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law in a case in which rental or benefit payments alone are to be made.

Section 9 amends the provision of the Agricultural Adjustment Act which fixes the rate of the processing tax at an amount which equals the difference between the current average farm price and the fair exchange value of the commodity. The amendment made by this section increases the rate of the processing tax to make up for the amount of tax lost because the tax is credited or refunded if the processed article is used for charitable or welfare purposes or because the processing is tax exempt. The increased amount of processing tax under this amendment cannot exceed 20 percent of the difference between the current average farm price and the fair exchange value. The amendment is not to affect processing taxes which are effective at the time the bill is enacted, and they are not required to be adjusted or altered unless the Secretary finds that such adjustment or alteration is necessary in order to effectuate the declared policy of the act.

Section 10 amends the provision of the Agricultural Adjustinent Act (sec. 9 (c)) which defines "parity price" to add to it a provision which requires, in the case of commodities the base period for which is August 1909 to July 1914, a parity price which will also reflect comparative interest payments per acre on farm indebtedness and tax payments per acre on farm real estate. Rates of tax in effect on the date the bill is enacted are not to be required to be readjusted as the result of the proposed amendment unless the Secretary of Agriculture finds it necessary to adjust such rates pursuant to section 9 (a). (See also sec. 1 (a).)

Section 11 adds a provision to section 10 (b) of the Agricultural Adjustment Act which authorizes the Secretary of Agriculture to utilize the services of State and local committees and associations of producers. The amendments permit the Secretary to utilize the cooperative associations of producers in connection with the distribution of payments for expansion of domestic or foreign markets. This section of the bill also requires the Secretary to accord such recognition and encouragement to cooperative associations owned or controlled by producers as will be in harmony with the policy toward them set forth in existing acts of Congress and will tend to promote efficient methods of marketing and distribution. It is not intended by this language to discriminate against other handlers, processors, or dealers, but it has been found from experience that the participation by local committees and associations of producers has been of material value in administering the program.

A new paragraph is added to section 10 (b) which provides that licenses issued under the title shall provide that the licensee shall pay to the authority established under the license that licensee's pro rata share of the expenses incurred by the authority, but no payment is required to be made for any part of the expenses of the authority, incurred in receiving, handling, holding, or disposing of commodities for the benefit of persons other than licensees. The provision also authorizes a suit by the authority in its own name to collect such expenses and authorizes the district courts to entertain such suits.

Section 12 amends section 10 (e) of the Agricultural Adjustment Act which provides that neither the determination of the amount of, nor the making of, any rental or benefit payment is subject to the review

of any governmental officer except the Secretary of Agriculture and the Secretary of the Treasury by extending the provision to apply to the determination and making of payments for expansion of domestic or foreign markets.

Section 13 specifically authorizes the use of the $100,000,000 fund appropriated under section 12 (a) of the Agricultural Adjustment Act for payments for expansion of domestic or foreign markets. This provision is complementary to the provisions of section 3 (b) of the bill which authorize payments out of processing tax receipts for such

purposes.

Section 14 adds a new subsection to section 12 of the Agricultural Adjustment Act. This provision authorizes an additional appropriation for each fiscal year of an amount equal to 30 percent of the gross customs receipts during the preceding year ending December 31. Amounts which may be appropriated under this subsection are to be maintained in a separate fund. The fund may be used for three major purposes. The first is the encouragement of exportation of agricultural commodities by the payment of benefits in connection with their exportation or indemnifying for losses incurred in connection with exportation and by payments to producers in connection with the production of that part of the production of any agricultural commodity required for domestic consumption. The second use is the purchase or lease, on behalf of the United States, of submarginal agricultural and grazing lands. The third use to which such sums may be put is the making of payments (which for the purposes of the act are not considered rental or benefit payments and hence do not require the levy of a processing tax as a condition of their payment) in connection with acreage or production adjustment of basic agricultural commodities. The Secretary is to expend the amounts as he deems will best effectuate the policy of restoring agricultural purchasing power as contemplated by the Agricultural Adjustment Act consistently with the fullest utilization of the productive capacity of land which can be profitably cultivated and with the most rapid expansion of agricultural exports.

