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HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE

HOUSE OF REPRESENTATIVES

EIGHTY-NINTH CONGRESS

FIRST SESSION

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H.R. 5508 1 

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MARCH 10, 1905

Serial D

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Printed for the use of the Com_mittee on Agriculture

U.S. GOVERNMENT PRINTING OFFICE

46-836 WASHINGTON : 1965
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COMMITTEE ON AGRICULTURE

HAROLD D. COOLEY, North Carolina, Chairman

W. R. POAGE, Texas, Vice Chairman

E. C. GATHINGS, Arkansas

JOHN L. McMILLAN, South Carolina

THOMAS G. ABERNETHY, Mississippi

WATKINS M. ABBITT, Virginia

PAUL C. JONES, Missouri

HARLAN HAGEN, California

FRANK A. STUBBLEFIELD, Kentucky

GRAHAM, PURCELL, Texas

JAMES H. MORRISON, Louisiana

ALEC G. OLSON, Minnesota

SPARK M. MATSUNAGA, Hawaii

MASTON O'NEAL, Georgia

THOMAS S. FOLEY, Washington

JOSEPH Y. RESNICK, New York

LYNN E. STALBAUM, Wisconsin

ELIGIO DE LA GARZA, Texas

JOSEPH P. VIGORITO, Pennsylvania

JOHN C. MACKIE, Michigan

ROLLAND REDLIN, North Dakota

BERT BANDSTRA, Iowa

STANLEY L. GREIGG, Iowa

CLAIR A. CALLAN, Nebraska

II

,

PAUL B. DAGUE, Pennsylvania

PAGE BELCHER, Oklahoma

CHARLES M. TEAGUE, California

ALBERT H. QUIE, Minnesota

MRS. CATHERINE MAY, Washington

DELBERT L. LATTA, Ohio

RALPH HARVEY, Indiana

PAUL FINDLEY, Illinois

ROBERT DOLE, Kansas

LAURENCE J. BURTON, Utah

PRENTISS WALKER, Mississippi

RESIDENT COMMISSIONER

"SANTIAGO POLANCO-ABREU, Puerto Rico

Mrs. CHRISTINE S. GALLAGHER, Clerk

HYDE H. MURRAY, Assistant Clerk

JOHN J. HErmBuRGER, General Counsel

ROBERT C. BRUCE, Assistant Counsel

FRANCIS M. LE MAY, Staff Consultant

Prt
CONTENTS

H.R. 5508, a bill to facilitate the work of the U.S. Department of Agriculture 

Statement of Charles L. Grant, Director of Finance; accompanied by F. H.

Spencer, Deputy Administrator, Management, Agricultural Research

Service; Dr. F. R. Senti, Deputy Administrator, Nutrition, Consumer

and Industrial Use Research, Agricultural Research Service; W. A.

Minor, Assistant Administrator for Management, Foreign Agricultural

Service; Robert L. Hill, assistant to the Director, Office of Personnel; and.

Carl J. Miller, Chief, U.S. Warehouse Act Branch, Consumer and Marketing Service, U.S. Department of Agriculture 

111

Page

1

3

TO FACILITATE THE WORK OF THE U.S. DEPARTMENT

OF AGRICULTURE

WEDNESDAY, MARCH 10, 1965

HOUSE OF REPRESENTATIVES,

COMMITTEE ON AGRICULTURE,

Washington, D.C.

The committee met, pursuant to notice, at 10:15 a.m., in room 1310,

Longworth House Office Building, Washington, D.C., Hon. Harold

D. Cooley (chairman) presiding.

Present: Representatives Cooley (presiding), Poage, Gathings,

Jones of Missouri, Stubblefield, Purcell, Olson, Matsunaga, O'Neal,

Foley, Stalbaum, De la Garza, Vigorito, Redlin, Bandstra, Greigg,

Callan, Dague, Teague of California, Latta, Harvey of Indiana,

Findley, Burton of Utah, Walker, and Resident Commissioner

Polanco-Abreu.

Also present: Christine S. Gallagher, clerk; Hyde H. Murray,

assistant clerk; John J. Heimburger, general counsel; Robert Bruce,

assistant counsel; and Francis LeMay, consultant.

The CHAIRMAN. The committee will please be in order.

We are delighted to have you gentlemen here, especially Mr. Minor,

whom we have not seen in a long time. Who is going to speak for the

Department?

Mr. GRANT. I will. I am Charles Grant, Director of Finance of

the Department of Agriculture. I will lead off and explain briefly

the purpose of the bill, and then I will call on my colleagues here to

discuss and explain specific sections.

The CHAIRMAN. Very well. You may proceed.

(H.R. 5508, introduced by Mr. Cooley, follows:)

[H.R. 5508, 89th Cong., 1st sess.]

A BILL To facilitate the work of the Department of Agriculture, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That, notwithstanding the provisions of existing

law, except the Commodity Credit Corporation Charter Act and without regard

to section 355, Revised Statutes, as amended (40 U.S.C. 255), but within the

limitations of cost otherwise applicable, appropriations of the Department of

Agriculture may be expended for the erection of buildings and other structures

on land owned by States, counties, municipalities, or other political subdivisions,

corporations, or individuals: Provided, That prior to such erection there is obtained the right to use the land for the estimated life of or need for the structure,

including the right to remove any such structure within a reasonable time after

the termination of the right to use the land: Provided further, That appropriations

and funds available to the Department of Agriculture shall be available for expenses in connection with acquiring the right to use land for such purposes under

long-term lease or other agreement.

1
2 FACILITATE WORK—DEPARTMENT OF AGRICULTURE

SEC. 2. The Secretary of Agriculture is authorized to make grants for periods

not to exceed five years duration, to State agricultural experiment 

grants,

colleges, universities, and other research institutions and organizations and to Federal

and private organizations and individuals for research to further the programs of

the Department of Agriculture. Each recipient of assistance under this section

shall keep such records as the Secretary shall prescribe, including records which

fully disclose the amount and disposition by such recipient of the proceeds of such

grants, the total cost of the project or undertaking in connection with which such

funds are given or used, and the amount of that portion of the costs of the project

or undertaking supplied by other sources, and such other records as will facilitate

an effective audit. The Secretary of Agriculture and the Comptroller General

of the United States or any of their duly authorized representatives shall have

access for the purpose of audit and examination to any books, documents, papers,

and records of the recipients that are pertinent to the grants received under this

section.

