Page images

For Canada:
For Venezuela:

quantity of wheat at a specified maxiMITCHELL W. SHARP

April 13/53

mum price. The minimum price under For Ceylon:


April 27, 1953.

the agreement is fixed at $1.55 and the G. C. S. COREA

April 13th 1953.

I certify that the foregoing is a true copy maximum has been set at $2.05 a bushel. For Costa Rica: of the Agreement Revising and Renewing the

These are substantially higher than the J RAFAEL OREAMUNO Abril 24, 1953.

International Wheat Agreement which was For Cuba:

open for signature in the English, French, prices in the old agreement. Member AURELIO F. CONCHESO Abril 15–1953.

countries which have difficulty in securand Spanish languages at Washington from For Denmark:

ing.guaranteed sales or purchases may April 13 until April 27, 1953, inclusive, the AF KNUDSEN

April 13, -1953.

signed original of which is deposited in the seek the assistance of the Council in For the Dominican Republic:

archives of the Government of the United securing the contracted quantities under Ad. referendum States of America.

the agreement. Dr L. F THOMEN

April 13/53
In testimony whereof, I, JOHN FOSTER

The agreement provides for an Inter-
For Ecuador:
DULLES, Secretary of State of the United

national Council, on which all particiAd. referendum

States of America, have hereunto caused the B PERALTA P

Abril 17/53 seal of the Department of State to be affixed pating countries are represented, with For Egypt:

and my name subscribed by the Authentica. responsibility for keeping the records of M. A. ZAYED

April 13, 1953

tion Officer of the said Department, at the operations under the agreement and For El Salvador:

city of Washington, in the District of Colum- with serving as an agency to enforce the CARLOS A SIRI

April 27, 1953

bia, this twenty-eighth day of April, 1953. rights of the participating countries to For France:


sell and purchase wheat under the H BONNET 13 avril 1953

Secretary of State

agreement. Participating countries are For the Federal Republic of Germany:


allotted votes in proportion to their

Authentication Officer Dr KURT HAEFNER 13 April 1953

share of the total quantity of wheat cov

Department of State For Greece:

ered by the agreement and the votes are C. P. CARANICAS

April 23, 1953 Mr. LANGER. Mr. President, the divided into 2 blocks of 1,000 each, 1 For Guatemala:

Senate is asked to give its advice and composed of the importing countries, the GUILLERMO TORIELLO 13 de Abril de 1953.

consent to a new agreement which re- other of the exporting countries. The For Haiti:

vises, renews, and extends for another United States is allotted 453 votes of the ALAIN TURNIER

13 avril 1953

3 years the International Wheat Agree- exporting countries. For Honduras: JOSÉ A. MONGE

April 23rd, 1953 ment of 1949 which expires on the 31st If Senators will look at the report beFor Iceland:

of this month. Article 20 of the new fore them they will find on page 7 that THOR THORS

April 27, 1953 instrument sets July 15 as the ratifica the revised agreement differs from the For India: tion deadline.

old in 10 main particulars. The loadI J BAHADUR SINGH. April 17th 1953.

Several Members of both Houses of ing period has been extended to provide For Indonesia:

Congress were privileged to participate greater flexibilities; members countries ALI-SASTROAMIDJOJO. April, 27, 1953 For Ireland:

in some way in the revision of this agree are permitted to tranfer their quota from JOHN J. HEARNE. April 24th, 1953. ment, some in the capacity of advisers,

one or more crop years to another counFor Israel:

others as members of the United States try, subject to Council approval; accesABBA EBAN April 21, 1953. delegation. Many other Senators from

sion of new members may be facilitated For Italy:

the practical standpoint are familiar by mutually agreed upon changes in ALBERTO TARCHIANI April 13th 1953

with the operation of the agreement. quotas; limitations on purchases due to For Japan: RYUJI TAKEUCHI

April 13 1953,

Four years of experiment with this short crops are expanded; permission is For Lebanon:

organization has proved it to be work- given to the recording of sales made SAEB JAROUDI April 14 1953 able and efficient. In April and May of prior to the agreement; the

escape For Liberia:

1952 negotiations were instituted for its clauses are tightened; adjustments to J. SAMUEL O COLEMAN 13 April 1953 renewal and on April 13, 1953, the re permit new importing countries to come For Mexico:

vised agreement was completed and sub- in are included; new provisions dealing MANUEL TELLO. 23 de abril de 1953.

sequently signed by 4 exporting coun- with voting are added; an advisory panel For the Kingdom of the Netherlands: J. H. VAN ROIJEN. April 13th 1953.

tries, namely, the United States, Aus- to assist the Council in settling disputes For New Zealand:

tralia, Canada, and France, and 45 im. is provided for; and numerous adjustL. K. MUNRO

April 27, 1953. porting countries. On June 2 the Presi- ments are made in exporting and imFor Nicaragua:

dent sent the agreement to the Senate, porting country quotas. ad referendum

which referred it to the Committee on Just one word about the subsidies inGUILLERMO SEVILLA-SACASA April 21, 1953 Foreign Relations. A subcommittee held volved in the agreement. The 1949 ALFREDO AVILÉS G.

