SMALL DEFENSE PLANTS
ADMINISTRATION

Mr. KNOWLAND. Mr. President, for the information of the minority leader, with whom I have spoken earlier about the matter, it is proposed to make S. 1523, the Small Defense Plants bill, the unfinished business, but it will not be taken up until Monday. It is now proposed to proceed to the call of the calen

dar for the consideration of measures to which there is no objection, as was announced yesterday.

Mr. JOHNSON of Texas. Mr. PresiMr. President, the Senator from California has previously discussed this with me, and it is acceptable to the minority.

The PRESIDING OFFICER. The Chair has inquired and has been informed that the Small Defense Plants measure has not yet been reported.

SALE OF

GOVERNMENT-OWNED

RUBBER-PRODUCING FACILITIES Mr. KNOWLAND. Mr. President, since the Small Defense Plants bill has not yet been reported, I move that the Senate proceed to the consideration of Calendar 579, which is Senate bill 2047, the so-called rubber-plants bill.

The PRESIDING OFFICER. The

clerk will state the bill by title.

The LEGISLATIVE CLERK. A bill (S. 2047) to amend the Rubber Act of 1948, as amended, to provide for the sale of Government-owned rubber-producing facilities, to repeal and modify certain of its provisions affected thereby, and for other purposes.

The PRESIDING OFFICER. The question is on agreeing to the motion of the Senator from California.

Mr. JOHNSON of Texas. Mr. President, do I understand correctly that the

Senator from California plans to displace S. 2047 with S. 1523, the Small Defense Plants bill, when that bill is ready?

Mr. KNOWLAND. The Senator is correct. I am making the present motion in order to have a measure made the unfinished business of the Senate.

The PRESIDING OFFICER. The question is on agreeing to the motion of the Senator from California.

The motion was agreed to; and the Senate proceeded to consider the bill (S. 2047) which had been reported from the Committee on Banking and Currency with an amendment, to strike out all after the enacting clause and insert:

That this act shall be known as the "Rubber Producing Facilities Disposal Act of 1953." SEC. 2. It is hereby declared that disposal of the Government-owned rubber-producing facilities pursuant to the provisions of this act is consistent with the national security

and will further effectuate the policy set forth in section 2 of the Rubber Act of 1948, as amended (62 Stat. 101, 50 U. S. C. App. 1921), with respect to the development within the United States of a free, competitive, synthetic rubber industry.

SEC. 3. (a) There is hereby established a Rubber Producing Facilities Disposal Commission, hereinafter referred to as the Commission, to be composed of three persons, to be appointed by the President. Members of the Commission shall be appointed from civilian life and shall receive compensation at the rate of $50 per diem for each day engaged in the business of the Commission, and shall be allowed transportation and a per diem of $9 while away from their homes or places of business pursuant to such business. No person who is employed in or at any time since January 1, 1950, has been an employee of, or who receives a substantial part of his income from, the rubber or petroleum industry, or that part of the chemical industry which supplies, or is capable of supplying, feedstocks for the manufacture of synthetic rubber, shall serve as a Commissioner.

(b) With respect to the Governmentowned rubber-producing facilities it shall be the duty of the Commission, and it is authorized in accordance with the provisions of this act (1) to invite and receive proposals for the purchase of the facilities; to negotiate for their sale and make recommenda

tions therefor to the Congress; to enter into appropriate contracts for their sale, which contracts shall be binding upon the Government and the prospective purchasers upon their execution subject only to the further provisions of this act; and in the performance of such contracts to execute and deliver such deeds or other instruments appropriate to effectively transfer to the purchaser thereof title to the facilities, no matter by what officer, agent, department, Government corporation, or instrumentality of the United States the same is held; (2) to lease and thereunder deliver possession of the alcohol butadiene facilities, if practicable; and (3) to take such action and exercise such powers as may be necessary or appropriate to effectuate the purposes of this act.

(c) From the time of its appointment and throughout the course of the performance of its duties, the Commission shall consult and advise with the Attorney General in order (1) to secure guidance as to the type of disposal program which would best foster the development of a free competitive synthetic rubber industry, and (2) to supply the Attorney General with such information as he may deem requisite to enable him to provide the advice contemplated by sections 9 (a) (4) and 9 (f) of this act.

