tain crops 100 percent in order to get down sufficiently to affect the price in the coming year. That you cannot do.

Senator CAPEHART. You cannot do that but I think if you will set up a commission such as this and they take the necessary steps and the world knows that we have mandated the administration to get rid of the surplus-it will take some time-I think you will find that there is an immediate reflection in the increase of farm prices all over the United States and all over the world.

I am talking here today because the bill I introduced has to do only with getting rid of existing surpluses. I am going to cover briefly in a moment my ideas of what we ought to do on future production.

Senator HUMPHREY. Just one observation that I want to add: I spent some time over the weekend talking with some grain people, at a meeting that we had, and the indication that I have at the present time is that where a private grain trader usually carries a certain amount of personal inventory, that they no longer carry it at all. Senator CAPEHART. That is correct.

Senator HUMPHREY. That the Government carries all of the inventory, and primarily so because the Government has such a power to depress prices by any amount of operations with the CCC, that the private grain trader hesitates to carry any inventory.

Furthermore, the private grain trader who used to have his own warehouse can rent that warehouse space out to the Government and at the same time have the Government carry the inventory and be paid for the storage of the very grain that he can go into and purchase. I talked to one man, for example, that recently sold over 100,000 tons of certain soybeans for meal. He never owned a pound of it. He just made the transaction through the Government.

And this is going on repeatedly, primarily because from time to time the Commodity Credit Corporation has dumped onto the market what I considered to be price-depressing amounts of grain and food products.

This is the general consensus. The CCC can also firm up that market. I will make it quite specific.

In corn they have been saying a lot of the corn they have been dumping has been spoiled. It may be spoiled, but I would like to bring my files to this committee and show you letters from some of the larger corn traders. They said they never had better corn in their life.

Some so-called spoiled corn that is coming into the market is really a good grade of corn, depressing the market far below support levels so that the Government has to take over practically all of the corn under loan.

I think that you have to look at what should be normal inventories, when you talk about your surpluses. What the Government has on hand is not all strictly surplus. There used to be a time that the private trader had a considerable amount of inventory in his hands. Senator CAPEHART. The facts are that practically all warehouses throughout the Nation are filled with surplus Government-owned grains; therefore, there is no room for the privately owned grains. Therefore, they carry no inventory.

Senator HUMPHREY. But they are filled with the Governmentowned grains, period, and some of it is surplus. I think we have to

be very careful that we do not ignore that the set-asides that this Congress has determined as legal set-asides are a part of that.

One of the things I resent when we discuss surplus or deplore it that we take everything over and above the current day needs and declare it surplus. It is only part of it that is surplus. The rest is what you call normal operating inventory.

The CHAIRMAN. Have you in the bill anything to make it possible that these surpluses would be used, let us say, domestically to give to our people a better diet, more than they can now afford to purchase? Senator CAPEHART. That is in the bill, and those are rules and regulations to be worked out by your commission.

The CHAIRMAN. But would it have to be in addition to what they are able to buy now?

Senator CAPEHART. That is right.

The CHAIRMAN. Because if you do not you would probably not really assist them.

Senator CAPEHART. For example, in Indiana, we have township trustees that take care of the welfare of the people that have no money, and they either give them money or buy foodstuffs for them.

I do not know why we should tax the people of Indiana or any other State, with property taxes, to feed these unfortunate people and at the same time tax the people for this surplus and not give it back to the township trustee to give away.

That would be one of the things that this commission would look into. They would see how much of this surplus foodstuff they could give to the charitable institutions of the United States, in order to increase their diets, and their health.

Let me call your attention to one other thing here. You may think it is a little farfetched. I do not.

Since the end of World War II, we have given away for military and economic aid about $56 billion. I do not bring this up to criticize it. I do not bring this thought up to say that it is either good or bad, that we should or should not have done it. That is not the point.

The facts are that we taxed the American people to the extent of $56 billion, and every dollar of that $56 billion came back to the United States in the form of the purchase of automobiles, trucks, tractors, and a thousand and one other things that the businessmen of America manufacture.

In other words, had we not appropriated that money, had we not given it away, they would have done just that much less business, because it was an indirect subsidy.