April 21, 1953 For the Kingdom of Norway:

hearings and reported favorably to the agreement has cost the United States an JOHAN CAPPELEN,

April 20, 1953.

full committee, which, in turn, on July 8, estimated $565 million in subsidies for For Panama:

reported the agreement to the Senate the entire 4 years of the agreement. RM HEURTEMATTE

April 24, 1953

with the recommendation that the Sen I desire to make it plain, Mr. PresiFor Peru:

ate give its advice and consent to rati- dent, that the $565 million in subsidy with the understanding that Peru's fication and also recommended that the covers the entire 4-year period. quota be increased to 200,000 metric Senate pass a joint resolution of imple Mr. YOUNG. Mr. President, will the tons, the amount originally requested mentation.

Senator yield? by my country and which is the minimum quantity required to cover our bare

The revised agreement covers an an Mr. LANGER. I yield to my distinnecessities

nual trade in wheat of 595 million bush- guished colleague. C DONAYRE

April 27, 1953 els, of which the United States share is Mr. YOUNG. This morning I reFor the Republic of the Philippines:

270 million bushels. This represents ceived some information from Dr. WilURBANO A. ZAFRA

April 13, 1953 approximately two-thirds of the world's cox, of the Library of Congress, as to JOSE TEODORO, Jr. April 13, 1953 international trade in wheat.

how large a subsidy would be involved at For Portugal: L. ESTEVES FERNANDES April the 15th, 1953

The agreement contains a number of present prices. I am advised that in For Saudi Arabia:

technical details, but the main outline June and July wheat prices at the KanMOHAMMED MUHTASIB April 21, 1953

is clear and readily understood by the sas City and Gulfport markets have been For Spain:

layman. Present arrangements are con averaging slightly above the $2.05 maxiJOSÉ F. DE LEQUERICA April 24–1953 tinued for international sales and pur mum price called for under the InterFor Sweden:

chases of wheat by a system of reciprocal national Wheat Agreement, the average M. VON WACHENFELT April 17th, 1953.

guaranties by the participant governFor Switzerland:

varying from 5 to 10 cents above the CHARLES BRUGGMANN

ments. Supplies of wheat are assured to maximum provided in the International

le 13 avril 1953 For the Union of South Africa:

importing countries and markets for Wheat Agreement. Therefore at the G. P. JOOSTE

April 21, 1953.

wheat are assured to exporting coun present time little loss would be in exFor the United Kingdom of Great Britain

tries at equitable and fair prices. Each porting wheat. Wheat purchased in and Northern Ireland:

importing country agrees to purchase at some areas actually might bring a profit, For the United States of America:

a specified minimum price a specific because some wheat is selling for as TRUE D. MORSE,

April 13, 1953 quantity of wheat and each exporting much as 65 cents a bushel below the EZRA TAFT BENSON April 16, 1953 country guarantees to sell a specific support level of about $2.21 per bushel.

Mr. LANGER. That is correct, except reason it would like to keep in touch with Supplies of wheat are assured to importing that the International Wheat Agreethe Soviet trade delegation.

countries and markets for wheat are asOne of the witnesses before the com- and stable prices. Under the revised agree

sured to exporting countries at equitable ment provides that no country shall sell the wheat at a higher price than it paid mittee, Mr. Stevens, vice president of

ment, the United States is guaranteed an in securing it.

General Mills, a man of great experience annual export market of 270 million bushels Mr. YOUNG. The IWA authorities in the field of wheat, and closely asso for the next 3 years at minimum prices specan purchase wheat through private private ciated with the negotiations, speaking in

cified in the agreement. channels, though.

behalf of the millers, told the committee 2. SUBCOMMITTEE ACTION AND HEARING Mr. LANGER. Oh, yes.

that it was his belief that the purpose of The President transmitted the agreement Mr. YOUNG. I am advised that from the United Kingdom in refusing to sign to the Senate on June 2, 1953, whereupon it 25 to 30 percent of the wheat exported was its hope of wrecking the Interna was referred to the Committee on Foreign originated from Government stocks. tional Wheat Agreement and thereby Relations. On June 17 the chairman of the Mr. LANGER. Yes. bringing about competition between the Foreign Relations Committee, Sen. ALEXAN

DER WILEY of Wisconsin, appointed a subMr. YOUNG. So approximately 70 United States and Canada as a result of

committee consisting of Senators LANGER percent has come from private stocks. which wheat prices would be depressed (chairman), HICKENLOOPER, KNOWLAND, While I am on my feet, Mr. President, I and the United Kingdom would succeed SPARKMAN, and MANSFIELD to study and report wish to commend my distinguished col- in securing wheat at lower prices. That on the agreement. Public hearings were league for the fine job he has done in this was not an empty hope is made clear held, at which the subcommittee received

the testimony of True D. Morse, Under Secbringing out the agreement. I believe he by the fact that Australia signed the

retary of Agriculture; Senator FRANK CARLdid the very best he could possibly do Agreement with the reservation that if

