Warehouse shortage and deterioration cases involving legal action which were not settled as of Dec. 31, 1960 & Grain, Clay, Ky. M & M Feed & Grain Co., Wyanet, Ill.. McMurray Elevators, Levelland, Tex.. Branch Grain & Seed Co., Martinsville, Ind. Cargill, Inc., Norris City, Il. Carlisle Mill & Elevator, Inc., Carlisle, Ind.. Chester Grain Co., Inc., Chester, Nebr. Coultas Brothers Grain Co., Florence, Il.. Des Moines Transfer & Storage Co., Des Moines, Desert Grain & Milling Co., Westmorland, Calif... Dixie Storage & Drayage Co., Inc., New Orleans, La. E. & S. Bonded Warehouse & Union Feed Co., San Everett Grain Co., Vegas, Tex.. Farmers Market Warehouse, Cordele, Ga.. Gisi Grain Co., Otis, Colo.. Gulf Shipside Storage Corp., New Orleans, La. Islais Terminals, San Francisco, Calif.. Kermit Dyche Warehouse, Inc., Fort Stockton, Tex. Lofton's Mill, Providence, Ky., and Lofton's Feed McClure Grain Corp., Dardanelle, Ark. Mid-Columbia Grain Co., Alderdale, Wash. Mid-Valley Warehouse Co., Inc., Quincy, Wash. O'Neill Grain Co., Willis, Nebr., and South Sioux Payless Feed & Fuel Warehouse, Coeur d'Alene, Pierce, W. F., Post, Tex..------ Refining Associates, Inc., Long Beach, Calif. Robinson-Gentry Grain Corp., Levelland, Tex. Schwab, F. A., Elevator, Eagle, Mich. Walker, Robert M., Elevator, Conway, Tex.. West View Grain Co., West View, Iowa.. Sterling Soybean Co., Inc., Rock Falls and Nelson, Corn, wheat, and Tennessee Cold Storage Co., Inc., Nashville, Tenn. Grain sorghum Closed. soybean. Dry beans. Cheese. Corn.. and wheat. Corn.... of the same New Orleans Commodity Office. The delay in forwarding of payments in some instances, and this was not general, was just in a few instances, and was occasioned by the fact that there were so many agents and heavy volume of workload. Mr. WHITTEN. If the gentleman will yield. Mr. HORAN. Surely. Mr. WHITTEN. I don't know whether this clarifies matters very much, but at this point, it might be well to point out that, under the class A and B programs which were in existence, I believe, for 1959 and 1960, under the A program, the Government bought the cotton. Under the Boption, it was put into loan. So you had there two distinct types of operations, which made for some differences. The point I wanted to ask, Did that show up in the difference in New Orleans and at the local areas or did you have a mixture of the two in each place? The point that Mr. Horan is making. Did it apply to the two different types of cotton programs, the purchase and the loan equally at each place, or did that in turn have anything to do with the difference that he is pointing out? Mr. GODFREY. The audit that he is referring to and the General Accounting Office statements about it refer entirely to the purchase part, the A part, and the two parts of the Agency operated under the purchase part. Under one, the man could operate as an agent for CCC, offer cotton for sale and buy the cotton himself, bid back on it. Under the other type of sales agreement, he could offer the cotton for sale for CCC's account, handle it through a bank and was not eligible to bid on it himself. This was the question raised by the General Accounting Office. In each case, the limited and the unlimited, as they were referred to in the audit account, there was some tardiness in submitting the funds that they received in payment for the cotton when it was offered for sale to the New Orleans office. Mr. HORAN. By all means, correct your testimony. Nobody is on trial here excepting CCC as an institution and I think that is proper. WAREHOUSE SHORTAGE AND DETERIORATION CASES Have you entered into litigation regarding any irregularities that have come to your attention regarding not only cotton, but other irreg ularities such as have occurred in the Midwest