SEC. 3. The Secretary of Agriculture is authorized to obtain insurance to cover

the liability of any employee of the Department of Agriculture for damage to or

loss of property or personal injury or death caused by the act or omission of any

such employee while acting within the scope of his office or employment and while

operating a motor vehicle belonging to the United States in a foreign country.

SEC. 4. Section 602 of the Agricultural Act of 1954 (68 Stat. 908) is amended

by adding at the end thereof the following:

"(e) Any officer or employee appointed and assigned to a post abroad

pursuant to this title may, in the discretion of the Secretary of Agriculture,

be assigned for duty in the continental United States, without regard to the

civil service laws (and without reduction in grade if an appropriate position

at the employee's grade is not available in any agency of the Department

of Agriculture), for a period of not more than three years: Provided, That

the total number of such employees assigned for duty in the continental

United States under this provision shall not exceed fifteen at any one time:

Provided further, That this Act shall not increase the number of persons

employed at grade GS-16, GS-17, or GS-18."

SEC. 5. Section 104(a) of the Agricultural Trade Development and Assistance

Act of 1954, as amended (7 U.S.C. 1704), is further amended by inserting, after

the word "Provided,", the following: "That the Secretary of Agriculture may

release such amounts of the foreign currencies so set aside as he determines not

to be needed, within a reasonable period of time, for such purpose: Provided

further,".

SEC. 6. Section 4 of the Act of August 2, 1956 (ch. 878 70 Stat. 934; 7 U.S.C.

1884), is hereby amended—

(1) by striking the word "insurance" and substituting the word "benefits";

(2) by inserting after "Federal Employee's Group Life Insurance Act of

1954" the words 'and the Federal Employees Health Benefits Act of 1959,"

and

(3) by insertinc,

b

after "employees' life insurance fund" the words "or the

employees' health benefits fund, as the case may be,".

SEC. 7. Section 1 of the Act of July 12, 1943 (5 U.S.C. 542-1), is hereby

amended by striking out the word "reimbursed" and inserting in lieu thereof the

words "credited with advances or reimbursements" and inserting after the word

"Provided", the following: "That such advances shall not be available for any

period beyond that provided by the Act appropriating the funds: Provided

further,".

SEC. 8. Subject to limitations applicable with respect to each appropriation

concerned, each appropriation available to the Department of Agriculture may

be charged, at any time during a fiscal year, for the benefit of any other appropriation available to the Department, for the purpose of financing the procurement

of materials and services, or financing activities or other costs, for which funds

are available both in the financing appropriation so charged and in the appropriation so benefited; except that such expenses so financed shall be charged on a final

basis, as of a date not later than the close of such fiscal year, to the appropriations

so benefited, with appropriate credit to the financing appropriation.

SEC. 9. Section 8f of the Agricultural Adjustment Act of 1933, as amended

(7 U.S.C. 608f), is hereby repealed.
FACILITATE WORK—DEPARTMENT OF AGRICULTURE 3

STATEMENT OF CHARLES L. GRANT, DIRECTOR OF FINANCE;

ACCOMPANIED BY F. H. SPENCER, DEPUTY ADMINISTRATOR,

MANAGEMENT, AGRICULTURAL RESEARCH SERVICE; DR. F. R.

SENTI, DEPUTY ADMINISTRATOR, NUTRITION, CONSUMER AND

INDUSTRIAL USE RESEARCH, AGRICULTURAL RESEARCH SERVICE; W. A. MINOR, ASSISTANT ADMINISTRATOR FOR MANAGEMENT, FOREIGN AGRICULTURAL SERVICE; ROBERT L. HILL,

ASSISTANT TO THE DIRECTOR, OFFICE OF PERSONNEL; AND

CARL J. MILLER, CHIEF, U.S. WAREHOUSE ACT BRANCH, CONSUMER AND MARKETING SERVICE, U.S. DEPARTMENT OF

AGRICULTURE

Mr. GRANT. Mr. Chairman and members of the committee, we

appreciate this opportunity to appear before you in support of H.R.

5508, to facilitate the work of the Department of Agriculture.

This bill consists of nine relatively minor but important provisions

which have been brought together to facilitate consideration by the

Congress. These items are proposed in order to improve and make

more effective the administrative operations of the Department.

This bill is identical to H.R. 7155 as reported by this committee in

the last session of the Congress, but on which no action was taken by

the Senate.

The CHAIRMAN. That bill was passed by the House?

Mr. GRANT. Yes, it was passed by the House. No action was

taken by the Senate. I said that it was identical. It is identical

except for three provisions. The bill that was passed in the last session

by the House included a provision giving authority to the Secretary

to designate agricultural attaches in certain specific circumstances as

agricultural counselors. That provision is not included in this bill.

Mr. POAGE. Why was that left out?

Mr. GRANT. I beg your pardon?

Mr. POAGE. Why was that left out?

Mr. GRANT. It was left out because we have been advised by

the Budget Bureau that they want to consider this provision further

and it has not been approved for inclusion in this bill.

Mr. POAGE. If they want to consider it further they had better be

considering it now. I think that it is quite clear that we are not going

to sit here all session and wait until the Budget Bureau makes up its

mind whether they want these things passed or not. They cannot

make up their mind with the farm bill; they cannot make up their

mind about these things. I know that that is not your fault.

Mr. GRANT. No. The bill which the House passed during the last

session included a provision relatinc, to the Department's working

capital fund authorizing us to transfer to the fund equipment and to

capitalize it in the fund. Because of certain questions that have been

raised, primarily by the General Accounting Office, we have decided

to omit that provision this year and limit the proposal to authority to

make advances to the fund.

The General Accounting Office felt that the Congress might be

losing some control over expenditures if this provision were included.

We have decided under the circumstances, that this provision is

not of major importance to us and, in order to facilitate getting the

bill through, we would delete that provision.
4 FACILITATE WORK-DEPARTMENT OF AGRICULTURE

The third difference in the bill as it passed the House during the

last session and the present bill is another provision that has been

added this year to the working capital fund proposal. Language

has been added to section 7 to make it clear that our proposal to

make advances to the fund will not extend the availability of funds

beyond the time that the Congress specifies in the appropriation act.