SEC. 4. The Commission shall be furnished upon its request all available information concerning the Government-owned rubberproducing facilities in the possession of any department, agency, officer, Government corporation, or instrumentality of the United States concerned with Government-owned rubber-producing facilities.

SEC. 5. The Commission shall proceed as promptly as practicable, conducting such hearings as may be necessary, with the disposal of the rubber-producing facilities in compliance with the provisions of this act.

SEC. 6. (a) Without regard to the civilservice laws or the Classification Act of 1949, the Commission shall be authorized to employ professional, clerical, and stenographic assistance, and shall be further authorized to request and, with the consent of the head of any department, agency, Government corporation, or instrumentality of the United States concerned with the Governmentowned rubber-producing facilities, receive the assistance of any employee thereof: Provided, That rates of pay for personnel employed by the Commission shall be in accordance with the Classification Act of 1949.

(b) No member of the Commission and no person employed by the Commission as an attorney, agent, or employee in activities involving discretion with respect to negotiations or contracts of sale of the Government-owned rubber-producing facilities, shall, during the period of such employment, or for a period of 2 years thereafter, be employed in any capacity by any purchaser, or affiliate thereof. No purchaser or affiliate thereof shall employ in any capacity any person, who has served as a member of the Commission or who was employed by the Commission and served the Commission as an attorney, agent, or employee in activities involving discretion with respect to negotiations or contracts of sale of the Government-owned rubber-producing facilities,

while any such person is serving as a member or employee of the Commission or for a period of 2 years thereafter. Any person violating the provisions of this subsection shall be fined not more than $10,000 or imprisoned not more than 1 year, or both.

SEC. 7 (a) The Commission shall invite, upon adequate notice and advertisement, proposals for the purchase of the Government-owned rubber-producing facilities, hereafter referred to as the facilities. The period for the receipt of proposals shall be determined and publicly announced by the Commission, and in no event shall be less than 45 days, nor more than 90 days, after the first day on which proposals may be received pursuant to the advertisement. The advertisement shall be in such form, contain such specifications and reservations, and be published in such manner as the Commission in its discretion determines will best effectuate the purposes of this act. All data concerning such facilities which in the judgment of the Commission may be reasonably required for the submission of a bona fide proposal shall be furnished by the Commission upon request by any prospective purchaser unless the Commission has reason to believe that such prospective purchaser has not identified his principal, or is not financially responsible, or is a poor security risk.

(b) Proposals shall be in writing, and shall contain, among other things—

(1) identification of the person in whose behalf the proposal is submitted, including the business affiliation of such person;

(2) the facility or facilities which are proposed to be purchased, and the order of preference if more than one facility is proposed to be purchased; or the order of preference if proposals are submitted on more than one facility, if only one facility is proposed to be purchased;

(3) the arrangements or plans, if any, formal or informal, for the supply of feedstock to, and the disposition of the end products of, the respective facilities proposed to be purchased;

(4) the amount proposed to be paid for

each of the facilities, and, if such amount is not to be paid in cash, then the principal terms of the financing arrangement proposed;

(5) the general terms and conditions which the prospective purchaser of a copolymer facility would be willing to accept in order to make the end product of such facility available for sale to small-business enterprises, and the general terms and conditions which the prospective purchaser of a butadiene or styrene facility would be willing to accept in order to make the end product of such facility available for sale to purchasers of copolymer facilities; and

(6) such other information as the Commission in its notice and advertisement for proposals shall require be set forth in proposals including the prospective purchaser's acceptance of the terms, conditions, restrictions and reservations contained in subsection (h) of this section.

(c) Should it become necessary to the effective prosecution of the disposal program, the Commission may, after the termination of the period for the submission of proposals provided for in subsection (a) of this section, disclose the contents of the proposals at such time, in such manner, and to such extent as it deems appropriate.

