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SALE OF GRAIN STORAGE FACILITIES '‘''

GOVERNMENT

Storage

HEARING

BEFORE THE

SUBCOMMITTEE ON DOMESTIC MARKETING

AND CONSUMER RELATIONS

OF THE

COMMITTEE ON AGRICULTURE

HOUSE OF REPRESENTATIVES

EIGHTY-NINTH CONGRESS

SECOND SESSION

ON

H.R. 12360

JULY 18, 1966

Serial QQ

Printed for the use of the Committee on Agriculture

436

U.S. GOVERNMENT PRINTING OFFICE

68-394 WASHINGTON: 1966

-

t".=•
COMMITTEE ON AGRICULTURE

HAROLD D. COOLEY, North Carolina, Chairman

W R. POAGE, Texas, Vice Chair man

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

MTS. CHRISTINE S. GALLAGHER, Clerk

HYDE H. MURRAY, Assistant Clerk

Jollic J. HEnthuanEa, General Counsel

FRANCIS M. LEMAY, Staff Consultant

PAUL B. DAGUE, Pennsylvania

PAGE SELCHER, Oklahoma

CHARLES M. TEAGUE, California

ALBERT H. QUIE, Minnesota

MRS. CATHERINE MAY, Washington

RALPH HARVEY, Indiana

PAUL FINDLEY, Illinois

ROBERT DOLE, Kansas

LAURENCE J. BURTON, Utah

PRENTISS WALKER, Mississippi

GEORGE V. HANSEN, Idaho

RESIDENT COMMISSIONER

SANTIAGO POLANCO-ABREU, Puerto Rico

SUBCOMMITTEE ON DOMESTIC MARKETING AND CONSUMER RELATIONS

SPARK M. MATSUNAGA, Hawaii, Chairman

HARLAN HAGEN, California CHARLES M. TEAGUE, California

GRAHAM PURCELL, Texas CATHERINE MAY. Washington

THOMAS S. FOLEY, Washington LAURENCE J. BURTON, Utah

JOSEPH Y. RESNICK, New York

STANLEY L. GRIEGG, Iowa

II
CONTENTS

H.R. 12360, a bill to amend the Agricultural Act of 1949 to permit the sale

of grain storage facilities to public and private nonprofit agencies and Page

organizations - 1

Statement of—

Fitzgerald, Ray, Deputy Administrator, State and County Operations,

ASCS, U.S. Department of Agriculture 3

Greigg, Hon. Stanley L., a Representative in Congress from the State

of Iowa 14

Hansen, Hon. John R., a Representative in Congress from the State of

Iowa 27

Heline, Oscar, Marcus County Fair Board, Marcus, Iowa 18

Hungate, Hon. William L., a Representative in Congress from the

State of Missouri 29

Correspondence submitted to the subcommittee:

Freeman, Hon. Orville L., Secretary of Agriculture, report on H.R.

12360, letter of July 18, 1966 2

McGovern, Hon. George, a U.S. Senator from the State of South

Dakota, letter of July 15, 1966 29

SALE OF GRAIN STORAGE FACILITIES

MONDAY, JULY 18, 1966

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON DOMESTIC MARKETING

AND CONSUMER RELATIONS OF THE

COMMITTEE ON AGRICULTURE,

Washington, D.C.

The subcommittee met, pursuant to notice, at 10 a.m. in room

1301, Longworth House Office Building, Hon. Spark M. 

a.m.,

(chairman of the subcommittee) presiding.

Present: Representatives Matsunaga, Hagen of California, Purcell,

Redlin, Greigg, Callan, Teague of California, and May.

Also present: Representative John Hansen.

Mr. MATSUNAGA. The -Subcommittee on Domestic Marketing and

Consumer Relations will please come to order.

The bill which is the subject of hearings before this subcommittee is

H.R. 12360, which will amend the Agricultural Act of 1949 to permit

the sale of grain storage facilities to public and private nonprofit

agencies and organizations. The proposal has aroused interest

among members of our farming community as well as those within

Government circles.

Without objection, H.R. 12360 is made a part of the record at this

time.

We do have a report from the Department of Agriculture concerning this bill, a report which was requested of the Department by

Chairman Cooley of the full committee.

Without objection, that report is made a part of the record at this

time.

(H.R. 12360 introduced by Mr. Greigg and the departmental report

follow:)

[H.R. 12360, 89th Cong., 2d sess.]

A BILL To amend the Agricultural Act 01 1949 to permit the sale of grain storage facilities to public and

private nonprofit agencies and organizations

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

America in Congress assembled, That section 404 of the Agricultural Act of 1949,

as amended, is amended by inserting before the period at the end thereof the

following: ": Provided, That, notwithstanding any other provision of law, where

a grain storage facility is not needed by the Secretary of Agriculture and, upon

being offered for sale no person offers to pay the minimum price set by the Secretary for such facility for use in connection with storage or handling of agricultural

commodities, then the Secretary may, without declaring such facility to be excess

property, sell it to any public or private nonprofit agency or organization for use

for the purposes of such agency or organization".

1
2 SALE OF GRAIN STORAGE FACILITIES

11011. HAROLD D. COOLEY,

.Chairman, Committee on Agriculture,

House of Representatives, Washington. D.C.

DEAR MR. CHAIRMAN: This is in reply to your request of February 3, 1966,

for a report on H. R. 12360, a bill "To amend the Agricultural Act of 1949 to permit

the sale of grain storage facilities to public and private nonprofit agencies and

organizations."

The bill provides that where a grain storage facility is not needed by the Secretary and cannot be sold to any person at the minimum price set by the Secretary

for use in storing or handling agricultural commodities, he may sell it to any

public or private nonprofit agency or organization for its use.

Since January 1961, the Department has disposed of 256.7 million bushels

of grain storage facilities owned by the Commodity Credit Corporation (CCC).

This storage was no longer needed directly by the Corporation due to the effectiveness of the feed grain program in reducing grain surpluses. There was,

however, a continuing private need for most of this storage capacity in programs

of CCC. A total of 252.7 million bushels of the storage space was sold through

public auctions and sealed bids to purchasers who certified that the bins would

be used for the storage or handling of agricultural commodities. This represented

the continuing need for use of these facilities by the respective purchasers in

programs of CCC. It is estimated that at least 90 percent of these bins was

purchased by farmers and the balance by warehousemen, cooperatives and others

for grain storage. Approximately 4 million bushels which would not be sold at

fair prices for the storage or handling of agricultural commodities were transferred either to other agencies within the Department for use in connection with

their programs, or were transferred to the General Services Administration (GSA)

for disposition.

Property which is "excess" to the needs of the Federal agency which has control

of the property or "surplus" to the needs of any Federal agency, must be transferred or disposed of in accordance with provisions of the Federal Property and

Administrative Services Act, 40 U.S.C. 471 et seq.

Commodity Credit Corporation has no authority to dispose of its storage facilities which have been acquired for the storage of its own grain except pursuant to

other programs of the Corporation.

In actual practice ASC State and county committees determine the bins which

are no longer needed by CCC directly for its storage needs. Upon approval by.

the Department in Washington, these bins are offered for sale to be used in programs of the Corporation, such as for storage under price support programs, reseal

programs, and commercial warehouse storage under the Uniform Grain Storage

Agreement. To insure that bins are eligible for sale for program uses, rather than

for other uses which could only be authorized under regulations of GSA, each

purchaser of a bin which is to be sold for CCC program uses is required to certify

that the structure purchased from CCC will be used in connection with the storage

or handling of agricultural commodities.

Bins which are not needed for these purposes are then declared "excess" property

and are offered to other agencies within the Department of Agriculture for use in

connection with their programs. If not needed by other departmental agencies,

the bins are reported to the GSA for transfer to other Government agencies or

other disposal.

Approximately 80 percent of the total storage capacity still owned by CCC is

made up of the standard round 3250 bushel steel and aluminum bins which have no

practical use other than for grain storage. The balance of the storage capacity

consists mostly of large flat buildings and miscellaneous types of storage which

have other uses besides grain storage.

We have no objection to the procedures under existing legislation. If, however,

in the judgment of the Congress further consideration is to be given to enactment

of legislation embodying the objectives of H. R. 12360, a revision of the bill is

recommended for the technical reason discussed below.

It is the view of this Department that amendment of Section 404 of the Agricultural Act of 1949 to meet the objectives of H. R. 12360 is not appropriate.

That section deals with Section 32 of Public Law 320, 74th Congress, as amended,

7 U.S.C. 613c, and Section 6 of the National School Lunch Act. The word

"facilities" used in Section 404 has no bearing or connection with grain storage

facilities. We believe that it would be more logical to amend the Commodity

Credit Corporation Charter Act. Accordingly, we suggest that if the legislation

DEPARTMENT OF AGRICULTURE,

Washington, D.C., July 18, 1966.
SALE OF GRAIN STORAGE FACILITIES 3

is enacted, the words in the bill "section 4(h) of the Commodity Credit Corporation Charter Act, as amended," be substituted for "section 404 of the Agricultural

Act of 1949, as amended;" that the words "owned by the Corporation" be inserted

after words "grain storage facility;" and that the word "Corporation" be substituted for "Secretary of Agriculture" and "Secretary".

The Bureau of the Budget advises that there is no objection to the presentation

of this report from the standpoint of the Administration's program.

Sincerely yours,

ORVILLE L. FREEMAN.

Mr. MATSUNAGA. We have as our first witness this morning from

the Department of Agriculture Mr. Ray Fitzgerald, Deputy Administrator of State and County Operations, ASCS.

Mr. Fitzgerald, we are pleased to have you with us. We shall

be pleased to hear from you.

STATEMENT OF RAY FITZGERALD, DEPUTY ADMINISTRATOR,

STATE AND COUNTY OPERATIONS, ASCS, USDA, ACCOMPANIED

BY T. SCOTT MOWRY, DIRECTOR, BIN STORAGE DIVISION,

ASCS, USDA, AND JOHN H. SHOUSE, OFFICE OF GENERAL

COUNSEL, USDA

Mr. FITZGERALD. Thank you, Mr. Chairman. I have with me

Mr. T. S. Mowry, Director of the Bin Storage Division of ASCS

and Mr. John Shouse, Office of the General Counsel.

