it is always within your power to reimpose controls if and when. there is such a substantial change in economic conditions as to show the necessity for controls, which change cannot take place for a long time. If the above request for complete termination is not acceptable to the committee, then, we ask that controls be terminated unless the Secretary of Commerce, certifies as to any calendar quarter that the volume of export fats and oils will, or is likely to, equal or exceed the imports of fats and oils into the United States. In the paragraph below the wording before the parenthesis takes care of our first request, and the additional language in parenthesis embodies our alternative suggestion if the first suggestion is not acceptable to the committee:

Sec. 3 (c). The authority granted by this section shall not be used to prohibit or restrict the exportation of fats and vegetable, animal, and marine oils to nations in North and South America or to European countries cooperating in the European recovery program

that is another way of saying that we would feel safer if this matter were in the hands of this committee to be determined when the time comes that export controls are needed than to leave them in their present hands.

Our alternative suggestion, if you think that is going too far, is to ask that you add "except upon certificate of the Secretary of Commerce that during the next calendar quarter the volume of exports of such fats and oils will, or is likely to, equal or exceed the imports into the United States of fats and oils."

In other words, we think we at least ought to have that balance. But our first request is that, at least for the present, you do as to the edible fats and oils what they did this morning or yesterday as to the inedible fats and oils. They removed those controls, and we would like to have the same thing done as to the edible fats and oils until this committee finds that the domestic situation is such as to require reimposition of the controls.

(The three letters referred to are as follows:)

GREAT FALLS MEAT Co.. Great Falls, Mont., January 21, 1949.

General Counsel WILBUR LA ROE, Jr.,
Washington, D. C.

DEAR MR. WILBUR LA ROE, Jr.: I am writing this letter on behalf of our company that has been in the meat-packing business for the past 61 years. We are asking you to give serious thought and consideration to the immediate decontrolling of inedible animal fats and oils.

We find ourselves in a position today being offered 6 cents to 62 cents for fats that have been accumulated and rendered off of cattle costing from 20 to 28 cents per pound.

At the present time, there is a lack of demand in the country for inedible animal fats and oils and we are forced to sell at ruinous prices and are at the mercy of the large users.

No doubt, you have been contacted from all angles and sources for the same request, but we hope, after being presented with the facts for your consideration and study that you might be in favor for decontrolling fats and oils at the earliest possible date, due to the lack of an American market.

Yours very truly,

GREAT FALLS MEAT CO.,
M. H. BROWN, Vice President.

P. S. The above letter has been sent to the Congressmen and the two Senators from Montana, and also to the Secretary of Agriculture and the Secretary of Commerce.

POTTS & WALL PACKING CO., Okmulgee, Okla., January 20, 1948.

Hon. CHARLES F. BRANNAN,

Secrtary of Agriculture, Washington, D. C.

Hon. CHARLES SAWYER,

Secretary of Commerce, Washington, D. C.

Hon. ROBERT S. KERR,

United States Senate.

Hon. ELMER THOMAS,

United States Senate.

GENTLEMEN: May we call your honorable attention to the state of the Nation, insofar as inedible, and, edible fats are concerned? Under export controls, the Nation is just about to drown in its own grease. While our operations are small. we feel the impact of reduced values of both edible and inedible fats. We find it almost impossible to move inedible fats at any price, and lard is selling for 4 cents below the live-hog cost. Renderers in this part of the country have decreased the price they pay for slaughterhouse offals by 50 percent; and in many instances rendering materials are left to rot because of the low value of inedible fats. Surely, it is time to decontrol fats and oils, so that the industry can get its fat "out of the fire." May we have your support in this deplorable situation?

Respectfully,

Mr. WILBUR LA ROE, Jr.,

Washington, D. C.

POTTS & WALL PACKING CO.
C. A. POTTS.

PEET PACKING CO.,

Chesaning, Mich., January 21, 1949.

DEAR MR. LA ROE: We are today sending the following letter to Hon. Charles F. Brannan, Secretary of Agriculture; Hon. Charles Sawyer, Secretary of Commerce, and copies to Senators Ferguson and Vandenberg and Congressman Crawford:

"It was with genuine interest that I read today of the additional 30,000,000 pounds of lard that has been allocated along with other fats and oils to foreign countries.

"Because about 30 percent of a hog is fat, the price of lard has traditionally approximated that of the live hog. However, today while the price of live hogs is 21 cents the price of lard is less than 13 cents. A year ago, the price of live hogs was 274 cents and the price of lard was 28 cents.

