As these tobaccos have not been delivered yet and we do not consider tobaccos sold until delivered, it is impossible for us to furnish you with the price received for any of these tobaccos listed above. Yours very truly, THOS D. MILLER, President. THE IMPERIAL TOBACCO Co., LTD., Mr. H. D. GODFREY, Executive Vice President, U.S. Department of Agriculture, Commodity Credit Corporation, Washington, D.O. DEAR MR. GODFREY: In answer to your letter of April 9, there have been invoiced by Flue-Cured Tobacco Cooperative Stabilization Corp. some of the loan stocks of the 1955 and 1956 crops of Flue-cured tobacco at sale prices effective February 11, under barter contract No. BSD-SM-62-23, CCC for account Imperial Tobacco Co., Ltd., agent for Reynolds Metals Co., contractor, Richmond, Va. The acquisition of these tobaccos and the sales to date, if any, were handled by the China American Tobacco Co., Rocky Mount, N.C., as subagent under this barter contract and we are requesting this firm to make reply to your letter of April 9, 1963. Sincerely yours, K. H. MAYFIELD. CHINA AMERICAN TOBACCO Co., U.S. DEPARTMENT OF AGRICULTURE, Washington, D.O. (Attention of Mr. H. D. Godfrey, Executive Vice President). GENTLEMEN: We have been requested by the Imperial Tobacco Co., Ltd., Richmond, Va., to reply to your letter of April 9, 1963, in connection with purchases of the 1955 and 1956 crops of tobacco from the Flue-Cured Tobacco Cooperative Stabilization Corp. Below we give you the information requested : A few additional hogsheads have been purchased, but as yet have not been disposed of. The export payment applicable under section 32 was claimed in connection with the five hogsheads of X3L/13/1956. You will note that the other tobacco was disposed of at a small loss. We were able to absorb this loss through our barter transactions. If we can be of further service in this matter, please advise. Mr. H. D. GODFREY, Executive Vice President, J. L. BOLLING, Secretary. P. LORILLARD CO., New York, N.Y., April 12, 1963. U.S. Department of Agriculture, Commodity Credit Corporation, DEAR MR. GODFREY: As requested in you letter dated April 9, there is indicated below the quantities and cost of our purchase of 1955 and 1956 crop tobacco from the Flue-Cured Tobacco Cooperative Stabilization Corp. under the revised price schedule which became effective February 11, 1963: DEAR MR. GODFREY: In reply to your letter of April 9, we are listing below information regarding our sales of 1955 and 1956 crops of Flue-cured tobacco purchased in February which you have requested on behalf of the Subcommittee for Agriculture of the Appropriations Committee, House of Representatives. Sales prices are approximate to the extent that they have been adjusted to net f.o.b. Seaboard prices, eliminating agents commissions, insurance and ocean freight where applicable. Otherwise, the prices do cover carrying charges, in some cases up to 11 months in the future. We are furnishing this information as requested but, at the same time, wish to point out that in principle we do not favor being called upon to divulge private information of this nature. Very truly yours, W. C. MONK, Vice President. UNIVERSAL LEAF TOBACCO CO., INC., Mr. H. D. GODFREY, Executive Vice President, Commodity Credit Corporation, DEAR MR. GODFREY: We refer to your letter of April 9 requesting information concerning the profit which was made on the 1955-56 Flue-cured tobacco acquired under the revised price schedule effective February 11, 1963. We first would like to say that the request, which we understand is being made at the behest of the Subcommittee for Agriculture of the Appropriations Committee, House of Representatives, is a surprising one. Although we are not concerned at all about divulging this particular information, it seems quite unusual for a firm to be asked its profit margin on a commercial transaction. Furthermore, if such infor mation is needed, it seem only proper that, in making such a request, the subcommittee would offer some reason for doing so. We purchased 27,383 hogsheads of 1955 and 1956 crops on February 11 and have sold 22,202 hogsheads. Our average cost was $43.19 but when one allows for the export subsidy for the portion which was sold abroad, the cost comes to $42.72. Our average selling price was $43.11. This, you undertsand, is our net selling price; in other words, our gross selling price was $43.27 and we have deducted 16 cents which are our direct selling costs. We trust that this is the information which is needed. With all good wishes, Very truly yours, G. L. CRENSHAW, Vice President. WILSON TOBACCO CO., INC., U.S. DEPARTMENT OF AGRICULTURE, Washington, D.C. Attention: Mr. H. D. Godfrey, Executive Vice President. GENTLEMEN: As requested in your letter of April 9, we have as of today purchased from the Flue-Cured Tobacco Cooperative Stabilization Corp. 140 hogsheads of grade B4L, 1956 crop, at $41.20 per cwt. f.o.b. storage. We have sold these tobaccos as listed below: These tobaccos were sold under section 32, tobacco export payment program CMX 40a, and we