Mr. SCHMIDT. Now, you say you had no discussion with Mr. Gould about getting this check from him as a finder's fee. Mr. COREY. He may have said to me that he would at the time this thing came up in the first instance-he may have said to me that you find me a tenant and I will do the right thing by you, or something to that effect. There was no agreement as to any amount or any positive decision on it, and I made no request for any funds. Mr. SCHMIDT. Now, this check is made out to Earl Corey, Inc. How did Mr. Gould become aware of this company of yours, this private company of yours, Earl Corey, Inc.? Mr. COREY. Undoubtedly I told him. If you decide to do something about it, why, make the check to Earl Corey, Inc. Mr. SCHMIDT. I see. If he was going to pay you this 5 percent, make it payable to Earl Corey, Inc. Mr. COREY. That is right. Senator SYMINGTON. Will counsel yield? If you were getting a cut of 5 percent on this lease in order to put this grain into a warehouse of which you were one-third a partner, wouldn't you feel obligated to split that cut with your other partners? Mr. COREY. Mr. Chairman, the matter didn't occur to me that way. The check came to me and, as I say, I didn't request it, and so I packed the thing around and never disclosed the receipt of it to either one of my partners, and Senator SYMINGTON. Well, you said you didn't cash it and you did not send it back, and I was just wondering if one of the reasons was that you felt that you ought to disclose it or send it back, and you have answered the question. Thank you very much. Mr. SCHMIDT. Neither of your partners knew about this check; is that right, sir? Mr. COREY. That is right. Mr. SCHMIDT. At the time you and Mr. Richards and Mr. Smith entered into this partnership, receiving a Uniform Grain Storage Agreement from the Government, what were storage conditions, warehousing conditions in the Portland area as to availability of space? Mr. COREY. The situation in the last few years has been very tight in all areas, including the Pacific Northwest. Mr. SCHMIDT. So you knew that if you had the lease on this, it would be an easy matter to fill it with Government grain; is that right, sir? Mr. COREY. No. I didn't know it for the reason, Mr. Chairman, that you never can tell what the Department may do in the way of sales, and we never know from one season to the next what the storage requirements may be. Mr. SCHMIDT. People were looking for storage space in the west coast area at this time, were they not, Mr. Corey? Mr. COREY. Well, this is a long ways back, Mr. Chairman, and my memory doesn't serve me too well on it, but I would suspect that they were. Mr. SCHMIDT. Now, Mr. Corey, at the time that you were Director of the Commodity Stabilization Service office in Portland, did you own stock in the California Malting Co. of Los Angeles? Mr. COREY. Yes, sir. Mr. SCHMIDT. How was this stock acquired? Mr. COREY. I purchased it with my own money. Mr. SCHMIDT. And we have two certificates here, two stock certificates, one for 200 shares and one for 103 shares in the California Malting Co. The one for 200 shares is dated May 12, 1955, and the stock certificate is to Mrs. Earl C. Corey. The one dated September 4, 1956, is to Lottie S. Corey in the California Malting Co. How did you purchase the stock? Who did you contact relative to the purchase of this stock? (The documents referred to will be found in the files of the subcommittee.) Mr. COREY. I bought the stock through Mr. Harvey Dick and Mr. Henry Collins. Mr. SCHMIDT. And who is Mr. Harvey Dick! Mr. COREY. He is an investment man in Portland, Oreg. Mr. SCHMIDT. Is he president of the California Malting Co.? Mr. COREY. And president of the California Malting Co. Mr. COREY. He is the vice president in charge of the west coast operation for Archer-Daniels-Midland Co. Mr. SCHMIDT. Archer-Daniels-Midland Co. is a grain dealer, right? Mr. COREY. That is right. Mr. SCHMIDT. Now, this company, according to the records of the California Malting Co., had 24 stockholders, is that right, Mr. Corey? Mr. COREY. I don't know. Mr. SCHMIDT. It was an unlisted stock, was it not, sir? Mr. COREY. Yes. Mr. SCHMIDT. A closely held corporation, most of the stock of which was owned by officers, executives, and relatives of officials of the Archer-Daniels-Midland Co. Archer-Daniels-Midland has furnished this committee, Mr. Chairman, with information