I am not criticizing it, please. I am just calling your attention to it. Only $11 billion of that $56 billion found its way into the farm products and cotton and that sort of thing. The rest of it went for a thousand and one things, much of it military, but nevertheless our manufacturers produced the military. They would have been that much short in total business since World War II, if it had not been for that.

Why do we spend such huge sums as that? Why do we indirectly-it is an indirect subsidy to the business interests of the United States, and I am not criticizing it-and yet hesitate to take the drastic action that is necessary to relieve the farmers when we are not talking about not all of $8 billion, because not all of that is

100 percent surplus, part of it is needed-I do not know why we hesitate at all.

I am finished unless you want an explanation of the bill which I . do not think is necessary. You can read as well or better than I can. The CHAIRMAN. The entire statement will be printed in the record. Senator CAPEHART. I would be happy to answer any questions. I have taken up a lot of your time now. I want to say that the purpose of the bill is to mandate the administration to get rid of surpluses, period; to set up a commission charged with 100 percent responsibility for doing it, so that we can call that commission over here and hold them responsible for getting rid of it and not have to run all over Washington and all over the world trying to find out who is responsible for it.

And I think if we do that we will get rid of these surpluses. It is not intended at any time to interfere with normal business. It is not intended at any time to interfere with normal business in the United States or any foreign country. I do not know how else to do it.

If I owned a business and it had $8 billion worth of surplus, I would not be able to operate that business until I got rid of it or knew how to get rid of it. I do not know why you do not have the same thing here.

I am sure that you are going to work out ways and means in the future for increasing the uses of farm products. That is very, very important. We have to appropriate, in my opinion, more money for research. The farmers have to spend more money through the help of the Government in advertising, in creating a bigger demand for farm products. The increase in population will partially take care of this problem we are talking about.

Here is an example of what I am talking about in new uses for farm products. I do not know whether that product is good or whether it is bad. I think it is good myself.

But there is a product that is made out of wheat, 100 percent out of wheat, not out of straw but made out of the kernels of wheat. That has many, many uses-the tops of desks-inside of houses, 101 uses for that sort of thing.

It is made 100 percent out of wheat.

I do not know why the Government does not, in their research laboratory, get behind a thing of that sort. I do not know why we do not appropriate sufficient money to find new uses for farm products. You will remember in World War I we had no trouble, when we made up our minds to do so, to develop synthetic rubber. We did it in a big way. We are now using synthetic rubber not exclusively but in large amount. We developed it.

I think the Government ought to do likewise, find new ways and means of using farm products. You might, with something of that sort relieve the wheat situation of the United States.

Thank you very, very much.

The CHAIRMAN. If there are no further questions, thank you very much.

64440-56-pt. 8 -8

(S. 2852 is as follows:)

[S. 2852, 84th Cong., 2d sess.]

A BILL To create an International Food Community Board, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this act may be cited as the "International Food Community Board Act of 1956”.

DECLARATION OF PURPOSE

SEC. 2. It is the purpose of this Act to distribute Government-owned stocks of surplus agricultural commodities by an orderly system of disposition of such commodities through private nonprofit organizaitons, and to needy peoples at home and in free foreign nations, and thus to relieve the agricultural economy of the United States of the harmful effect to fair market prices of these surpluses hanging over the market and at the same time provide food and clothing for underprivileged peoples of the free world.

INTERNATIONAL FOOD COMMUNITY BOARD

SEC. 3. There is hereby established in the executive branch of the Government an agency to be known as the International Food Community Board (hereinafter referred to as the "Board"). The Board shall be composed of five members who shall be appointed by the President from among the heads of departments in the executive branch most concerned with the purposes of this Act. One of the members shall be designated by the President as Chairman and one shall be designated by him as Vice Chairman. No member of the Board shall receive any additional compensation for his services on this Board. Members of the Board shall serve at the pleasure of the President.

(b) The Board is authorized to appoint and fix the compensation of such officers and employees, and to make such expenditures as may be necessary to carry out its functions. The Board may delegate any of its functions to such of its officers and employees as it may designate.

(c) The Board shall, with the consent of the Government agency concerned, avail itself of the services and facilities of existing Government agencies in carrying out its functions under this Act and may, with the approval of the President, delegate any of its powers to any Government agency.