My name is Ray Fitzgerald. I am Deputy Administrator of

State and County Operations, ASCS.

I welcome the opportunity to appear before this committee to

present our views on H.R. 12360.

Successes of the feed grain programs beginning in 1961 have greatly

reduced grain surpluses and storage requirements. On January 1,

1961, CCC-owned storage was filled to 84.5 percent of capacity as

compared to 33.5 percent today.

Due to the substantial reduction in grain stocks, the Department

began in 1961 to dispose of bins that no longer were needed for grain

storage directly by the Corporation. There was, however, a continuing

private need for most of this storage capacity in programs of CCC.

Bins which have been acquired by CCC for the storage of CCCowned grain and for which the Corporation no longer has a need are

offered for sale to be used in programs of the Corporation such as the

price-support programs, reseal programs, and commercial warehouse

storage under the uniform grain storage agreement. Such disposals

are made under the general authority of section 4(m) of the Commodity Credit Corporation Charter Act, 15 U.S.C., 714b(m), which

provides that the Corporation "shall have such powers as may be

necessary or appropriate for exercise of the powers specifically vested

in the Corporation," and section 5(b) of the act which provides that

"in the fulfillment of its purposes and in carrying out its annual budget

programs submitted to and approved by the Congress * * * the

Corporation is authorized to—

*

"(b) make available materials and facilities required in connection

with the production and marketing of agricultural commodities."
4 SALE OF GRAIN STORAGE FACILITIES

The budget estimates for the U.S. Department of Agriculture for

the fiscal year ending June 30, 1966, as submitted to the Congress,

described the storage facilities program of the Corporation as follows:

The Corporation conducts a program to provide storage adequate to fulfill its

program needs. This program is conducted pursuant to sections 4(h) and 4(m),

and 5 (a) and (b).

The Corporation buys and maintains (in storage-short areas) bins and equipment for care and storage of grain owned by Commodity Credit Corporation or

under its control. It makes loans for the purchase, building, or expanding of

storage facilities on the farm and sells to producers and others bins needed for the

storage of grain. Bins sold by the Corporation may be those acquired for resale

for this purpose or those which are no longer required by the Corporation for the

storage of its own grain. The Corporation may also provide storage use guarantees, to encourage building of commercial storage and undertake other operations

necessary to provide storage adquate.to carry out the Corporation's programs.

A total of 253 million bushels of bin storage space has been sold

mostly through public auctions and sealed bids to farmers, warehousemen, cooperatives, and others for use in the storage or handling of

agricultural commodities. To insure that structures sold by the

Corporation will be used for program purposes, each purchaser is

required to certify that the facilities purchased from CCC will be used

in connection with the storage or handling of agricultural commodities.

Pursuant to the Federal Property and Administrative Services Act

of 1949, bins which cannot be sold under the required certification

are offered to other agencies within the Department of Agriculture

for use in connection with their programs. If not needed by these

agencies, the bins are declared to General Services Administration

(GSA) for transfer to other Government agencies or outright sale for

any use. Some 4 million bushels has been transferred either to other

agencies within the Department or to GSA for disposition.

When property of the Corporation cannot be disposed of for programs of the Corporation as previously mentioned, such property is

then "excess." Property which is "excess" to the needs of the

Federal agency which has control of it, or which is "surplus" to the

needs of any Federal agency, must be transferred or disposed of in

accordance with the provisions of the Federal Property and Administrative Services Act (40 U.S.C. 471 et seq.).

We feel that the bin sales program has been very successful. It is

estimated that at least 90 percent of the bins sold are purchased by

farmers and moved to farms. A small percent is purchased by warehousemen to increase their grain storage capacities. This type of

storage is needed on farms in the States where bins are surplus to the

requirements of the Commodity Credit Corporation. Farmers who

buy this storage are able to participate to a greater extent in the pricesupport, loan reseal, and storage programs of the Department.

We have no objections to the procedures under existing legislation.

If, however, the Congress in its good judgment feels consideration

should be given to enactment of legislation embodying the objectives

of H.R. 12360, we recommend revision of the bill for a technical reason.

It is the view of this Department that amendment of section 404

of the Agricultural Act of 1949 to meet the objectives of H.R. 12360

is not appropriate. That section deals with section 32 of Public Law

320, 74th Congress, as amended, 7 U.S.C. 613c, and section 6 of the

National School Lunch Act. The word "facilities" used in section 404

has no bearing or connection with grain storage facilities. We be-
SALE OF GRAIN STORAGE FACILITIES 5

lieve that it would be more logical to amend the Commodity Credit

Corporation Charter Act. Accordingly, we suggest that if the legislation is enacted, the words in the bill "section 4(h) of the Commodity

Credit Corporation Charter Act, as amended," be substituted for

"section 404 of the Agricultural Act of 1949, as amended;" that the

words "owned by the Corporation" be inserted after words "grain

storage facility;' and that the word "Corporation" be substituted

for "Secretary of Agriculture" and "Secretary".

Thank you.

Mr. MATSUNAGA. Thank you very much, Mr. Fitzgerald.

You are then suggesting an amendment of an altogether different

section from that proposed in H.R. 12360?

Mr. FITZGERALD. Yes, sir.

Mr. GREIGG. Mr. Chairman, I have no objection to that technical

change.

Mr. MATSUNAGA. You have no. objection?

Mr. GREIGG. NO.

Mr. MATSUNAGA. One thing that puzzles me is if the language is

left as is, that is the other sections of the bill, at what price would you

be selling these so-called excess facilities?

Mr. FITZGERALD. In either case, Mr. Chairman, they would be

sold presumably at the fair market price.

Mr. MATSUNAGA. Is the language clear enough to insure this?

Mr. FITZGERALD. That is what we have been doing with them thus

far, Mr. Chairman, selling them to farmers and others for storage of

agricultural commodities at the fair market price and presumably

we would make them available to other agencies and nonprofit organizations at a fair market price.

Mr. MATSUNAGA. As I understand it, right now under the present

setup, when you sell to a Government agency requiring the use of

your excess facilities, frequently these facilities are transported to other

areas at a cost to the Government.

Mr. FITZGERALD. Mr. Chairman, we do not sell to other Federal

agencies.

Mr. MATSUNAGA. I mean transferred.

Mr. FITZGERALD. We do transfer; yes, sir. And they are transported oftentimes to other parts of the country; yes, sir, at Federal

expense.

Mr. MATSUNAGA. At rather excessive costs, I am told?

Mr. FITZGERALD. The recipient agency would have to judge whether

the cost is excessive or not.

Mr. MATSUNAGA. It has been suggested that the price to these

nonprofit institutions be the fair market value of the property less

what it would cost to transport the facilities to the agency which

would have wanted the use of the excess facilities.

Mr. FITZGERALD. I do not believe we would have any objection to

that, Mr. Chairman.

Mr. MATSUNAGA. You have no objection to that?

Mr. FITZGERALD. NO.

Mr. MATSUNAGA. Are there any questions?

Mr. TEA GUE. Yes, Mr. Chairman.

It seems to me, Mr. Fitzgerald, you are saying that you have no

objection to this bill if it were amended as you suggested, but that

really you see no real need for it; is that correct?

68-394-- 66 2
6 SALE OF GRAIN STORAGE FACILITIES

Mr. FITZGERALD. I think we are saying, yes, sir, that we are not

asking for the additional responsibility but we would not object to

administering it if we had to.

Mr. TEAGUE. Is it your view that this would save the Government

money or would it cost the Government money?

Mr. FITZGERALD. I suppose, in that it might shortcut the present

procedure, it might conceivably save some money. But I think it

would be somewhat minor.

Mr. TEAGUE. I have not discussed this with Mr. Griegg or anyone

else and I am entirely openminded on it. This would give, would it

not, the Secretary of Agriculture some additional discretion or authority and at the same time remove from the discretion and the

authority that the Administrator of GSA now has for disposing of

surplus property; is that correct?

Mr. FITZGERALD. Yes, sir; I think that is about it.

Mr. TEAGUE. That is all.

Mr. MATSUNAGA. Mr. Greigg?

Mr. GREIGG. Mr. Fitzgerald, just a couple of questions before I

have my own statement in relation to the measure.

Can you give me some indication at the present time as to what

the Commodity Credit Corporation has realized in profits in terms

of money as a result of the sale of these facilities?

Mr. FITZGERALD. I guess I can say it this way, Mr. Greigg: that

our experience thus far is to the effect that we sell the standard 3,250-

bushel round bins, steel or aluminum bins, for about the range of 8

to 10 cents a bushel. This is $260 to $325 a bin. And these bins

cost originally from $500 to $600 f.o.b. unerected.

Mr. GREIGG. I want to draw a distinction between the circular

type bin and the quonset type bin. The primary purpose of this legislation, of course, is to make the quonset type facility available.

Do you have any comment in relation to the sale of the quonset?

Mr. FITZGERALD. We get about $1,000 or $2,000 for what you call

the quonset type building.

Mr. GREIGG. What was the original cost of the quonset facility?

Mr. FITZGERALD. $4,500 to $6,000 unerected.

Mr. GREIGG. Does this include the concrete slab that is required

in order to mount these facilities?

Mr. FITZGERALD. No; we consider this as part of the erection cost.

Mr. GREIGG. From previous history of the sale of these quonset

type facilities, what has happened to the concrete slab once the

quonset has been dismantled and moved to another Federal agency

somewhere else throughout the industry?

Mr. FITZGERALD. Congressman, our expense is somewhat limited,

but usually we do not have to stand the expense of restoration, that

is tearing up the slab and restoring the site for the reason that usually

the landowner, in consideration of our leaving the fencing, the electricity, the slab itself, will let us off without any cost of restoring.

Mr. GREIGG. What happens, Mr. Fitzgerald, when you move it to

a new location? Who stands the cost of laying the new concrete slab

for construction?

Mr. FITZGERALD. The purchaser.

Mr. GREIGG. What if it is another Federal agency? Would this

not be an additional cost to the taxpayer?

Mr. FITZGERALD. They would stand the cost; yes, sir.
SALE OF GRAIN STORAGE FACILITIES 7

Mr. GREIGG. Are we talking about roughly $500?

