the Department of Agriculture would welcome a chance for the Secretary of Agriculture to have an easement-granting authority as he does now for roads. The CHAIRMAN. Do you run into any trouble with powerlines? Mr. NELSON. I am not exactly sure where the trouble was. One of the things I have been told was that some of the attorneys that were working on the bill felt that it should also repeal any previous authority, and name each one of the laws that the Department of Interior or Agriculture had for granting of this type of authority. The bill that was sent to the Congress did not name those. Consequently, that was one of the reasons, I have been told, why it did not get through the committees at that time. The CHAIRMAN. Are there any questions? Mr. MYERS. This involved about 23 miles. How many acres is involved here? I say it is about 23, is that correct? Mr. NELSON. That is about right. The actual acres of national forest land that it covers is 138.7 acres. It crosses national forest land, the green in the map there, for 14.17 miles. Mr. MYERS. Will the railroad take more land than they are using now under this bill? Mr. NELSON. NO. Mr. MYERS. It is going to be a different provision for this railroad than you have now? Mr. NELSON. It is just a different instrument under which they will hold the easement in this case, rather than a special-use permit, which is revocable. Incidentally, the railroad company has done all the cleanup work, the provisions for erosion control that were required in the specialuse permit, so that part has been taken care of, and incidentally they did a very nice job. I have been on the area and have seen where they were constructing the railroad at the time they were constructing it. Mr. MYERS. The chairman was speaking about easements providing for power transmission lines. What is your policy now concerning transmission lines and possibly even a utility line running across a national forest? Mr. NELSON. We first issue a special-use permit for construction of such powerlines. If it is a major powerline, it might come under the Federal Power Act in connection with a Federal power project, and it is then authorized under the Federal Power Act. We also have authority to issue easements for powerlines for a period not to exceed 50 years. The minor lines are those that are not connected with a Federal power project and are handled under a special-use permit if voltage is less than 33 kilovolts, or by limited easement if voltage is over 33 kilovolts. We have many, many miles of such powerlines on the national forests, both minor and major. We do, in connection with those, have a hand in the actual location, and we have requirements to protect resources and prevent damage such as erosion, and to consider the location in relation to the natural beauty along rivers, or major scenic highways. Mr. MYERS. But an individual who through necessity might need to cross part of this, would have relatively no problem in getting power. Mr. NELSON. That is right. Mr. MYERS. This is not relevant to this bill, but I have this question come up. Mr. NELSON. No, we have had many, many miles of powerlines. Mr. MILLER. Mr. Nelson, is there a possibility of increased traffic on the railroad? Is this why a change in easement would be made? Mr. NELSON. I am sure there will be increased traffic. I think the railroad people are here today and can answer that better than I can. Many of the mines are just getting under development. When I was last there, they were sinking shafts on several mines and at that time they were not hauling ore by rail. I am sure that some of the mines are not yet completely developed and there will be a considerable amount of increased traffic. I think, however, the basic reason, as was indicated before, is because of the financing of the project. Mr. MILLER. What control would you not have under this type of a permit that you did have under the old special use permit? Mr. NELSON. Under the old special use permit we could cancel it at any time, and that is one of the objections that the finance people have. Under an easement we will include stipulations that will take care of any of the items that we think are necesssary to protect the adjacent national forest land and protect the public. Those same type of stipulations are in the special use permit at the present time. Those will be carried forward into the new easement. The easement does allow such stipulations. So we feel that the public is fully and adequately protected under an easement just as well as they would be under a special use permit. Mr. MILLER. Thank you. The CHAIRMAN. Are there other questions? Mr. ZWACH. Yes, Mr. Chairman. Just for information, does this ore also contain nickel, and, also, copper, and manganese and some of the other ores, or is it ore? a pure lead Mr. NELSON. I know the ore there contains many of the other minerals. The railroad people are here that haul the ore and maybe they can answer that better than I can, but when I was there, I talked to many of the mining people and I know it contains some of the other minerals you named, such as nickel, copper, and so forth. Mr. ZWACH. Mentioned here was magnetic iron ore. Mr. NELSON. Yes. Mr. ZWACH. I come from the great ore area of the United States, Minnesota. Is this ore underground? Mr. NELSON. Yes. The iron ore that has been referred to is very deep underground but of very high quality. Mr. ZWACH. Fifty or 60 percent iron. Mr. NELSON. I could not say that. I am not expert in that field. Mr. ZWACH. Is it granular or is it taconite, the real hard rock-type ore? Mr. NELSON. Mr. Congressman, I am a forester and that is out of my line. Mr. ZWACH. Thank you. That is all, Mr. Chairman. 