(The material requested follows:) Ocean transportation paid and tonnage booked under Public Law 480 1 Since Oct. 31, 1956, full cost of shipments on foreign flag carriers financed by foreign importers or governments. Mr. WHITTEN. Is the determination as to the method or means of shipment made by the Department. Is it paid out of your funds, or do you get repayment? Mr. BEACH. No, sir. We finance that out of CCC funds. That is reimbursed to CCC as part of the foreign assistance program cost. Mr. WHITTEN. To the degree that you pay out these dollars, to that degree our dollar balances are affected. Mr. BEACH. That's correct. Mr. HORAN. I believe, Mr. Chairman, at that point, that the Commodity is not reimbursed, the value of the commodity that enters into the foreign aid program is not reimbursed. Mr. WHITTEN. The freight is not, either. Mr. BEACH. We are talking about title I sales for foreign currency. Mr. WHITTEN. The freight is not refunded. Mr. HORAN. We have already raised the point that this certainly should be added to the cost of foreign aid and should be Mr. WHITTEN. In the public mind it should be charged up to it because it is a part of it. Mr. Beach, in answer to my question, made the point that the Commodity Credit Corporation pays this in cash and gets no refund from any source. 95910-63-pt. 3-44 Mr. HORAN. It is not even mentioned as an item when we have the foreign aid assistance bill before us. Mr. BEACH. It is in the appropriation for foreign assistance in this budget. STORAGE FACILITIES Mr. WHITTEN. Mr. Godfrey, in connection with our responsibility on this committee we have had our own investigations. And regularly the Comptroller General of the United States makes a check of the activities of the Commodity Credit Corporation in the discharge of his responsibilities. Copies of those investigations are sent to the Speaker and to the respective committees of the Congress. Recently I attended the public hearing, as you will recall, when you were dealing with the matter of storage. I was requested to attend, I presume by fully a thousand people scattered over the whole southern area. I pointed out two or three basic things with which you and I are familiar, but many people who don't deal with it are not familiar. They are that, with a few very limited exceptions, the price support program for which the Commodity Credit Corporation was created is contingent upon having available warehousing which has been approved by the Corporation. In order to have storage available, the Corporation beginning way back in 1949, I believe, spent something like $200 million building warehouses. This was largely in the corn, feed grain, wheat area, so as to have local storage available to enable the farmer to get the loan which the law provided for him. I believe that the record shows further that about $193 million had been loaned by the preceding administration for the same purpose, all in order to keep the production in the area of production. This has been the main issue in a presidential race or two, as to whether it was available. To have it available in the community in the hopes it would be redeemed from the loan, the chances of that happening would be greatly enhanced. In the statement I made at this big public meeting, I quoted from Attorney General's report of January 31, 1963, as follows: It is CCC's policy to retain acquired cotton and cotton collateral to outstanding price-support loans in the growing areas as long as possible in order to avoid transportation costs and to encourage repayments of loans and redemptions of the cotton. Under this policy storage facilities in the growing areas sometimes become congested and CCC finds it necessary to move or reconcentrate cotton out of the growing areas in order to make warehouse space available for the oncoming crop. I mention this because at times we have tried to hold the Government down on spending money on building warehouses if they could prevail on getting others to do it, and on making loans if private persons could do it. In the cotton industry the private industry has provided this warehousing. That being true, the Government has a very firm interest, in my opinion, in seeing that reasonable rates are paid. That is for the Department to work out with the folks involved, so as to see that it is kept available so that the Government won't have to build it. You can easily see that at the local level favoritism can never be charged to the Department, because the grower carries his cotter to the designated place to obtain the loan, all the time it being a warehouse you have approved. It is when you get out of the area of production that you have to watch so as not to be accused of favoritism. In that area I can see that you would have to have some degree of competitiveness or something so as to prevent the charge of favoritism. But you agree that at the local level the producer himself selects his warehouse and for that reason it is a matter beyond your control and no one can accuse you in that instance. Mr. GODFREY. That is right. Mr. WHITTEN. I would hope that you could get this matter resolved at an early date. It has greatly upset, as you can imagine, all the people in the area. At this point I am greatly interested in all of the operations of the Department. I have tried through the years to develop for the record all of these things. Cotton happens to figure a little more prominently in much of my area than the others. THE GAO REPORT AND CORRECTIVE ACTION TAKEN May I say that inferentially the General Accounting Office approved this policy that I stated, because they found no complaint with it. I would like to have you for the record point out those places in dealing with cotton where the Comptroller General has found fault, giving the dates and the action that has been taken by the Department to correct those things. I have not read all of the GAO report, but you have it. In my own. reading of it, many of the practices and policies complained about are no longer carried on, so the Comptroller General has said. I would want the actions, if any, the Department has taken and what may be pending, if anything, to bring about the correction of those that happened in the past. Could you do that? Mr. GODFREY. Yes, sir. To start with, the first main criticism that we received from the Comptroller General was in regard to the operation of the 1959 and 1960 cotton purchase programs. Mr. WHITTEN. I have it in front of me. I think much of what have done has been made a matter of record. Be sure the record is complete. you Mr. GODFREY. This will suit us. Mr. WHITTEN. Others may want to go into it further. I am familiar with the findings and the actions. Mr. GODFREY. We will submit a chronology of everything that has happened, and what criticism has taken place. (The material referred to follows:) Chronology of events relating to GAO audit on 1959 and 1960 cotton purchase programs Remarks 1959 cotton price support program approved by Acting Secretary of Agriculture. 1960 cotton price support program approved by Acting Secretary of Agriculture, Feb. 25, 1960. Review of tentative draft by GAO advising program instituted by previous Administrator. First report on 1959 and 1960 purchase program. Referring GAO report to Department of Justice to protect Government's interest. Also enclosing report of survey prepared by New Orleans commodity office for 1959 sales agencies with a special reference to 5 sales agencies described in GAO report. General Counsel offered to pursue action against sales agencies as deemed warranted by Department of Justice. Department of Justice. General Counsel requested status of Department of Justice. General Counsel matter and whether further assistance from USDA is required. A cotton Company. Do. In answer to a letter from General Covered details of survey made by A cotton company. Do. Do. Do. Do. Do. Do. The Criminal Division of Department of Justice advised that no prosecution could be made under Criminal Division statutes and that the case was referred to Anti-Trust Division. |