Evening star., 1953-05-02
Justice Department
Studies Action in
Oats Manipulation

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The Justice Department today
was studying possible action on
an Agriculture Departm n t
charge that Cargill, Inc, one of
the Nations largest grain firms,
may be trying to manipulate oat
prices by illegal trading.
Agriculture officials told a
Senate Appropriations subcom-
mittee yesterday that they rec
commended criminal prosecution
of the firm last October for the
same type of manipulation in
oats" They said the aim was to
pile up big profits by forcing
down domestic oat prices and
cashing in on contracts for
future deliveries.
A Justice Department spokes-
man said the new charge by the
Agriculture Department "is under
study here"
At Minneapolis, Cargill head
quarters, the company said in a
statement:
"Cargill, Inc. has previously
made a fiat denial of all sug-
gestions or charges of this kind.
We now repeat this denial"
The testimony came from j. N.
Mehl, administrator of the Com
modify Exchange Authority,
which supervises trading in many
farm products, and D. B. Bagnell,
the CEA's chief compliance Of
flcer.
They said Cargill's operations
included important importation
of Canadian oats.
May Restrict Imports.
Senator Jenner, Republican, of
Indiana, reported, meanwhile,
that Secretary of Agriculture
Benson may restrict imports of
Canadian oats.
Senator Jenner said in a
Senate speech that Mr.. Benson
assured him Justice Department
officials would push criminal
charges against Cargill, 'involv-
ing alleged manipulation and
false reports"
For three years, the Senator
said, large imports of Canadian
oats had depressed market prices
received by United States farm
ers.
He quoted Mr.. Benson as say
ing that an investigation was
under way, and if the Canadian
imports threaten the United
States farm price-support pro-
gram, import curbs will be asked.
The Senator said United States
oat producers were receiving 10
to Is cents a bushel less than
Government price support levels.
He said Canada might send in as
much as IS million bushels this
year unless imports are re-
Stricted.
200 Pct. Storage Profit.
Cargill has had several rum
ins with Senator Jenner and the
Agriculture Committee in the
past.
In May. 1852, the committee
was told the firm was making a
200 per cent profit on an un-
usual grain-storage contract with
the department. The company
purchased an old oil tank firm
at Norris City, ILL.,, for 1925, 900,
repaired the tanks for storage
at cost Of $150,000. and col
lected approximately $1.1 million
from the Government over a
period of two years for storing
corn.
The contract with Cargill,
only storage contract the Agri-
culture Department had signed
up to that time, guarantees a
specific dollar payment, obligated
the Government to pay $612,500
for one years storage. The de-
partment failed to move the
grain at the end Of the year
and had to pay Cargill an extra
$37,500. In addition, much of
the S million bushels of corn de-
Perforated and had to be sold at
a loss of between $500,000 and
81 million.
Jenner Demanded Action.
Last November Senator Jenner
charged that the Agriculture De-
partment was shielding interna-
tional SPECTATORS" and demand
ed that then Secretary Brannan
do something" to halt Cargill'S
operations.
The Mehl- -Bagnell testimony
came up in consideration OF the
annual Agriculture Department
appropriations.
Senator Young, Republican.
of North Dakota, conducting the
hearing by an Appropriations
subcommittee, said he under
stands a "vice president of Car
gill now is on one of Secretary
of Agriculture Benson's advisory
committees"
Agriculture Department rec
ords show that r. c. Wood
worth, vice president Of Cargill,
Inc, Of Minneapolis, is on the
Secretary's Advisory Committee
on Feed.
A department spokesman said
Mr.. Woodworth would continue
as a member Of the Corn In
dustry Advisory Committee.
There is no legal problem,
the spokesman said. "He Is serv-
ing on a committee having to do
with warehousing. not dealing