Mr. FITZGERALD. Yes, about that.

Congressman let me correct that. It is about $2,500 to lay a

slab and costs about $500 to tear one up.

Mr. GREIGG. You indicated that a number of farmers are interested

in acquiring these facilities, and it is very true. Are they in a position

to receive any FHA assistance in the purchase of these storage

facilities?

Mr. MOWRY. We have a farm facility loan program that we will

loan money on these buildings purchased from CCC. I believe it is

a 4-year loan with a total of 5 years to repay, at 4 percent interest.

Mr. GREIGG. They can actually use this money in the purchase of

these units that are surplus?

Mr. MOWRY. Yes.

Mr. GREIGG. We are fortunate, I believe, in seeing the reduction

of surpluses at the present time. These facilities were used in the

storage of these commodities. These quonsets and other facilities

are located in what I would consider to be some rather strategic areas

in the countryside. I know in my district in northwest Iowa they

dot the entire 18-county countryside.

Should a quonset facility be moved from one of my counties in

northwest Iowa to another county in an adjoining State or somewhere

else, to be used by another Federal agency; is there not some merit in

keeping these facilities where they presently are in that the time could

conceivably come when the need would also be great in that immediate

area for the same purpose for which they were originally constructed?

Mr. MOWRY. Yes, sir.

Mr. GREIGG. Are most of the leases for the quonset type facility

lease arrangements that run about a cost of $50 a year for the quonset

type?

Mr. MOWRY. For buildings?

Mr. GREIGG. Right.

Mr. MOWRY. Those leases are at wide variance. Most of them

we entered into in 1949 when land was much cheaper than it is today

and we have not increased them very much. They have been

increased very little. So I would suppose in Iowa—and this would be

just a good guess—it probably would run $150 to $200 an acre something like that. It may be higher. And in some areas like Ohio

industrial centers, it was higher than that. When you get into the

Northwest in a State like Montana where the land was cheaper at

that time, we have leases for 4 or 5 acres for as little as $50 to $75

a year.

GREIGG. Is any of that Government-owned property or is it

by and large leased property?

Mr. MOWRY. Out of some 3,300 bin sites that the CCC leases, the

Corporation owns 33 outright.

Mr. GREIGG. I have, Mr. Chairman, some very specific statements

I would like to make a little later on this morning in relation to the

measure.

I would point out that it seems to me that it is going to be extremely

difficult to convince a farmer or someone who needs one of these facilities for something other than the storage of grain to sign an agreement

that states—

This is to certify that the structures or equipment identified above, purchased

by the undersigned from the Commodity Credit Corporation of the United States
SALE OF GRAIN STORAGE FACILITIES

Department of Agriculture, will be used in connection with the storage and

-handling of agricultural commodities.

The very reason that these facilities are now vacant comes because

-there is no longer the agricultural commodities to store in them.

My concern and the reason I introduced the legislation resulted

from a great local need ranging from school boards to fair boards, to

industrial development corporations, county and State offices for

storage purposes. But I will point this all out to show the members

of the subcommittee in a short period of time why the introduction of

the bill and the need for the facilities. Thank you very much.

Mr. MATSUNAGA. Mr. Callan.

Mr. CALLAN. What are the terms of the lease of the Commodity

Credit Corporation?

Mr. MOWRY. The terms of the lease vary. Generally at the beginning we tried to get anywhere from 5 to 10 years with 5- to 10-year

option on renewal, and wherever we had the large flat permanent-type

storage we always tried to get an option to purchase the land.

Mr. CALLAN. Do you have options to purchase?

Mr. MOWRY. We do not have them on every place we have bin

sites, but mostly where we have the large permanent-type buildings

we do have an option to purchase.

Mr. CALLAN. Do I understand you received about $1,000 for the

steel in 55,000 bushel bins?

Mr. MOWRY. There are two sizes of quonsets, 25,000 bushels and

40,000 bushels.

Mr. CALLAN. You get about $1,000 for them?

Mr. MOWRY. A thousand or 2,000, in that range.

Mr. CALLAN. From 1,000 to 2,000?

Mr. MOWRY. That is right.

I believe in Nebraska that earlier last year they sold a few for

$3,000 or $4,000.

Mr. CALLAN. If you built them new today in a rural area it would

probably cost at least $12,000 to $15,000 by the time you put the

slab down and erect the steel; is that right?

Mr. MOWRY. We checked with a reliable company and asked them

what it would cost to erect a 40 by 100 large quonset-type building

in central Iowa, and they said today it would cost around $13,000,

turn key job.

Mr. CALLAN. What this would mean then, you could probably

realize at least twice what you are getting out of them right now if

you left them on the site; is that right?

Mr. MOWRY. Right now some of these buildings are left on sites

when we sell them because the buyer, the warehouseman, for example,

will go to the owner of the land and make arrangements to lease the

land and in some cases buy it and leave the buildings there. So they

are not all moved when we sell them.

Mr. CALLAN. Do you get more money out of those buildings then?

Mr. MOWRY. No, I would not say we did.

Mr. CALLEN. Do you not think they are worth more than $1,000?

Mr. MOWRY. They are good buildings in most cases.

Mr. CALLAN. It would seem to me if you let it go to an agency or

school district or small industrial development corporation they would

be real pleased to give something like $2,000, $3,000, or $4,000.

Would you agree to that?
SALE OF GRAIN STORAGE FACILITIES 9

Mr. FITZGERALD. Yes, sir.

Mr. GREIGG. Mr. Fitzgerald, do you have any instances you know

of throughout the country at the present time where the purchasers

have signed this statement indicating that they will be used for the

storage of agricultural commodities and yet they are being used for

other purposes?

Mr. FITZGERALD. We have one that I am familiar with at the

present time in a Midwest State where we believe the purchaser

didn't carry out the intent of the certification after he purchased

the building.

Mr. GREIGG. Does the Department follow through to make sure

that once these are sold they are used-for strictly agricultural storage?

Mr. FITZGERALD. No, we do not have any system of checking, formal

system of checking, usually relying upon local information or complaints that are registered with us.

Mr. GREIGG. That is all.

Mr. MATSUNAGA. Mr. Teague?

Mr. TEAGUE. This impresses me as legislation which is probably

meritorious but I suggest we would be asking for trouble if we take

it to the floor without a report from the GSA, since we are taking

some authority and jursidiction away from them and bestowing it

upon someone else. That is just a suggestion.

Mr. MATSUNAGA. We will seek a report then from the General

Services Administration as to what its position is on the matter, if

there is no objection.

Mr. GREIGG. I would like to discuss that based on the attitude in

correspondence I have had with GSA. And here again I think we

must be frank. GSA, like all agencies and departments of Government, have certain jurisdictional areas. I am talking about a piece

of legislation that would make it possible for the sale of these facilities

before that step is taken before given to GSA.

Mr. Teague, I appreciate your suggestion, but I think that this

step comes prior to what would normally be the jurisdiction of the

GSA. I do not see a report is necessary from that administration.

Mr. TEAGUE. I am not requesting it, I am suggesting it is something that ought to be considered.

Mr. MATSUNAGA. Any further comment, Mr. Greigg?

Mr. GREIGG. No.

Mr. MATSUNAGA. Mr. Hagen?

Mr. HAGEN. I am at a little bit of loss to understand what you

contemplate. Do you contemplate sale for market value to public

or private nonprofit agencies?

Mr. GREIGG. These would be put on a bidding process as has been

the case in all previous sales. In my testimony this morning, Mr.

Hagen, I will outline what the past procedure has been and what my

bill would do in terms of making an adjustment and possibly at that

time additional questions could be raised as to your point.

Mr. MATSUNAGA. We raised the question earlier of Mr. Fitzgerald

as to what the price would be if the sale as provided in the bill were

allowed, and he indicated that we do have other provisions in the

existing law which would provide for that.

Mr. HAGEN. I might ask Mr. Fitzgerald a question.

As I understand it, most of the storage is somewhat of a temporary

nature; is that correct?
10 SALE OF GRAIN STORAGE FACILITIES

Mr. FITZGERALD. They have been temporary for 20 years or more.

Mr. HAGEN. I mean they are not a big fixed cement warehouse or

anything like that?

Mr. FITZGERALD. No, sir.

Mr. HAGEN. What do you call the metal bin? Is there a name

for it?

Mr. FITZGERALD. Quonsets are the large ones; the others are

standard round bins.

Mr. HAGEN. Your policy has been to offer them first to other

Government agencies?

Mr. FITZGERALD. Farmers first of all.

Mr. HAGEN. You have -authority to sell directly to farmers?

Mr. FITZGERALD. Restricted to making them available to storage

of agricultural commodities.

Mr. HAGEN. Do you have a minimum price attached in each instance?

Mr. FITZGERALD. We do have. However, practically the State

ASCA committees set what they consider to be a fair market value so

we are not depressing the market or overloading the market.

Mr. HAGEN. So if you do not get takers from the farmers at those

fair market value prices, you offer them to the other agencies of

Government. Is that correct?

Mr. FITZGERALD. First of all, they would be declared excess to our

needs, that is, Commodity Credit Corporation.

Mr. HAGEN. Right.

Mr. FITZGERALD. Then we send the paper to Kansas City to the

MFO office. This office then has a committee which makes them

available to other agencies in Agriculture. If these agencies then

indicate no desire or need for them, they are made available to GSA

who disposes of them to other Government agencies or by sale or

donation or whatever.

Mr. HAGEN. At what point do the farmers come into the picture?

Mr. FITZGERALD. The farmers have the first opportunity.

Mr. HAGEN. They have the first opportunity?

Mr. FITZGERALD. Yes, Sir.

Mr. HAGEN. Then you offer them to other Government agencies?

Mr. FITZGERALD. Yes, sir, in Agriculture, and then to GSA who

offers them to all other Federal agencies.

Mr. HAGEN. Then if they get no takers they are offered for sale

through the GSA?

Mr. FITZGERALD. They can be donated or sold, yes, sir.

Mr. GREIGG. Will the gentleman yield?

Mr. HAGEN. Yes.

Mr. GREIGG. I think we ought to draw a distinction between the

type of facilities we are talking about.