(d) Proposals shall be accompanied by a deposit of cash or United States Government bonds of face amount equal to 22 percent of the gross amount proposed to be paid but not exceeding $250,000 for each facility: Provided, however, That the deposit required in the case of a proposal for one of a number of facilities on an alternative basis shall be the same as would be required if such proposal were for only the facility for which the particular prospective purchaser proposed to pay the highest amount. Except in the case of purchasers, deposits made hereunder shall be refunded without interest and not later than upon the termination of the period for congressional review as provided in section 9 of this act. In the case of purchasers, deposits made hereunder shall be applied without interest to the purchase price: Provided, however, That upon the closing of the contract of sale the purchaser shall be required to substitute cash equal to the face amount of the Government bonds then held in connection with such purchaser's proposal.

(e) Payment of the purchase price may be made in part by a first lien purchasemoney mortgage, in an amount not to exceed 75 percent of the purchase price. The terms of any such mortgage obligation, to be determined by negotiation, shall provide among other things for a maturity of not more than 10 years, periodic amortization, and a uniform interest rate of not less than 3 percent per annum.

(f) Promptly after the termination of the period for the receipt of proposals, pursuant to subsection (a) of this section, and for such period thereafter not to exceed 6 months as may be determined and publicly announced by the Commission, it shall negotiate with those submitting tracts of sale: Provided, That the President may, upon a finding that further time for negotiation is desirable, extend such period for an additional period, not to exceed 30 days.

(g) Nothing contained in this act shall be construed to prevent the Commission from securing such additional information from those submitting proposals at any time as the Commission may deem necessary or appropriate to fulfill its responsibilities under this act.

(h) All contracts of sale and instruments in execution thereof shall contain a national security clause having terms, conditions, restrictions and reservations which will assure the prompt availability of the rubber-producing facilities, or facilities of equivalent capacity, for the production of synthetic rubber and the component materials thereof for a period of 10 years from the date of the contract.

(i) All contracts of sale shall become fully effective upon the expiration of the period for congressional review provided for in section 9 of this act if the Congress within such period has not disapproved the report of the Commission. The transfer of possession of all of the rubber-producing facilities to be sold shall be made as promptly as is practicable after the effective date, in accordance with the terms of the contracts, but in any event within a period terminating 60 days after the expiration of the period for congressional review as provided in section 9 (b) of this act. The failure to complete transfer of possession prior to said termination date shall not give rise to or be the basis of rescission of the contract sale.

(j) Upon termination of the transfer period, as provided in subsection (i) of this section, the operating agency last designated

by the President shall make no further sales of synthetic rubber and its component materials except as otherwise provided in this act.

(k) During the period of 1 year following the termination of the transfer period, the operating agency last designated by the President shall offer for sale to the purchasers of the facilities the synthetic rubber and its component materials held by it at a price determined in accordance with its pricing policy prevailing at the close of the transfer period, in amounts prorated in accordance with the ratio of the capacity of each such facility purchased to the total capacity of all facilities of the same type sold. Any synthetic rubber or component materials not purchased by an eligible purchaser during periodic intervals, as determined by the operating agency, shall be made available to other eligible purchasers on a like equitable basis. Any synthetic rubber or component materials not sold during such 1-year period shall thereafter be disposed of in such manner as said agency deems advisable.

SEC. 8. (a) Upon the termination of the transfer period, the operating agency last designated by the President, shall, as promptly as possible consistent with sound operating procedures, take out of production and place in adequate standby condition the rubber-producing facilities which shall not have been sold. At any time after the termination of production, such facilities may be transferred without reimbursement or transfer of funds to the General Services Administration and administered in accordance with the provisions of sections 6, 7, and 8 of the National Industrial Reserve Act of 1948, as amended (62 Stat. 1227, 50 U. S. C. 456-458), or to such other agency as the President may designate for administration in such manner as he may direct. In such event (1) no such facility shall thereafter be operated as a rubber-producing facility for the account of, or by, the Government except pursuant to further act of Congress; (2) no such facility, other than alcoholbutadiene facilities, shall be leased for operation as a rubber-producing facility at any time: Provided, That nothing contained in this act shall preclude the leasing of alcoholbutadiene facilities for purposes other than the manufacture of alcohol butadiene so long as such leases are in accordance with the provisions of section 8 (a) or section 9 (f) of this act; and (3) no such facility shall be disposed of by sale within a period of 3 years from the termination of the transfer period, and in any subsequent lease or sale, the Government agency acting under authority of this section shall within a reasonable time and in no event less than 60 days prior to the lease or sale, request the advice of the Attorney General as to whether the proposed lease or sale would tend to create or maintain a situation inconsistent with the antitrust laws. The Attorney General shall give his advice within 45 days of the receipt of such request. Upon the request of the Attorney General, the Government agency shall furnish, or cause to be furnished, such information as it may possess which the Attorney General determines to be appropriate or necessary to enable him to give the advice called for by this section.