"A similar situation exists in inedible fats. Prime tallow today is quoted at 9 cents while a year ago it was 27 cents. Naturally these prices reduce the amount the packer can pay the farmer for his livestock and at the same time increases the amount of money the consumer must pay for his meat.

"While the additional 30,000,000 pounds allocation should have some bolstering effect upon a badly sagging fats and oils market, the best that can be hoped for will be something in the way of a temporary result. Because of the abundant domestic supply of fats and oils along with what we are told is a great need for these items in foreign countries, it is difficult for us to understand why there is any further need of imposing export controls on fats and oils. The effect of these controls is simply to create an artificial surplus of these items and we would urge you to lend every effort toward the decontrol of fats and oils at the earliest possible date."

Very truly yours,

PEET PACKING CO.,
R. D. STEARNS,
Vice President and Treasurer.

The CHAIRMAN. What is the demand for edible oils and fats in the United States, Mr. La Roe?

Mr. LA ROE. I do not know that I can be specific on that. I know that it is difficult. The Department of Agriculture calls what goes

out as disappearance, and for the last 12 months of the fiscal year ending in 1948 the total disappearance of edibles was 6,600,000,000 pounds, and of the inedibles 3,743,000,000 pounds.

The CHAIRMAN. How did that compare with the supply?

Mr. LA ROE. There has been some increase in the demand, if that is what the chairman is getting at. I can give it to you, if you like, by quarters running all the way to the first part of 1946.

Taking first the July-September quarter-that is, the third quarter in 1946-total disappearance-I will give you the supply as well as the disappearance, and, in order to avoid confusion, I will give the supplies first.

Third quarter of 1946, total production, 1,164,000,000 pounds. Next quarter, 1,953,000,000 pounds. First quarter of 1947, 1,994,000,000 pounds. Second quarter of 1947, 1,566,000,000 pounds. For the whole fiscal year, ending in 1947, 6,600,000,000 pounds.

For the third quarter of 1947, 1,373,000,000 pounds. Last quarter of 1947, 2,000,000,000-almost an even figure.

For the first quarter of 1948, 1,991,000,000 pounds. Second quarter, 1,562,000,000 pounds. Total for the fiscal year ending in the middle of the last calendar year, 6,899,000,000.

The third quarter of 1948, 1,287,000,000 pounds, and in the last quarter, 2,150,000,000 pounds, those latter two being partially estimates.

Now as to the disappearances.

Going back to the third quarter of 1946, 1,300,000,000 pounds.
The last quarter, 1,700,000,000.

First quarter of 1947, 1,700,000,000.

April-June, second quarter, 1,300,000,000 pounds.

Total for the 12 months ending in the middle of that year,

6,100,000,000 pounds.

Now, for the third quarter of 1947, 1,572,000,000 pounds.

Last quarter, 1,790,000,000 pounds.

First quarter of 1948, 1,651,000,000 pounds.

Second quarter, 1,650,000,000 pounds.

Total for the 12 months ending in the middle of last year, 6,600,000,000, which is about a half billion more than the previous

year.

Third quarter of 1948. 1,400,000,000, and the last quarter of 1948, partially estimated, 1,800,000,000 pounds, which is about 300,000,000 pounds in excess of the previous year.

The CHAIRMAN. What is the excess of production over disappearance for that period?

Mr. LA ROE. Well, that ought to be shown by the ending stocks, which are as follows:

For the third quarter of 1946, 589,000,000 pounds; for the last quarter, 745,000,000 pounds: for the next quarter-that is, the first quarter of 1947-844,000,000 pounds; second quarter, 948,000,000 pounds; third quarter, 614,000,000 pounds last quarter, 755,000,000 pounds; first quarter of the last calendar year, 678,000,000 pounds; second quarter, 679,000,000 pounds; July to September, estimated, 431,000,000 pounds; and October to December, 659,000 pounds.

Those are edible fats and oils only, you understand.

The CHAIRMAN. What is the existing store of fats and oils now? Mr. LA ROE. The last figure we have is what we get from them, and they have not given us confidential figures up to date. But you can get that from them in executive session.

The CHAIRMAN. You say that the exports exceeded the imports. What were the imports and where did they come from?

Mr. LA ROE. Well, I cannot tell you where they came from, but I can give you the figures.

