Evening star. [volume] (Washington, D.C.) 1854-1972, 1963-09-29
US. Decision
On Wheat Deal
Expected Soon
BY JOHN M. HTGHTOWER
Associated Press staff Writer


President Kennedy is ex-
pected to make a decision soon
after returning to Washington
this week on proposals to re-
verse longstanding United
States policy and permit the
sale Of wheat to Russia at sub
sidiZed export prices.
Word spread through Admin
tStration circles yesterday that
key Government departments
would recommend the policy
change at a White House meet
ing. probably Tuesday.
If. as high officials seem to
expect. Mr.. Kennedy approves
the step. 1t could lead to an
early sale Of wheat to Russia
and to trade in other agri-
cultural products with the
Communist bloc to whatever
extent such products might be
needed IN various Red coun-
tries.
Publish e d reports on how
much grain the SovietS are in |
terested in buying have varied
from 100 million to 800 million |
bushels. One report yesterday
said Soviet negotiators at Otta-
wa had offered to take three
million tons at $3.50 million.
Three million tons would be in
excess of 100 million bushels.
Subsidy Causes Concern
state Department officials
insist that the Government still
has received no direct ap-
proach from the Soviet Union. |
Grain dealers, however. have
informed key G oNernmen t
agencies Of Soviet interest In a
deal.
One Of the big problems for
the President relates to price
subsidy. United States wheat
sells at the farm for $1.90 al
bushel in the domestic market.
The competitive export price is
around $1.30 a bushel which
means a go cent? subsidy paid
by the Federal Government-or
the American taxpayer-to
maintain the farm income
level.
state Department officials
said there is no law barring the
sale Of wheat to q Communist
country at the export price.
But there Is q policy which was
reinforced in 1861 by a state
ment Of Congress saying that
price support money should not
be used to finance exports to
Communist countries.
1t was primarily for this rea-
son that Mr.. Kennedy had Sec
rotary Of Coz m cree Hodges
and Secretary Of Agriculture
Freeman spend considerable
time last week with congressio-
nal committees to sound out
whether the intent Of Congress
might have changed.
Credits . Problem
There were some outspoken
opponents Of selling wheat to
the Russians but State, Agri-
culture and Commerce depart
ment experts are understood to
have advised their chiefs that
majority congressional senti-
ment appears to favor the poll
cy change.
Another problem is that Of
credits. A law put on the books
almost 80 years ago, the john
son Act, prohibits loans to
countries which are in default
on their debts to the United
States. Russia is In that cate
CORY.
However, the Johnson Act
has been interpreted as prohib-
iting long term loans or cred |
its in such cases but not nor.
NAL commercial credits cover
ing a period Of months.
In last weeks. purchase of
wheat from Canada. Russia
agred to pay by combination
Of cash and credits extended
only to an 1S-month period.
On any specific deal, the |
United States Government
would ask for q specific inter-
probation from the Justice De-
partment, 1t was said, to be
sure that 1t was considered
legal under the johnson Act.