Section 15 adds a new subsection to section 12 of the Agricultural Adjustment Act which provides that the amounts expended for expansion of domestic and foreign markets, removal of surpluses, administrative expenses, and rental and benefit payments in connection with any basic agricultural commodity shall not be less than the amount of the taxes levied under the act with respect to that commodity. For the purpose of the calculations required under this provision, amounts collected and expended from taxes which are held for, or paid for use in, any possession are not to be included, refunds and abatements of taxes are not to be included, and hogs and field corn may be considered a single commodity.

Section 16 amends the provision of section 15 of the Agricultural Adjustment Act which authorizes the Secretary to ascertain whether the payment of processing taxes upon any basic agricultural commodity is causing or will cause the processors thereof disadvantages in competition from any competing commodity by reason of excessive shifts in consumption. The Secretary is then authorized to specify the competing commodity and thereupon a compensating tax is imposed on the processing of that competing commodity which will prevent such disadvantages in competition. The effect of the amend

H. Repts., 74-1, vol. 2-36

ment made by this section is to authorize the inquiry to ascertain if similar disadvantages in competition are being caused or may be caused to producers or both producers and processors and to impose a similar compensating tax if the Secretary finds that such disadvantages in competition are caused or will be caused.

Section 17 provides that the amendments made to the Agricultural Adjustment Act by the proposed bill are not to invalidate marketing agreements or licenses in force on the date of the enactment of the bill or invalidate acts done under such agreements or licenses on or before or after such date.

CHANGES IN EXISTING LAW

In compliance with paragraph 2a of rule XIII of the Rules of the House of Representatives, changes in the Agricultural Adjustment Act made by the bill are shown as follows: Existing law proposed to be omitted is enclosed in black brackets; new matter is printed in italics; existing law in which no change is proposed is shown in roman.

DECLARATION OF POLICY

SEC. 2. It is hereby declared to be the policy of Congress

(1) To establish and maintain such balance between the production and consumption of agricultural commodities, and such marketing conditions therefor, as will reestablish prices to farmers at a level that will give agricultural commodities a purchasing power with respect to articles that farmers buy, equivalent to the purchasing power of agricultural commodities in the base [period] period; and, in the case of all commodities for which the base period is the prewar period, August 1909 to July 1914, will also reflect current interest payments per acre on farm indebtedness secured by real estate and tax payments per acre on farm real estate, as contrasted with such interest payments, and tax payments during the base period. The base period in the case of all agricultural commodities except [tobacco] tobacco, wool, and mohair shall be the pre-war period, August 1909July 1914. In the case of tobacco, wool, and mohair the base period shall be the postwar period, August 1919-July 1929.

(2) To approach such equality of purchasing power by gradual correction of the present inequalities therein at as rapid a rate as is deemed feasible in view of the current consumptive demand in domestic and foreign markets.

(3) To protect the consumers' interest by readjusting farm production at such level as will not increase the percentage of the consumers' retail expenditures for agricultural commodities, or products derived therefrom, which is returned to the farmer, above the percentage which was returned to the farmer in the pre-war period, August 1909-July 1914.

GENERAL POWERS

SEC. 8. In order to effectuate the declared policy, the Secretary of Agriculture shall have power

(1) To provide for [reduction] adjustment in the acreage or [reduction] adjustment in the production for market, or both, of any basic agricultural commodity, through agreements with producers or by other voluntary methods, and to provide for rental or benefit payments, or payments for expansion of domestic or foreign maṛkets, in connection therewith or upon that part of the production of any basic agricultural commodity required for domestic consumption, in such amounts as the Secretary deems fair and reasonable, to be paid out of any moneys available for such [payments] payments or to be made in quantities of one or more agricultural commodities acquired by the Secretary of Agriculture pursuant to this title; and, in the case of sugar beets or sugarcane, in the event that it shall be established to the satisfaction of the Secretary of Agriculture that returns to growers or producers, under the contracts for the 1933-1934 crop of sugar beets or sugarcane, entered into by and between the processors and producers and/or growers thereof, were reduced by reason of the payment of the processing tax, and/or the cor