SON; Samuel C. Waugh, Assistant Secretary under all the circumstances. her customary markets were affected by

of State; D. A. FitzGerald, Deputy for OperMr. LANGER. I thank my distin- the failure of any importing country to

ations to the Director for Mutual Security; guished colleague, but I was very maenter the agreement, that Australia Gus Geissler of the National Farmers Union;

and Glen Talbot, North Dakota Farmers terially assisted by the junior Senator would be free to withdraw from the from North Dakota, who is himself a agreement unless quotas could be ad- Union. In addition the committee received

a number of written statements from agrifarmer and is thoroughly familiar with justed to her satisfaction. the entire problem. A few years ago he

cultural groups in lieu of personal appearMr. President, it is the prerogative of

ances. On July 2 the subcommittee reported went to Geneva, I believe, and sat with any country to sign or to refuse to sign the agreement favorably to the full comthe Council which was considering the any international agreement which it

mittee which adopted the subcommittee subject matter. He is perhaps as famay have under consideration. But I recommendations and its report as those of

the full committee and voted 11 to 1 to miliar with the subject as any Member of

am gravely concerned about the alleged the Senate.

attitude of the United Kingdom, and I report the agreement without amendment Mr. YOUNG. I thank the Senator. may say that all the members of the or reservation to the Senate for favorable

action, subcommittee were likewise very much Mr. LANGER. In substantial measure concerned. A great many questions

3. BACKGROUND this was due to the increase in United were asked by the distinguished Senator

The International Wheat Agreement of States quota from the original 168 mil- from Kansas (Mr. CARLSON), the distin

1949 was concluded after 18 years of negotialion to the final 253 million bushels. The guished Senator from Iowa (Mr. HICK

tion, stretching back to a conference in Rome Department of Agriculture assures us

in 1931. Efforts to achieve a wheat agreeENLOOPER), and the distinguished Senathat it anticipates a substantial reduc

ment were delayed, but not abandoned, durtion in the amount of subsidy under the

tor from Montana (Mr. MANSFIELD). ing World War II. In 1948 an International new and revised agreement. It expects lions of dollars from the United States,

The United Kingdom has received bil Wheat Agreement was signed, sent to the

Senate by the President, and reported by the a drop from an average of 62 cents a bushel to 40 cents a bushel. I submit since World War I I believe the amount Foreign Relations Committee to the Senate

Calendar. But the crowded calendar prethat the benefit to be obtained from the is $43 billion—not in the form of loans

vented Senate action prior to adjournment, International Wheat Agreement far outto be repaid, but as grants and outright

and it became necessary to renegotiate the gifts. Under the circumstances, it seems agreement, which in its new form was subweighs this relatively modest subsidy.

to me that the United Kingdom might sequently submitted to the 81st Congress, Mr. President, one subject overshad- have signed the International Wheat which gave its approval to ratification in owed all others, both in the subcommit

1949. The 1949 agreement is due to expire tee and in the full

committee. That was Agreement. The additional 5 cents a Britain's refusal to sign the new agreebushel would only cost the United King

at the end of July 1953. Forty-six countries,

by ratification and accession, ultimately adment. In this connection, permit me to dom $8,500,000. They refused to sign

hered to the 1949 agreement; 4 were exportthe agreement. remind you again that two-thirds of the

ing countries and 42 were importing counworld's international wheat trade is in; committee report the kind of readjusto

Senators will find on page 8 of the

tries. volved in this agreement. The United ment of quotas that may be involved if April and May of 1952, the International

At its eighth session in London during Kingdom was allotted roughly 30 percent Britain persists in remaining outside the Wheat Council discussed the renewal of the or 177 million bushels of the amount involved in the agreement. I have been agreement. The table shows what the agreement upon its expiration in 1953. The

eighth session adjourned and was resumed informed that the British refusal was guaranteed quantities would be if ad

in Washington on February 2, 1953. By April due to her unwillingness to pay the 5 justed according to the past pattern of

13 the Council succeeded in drafting an cents a bushel over $2 that the agreetrade or if adjusted on a pro-rata basis.

agreement revising and renewing the Interment provides. In addition to this, in

Mr. President, I ask unanimous con

national Wheat Agreement of 1949. A peformation from the executive branch insent that the report may be made a part riod was provided for signature from April

13 to 27, inclusive. During this time 4 exdicates that Britain is not unfavorable of my remarks at this point in the RECORD.

porting countries (the United States, Austo the purchase of wheat from the

There being no objection, the report tralia, Canada, and France) and 41 importU.S. S. R. Let me quote from a state(Ex. Rept. No. 4) was ordered to be

ing countries sig ed. As indicated above, ment to the committee by the Assistant printed in the RECORD, as follows:

the President sent the agreement to the Secretary of State for Economic Affairs:

Senate for approval on June 2, 1953. The Committee on Foreign Relations, hav

4. SUMMARY OF THE MAIN PROVISIONS We have been assured by the British Min- ing had under consideration Executive H, istry of Food that * * * if they were offered 83d Congress, 1st session, the agreement re

The agreement consists of 23 articles dithe kinds of wheat they needed at attractive vising and renewing the International Wheat vided into 5 parts. A short preamble is folprices and for shipment at the times when Agreement, signed at Washington between

lowed in part 1, devoted to definitions used wanted, such offers would be given favorable April 13 and 27, 1953, reports the agreement

in the agreement. Part 2 defines the rights consideration if coming from Russia or any favorably and recommends that the Senate

and obligations and specifies the guaranwhere else in the world. advise and consent to its ratification,

teed purchases and guaranteed sales and The Ministry of Food has also informed

rules regarding the recording of transactions

1. MAIN PURPOSE OF THE AGREEMENT us that the Soviet trade delegation was told The agreement continues for another 3

against guaranteed quantities, the enforcethat the Ministry hoped it would not be years the arrangements for the international

ment of rights, the basic maximum and necessary for the Ministry to make further sales and purchases of wheat established by

minimum prices, the maintenance of stocks, purchases but to leave this operation to pri. the International Wheat Agreement of 1949.

and reporting requirements. In part 3 the vate traders. If the private trade should By means of a system of reciprocal guaranties procedures for the adjustment of guaranteed fail to import sufficient supplies, then the the participant governments aim at sta quantities are provided to take care of changMinistry would have to step in and for this bilizing the international wheat market. ing needs under varying circumstances.


