This will

500,000 bushels for shipment from Canada the last 10 days in August. be available for shipment out of Duluth the early part of September. Confidentially, I sold some more of this wheat to Julian Scott today. We have sold him a good lot of Canadian wheat and we have done fairly well on it and I believe that he has made a lot of money-more power to him. As you know, he does not want too many people to know of the wheat which he has bought from us.

The Santa Fe crop report certainly doesn't look very hot and I imagine that there will be quite a lot of spring wheat worked that way if we raise a crop up here. Glad that you had a nice meeting in Dallas entertaining the CCC fellows. Also the Galveston wharves people. I believe that this kind of a thing is very good for us-certainly a good idea to be well built in with these fellows.

Glad to have seen you in Kansas City. Give my best to Wendy in which Ann joins me. With kindest regards.

Signed by W. G. Kellogg.

Who is Julian Scott? is he with the Transit Grain Co.?

Mr. KELLOGG. He is with them, I don't know whether he is an officer or not.

Mr. GUINANE. Is he the one who has been indicted recently for conspiracy to defraud the Government in mixing the wheat that you sold to him?

Mr. KELLOGG. I have heard that; yes.

Mr. GUINANE. Now, why did you think it was such a good idea to be built in with Commodity Credit Corporation and the Galveston wharves people, if you were operating entirely a legitimate business? Mr. KELLOGG. The Galveston people, the wharves people, I felt that as long as he entertained them, I took if for granted it might do him some good as far as the Commodity Credit Corporation. There are a good many times when they have not too much grain for storage and I believe at times they do give preference to some grain firms.

Mr. GUINANE. Did you think it was a good idea that he entertained the Galveston wharves people for the purpose of mixing wheat that was to be shipped by the Bunge Corp. to Galveston wharves? Mr. KELLOGG. No, sir.

Mr. GUINANE. That was not the idea?

Mr. KELLOGG. No, sir.

Senator THYE. Have you finished this particular series of questions? Mr. GUINANE. Yes.

Senator THYE. All right, we will recess for lunch and reconvene at 2 o'clock.

(Whereupon, at 12:35 o'clock, the subcommittee recessed to reconvene at 2 p. m. of the same day.)

AFTERNOON SESSION

Senator THYE. The committee will come to order at this time. You may proceed, Mr. Guinane.

Mr. GUINANE. I want to read another letter written to you, dated May 9, 1951, addressed to the Kellogg Milling Co. and signed, "Sincerely, Dick." Who is Dick?

Mr. KELLOGG. That is Dick Bailey.

Mr. GUINANE. The letter reads:

DEAR BILL: Please find enclosed a note to Bob Straub regarding a new idea, as against present methods.

Who is Bob Straub?

Mr. KELLOGG. He is now president of Bunge Corp. in New York. Mr. GUINANE (reading):

During the San Antonio convention I had the people mentioned in the letter to New York out to a dinner and a real shindig. The CCC fellows and their wives as well as the wharves fellow and his wife. They, of course, tell me about all I want to know and I get along real well with them.

Sweeney runs the wharves and told me that Cargill is giving him much trouble and grief as to this mix business. Bunge is about the best as far as he is concerned. What did he mean by this "mix business"?

Mr. KELLOGG. I suppose the mixing of Canadian wheat.

Mr. GUINANE. Mixing of Canadian wheat?

Mr. KELLOGG. Any kind of wheat.

Mr. GUINANE. What do you think he meant when he wrote you in regard to this "mix business"?

Mr. KELLOGG. I don't remember, it was such a long time ago.

Mr. GUINANE. Do you think it is mixing wheat? Mixing wheat owned by the Commodity Credit Corporation?

Mr. KELLOGG. No, definitely, no.

Mr. GUINANE. Definitely, no?

Mr. KELLOGG. Definitely, no.

Mr. GUINANE. Why do you know it is not?
Mr. KELLOGG. I don't think so.

Mr. GUINANE. It could be?

Mr. KELLOGG. I am quite sure it is not.

Mr. GUINANE. But you don't know.

Mr. KELLOGG. I don't know.

Mr. GUINANE. It could be wheat owned by the Commodity Credit Corporation?

Mr. KELLOGG. I don't think so; he knows more than that.

Mr. GUINANE. Did he ever tell you it is not wheat owned by the Government?

Mr. KELLOGG. I assume that Mr. Bailey knew that you couldn't mix Canadian wheat into anything they booked to the Commodity Credit Corporation.