responding floor stocks tax, on sugar beets or sugarcane, in addition to the foregoing rental or benefit payments, to make such payments, representing in whole or in part such tax, as the Secretary deems fair and reasonable, to producers who agree, or have agreed, to participate in the program for [reduction] adjustment in the acreage or [reduction] adjustment in the production for market, or both, of sugar beets or sugarcane. In the case of rice, the Secretary, in exercising the discretion conferred upon him by this section to provide for rental or benefit payments, is directed to provide in any agreement entered into by him with any rice producer pursuant to this section, upon such terms and conditions as the Secretary determines will best effectuate the declared policy of the Act, that the producer may pledge for production credit in whole or in part his right to any rental or benefit payments under the terms of such agreement and that such producer may designate therein a payee to receive such rental or benefit payments. Under regulations of the Secretary of Agriculture requiring adequate facilities for the storage of any non-perishable agricultural commodity on the farm, inspection and measurement of any such commodity so stored, and the locking and sealing thereof, and such other regulations as may be prescribed by the Secretary of Agriculture for the protection of such commodity and for the marketing thereof, a reasonable percentage of any benefit payment may be advanced on any such commodity so stored. In any such case, such deduction may be made from the amount of the benefit payment as the Secretary of Agriculture determines will reasonably compensate for the cost of inspection and sealing, but no deduction may be made for interest.

(2) After due notice and opportunity for hearing, to enter into marketing agreements with processors, producers, associations of producers, and others engaged in the handling of any agricultural commodity or product thereof, in the current of or in competition with, or so as to burden, obstruct, or in any way affect, interstate or foreign commerce. The making of any such agreement shall not be held to be in violation of any of the antitrust laws of the United States, and any such agreement shall be deemed to be lawful: Provided, That no such agreement shall remain in force after the termination of this Act. For the purpose of carrying out any such agreement the parties thereto shall be eligible for loans from the Reconstruction Finance Corporation under section 5 of the Reconstruction Finance Corporation Act. Such loans shall not be in excess of such amounts as may be authorized by the agreements.

[(3) To issue licenses permitting processors, associations of producers, and others to engage in the handling, in the current of interstate or foreign commerce, of any agricultural commodity or product thereof, or any competing commodity or product thereof. Such licenses shall be subject to such terms and conditions, not in conflict with existing Acts of Congress or regulations pursuant thereto, as may be necessary to eliminate unfair practices or charges that prevent or tend to prevent the effectuation of the declared policy and the restoration of normal economic conditions in the marketing of such commodities or products and the financing thereof. The Secretary of Agriculture may suspend or revoke any such license, after due notice and opportunity for hearing, for violations of the terms or conditions thereof. Any order of the Secretary suspending or revoking any such license shall be final if in accordance with law. Any such person engaged in such handling without a license as required by the Secretary under this section shall be subject to a fine of not more than $1,000 for each day during which the violation continues.]

(8) (A) After due notice and opportunity for hearing, and upon a finding by the Secretary that such action will tend to effectuate the declared policy of this title, to issue licenses to processors, associations of producers, and others engaged in the handling of any agricultural commodity or product thereof, or any competing commodity or product thereof, in the current of or in competition with or so as to burden, obstruct, or in any way affect, interstate or foreign commerce. Such licenses shall provide that such handling may be engaged in by the licensees only upon such terms and conditions, not in conflict with existing Acts of Congress or regulations pursuant thereto, as may be necessary for any one or more of the following purposes:

(1) To eliminate unfair practices or charges that prevent or tend to prevent the effectuation of the declared policy and the restoration of normal economic conditions in the marketing of such commodities or products and the financing thereof.

(2) To make effective any marketing plan set forth in any marketing agreement (or appendix thereto) signed by the persons handling not less than 50 per centum of the volume of the business done in the respective classes of industrial or commercial activity specified in such agreement.