(b) Whenever any transfer to any Government agency is made pursuant to this section, all unexpended funds budgeted as provided in section 9 (e) for standby and maintenance in such condition shall also be transferred.

SEC. 9. (a) Not later than 30 days after the termination of the negotiating period provided in section 7 of this act, and in no event later than June 1, 1954, the Commission shall prepare and submit to the Congress a report setting forth

(1) the steps taken to elicit proposals and the proposals which have been received;

(2) the principal terms of all sales contracted for and the Commission's recommendations in respect thereto;

(3) in the event that there may have been a financially more advantageous proposal for any rubber-producing facility than the sale recommended, a statement of the reasons why such sale is nevertheless proposed.

(4) to the extent requested by the Attorney General, his advice concerning the disposals which are proposed;

(5) the program to be followed to place in standby condition the rubber-producing facilities not sold;

(6) an inventory report concerning the Government's current stocks of synthetic rubber and its component materials;

(7) a program for the continuance, to the extent it deems necessary, during the fiscal year following the fiscal year in which the transfer period terminates, of the research program on synthetic rubber and its component materials then being carried on by the operating agency; and

(8) the names of persons who have represented the Government or the purchasers in conducting negotiations or in making contracts for disposal of the rubber-producing facilities.

(b) The report shall be submitted to both Houses of Congress on the same day. Upon the expiration of 30 days of continuous session of the Congress following the date upon which the report is submitted to it, the Commission shall proceed to carry out the contracts and proposals, as outlined in its report, unless the report is disapproved by either House of Congress by a resolution within the 30-day period.

(c) For the purposes of subsection (b) of this section

(1) continuity of session shall be considered as broken only by an adjournment of the Congress sine die; but

(2) in the computation of the 30-day period there shall be excluded the days on which either House is not in session because of an adjournment of more than 3 days to a day certain.

(d) No rubber-producing facility shall be sold or leased except in accordance with this act, or in accordance with section 7 (d) (4) of the Rubber Act of 1948, as amended.

(e) Such sums as may be required for the foregoing purposes may be provided out of the proceeds of disposal, and annual budgets for the expenses necessary for such purposes shall be submitted in accordance with the Government Corporation Control Act of 1945, as amended (59 Stat. 597, 31 U. S. C. 841).

(f) Notwithstanding any other provisions of this act, the Commission may, after securing the advice of the Attorney General as to whether the proposed lease would tend to create or maintain a situation inconsistent with the antitrust laws, enter into leases for the alcohol-butadiene facilities for a period of not less than 1 year, nor more than 3 years: Provided, That any such lease shall contain, among other things, (1) a national security clause, and (2) provisions for the recapture of such facilities by the Government and the termination of the lease, if the President determines that the national interest so requires. Not less than 60 days prior to said lease the Commission shall request such advice from the Attorney General who shall give the same within 45 days of the receipt of such request.

SEC. 10. At the expiration of 1 year after the transfer period or as soon thereafter as the Congress is in session, the President shall report to the Congress concerning the Nation's rubber requirements and resources, and the need, if any, for further research by the Government relative to the production or use of synthetic rubber and its component materials.

SEC. 11. The term "rubber-producing facilities" as used in this act shall not include the Government-owned evaluation laboratory at Akron, Ohio.

SEC. 12. All final net proceeds from disposal of the rubber-producing facilities shall be covered into the Treasury as miscellaneous receipts except as otherwise provided by this act.

SEC. 13. The sales, leases, or other dispositions made prior to the enactment of this act, pursuant to section 9 (b) of the Rubber Act of 1948, as amended, shall not be affected by this act.

