Mr. DODD. There is no storage space available for the many eggs. Senator AIKEN. In regard to the question of cooperation on the part of the farmers in getting rid of his old hens, was there not an interval, at that time, when the prices dropped 10 or 12 cents a pound and he could not afford to sell his old hens and take a loss which would have resulted? Mr. DODD. Senator Lucas has touched on the farmer not knowing too much about these things. I think they know pretty much all about it. I think the consumers in this country are the people really not informed. Senator THYE. Is there any reasoning or even any foundation in the reasoning that the beef and pork prices are where they are because of the consumers, and that poultry and eggs as a food could very easily be put on the table to serve the same purpose? Mr. DODD. And you could buy it a lot cheaper. Senator THYE. Why are we not moving into that channel? I realize that during the war years, of course, their appetites were pretty keen for the beef and the meat cuts. Mr. DODD. You hear a lot of questions about these support prices. I just feel 100 percent that without these support prices we would not have had the thing happen in this country that never happened in any other country in history. That was to increase its production of food in wartime, when your available manpower was going down, and the equipment was going down. It was largely older folks on the farms, and still we increased the production of food 40 percent. If the farmers have taken on the responsibility to see the consumers always have an adequate supply of food, I think the consumers of this country really have a responsibility to see that the farmers get a fair price for it and do not get caught with their own production as has happened to them once or twice before. Senator THYE. I wonder if we now could offer the question. We are going to have to determine in the next few minutes what we are going to do. Mr. DODD. I think regardless of your farm program, the Commodity Credit, through its operations over the years, has had a very creditable performance. When the cost of consumer subsidies paid during the war is excluded, it shows over-all a profit. There are some commodities here and there where you have losses, but over-all Commodity Credit has made money when the cost of consumer subsidies is excluded. I think if you have that farm program, you have got to have something like the Commodity Credit Corporation to carry it out. It is the backbone of the whole agricultural program. Senator LUCAS. I move we report the bill, Mr. Chairman. Senator THYE. I second the motion. The CHAIRMAN. This bill S. 1322, was drawn by your Department, I believe. Mr. DODD. That is right. We strongly urge its approval. The CHAIRMAN. Do you think in the main that the bill covers what ought to be enacted and recommended by this committee? Mr. DODD. Yes; we do. The CHAIRMAN. And have you any changes? Mr. DODD. No change whatever. The CHAIRMAN. It seems to me that gets right down to business here. We have got a bill here which the Department of Agriculture says is all right. It has been here for quite some time. Mr. DODD. It has been almost a year. Senator ELLENDER. Mr. Chairman, we might ask if there is anybody opposed to the bill present. Senator AIKEN. There have been other requests to be heard. Senator AIKEN. The Grain Trade Council has asked to be heard. The CHAIRMAN. We ought to give them a chance to be heard. There is time for everybody to be heard if we get right down to business and say we are going to enact some sort of legislation. Senator ELLENDER. The question here is whether we should report it without hearing those requesting to be heard. The CHAIRMAN. I do not think so, no. I think we want everybody to be heard who has a real interest in the legislation. Senator ELLENDER. I am for it. I am sure every member of the committee is for it. It looks that way, anyway. I wonder if it would not be a good idea to find out if these people want to be heard, and if so, fix it immediately. The CHAIRMAN. I think you are absolutely right, and we ought to go ahead. Senator AIKEN. I suggest we hear them tomorrow morning at 10 o'clock. The CHAIRMAN. Any objection to that? If not, the committee will meet here tomorrow morning at 10 o'clock and continue the hearing on the bill and try to get an understanding or something definite that the committee can vote on. Mr. DODD. Mr. Chairman, might I say just one more word? Some of us have been working with this Commodity Credit Corporation a long time. The CHAIRMAN. I believe you know more about it than anybody that comes before this committee. Mr. DODD. Some of us have lived with this thing a long time. I do not want to be so presumptuous as to say there are a lot of these things that should not be done, but I would hate to see some restrictive amendments put onto this legislation that would make it impossible for Commodity Credit to carry out the job assigned to it by the Congress. The CHAIRMAN. Frankly, I think this committee feels you have good judgment in the various provisions of this pending bill. Mr. DODD. We have got some persons right around here that have been living with this just the same as I have, Senator. This is their considered judgment. Senator ELLENDER. Mr. Chairman, may I suggest this: Mr. Dodd did not have the opportunity of reading his entire statement, but I suggest that that statement, as well as another statement we have here, be filed with the committee. If we see fit, we can have them incorporated in the printed hearings. Senator AIKEN. I think they should be printed in the hearings. Senator ELLENDER. We can decide that. The CHAIRMAN. Without objection, it is so ordered. (The statements are as follows:) OPENING STATEMENT OF THE UNDER SECRETARY OF AGRICULTURE IN THE HEARINGS BEFORE THE SENATE AGRICULTURE AND FORESTRY COMMITTEE ON A FEDERAL CHARTER FOR COMMODITY CREDIT CORPORATION The Commodity Credit Corporation has, during its existence, played a vital role in stabilizing and protecting farm income and prices, assisting in the maintenance of balanced and adequate supplies of foods, feeds, and fibers, and facilitating their orderly distribution. It is, in my opinion, essential to American agriculture that the Commodity Credit Corporation be continued as a Federal agency with flexible authority to meet problems as they arise. Bill S. 1322 which has been introduced