Let us take the imports first because they are shown first on the list. For the 12 months ending in the middle of 1947, only about 22,000,000 pounds, and for the 12 months ending in the middle of last year, 1948, 28,000,000 pounds. For the third quarter of last year, estimated, 12,000,000 pounds, and for the last quarter, 3,000,000 pounds.

Now, as to exports:

July to September period, 1946, 124,000,000 pounds; last quarter, 74,000,000 pounds; first quarter of 1947, 118, 000,000 pounds; second quarter, 110,000,000 pounds; third quarter, 137,000,000 pounds; last quarter, 152,000,000 pounds. This last year-last calendar year-first quarter, 153,000,000 pounds; second, 83,000,000 pounds; third quarter, estimated, 69,000,000 pounds; and last quarter, estimated, 116,000,000 pounds.

You see, one point is this, if the committee please: That as to the edible fats and oils the exports have been only about a tenth of a billion and a quarter compared with a production which runs up as high as over 2,000,000,000 pounds. In other words, the amount that goes out is only a very small percentage of the total, and that in the face of a demoralization of the domestic market.

Now, there is one thing I want to emphasize. I want to be fair about this. The figures themselves are a little bit misleading for this reason-the use of detergents is something terrific. By detergents I mean these chemicals that are used as a substitute for soap. My wife hardly uses soap any more. She is disloyal to the meat packers. She uses these new chemicals that are very popular for dishwashing, and so on. They say they hurt their hands less. I don't know the facts about that, but in any event the use of detergents is terrific and does not show up in these figures.

You naturally ask the question: Why is it that the price is so much more demoralized than the figures would seem to justify? Well, I think that that is a very large part of the answer. But, no matter what causes this demoralization, why should the export controls be strictly limited, very strictly limited, at a time when there is a demoralization of the whole domestic situation? And when General Clay is pleading for more?

Now, the President says he wants to help rebuild these other countries in every way possible. General Clay wants the Germans to have some of our surplus fats. Why should he not have them until the point is reached where there is something like a tightening of the domestic supply?

I hate to say it, but the administrative discretion in this matter is not being intelligently or fairly exercised, and I do not think it is primarily Mr. Sawyer's fault. I think he rubber stamps with his

approval nearly every one of these requests that go to him. I am speaking now about the agricultural commodities because I believe he leaves those to Mr. Brannan, as perhaps he should. But we cannot get by the Department of Agriculture. That is where our trouble is. The CHAIRMAN. Where have the exports gone? What has been the destination of the exports?

Mr. LA ROE. I saw the other day a very wide list. It is primarily, of course, to South American countries. Cuba takes an awful lot, as well as some of the European countries.

The CHAIRMAN. What European countries?

Mr. LA ROE. France, some small amount to Germany; England takes quite a bit.

The CHAIRMAN. None of the satellite countries of Russia?

Mr. LA ROE. Oh, no; the satellite countries do not get any. The satellite countries should not get a pound of it, in my opinion, and under our proposal they would not get a pound.

We say that the authority to export should be limited to the Marshall plan countries and the countries of the Western Hemisphere. The CHAIRMAN. Do you not think that the destination controls should continue?

Mr. LA ROE. Oh, yes; by all means. I would not suggest anything different for a minute. I think there would be a danger in not continuing those controls.

The CHAIRMAN. Fats and oils are essential for the defense of those nations, are they not? Explosives are made from them, are they not? Mr. LA ROE. Yes, to some extent.

The CHAIRMAN. And they are very essential to the defense of those countries. They certainly should not get into the hands of any potential enemies; do you not agree with that?

Mr. LA ROE. Well, of course that is an ECA problem that applies to almost everything and is not limited to fats and oils. But I would say that whoever administers the export controls of fats and oils in the United States ought to be duly careful that they do not get behind the "iron curtain."

That is true of all things of a military character.

The CHAIRMAN. There is a provision in the law that it should be administered for our national security.

Mr. LA ROE. Yes. Nobody is stronger for national security than I am.

The CHAIRMAN. And for our foreign relations.

Mr. LA ROE. There is nobody stronger for national security than I, and I put it ahead of the interests of my own clients.

The CHAIRMAN. We do not want some of the things to happen again that happened before some of the other wars, when we shipped materials to countries to make them strong while they were on the verge of war with us.

Mr. LA ROE. I can only say "Amen" to that.

The CHAIRMAN. If fats and oils are useful as a means of national defense in those countries, or aggression, they should be kept away from them.

Mr. LA ROE. I still fully agree with you, Mr. Chairman.