SECTION 4 - INVESTIGATIVE REPORTS

2095. POLICY. (S)→It is the policy of the Department that all investigative reports shall be considered as confidential and privileged documents intended for internal use only and that the identity of informants mentioned therein must be protected.

2096. RESTRICTIONS ON DISTRIBUTION AND USE. The following restrictions on the distribution and use of investigative reports are prescribed:

a. Except as provided in 8 AR 2090, investigative reports or investigative data of any type, shall not be furnished to any person, committee, or agency outside the Department, but the contents of such reports may be discussed with, or examined by, those persons in the Executive Branch who are entitled thereto by reason of their official duties.

b. Reports of investigations conducted by the Office of Personnel, that are furnished to heads of agencies for consideration and recommendation as provided by 8 AR 2089, shall not be circulated within the agency except to such administrative officials as are required to initiate action based on information in the reports, and copies of such reports shall not be made.

c.

The identity of informants mentioned in any investigative report shall not be disclosed by administrative officials to whom the reports are sent for review and consideration, and such officials shall exercise every precaution to prevent embarrassment to any person by reason of his having furnished information in connection with an investigation.

d. Under no circumstances shall an investigative report be made available to the subject of the investigation. (See also 1 AR 503, and 535a(8).)←(S)

e. Reports of investigations and other similar material, which, prior to the security regulations, were considered and marked "Confidential," shall not be filed in the official personnel folder but must be maintained in separate envelopes. These envelopes may be filed with the folder, but not in it. (See 8 AR 1364.)-*

2097.

REPORT TO CIVIL SERVICE COMMISSION OF AGENCY INVESTIGATIONS. Agencies shall follow the reporting procedures in 8 AR 384 and 2340 when initiating suitability investigations of applicants or appointees by personal contacts.

APPENDIX A

The CCC Charter Act provides that the Corporation may

"*** acquire real property or any interest therein for the
purpose of providing storage adequate to carry out effec-
tively and efficiently any of the Corporation's programs,
*** Provided, That the authority contained in this subsec-
tion (h) shall not be utilized by the Corporation for the
purpose of acquiring real property, or any interest therein,
in order to provide storage facilities for any ccmmodity
unless the Corporation determines that existing privately
owned storage facilities for such commodity in the area
concerned are not adequate: Provided further, That no
refrigerated cold storage facilities shall be constructed
or purchased except with funds specifically provided by
Congress for that purpose: *** and provided further, That
to encourage the storage of grain on farms, where it can be
stored at the lowest cost, the Corporation shall make loans
to grain growers needing storage facilities when such
growers shall apply to the Corporation for financing the
construction or purchase of suitable storage, and these
loans shall be deducted from the proceeds of price support
loans or purchase agreements made between the Corporation
and the growers. * *"

The Charter Act also provides that:

"*** In the Corporation's *** warehousing * * * or
handling of agricultural commodities, the Corporation shall,
to the maximum extent practicable, consistent with the
fulfillment of the Corporation's purposes and the effective
and efficient conduct of its business, utilize the usual
and customary channels, facilities, and arrangements of trade
and commerce. ***"!

APPENDIX B

The Cost Value of Materials in 9 Federal Stockpiles
January 1960, by Agency and Program 1/

1/ Source: CONGRESSIONAL RECORD, March 29, 1960, p. 6241.

APPENDIX C

The Proposed 1960 Uniform Grain Storage Agreement
Compared with the 1956 Agreement

The draft of the revised Uniform Grain Storage Agreement distributed for discussion purposes at the Kansas City meeting March 30, 1960, would add substantially to the responsibilities the warehouseman assumes when he handles or stores grain subject to the terms of the revised agreement.

At the first meeting at which the terms and conditions of the U.G.S.A. were discussed by USDA and trade representatives, the Department stated its determination to attain these objectives:

1. Rearrange the format of the contract and clarify some of the language.

2.

Delete some of the 1956 contract provisions which afforded the ware-
houseman some protection against unavoidable risks and almost certain
losses.