by Senator Capper and which is being considered by this committee is designed to grant the Corporation a Federal charter. We recommend the proposed bill and believe it will furnish the Corporation with necessary basic authority. The present Corporation was incorporated in 1933 under the laws of the State of Delaware, pursuant to an Executive order issued by the President under the authority vested in him by the National Industrial Recovery Act of 1933. It originally was operated as an affiliate of the Reconstruction Finance Corporation, but it was transferred to the Department of Agriculture in 1939 and was placed under the general direction and supervision of the Secretary. This action was taken in order to facilitate the coordination and integration of all farm programs of the Government. The Corporation's stock is owned by the United States and the rights arising out of the ownership of the stock are exercised by the Secretary. The Corporation under its present charter is authorized, among other things, to engage in buying, selling, lending, and other activities with respect to agricultural commodities, products thereof, and related facilities. Acts of Congress have ratified the Delaware charter and continued the Corporation as an agency of the United States until June 30, 1948. Congress has also assigned specific responsibilities to the Corporation, and has prescribed policies and established limitation with respect to various phases of its activities. Congress specifically directed the Corporation to carry out certain operations, such as the price-support program. The Corporation is also subject to the Government Corporation Control Act. This act requires the Corporation to submit an annual budget program to the Congress. In approving the budget each year, the Congress limits the Corporation to carrying out the types of programs provided for in the budget. Limitations have also been placed by Congress upon certain of the Corporation's operations, for example, the prices at which certain agricultural commodities may be disposed of have been limited. The Government Corporation Control Act also requires that wholly owned Government corporations incorporated under State laws be reincorporated under Federal law in order to continue as agencies of the United States after June 30, 1948. As I have said before, the Corporation carries out a vital part of the Government's agricultural program. Its primary function is to stabilize prices of agricultural commodities to the American farmer, to assure adequate supplies of agricultural commodities to the consumers, and to assist the producers in marketing their farm products in an orderly manner at fair prices to both producers and consumers. By aiding the stabilization of agricultural economy, the Corporation also assists in the stabilization of our national economy since a healthy agriculture is essential to the well being of the nation. During the prewar years the Corporation's main activity was supporting prices of a number of agricultural commodities through commodity loans which encouraged the orderly marketing of such commodities, and the withholding of price-depressing surpluses from the market. These operations were designed to fill demands for agricultural commodities over a term of years as well as during 74439-48- -3 the individual marketing year and implemented what is popularly known as the ever-normal granary. While these basic activities have continued from the Corporation's inception to the present time, needs arising from the war and its aftermath have greatly increased the demands on the Corporation. By assuring producers a reasonable return and a ready market for the commodities harvested, the Corporation has aided in increasing production to levels never before attained; the wartime food requirements of our allies were met; and the more pressing postwar needs of foreign countries are being filled. Corn loans afford an excellent illustration of the operations of the pricesupport program. The first corn loans were made on the 1933 crop; since that time loans have been made on over a billion bushels of corn. In 1932 the market price of No. 3 yellow corn at Chicago averaged 44 percent of parity, but in 1933, the first year the loan was in effect, this market price averaged 68 percent of parity. During the 10-year period from 1923 to 1932 the market price of corn averaged 74 percent of parity; during the years that loans have been offered— 1933 through 1947-the market price has averaged 107 percent of parity. During the immediate prewar and early war years, heavy production resulted in the building up of the country's stocks in grain. The farmers of this country produced large crops in response to the Government's request and on the assurance by the Government of a reasonable price. Stocks of corn increased to the unprecedented carry-over of over 645,000,000 bushels on October 1, 1941, while the carry-over of wheat reached a total of 632,000,000 bushels on July 1, 1942. These were the largest stocks ever to fill the Nation's granaries and they met an urgent need during the critical war and postwar period. The number of cattle and calves slaughtered increased 45 percent between 1940 and 1945. Grain, and large stocks of it, made this possible. Our soldiers and civilian population and our allies benefited by such heavy production. The corn and other commodities obtained as a primary result of the price-support operations and held in our "over-normal granary" proved invaluable when the Corporation was called on to meet greatly expanded wartime foreign and domestic needs for food and feed. Substantial stocks of cotton were accumulated prior to the war. Our carryover in 1938 exceeded 13,000,000 bales which was equivalent to an average year's production. The Corporation had, first under loan and later in its inventory, a major portion of this carry-over. When demands for cotton permitted, we moved this huge supply into consumption channels. Considerable quantities had been carried over for from 7 to 9 years. The Government, in supporting the prices at the time of production, had saved many producers from severe financial difficulties and was still able to utilize the cotton effectively. These operations, although they extended over a considerable period, ultimately resulted in a financial profit to the Government in addition to the economic profit to the