Part 4 sets forth the organization and admin. lion bushels of which 270 million are en nonparticipation or withdrawal of any of the istration, including the composition and tered for the United States. The guaranteed countries included in the agreement in order functions of the International Wheat Coun purchases of the importing countries also to bring the total guaranteed sales and guarcil, the Executive Committee, the Advisory total 595 million bushels, including 177 mil anteed purchases into balance. On the other Committee on Price Equivalents, and the lion bushels entered for the United King. hand, increases can take place in the total Secretariat, and also provisions relating to dom,

agreement pool throughout the life of the the Council's finances and budget, coopera Article III of the agreement specifies the agreement by increases in the quantities of tion with other intergovernmental organi quotas of both the importing and the ex member countries or accession of additional zations, and procedures for the settlement of porting countries as follows:

countries as long as quantities sought by imdisputes arising under the agreement. Part

porting countries are covered by increase in 5 contains the provisions for signature, ac


the quotas of exporting countries. cession, duration, amendments, withdrawal,

Guaranteed purchases

The quantity of 595 million included in the and territorial application.

new agreement compares with 456 million Under the agreement each exporting coun


negotiated in the 1949 agreement, which grew try guarantees to sell a specific quantity of

Crop-year Aug. 1

lent in to 581 million in the latter part of the agreewheat at a specified maximum price, and

1953/54 1954/55 1955/56 bushels to July 31

ment period. The quantity of 270 million each importing country agrees to purchase

for each

included for the United States in the new a specific quantity of wheat annually at a


agreement compares with 168 million bushels specified minimum price (art. III). The

originally included for the United States in total guaranteed sales equal to total guar

Thousands of metric

the 1949 agreement which grew to 253 mil

tons anteed purchases (art. III, annexes A and

lion in the last years of the agreement. B). Provision is made for the increase of

The quantity of 595 million bushels covguaranteed quantities and for the transfer Austria..

250 250 250 9, 185, 927 ered by the new agreement represents about to other member countries of parts of guar


615 615 615 22, 597, 382
95 95

two-thirds of average world exports in the

95 anteed quantities by mutual consent (art.

3, 490, 652
360 369 360 13, 227, 736

postwar period (1945-46 to 1952-53) of 900 XI). Provision is also made for the in Ceylon.

255 255 255 9, 369, 646 million. crease in purchases in times of critical need Costa Rica

35 35 35

1, 286, 030

Quantities guaranteed in the agreement in(art. XII). The maximum and minimum


202 202 202 7, 422, 229
50 50

clude flour which is counted in terms of its

50 prices will remain the same for the 3 years

1, 837, 185

Dominican Republic 26 26 26 955, 336 wheat equivalent. The part to be supplied during which the agreement is to be re


35 35 35 1, 286, 030 in the form of flour is to be determined benewed (art. VI), namely $2.05 a bushel maxi Egypt.

400 400 400 14, 697, 484 tween the buyer and the seller, subject to mum, and $1.55 a bushel minimum. Prices El Salvador..

20 20 20

734, 874 are fixed in Canadian currency at a fixed Federal Republic of

decision by the Council in case of disagreeGermany. 1, 500 1,500 1,500 55, 115, 565

ment when the matter is considered by the parity with the United States dollar, and Greece..

350 350

350 12, 860, 299 Council under article V on enforcement of quality is set in terms of No. 1 Manitoba Guatemala


25 25 918, 593 rights. Northern Canada wheat (art. VI) in bulk Haiti..

45 45 1; 653, 467 Honduras.

15 15 15 in store Fort William/Port Arthur. Export

551, 156

6. PRICES Iceland,

11 11 11 404,181 ing countries endeavor to maintain sufficient India

The prices negotiated in the new agree

1,500 1,500 1,500 55, 115, 565 ment represent a considerable change from stocks of wheat in order to assure supplies to Indonesia.

142 142 1425, 217, 607 importing countries, and importing counIreland.

those included in the 1949 agreement. The 275 275 275 10, 104, 520 Israel.

215 tries take precautions to prevent dispropor- Italy.

215 215/ 7,899, 898

maximum in the old agreement of $1.80 for

850 850 850 31, 232, 154 Manitoba No. 1 in store at Fort William/Port tionate purchases of wheat at the opening Japan..

1,000 1,000 1,000 36, 743, 710 Arthur, Canada, has become $2.05 in the new and closing of crop years (art. VII).


