equalization fee applicable in respect of such transfer of title shall be the equalization fee in effect at the time when such specified price was determined.

“There shall be deposited to the credit of the stabilization fund for any agricultural commodity (1) advances from the revolving fund as hereinafter authorized; (2) profits arising out of marketing agreements in respect of the commodity; (3) repayments of advances for financing the purchase, withholding, or disposal of the commodity; and (4) equalization fees collected in respect of the commodity and its imported food products.

"In order to make the payments required by a marketing or price-insurance agreement in respect of any agricultural commodity, and in order to pay the salaries and expenses of experts, the board may, in its discretion, advance to the stabilization fund for such commodity out of the revolving fund such amounts as may be necessary.

"The deposits to the credit of a stabilization fund shall be made in a public depositary of the United States. All general laws relating to the embezzlement,

conversion, or to the improper handling, retention, use, or disposal of public moneys of the United States shall apply to the profits and equalization fees payable to the credit of the stabilization fund and to moneys deposited to the credit of the fund or withdrawn therefrom but in the custody of any officer or employee of the United States.

“There shall be withdrawn from the stabilization fund for any agricultural commodity (1) the payments required by marketing or price-insurance agreements in respect of the commodity, (2) the salaries and expenses of such experts as the board determines shall be payable from such fund, (3) repayments into the revolving fund of advances made from the revolving fund to the stabilization fund, together with interest on such amounts at a rate of interest per annum equal to the lowest rate of yield (to the nearest one-eighth of 1 per centum of any Government obligation) bearing a date of issue subsequent at the time the advance is made by the board, as certified by the Secretary of the Treasury to the board upon its request: Provided, That in no case shall the rate exceed 4 per centum per annum on the unpaid principal, and (4) service charges payable for the collection of equalization fees.

"TITLE II “Sec. 13. (a) It shall be the duty of the Secretary of the Treasury to issue to any farmer, cooperative association, or other person, on application therefor, export debentures with respect to such quantity of any debenturable commodity or any manufactured product thereof as such person may from time to time export from the United States to any foreign country. The export debenture shall be in an amount to be computed under the direction of the Secretary of the Treasury, in accordance with such regulations as he may prescribe, at the debenture rate for the commodity or product that is in effect at the time of exportation. Any such computation shall be final. "(b) As used in this title the term 'debenturable commodity' means"(1) Corn, rice, wheat, cotton, and tobacco; and

"(2) Any agricultural commodity not specified in subsection (a) of this section, if the Federal Farm Board finds the issuance of export debentures with respect to such commodity advisable in order to carry out the policy declared in section 1 of the agricultural marketing act of June 15, 1929, and give notice of such finding to the Secretary of the Treasury.

"(c) The issuance of export debentures with respect to debenturable commodities specified in subsection (a) of the preceding section shall commence on July 1, 1932, and continue until otherwise provided by law, and their issuance with respect to other debenturable commodities shall commence and terminate at the time prescribed by the Federal Farm Board.

"(d) In order to procure the issuance of an export debenture with respect to any commodity or manufactured product, the farmer, cooperative association, or other person shall, in accordance with such regulations as the Secretary of the Treasury may prescribe, make application for such debenture and submit satisfactory proofs (1) that the commodity to be exported was produced in the United States and has not previously been exported therefrom, or (2) that the commodity used in making the manufactured product to be exported was produced in the United States and the manufactured products have not previously been exported therefrom.

(e) An export debenture, when presented by the bearer thereof within one year from the date of issuance, shall be receivable at its face value by any collector of customs, or deputy collector of customs, or other person authorized by law or by regulation of the Secretary of the Treasury to perform the duties of collector of customs, in payment of duties collectible against articles imported by the bearer. Title to any export debenture shall be transferable by delivery. In order to prevent any undue speculation in the handling of such export debentures, the Secretary of the Treasury is authorized and directed, under such rules and regulations as he may prescribe, to provide for the redemption of such export debentures from any money in the Treasury derived from the payment of duties collectible against articles imported at a rate of not less than 98 per centum of the face value of such export debentures.