95-893-68- -5 Mr. KLEPPE. Dr. Nelson, I understand you are going to be the last witness on this, and maybe this is not a proper question for you, but I want to ask you anyway. I suspect that the railroad people involved in this perpetual easement are perfectly in agreement? You do not have any areas of difference between the Department and the railroad in setting up the perpetual easement that is talked about here, is that correct? Mr. NELSON. That is absolutely correct. The CHAIRMAN. Are there any other questions? Mr. TEAGUE. Mr. Chairman, I do not have a question. I would like to make a statement. I am always impressed with Dr. Nelson's testimony. He is one of the best witnesses we have here. He is concise and precise and when he does not know the answer, he says so. I would like to compliment him. Mr. NELSON. Thank you. The CHAIRMAN. We always like to have Dr. Nelson with us. We appreciate your statement, if there are no further questions. Mr. NELSON. I should clear up the record, Mr. Chairman. I am not "Doctor" Nelson. I am just M. M. Nelson or "Red" Nelson, as the Secretary and Chief call me. I do not have a doctor's degree. Also, the paper this morning promoted me to "Chief," I am not the Chief of the Forest Service, either. The CHAIRMAN. Mr. Ichord. Mr. ICHORD. Mr. Chairman, I did not know the figure which the Forest Service was contemplating demanding for this perpetual easement. Mr. Nelson has given it at around $13,000 or $14,000. I would point out that seems to be a very good price for the Government to receive for a perpetual easement. Prior to the discovery, the land in this area was selling for as little as $4 or $5 an acre. The average price for cutover timberland was probably around $10 an acre. That is not the mineral land. Now the land in the area is selling for $40 or $50 an acre. If they are going to charge $100 an acre to the Frisco Railroad, you can bet the Government is getting a good return for the land in this area. We do have a representative from the Frisco Railroad, Mr. Grinnell, who would be available for answering any questions that the committee might have. The CHAIRMAN. Are there any questions by the committee? If not, we appreciate your coming, sir. If there are no further questions, we are very much obliged to you, gentlemen. The committee will go into executive session. (Whereupon, at 10:35 a.m., the committee went into executive session.) FROZEN CONCENTRATED ORANGE JUICE WEDNESDAY, JUNE 5, 1968 HOUSE OF REPRESENTATIVES, The committee met, pursuant to notice, at 10 a.m. in room 1301 Longworth House Office Building, Hon. W. R. Poage (chairman) presiding. Present: Representatives Poage, Gathings, Abbitt, Jones of Missouri, Stubblefield, Purcell, de la Garza, Jones of North Carolina, Dow, Teague, Hansen, Wampler, Miller, Burke, Mathias, Zwach, Kleppe, and Price. Also present: Christine S. Gallagher, clerk; William C. Black, general counsel; Hyde H. Murray, assistant general counsel; L. T. Easley, staff consultant. The CHAIRMAN. We will now take up the bill, S. 3143— To amend the Commodity Exchange Act, as amended, to make frozen concentrated orange juice subject to the provisions of such act. (The bill follows:) [S. 3143, 90th Cong., second sess.] AN ACT To amend the Commodity Exchange Act, as amended, to make frozen concentrated orange juice subject to the provisions of such Act Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the third sentence of section 2(a) of the Commodity Exchange Act, as amended (7 U.S.C. 2), is amended by striking out "and livestock products" and inserting in lieu thereof ", livestock products, and frozen concentrated orange juice". Passed the Senate May 17, 1968. FRANCIS R. VALEO, Secretary. The CHAIRMAN. I call on Mr. Alex Caldwell, Administrator of the Commodity Exchange Authority, who is present. We will be glad to hear from you, Mr. Caldwell. At this time I ask permission to insert after Mr. Caldwell's statement a statement by Mr. Lynn of the American Farm Bureau Federation, in general support of the bill, suggesting, however, that we should change the law so that any time in the future when a commodity is admitted to trading on the board it automatically be under the provisions of the Commodity Exchange Act. (63)' STATEMENT OF ALEX C. CALDWELL, ADMINISTRATOR, COMMODITY EXCHANGE AUTHORITY; ACCOMPANIED BY RONALD CALLANDER, DIRECTOR OF TRADING DIVISION, COMMODITY EXCHANGE AUTHORITY Mr. CALDWELL. Thank you, Mr. Chairman. I have with me Mr. Ronald C. Callander, Director of the Trading Division of the Commodity Exchange Authority. The CHAIRMAN. Glad to have you with us. Mr. CALDWELL. Mr. Chairman and members of the committee, I am pleased to have this opportunity to appear before you today to present the Department's views on S. 3143, a bill to amend the Commodity Exchange Act by adding frozen concentrated orange juice to the commodities covered by the act. The Department recommends the enactment of the bill. Frozen orange juice is a new commodity in futures trading. Trading began in October 1966-about 20 months ago-on the Citrus Associates of the New York Cotton Exchange. In other words, the cotton exchange and its members inaugurated trading in this new commodity. I believe the market has taken hold in a manner beyond the highest hopes of its promoters. The contract unit in which futures trading is conducted is 15,000 pounds of orange solids. Deliveries are made from exchange-licensed warehouses in Florida. The deliverable grade of frozen orange concentrate is U.S. Grade A. Since the beginning of the market, futures trading in orange juice has risen steadily. In the calendar year 1967, the total volume of trading was 23,338 contracts. However, in the first 5 months of 1968, trading has ballooned to 52,246 contracts-more than double the total trading for all of 1967. The estimated value of this trading is $400 million. Open contracts in frozen orange juice futures at the end of May amounted to 5,411 contracts and were approximately one and one-half times the level at the beginning of 1968. Open contracts are the number of contracts outstanding remaining to be settled, and are the best measure of market utilization by the industry and by the speculative public. There is every indication that the orange juice futures market is growing in economic use and is making itself felt as a marketing tool in the distribution of citrus products. Since the beginning of trading, futures prices of frozen orange juice have been featured by wide fluctuations. The range between the high and low prices of the near futures in the first 6 months of 1967 amounted to 11 cents per pound. The range in the second 6 months amounted to 28 cents per pound. In the first 6 month of 1968, the range has been 11 cents per pound. These wide fluctuations which have occurred have increased participation by the citrus industry and the public as is the case in all futures markets with large fluctuations. The price of the July future on May 29, 1968, closed at 53.60 cents per pound compared to 61.55 cents on December 29, 1967. Under the Commodity Exchange Act we have no authority to make a direct study of the operations of the futures market in orange juice. However, a study of market utilization has been made by the Florida. Citrus Commission. The report on this study entitled "The Futures |