SEC. 14. Notwithstanding the provisions of section 20 of the Rubber Act of 1948, as amended, (1) if no report is submitted by the Commission, or if the report submitted by the Commission pursuant to section 9 of this act is disapproved by either House of the Congress, as provided in this act, then the Rubber Act of 1948, as amended, shall be extended until March 31, 1956; and (2) if the Commission submits a report and it is not disapproved by either House of the Congress, the Rubber Act of 1948, as amended, shall terminate at the termination of the transfer period as provided in section 7 (i) of this act.

SEC. 15. Thirty days following the receipt of proposals, as provided in section 7 of this act, the Commission shall submit to the Congress a report stating the amount of funds expended by or obligated by the operating agency for the repair, replacement, additions, improvements, or maintenance of each synthetic rubber-producing facility for which proposals have been submitted. Thereafter reports shall be made monthly until such time as the Congress shall have permitted or disapproved the disposal recommended by

the Commission.

SEC. 16. In arriving at its recommendations for the disposal of the facilities, the Commission shall use, as the basis for negotiating the sale of each facility the highest amount proposed to be paid for each facility, if, in the opinion of the Commission, the highest amount proposed to be paid was a bona fide proposal and was submitted by a person competent to operate a rubber-producing facility: Provided, That the words "competent to operate a rubber-producing facility" shall not be interpreted so as to require prior experience in the operation of a ruber-producing facility: Provided further, That in using such highest proposed amount as a basis for negotiations the Commission may negotiate with respect to any facility with any person who submitted a proposal on any facility and may recommend sale of any facility to any person who submitted a proposal on any facility at a price which is equal to, higher than, or lower than the highest amount proposed to be paid for each facility as the Commission determines will best effectuate the purposes of this act.

SEC. 17. The following criteria, together with such other criteria as the Commission deems necessary or desirable to best effectuate the purposes of this act, shall be used by the Commission in arriving at its recommendations for disposal:

(1) That the disposal program be designed best to afford small business enterprises and users, other than the purchaser of a facility, the opportunity to obtain a fair share of the end products of the facilities sold and at fair prices;

(2) That the prospective purchaser has the technical competence necessary to operate a rubber-producing facility, except that prior experiene in operating a rubber-producing facility shall not be required as a basis for determining whether a prospective purchaser has the technical competence necessary to operate a rubber-producing facility;

(3) That the recommended sales shall provide for the development within the United States of a free, competitive, synthetic rubber industry, and do not permit any person to possess unreasonable control over the manufacture of synthetic rubber or its component materials;

(4) That the prospective purchaser is acting in good faith, and actually intends to

operate the facility or facilities for the purpose of manufacturing synthetic rubber or its component materials;

(5) That full fair value for the facility or facilities will be received by the Government, taking into consideration the policy set forth in section 2 of this act;

(6) That disposal of the facility or facilities to the purchasers is consistent with national security; and

(7) That the facilities recommended for sale will in the aggregate be capable of annually producing not less than 500,000 long tons of general-purpose synthetic rubber, and not less than 43,000 long tons annually of butyl rubber.

SEC. 18. Unless otherwise provided in this act, the disposal of the Government-owned rubber-producing facilities shall be authorized notwithstanding the provisions of the Rubber Act of 1948, as amended.

SEC. 19. Unless otherwise provided in this act, all costs incurred by the Commission or any other department, agency, officer, Government corporation, or instrumentality of the United States pursuant to the provisions of this act shall, so long as synthetic

rubber is produced for the account of the Government in the Government-owned rubber-producing facilities, be paid from and charged against the operating income of the Government-owned synthetic rubber program, administered by the operating agency.

SEC. 20. The Commission shall cease to exist 30 days after the termination of the transfer period as provided by section 7 (i) of this act, but nothing contained in this section shall be construed in any way so as to abrogate, modify, or adversely affect any contract of sale or lease of the Governmentowned rubber-producing facilities pursuant to this act. After the Commission ceases to exist, such contracts and leases and other matters involving the Commission shall be administered by such agency of the Government as the President may designate.

SEC. 21. (a) The term "synthetic rubber" means any product of chemical synthesis similar in general properties and applications to natural rubber, and specifically capable of vulcanization, produced in the United States, not including reclaimed synthetic rubber.

(b) The term "general-purpose synthetic rubber" means a synthetic rubber of the butadiene-styrene type generally suitable for use in the manufacture of transportation items such as tires or camelback, as well as any other type of synthetic rubber equally or better suited for use in the manufacture of transportation items such as tires or camelback as determined from time to time by the President.