Out in the rural areas we have two types, the circular type that I

think is most appealing to the farmers, and the quonset type that

not too many farmers are going to be bidding on because of the size

and the cost involved. I think this distinction should be drawn.

I also want to go back to a point made a few minutes ago and

possibly challenge the statement as to whether or not these facilities

are temporary. These are not temporary facilities; these are permanent facilities, are they not, Mr. Fitzgerald?
SALE OF GRAIN STORAGE FACILITIES 11

Mr. FITZGERALD. They are not permanent in the sense I thought

the Congressman was referring to, that is, concrete structures like a

warehouse facility.

Mr. GREIGG. But from the standpoint of lease arrangement, Mr.

Hagen, these are pretty permanent structures. We are not talking in

terms of concrete.

Mr. HAGEN. They are metal type structures?

Mr. GREIGG. They are.

Mr. HAGEN. Right. Then GSA offers them for sale to any taker.

Do they have a minimum price?

Mr. FITZGERALD. I really cannot say how they operate.

Mr. HAGEN. They establish a fair market value, do they not, and

they sell them for that, I assume?

Mr. FITZGERALD. I could not answer your question intelligently.

I do not know.

Mr. HAGEN. What percentage of your disposals have been made to

farmers and what percentage through the GSA?

Mr. FITZGERALD. The bins as a whole, over 90 percent have been

sold to farmers.

Mr. HAGEN. Over 90 percent?

Mr. FITZGERALD. Yes.

Mr. HAGEN. And the remaining 10 percent disposed of through

GSA.

Mr. FITZGERALD. Some of them go to warehousemen for storage of

agricultural commodities.

Mr. HAGEN. Through you?

Mr. FITZGERALD. And others are donated or given to other agricultural agencies in the Department of Agriculture or transferred to

GSA, which may make them available to State agencies such as conservation commissions.

Mr. HAGEN. What percentage of them have been disposed of

through GSA?

Mr. MOWRY. A total of 4 million bushels so far have been transferred either to other agencies in Agriculture in our own Department

or have been given to GSA, and as I recall we have a breakdown in

the numbers here if I can find it.

Mr. FITZGERALD. A total of 101 have been transferred. Of those,

61 have been transferred within the Department of Agriculture and

40 to GSA, in addition to which there are 44 now undergoing screening.

Mr. TEAGUE. Will the gentleman yield?

Mr. HAGEN. Yes.

Mr. TEAGUE. Is there anything in existing law which prohibits the

GSA from selling these bins to schools or industrial concerns?

Mr. FITZGERALD. I really do not know, Congressman.

Mr. TEAGUE. I am trying to get at—maybe you will explain to us,

Mr. Greigg, later what this will really accomplish that cannot be

done under existing law.

Mr. HAGEN. What percentage of those sales you made will be

continued to be used as grain storage and what percentage will disappear? I would assume this is one of Mr. Greigg's concerns, reduction in the amount of storage.

Mr. FITZGERALD. The great overwhelming majority of bins we have

is what we call standard round bins, 3,250 bushels or less. These are

not good for much of anything except storage of grain. Very limited
12 SALE OF GRAIN STORAGE FACILITIES

in use. The ones Mr. Greigg is concerned with I think is what we call

the large flat storage structures, and specifically, the quonset type of

buildings. These can be used for things other than the storage of

agricultural commodities.

Mr. GREIGG. Will the gentleman yield?

Mr. HAGEN. Yes.

Mr. GREIGG. I would like to go back to Mr. Teague's question and

point out to you that the problem that arises is that once the Agriculture Department turns over the jurisdiction to GSA, then the General

Services Administration follows very methodical procedure of contacting the various Federal agencies to give them priority for these

facilities. Conceivably we could get down possibly to the time when

no Federal agency would want to consider the quonset and a school

board or a fair board would have something to say, but it would be

indeed remote because, as most of the agencies are anxious to acquire

additional storage facilities, these Federal groups are anxious, and

certainly do not pass up the chance. I know that the Forestry

Division, for example, looks upon these facilities with real need.

I believe a good case in point would be in Minnesota, at Sandstone,

Minn., a correctional institution. They have need for quonset type

facilities. So by the time these Federal agencies say we need them,

there would be little opportunity for someone on the local level to even

be considered.

My attitude on this, Mr. Teague, is that on the local level where

these facilities are presently located, need is great. Not only is the

need great, but it seems economical to me that they remain in the

locale where they have been constructed and thus saving the taxpayers

dollars by not dismantling them and sending them somewhere else.

Mr. HAGEN. I am not trying to filibuster, but you contemplate—

I cannot imagine a school, for example, in the grain storage business.

You contemplate nongrain storage use of the facilities?

Mr. GREIGG. Mr. Hagen, that is the whole purpose of the legislation—to make these available to private and nonprofit agencies for

use other than grain storage.

Mr. MATSTJNAGA. Mr. Callan?

Mr. CALLAN. I want to make a couple of points here.

Number one is that round bins go out to farmers, and in the flat

storage bins out there, the Government has $12,000 or $13,000 invested, and they get about $1,000 out of the steel. This leaves all

the concrete in place.

Mr. MATSUNAGA. May I suggest, Mr. Callan, if we have no questions of the witness here that we make our statements subsequently.

Mr. CALLAN. All right.

Mr. MATSUNAGA. Does anyone have a question of the witness?

Mr. REDLIN. I have one question.

I am aware of a situation in my district wherein a Job Corps which is supervised by the Forest Service acquired some quonset buildings

and moved them from a point to the point of a former radar site. This would be an example of what you have turned over to GSA and

they handled it.

Mr. FITZGERALD. That was handled within the Department of Agriculture. When your State committee decided that this bin could

not be sold at a fair price to a farmer or warehouseman for storage of

an agricultural commodity, the bin was declared excess to our ASCS
SALE OF GRAIN STORAGE FACILITIES 13

needs and transferred to a departmental committee. This committee

then makes its bin available to all the agencies within the Department

of Agriculture. In this case the Forest Service said "Yes, we have a

need for this bin," therefore the Forest Service got the bin.

If, however, no agricultural agency had put a claim on this bin,

it would have been transferred to GSA.

Mr. REDLIN. The point I believe I understand Mr. Greigg is

seeking to make is that had there been a local organization, a school

board or fair board in the town at the point where the quonset was

standing on the cement slab ready to be used, they would not then

under this procedure have had an opportunity to enter into the

picture at all.

Mr. FITZGETtALD. They have not had.

Mr. REDLIN. As I understand, Mr. Greigg, you are seeking to

create this opportunity.

Mr. GREIGG. The opportunity only after the Department indicates

that there is no area for the consumption or use of these facilities

under their regulations, that point where they declare that none of

their agencies can use them and thus turn them over to GSA. At

that point is when I want them available to the local communities.

Mr. REDLIN. Then as I understand it, in this particular instance

this would have been a departmental need within the Department

of Agriculture and the local entity would not have entered into the

picture even had this legislation been law?

Mr. FITZGERALD. Yes, sir.

Mr. HANSEN. I do not want to ask any questions, Mr. Chairman.

I merely would appreciate very much to make a statement regarding

the measure. .

Mr. MATSUNAGA. We will call on you then after we excuse the

witness if we have no further questions of the witness.

Thank you very much.

Are there any witnesses other than those listed who would like to

testify in this matter?

Mr. HAGEN. I might ask one more question of Mr. Fitzgerald.

Do your procedures with these bins differ in any sense from disposal

of other real estate or personal property by any other agency of

Government? For example, the armed services. Are your procedures any different?

Mr. SHOUSE. In answer to your question, I would say that the

Commodity Credit Corporation disposes of grain storage structures,

as Mr. Fitzgerald outlined in his testimony, through the specific and

general powers of the Commodity Credit Corporation as set forth in

the Commodity Credit Corporation Charter Act and under the

budget program of the Commodity Credit Corporation which have

been submitted to and approved by the Congress.

Mr. HAGEN. Do your procedures differ, we will say, from the

method the Navy might use to dispose of some similar building?

Mr. SHOUSE. So far as I know, the Navy would dispose of its

surplus property under authority of the Federal Property and Administrative Services Act through the General Services Administration.

I do not know of any special legislation applicable to that agency.

I know Commodity Credit Corporation disposes of storage facilities

under the powers of the Commodity Credit Corporation before they

become excess or surplus and while we still have a program use for

68-394 66 8
14 SALE OF GRAIN STORAGE FACILITIES

them for Commodity Credit Corporation in the storage program of

the Commodity Credit Corporation. If Commodity Credit Corporation

has no program need, or if the structures cannot be disposed of for a

program need, they are declared excess pursuant to the Federal

Property and Administrative Services Act.

Mr. FITZGERALD. My impression is that we probably have more

authority than most Government agencies in disposing of surplus

properties and in this case making it available to farmers.

Mr. MATSUNAGA. Thank you very much.

We will now hear from Mr. Stanley Greigg, not as a member of

the subcommittee but as a witness and author of the bill, Mr. Greigg.

STATEMENT OF HON. STANLEY L. GREIGG, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF IOWA

Mr. GREIGG. Thank you very much, Mr. Chairman and members

of the committee. I very much appreciate this opportunity to present

my views on H.R. 12360.

This measure would make it possible to permit the sale of grain

storage facilities to public and private nonprofit agencies and organizations. A great number of these storage facilities have become

available in the Midwest as a result of a substantial reduction in

surpluses, which posed a severe problem in the late 1950's and early

1960's. H.R. 12360 would not alter the law which allows farmers to

buy the units for farm use. It would only pertain to those Commodity Credit Corporation buildings which still remain available

after farm producers have had every opportunity to purchase them.

As a result, no present policy for use by the Agriculture Department

or the entire structure of the farm producer would be affected. The

point at which•disposal would take place under H.R. 12360 is just

prior to the jurisdictional declaration by the Secretary of Agriculture

that "these units are excess to CCC needs." This determination, if

made by the Secretary, automatically causes the units to come under

General Services Administration jurisdiction and they then follow

the regular disposal system set up under the Federal Property and

Administrative Services Act.

A distinction can be made at the outset as to the type of building

H.R. 12360 would as a practical matter make available to public and

nonprofit private agencies. Generally there are two basic types:

One the familiar single purpose circular metal building, and second

was commonly known as the multipurpose quonset type.

