COMMITTEE ON AGRICULTURE AND FORESTRY

ALLEN J. ELLENDER, Louisiana, Chairman OLIN D. JOHNSTON, South Carolina

GEORGE D. AIKEN, Vermont SPESSARD L. HOLLAND, Florida

MILTON R. YOUNG, North Dakota JAMES 0. EASTLAND, Mississippi

BOURKE B. HICKENLOOPER, Iowa HUBERT H. HUMPHREY, Minnesota

KARL E. MUNDT, South Dakota STUART SYMINGTON, Missouri

ANDREW F. SCHOEPPEL, Kansas HERMAN E. TALMADGE, Georgia

JOHN SHERMAN COOPER, Kentucky WILLIAM PROXMIRE, Wisconsin B. EVERETT JORDAN, North Carolina STEPHEN M. YOUNG, Ohio PHILIP A. HART, Michigan

COTYS M. MOUSER, Chief Clerk

SPECIAL AGRICULTURE INVESTIGATING SUBCOMMITTEE

STUART SYMINGTON, Missouri, Chairman HUBERT H. HUMPHREY, Minnesota MILTON R. YOUNG, North Dakota HERMAN E. TALMADGE, Georgia

JOHN SHERMAN COOPER, Kentucky WILLIAM PROXMIRE, Wisconsin

ALLEN J. ELLENDER, Louisiana

(Ex officio)
RICHARD M. SCHMIDT, Jr., Special Counsel

CONTENTS

Testimony of-

Betts, Ernest C., Jr., Director of Personnel, U.S. Department of Pago

Agriculture-

148

Ballou, Roland F., Assistant Deputy Administrator, Operations,

Commodity Stabilization Service, U.Š. Department of Agriculture - 280

Brooks, William F., attorney and Washington representative, National

Grain Trade Council..

340

Charam, Philip, Assistant Director, Civil Accounting and Auditing

Division, General Accounting Office.----

243

Cole, James A., Minneapolis, Minn., regional director, Commodity

Stabilization Service.

262

Corey, Earl C., Portland, Oreg---

97
Dudden, Garrett, Dudden Elevators, Inc., Venango, Nebr.

37
Goold, W. George, Assistant Director of Personnel in Charge of
Security and Investigations, U.S. Department of Agriculture - 96,

139, 148, 262

Gregg, Joseph B., Kansas City, Mo., partner in Morrison-Gregg-

Mitchell Grain Co.--

184

Hanson, Robert, Deputy Director, Grain Division, Commodity Sta-
bilization Service, U.Š. Department of Agriculture..

60

Hendrickson, Roy F., executive secretary, National Federation of

Grain Cooperatives

193

Hunter, Howard M., Venango, Nebr., accountant..

37

Laybourn, L. A., Salina, Kans., on behalf of the Grain & Feed

Dealers National Association..

304

Oliver, Alvin E., executive vice president, Grain & Feed Dealers

National Association...

304

Olson, Howard D., Lincoln, Nebr., accountant.

45
Palmby, Clarence D., Acting Administrator, Commodity Stabilization
Service, U.S. Department of Agriculture -

280

Pickard, Howard, attorney, Office of the General Counsel, U.S. De-

partment of Agriculture -

57, 148, 262

Phillips, Dr. Richard, Ames, Iowa, professor of agricultural economics
at Iowa State University -

2
Pollock, Raymond J., Director, Grain Division, Commodity Stabiliza-

tion Service, U.S. Department of Agriculture

Puelz, Robert A., Lincoln, Nebr., manager, Equity Union Grain Co.. 45

Roberts, Ralph S., Administrative Assistant Secretary of Agriculture,

U.S. Department of Agriculture.

148

Summa, Ivan, Archer, Iowa, manager of Farmers Cooperative Grain
Coca-

22

Theis, Frank A., Kansas City, Mo., president, Terminal Elevator

Grain Merchants Association..