(c) The term "rubber-producing facilities" means facilities, in whole or in part, for the manufacture of synthetic rubber, and the component materials thereof, including, but not limited to, buildings and land in which or on which such facilities may be located and all machinery and utilities associated therewith.

(d) The term "component materials" means the material, raw, semifinished, and finished, necessary for the manufacture of synthetic rubber.

(e) The term "standby condition" means the condition in which rubber-producing facilities, in whole or in part, are placed if not sold or leased in accordance with this act, but are maintained so as to be readily available for the production of synthetic rubber or component materials.

(f) The term "person" means any individual, firm, copartnership, business trust, corporation, or any organized group of persons whether incorporated or not.

(g) The term "operating agency" means the Department, agency, officer, Government corporation, or instrumentality of the United States designated from time to time by the President pursuant to section 7 (a) of the Rubber Act of 1948, as amended.

BLENDING OF WHEAT IMPORTED AS UNFIT FOR HUMAN CONSUMPTION WITH WHEAT SUITABLE FOR HUMAN CONSUMPTION

The Senate proceeded to consider the bill (S. 2137) to prohibit the blending of wheat imported as unfit for human consumption with wheat suitable for human consumption which had been reported from the Committee on the Judiciary with amendments.

Mr. HENDRICKSON. Mr. President, may we have an explanation of the bill, which I understand has been reported by the Committee on Agriculture and Forestry with an amendment?

Mr. SMATHERS. Mr. President, with reference to S. 2137, which was introduced by the Senator from Idaho [Mr. WELKER] and other Senators, I wish to ask the Senator from Idaho if he would be agreeable to amending the bill on page 2, line 7, through line 10, by striking out the words "Whoever knowingly transfers, in a form suitable for human consumption or for conversion into a form suitable for human consumption."

Mr. WELKER. I am willing to accept the amendment, but I wish to explain the bill, at the request of the Senator from New Jersey.

The PRESIDING OFFICER. There are certain committee amendments that must first be considered. The clerk will state the first committee amendment.

The LEGISLATIVE CLERK. On page 2, line 19, after the word "is", it is proposed to strike out "found pursuant to the United States Grain Standards Act (39 Stat. 453; 54 Stat. 765", and to insert "found."

The PRESIDING OFFICER. The question is on agreeing to the committee amendment.

the bill. What was the amendment just agreed to?

It was The Chair

The PRESIDING OFFICER. a committee amendment. will ask the clerk to state the next amendment offered by the committee.

The LEGISLATIVE CLERK. On page 2, line 20, after the word "contain", it is proposed to strike out the word "as" and insert "at."

Mr. AIKEN. Mr. President, I understand the Senator from North Dakota has an amendment to strike out all the language beginning with line 13, and to insert substitute language. Would that be in order?

The PRESIDING OFFICER. Committee amendments are being considered first.

Mr. AIKEN. It is not a committee amendment, but the bill as reported by the Committee on the Judiciary does not accomplish the purpose for which I believe it was originally intended. It accomplishes the opposite purpose, and an amendment will necessarily be required if the bill is to prohibit the blending of cheap imported wheat with good American wheat.

The PRESIDING OFFICER. The Chair is informed that the amendment will be in order after the conclusion of

action on committee amendments.

Mr. AIKEN. The last committee amendment ought not be approved by the Senate, because it does exactly the opposite from what I believe was intended.

Mr. SMATHERS. Mr. President, a parliamentary inquiry. The PRESIDING Senator will state it.

OFFICER. The

Mr. SMATHERS. Did not the Senator from North Dakota offer his amendment as a substitute for the committee amendment?

The PRESIDING OFFICER. The Chair has been informed by the Parliamentarian that it covers more than is covered by the committee amendment.

According to the Parliamentarian, the last committee amendment, striking out the word "as" and inserting "at" in line 20 is a clarifying amendment. Without objection, the amendment is agreed to.

The clerk will state the next committee amendment.

The next amendment was in line 21, after the word "damaged," to strike out "kernels." and insert "kernels, determined in accordance with the Official Grain Standards of the United States for Wheat."