(f) Debenture rates in effect at any time with respect to any debenturable commodity shall be one-half the rate of duty in effect at such time with respect to imports of such commodity, except that the debenture rate on the follow

ing commodities shall be the amount set forth opposite each such commodity, respectively:

**(1) Corn or maize, 742 cents per bushel of fifty-six pounds; (2) Rice, one-half of 1 cent per pound;

(3) Wheat, 21 cents per bushel of sixty pounds; “(4) Cotton, 4 cents per pound; " (5) Tobacco, 2 cents per pound; and

"16) The debenture rate in effect at any time with respect to any manufactured product of any debenturable commodity shall be an amount sufficient as nearly as may be, to equal the debenture that would be issuable upon the exportation of the quantity of the debenturable commodity used or consumed in the manufacture of the exported manufactured product, as prescribed and promulgated from time to time by said board.

“(g) Regulations requiring that metal tags or other appropriate markings be placed on all bales of cotton produced in foreign countries and allowed transit through the United States for exportation may be prescribed by the Secretary of the Treasury. Every person who violates any such

regulation of said board shall be liable to a civil penalty of $100 for each such offense. Such penalty may be recovered in a civil suit brought by said board in the name of the United States. On and after July 1, next following the passage of this title, a custom's duty of 4 cents per pound shall be levied, collected, and paid on all cotton imported into the United States or Porto Rico, in the same manner as other customs duties are levied, collected, and paid.

“(h) The Secretary of the Treasury shall prepare and issue all export debentures. Export debentures issued under authority of this title shall be obligations of the United States within the definition in section 147 of the act entitled 'An act to codify, revise, and amend the penal laws of the United States,' approved March 4, 1909, as amended (U. S. C., title 18, sec. 261).

"(i) Any person who shall make any false statement for the purpose of fraudulently procuring, or shall attempt in any manner fraudulently to procure, the issuance or acceptance of any export debenture, whether for the benefit of such person or of any other person, shall be fined not more than $2,000 or imprisoned not more than one year, or both.

"(j) In order to prevent undue stimulation in the production of any debenturable agricultural commodity, whenever said board finds that the production of any debenturable agricultural commodity during any crop year has exceeded the average annual production of such debenturable agricultural commodity for the preceding five years, said board shall proclaim such fact and the debenture rates for such commodity shall be reduced by the percentage hereinafter fixed. Such reductions shall become effective on the date fixed in sucn proclamation, not less than sixty days from the date of the issuance thereof, and shall remain in effect for one year. The term “crop year,' as used in this paragraph, means a twelvemonth period beginning at a time designated by said board. Reductions in debenture rates under this joint resolution shall be made in accordance with the following percentages:

"(1) For an increase in production of less than 20 per centum, there shall be no reduction;

“(2) For an increase in production of 20 per centum but less than 30 per centum, there shall be a reduction of 20 per centum;

" (3) For an increase in production of 30 per centum but less than 50 per centum, there shall be a reduction of 50 per centum; and

"(4) For an increase in production of 50 per centum or more, there shall be a reduction of 99 per centum.

(k) As used under this title

"(1) The term 'cotton' means cotton of any tenderable grade under the United States cotton futures act and which has a staple of less than one and one-eighth inches in length.

"(2) The term 'wheat means wheat not below grade numbered 3 as prescribed by the Secretary of Agriculture under the United States grain standards act.

"(3) The term 'manufactured product' shall mean any article in the manufacture of which any debenturable commodity is used or consumed.

“(1) If any provision of this title is declared unconstitutional or the applicability thereof to any person or circumstance is held invalid, the validity of the remainder of the title and the applicability thereof to other persons or circumstances shall not be affected thereby.

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