3. Shift to the warehouseman some responsibilities and risks CCC had
assumed under the 1956 contract.

4. Compensate in the handling and storage rates for being relieved of
these risks and responsibilities.

The format and structure of the contract have been improved the clarifying language is still difficult, but admittedly improved. However, in the process of clarifying the language of the agreement the Department has tightened its terms in numerous, almost unnoticed, instances. For example:

1. The phrase "or as otherwise instructed by CCC" appears where the
phrase "as mutually agreed to by CCC and the warehouseman" would be
more equitable.

2.

Practically all limitations on CCC's "right to reject" shipments have
been deleted.

3. The right to "offset" quality deficiencies has been curtailed.

4.

In some instances, the burden of proof has been shifted to the
warehouseman.

These very substantial revisions in the contract are burdensome and costly, but they are almost ignored by the trade in its concern with two major changes in the contract:

1.

The 1956 contract in paragraph (h) of Section 11 protected the prudent
warehouseman against losses due to the unavoidable breakage of grain
in the process of handling and storing it. This protection has been
withdrawn by deleting section 11(h) of the 1956 contract.

2.

Warehousemen were, and still are, vitally concerned with the contract
provision which would fix responsibility for losses on CCC grain
which might be subject to action by the Food and Drug Administration.
Acceptable language covering this threatening situation has yet to be
drafted. Efforts to draft acceptable language were undertaken at a
time when the action against cranberries and caponettes was fresh in
the minds of everyone and, as a consequence, everyone was extremely
concerned that the language covering the warehousemen's responsibil-
ities in this area should protect him against unavoidable and
catastrophic losses due to circumstances over which he would have no
control.

At this point the record should show that the proposed 1960 agreement, and previous agreements, delineate the terms and conditions for handling and storing CCC grain (1) commingled, or (2) identity preserved - and that CCC has again proposed one schedule of rates for handling and storing commingled, and another for handling and storing identity preserved.

When a warehouseman handles or stores CCC grain commingled he is obligated to deliver to CCC grain of the same grade, quality, and quantity that he received for the account of CCC. If he fails to do so he must reimburse CCC for deficiencies in quality and quantity.

If he handles or stores CCC grain identity preserved, the warehouseman is obligated to keep the CCC grain separate and apart from all other grain and to deliver to CCC the identical grain he received for CCC's account. If he does this and has warehoused the grain as though he was the prudent owner thereof, then any deficiency in grade and quality is for the account of CCC - and if the warehouseman furnishes official weights, any quantity deficiency would also be for CCC's account.

As the probable final form of the 1960 contract took shape, warehousemen appraised the additional responsibilities and risks it would impose and calculated the adjustment in rates that would compensate for these additional responsibilities and risks. It was generally agreed in the trade that if a warehouseman fully understood the differences in the 1956 and 1960 contracts he would, if given the choice, warehouse grain under the terms of the 1956 contract at the 1956 rates rather than warehouse grain under the terms of the proposed 1960 contract at rates 20 percent higher than the 1956 rates. In other words, the trade assays the 1960 contract terms as 20 percent tougher than the 1956 terms.

When the proposed IP and commingled storage rate schedules are compared, it seems obvious that USDA has also appraised these added responsibilities and risks and has calculated how much lower the IP storage rate must be before CCC can justify agreeing to store IP, and in so doing assume the unavoidable losses due to breakage incident to warehousing grain plus the incalculable Food and Drug risks, plus the risks of rejection.

Because the warehouseman's responsibilities and risks under the 1956 contract were about the same whether he stored CCC grain subject to the IP or commingled provisions of the 1956 contract, the 1956 rates for both IP and commingled storage were exactly the same for these five grains wheat, barley, grain sorghum, soybeans, and

flaxseed

but after comparing the responsibilities and risks of the 1956 and 1960 contracts USDA, on the eve of the Kansas City Town Hall meeting on March 30, published for the first time its proposed schedule of IP rates, and for these same