showing the fiscal year ending June 30, 1959, it received $6,824,427.39 in payment from the U.S. Government on a Uniform Grain Storage Agreement. Mr. COREY. May I interrupt, Mr. Chairman? What was that statement you said there? Mr. SCHMIDT. They, Archer-Daniels-Midland, have furnished this committee with information showing in their fiscal year ending June 30, 1959-this is the fiscal year of the Archer-Daniels-Midland Co., Mr. Corey-they received $6,824,427.39 in payments from the Government under the Uniform Grain Storage Agreement. This is the national picture of Archer-Daniels-Midland. Mr. COREY. I have no knowledge of that, the accuracy of it. And Mr. SCHMIDT. And, Mr. Chairman, we further have from the U.S. Department of Agriculture a copy of the most recent list prepared by them of recipients of storage payments in excess of $500,000 made in calendar year 1959 for companies operating under the Uniform Grain Storage Agreement. We would like to include it in the record for our study of the grain storage problem. It shows ArcherDaniels-Midland is the fifth largest recipient of the grain storage payments. Senator SYMINGTON. Without objection. (The document referred to will be found in the appendix at p. 402.) Mr. CORDON. Off the record. Senator SYMINGTON. Off the record. (Discussion off the record.) Senator SYMINGTON. Back on the record. Mr. SCHMIDT. How much did you pay for this stock, Mr. Corey? Mr. COREY. $10 a share. Mr. SCHMIDT. Do you know what the value of it was at the time of the purchase? Mr. COREY. Pretty close to the $10 figure. I have no positive knowledge what it was. Mr. SCHMIDT. If the books of the company show it to be $13 a share, would you think that was approximately correct? Mr. COREY. I would say that would be approximately correct. Mr. SCHMIDT. Now, do you know what the book value of the company was in September of 1956 when you purchased stock? Mr. COREY. No. Mr. SCHMIDT. Purchased the last 103 shares. Again if the books of the company showed that this could be approximately $26 a share, would you say this is correct? Mr. COREY. I can't testify to that, Mr. Chairman. I have no access to the records of the company. I don't know. Mr. SCHMIDT. Now, you still own stock as a result of this purchase, is that correct, sir? Mr. COREY. As of today the California Malting Co. does not exist. Mr. SCHMIDT. It was merged, was it, into the Great Western Malting Co. of Los Angeles. Mr. COREY. That is right. No. Great Western Malting Co., Vancouver, Wash. Mr. SCHMIDT. When was that merger effective, Mr. Corey? Mr. SCHMIDT. February 1, 1960, would be approximately correct? Mr. COREY. I would think if you have the date, I would accept that as approximately right. Mr. SCHMIDT. Do you know what the value of the stock was at the time of the merger? Mr. COREY. No, sir. Mr. SCHMIDT. Mr. Chairman, we have a letter dated November 27, 1959, furnished to us by Mr. H. W. Collins, a copy of a letter from Mr. Collins to Mr. E. A. Wick, president of the Archer-Daniels-Midland Co., Minneapolis, Minn., which recites: I today delivered to Great Western Malting Co. the 3,282 shares of California Malting Co. stock that was issued to Archer-Daniels-Midland Co., and attached hereto you will please find their check for $364,413. Then it talks about the excise tax which will be billed to ArcherDaniels-Midland Co, and says it is sending a check. We would like to include it in the record because it shows the stock values as of November 1959, which culminates in the merger of February 1, 1960, of approximately $111 a share. Senator SYMINGTON. Without objection. (The letter is as follows:) Registered, return receipt. Mr. E. A. WICK, NOVEMBER 27, 1959. Archer Daniels Midland Co., Post Office Box 532, Minneapolis, Minn. DEAR ELNAR: I today delivered to Great Western Malting Co. the 3,283 shares of California Malting Co. stock that was issued to Archer-Daniels-Midland Co., and attached hereto you will please find their check for $364,413. The excise tax, which amounts to 4 cents per $100 of value will be billed to Archer-Daniels-Midland Co. in due course, and I will pass it on to you for payment. I am sending you this check as per your request. Sincerely yours, H. W. COLLINS. Mr. SCHMIDT. Mr. Corey, you originally invested $3,030 in this California Malting Co., right? Mr. COREY. Right. Mr. SCHMIDT. Now, did Archer-Daniels-Midland hold a Uniform Grain Storage