In regard to the former, little real use can be foreseen except for

grain storage. The latter is a very different matter, however. The

multipurpose quonset type is generally 40 feet wide by 100 feet long.

These buildings are generally in place on leased ground with substantial concrete foundations. They can be found in most areas

throughout the Midwest and very specifically in my district in

northwest Iowa.

More than 90 percent of these available facilities have been purchased by farm producers. Still the problem remains.

These remaining structures are greatly desired by local citizens

for use in a variety of local public and quasi-public needs. One is on

the property of a county fair board and can be an integral part of the

fair facility. One is near the consolidated school that needs garage
SALE OF GRAIN STORAGE FACILITIES 15

space for their buses. One is adjacent to an industrial park complex in

which there is substantial demand for storage facilities of this type.

These people cannot, under present law, bid for or purchase these

structures even when they are normally placed upon their ground

and surplus to any U.S. Department of Agriculture needs. Present

law declares that a purchaser must sign the following statement,

and that statement again is:

This is to certify that the structure or equipment identified above, purchased

by the undersigned from the Commodity Credit Corporation, U.S. Department

of Agriculture, will be used in connection with the storage or handling of agricultural commodities.

H.R. 12360 is short and to the point:

Where a grain storage facility is not needed by the Secretary of Agriculture

and upon being offered for sale no person offers to pay the minimum price set

by the Secretary for such facility for use in connection with storage or handling

of agricultural commodities, then the Secretary may, without declaring such

facility to be excess property, sell it to any public or private nonprofit agency or

organization for use for the purposes of such agency or organization.

Many times I feel it is most important in my own mind to know

what a certain bill will not do as well as what it will do. This bill

will not affect anyone in the U.S. Department of Agriculture, it will

not affect anyone in the entire range of farm productivity, but it

will answer any definite need for a great number of farm communities.

The alternative is that these buildings will be diluted into the

federal system. There will be no cost recovery, there will be additional expense to uproot the foundation as per Government lease

requirement. But most important, you will have a fine group of

public-spirited citizens who simply will not accept the logic of seeing

these rural related buildings being carried away.

Mr. Chairman, I know that we have some additional Congressmen

this morning who have some statements relating to this measure.

Also I have a statement, as I indicated a little earlier, which will be a

part of the record, from Senator McGovern, as he has experienced

similar problems as they relate to consolidated school districts.

But I also have a gentleman who has come from my district of

northwest Iowa who has, for many months now, been involved in this

entire process of attempting to acquire one of these quonset buildings

for the local fair board, adjacent to the grounds that the fair board

has a lease on, on which some of these quonsets are actually constructed. So a little later this morning Mr. Heline can also be heard

on this, as he has lived with this problem.

I will be more than pleased to answer any questions members may

have.

Mr. MATSUNAGA. Any questions of Mr. Greigg?

Mr. TEAGUE. Just one, Mr. Greigg, and I do not wish to sound as

though I am opposed to this bill, because I do not know that I am.

It was mentioned a while ago that the Secretary of Agriculture, in

one instance at least, transferred some of these bins to the Forest

Service.

Mr. GREIGG. Yes.

Mr. TEAGUE. Within the Department?

Mr. GREIGG. Yes.

Mr. TEAGUE. Suppose the National Park Service in a comparable

situation expressed desire to get the bins. Not being part of the
16 SALE OF GRAIN STORAGE FACILITIES

Agriculture Department, I assume they would be out of the picture

under this bill.

Mr. GREIGG. Mr. Teague, I really feel as far as changing the law,

this bill does not change the jurisdiction of the Agriculture Department or affect, as I pointed out, the farm productivity area, so to

speak.

As was pointed out this morning, I think it was pretty clear that

the Department has probably more authority in disposal than most

agencies and departments of the Government. I do not want to

enlarge that. I want to make these available to the local communities at that point where the Agriculture Department has exhausted all areas. I do not want to add to that list.

The group that you speak of would come in for consideration once

the GSA would have jurisdiction allowing them to go to another

Federal agency. But I would not want to increase the list at this

point because I think that this was considered early when the Agriculture Department stated their initial needs.

Mr. TEAGUE. It is true though, is it not—it may be all right but

I want to be sure it would be the situation—that if a local fair board

and the National Park Service each expressed an interest in a particular quonset, under this legislation the Secretary of Agriculture

would be required to sell it to the local fair board rather than the

National Park Service?

Mr. GREIGG. No. It would be again on a bid basis on the local

scene.

You raise the point as to making them available for the Park

Service. Possibly they have some storage they could use these for

also. I do not know.

Mr. TEAGUE. I cite that as an agency somewhat comparable to the

Forest Service, just in a different department.

Mr. GREIGG. I think that a good case could be made for all Federal

agencies outside of the jurisdiction of the Agriculture Department

for the need of these facilities. I think this is probably a valid statement. The only thing, I do not want to increase the list. I want to

stop at that point where the Agriculture Department decides that

there is no need for them within their jurisdiction before they turn

them over to the General Services Administration to go into the entire

federal system. I am not questioning there could be the need in the

Department for the same facility.

Mr. TEAGUE. I want to be sure about one thing which is not quite

clear to me.

If we should pass this bill and the National Park Service expressed

interest in a quonset—they might know about it even though it was

not referred through the GSA—and a local fair board, let's say, wanted

the same quonset for storing buses—certainly not connected with

Agriculture—then would the Secretary be required to dispose of it to

the local school board and leave the Forest Service out?

Mr. GREIGG. Yes, that is true under the bill.

Mr. TEAGUE. I am not saying that is wrong, but I want to understand it.

Mr. GREIGG. This is a true statement, as it would be with any other

Federal agency outside the Agriculture Department.

Mr. MATsuNAGA. Mr. Hagen?

Mr. HAGEN. Already, of course, under the present law once it gets

into the channels of GSA, these public or nonprofit agencies can corn-
SALE OF GRAIN STORAGE FACILITIES 17

pete with any one in acquiring the property. In fact, I think under

the law they have a priority.

Mr. GREIGG. If they have a priority, I am not familiar with that

priority, Mr. Hagen. I can tell you that we have fought long and

hard to try to find them priority for a local school board, but we

have not been successful. As a result of the introduction of this piece

of legislation back in January, a freeze has been placed on the dismantling of these quonset facilities pending the outcome of this piece

of legislation.

To show you the type of problems related to this, Senator McGovern

had a dire need for two of these facilities for some consolidated school

districts in South Dakota. We sent a letter to GSA asking them,

through Chairman Cooley of the Ho-use Agriculture Committee, to

see if they could make allowance so that these school boards could

acquire these. GSA would not make that allowance, because the law

is pretty clear that such facilities be put into Federal agencies first.

Mr. HAGEN. I think we should clarify this aspect of it. I have

some interest in it, because I am trying to get authority for the Navy

to donate a parcel of real estate to one of my counties for about 3

years now. It is my understanding that any surplus Government

real estate, or I would assume a building, if an educational agency,

say a school district, wants property they have a priority, and not

only do they have a priority, they can get it for nothing if it is for

educational purposes. That is my understanding. If they want if

for recreational purposes, they can get it for 50 percent of the

appraised market value.

This is the problem I have because in this particular instance,

where I am speaking of Navy property, 50 percent is more than the

county wants to pay. That is my understanding of the law. I could

be in error. If it is for educational purposes, I think you can get an

outright gift under the present law.

Mr. MATSUNAGA. It is only through GSA.

Mr. HAGEN. I understand.

He just wants to put a priority ahead of the GSA process. Actually,

all I am saying, if he lets it go through GSA and it is for educational

purposes for school districts, they could get if for nothing.

Mr. GREIGG. This has not been the case.

Mr. HAGEN. I am curious about this because I have struggled with

this problem in connection with the parcel of Navy land I am trying

to get.

Mr. GREIGG. Mr. Chairman, let me point out something I was

pointing to--

Mr. MATSUNAGA. Mr. Hagen still has the floor.

Mr. HAGEN. I think we ought to clarify that and for that reason

alone have GSA up here. I want to know what their rules are.

Mr. MATSUNAGA. The witness, Mr. Greigg.

Mr. GREIGG. I pointed out to Mr. Fitzgerald a while ago, and I

think we should emphasize the point again, when these quonsets remain in the local communities the tie-in I think with agriculture is

significant. Should we find in the future the same kind of surpluses

that we have had the past 6 or 10 years, the Agriculture Department

would be in a better position to acquire these facilities right in the

area than to go to the additional expense of building new structures

or moving them in. This is why I think it is important to tie this in
18 SALE OF GRAIN STORAGE FACILITIES

with the Agriculture Department. I think this makes it a little more

unique than having just the whole sphere that the General Services

Administration follows.

I wanted to point that out in answer to Mr. Hagen's comments.

Mr. HAGEN. You don't spell out any formula for price here, if any?

Mr. GREIGG. NO.

Mr. HAGEN. You are liable to run into a problem. Senator Morse

has the Morse formula that you are well aware of, where he requires

market value cash on the barrelhead except for these specified purposes of education and recreation.

Also you not only include public agencies, but private nonprofit

agencies as eligible and I think this aggravates the problem unless you

do state this is to be a sale for-the fair market value.

Mr. GREIGG. Again this follows the same procedure that is being

used at the present time and that is the bidding process and the department accepting the bid based on what the market price is.

As far as spelling it out is concerned, I don't know that there is

any need for additional spelling out, but if it would improve the piece

of legislation, I would have no objection to making some adjustment

to make it specific about price.

Mr. HAGEN. I think you might have a problem there. I know

Senator Morse from Oregon is very adamant on this.

Mr. TEAGUE. I think so too. I repeat, I am not opposed to this,

but I forsee some troubles. You are going to have people say, "Well,

why should we sell this quonset hut to the local fair board for $2,000

when another Government agency wants it and it would cost $13,000

or $15,000 to build a comparable facility which is needed by the other

Federal agencies?"

Mr. GREIGG. Mr. Teague, I don't see how you can justify the

dismantling of one of these quonset facilities and, at great cost, move

it 400 or 500 miles for another Federal agency and put in another

concrete slab, erect a structure elsewhere. Keep in mind the department is not going to take a loss in the purchase price back in the community that will be seeking these facilities.