Again there was a feeling, I believe, on the part of some, that the

provision as it passed in the last session would have permitted the

Department to change the availability of appropriations, so we

have written this so as to make it more restrictive and to make it

clear that that is not the intent.

The first three provisions in this bill relate to the activities of the

Agricultural Research Service, and with the committee's permission

I would like to have Mr. Frank Spencer, Deputy Administrator of

the Agricultural Research Service, briefly describe those sections.

The CHAIRMAN. Very well. We will be glad to hear from you.

Mr. SPENCER. The first section authorizes the Department to erect

facilities on land which is owned by States or other political subdivisions or by corporations or individuals, but which is secured for

the estimated life or the need for the building to be constructed. It

will be used mostly for the construction of research facilities. As you

know, much of our research is cooperative and the buildings are very

frequently located on the campuses of State agricultural experiment

stations. These institutions are almost invariably willing to make

land available for the erection of our buildings, but in many instances

they lack the authority to sell or donate the land without specific

action by the State legislatures. This means that in these cases we

are limited to the construction of a temporary type of building.

These can be the Butler-type or the quonset-type building, but are

not masonry construction. This results in a rather inferior type of

building and usually it does not fit in at all appropriately with the other

buildings on the campus.

This authority, if granted, would permit the Department to construct a more suitable type of building on land which is owned by these

cooperative institutions. In every case the interest of the Government would be protected through leases or other instruments which

would insure tenure for the estimated life or need of the structure.

The CHAIRMAN. Suppose that some States would offer land on

which these were to be built? Who would have the title?

Mr. SPENCER. If the State offers the land and has the authority

to donate the land, we take title to it and build the building:

The CHAIRMAN. The reason I was asking the question is that we

have a place in North Carolina called the research triangle. It is

supported by the University of North Carolina, Duke University,

and North Carolina State College. I am certain that land could be

made available there for such institutions. If it was decided to put

one in that area, would you have authority officially to accept the site?

Mr. GRANT. We have authority in the organic act of 1944 to accept

the donation of land by transfer, or when provided in appropriation

acts to purchase land needed for the administrative operations of the

Department.

The CHAIRMAN. What size building did you have in mind?

Mr. SPENCER. The laboratories that we would plan to erect, in

buildings of this type, would not be big jobs like the National Animal
FACILITATE WORK-DEPARTMENT OF AGRICULTURE 5

Disease Laboratory, that type of thing. They would range in general

probably from a limit of $20,000, above which we cannot build without

specific authority up to, perhaps, $200,000 or $300,000 in maximum.

We would not plan to put a major type of building on land under

lease.

The CHAIRMAN. Do you mean up to 200,000 square feet?

Mr. SPENCER. In dollars. I mean dollars. We cannot erect any

permanent-type structure without specific legislative authority in the

appropriation.

Mr. TEAGUE of California. The first part of the bill particularly

deals with funding appropriations. I understand that we passed

approximately the same bill last year. I take it that Mr. Whitten

and his committee have no objection to this being reported here?

Do you recall?

The CHAIRMAN. Did you have any objections from them?

Mr. GRANT. No, sir. The House Appropriations Subcommittee

has not raised any questions at all on the bill as it was passed by the

last session.

The CHAIRMAN. This a substitute?

Mr. GRANT. Yes, sir.

Mr. TEAGUE of California. I have confidence in Mr. Whitten.

If he had any objections I would assume that we would know about

them. I am glad to know that he has no objections.

The CHAIRMAN. Are there any further questions of this witness?

If not, we will proceed to the next.

Mr. SPENCER. Section 2 would authorize the Department to make

grants for a period not to exceed 5 years to the State agricultural

experiment stations, colleges and universities, and other research

institutions, for research on parts of the program on behalf of the

Department of Agriculture. This does not refer to the grant authority

of the Department under the Hatch, Adams, and similar acts which

are grants on a formula basis. This refers, rather, to grants for

specific pieces of research which are needed to accomplish the Department's purposes.

At the present time our grant authority in this area is limited to

grants for basic research to nonprofit institutions and we find that

there are institutions that are not nonprofit institutions which do

highly satisfactory research work and, also, that very often after

making a grant for a piece of basic research we find that as it develops

that there is a need for applied research which requires us either to

contract for the work to do so or to make some other arrangement

through cooperative agreements for the institutions performinc,the

research to go ahead with that phase of the work. The feeling of the

Department is that much more effective work could be done if this

authority were extended to apply to types of research other than

basic and also to make other than nonprofit institutions eligible to

receive grants.

Mr. LATTA. I have a question on that section. You have in that

section a reference to making grants to Federal organizations—what

do you have reference to there?

Mr. SPENCER. The National Academy of Sciences. Frequently

there are available to institutions like that means of doing research

that we need, but under the present grant arrangement we are not able

fully to avail ourselves of their services.

46-836-65-2
FACILITATE WORK—DEPARTMENT OF AGRICULTURE

Mr. LATTA. Thank you.

The CHAIRMAN. Proceed.

Mr. MATSUNAGA. The same question could arise under the bill ,

that we just passed out of the House. Supposing that a grant was

given to a private organization and it comes up with some process that

is unique, who would own the title to that?

The CHAIRMAN. That is not involved in this bill, is it? That was

involved in the bill that we had on the floor last week.

Mr. MATSUNAGA. That is what I am referring to. Is not the same

problem here involved?

Mr. SPENCER. In general, our policy on the results of research are

that such discoveries must either be patented to the Government or

made available under a license which has to be approved by the

Department.

Mr. MATSUNAGA. Do you have a contractual agreement?

Mr. SPENCER. With the grantee.

Mr. MATSUNAGA. So that the title would belong to the Government?

Mr. SPENCER. Yes, sir.

The CHAIRMAN. All right. You may proceed.