75 75 75 2, 755, 778

Members which have difficulty in securing


agreement and the minimum in the 2 73, 487

old Mexico 415 415 415 15, 248, 640

agreement ranging from $1.50 in the first their guaranteed sales or purchases may seek


675 675 675 24, 802, 004 year to $1.20 in the fourth has become a unithe assistance of the Council in obtaining the

New Zealand.
160 160 160 5, 878, 994

form $1.55 for the 3 years of the new agreeguaranteed quantities under the agreement Nicaragua.

367, 437

Norway. (art. V). All transactions over and above

230 230 230


8, 451, 053 Panama.

20 20 20 those contracted for are unaffected by the

734, 874

Price equivalents are calculated with rePeru...

185 185 185 6, 797, 586 lation to the basic prices for the United agreement:


236 236 236 8, 671, 515 Certain adjustments are provided so that

States coast ranges. Thus the equivalent of Portugal.

175 175 175

6, 430, 149 exporting countries with short crops and im Saudi Arabia

60 60

2, 204, 623

the basic grade at the basing point mentioned Spain...


145 145 porting countries, whose balance of payments

5, 327, 838

above would with present transportation Sweden.

25 25

918, 593 and monetary reserves are jeopardized, may

rates be $2.28 for U. S. No. 1 Hard Winter Switzerland.

215 215 215 7,899, 898 wheat at gulf ports. have their obligations altered to meet emer Union of South Afgency situations. In making such adjust


320 320 320 11, 757, 987 7. COST OF THE AGREEMENT TO THE UNITED

United Kingdom.. 4, 819 ments, the Council adheres to the principle

4,819 4,819 177, 067, 939
170 170 170


6, 246, 431 that the country concerned will meet its

In 1949, the Departments of State and obligations under the agreement to the max

Total (42 coun

Agriculture were asked to estimate the costs imum extent feasible (art. X).

tries)... 16, 208 16, 208 16, 208 595, 542, 052

in subsidies that were involved in the agreeThe agreement provides for an Interna

ment. At that time the committee was intional Wheat Council on which all partici


formed that the Department of Agriculture pating countries are to be represented (art.

Guaranteed sales

"anticipated that a maximum subsidy of $84 XIII), which is to be responsible for keeping

million would be required in the first year records necessary for the operation of the

of the agreement but that the need for a agreement, and which will serve as the agency

lent in

subsidy will decline or disappear in the latto enforce the rights of the participating Crop-year August 1

1953/54 1954/55 1955/56 bushels ter years.”

to July 31 countries to sell and purchase wheat under

for each

This figure was reached by applying a 50the agreement (art. V). Participating coun


cent differential per bushel for the total tries are allotted votes in proportion to their

United States quota of 168 million bushels. share of the total quantity of wheat covered

Thousands of metric

In the hearings on the present agreement, by the agreement (art. XIII).


the United States Secretary of Agriculture The Council will be aided in its work by

testified that the total cost for the 4 years an Executive Committee (art. XIV), an Ad


2,041 visory Committee on Price Equivalents (art.

2,041 2,041 75,000,000 of bridging the gap between the domestic Canada..

6,804 6,804 6,804 250,000,000 price level and the maximum price of wheat xv), and a Secretariat (art. XVI). Detailed France.

10 10

367, 437 provisions cover financing cooperation with United States of

of the 4 years of the agreement will total other intergovernmental agencies, and the


7,353 7,353 7,353 270, 174, 615 approximately $570 million for an average settlement of disputes and complaints (arts.

export subsidy rate of about 62 cents per Total..

16, 208 16, 208 16, 208 595, 542, 052 bushel. It should be remembered that this XVII-XIX).

substantially larger figure than was anticiRatifications must be deposited by July *In the event of the provisions of Article X being in pated is due in part to an increase in the 15, 1953, by governments responsible for not voked by Australia by reason of a short crop, it will be United States quota from 168 to 253 million less than 50 percent of the guaranteed pur- recognized that certain markets, by virtue of their geo

bushels. chases listed in annex A and 50 percent of

graphical positions, are traditionally dependent upon

Australia for the supply of their requirements of wheat the guaranteed sales listed in annex B (art. grain and wheat-flour. The necessity of meeting these

The increased minimum and maximum III), or the agreement fails to come into op- requirements will be one of the factors to be taken into prices in the revised agreement promise to eration (art. XX).

account by the Council in determining the ability of make substantial reductions in the amount

Australia to deliver its guaranteed sales under this of subsidy. Secretary Morse testified that, 5. QUANTITIES Agreement in any crop-year.

“With this increase it is estimated that The 1953 agreement accounts for guaran After the agreement comes into force ad- the per bushel cost of the renewed agreeteed sales by exporting countries of 595 mil. Justments must be made in the event of ment will be reduced from 62 cents per







bushel * We estimate that for the first 9. PRINCIPAL CHANGES FROM THE 1949 obligations to buy or sell under the agreeyear the export subsidy will be about 40 cents


ment. per bushel, or a total cost of about $108 mil

The revised and renewed International 7. Importing countries may decrease their lion based on the United States tentative Wheat Agreement differs from the 1949 agree

quotas to make room for new countries to quota of 270 million bushels." ment in 10 main particulars as follows:

come in. In information supplied preliminary to the

1. The loading period may be extended 8. Before each session of the Council the hearings, the Department of Agriculture ex 1 month before and 1 month after the be votes are to be distributed in such a way plained the matter as follows:

ginning and the end of the crop year if agreed that exporting and importing countries have “The maximum IWA price is $2.05 per to by both the importing and the exporting equal votes. bushel for Manitoba Northern wheat in store countries concerned and if authorized by the 9. The Council may call upon an advisory Fort William/Port Arthur. The equivalents Council.