Mr. TEAGUE. Perhaps you can't justify it, but I just point out

again that this is the sort of thing you are going to run into when it

reaches the floor.

Mr. GREIGG. I will say this, that Mr. Heline this morning has

followed this whole process step by step, and I am sure that in his

testimony he will have some comments to make that will probably

go into a little more detail as to some of the real problems he has

encountered as to securing one of these on the local level.

Mr. MATSUNAGA. If there are no further questions of Mr. Greigg,

we will call our next witness.

Are there any questions of Mr. Greigg?

If not, our next witness will be Mr. Oscar Heline, of Marcus, Iowa.

Mr. Heline, will you kindly take the witness stand?

STATEMENT OF OSCAR RELINE, MARCUS, IOWA, REPRESENTING

THE MARCUS COUNTY FAIR BOARD

Mr. HELINE. Thank you, Mr. Chairman and members of the

committee.
SALE OF GRAIN STORAGE FACILITIES 19

Because of my eyesight, I haven't been able to put down on paper

notes or a statement and read it if I had it, so I am going to talk for

a few minutes.

First, I would like to give you a little background to indicate my

reason for this interest. It has been a longtime interest in all of the

activities of the Department of Agriculture. Originally I was a

member of the State corn and hog committee. Many of you don't

remember back that far. It was in the State of Iowa and we were

associated with men like the late Spike Evans who was on the Federal

Reserve Board and Bill MacArthur, who was in the Department of

Agriculture; Bob Morse, whom many of you have known, and Henry

Wallace, when he was Secretary of Agriculture. We started in the

old AAA days and we used to have to write some of these rules. I

remember when we used to experiment with the rules out in the field

and then we would go into Washington and have them written so

they could be used by the Government in other areas.

The rules have been written and looked at for a long time as far as

I am concerned. I know what some of the difficulties are and the

processes which we have to go through, but this local problem is one

in which I get amused sometimes when I think about the effort that

we have put forth for a few quonset buildings for a local school and

fair board. The total value, the acquisition cost, was less than

$16,000, but they are a part of a community which is agricultural.

The law originally was for the purpose of helping agriculture and it

has done so very well over these many years. Everybody out in our

country are farmers, whether they are local business people or are

actually tilling the soil, as you well know, and so this total community

is interested in these quonsets that happen to be on the fairground

property. They have been used for a small fee each year that there

was need for storage. I was visiting with some of the members of the

school board the other day and I said, "If you acquired the property

and could use it for your purposes, would there be any question of

doubt if the Government needed them again, but what they would be

made available," and he said, "Of course not. That is the reason they

were put there in the first place, so they could serve the agricultural

needs of that community, and they would be available and serve

again in many ways.

Now, this is just a little fair. They have about 3,000 exhibits.

It is rated quite highly by judges as comparable to much larger fairs.

We have got some records up there on livestock entries all over the

United States, so we have a good community with good farmers and

with people who are good citizens and all we are asking for is an opportunity to retain that which they, have used and have helped contribute to.

This is only a typical example of many areas and many other situations. They could be listed from this local fair board to the consolidated school district which had two quonsets just two miles from where

I live—I have some land in two school districts and I am right in the

center of them. These two buildings were situated right across the

street from the consolidated school. The school board would have

liked to have acquired them for storage of school buses but because

they couldn't be sold under the law that exists now, to the school

board because they were not handlers for storage of agricultural
20 SALE OF GRAIN STORAGE FACILITIES

commodities, they were finally sold to two farmers; they were hauled

out into the country and they were sold for $1,000 apiece.

I don't remember the acquisition cost of those, but it was probably

around $5,000 apiece. They were hauled to the country and the slab

was left on the ground. They were sold for $1,000. The county

has to tear up the concrete and dispose of it and clear the land in its

original state which costs about $500 for each unit. So the net income

to the U.S. Government is $500 for each of these quonsets.

You can readily see there isn't very much return to the Government

when you have to go about it in that method. The same thing would

occur at the fair board so the fair board decides they have no use for

the cement slabs and the county would have the expense of removing

them.

Now, this happens in every place where there is a Government

facility on a piece of public land, or where a public unit would like to

acquire it.

We had a situation of a county that had a quonset on county land.

It would have liked to have used it for storage and found exactly the

same situation. I could go on and on.

The point that I think this bill provides is that these other agencies

could purchase these in competitive bidding if they were not used for

the storing or handling of agricultural products, but were used for

public need. I would like to see the bill go further than that. I think

in situations like the school board I was telling you about, it should

be given as a grant as one of the Congressmen mentioned, because it

is for public and educational purposes.

The GSA, I understand, has given considerable property over the

United States to Government agencies, to educational institutions

and we don't see any reason why it shouldn't be done similarly in these

smaller communities.

But there is something in the law which keeps the Department of

Agriculture from selling the buildings to anyone who cannot sign this

statement: for the handling and storage of agricultural commodities.

I might add one word. Some of these buildings that go into the

country aren't always used for that purpose. Once they become the

property and are placed on the land of the farmer, it is pretty hard to

keep that building from being used for whatever purpose suits his

particular needs once it arrives. I don't think anybody is running

around trying to find out how many people are disregarding the law.

If a public institution such as the school board or the fair board, or any

other county unit, local or State, would use them for other purposes,

it would be known immediately. So most people don't like to sign a

statement of that kind whether it will be used for the purpose or not

and, therefore, they just don't want to bid.

Now, those are some of the problems that are arising. Once these

quonsets were turned over to GSA, they went to forestry. Forestry

turned it over to our State conservation commission. The State

conservation commission couldn't do anything with them to help us.

They had to use them for the specific purpose for which the law provided under the forestry section.

Now, the commission in Iowa would like to have buildings for their

forestry section and they would also like to have them for the fish

and game, but the law doesn't permit them, as a conservation committee, to use them for fish and game. They only can use them for
SALE OF GRAIN STORAGE FACILITIES 21

forestry. In other words, hands are tied here and there along the

way where it would make good sense to have some freedom to do some

of the things which would be in the public interest.

Now, all we are asking is that we try to do the sensible thing, whatever it takes to do this thing in a sensible manner, which does the most

good for the most people. This is all we are asking. This bill goes,

I think, quite a ways in that direction. I don't think it goes far

enough, but I think there is fear. on the part of some of the departments that if you open this up once, you get into a great deal of

trouble and I can see where that might be true.

Mr. MATSUNAGA. Have you finished your statement now?

Mr. HELINE. Yes; I think I have talked long enough.

Mr. MATSUNAGA. Thank you very much.

Mr. HAGEN. I am not quarreling with Mr. Greigg, who is one of

the very able new Congressmen from Iowa that we have here, but

actually his bill wouldn't reach your situation. The problem is, these

farmers have a first priority. This would establish a priority after the

farmers had exhausted theirs. What you want really is a priority

equal to that the farmers have, or even ahead of it, if I am correct

in understanding your situation.

Mr. HELINE. In this particular situation, the farmers would not

have bid on these buildings if they were wanted by the fair board

because it was a community project. The other thing is that it

would be almost impossible to move them out intact because of the

difficulties in the area surrounding it. They would have to be torn

down.

Mr. HAGEN. That is very true, but under that portion of the law,

which would not be changed by Mr. Greigg's bill, the farmers have an

absolute priority. That is the first route of disposal and if a farmer

wants to come in, he gets it regardless of whether the school district

wants it or not. That is the point I wanted to establish.

Mr. HELINE. If they have priority, they would be permitted to

bid and if they were the high bidder, they would receive them.

Mr. HAGEN. Would you be in favor of eliminating this farmers'

priority and giving a local agency of government equal priority or a

higher priority?

Mr. HELINE. Oh, no. I think the farmer should have the priority

and under the bidding system they do have it.

Mr. HAGEN. That would not be changed by this bill so it really

wouldn't handle your particular situation with this bill, as I understand it.

Mr. MATSUNAGA. Mr. Heline, in the case of a farmer purchasing

on priority from the Department of Agriculture, is he permitted to

remove the quonset hut, for example, off the property upon which it

is located after he is successful in the bidding?

Mr. RELINE. Yes, sir.

Mr. MATSUNAGA. In about what percentage of the cases would

you say the quonset is removed out of the district?

Mr. RELINE. Well, I don't know of any farmer, or warehouseman

who has moved them out of the district once they were purchased.

When I say "district," I mean the local community. The nearby

community.

Mr. MATSUNAGA. Then you are saying in the overwhelming majority of cases the facility is kept right within the district wherein the

facility is located?
22 SALE OF GRAIN STORAGE FACILITIES

Mr. HELINE. Yes, sir; I am sure that is right.

Mr. MATSUNAGA. So actually the farmer is being restricted to the

storage of agricultural products and the facility is being put to the

original intended purpose?

Mr. HELINE. In most cases.

Mr. GREIGG. Mr. Heline, I think you have stated exactly your

feelings on the question. You do not want a bill that would change

the overall procedure of taking care of farm productivity. This was

my thinking in the introduction of this bill. As I said in my testimony

this morning, this bill will not affect anyone in the Department. It

will not affect anyone in the entire range of farm productivity, but I

do think a distinction should be drawn here between these circular

bins and the quonset-type bin. There is a continuing need in the

rural areas for the circular-type bin. On the other hand, Mr. Heline

pointed out a couple of instances where some quonsets were moved

out into some rural adjacent areas. This is rather rare. Mr. Hagen

expressed concern that this bill would not change the law and the

farmers would still proceed and bid and acquire the quonset facilities.

I do want to emphasize the point which Mr. Heline was making that

in a community such as Marcus, where there is a closeness in cooperation between the various segments, that the majority of the farmers

there would do everything possible to see that these quonsets could be

acquired for fair purposes rather than for one farmer to try to bid so•

that he could move them out.

Mr. TEAGUE. I want to ask Mr. Greigg a question if I may.

In your bill you refer to the minimum price set by the Secretary.

Well, suppose the Secretary sets a minimum price of $2,000 and no

one offers that. Suppose the local school board offers $1,950 and the

local farmers offer $1,900. The school board would get it, would it

not?