Mr. SPENCER. Section 3 authorizes the Department to provide

liability insurance coverage on the operation of its motor vehicles in

foreign countries. This is a problem which has plagued us for a

number of years. It is not large, so far as its proportions are concerned. The total amount of expense involved would be only a few

thousand dollars, but as it is now our employees operating motor

vehicles in foreign countries, if they are protected by insurance, have

to pay their own premiums, which seems very unfair and which has

been quite a burden on them in some instances.

The CHAIRMAN. That is liability insurance?

Mr. SPENCER. Yes, sir.

Mr. GRANT. Mr. Minor will discuss the proposal with respect to

agricultural attaches.

Mr. MINOR. Mr. Chairman, the Department is requesting authorization for the Secretary to permit an agricultural attaché or other

employee of the Foreign Agricultural Service assigned to duties

overseas to be brought back to the United States for a period of

reorientation with domestic agriculture without having to take a

reduction in grade in the event that there is no position available at

his particular grade. Generally there will be positions that fit the

man's qualifications at his grade, but if we brought back a grade 15

who is an expert in marketing and there happened not to be an opening

at that time in that grade, he could be assigned as a marketing specialist and go ahead and do his work here and become reoriented and

prepare himself to go back out again.

Such assignments would be limited to 3 years. And at the end of

3 years we would have to make other arrangements if there was not

a job available at that time or he was not ready to go back to the field.

The CHAIRMAN. He has to come back here for 3 years to be reoriented?

Mr. MINOR. Yes. They would actually carry on assigned work

here. We rotate our people between Washington and the field.

The CHAIRMAN. I know that. I believe in rotation. I believe

in bringing them back here. If a man has been away from home for
FACILITATE WORK-DEPARTMENT OF AGRICULTURE 7

10 years I believe that he should be brought back to this country,

but I do not see why, if he comes back, he has to hang around Washington for 3 years, even though he is working.

Mr. MINOR. You do not learn U.S. agriculture over again quickly.

For most attaches the period of orientation is 1 or 2 years.

The CHAIRMAN. I think there should be some limit on it. I do not

know of any agricultural attaché who needs 3 years to become familiar

again with American agriculture.

Mr. MINOR. I do not, either, think that he usually needs that long

a period.

The CHAIRMAN. I do not see why you set it at 3 years.

Mr. MINOR. We would seldom use the 3-year period.

A similar authorization in the State Department, I believe, is 4 years

but we have held to 3 years. And we do not expect that we would

be using that generally.

It is possible that the particular post that we would want to send a

man to might not be open exactly at the time that he would be ready

to go out again. This timing is a part of the picture in fitting assignments all over the world. We anticipate that the authorization will

be used for a very few people. The legislation limits its use to not

more than 15 at any one time and we anticipate that we generally will

not use nearly that many. It will facilitate our rotation of personnel

and make our work here and in the field more effective.

The CHAIRMAN. For how many years do our attaches stay abroad?

Mr. MINOR. They go for 2-year tours after which they are usually

back for a short period of home leave and go out for another tour.

Most of them serve from 4 to 6 years before they are assigned back

here.

Mr. OLSON. Mr. Chairman, I would like to suggest that they spend

some time in the farm communities when they come back to the

United States to reorient themselves to American agriculture. And I

feel that it might also be of benefit for some who have never seen a

family farm and who have been working in the Department downtown for a long time.

The CHAIRMAN. Amen.

Proceed with your statement.

Mr. MINOR. They do spend some time out in the field. They

spend their home leave out there, usually.

I believe, unless there are some questions, that covers it.

The CHAIRMAN. Are there any further questions?

Mr. FINDLEY. The purpose of this section is to bring them back

for a maximum of 3 years, when they come back?

Mr. MINOR. That is correct.

Mr. FINDLEY. Is that assignment voluntary on their part or is it

generally required?

Mr. MINOR. Usually we work together on it, but we do order them

back. In other words, we bring them back even though they might

like to stay out without coming back.

Mr. FINDLEY. This pay protection would not be for special extra

pay because of oversea duty?

Mr. MINOR. Oh, no, it is at the regular grade and pay. Their

salaries are in line with the stateside people. This amendment would

not mean any additional pay for anybody but would avoid the

necessity of reducing them in case there is not a place available in the
8 FACILITATE WORK-DEPARTMENT OF AGRICULTURE

Department which fits their qualifications and which would give them

the kind of experience that they need to go back out again.

Mr. GATHINGS. This follows what Mr. Findley asked about. Do

they get additional emoluments over and above their grade 15 pay,

for example, when they are abroad, and if so, when they come back

to this country they would lose that additional percentage, would

they not?

Mr. MINOR. They get a quarters allowance or quarters are furnished overseas. This is standard for people who are stationed in

foreign countries. In a few posts, where the costs are expecially

high, they get a cost-of-living adjustment. At some of the posts

where living conditions are extremely difficult they get what is known

as a hardship allowance.

Mr. GATHINGS. What percentage would that hardship allowance

be?

Mr. MINOR. That can go as high as 25 percent. There are very

few posts that have the hardship allowance, and still fewer that have

the 25 percent. When they come back to the States they get nothing

except their salary.

Mr. GATHINGS. Thank you.

Mr. MINOR. As a matter of fact, sometimes they look on the service

here as a letdown since they have to provide their own housing and

they get none of these other allowances. It makes quite an adjustment necessary.

The CHAIRMAN. You may proceed.

Mr. MINOR. Section 5, Mr. Chairman, authorizes the Secretary of

Agriculture to release currencies set aside under section 104—A,

Public Law 480, when he determines that the currency set aside in

the particular country is in excess of the needs within a reasonable

period of time for the market development program. When, for

example, a billion dollars' worth of foreign currency is received for

commodities under title I, at least 5 percent of that total, not country

by country, but of the total, is required to be set aside for market

development. This means $50 million for each $1 billion of sales

proceeds.

Our market development program is running at a level of obligation

of some $16 to $17 million per year at the present time. The

currencies that are set aside are building up faster than the rate of

obligation. Most of the currencies that are accrued under title I are

in the excess currency countries or in countries where market development opportunities are limited. The set-aside is requested of amounts

available for U.S. use, in currencies which are needed for market

development. We also make full use of the provision, which the

committee provided, for conversion from one country to another to

permit us to do work in potential dollar market areas. However,

there is a buildup in certain countries of currencies which cannot be

converted and which we do not need in the countries where they

accrue. This is particularly true in the excess currency countries

and in countries like Korea and Iceland, where market development

opportunities are quite limited.