panel, of its own selection, for advice in setfor United States wheat are about $2.25 At 2. Countries may transfer part of their tling items in dispute in the Council. lantic, $2.23 gulf, and $2.08 west coast ports, quota for one or more crop years to another 10. Numerous adjustments are made in the all f. o. b. vessel. To the extent that United country, subject to Council approval by a exporting and importing country quotas. States prices at these points exceed the majority of the votes cast by the importing

10. THE FAILURE OF THE UNITED KINGDOM TO equivalents a subsidy will need to be paid. countries and a majority of the votes cast Also a considerable amount of the export by the exporting countries.

SIGN able surplus of United States wheat does 3. Accession of new members may be fa

The committee notes that nonparticipanot always obtain the same price in all ex ciliated by reductions of the quantities of tion of the United Kingdom in the agreement as does Manitoba Northern be the importing countries or by increases in will result in a considerable reduction in the cause of differences in quality. Taking these the quantities of exporting countries.

total quantity of wheat covered by the agreepoints into account and assuming that 4. Provisions are added to limit the pur ment; likewise resultant adjustments by reUnited States wheat prices will be at about chases by importing countries to 90 percent duction of the quantities of the exporting this year's level and that IWA prices for the of the agreed upon quotas until February 28 countries, if made on a pro rata basis, will top classes of wheat will be at the maximum, of any crop year except by permission of the considerably reduce the quota of the United the estimated subsidy cost is 40 cents per Council in order to make possible adjust States. The agreement does, however, probushel for the first year or about $108 mil ments due to short crops in one of the ex vide that division of the reduction among lion on a quota of 270 million bushels." porting countries.

the exporters can be on other than a pro rata 8. HOW THE AGREEMENT WILL BE ADMINISTERED

5. Sales may be recorded upon the ratifica basis, if supported by two-thirds of the votes

tion of the agreement by a country if the The central organization for carrying out

cast by the exporting countries and the imsales are made prior to the time either the the agreement and serving as a tribunal of

porting countries counted separately. exporting or the importing country ratifies. last resort is the International Wheat Coun

The following table shows what would be

6. The escape clauses, by which states may cil, composed of representatives of all the escape from the obligations imposed by the

the result if adjustment were pro rata and exporting and importing countries. Votes agreement, are tightened by the rewording of

alternatively if reductions were made proare to be allocated to each country in accordance with the amount of its guaranteed

article X (Short Crop Imbalances and Pay- portionate to the quantities which the ex

ment Safeguard). The Council is instructed porting countries sold to the United Kingdom purchases or sales. Importing countries will

in dealing with requests for relief to adhere under the 1949 agreement. The table is also have a total of 1,000 votes and exporting

to the principle that member countries to illustrative in general of possible alternative countries will have a total of 1,000 votes.

the maximum extent feasible meet their methods of quota adjustment. The United States share, based on guaranteed sales entered in the agreement, will be

Illustrative quota adjustments to meet United Kingdom nonparticipation in International 453 of the exporting votes.

Wheat Agreement i Routine administrative decisions will be made by a simple majority vote. More im

[In millions of bushels] portant decisions on matters specifically provided for in the agreement are to be taken

Reduction in quotas reby a majority of the votes of importing coun


sulting from United tries and exporting countries voting sep

Kingdom nonparticipa

Adjusted quotas 3 arately. Vital decisions can only be taken

tion by a two-thirds vote of the exporting countries and a two-thirds vote of the importing Exporting country ? countries. Thus the United States 453 votes

4-year aver. Pro rata basis 4-year aver1949 agreeRevised

age sales Pro rata basis

(column 2

age sales to will be decisive in the protection of United

basis (colment agreement


less States interests.

Kingdom column 3)

umn 2 less

column 4) For example, a two-thirds vote is required for amendments, adjustments of quantities



(6) to be bought or sold by various countries, reduction of guaranteed purchases to meet Australia..


41 critical needs, the delegation of powers or Canada.



128 United States. functions of the Council, and the accession


249 of new members.



418 Sessions of the Council will be held at least once during each half of the crop year. A quorum will consist of a majority

1 British quota 177 million bushels.

2 Quantities negligible for France. of the votes held by both importing and 3 Subject to negotiation within the ranges indicated in (5) and (6). exporting countries taken separately. The

The committee notes the following state "If the United Kingdom fails to take adpermanent seat of the Council will be London unless the Council decides otherwise by

ment in the letter of transmittal sent by vantage of the privilege of acceding to the a majority of votes of the importing and ex

Acting Secretary of State Walter B. Smith to agreement or if any of the signatories fails

President Eisenhower on May 29, 1953: to ratify, article IX provides a mechanism porting countries, voting separately.