(8) To make effective the marketing plan set forth in any proposed marketing agreement (or appendix thereto), on which a hearing has been held, whenever the Secretary, with the approval of the President, determines

(a) That the refusal or failure to sign such proposed agreement by the persons handling more than 50 per centum of the volume of business done in any class of industrial or commercial activity specified therein tends to prevent the effectuation of the declared policy with respect to the commodity or product specified in such proposed agreement, and

(b) that the issuance of such license is the only practical means of advancing the interests of the producers of such commodity pursuant to the declared policy, and is approved or favored by at least two-thirds of the producers who, during a representative period determined by the Secretary, have been engaged in the production for market of the commodity specified in such marketing agreement or license, or by producers who, during such representative period, have produced for market at least two-thirds of the volume of such commodity produced for market during such period.

No license shall be issued pursuant to clause (2) or clause (3) of the preceding sentence unless the terms and conditions thereof (a) have been set forth in an executed or proposed marketing agreement, as the case may be, or in an appendix thereto, and (b) are made applicable only to persons in the respective classes of industrial or commercial activity specified in such executed or proposed agreement. Except in the case of milk and its products, tobacco, and sugar beets and sugarcane, no license issued under such clause (3) shall be effective with respect to any commodity which on April 1, 1935, is defined, under section 11, as a basic agricultural commodity. No license shall be issued under such clause (3) which is applicable to all production areas or marketing areas, or both, of any commodity or product thereof unless the Secretary finds that the issuance of several licenses applicable to the respective regional production areas or regional marketing areas, or both, as the case may be, of the commodity or product would not effectively carry out the declared policy of this title. Licenses issued under such clause (3) shall be limited in their application to the smallest regional production areas or regional marketing areas, or both, as the case may be, which the Secretary finds practicable consistently with carrying out such declared policy. All licenses issued under such clause (3) which are applicable to the same commodity or product thereof shall, so far as practicable, prescribe such different terms applicable to different production areas and marketing areas as the Secretary finds necessary to give due recognition to the differences in production and marketing of such commodity or product in such areas. No license shall be issued under this title except in aid of an executed or proposed marketing agreement or appendix thereto. No license issued under such clause (3) shall be applicable to any person who sells agricultural commodities at retail in his capacity as such retailer. No license issued under this title shall be applicable to any producer in his capacity as a producer.

(B) Any license under any license issued pursuant to this title, or any officer, director, agent, or employee of such licensee, who violates any provision of such license (other than a provision calling for payment of a pro rata share of expenses) shall, on conviction, be fined not less than $50 or more than $500 for each such violation, and each day during which such violation continues shall be deemed a separate violation: Provided, however, That no person shall be convicted under this title because of any violation (1) of any license or (2) of any obligation imposed in connection therewith, if such violation occurs between the date upon which such person files with the Secretary a petition, with respect to such license or obligation, as provided for in this subsection, and five days after the Secretary enters an order thereon. (C) Any licensee may file a written petition with the Secretary of Agriculture stating that any provision of any such license or any obligation imposed in connection therewith is not in accordance with law. He shall thereupon be given an opportunity for a hearing upon such petition, in accordance with regulations made by the Secretary of Agriculture with the approval of the President. After such hearing, the Secretary shall make an order which shall be final, if in accordance with law. The District Court of the United States (including the Supreme Court of the District of Columbia) n any district in which such licensee is an inhabitant or has his principal place of business is hereby vested with jurisdiction in equity to review such order, provided a bill in equity for that purpose be filed within twenty days from the date of the entry of such order. Service of process in such proceedings may be had upon the Secretary by delivering to him a copy of the bill of complaint. If the court determines that such order is not in accordance with law, it shall remand such proceedings to the Secretary with directions either (1) to enter such order as the court shall determine to be in accordance with law, or (2) to take such further proceedings as, in its opinion, the law equires. Nothing contained in this subsection shall be construed to prevent, hinder,

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