348

Thompson, L. F., attorney, General Counsel's Office, General Ac-

counting Office --

243

Wilker, G. J., supervisory accountant, General Accounting Office.--- 243
Exhibits and other documents
Resolution creating subcommittee

1
Biographical data concerning Dr. Richard Phillips, Iowa State Univer-
sity, Ames, Iowa..

3
Schedule of value of CCC commodities pledged for outstanding loans

and commodities in inventory for fiscal years 1951 through 1959.-- 4
Schedule of costs incurred by ČCC for storage, handling, transporta-

tion, and interest expense applicable to price support inventory and
loan operations, fiscal years 1952 through estimated 1961.-

4

CCC storage and handling costs for all commodities and for grains

during fiscal years 1952 through estimated 1960-

5

57

NI

Exhibits and other documents—Continued

Schedule of storage volume and annual storage costs for 44 country Page

elevators in Iowa..

7

Schedule from Iowa State University concerning Newhall Grain Co.,

Newhall, Iowa.

12

Revenues, costs, profits, and rates of return on Government storage

for Newhall Grain Co. and Farmers Cooperative Grain Co., Archer,

Iowa..

21

Affidavit of Hugo Blumstengel concerning sale of storage bins.-

43

Advertisement of Aldinger Farm Service, Iowa Falls, Iowa, concern-

ing payment to producers for storage of Government grain.---

53

Advertisement of Farmers Cooperative Society, Rockwell, Iowa, con-

cerning payments made to producers for storage of Government

grain ---

54

Letter from counsel of subcommittee, dated January 15, 1960, to Mr.

Robert Puelz, concerning supplemental matter to be furnished to

the subcommittee by Mr. Puelz.

55

Letter of January 18, 1960, from Robert A. Puelz, general manager,

Equity Union Grain Co., Lincoln, Nebr., to counsel for subcom-

mittee concerning additional material to testimony of Mr. Puelz.- 55

Chart from Grain Division, CSS, showing total CCC bin site capacity

and reduction in such capacity for fiscal years 1950-59--

78

Supplemental statement of USDA concerning H.R. 3407, H.R. 5670,

and H.R. 6426, 83d Congress-

81

Letter dated January 25, 1960, to subcommittee from Raymond J.

Pollock, Director, Grain Division, CSS, concerning ownership of

elevators...

88

Memo dated January 22, 1960, to Marvin L. McLain, Assistant Sec-

retary of Agriculture, from W. George Goold, concerning Raymond

J. Pollock

89

Affidavit of Raymond J. Pollock dated January 21, 1960, concerning

ownership of grain elevators--

90

Promissory note dated August 1, 1953, from Gerald R. Pollock to

Raymond J. Pollock -

92

Promissory note dated February 23, 1957, from Gerald R. Pollock to

Raymond J. Pollock.

93

Letter dated March 4, 1960, to chairman of subcommittee from

Malcolm R. Wilkey, Assistant Attorney General, concerning

Earl C. Corey ---

97

Organization chart, dated November 2, 1956, USDA, CSS, Portland,

Oreg., office

397

Partnership agreement dated August 1, 1956, Three State Warehouse

Co., Portland, Oreg---

397

Letter dated May 10, 1956, from Portland CSS to Three State Ware-
house Co. approving warehouse for grain storage.

399, 101
Application for approval of Three State Warehouse Co. facility under
UGSA

(*)

Copy of UGSA dated April 26, 1956, for Three State Warehouse Co-- 400

Chart showing revenues received by Three State Warehouse Co.

under UGSA from April 1956 to January 1960.-

103

Check dated April 17, 1959, for $150.82 to Earl C. Corey-

106

Check dated April 17, 1959, for $5,000 to Robert E. Corey

107

Check dated April 17, 1959, to New York Life Insurance Co. in the

amount of $2,372.19.

108

Check dated April 10, 1959, to Earl C. Corey for $3,409.69.

109

Check dated April 10, 1959, to Earl C. Corey for $20,567.30.