Mr. ANDERSON. Mr. President, a parliamentary inquiry.

The PRESIDING Senator will state it.

OFFICER. The

Mr. ANDERSON. I think the Senator from New Jersey asked the Senator from Idaho [Mr. WELKER] to explain the bill. Should that be done prior to the adoption of the committee amendments, or subsequently? I should like to have the bill explained by the Senator from Idaho.

The PRESIDING OFFICER. An explanation of the bill is in order at any time.

Mr. WELKER. Mr. President, S. 2137 is a bill which seeks to end abuses of the

International Wheat Agreement involving the illegal mixing of grain unfit for human consumption with wheat fit for human consumption.

The Senate Agriculture and Forestry Committee held exhaustive hearings on this subject and uncovered widespread evidence of fraudulent dealings in wheat, especially imports from Canada. Specifically, during the years 1950-52, over 60 million bushels of Canadian wheat classified as "unfit for human consumption" were imported into the United States. A duty of around 72 cents a pound was paid instead of the regular duty of 21 cents per bushel, and this entire amount was allowed in this country over and above the presidential import limitation of 800,000 bushels yearly.

Approximately 90 percent of the damaged wheat was milled into flour, after being mixed with high grade American wheat, or will be after the mixing after the mixing process. The other 10 percent passed into feed channels. Bear in mind that this was wheat found to be unfit for human consumption.

S. 2137 simply provides a means of ending this type of vicious practice. It It will close a gaping loophole in our tariff laws, which has worked to the detriment of the American public, and it will put an end to indirect subsidies of foreign imported wheat. It will stop a process which has been shown to be harmful to the American grain market and the American wheat grower.

The penalties which it provides are severe enough to discourage further frauds of the type which led to the Agriculture Committee's investigation, as as well as the thorough investigation by the Judiciary Committee of the Senate.

As I stated in the beginning, the entire Committee on Agriculture and Forestry held exhaustive hearings concerning this repulsive practice which has been permitted to continue too long. I believe this bill, with the amendments which have been suggested, will definitely end the fraud upon the taxpayers, upon the American grain grower, and the consumer of the wheat when it is ground into flour, when it should go only for feed purposes.

Mr. JOHNSTON of South Carolina. Mr. President, I should like to ask the Senator from Idaho if it is true that we have been troubled a great deal by wheat being shipped in from a nearby country, which shipments have had an effect upon our wheat market?

Mr. WELKER. There is no question There is no question about that. They have had a very bad effect upon our domestic market. Nearly all the wheat which has come to the attention of the junior Senator from Idaho has been imported from the Dominion of Canada.

Mr. JOHNSTON of South Carolina. When such wheat is shipped in, as I understand, it carries a different rate of duty if it is unfit for human consumption. Is that true?

Mr. WELKER. Yes. It carries a duty of 72 cents a bushel. If it were wheat fit for human consumption, fit to be milled into flour, it would ordinarily carry a duty of 21 cents a bushel.

Mr. JOHNSTON of South Carolina. Is it not true that the shipping rates in Canada are very much lower than ours

and that we cannot meet competition from a shipping standpoint?

Mr. WELKER. I am so informed.

Mr. YOUNG. Mr. President, on behalf of the Senator from New Mexico [Mr. ANDERSON] and myself, I send to the desk ANDERSON] and myself, I send to the desk an amendment and ask for its immediate consideration.

The PRESIDING OFFICER. The question first is on agreeing to the last committee amendment, on page 2, line 21.

Mr. AIKEN. Mr. President, I think it is safe to say that the members of the Committee on Agriculture and Forestry would approve the amendment offered by the Senator from North Dakota and the Senator from New Mexico, because it Senator from New Mexico, because it accomplishes what we hope can be accomplished, and makes it more hazardous to perpetrate fraud through the improper or illegal use of imported feed wheat from Canada. The question is on the matter of procedure. If the committee amendment on page 2, in lines 21, mittee amendment on page 2, in lines 21, 22, and 23 is approved, can the commit tee amendment then be stricken out by a subsequent amendment offered by the Senator from North Dakota and the Senator from New Mexico?

The

The PRESIDING OFFICER. Chair is informed that that can be done. Without objection, the last committee amendment is agreed to.