Nation. Activities of the Corporation during the war and immediate postwar years have reemphasized the Corporation's value as a flexible instrument designed to meet emergencies as they arise as well as to aid in the long-term stabilization of agriculture. The Corporation has carried out its long-term objectives of stabilizing prices and encouraging orderly marketing mainly through its price-support program. In meeting emergency war and postwar needs the Corporation has served as the procurement agency of foods and agricultural commodities required by the Government, foreign nations, and relief agencies. In view of the huge demands for such commodities, centralized procurement was essential. Due to extreme shortages of certain commodities as compared to over-all demands, separate purchases of large quantities by several competing procurement agencies would completely disrupt the marketing situation. Centralization also enables procurement operations to be conducted in a manner that gives maximum benefit to American agriculture since purchase operations can be closely coordinated with price support operations. Moreover, agriculture is a seasonal operation and it is essential if farmers are to receive maximum benefits, that requirements be filled while the commodities are in most plentiful supply or as they move off the farms. In other words, purchases of large quantities should be made during the normal marketing or flush production season and as close to the point of production as possible. Purchases to meet supply needs were first made in 1941 and reached a maximum of over $2,000,000,000 a year. Last year purchases of agricultural commodities for supply purposes amounted to approximately $1,100,000,000. Other activities carried on by the Corporation include exporting agricultural commodities surplus to the needs of this country and the procurement of agricultural commodities and products thereof in foreign countries. The anticipated demands to be made on the Corporation in the immediate future are estimated in the 1949 budget which has just been submitted to the Congress by the President. The total funds we estimate will be needed in carrying out the Corporation's programs gives you a rough idea of the extent and scope of these activities. It is estimated that during the fiscal year 1949 the pricesupport program will require $1,455,000,000 and commodities furnished under the supply program will be valued at $1,746,000,000. It is difficult to forecast the long-term demands on the Corporation. We believe, however, that there is an imperative need for an agency with the Corporation's authority to stabilize the marketing of agricultural commodities, to aid in securing maximum production when requirements are high, to cushion the transition when foreign and domestic needs tend to peacetime levels, to procure commodities for Government needs with a minimum dislocation of price and marketing patterns, to serve as a focal point for agricultural commodity-action programs, and to act promptly in similar emergencies. I would now appreciate the opportunity of briefly commenting on the major provisions in S. 1322 which is being considered by this committee. The Commodity Credit Corporation Charter Act would reincorporate the Commodity Credit Corporation as a corporate agency and instrumentality of the United States, within the Department of Agriculture, subject to the general direction and control of the Secretary of Agriculture. The Corporation would have as its purposes the stabilization, support, and protection of farm income and prices, the maintenance of balanced and adequate supplies of agricultural commodities, and the facilitation of the orderly distribution of such commodities. The term “agricultural commodities" as it is used in the bill also includes products of such commodities, foods, feeds, and fibers. To effectuate these purposes, the Corporation would be granted by section 5 of the act certain specific authority, namely, to support the prices of agricultural commodities through loans, purchases, payments, and other operations, to make available materials and facilities required in connection with the production and marketing of agricultural commodities, to procure agricultural commodities for sale to other Government agencies, foreign governments, and domestic, foreign, or international relief or rehabilitation agencies, and to meet domestic requirements, to remove and dispose of or aid in the removal or disposition of surplus agricultural commodities, to increase the domestic consumption of agricultural commodities by expanding or aiding in the expansion of domestic markets or by developing or aiding in the development of new and additional markets, marketing facilities and uses for such commodities, to export or cause to be exported, or aid in the development of foreign markets for agricultural commodities and to carry out such other operations as the Congress may authorize it to carry out or otherwise provide for. These specific powers could be used only in fulfilling the purposes of the Corporation pursuant to annual budget programs approved by the Congress in accordance with the Government Corporation Control Act. To carry out its specific powers, the Corporation would, by section 4 of the act, be granted certain general powers. Some of these general powers are those necessary and customary to the corporate form of organization, such as the right to sue and be sued, to adopt bylaws, to enter into contracts, etc. The other general powers are those appropriate to the Corporation as a Government agency, such as the use of the mails upon the same conditions governing their use by executive departments and the exercise of certain immunities of the Government. Section 6 of the act makes Fedral statutes which are now applicabl to the Commodity Credit Corporation under its Delaware charter also applicable to it under its Federal charter. The act continues the capitalization of the Corporation at $100,000,000, and provides for management of the Corporation by a board of directors of not less than 3 or more than 11 employees of the Department of Agriculture, subject to the general direction of the Secretary of Agriculture, who would be a member and the chairman of the board. At the time this act was in connection with the bill. introduced, we furnished the Congress a statement The statement was in two parts. Part I reviewed |