in wheat and grains, tobacco? Could you supply for the record now a list of those court actions? Mr. GODFREY. Yes, sir: we can supply a detailed listing of the court actions as a result of CCC operations that will be quite voluminous, but in the case of this General Accounting audit, some cases have been referred to the Department of Justice insofar as this so-called conflict of interest is concerned, but not insofar as the delay in making these payments are concerned. We did collect all the money but it was just a matter of a few days. (The information requested follows:) Warehouse shortage and deterioration cases involving legal action which were not settled as of Dec. 31, 1960 & Grain, Clay, Ky. M & M Feed & Grain Co., Wyanet, Ill.. Carlisle Mill & Elevator, Inc., Carlisle, Ind.. Chester Grain Co., Inc., Chester, Nebr.. Coultas Brothers Grain Co., Florence, Il.. Des Moines Transfer & Storage Co., Des Moines, Desert Grain & Milling Co., Westmorland, Calif... Dixie Storage & Drayage Co., Inc., New Orleans, La. E. & S. Bonded Warehouse & Union Feed Co., San Everett Grain Co., Vegas, Tex.. Farmers Market Warehouse, Cordele, Ga.. Gisi Grain Co., Otis, Colo.. Gulf Shipside Storage Corp., New Orleans, La.. Islais Terminals, San Francisco, Calif.. Kermit Dyche Warehouse, Inc., Fort Stockton, Tex. Lofton's Mill, Providence, Ky., and Lofton's Feed McClure Grain Corp., Dardanelle, Ark. Mid-Valley Warehouse Co., Inc., Quincy, Wash. O'Neill Grain Co., Willis, Nebr., and South Sioux Payless Feed & Fuel Warehouse, Coeur d'Alene, Pierce, W. F., Post, Tex..---- Refining Associates, Inc., Long Beach, Calif. Robinson-Gentry Grain Corp., Levelland, Tex. Rochelle Grain Co., Rochelle, Ill.. Schwab, F. A., Elevator, Eagle, Mich. do. Deterioration. Do. deterioration. Shortage. Do. Deterioration... Do. Shortage.. Open. Do. terioration. Deterioration........... Closed. Shortage.. Do. Deterioration. Open. Shortage.. Do. Sterling Soybean Co., Inc., Rock Falls and Nelson, Corn, wheat, and Warehouse shortage and deterioration cases involving legal action filed on and after Name and location Jan. 1, 1961 Gary Grain Co., Gary, Minn.. Haddix & Sons, Inc., Monroe, Mich. Hardy Grain Co., Mount Auburn, Ill. Harlan Grain Co., Chalmers, Ind. Hawkeye Mill, Knoxville, Iowa. Adams Seed Co., Macdoel, Calif. Chrislaw, Bob, Inc., Jefferson Junction, Wis. Delta Rice Growers Association, Greenville, Miss.. E. & E. Grain Storage Co., Claremore, Okla., East Carroll Grain Association, Inc., Lake Providence, La. Federa! Grain Co., Inc., Morley, Bell City, Diehlstadt, and Vanduser, Mo. Foltz Flour Mill, Salem, Ohio.. Forest Grain & Supply, Forest, Ohio. Fort Wayne Grain Terminal, Inc., Fort Wayne, Ind Corn. Wheat Corn. ..do. ...do. Rice and wheat. Indianapolis Grain Warehouse, Indianapolis, Ind. Kenton Grain & Machinery Co., Kenton, Ohio.. Lindsey, A. A., Gin & Grain Co.. Hart, Tex... McGoldrick Elevator Co., Glenwood, Mo.. Morganfield Grain Co., Inc., Morganfield, Ky. North, Allen T., Grain Co., Vail and Westside, Iowa Pan-American Mills, Inc., Bowling Green, Ky.. Rathbun, R. L., Feed & Grain Co., Weyer Station, Reading Grain & Storage Co., Tulsa, Okla.. Reuben Grain Co., Reuben, Idaho... Roberts & Pearson Grain Co., North Henderson and Corn and soybean. Shortage.. Closed. Roberts Seed Co., Clovis, N. Mex. Ross Elevators, Inc., Union City, Ohio. W. J. Lamberton Warehouse, Tulsa, Okla. Samjo, Inc., Bakersfield, Calif Sapulpa Grain Storage Co., Tulsa, Okla. Schaardt Grain & Lumber Co., Elk Creek, Nebr. Sonnek Grain & Feed Co., Brownsdale, Minn. Do. Grain. ..do. Do. .do. Do. Do. Deterioration Do. Do. Do. Mr. CONDON. With your permission, Mr. Chairman, insofar as the names of the firms that are reflected in the GAO report dealing with unlimited and limited sales agencies, all