The proposed amendment would permit the Secretary, on a selective

basis, to release currencies which he determines are not needed. We

would strongly urge the adoption of the amendment.
FACILITATE WORK—DEPARTMENT OF AGRICULTURE 9

The CHAIRMAN. When you say "release," you mean just to give

it back to the treasury?

Mr. MINOR. No, give it back to the Treasury of the United States—

release it from the set-aside for market development. It would still

belong to the United States. It would not change that at all. It

would simply release it from being set-aside for market development.

The CHAIRMAN. I see.

Mr. FINDLEY. Would these currencies then be available for any

other specified and authorized U.S. uses?

Mr. MINOR. That is right.

Mr. FINDLEY. Would this provision be retroactive so that any funds

for market development unused in previous years in these recipient

countries would then automatically be released for U.S. uses in those

countries?

Mr. MINOR. Any that is set aside for U.S. use, regardless of when

it was set aside, could be released.

Mr. FINDLEY. And the effect of this amendment would be to release

any funds accumulated in the past?

Mr. MINOR. It would permit their release. There is another provision of law which has permitted the Treasury to go ahead and actually

use the currency where it was needed, but they were still obligated to

provide the funds for market development when they were called for.

It would in that case release the obligation to replace the currencies.

To the extent that it will not be needed in a reasonable time, we believe

that it should be released to the Treasury.

Mr. TEAGUE of California. I have considered this market development part very important and worthwhile as a project, and I would

like to say for the record and to express the hope that the Department

will certainly not cut down on its efforts to develop foreign markets.

As I understand the situation there are few ways that the foreign

country can be used properly. And this seems to me one of the best

ways. I hope that there will be not too much of a cut or to be used

for some other purpose.

The CHAIRMAN. I quite agree with you, Mr. Teague. I am just

wondering why you have not used all of this money for market development. We sit around here with $8 billion or $9 billion invested

in agricultural commodities stored in warehouses which are packed

and jammed. You cannot tell me that you could not use more of

this money than you are using for greater market development. I

know that in some places where we have used this money we have

gotten benefits, but what bothers me all of the time is that the Department is not trying to do as much as they could and should do

with these funds.

Could you tell us how much you have in Pakistan and in India?

Mr. MINOR.. On the basis of estimates of sales through June 30,

1965, we will have a total set-aside of approximately $260 million of

which about 13 percent is in India.

In other words, there is about $33 million in India. The amount

in Pakistan is about $25 million. The opportunity to expand markets

in India and Pakistan is limited. We are using Indian and Pakistani

currencies to the extent that we can make them effective.

The CHAIRMAN. Could you not use that money in some other

country?
10 FACILITATE WORK---DEPARTMENT OF AGRICULTURE

Mr. MINOR. Only the part that is subject to conversion under the

agreements, I will make two points. We have no intention of releasing any currency that we believe can be used for market development in the country where it is located. We have no intention of

releasing any currency which can be converted into currencies to be

used in other places. In other words, all of the currencies which can

be converted will be held as will currencies which can be used in India.

When we could ever use $35 million in India I do not know, and we

are converting all that we can convert from there.

The CHAIRMAN. We have one loan to India of $2,200 million which

took up almost all of the moneys that we authorized for the whole

wide world. We gave them 45 percent of the money; we loaned the

other 45 percent, and the remainder was left for U.S. uses.

Do we now propose to give them back that amount?

Mr. MINOR. We do not propose to give any of it back to India.

The CHAIRMAN. And we do not propose to give it to anybody else?

Mr. MiNoR. It would still be available for other U.S. uses.

The CHAIRMAN. We could use some of those funds in some other

country, couldn't we? Can you use it in Italy, for example?

Mr. MINOR. In Italy?

The CHAIRMAN. In Italy, yes.

Mr. MINOR. We have been convertin,

b

money into Italy. We

converted some $1 million into Italy last year for use in market

development. I do not know whether it was from India or Poland

or where. We are converting money into Italy.

The CHAIRMAN. What is wrong with that? Seventy-five percent

of all of the funds are in those three countries, India, Pakistan, and

Poland, are they not?

Mr. MINOR. About 38 percent of the funds are in the seven excess

countries which includes both the ones you have mentioned.

The CHAIRMAN. What you are doing is releasing it from market

promotion and usin,

b

it for something else; is that right?

Mr. MINOR. Yes, but we would not release any that can be used

effectively for market development. Also the Secretary, under the

set-aside provision, can request the set-aside of currencies received in

repayments of loans and interest. There are large sums in many of

these countries that have been loaned to the country, and as those

are repaid the Secretary can place those currencies in the set-aside if

the needs should arise.

The CHAIRMAN. Do you not agree that there are many places in

the world that we could use all of this money for promotional purposes

when we are sitting here in this country with billions of dollars of

commodities that we cannot give away.

Mr. MINOR. No, sir; it is not practical to use it in some places and

it is not possible to move much of it into the places where it could be

used effectively.

The CHAIRMAN. Did you say that you could not take the money

from India, for example, and convert the rupees and use them somewhere else?

Mr. MINOR. We can within the limits that are prescribed in the

agreements and none of that will be released. No money that can

be converted from Indian rupees to any other country's currency will

be released at any time.

The CHAIRMAN. All right. Thank you.
FACILITATE WORK-DEPARTMENT OF AGRICULTURE 11

Mr. FINDLEY. In future agreements under title I will you still

provide 5 percent which is earmarked for market development in

each of these agreements?

Mr. MINOR. The law requires that it be done, yes.

Mr. FINDLEY. So that this authority would not be used to reduce

it to, say, 3 percent based on the actual usage of the currencies in

the past?

Mr. MINOR. No, the set-aside is required to be 5 percent of the

total proceeds from the agreements, which are signed. The amendment does not change the 5-percent requirement nor does it change

the requirement that 2 percent of the 5 percent be available for

conversion to other countries where it is needed more.

Mr. TEAGUE of California. I would appreciate having two or three

examples of how you are going to use the money or how the money

will be used which is released.