"While the agreement was not signed on for the redistribution by the Council of In order to assist the Council in carrying

behalf of the United Kingdom within the guaranteed quantities to balance the total out its functions the agreement provides for period provided by its terms, that country of the guaranteed quantities of exporters the following: an Executive Committee, an

can nevertheless accede to the agreement with those of importers. This redistribution Advisory Committee on Price Equivalents,

subsequent to its entry into force on July would be made by a pro rata reduction of the and a Secretariat. Provision is also made

15 by a two-thirds vote of exporting countries guaranteed quantities of exporters or imin cases of dispute to seek the advice of an

and a two-thirds vote of importing countries. porters unless the Council should decide ad hoc advisory panel (art. XIX). The

The agreement also provides in article XXII otherwise by a vote of two-thirds of the exExecutive Committee, consisting of repre

that if any exporting country considers its porters and two-thirds of the importers.” sentatives of 3 exporting countries and of

interests to be seriously prejudiced by non In this connection the committee wishes to not more than 8 importing countries, will

participation or withdrawal of an importing call the attention of the Senate to the reserwork under the direction of the Council.

country responsible for a quota of more than vation with which Australia signed the agreeThe Advisory Committee on Price Equiva

5 percent of the total in the agreement, such ment: lents, composed of representatives of 3 ex

country may withdraw before August 1 by porting countries and of 3 importing coun

"PERCY C SPENDER notification to the United States Govern

April 20th, 1953 tries, will advise the Council and the Execument. An importing country is accorded this

"Subject to the acceptance however of the tive Committee on technical matters persame privilege upon nonparticipation or

reservation that in the event of the nontaining to prices and price equivalents. The withdrawal of an exporting country. The

participation in or withdrawal from the Secretariat, appointed by and responsible to

quota established for the United Kingdom Agreement by any one of more of such of the Council, will perform the necessary staff represented about 30 percent of the aggregate the Governments of such importing countries work. quantity of the importers.

listed in Annex “A” to Article III thereof as XCIX -541


in the opinion of the Government of the times when wanted, such offers would be held by the Corporation in its price-support Commonwealth of Australia are traditional given favorable consideration if coming from stocks which are procured from the Corpomarkets for Australian wheat or in the event Russia or anywhere else in the world. ration with foreign assistance funds and of any one or more of such countries re “The Ministry of Food has also informed where the transfer to the recipient country ducing its or their respective guaranteed us that the Soviet trade delegation was told is by grant) and section 4 of the act of July quantities below the quantities shown for that the Ministry hoped it would not be nec 16, 1943 (57 Stat. 566) (which requires Comthem respectively in the said Annex A the essary for the Ministry to make further pur modity Credit Corporation to be fully reimGovernment of the Commonwealth of Aus chases but to leave this operation to private bursed for all commodities procured to suptralia if it shall have accepted the Agreement

traders. If the private trade should fail to ply the needs of other Government agencies) may request such reduction to the guaran import sufficient supplies, then the Ministry wheat and wheat flour supplied to countries teed quantity shown in respect of Australia

would have to step in and for this reason which are parties to the International Wheat in Annex B to Article III of the said Agree

it would like to keep in touch with the Agreement of 1949 and credited to their ment as may in its opinion be necessary to Soviet trade delegation."

guaranteed purchases thereunder. Under enable Australia to supply to such importing

In spite of the difficulties raised by the this exemption Commodity Credit Corporacountry or countries the quantities of wheat

failure of the United Kingdom to participate, tion is authorized to assume the difference which Australia would normally expect to

both the Government and private witnesses between the agreement prices at which the supply to it or them as the case may be and

appearing before the committee urged the wheat would move, and market prices or may withdraw from the said Agreement if

Senate to give its advice and consent to the Commodity Credit Corporation costs at which

agreement. That is the view of the comany such request for reduction be not met.

it was procured. It should be noted, how"PCS.”

mittee, and its recommendations are made ever, that the exemption granted by section accordingly.

112 (m) has not been available during the During the hearings, members of the subcommittee sought to learn the reason for


fiscal year 1953 by reason of the so-called Britain's refusal to sign. At that time the The International Wheat Agreement re

Whitten amendment contained in the Muquestion arose as to whether or not the quired the International Wheat Agreement

tual Security Appropriation Act, 1953 (66 United Kingdom has an agreement or is Act of 1949 (63 Stat. 945) in order to give its

Stat. 655), which requires the payment to negotiating an agreement with the U. S. S. R. terms full application in the United States.

Commodity Credit Corporation of support

and The statute authorized the President, acting price, including handling by virtue of which the latter agrees or will

storage agree to supply Britain with wheat. The through the Commodity Credit Corporation, charges where commodities are purchased

to make available such quantities of wheat committee requested specific information on

from Commodity Credit Corporation with this point. Following the hearings, the

funds appropriated for economic assistance and wheat flour as may be necessary to meet committee was informed by the Mutual Sethe obligations of the United States under

by that act." curity Agency as follows: the International Wheat Agreement of 1949,

It is the understanding of the committee "1. The latest contract involving wheat and to take certain other action necessary

that the full current domestic price is to be shipments from U. S. S. R to the U. K. was

for the implementation of the agreement. paid in procurement from Commodity Credit signed in September 1951. It provided for

The Commodity Credit Corporation under Corporation, when it is higher than the sup800,000 tons of coarse grains and 200,000 tons

this authority has made available under the port price plus costs. Likewise, commodities of wheat. It became effective immediately

agreement wheat acquired under its price included in aid programs which are procured

support program. The Commodity Credit from the private trade, must, under the and shipments were completed in the ensuing year.