of these have been referred to the Department of Justice. The Criminal Division has declined to take any prosecutive action insofar as these cases are concerned with the conflict-of-interest statute. However, these cases and others have been transferred to the Antitrust and Civil Divisions of the Department of Justice, who are currently reviewing them as to what other appropriate action should be taken. COTTON SALES AGENCY AND OTHER AGREEMENTS Mr. HORAN. Of course, anyone who has commodities in commerce that he does not own but has an option on for a period here, has a little leeway; doesn't he? Who determines this grace period and how long do they assume that it should last? How long was the grace period? Mr. GODFREY. There was no grace period provided in the agreement. It was expected that transactions would be processed promptly. I will furnish a copy of the agreement for the record. (The information follows:) UNITED STATES DEPARTMENT OF AGRICULTURE-COMMODITY CREDIT CORPORATION COTTON SALES AGENCY AGREEMENT (LIMITED) This Agreement made and entered into by and between Commodity Credit Corporation, an agency of the United States (hereinafter called "CCC"), and Whereas CCC will conduct a program to sell Choice (A) upland cotton purchased from producers under Cotton Purchase Programs of CCC; Whereas CCC, in carrying out such sales program, desires to utilize sales agencies with experience in merchandising cotton during 1957 or 1958, which have entered into Cotton Sales Agency Agreements with CCC; Whereas the Agency desires to make its facilities available to CCC in connection with such program; and Whereas the Agency does not desire to purchase CCC-owned Choice (A) cotton which the Agency or any other sales agency is offering for sale on behalf of CCC and will not be eligible to purchase any CCC-owned cotton either directly or indirectly except cotton offered for sale by the New Orleans CSS Commodity Office (hereinafter called the "New Orleans Office"); Now, therefore, in consideration of the premises and of the mutual covenants and agreements herein contained, the parties hereto agree as follows: SECTION I. SALES PROCEDURE 1. Subject to the terms and conditions hereinafter set forth, the terms and conditions of Sales by Local Sales Agencies of Choice (A) Cotton for Unrestricted' Use (Sales Announcement CN-A) and any amendments thereto issued by CCC, and such instructions as CCC may from time to time issue, the Agency is authorized, on and after August 1, 1959, to act as agent for CCC in the sale of Choice (A) upland cotton purchased by CCC from producers under Cotton Purchase Programs of CCC. The cotton available for sale by the Agency shall be all of the cotton represented by warehouse receipt held in custody for CCC by the bank designated by the Agency and approved by CCC (hereinafter called "the custodian bank") for sale locally by the Agency for CCC. All such cotton shall be offered for sale by the Agency at each opening of offers during the period beginning August 1, 1959, or one week after delivery of the warehouse receipts to the custodian bank, whichever is later, and ending when the cotton is sold or sales are to be discontinued in accordance with paragraphs 8 and 9 of this Section I. There shall be an opening of offers at least once a week at such time and on such days as may be selected by the Agency, taking into account the time and days other local agencies are opening offers. The Agency shall not purchase any CCC-owned Choice (A) cotton either directly or indirectly under this agreement or from another sales agency selling Choice (A) cotton for CCC and shall not submit bids on any such cotton as agent for any other person or firm. 2. At least 24 hours in advance of the time specified for each opening of offers, |