Mr. MINOR. Which is released?

Mr. TEAGUE of California. Yes.

Mr. MINOR. Let us take Korea, for example: I do not have exactly

the amount that is there, but we have set aside substantially more

than practical judgment would indicate to us can be used for market

promotion in Korea because of the limited power to buy. When

this is released the Secretary would simply write to the Secretary of

the Treasury and say, "I release so much of the currency which was

set aside for market development in Korea." It would then be

available in the Treasury to be used for any of the purposes specified

in section 104 of Public Law 480. The amount available in each of

the various U.S. use items of section 104 is spelled out in the appropriation acts of the Congress. So it would actually be the Congress

that would be determining which sections would be authorized to

use them.

Mr. TEAGUE of California. Could they be used as a part of our

overall foreign aid program, military assistance, or economic aid to

foreign countries?

Mr. MINOR. There are provisions in the act for some acquisitions

of materials and things like that, for the programs; yes, sir.

Mr. TEAGUE of California. Thank you.

The CHAIRMAN. What are some of the purposes for which they

might be used and in what countries would there be these releases?

Mr. MINOR. Most of the release, for instance, would be in countries

like Poland, India, Pakistan, and Egypt. Those are the principal

excess currency countries. And Israel, too. There would also be

the countries like Iceland and Korea. And I would have said earlier

Taiwan, but now I am not sure about it. These are the type of

countries where the release would take place. It would not be released

where it can be used for market development.

Mr. POAGE. How about Brazil—are you using it there at all?

Mr. MINOR. There is a fairly substantial amount in Brazil but

I would not want to commit myself on Brazil without a further look

at the figures. Brazil ,possibly would be a place where some could

be released.

Mr. POAGE. You have vast amounts there now.

Mr. MINOR. Yes, it is accumulating there.

Mr. POAGE. You are using a substantial amount of the money?
12 FACILITATE WORK-DEPARTMENT OF AGRICULTURE

Mr. MINOR. That is right. It takes rather large amounts to accomplish very much in Brazil, with the exchange rates and price level

as they are.

Mr. POLANCO. Can those funds be used in Latin America?

Mr. MINOR. Yes. We can convert the currencies that can be

converted to any country where we want to use them. I do not

believe that there is any country in Latin America where there would

likely be any large excess except, possibly, in Brazil.

Mr. POLANCO. In Brazil?

Mr. MINOR. Yes. And in the others I think that we would need

the currency being generated.

The CHAIRMAN. flow does it happen that in Poland you should

have such enormous amounts of currencies?

Mr. MINOR. Through title I sales in previous years. As you

know, these currencies have not been loaned to Poland and if they

are not used for U.S. uses, the Polish Government is obligated to

repay them in dollars as they become due.

The CHAIRMAN. When will they start paying?

Mr. MINOR. I believe that the first payments are due in 1967—that

is my recollection.

The CHAIRMAN. When they start paying us back in dollars, they

will not be able to trade with us, will they?

Mr. MINOR. The Department would reduce the dollars otherwise

available for purchases but their economic development and increased

trade should enable them to acquire foreign exchange that could be

converted into dollars to maintain substantial purchases from the

United States.

The CHAIRMAN. We have enormous amounts piled up in that

country that we have no use for.

Mr. MINOR. Yes—all of the Polish sales proceeds are for U.S.

uses only. Under the new authorizations for Public Law 480 there

will be no title I sales to Poland, so anythinethat we`use from here

on will be reducing the total.

Under the provisions of the recent Public Law 480 extension, title I

is not now available to Poland.

The CHAIRMAN. Can you sell to them or give it to them?

Mr. MINOR. We can sell to them under other provisions for dollar

credit, but not under title I.

Mr. POAGE. You can make them under title IV.

Mr. MINOR. You can make title IV sales, yes.

The CHAIRMAN. How about that?

Mr. MINOR. I am not in a position to tell you the exact situation at the present time

The CHAIRMAN. Are we making any?

Mr. MINOR. I am sure that we are ready to do so.

The CHAIRMAN. People from the Polish Embassy have come to see

me, and they all want to talk about tobacco and other commodities which they cannot buy. Why can't they buy these commodities, especially ones we have in surplus?

Mr. MINOR. No, I am not aware of that. We have been selling

to them. That does not happen to be my particular field, so that I

am not able to give you complete information on it at the moment, but title IV sales can be made for credit and I am sure will be con- sidered.
FACILITATE WORK-DEPARTMENT OF AGRICULTURE 13

Mr. FINDLEY. The excess currency in Poland is somewhere around

$500 million, I believe.

The CHAIRMAN. HOW much?

Mr. FINDLEY. $500 million, is it not?

The CHAIRMAN. That is what I thought.

Mr. FINDLEY. You say that this will be repaid in dollars. What

percentage of that would be repaid, over what period of years?

Mr. MINOR. All of it except that which is expended for U.S. uses in

Poland or converted to other countries.

Mr. FINDLEY. All of it. So that we can expect eventually to recover all of this money in hard currency; is that correct?

Mr. MINOR. That is the term of the sales.

Mr. FINDLEY. I understand that Egypt and Israel are the only two

countries now utilizing the tourist dollar exchange program. I

understand that India may start it a little later this year. Can you

tell us why it is that this provision which would help our balance-ofpayments problem substantially has not been implemented? There

are 30 countries which have accepted this as an approved use of currencies under title I sales, but in only two is it actually being carried

out, although the authority is on the books for the others.

Mr. MINOR. That is not a responsibility of the Department of

Agriculture and I am not prepared to state the facts on it. It is the

Treasury Department that makes those sales through U.S. Embassies.

Mr. FINDLEY. SO far as you are aware, you cannot implement this

tourist dollar exchange program, can you?

Mr. MINOR. That section is not assigned to the Department of

Agriculture. We have no responsibility for it.

Mr. FINDLEY. Thank you.

Mr. POAGE. May I ask in that connection how anyone could

reasonably expect tourists to buy these counterpart funds at the

present time when there is no inducement to the tourist to buy them,

is there?

Mr. MINOR. I am not the expert on that, Mr. Poage, but as far as I

know they do not get more at the embassy for them than they would

be able to get otherwise.