Corporation has made export payments to Whitten amendment, be procured at the full 2. Another U. S. S. R.-U. K. contract in

commercial exporters for wheat and wheat domestic price.

flour exported to importing countries under volying shipment of coarse grains only (150,

12. THE UNDERLYING JUSTIFICATION the agreement in accordance with the terms 000 tons of barley, 30,000 tons of oats, and and conditions of the export payment pro

The International Wheat Agreement is not 20,000. tons of corn) was signed early in gram. The rate of payment on such exports

designed to benefit one country or a group October 1952. Delivery of the grain against reflects the difference between the price of

of countries alone but exists because it prothis contract has been completed. wheat on the domestic market and the price

vides a more stable and orderly world market "3. We understand that the Department of wheat under the agreement. Those trans

condition than would be the case without of State has advised the committee that ap actions are reported to the International

the contract. The obligations and rights of proaches have been made by the Soviet trade Wheat Council for credit against the quan

the importing countries are balanced by the delegation in London to the British Min tity of wheat guaranteed by the United obligations and rights of the exporting counistry of Food to determine the United King States.

tries. It is significant that every delegation dom's interest in buying Soviet grain, in Since the agreement here under considera with one exception that participated in the cluding wheat. However, no agreement has tion renews and revises the agreement of

negotiations signed the agreement, and there yet been concluded and the British Ministry 1949 the original implementing legislation is some expectation that the one exception, of Food is uncertain concerning the likeli will suffice with little modification. The Great Britain, may accede in the near future. hood of the conclusion of such an agreement necessary changes may be accomplished by There was a general agreement among or its possible terms. The grain trade in the the following resolution, which the commit United States representatives and private United Kingdom has been returned to pri tee hereby reports to the Senate for favor interests concerned with the renewal of the vate operation but this does not exclude the able action:

agreement on five basic points: possibility of a direct contract between the

"Senate Joint Resolution

1. The fundamental principles on which British Ministry of Food and the U. S. S. R. "Joint resolution to amend the International

the International Wheat Agreement is built Being free to buy on its own account, the

are sound, and the experience of the past four United Kingdom private trade has ap

Wheat Agreement Act of 1949

years fully justifies the renewing and revisproached the Russians for offers but as yet Resolved, etc., That section 2 of the Inter ing of the agreement of 1949. has made no purchases."

national Wheat Agreement Act of 1949 (63 2. The International Wheat Agreement efThe following statement was submitted by Stat. 945) is amended by inserting before fectively implements both the domestic and Assistant Secretary of State Waugh in reply the parenthesis at the end of the first sen foreign policies of the United States. to the subcommittee question:

tence thereof the following: ‘and the agree 3. The operations of the International “We are informed that approaches have

ment revising and renewing the Interna Wheat Agreement of 1949 demonstrate that been made by the Soviet trade delegation

tional Wheat Agreement for a period ending the agreement is workable and desirable, in London to the British Ministry of Food to July 31, 1956, signed by Australia, Canada, from a practical point of view. determine the United Kingdom's interest in

France, the United States, and certain wheat 4. There should be a substantial increase buying Soviet grain, including wheat. Howimporting countries.'

in the basic maximum and minimum prices ever, no agreement has yet been concluded "SEC. 2. Reference in any law to the Inter of the 1949 agreement. and the Ministry is uncertain concerning the

national Wheat Agreement of 1949 shall be 5. The quotas of individual countries likelihood of the conclusion of such an agree

deemed to include the agreement revising should be readjusted so as to eliminate cerment or its possible terms. As previously

and renewing the International Wheat Agree tain competitive disadvantages to flour exstated, the British grain trade was recently ment."

porters which were revealed under the returned to private operation. However, this In his comment on this resolution, dated administration of the agreement of 1949. apparently does not exclude the possibility June 24, 1953, the Secretary of Agriculture, The committee is convinced that these obof a direct contract between the Ministry of Ezra Benson, stated the following:

jectives have been embodied in the new Food and the Soviets. The United Kingdom “Section 2 of the proposed bill would make agreement and that they are consistent with private trade is now free to buy Soviet grain the provisions of section 112 (m) of the United States interests. The committee on its own account, and has approached the Economic Cooperation Act of 1948, as amende further notes that although Britain may Russians for offers, but no private purchases ed, applicable to the new agreement. Section persist in staying outside the agreement, have apparently yet been made.

112 of the Economic Cooperation Act of 1948 nevertheless, it is in the interest of the "We have been assured by the British Min was continued by section 502 of the Mutual United States to ratify. Accordingly, the istry of Food that their reasons for not sign- Security Act of 1951 (22 U. S. C. 1653). Sec committee recommends that the Senate give ing wheat agreement are not in any way con tion 112 (m) exempts from the pricing pro its advice and consent to ratification so that nected with negotiations for further pur visions of section 112 (e) of that act (which the President may ratify by July 15. The chases of Russian wheat. If they were of requires Commodity Credit Corporation to committee further recommends that the fered the kinds of wheat they needed at charge cost or domestic market price, which Senate promptly pass the implementing legattractive prices and for shipment at the ever is lower, on all surplus commodities islation, namely, the committee's joint reso.

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