The amendment offered by the Senator from North Dakota for himself and the Senator from New Mexico [Mr. ANDERSON] will be stated.

The LEGISLATIVE CLERK. On page 2, beginning with line 13, it is proposed to strike out through line 23 and insert in lieu thereof the following:

Shall be fined for each bushel of wheat so blended, commingled, or transferred, and for each 43 pounds of flour so transferred, not more than an amount equal to the duty on a bushel of wheat fit for human consumption, and, in addition, shall be fined for each offense not more than $5,000 or imprisoned not more than 1 year, or both.

For the purposes of this section, wheat imported as being unfit for human consumption shall be imported wheat classified or classifiable under paragraph 729 of the Tariff Act of 1930, as "wheat, unfit for human consumption."

Mr. WELKER. Mr. President, I am happy to accept that amendment.

Mr. YOUNG. Mr. President, I should like to make a brief statement with regard to the amendment.

The first part of the amendment is intended simply as a clarifying amendment. It provides that in addition to the fine of not more than $5,000, and imprisonment, the violator shall be fined for each bushel of wheat and each 43 pounds of flour an amount equal to the duty on a bushel of wheat fit for human consumption. consumption. Forty-three pounds of flour is the quantity derived from a bushel of wheat at the usual extraction rate for good wheat. Under this provision a violator who had paid the duty of approximately 8 cents at the time of importation might also be fined an amount equal to about 21 cents a bushel plus an additional fine of $5,000 and might also be imprisoned. A fine of only $5,000 might be an inadequate deterrent in view of the large profits that might be realized by bringing the wheat in at the lower duty. I believe that this is the purpose of the bill, but the

present language does not by its terms impose such a penalty.

The second part of the amendment, while not necessarily in the nature of a clarifying amendment, is necessary in order that the purpose of the bill may be carried out. The bill as reported is applicable only to wheat having at least 75 percent of damaged kernels. Wheat having only 30 percent of damaged kernels may be brought in excess of the quota and at the lower duty. This means that the bill, as now worded, would permit blending of most, if not all, of the wheat imported as being unfit for human consumption. The second part of our amendment corrects this situation by making the bill applicable to all wheat classified under paragraph 729 of the Tariff Act of 1930 as wheat unfit for human consumption.

The PRESIDING OFFICER (Mr. SCHOEPPEL in the chair). The question is on agreeing to the amendment offered by the Senator from North Dakota [Mr. YOUNG] for himself and the Senator from New Mexico [Mr. ANDERSON].

Mr. LANGER. Mr. President, will the Senator yield?

Mr. YOUNG. I yield.

Mr. LANGER. As I understand, the penalty provisions are not abolished.

Mr. YOUNG. No; they are clarified. Mr. LANGER. In other words a person who imports such wheat would still be subject to criminal prosecution.

Mr. YOUNG. The Senator is correct. The PRESIDING OFFICER. Without objection, the amendment is agreed to. The bill is open to further amendment.

Mr. SMATHERS. Mr. President, I offer an amendment on page 2, line 7, after the word "transfers" to strike out the words "in a form suitable for human consumption or for conversion into a form suitable for human consumption."

The PRESIDING OFFICER. The question is on agreeing to the amendment offered by the Senator from Florida.

Mr. SMATHERS. I wonder whether the Senator from Idaho would be willing to accept the amendment.

Mr. WELKER. I am very glad to accept it, for the reasons given to the junior Senator from Florida and the junior Senator from Idaho by the Department of Justice. Under the terminology of the bill as I drafted it, it would be practically impossible to secure a conviction. I certainly wholeheartedly join in asking for the adoption of the proposed amendment.

The PRESIDING OFFICER. Without objection, the amendment offered by the Senator from Florida [Mr. SMATHERS] is agreed to.

Mr. HENDRICKSON. Mr. President, for the majority calendar committee I thank the distinguished Senator from Idaho for his explanation of the bill.

The PRESIDING OFFICER. The bill is open to further amendment. If there be no further amendment to be offered, the question is on the engrossment and third reading of the bill.

The bill was ordered to be engrossed for a third reading, read the third time, and passed, as follows:

Be it enacted, etc., That the analysis of chapter 27 of title 18 of the United States Code is amended by inserting immediately