Mr. POAGE. They are liable to get less in some cases.

The CHAIRMAN. A man was here yesterday who was going on a trip

and he had to buy them at the Treasury. You say that he can get

them at the embassies?

Mr. MINOR. In certain countries they are available. I am not

prepared to say which countries.

Mr. FINDLEY. In Israel and Egypt right now.

The CHAIRMAN. He could not walk into the Embassy in London

or Rome or any other place and buy them?

Mr. POAGE. He should be able to buy them anywhere where there

are excess currencies on hand.

The CHAIRMAN. I know of two countries where they can. You say

there are only two countries in the world where they can do that?

Mr. FINDLEY. Yes. I might say that I offered an amendment to

Public Law 480 which became the authority for this program. I have

encouraged the Treasury ever since to promote it. It has been promoted on a very meager basis by the Treasury and the State Department. Knowledge of this exchange opportunity is very limited.

There has been some sale of these currencies, Mr. Poage, in Egypt and

Israel I believe.
14 FACILITATE WORK-DEPARTMENT OF AGRICULTURE

It is extremely limited considering the fact that most people going

to Egypt and Israel do not even know that it exists. With good promotion by the Treasury and the State Department I think that it

could be of tremendous assistance to our balance-of-payment

problems.

Mr. POAGE. Under the law of the United States, not Egypt, not

Israel, but of the United States our Government sells these currencies

to any tourist that wants them, as I understand it. The United

States must sell them to these tourists; is that not right?

Mr. MINOR. The authorization is for the United States to sell

them, yes.

Mr. POAGE. In Egypt and Israel, as I understand it, you take these

funds that are not allocated to American uses and you use them for

sales to tourists; is that correct?

Mr. FINDLEY. They are funds which are necessarily allocated to

U.S. uses.

Mr. POAGE. Is that anywhere in the world?

Mr. FINDLEY. But the tourist cannot buy currencies there.

Mr. POAGE. Can he buy if the United States wants to sell them

to him?

Mr. FINDLEY. No, not according to my understanding.

Mr. MINOR. They are for the use of the U.S. Government for its

purposes.

MT. FINDLEY. For specific purposes.

The CHAIRMAN. You mentioned Egypt. If an American wants to

go to Egypt, could he go right down here to the Treasury. or State

Department and buy some counterpart funds for use there?

Mr. FINDLEY. He could go to the Embassy in Egypt and buy them.

The CHAIRMAN. Can he buy them here?

Mr. MINOR. No, he cannot.

The CHAIRMAN. He cannot buy them here?

Mr. MiNoR. For that private individual that is correct.

The CHAIRMAN. He can go to Cairo and buy the foreign currencies?

Mr. MINOR. Yes, sir. He could go to the Embassy and buy the

currencies and expend them for whatever purpose that he wants to.

Mr. POAGE. But the important question is, what advantage is

there to the individual? I know that it is an advantage to the

Government. What advantage is there to the individual to do so?

Mr. MiNoR. The advantage to the individual is that, so far as I

know, as a citizen of the United States he is interested in the welfare

of the United States and when he buys those currencies his dollars

come directly back to the Commodity Credit Corporation instead of

going into the treasury of the country where he is located or to a

private firm there and becoming dollar exchange.

Mr. POAGE. Of course, you could say the same thing if I buy this

water pitcher and it is made in the United States, that is an advantage

to me. But, frankly, I do not know whether it is made in the United

States or in Japan, this water pitcher. It is too filled with water for

me to turn it over and see. That is an argument which would lead to

the belief that everybody in the United States, if he refused to buy

any foreign goods in the United States, to buy a water bottle like this,

that is made in Japan, if it is, it has exactly the same effect upon our

trade as when I go to a foreign country and spend my dollars to buy their local currency, does it not?
FACILITATE WORK-DEPARTMENT OF AGRICULTURE 15

Mr. MINOR. Yes, I think that it does or will have the same effect

on the balance of payments.

Mr. POAGE. Yes. There is enough business done in the United

States with many of these things that are imported into the United

States where the people buy them, and people who are going abroad

are going to spend money when they are abroad. And if there was

any advantage to the American citizen the Government would sell a

lot of this currency, but if there is no advantage to the citizen he will

not buy it.

On the contrary, he usually has to pay the highest rate of exchange

anywhere at the Embassy. And if he has to pay that high rate he

will not be very much interested in buying his currency there, will he?

Mr. MINOR. Since it is not our responsibility I would have hesitancy

in quoting opinions on that.

Mr. POAGE. You just pointed out the responsibility of it is that it

would help this Government, you said. And by the same token it is

your responsibility. You are charged with the responsibility of helping

the foreign aid program by this sale in foreign countries. And you do

have a responsibility to know something about it and to have opinions

on it and to express them anywhere where it might be helpful. I

think that you do have a responsibility. And I think that you have

a lot more responsibility than that American citizen over in Cairo,

Egypt.

Mr. MINOR. It happens that the administration of that provision

is assigned to another department of the Government and I cannot,

nor can anyone in the Department of Agriculture, take action.

Mr. POAGE. You are talking to people who can take action.

Mr. MINOR. Yes.

Mr. POAGE. And I am saying that you have some kind or degree of

responsibility to give some opinion if you have any as the result of

your experience in handling these things.

Mr. MINOR. Wherever possible I think they should be available

for purchase. There is no question about that. I think that we

have stated that. That has been stated numerous times.

Mr. POAGE. What about the inducement to buy them?

Mr. MINOR. I do not know what would be required to give a

better rate for those currencies.

Mr. POAGE. In your negotiations for new agreements, because

after 'you have made the agreement you cannot get these people to

make it any more favorable to the United States but you can oftimes

get it quite favorable to the United States while making the agreement. What about that?

Mr. BURTON of Utah. Maybe you can help me out. Did I understand correctly that we already have such agreements with 30

countries?

The CHAIRMAN. More than that.

Mr. POAGE. I think probably that many have agreed to it, yes.

Mr. BURTON of Utah. Am I also given to understand that in only

two of these countries it is possible to make such arrangements?

Mr. POAGE. I understand that is probably true, from what has

been said here.