Mr. GREIGG. The school board would not get it. The first use

would still go to the farmer. This would be the procedure. The use

would first go, Mr. Teague, to anything connected with agriculture

and the farmer then would be in a position to acquire that facility.

After all of the agricultural uses have been exhausted, then the school

board or industrial corporation or a fair board would have an opportunity.

Mr. TEAGUE. Supposing the school board bids $1,950 and the

farmer bids 10 cents. That is a little ridiculous, I realize, but the

farmer would get it?

Mr. GREIGG. The rights are stated in the measure which would

follow the bidding procedure which would initially make them

available to farmers. After this use has been exhausted—the mnimum price figure still holds for the farmer.

Mr. TEAGUE. Suppose no one offers the minimum price. Then

you provide it can be offered to any public or nonprofit agency.

Suppose a farmer is interested but neither the agency nor the farmer

is willing to pay the minimum price? I think Mr. Heline wanted to

comment on this.

Mr. HELINE. Once the Government set a minimum price, they

were not sold regardless of the price bid by the individual farmer and

what has actually happened in most cases, whether they are round

bins or quonset bins, there has been a minimum price set. Generally

the auxiliary would go down the line and a bunch of farmers will say
SALE OF GRAIN STORAGE FACILITIES 23

"I will take one, two, three, four, five," and they take them at the

minimum price and the auction doesn't go beyond that. That has

happened in almost every instance, where they set a minimum price

of $1,000 a quonset, if there was no bid there was no sale and no bid

was accepted under $1,000 because it was announced it wouldn't be

sold for less than $1,000. So, consequently, it wasn't sold at all.

Mr. TEAGUE. Desiring still to dispose of the property, could it not

be offered for sale in a sealed bid arrangement?

Mr. HELINE. Yes, and it could be offered for sale again at a different

price if they so determined, but at that particular sale that would be

it. Whatever they determined.

After that it could be sealed bids or it could be a different price if

they should so determine.

Mr. TEAGUE. But the Secretary, if this bill were passed, could still

be under obligation to sell to the farmer if the farmer wishes the

facility. Is that your answer?

Mr. HELINE. At the minimum pike. Not less than the minimum

established price.

Mr. TEAGUE. Thank you.

Mr. MATSUNAGA. Mr. Heline, do I understand you to say that in

general practice the sale is by direct negotiation with a buyer at a

minimum price? Is that the common practice, or is the sealed bid

the common practice? -

Mr. HELINE. The auction is the common practice, but what actually

has occurred in most of the sales that I have seen and attended and

heard about is that they will set a minimum price of say $100 for a

circular bin and then they don't go through the process of bidding it up

to $100 because they wouldn't be sold for less than $100 so they say,

"Does anybody want the bin for more than $100?" That is the

auctioneer's cry. "Does anybody want to bid more than $100?"

I attended a sale in my own community last winter where I think

there were 30 or 40 bins sold and nobody bid over the $100, but we

would walk along with the auctioneer and somebody would say, "Well,

I will take three," or "I will take two," or "I will take five.'

We went down the line and when we got all through, when we got

toward the end of the string, the auctioneer said, "Is there anybody

who would like to bid more than $100 for the last few bins? "

Nobody did, so the whole string of bins sold for the $100 by everybody saying, "I will take one, two, or three, at that price."

The auctioneer was there to take a higher bid if somebody was

afraid he couldn't get it for $100 and wished to pay more. He would

have had the opportunity.

Mr. MATSUNAGA. Then the minimum price is the real important

thing in the type of sales you have been having?

Mr. HELINE. That is right. That is the method by which they have

been held.

Mr. MATSUNAGA. Do you have any idea as to how the minimum

price is determined?

Mr. HELINE. No. I think upon some basis of percentage of cost

and what the public is willing to pay.

When they have tried to sell them at a price higher than $100, they

haven't had many takers. They just sit there. We still have some

buildings that are not sold because there are not enough people who

are willing to buy them at that price. It depends on the kind of
24 SALE OF GRAIN STORAGE FACILITIES

construction of the bin, whether it is aluminum or steel or double

rifted, or single rifted, et cetera. Some people will take most any kind

of a bin at $100 and others will take only the choice ones.

Mr. MATSUNAGA. Have you attended any sale where there was a

sealed bid method of sale?

Mr. HELINE. The sealed bids would be taken at the county office.

Mr. MATSUNAGA. Have you attended any sales where the method of

sales was by sealed bid?

Mr. HELINE. NO, I have not.

Mr. TEAGUE. As I understand it, the purpose of this bill is to

provide a procedure where nobody will pay the minimum price. There

is no requirement that the Secretary set another minimum price. It

is offered at the minimum price and there are no takers. Then he can

go ahead without restriction and sell it to any nonprofit private or

public organization.

Mr. HELINE. And the reason in many- instances where there was

not a bid was because of the clause "to be used for the handling or

storage of agricultural commodities." The Fair Board could stretch

its imagination by saying, "Yes, we accept exhibits and we store

them for the period of time of the fair," but that is stretching your

imagination a little bit and some of the people who are particular

about what they sign dislike the idea of signing for buildings where it is

really not the intent. That really wasn't the intent of the law, to use

it for that particular purpose. It was to be used for the storage and

handling of grain.

For that reason, the Fair Board—they would have made the

purchase, there was no question about that, if they could have felt

justified in signing the statement.

Mr. GREIGG. As Mr. Heline knows, I have had many requests for

consideration of these quonset facilities in northwest Iowa. The

procedure we followed, once it was indicated a hearing would be

held on this measure, was to send telegrams to these people who had

indicated some additional interest. In the community of Pocahontas,

Iowa, there are some quonsets there that are sorely needed by the

local industrial development corporation. I think one thing we should

also emphasize is that if we are going to do everything we can to boost

these rural communities, a substantial incentive for industry coming

into these little communities would be to make these facilities available.

In Pocahontas, for example, the department made available these

quonsets for farm use. Apparently there was no interest on the

part of farmers in that area to acquire the facility. The next step

was then to turn the facility over to GSA and until a freeze was put

on the dismantling of these facilities, one was slated to go to Sandstone, Minn., for part of the services connected with the correctional

institution in that community.

As Mr. Heline pointed out, we could cite many examples of the

need—now, I point to that specific case to show that there was

apparently no interest on the part of farmers or those related to

agricultural commodity needs for the acquisition of that piece of

property. That is why the bill was introduced, so that different

groups within the community then would be in a position to secure

that facility.

Thank you very much.
SALE OF GRAIN STORAGE FACILITIES 25

Mr. MATSUNAGA. Are there any questions?

Mr. REDLIN. Are these quonset buildings the type called a crimped

nail construction?

Mr. HELINE. I haven't paid much attention to that construction.

Mr. REDLIN. In taking them down, do you feel you would do

considerable damage unless you are very careful and you wouldn't

have as good a building when you reconstructed it as you had in the

original installation?

Mr. RELINE. Certainly anybody who knows anything about steel

construction of any kind, it doesn't matter how they are built; we

have several steel buildings on our farms and we try to do something

with them and you hardly could ever make them leakproof and

anybody knows just as soon as you start hammering steel you are apt

to make indentations or some bends and when you try to straighten

them out you will have a real problem in getting a leakproof building.

It is difficult enought to install them the first time so that they are

leakproof.

Mr. REDLIN. I have several of these buildings on my own farm and

I do want to establish this point: The value of the building, when you

are contemplating dismantling it, would be considerably less. The

man who knows he has to dismantle it is not going to give as much for

that building as he would if he could find use for it and could get a

lease on the property and leave it where it is and use the foundation

in addition.

Mr. RELINE. Certainly.

Mr. REDLIN. There is no question about that.

Would it be a fair statement to say then that the U.S. Government

will recover a great deal more if it can sell these on the basis that the

man is going to use the building on the spot, with the building being

left where it is?

Mr. RELINE. That is right.

As I say, the net to the Government now is about $500. If you sell

it for $1,000 and pay $500 to get the foundation removed, it doesn't

leave very much for the Government and it could be very useful if it

was left intact for various purposes, not only for the purposes we have

mentioned but, as you mentioned, relative to industrial use.

The U.S. Government is spending quite a little money. We have

attended meetings in our district where they are trying to develop

industrial activity in all these little towns, and I guess every little

town has spent a good deal of money itself in trying to bring industry

in the community in order that we can keep a well-balanced agricultural community. So we take it away with one hand and give it back

with the other, but in the process we lose a great deal. There could

be a great deal saved, it seems to me, on the part of the public, if we

could utilize the facilities wherever they are available for the needs to

which they could be applied, whatever that is.

Mr. REDLIN. Coming from an area where we have reorganization

of rural school districts, this school garage problem is quite a thing for.

us as well. I can conceive of very many areas wherein this would be a

tremendous asset to the rural communities.

Mr. GREIGG. Will the gentleman yield?

Mr. REDLIN. Yes, sir.

Mr. GREIGG. I can point out, Mr. Chairman, that there is a small

community not far from Sioux City where the county would want to
26 SALE OF GRAIN STORAGE FACILITIES

make use of one of these quonset facilities strictly for the storage of

maintenance equipment and yet they are prohibited from doing so

because they are not going to go out on a limb and sign the statement

that they will be used for the storage of commodities, agricultural

commodities.

Mr. REDLIN. In many cases in the community it is quite hard for

the local people to understand the tearing down of a building which

reduces its usefulness tremendously and then leave a local community

with nothing but a bare piece of concrete that has to be destroyed.

This is one of the things we are dealing with. It is difficult for the

local people to understand how this means provident use of the

Government's resources. Is this not true?

Mr. HELINE. Yes, sir. I think there is a great deal of wonderment

on the part of the public about some of these things, why they are done

the way they are, and I suppose within Government it is necessary

to do some of these things. But, after all, we are a group of taxpayers

and really pretty good citizens of these United States, and I think

most of us feel that we ought to be given a fair deal in the disposition

of Government property where it isn't necessary to use it for the original purpose. It is for that reason that we are here. It makes me

smile sometimes

'

when I think of the effort we have put forth in trying

to save about $16,000 worth of property that was acquired by the

United States when we could be doing so many other things more

profitably.