110

Check dated June 29, 1959, to Earl C. Corey for $30,000

111

Check dated June 12, 1959, to Earl C. Corey for $18,250.07.

112

Check dated June 12, 1959, to Director, Internal Revenue, $3,500.- 113
Ledger sheet of Diamond Lumber Co., Portland, Oreg., showing check

dated November 6, 1956, issued to Earl Corey, Inc., for $3,295--- 115
Stock certificate dated May 12, 1955, for 200 shares of California
Malting Co. in the name of Mrs. Earl C. Corey -

(*)
Stock certificate dated September 4, 1956, for 103 shares of California
Malting Co. stock in the name of Lottie S. Corey-

(*)

USDA list of recipients of storage payments in excess of $500,000

made in calendar year 1959 under UGSA.

Exhibits and other documents—Continued

Letter dated November 27, 1959, from H. W. Collins concerning Page

valuation of stock of California Malting Co.---

119

Affidavit of George C. Jacobson concerning employment with Three

State Warehouse Co.-

121

Employee Handbook issued by Office of Personnel, USDA.

(*)

P.M.A. Instruction No. 344–5, dated August 27, 1953, concerning

types of misconduct which subject an employee to disciplinary

action...

403

Chapter 55, USDA Regulations concerning conduct of employees,

January 15, 1960.--

410

Chapter 55, U.S.D.A. Regulations dated June 30, 1947, “Conduct of
Employees,” Section 2—“Outside Interests”

428

Code of #thics for Government service issued by the 85th Congress - 430

Statement of Ralph S. Roberts, Administrative Assistant Secretary,

U.S.D.A., before subcommittee, March 23, 1960.-

149

C.S.S. instruction concerning general policies and authorities governing
C.S.S. procedure, of August 23, 1955---

431

Letter dated March 29, 1960, to W. George Goold, Security and

Investigations, U.S.D.A., from Arnold R. Beasley, Assistant to the

Assistant Administrator, F.A.S., concerning P.D. Bulletin No. 49-- 161

Schedule of handling and storage charges under 1956 U.G.S.A. and

under 1960 revision of U.G.S.A.-

191

Letter dated April 18, 1960, from U.S.D.A. listing the individuals

representing the grain storage industry negotiating the U.G.S.A.

with the U.S.D.A.

194

Statement of Senator Symington before the U.S. Senate on April 14,

1960, "The Need for Cost Knowledge in Setting Fair Grain Storage

Rates"

196

Excerpts from C.C.C. Charter.

448

Cost value of national stockpiles other than food.

449

Analysis by R. F. Hendrickson of 1960 U.G.S.A.--

450

Chart prepared by R. F. Hendrickson concerning handling rates

under U.G.S.A.

455

Letter dated March 24, 1952, by the Honorable Charles Brannan,

Secretary of Agriculture, as presented by R. F. Hendrickson... 456

Excerpts of testimony of Marvin McLain, Assistant Secretary of

Agriculture, before House Committee on Appropriations, as pre-

sented by R. F. Hendrickson

463

Subsequent statement of R. F. Hendrickson presented to subcommittee

after his testimony..

240

Schedule showing location of 57 warehouses audited by General

Accounting Office-----

250

Schedule showing rate of occupancy for 57 warehouses audited by

General Accounting Office.

256

Audit report of General Accounting Office giving costs of grain storage

in 57 elevators, dated May 10, 1960.-

465

Teletype dated August 18, 1954, from James A. Cole to Marvin

McLain concerning approval of Cargill elevator at Savage, Minn.- 298
Teletype dated August 25, 1954, from Marvin McLain to James Cole
concerning Cargill elevator, Savage, Minn.

298
Teletype dated September 1, 1954, from A. F. Troyer to James Cole
concerning Cargill warehouse, Savage, Minn.

298
Teletype dated September 1, 1954, from James Cole to A. F. Troyer
concerning Cargill elevator, Savage, Minn.

299
Teletype, November 23, 1959, from James A. Cole to Andrew J.

Mair concerning policy changes adding commissions and loadout
charge on soybean sales by CČC..