Agreement on the facilities of the California Malting Co. in Los Angeles? Mr. COREY. They probably did. I think you developed that information yesterday, and they probably did. Mr. SCHMIDT. Do you know whether or not your office handled this Uniform Grain Storage Agreement that was on these facilities? Mr. COREY. If it was in my territory, my office handled it. Mr. SCHMIDT. Do you know how much storage capacity in the Portland area the Archer-Daniels-Midland Co. has under uniform grain storage agreements? Mr. COREY. No, sir. Mr. SCHMIDT. The record of the U.S. Department of Agriculture concerning approved capacity of warehouses shows it to be 13 million bushels. Would that be approximately correct? Mr. COREY. If that is what the record shows, I have no reason to doubt it. Mr. SCHMIDT. Mr. Corey, did you participate on behalf of the Government in the 1956 negotiations for Uniform Grain Storage Agreements? Mr. COREY. I was present at some of the discussions. However, the negotiations with the industry were carried on by the Washington office and I had no participation or had nothing to do with that. I could have been present but I had nothing to do with the negotiations themselves. Senator SYMINGTON. You said you could have been present. Were you present? Mr. COREY. There have been many meetings regarding this Uniform Grain Storage Agreement. Some of them I was there and some of them I was not. Senator SYMINGTON. Negotiations between the Department of Agriculture and the trade? Mr. COREY. That is right. Senator SYMINGTON. Thank you. Mr. SCHMIDT. Mr. Corey, who arranged for the hiring of the superintendent of the Three State Warehouse Co. ? Mr. COREY. Mr. Smith. Mr. SCHMIDT. Who is the superintendent? Mr. SCHMIDT. Do you know Mr. Jacobson? Mr. COREY. I have known Mr. Jacobson for a number of years. Mr. SCHMIDT. Did you make the initial contact with them for his employment by the Three State Warehouse Co. ? Mr. COREY. I told Mr. Smith about Mr. Jacobson. I don't recollect that my contact was other than that. Mr. SCHMIDT. But you did give his name to the partners as a possible superintendent, is that right? Mr. COREY. That is right. Senator SYMINGTON. May I ask, if that is true, how you can say that your interest was only that of an investor? Mr. COREY. Mr. Chairman, many times various warehousemen asked me, they have got to have a new superintendent, do I know one. This situation is not unique to the Three State Warehouse Co. It has happened in connection with many storage facilities. Mr. SCHMIDT. Do you remember getting a letter from Mr. Jacobson asking you whether there was a job available with the Government in your office? Mr. COREY. No, I don't recollect that. Mr. SCHMIDT. Or your replying to him that you knew of a position with Three State Warehouse Co.? Mr. COREY. I don't recollect the correspondence, Mr. Chairman. Mr. SCHMIDT. Now, did you ever disclose your interest in this Three State Warehouse Co. or California Malting Co. to your superiors in the Department of Agriculture? Mr. COREY. I was never asked. Mr. SCHMIDT. You were never asked. Did you ever have to disclose to them any of your outside holdings, or did you ever discuss with them or did they ever discuss with you your ownership in anything, any company that might be contracting with the Govern ment? Mr. COREY. They have never asked me-in the years that I have worked in and out of Government, they have never asked me what I owned. That is while I was with the Government. Senator SYMINGTON. Am I to understand that you were never told by the Department of Agriculture at any time that you should not have an interest in a company where money was being paid and where decisions were being made out of your office? Mr. COREY. The first notice that I have any recollection of was the bulletin that came out in the latter part of May 1959, and which was produced in the Portland office under date of June 1, 1959, regarding this code of ethics as adopted by the 85th Congress. Senator SYMINGTON. And before that there were no regulations in the Department of Agriculture that you knew anything about or which had been submitted to you verbally or in writing statingMr. COREY. Not to my knowledge. Senator SYMINGTON. Stating it would be improper for you to have a cut on the side in a warehouse setup where you were making the decisions as to how much grain would be there and enforcing the i |