Mr. GUINANE (reading):

Saw Julian Scott

Who is he, the same Julian Scott of the Transit Grain Co.?

Mr. KELLOGG. Yes.

Mr. GUINANE (reading):

Saw Julian Scott at the convention a couple of times and he said that he had talked to you.

It is really quiet down here. We are busy at the elevators on old sales but it is hard to get any new cars on the books.

Bill, I surely enjoyed your last letter. As much as we would like to see you pay us a visit, it is starting to get hot down in this area. Maybe we had better come and see you.

Not much more at this writing. Ben Dodge is due in town tonight. I have him fixed up at the Worth Hotel but didn't know just what time he gets in. Probably see him in the morning.

Back to the enclosure. When I see something that I think will help Bunge I am just going to let fly.

What is the date of that letter?

Mr. KELLOGG. I believe you said May 9, 1951.

Mr. GUINANE. Now Mr. Kellogg, how much Canadian wheat did the Bunge Corp. clear through the Galveston port?

Mr. KELLOGG. I haven't the faintest idea. I have had no access to the records. I have not seen these sheets since they were prepared. How much they cleared through it, I haven't the faintest idea.

Mr. GUINANE. Maybe Mr. Moskovitz will know. I take it that he is not concrened with the record of the exports either.

Mr. MOSKOVITZ. For the Senate's information, prior to this hearing, we have some reasonable information which the Senators asked for including this correspondence and the list of all the exports including Canadian wheat. If the Senate wants I will read it or turn it over Would you like to have the information?

to you.

Senator YOUNG. Not us, but our counsel does.

Mr. GUINANE. I would like to have the information on the last question.

Senator THYE. Then we will have the information.

Mr. MOSKOVITZ. I think the total runs about 1,100,000 bushels. I don't have the total here on the paper.

bushels.

It runs about 1,100,000

Mr. GUINANE. That is the amount of Canadian wheat placed in the Galveston elevator by Bunge?

Mr. MOSKOVITZ. That is the amount of wheat exported by Bunge Corp.

Mr. GUINANE. Mr. Kellogg made the arrangements for Bunge Corp?

Mr. KELLOGG. Stone Forwarding Co. made that arrangement. Mr. GUINANE. What arrangement did you make with Stone Forwarding Co.?

Mr. KELLOGG. I do not know.

Mr. GUINANE. You do not know?

Mr. KELLOGG. NO.

Mr. GUINANE. When was this Bunge Canadian wheat placed in Galveston?

Mr. MOSKOVITZ. I would guess I would have to guess because I am judging from the date the ship was loaded-sometime in April or perhaps a little before that of April 1952 so the wheat was shipped down there prior to that date.

Mr. GUINANE. When was that?

Mr. MOSKOVITZ. Sometime prior to April.

Mr. GUINANE. It could have been a month or two before that date of April 1952?

Mr. MOSKOVITZ. I don't know.

Mr. GUINANE. You were still vice president for the Bunge Corp.? Mr. KELLOGG. Yes.

Mr. GUINANE. Who made the arrangements or who would have, do you know?

Mr. KELLOGG. Our export offices in New York. Our office here had nothing to do with exports.

Mr. GUINANE. But you had something to do with sending the wheat down to Stone Forwarding Cc. and into Galveston; didn't you? Mr. KELLOGG. If we had it sold to somebody we had nothing to do with getting it down there.

Mr. GUINANE. This wheat that was brought in through Duluth and Superior, I

Mr. KELLOGG. I know nothing about it.

Mr. GUINANE. Who did Bunge sell that wheat to?

Mr. MOSKOVITZ. I think I have obtained the information and am ready to explain it to Mr. Guinane.

The wheat was cleared for export by the Bunge Corp. office in Kansas City and was then shipped by them down to wherever they wanted to have it shipped.

Mr. GUINANE. You have it

Mr. MOSKOVITZ. As I recall, I can't remember whether it was explained or not, but Senator Young did want to have it for the record once before in this hearing, that when you send wheat for exporting, you send various grades of that wheat and then it is blended according to the grade you sell.

It is blended according to the United States Department of Agriculture standards and then it is tested and inspected and then it goes into the holds by the Department of Agriculture standards and as it passes over these holds it is blended so that it goes into holds. You don't send down any one grade. You send a variety and then it is mixed according to the grade the Department of Agriculture called for and then exported in that manner.