Mr. FINDLEY. We set up the machinery to carry it out. I think it

is unfortunate because of the dollar exchange problem. Your suggestion about an inducement to the citizen, obviously, would be

helpful.
16 FACILITATE WORK-DEPARTMENT OF AGRICULTURE

The CHAIRMAN. Would it be a gain?

Mr. MINOR. It is not 100-percent gain.

The CHAIRMAN. It would be a gain to the Treasury if we could do

that.

Mr. MINOR. When a dollar is expended in a foreign country that,

dollar of exchange ceases to be a credit to the United States. If currencies are bought at the Embassy the whole dollar comes back, but

the ability for the countries to buy U.S. commodities is decreased compared to the country purchases so that it is not a 100-percent gain.

The CHAIRMAN. Do we get a better rate at the Embassy in any

country than we do on the open market?

Mr. MINOR. That varies by countries. In some countries the

Embassy rate may be more favorable and in others it may be less

favorable. There is usually a charge at the hotels and other banking

institutions for converting the currency, which is not charged at the

Embassy, so that most of the time in my experience I get just a little

bit better rate at the Embassy than I would get at the hotels or

the banks.

Mr. FINDLEY. Along that line, it has been suggested to permit the

tourists to utilize this exchange authority to bring back duty free an

additional amount of purchases from that country. This privilege

would not hurt our balance-of-payments situation one bit and it

would provide extra inducement for the tourist to go to the Embassy

to make the exchange. Perhaps $100 extra duty-free purchase might

do the job, or even $200 or more. The only loss that we would have

would be the loss of the duty and that would be minor compared to

the gain to our balance-of-payments problem.

The CHAIRMAN. That would have to go to the Ways and Means

Committee.

Mr. FINDLEY. Yes, it would. And when they take up this proposal

for a change to $50 as the duty exemption for tourists they might

consider that.

Mr. TEAGUE of California. I want Mr. Poage to know that on the

Republican side of the table we have determined that these are made

in Connecticut, good American water bottles. [Laughter.]

Mr. GRANT. There are three or four more sections that we should

like to cover, if you desire.

There is section 6 of the bill which would permit the employees of

the Department while detailed to States to retain their health insurance benefits in the same manner as for retirement and group life

insurance. I think this is a relatively simple matter and if it is all right with the committee we will move on to section 7. If there are

any questions we will be glad to answer them.

Section 7 would provide authority to make advances to the Department working capital fund. The statement which the Secretary attached to his letter to the committee I think explains rather fully the

purposes of this advance or this authority. It would not extend the

availability of the fund. It would not increase the cost. It would simply provide a more simple manner of carrying on the administrative operations under this working capital fund.

The CHAIRMAN. All right. Go to the next one.

Mr. TEAGUE. I have one question, if you please. What kind of

transfer do you have in mind?
FACILITATE WORK-DEPARTMENT OF AGRICULTURE 17

Mr. GRANT. This finances central mimeographing services, supply

services, motion picture and arts and graphic activities of the Office

of Information and also central payroll services. At the beginning

of the year the working capital is depleted, so we would approve advances to the working capital fund based on firm orders from the

agencies for work to be performed and then as the services are performed they would receive credit for it.

Mr. STALBAUM. This section would transfer within the agency?

Mr. GRANT. No. 8 has to do with enabling the Department to

reimburse an appropriation within an agency for services performed

for another appropriation. I will give an example in the Soil Conservation Service which has an appropriation for assistance to soil

conservation districts, for flood prevention, and for watershed protection. They have a central Soil Mechanics Laboratory to serve all

of these appropriations. A simple way to operate such a central

service is to pay all of the expenses out of one of these appropriations

and then get reimbursement from the others, so that you can have

each appropriation carry its own share of the costs. The General

Accounting Office in an opinion some years ago said in effect: "No,

you have to distribute each expense to all of these funds." And this

is an expensive operation. So this is proposed in order to permit

us to keep the charges in one place and then distribute them at the

end of the accounting period. The ultimate charge is the same to

each appropriation. The General Accounting Office decision said,

in effect, that this kind of legislation is the way to cure the problem.

As a matter of fact, Congress has provided this kind of authority

to certain other agencies where this situation exists, and the General

Accounting Office has not raised any question about this particular

proposal.

Mr. TEAGUE of California. Is this section identical with the section

contained in the bill that the House passed last year?

Mr. GRANT. Yes, sir.

Mr. TEAGUE of California. And the Appropriations Subcommittee

of the House had no objection?

Mr. GRANT. Not to my knowledge, sir. The last section, Mr.

Chairman, has to do with a proposal to repeal a provision relating to

shipments of grain from public warehouses to other warehouses without

cancellation of warehouse receipts. This is a provision that has been

in the law for many years. It has not been practical to carry it out.

It is the same provision that we discussed with the committee last year

and which was approved by the committee. Mr. Miller, of the

Consumers and Marketing Service, will be glad to answer any questions that you may have on it.

The CHAIRMAN. Are there any questions?

Mr. PoAciE. I would like to know what it does do when you say it

repeals the law? The present law allows the movement of this grain

from a public warehouse to a private warehouse without changing the

receipts; is that right?

Mr. MILLER. The present law provides for the promulgation of

regulations to cover this subject. However, in the 25 years since the

law has been on the books, the Department, for one reason or another,

has not promulgated those regulations. I believe the reason is that

the Department feels that this industry is adequately regulated under

both State and Federal laws and under other warehousing statutes,
18 FACILITATE WORK-DEPARTMENT OF AGRICULTURE

and that it would be confusing from the standpoint of the administration and that it would be expensive to impose new regulations and

would be unnecessary.

Mr. POAGE. Why is there a necessity of repealing the law if it has

been on the books for 25 years and the Department has not taken

advantage of it?

I admit that it does not appear to do any good, but what possible

harm does it do?

Mr. MILLER. It is doing no harm that I know of, Mr. Poage.

The CHAIRMAN. Let us repeal it anyway. [Laughter.]

Are there any further questions? If not, we will go into executive session.

Mr. GRANT. Thank you very much.

The CHAIRMAN. Thank you.

(Whereupon, at 11:20 a.m., the committee proceeded into executive

session.)

0