are filing for participation under this program. We trust that the above information will be helpful to you and your committee. With best wishes, we are Yours very truly, CARL H. LANE, Secretary-Treasurer. THE AUSTIN Co., Greeneville, Tenn., April 15, 1963. U.S. DEPARTMENT OF AGRICULTURE, Commodity Credit Corporation, Washington, D.C. (Attention of Mr. H. D. Godfrey). DEAR MR. GODFREY: We are enclosing the information that you requested in your letter of April 9, 1963. We trust that this will be sufficient. Yours very truly, ROBERT C. AUSTIN, Executive Vice President. GENTLEMEN: In reply to your inquiry of April 9, please be advised that the 1955 and 1956 crops of Flue-cured tobacco we purchased from the Flue-Cured Tobacco Cooperative Stabilization Corp. under its price schedule of February 11, 1963, was on firm order, on commission basis of about 5 percent on net cost price. Trusting this information answers your question, we remain, Z. TCHEYAN. Mr. WHITTEN. Have you had any complaints or has anybody written you about it, contending that they made unconscionable profits? Mr. GODFREY. I have not had the first complaint myself. Mr. WHITTEN. I understood you to say that two of these buyers were upset because they did not get their cut. Mr. GODFREY. They did not say this to me. This was reported by the officials of the stabilization cooperative. Mr. WHITTEN. Could we have the names of those folks? We might wish to ask them questions. Mr. GODFREY. One was out in Tennessee. Mr. TURNER. John R. Baukhofer, Colonial Tobacco Co., Springfield, Tenn. Mr. GODFREY. Who submitted a bid. No tobacco was allocated to him because he had no previous purchase history. The stabilization people reported that Universal Tobacco Co. was dissatisfied because they could not buy all that they wanted. Mr. WHITTEN. How long would it take to get the names of the actual purchasers? Mr. GODFREY. We could have that by midweek. We could get it from the stabilization co-op. Mr. WHITTEN. You see what this leads to. Any time you sell Government property at a fixed price, folks get angry because they did not get a part of it and it raises a presumption. Then when some people want to get it all and then reallocate it, it adds to the presump tion. Then when you read newspaper stories where some folks have made hundreds of thousands of dollars in 2 or 3 hours as a result of buying a Government bargain, it strengthens the presumption. Then when you say that there was a domestic market for it because they had quit producing that type of tobacco, and when you substantiate that with the fact that 40 percent of the American tobacco used today still is not in filter cigarettes, with all of this put together you can see why it raises questions about looking after the assets of this Corporation. Mr. GODFREY. Let me point out that there was not a domestic market for these particular grades of these varieties of tobacco. The domestic buyers had an opportunity to buy it all along ever since then, and this is indicated by the fact that they did not come in and buy the majority of this when the price was set on it. Mr. WHITTEN. Let us see what was sold on the domestic market then. Could you tell us how much? Mr. GODFREY. Roughly 18 percent of it-80-some-odd million pounds that had been sold were bought by people who normally buy domestic tobaccos. Mr. WHITTEN. Of course they, too, had the privilege of export if they saw fit. Mr. GODFREY. Yes, they had a privilege of exporting and using it in their foreign plants. Now, I would like to correct one thing. I said the current market average in Rhodesia is 39.4. The 5-year average export price for Rhodesian tobacco to some of the countries where we normally export has been from 27 to 37 cents a pound. Mr. WHITTEN. Mr. Godfrey, if you were to read where somebody had offered $50 million to $80 million worth of tobacco or anything else, and those folks in the trade fell out among themselves about not getting their fair share, and they had to close the doors because the bids came so fast they could not handle them, would you not figure someone was offering somebody a whale of a bargain? Mr. GODFREY. Well, I take it about like I take some of the complaints we get on the sale of grain. We have got corn, for example, that we have in stock now that we paid $1.40 a bushel for, that we have got an investment in of better than $1.70. It is being sold for $1.05 and $1.10. Mr. WHITTEN. Flat? Mr. GODFREY. Yes, sir. Mr. WHITTEN. No bid? Mr. GODFREY. No bids, no, sir; sold at market price, whatever the market price is. For this tobacco we considered 45 cents as a market price the best people we could get to look at the tobacco. Mr. WHITTEN. Who are they? Mr. GODFREY. Stabilization people, the managers of the stabilization co-ops. COOPERATIVE ASSOCIATION INTEREST IN CCC TOBACCO Mr. WHITTEN. How do they make their money out of this? In other words, they did not have their money in there, but it was all Commodity Credit Corporation? Mr. GODFREY. They had money that they had borrowed from CCC to finance the operation, plus some of theirs. |