It isn't the funds that are at stake. Our community is a pretty

well-to-do community; it is a good agricultural area. I imagine they

could go out and buy the buildings and put them up there new if they

wanted to, under a community project. We have done some things,

communitywise from time to time that have cost a good deal more

than that. We are building new churches, a million-dollar school.

One night when I was chairman of the local Rotary Club they wanted

a golf course up there in my community and we raised $30,000 in one

-evening and they are playing golf up there now.

It isn't because we are so desperate. We are in one of the best

agricultural areas in the United States. But there is some principle

involved in this thing. It seems to me it needs to be discussed. It

is a principle that ought to be good business sense for the Government

and that is what we are concerned about.

I think it is possible for the Congress of the United States, if there

have been some errors in the law, they could be corrected to the point

where there would be equity established, and so that everybody

would be happier than they are at the present time.

Our conservation commission down there, when we visited with

them last winter, recognized our situation and then they came up, after

they had been given the property, they came up with having to make

decisions which are not according to their best judgment. In other

words, they have jurisdiction over areas in which they could use these

facilities to better advantage in fish and game for instance, than in

forestry. At least they would receive more of them, but their hands

are tied also. I think they have an interest.

All we are asking is that there be the kind of equity in which good

citizens are interested.

Mr. MATSUNAGA. I think you have made your point, Mr. Heline.

Mr. CALLAN. Mr. Heline, don't you think this could probably be

1
SALE OF GRAIN STORAGE FACILITIES 27

-handled if you just amended the Commodity Credit Corporation Act

to say that the Commodity Credit Corporation could take factors

other than farm storage into consideration in the disposal of this

property? Wouldn't this do the job?

Mr. HELINE. I think that would help, but at the present time we

have gone too far. These buildings are tied up now in forestry.

They have gone past the stage where we could do what you suggest.

It could save other situations, but I would surely hope that action

could be taken which would save the present situation while they are

still there.

We now have a freeze all over the United States because of the

situation and we don't want to continue the freeze all over the United

States on these quonset buildings. We want them released, like

everybody else does. I don't think it is fair that we have them tied

up for any length of time.

Mr. CALLAN. They are tied up now, in other words.

Mr. HELINE. All the quonsets in the United States are tied up

because of this action. The conservation people in the States that

are involved are tied up. They can't do anything. They can't

move. They are sitting idle at the moment.

All we are asking is that someone who has some authority and if

it isn't within the jurisdiction of the agencies of Government, then

we do have the U.S. Congress, and that is why we are here appealing

to you.

Mr. MATSUNAGA. If there are no questions, we thank you very

much, Mr. Heline. We certainly appreciate your taking time out to

be with us this morning and to come up on a matter such as this,

which doesn't really involve too much, but involves real principle,

as you say.

Mr. HELINE. Thank you, sir.

Mr. MATSUNAGA. Are there any other witnesses here?

Our next witness will be the Congressman from Iowa, Mr. John

Hansen.

STATEMENT OF THE HON. JOHN R. HANSEN, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF IOWA

Mr. HANSEN. Mr. Chairman and members of the committee, as

you know, I am Congressman Greigg's next-door neighbor, as well as

a next-door neighbor to Congressman Callan. We come from an area

where we have a lot of wide open spaces and I concur in what Mr.

Heline has said, that this sounds like we are making a mountain out

of a molehill, but this question of storage and space in our part of the

country is just a little more crucial in the minds of our people than

might ordinarily be the case under a given set of circumstances

elsewhere.

Now, the thing sums up briefly this way: That there is a situation

which could benefit many of our local communities in rural America

and this has come about because there has been a successful reduction

in our agricultural surpluses and that has left many of these quonsettype storage bins that are no longer needed for that purpose.

It is my understanding that under present law such a building is

not purchased by a local farmer or a local firm for grain storage and

cannot be held in its present location but is offered to other Federal
28 SALE OF GRAIN STORAGE FACILITIES

agencies and, failing their disposition, it is finally placed in the hands

of General Services Administration for disposal.

This usually means that it is shipped away and the concrete base

upon which it rests is broken up and too often these buildings are

sorely needed. The communities are endeavoring to grow. I think

it is a question of where the utilization would be much more beneficial to the country as a whole leaving it where it is rather than sending it to another State, or perhaps to a foreign country.

There are many local governmental or quasi-governmental groups

who can use these excellent facilities that are in fine shape. As has

been mentioned here before, there is a dire need in practically every

county for school bus storage and for county road department storage

and for 4—H Club space. The fine thing about these surplus buildings

is that they are located in areas where they can be put to use without

a lot of expense. This situation offers Congress a unique opportunity

to develop much of the local potentiality we have in this area and at

the same time save the taxpayers the cost of moving these 'facilities

around the country.

I believe that the purpose of this bill would be realized best if school

boards, city councils, county boards of supervisors and other quasigovernmental agencies be given the first opportunity to acquire these

buildings after the agriculture requirements have been met in the area.

I urge the committee to approve this bill or a similar piece of legislation that would reach that goal and which would allow and encourage

the facilities to be used in these various ways.

I want to point out one additional factor which I think has been

overlooked and that is by opening up this one extra slot of acquisition

possibility on the part of the potential buyer, I think you are creating

a situation where you will have a greater potential market and thus

serve the interests of the government and the public to a better degree

by bringing about a situation where you have a possibility of a greater

number of bidders for these facilities and thus arrive at a better price

at the local point.

With that I thank you for your time.

Mr. MATSUNAGA. Thank you, Mr. Hansen. We certainly appreciate your appearing before the committee and sharing with us your

views.

Are there any other witnesses?

Mr. CALLAN. I have just one short statement, Mr. Chairman.

Most all of this has been covered, but I would like to add one point.

We are considering legislation to establish community development

districts. It just occurred to me we could use these unneeded general

storage facilities in these rural areas and it would certainly complement this program.

Mr. MATSUNAGA. Thank you very much.

Are there any other statements?

I have a statement from Congressman William L. Hungate and a

letter here addressed to me as chairman of the subcommittee, from

Senator George McGovern of South Dakota.

Without objection I will have these made a part of the record at this

point.

(The statement and letter referred to follow:)
SALE OF GRAIN STORAGE FACILITIES 29

STATEMENT OF HON. WILLIAM L. HUNGATE, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF MISSOURI

Mr. Chairman and other distinguished Members of the Committee on Agriculture, I appear before you today because I strongly believe that the Department

of Agriculture is unnecessarily restricted in its authority to dispose of grain

storage facilities.

For far too long such facilities have been declared excess property and have

not been offered to the private purchaser for uses other than those having to do

with the storage or handling of grain commodities.

If the Department of Agriculture has no expressed need of a grain storage

structure; and if the minimum price as set by the Secretary of Agriculture is not

met by a private bidder seeking the structure for agricultural storage purposes,

then said property should be offered for sale to any reputable public or private

nonprofit buyer, for unrestricted use.

Let our laws recognize the need for flexibility in administering the disposition

of agricultural storage facilities. I respectfully request that this Committee

recommend passage of H.R. 12360.

U.S. SENATE,

COMMITTEE ON AGRICULTURE AND FORESTRY,

July 15, 1966.

Hon. SPARK M. MATSUNAGA,

U.S. House of Representatives,

Washington, D.C.

DEAR CONGRESSMAN MATSTINAGA: I have been advised that your Subcommittee of the House Agriculture Committee is currently holding hearings on Congresman Stanley Greigg's bill, H. R. 12360, which would allow the Department of

Agriculture to dispose of excess grain storage facilities directly to school districts.

I would appreciate having my views on this matter made a part of the hearing

record.

As you know, the Department is presently required to transfer these bins to

the General Services Administration when they become excess to the Depart--

ment's needs. Under the provisions of the Federal Property and Administrative

Services Act, GSA then offers them to other Federal agencies and, if there is no

demand, they may be disposed of to school districts through the Department of

Health, Education and Welfare.

I have been in close contact with several cases in recent months where this

procedure has resulted in bins being unavailable to schools in the same community

in which they are located, because they are claimed by Federal installations a

considerable distance away. The Subcommittee will no doubt be advised of

instances where bins have been moved great distances, at substantial cost, instead

of staying in the same locality and filling a legitimate public need.

In my contacts with officials of the General Services Administration, I have

found that they are sympathetic to these problems, but that they are bound by

present law. I am of the opinion that a change in the law is highly warranted, and

that the Greigg bill has great merit. The Subcommittee may also want to consider the possibility of allowing the General Services Administration to sell the bins

to school districts at a price equal to the assessed value minus the cost of transporting it to the location at which it is demanded by a Federal agency.

I will be very much interested in your progress on this legislation, and appreciate

your courtesy in allowing me to offer my comments.

With every good wish, I am,

Sincerely yours,

GEORGE MC GOVERN.

Mr. MATSUNAGA. As outlined above, the Senator supports Mr.

Greigg's bill and requests that he be recorded as being in favor of

the Greigg bill.

Are there any further statements?

If not, it has been suggested that the GSA be called as a witness.

Is there any objection from members of the subcommittee? The

feeling is that unless GSA is heard from we may run into opposition

on the floor.
30 SALE OF GRAIN STORAGE FACILITIES

Mr. GREIGG. Mr. Chairman, I have no objection to having the

GSA appear before the committee, but I think in all frankness the

members of this committee know about the attitude of the General

Services Administration; we know that they are not going to be very excited about the suggestion of giving up some of their jurisdiction.

If the GSA would want to appear and it is the consensus of the com- mitte that the members would want to hear someone from the GSA, certainly I would not object to it.

Mrs. MAY. Would the gentleman yield?

MT. GRE1GG. Yes.

Mrs. MAY. Have you contacted them, Mr. Greigg?

Mr. GREIGG. Oh, yes; and I can tell you, Mrs. May, that I have a

very substantial folder of correspondence on this issue between the

Department of Agriculture and the General Services Administration

as it relates to the bill introduced.

Mr. HANSEN of Iowa. Isn't it true actually about all you are ask- ing to have done is to set one more slot in the process before it reaches GSA?

Mr. GREIGG. Yes.

Mr. MATSUNAGA. If there is no objection, the subcommittee will stand adjourned until further call of the Chair.

(Whereupon, at 11:50 a.m., the subcommittee was adjourned, to

reconvene at the call of the Chair.)

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