(d) The Board is authorized to appoint without regard to the civil service laws and regulations such advisory committees as it deems necessary to assist it in carrying out its functions under this Act. Persons so appointed may be compensated at rates not in excess of $50 per diem and may be reimbursed for necessary traveling and subsistence expenses incurred by them while engaged in the business of the Board.

STATE LIAISON COMMITTEES

SEC. 4. The Board is authorized to appoint for any State or regional area, a State or regional liaison committee composed of three members. The Board shall perform its functions under this Act in such States or regions with the advice and on the recommendations of such liaison committees. Members of such State or regional liaison committees shall serve at the pleasure of the Board, may be compensated at the rate of not more than $50 per diem, and shall be reimbursed for necessary traveling and subsistence expenses incurred by them while engaged in carrying out functions under this Act. The Board shall provide each such liaison committee with such stenographic and other assistants as it may reasonably require. Such liaison committees shall be charged with the responsibility of assisting properly qualified applicants to avail themselves of the benefits of this program.

FUNCTIONS OF THE BOARD

SEC. 5. It shall be the duty of the Board to formulate and put into effect programs designed to carry out the purposes of this Act. Such programs shall include, but shall not be limited to, plans for

(1) the distribution over a period of approximately three years (or, in the case of perishable commodities, such shorter period as may be necessary

to prevent spoilage) to needy peoples in the United States and in friendly foreign countries who would otherwise be unable to obtain such commodities or products, of all stocks of Government-owned surplus agricultural commodities, or products processed therefrom, less

(i) such quantity of each commodity as the President may estimate is necessary to provide an adequate national reserve of such commodity for emergency purposes;

(ii) such quantity of each such commodity as the President may estimate can be sold or otherwise disposed of, from the stocks of Government-owned agricultural surpluses, during the period of this program, through previously authorized programs; and

(iii) the President may from time to time revise such estimates and thereupon this program shall be correspondingly revised;

(2) carrying out such distribution in a manner which will not materially displace, disrupt, or interrupt existing commercial markets;

(3) carrying out such distribution, to the maximum extent feasible, through the facilities of private nonprofit organizations in the United States and abroad and through locally sponsored or locally administered plans of operation;

(4) storing in foreign countries of commodities transported for ultimate distribution within, or in the areas of, such countries, and for the transportation abroad as soon as possible of the commodiites proposed ultimately to be distributed abroad;

(5) transportation of commodities and products to be distributed to storage facilities in areas of distribution and the leasing, or where necessary the construction, of necessary storage space in such countries;

(6) processing of commodities into consumable goods wherever possible without cost to the Government; and

(7) reimbursement of costs incurred by the Board in processing commodities into consumable goods and in providing transportation from storage facilities to points of consumption.

POWERS OF BOARD

SEC. 6. In carrying out its functions under this Act, the Board is authorized to

(1) obtain Government-owned surplus agricultural commodities from the Commodity Credit Corporation, without reimbursement to the Commodity Credit Corporation for such commodities, and the Commodity Credit Corporation is directed to deliver to the Board for the purposes of this Act such commodities as the Board may request and which are to be disposed of under section 5 (1) of this Act;

(2) enter into contracts for the processing into consumable goods and bulk packaging of such commodities, and for their transportation to storage facilities in areas of distribution (or, in exceptional cases, to points of consumption);

(3) enter into agreements, as provided in section 7 of this Act, with private nonprofit organizations in the United States and in foreign countries for the distribution of commodities and products processed therefrom to the ultimate consumers thereof;

(4) accept donations of transportation, processing, and other services.

AGREEMENTS WITH DISTRIBUTING ORGANIZATIONS

SEC. 7. Agreements entered into pursuant to section 6 (3)

(1) shall provide, except as provided in section 8, for payment to the Board for commodities or products furnished to the distributing organization, and reimbursement of the Board for costs incurred by it in the processing or transportation of such commodities or products, but such payment need bear no relation to the fair market value of the commodity or product, the purpose of this Act being to distribute surplus goods to needy peoples; (2) shall contain such provisions as the Board may deem necessary or appropriate to assure that the commodities and products to be distributed under such agreement will be delivered only to needy peoples not otherwise able to obtain such commodities, or to schools, hospitals, or other institutions for consumption or use by such peoples, all pursuant to the purposes stated in section 5, paragraphs 1 and 2, of this Act;