Page

534

535

536

538

539

543

544

545

546

547

548

549

550

551

552

553

555

558

Exhibits and other documents—Continued

Letter from Grain Dealers Mutual Insurance Co. dated March 2, 1960,

to Transport Indemnity Co. concerning insurance coverage for grain

storage, handling, deterioration, risk, etc..

Letter from Transport Indemnity Co. to Mr. Al Laybourn, dated

March 8, 1960, concerning insurance coverage..

Letter from Transport Indemnity Co. to Grain Dealers Mutual In-

surance Co. dated Februsry 16, 1960, concerning insurance-

Computation by Grain & Feed Dealers National Association con-

cerning risk in grain storage-

Statement of Grain & Feed Dealers National Association concerning

bond coverage for warehousemen.

Chart of G. & F.D.N.A. showing CCC and commercial storage

capacity and annual wheat production.-

Chart of G. & F.D.N.A. showing commercial storage facilities under

the U.G.S.A.

G. & F.D.N.A. chart showing labor costs---

G. & F.D.N.A. chart showing purchasing power of the dollar -

G. & F.D.N.A. chart showing engineering construction cost index.---

G. & F.D.N.A. table of storage costs.--

G. & F.D.N.A. chart showing their estimated storage rates required.-

G. & F.D.N.A, table of receiving and loading costs -

G. & F.D.N.A. chart showing estimated cost of storage in 27 country

elevators in Ohio.-

G. & F.D.N.A. chart showing estimated handling costs on 27 Ohio

elevators,

Letter dated May 10, 1960, from Blanton Grain Co. to the G. &

F.D.N.A..

Letter dated May 11, 1960, from Illinois Grain Dealers Association

to G. & F.D.N.A..

Letter dated May 10, 1960, from Western Grain & Feed Association

of Iowa to G. & F.D.N.A.

Letter (undated) from Montana Feed Manufacturers and Dealers

Association's Secretary to President of that association.-

Letter dated May 14, 1960, from Missouri Grain & Feed Association

to G. & F.D.N.A.

Letter dated May 9, 1960, from Nebraska Grain & Feed Dealers

Association to G. & F.D.N.A.

Letter dated May 10, 1960, from Farmers Elevator Association of

South Dakota to G. & F.D.N.A.-

Letter dated May 9, 1960, from Osborne McMillan Elevator Co--

Letter dated May 9, 1960, from McCarthy Bros. Co. to G. & F.D.N.A.

Chart submitted by L. A. Laybourn comparing obligations for farm-

stored grain vs. commercial-stored grain.-
Arthur Young & Co. report on combined financial information cover-

ing 36 members of the Terminal Elevator Grain Merchants Asso-

ciation, fiscal years ending 1951 to 1959, inclusive.

Chart from "Business and Economic Conditions,” First National City

Bank of New York dated April 1960, showing net income of leading

corporations for years 1958 and 1959.

Letter to counsel of subcommittee dated May 25, 1960, from Clarence

Palmby, Acting Administrator, CSS, concerning effect of storage

rate cut on farmers..
Chart of subcommittee prepared from data by USDA showing

savings to farmers under proposed grain storage rate--
Chart prepared by Terminal Elevator Grain Merchants Association

showing cost to farmers under proposed new grain storage rate--

USDA cost study of commercial warehouses storing grain.---

USDA handling cost study of commercial warehouse handling grain..

USDA binsite storage cost study.

List of members of Grain Storage Advisory Committee of USDA.
Schedule of storage and handling payments to companies represented

on USDA Grain Storage Advisory Committee under UGSA for

years 1958 and 1959.

Statement of Arthur Young & Co. concerning Simonds-Shields-Theis

Grain Co., Kansas City, Mo.----

*Denotes that material may be found in the files of the subcommittee.

562

563

566

568

570

572

329

575

580

390

391

392

582

618

627

393

(*)

631