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(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 department, 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 Congress 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
entered into by the United States and other countries relating to the stabilization of supplies and prices in the international wheat market.
The views of this Department with respect to legislation to implement the international wheat agreement are contained in the draft of proposed legislation submitted for consideration by the Congress with out letter of July 18, 1949. As you know, this draft was introduced by you on August 4 as S. 2383.
The essential differences between S. 2383 and S. 2287 are as follows:
1. The authority conferred upon the Secretary of Agriculture by S. 2287 is vested in the President by the provisions of S. 2383.
2. Under the provisions of S. 2287, 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 difference between the domestic market price of such wheat and the international wheat agreement price will be paid out of funds appropriated to the Economic Cooperation Administration and charged to the foreign-assistance program conducted under the Economic Cooperation Act. Under S. 2383, such difference between the market price and the wheat-agreement price would be paid by the Commodity Credit Corporation and charged to the farm programs conducted by the Corporation.
It is noted that S. 2287 provides that 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. A similar specific provision is not contained in S. 2383, and we believe that the Commodity Credit Corporation may perform the functions authorized therein under the budget program of the Corporation approved for the fiscal year 1950.
This Department recommends passage of S. 2383 rather than S. 2287.
The Bureau of the Budget advised that, from the standpoint of the program of the President, there was no objection to the submission of the proposed legislation which this Department forwarded to the Congress with our letter of July 18, 1949, and which has been introduced as S. 2383. Sincerely yours,
A. J. LOVELAND,
Acting Secretary. Senator JOHNSTON. The first witness will be Mr. Ralph S. Trigg. You can just proceed in any way that suits you best.
STATEMENT OF RALPH S. TRIGG, ADMINISTRATOR, PRODUCTION
AND MARKETING ADMINISTRATION AND PRESIDENT, COMMODITY CREDIT CORPORATION, UNITED STATES DEPARTMENT OF AGRICULTURE, WASHINGTON, D. C.
Mr. TRIGG. Thank you, Mr. Chairman, I have a prepared statement, Mr. Chairman, which is not too long, that I would like to give, if I may
Senator JOHNSTON. You may proceed.
Mr. TRIGG. I am glad to appear before this subcommittee today to testify in connection with proposed legislation to implement United States export operations under the international wheat agreement. This agreement was ratified by this Government in June.
It is important that the legislation in question be acted upon promptly, in order to facilitate operations under the agreement. In the absence of implementing legislation, clearly defining the policy of Congress, the United States has been endeavoring to meet its obligations under the agreement since August 1 in keeping with present legislation. Operations under existing authority are so limited that the necessary flexibility of action to compete with other exporting countries is not possible. As a result, we are pressed to retain our traditional markets for domestic wheat.
The United States not only took a leading part in negotiating the wheat agreement, but it also urged the United Nations Food and Agriculture Organization to use the commodity agreement approach as being the most effective method in stabilizing world trade in food. Work leading to the international wheat agreement began in 1933, with the establishment of the International Wheat Advisory Committee. From that time until the adoption of the agreement, this Government continued its efforts to work out some plan under which we could have a dependable market for our exportable wheat.
The fact that the United States exported an annual average of less than 50,000,000 bushels of wheat in the decade of the 1930's shows the need for an effective operating agreement, and the potential benefits to this country from such an 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. During the period covered by the agreement, the United States will export annually, under the agreement, 168,000,000 bushels of wheat at specified prices. It is hoped of course that we will also export substantial quantities outside the agreement. To date, 4. of the exporting countries and 24 of the 36 importing countries have accepted the agreement. The International Wheat Council established by the agreement fixed August 1, 1949, as the effective date of part 2 of the agreement, which relates to the rights and obligations of the parties to the agreement.
Senator HOLLAND. I have a question, Mr. Trigg.
Senator HOLLAND. Is the number, four, of the exporting countries which accepted the agreement, including the United States, sufficient to put the agreement into effect?
Mr. TRIGG. It is my understanding that it is, sir.
An indication of the need for prompt enactment of legislation to clarify questions of pricing and operations is given in the record of exports under the agreement since August 1. Sales of wheat and flour by the United States under the terms of the agreement since that date have amounted to only a little over 7,000,000 bushels. In terms of a yearly guaranteed quantity of approximately 168,000,000 bushels, it is obvious that exports must be materially increased soon if we are to export the remainder before next August. Our best opportunity to export under favorable conditions is in the next 4 or 5 months.
In view of this situation, and the fact that the wheat agreement is an integral and important part of United States foreign economic policy, the need for early legislative action is apparent.
On July 18, 1949, the Department of Agriculture submitted a draft of proposed legislation for consideration by the Congress. This draft was introduced by Senator Elmer Thomas, chairman of the Senate Committee on Agriculture and Forestry, on August 4 as S. 2383. This bill is now under consideration by this subcommittee, along with a similar bill, S. 2287. S. 2383 would authorize the President, acting through the Commodity Credit Corporation and such other department, agency, or officer of the Government as the President may designate, to take certain action necessary in the implementation of the international wheat agreement.
Section 2 of S. 2383 directs the President, acting through the Commodity Credit Corporation, to make purchases and sales of wheat and wheat flour or otherwise cause to be made available quantities of wheat and wheat flour at prices necessary to exercise the rights, obtain the benefits and fulfill the commitments of the United States under the agreement. In designating the CCC to exercise this authority we would be utilizing an agency which, because of its experience in the type of operations required, would 'assure an efficient and economic performance of our rights and obligations under the agreement.
As pointed out in our letter transmitting the draft of proposed legislation, the designation of the Corporation would likewise permit a better coordination of operations required by the agreement and other operations of the Corporation as authorized by law. For example, in making wheat available under the agreement the Corporation could use wheat acquired by it under its price support program, could procure the commodities upon the open market under its charter authority, or could make subsidy payments to exporters who would make sales to designated countries under the terms of the agreement. In this connection, the bill requires the Corporation to utilize the usual and customary channels of trade and commerce to the maximum extent practicable in making wheat available under the agreement.
The proposed bill, S. 2383, also includes provisions which would affect the pricing of wheat or wheat flour supplied by CCC to meet ECA needs. Under existing legislation, CCC must be fully reimbursed for commodities it procures for ECA supply. Present legislation also sets the levels of payment ECA must make to CCC when it receives wheat from stocks which the Corporation has acquired under price support operations. For such stocks, ECA must pay either the CCC cost of the commodities or the domestic market price, whichever is lower. The wheat agreement price, of course, would be lower than either of these levels under present conditions. Under S. 2383, these pricing provisions of present legislation would not apply to domestic wheat and flour supplied to agreement countries and credited to their guaranteed agreement purchases. CCC would be authorized to assume the difference between agreement prices, at which the wheat would move, and market prices or CCC costs, at which it was procured. ECA would save this amount on its operations; CCC costs would be increased proportionately.
Senator HOLLAND. One question: You say "domestic" on the sixth line from the bottom. Do you mean from the United States?
Mr. TRIGG. Yes, sir.
The proposed bill contemplates that the operations which CCC would be authorized to carry out would be financed by it in the same manner as other programs conducted under its charter. Accordingly, no authorization to appropriate funds is contained in this section.
Section 3 of the bill empowers the President, or such agency as he may designate, to regulate exports and imports of wheat and wheat flour and to issue such rules and regulations as he may deem necessary to accomplish the purposes of the legislation. Available authority to regulate the movement of wheat into and out of the United States would be essential to the proper fulfillment of responsibilities under the agreement. Such regulation would be applied in large part to pre