Mr. GUINANE. Where did it come from, this wheat that was sent to Galveston?

Mr. MOSKOVITZ. Are you talking of Canadian wheat?

Mr. GUINANE. All the wheat.

Mr. MOSKOVITZ. The wheat that went to Galveston was imported by Bunge Minneapolis office and then transferred to Bunge Kansas City office.

Mr. GUINANE. Then Bunge Kansas City office handled the wheat into the Galveston elevator?

Mr. MOSKOVITZ. I don't know whether it came through Minneapolis or where.

Mr. KELLOGG. It was handled through Kansas City direct.

Mr. GUINANE. Was that billed to Kansas City or direct from Minneapolis and Duluth to elevators in Galveston?

Mr. MOSKOVITZ. What was that?

Mr. GUINANE. That is the bill of lading, was it sent directly to Minneapolis or was it sent to Galveston or Kansas City?

Mr. HENDERSON. I would say it was sent directly to Kansas City. I am not sure, I would think that.

Mr. GUINANE. Did you have any conversation with any representative of the Stone Forwarding Co., at Galveston, Tex.?

Mr. KELLOGG. NO.

Mr. GUINANE. Did you have any conversation with them concerning the receipt of wheat into the elevator?

Mr. KELLOGG. No.

Mr. GUINANE. None whatsoever?

Mr. KELLOGG. None.

Mr. GUINANE. All you know is that you sold this Canadian wheat to Bunge in Kansas City and shipped it directly to the elevator in Galveston?

Mr. KELLOGG. Yes.

Mr. GUINANE. You had no conversation with anyone at Galveston? Mr. KELLOGG. None at all.

Mr. GUINANE. Did Bailey ever tell you he had a conversation with Mr. Thornton at Galveston for handling Bunge wheat?

34117-53-pt. 2- 4

Mr. KELLOGG. I don't know if he ever did. I don't know why he would because exportation was out of my department.

Mr. GUINANE. He was handling Galveston wharves for you people down there wasn't he?

Mr. KELLOGG. I had nothing to do with the handling of anything at Galveston.

Mr. GUINANE. Didn't he submit an expense sheet to you at the same time he did Hallet & Carey?

Mr. KELLOGG. No; not to my knowledge.

Mr. GUINANE. Not to your knowledge?

Mr. KELLOGG. Not that I know of. Most of the people whatever expenses they had were sent into the office and I never looked into those expense accounts.

Mr. GUINANE. Who would

Senator THYE. Who would authorize the expense accounts that would cover the entertainment at the dinners that was referred to in the previous letters?

Mr. KELLOGG. I would say the general office manager at Fort Worth. Mr. Bailey worked under him.

Mr. GUINANE. Mr. Kellogg, we have some transportation entries, manifest documents here. Are you familiar with any of these documents?

Mr. KELLOGG. No, I am not.

Mr. GUINANE. This is an importation by Kellogg Milling Co.

Mr. KELLOGG. Yes.

Mr. GUINANE. Who handled these documents for Kellogg Milling Co.?

Mr. KELLOGG. On the importation, Mr. Vosika.

Mr. GUINANE. Mr. Vosika?

Mr. KELLOGG. I think so.

Mr. GUINANE. Did you know he had made these documents dated April 23, 1951? Did you know about this paragraph:

Entered or imported by Kellogg Milling Co., Duluth, Minn., to be shipped in bond via the Omaha Railroad, consigned to collector of customs at Houston, Tex. Final foreign destination, Belgium. Consignee, Commodity Credit Corporation, care of Transit Grain Co., notice to Stone Forwarding Co., Houston, Tex. This entry describes 30,000 bushels of wheat at the rate of 21 cents per bushel.

Did you know that Commodity Credit Corporation was going to be made the consignee, and that it was named as such on the transportation entry and manifest document?

Mr. KELLOGG. I can tell you about that. When we sell anybody we receive the shipping instruction from them and in this particular case we shipped it according to the directions that we received. In this particular case it looked rather strange to me and I called Julian Scott at Fort Worth.

Mr. GUINANE. Called whom?

Mr. KELLOGG. Julian Scott. I didn't see these papers but I saw a telegram or letter telling us how to ship it and I said it seems kind of strange to me.

Mr. GUINANE. How come this goes to Commodity Credit Corporation?

Mr. KELLOGG. He said:

We don't have a shipping permit and we borrowed one from the Commodity Credit Corporation and gave them back a permit for a later ship.