Senator YOUNG. Who did you meet with?

Mr. HORAN. Vosika.

Senator YOUNG. How many meetings did you have?

Mr. HORAN. In regard to the wheat, Senator, I have had conferences with Vosika many times, about the seed, about wheat, about various things. They are regular importers of products other than wheat.

Senator YOUNG. On any particular decision that you rendered? Mr. HORAN. One or two, perhaps.

Senator YOUNG. Where?

Mr. HORAN. In our office.

Senator YOUNG. None outside of your office?

Mr. HORAN. None outside the office.

Senator YOUNG. You didn't accept any gratuities of any kind?
Mr. HORAN. No, sir.

Senator YOUNG. No drinks?

Mr. HORAN. No, sir.

Senator YOUNG. You were sober when you made this decision?

Mr. HORAN. We might have had lunch. Who might have paid for the lunch depends largely on who extends the invitation.

Senator YOUNG. Do you make a practice of having lunch with people like this?

Mr. HORAN. No.

Senator YOUNG. How come you had lunch with this man?

Mr. HORAN. I have had lunch with this man several times during the years.

Senator YOUNG. Is it a common practice?

Mr. HORAN. We meet on the street, and he says, "Where are you going?" I say, "Going to lunch." I say, "Come along."

It is a common practice among people who are acquainted. It is not a customs practice.

Senator YOUNG. It is not an ordinary thing to do?

Mr. HORAN. No.

Senator YOUNG. How did you happen to do it in this particular case?

Mr. HORAN. It is an ordinary thing to do among friends at any time.

Senator YOUNG. The people in the customs service to have lunch with someone that is beneficiary of a decision that can make them a lot of money?

Mr. HORAN. Not many times. I have had lunch with Walter Vosika. He is a customshouse broker. I have had representatives of railroad companies, airlines at times it depends on where we meet them, and when.

Senator YOUNG. You had lunches before a decision of considerable importance?

Mr. HORAN. I can't say I did or didn't.

Senator YOUNG. Who paid the lunch check?

Mr. HORAN. That depended on who extended the invitation, or the flip of a coin. That is the way we do it among ourselves, customs people.

Senator YOUNG. You make a practice of doing that kind of business?

Mr. HORAN. Not a practice. It happens once in a while.
Senator YOUNG. You don't remember how many times?

Mr. HORAN. Of course, I can't remember how many times. I have been in the custom service 31 years. I have had lunch with a lot of people, but I don't remember how many times. I usually go to lunch by myself, only on rare occasions do I go to lunch with somebody.

Senator YOUNG. Was it one of your mottoes, to increase the flow of business going through your office?

Mr. HORAN. We like to render service, and we like to have importing public transacting business through our office.

Senator YOUNG. Even though imports of 60 million bushelsalready there is a great surplus of wheat in this country-even though it was bad business, to transact a little more business through your office?

Mr. HORAN. I don't know how much wheat is stacked up in the United States. I still don't know.

Senator YOUNG. Don't you think, really, your decision was contrary to the intent of the law, to prohibit more than 795,000 bushels of wheat to come in here?

Mr. HORAN. Senator, I am not allowed to let my prejudices sway me in it. We rely on the instructions whether we like it or not. That is what we have to do.

Senator YOUNG. Did you, at any time, contact the Washington office?

Mr. HORAN. No.

Senator YOUNG. Did Mr. Vosika advise you not to contact the Washington office?

Mr. HORAN. No.

Senator YOUNG. What was his reason for that?

Mr. HORAN. I don't know. I never, at any time, instructed anybody, or advised them not to contact the Washington office in regards to a custom transaction.

Senator YOUNG. The fact that you didn't contact the Washington office, don't you think that looks a little strange?

Mr. HORAN. It might to you, Senator, but it does not to me.
Senator YOUNG. You are a rather strange official.

Senator THYE. Let us have from his records the information that would give him the right to make the decision that he made on that wheat, that would be the regulation.

Mr. HORAN. This is the customs regulations of 1943, section 18.11: Customs form 7512 shall be used as a combined entry, invoice and manifest, and nine copies shall be required at the port of origin, the merchandise shall be described on this form in such detail as to enable the collector of customs to make and estimate of the duties due thereon.

Senator THYE. And you consider yourself a port of entry?

Mr. HORAN. Yes, sir.

Senator THYE. And did you collect the customs?

Mr. HORAN. Not on the wheat that moved in bond from Minneapolis.

Senator THYE. You changed the classification of that wheat in bond when it departed from Minneapolis?

Mr. HORAN. Not the classification, the description on the in bond manifest.

Senator THYE. The description is the classification, because it changed it from "unfit for human consumption" into something different than that language, and you did that in your office, but you didn't collect the customs?

seen.

Now, that is a strange transaction. It's the strangest I have ever The wheat entered the Duluth port. It was not touched in the Duluth port. It comes to Minneapolis and you proceed to change the classification of the commodity in cars, but you didn't collect the customs, and you let it go on to some other port. You call them ports. It is just another custom collectors office in the United States. Mr. HORAN. That is right.

Senator THYE. That is a transaction I can't get clear in my mind, and I want to get it cleared up. That is the strangest transaction Í I have ever seen. You didn't collect the duty, as custom collector. Why did you do this business? You were not really doing business, except to accommodate the change of the name of the kind of grain in bond.

Mr. HORAN. That is right. Yet, the description was used.

Senator THYE. Why didn't the Duluth office refer to the same regulation?

Mr. HORAN. I don't know why the Duluth office didn't. I don't know what reasons they have.

Senator THYE. Why didn't you inform them to ship it on to the next port, and let them deal with it, when they collect the money? Why didn't you handle it in that manner as long as you were not getting the money?

Mr. HORAN. Senator, we have no right to deny the acceptance on in bond to our customs office.

Senator THYE. Did you have any right to do anything with it inasmuch as you didn't collect the customs?

Mr. HORAN. I think so.

Senator THYE. There is nothing in the regulations that you could change the grade and classification of that commodity and still not collect the customs.

Mr. HORAN. There is nothing in the regulations that we can't either, Senator.

Senator YOUNG. You do everything specifically to the regulations, not written in the law?

Mr. HORAN. Everything that we want to do within the regulations or the law.

Senator YOUNG. There is nothing in the law?

Mr. HORAN. This tells how it may be described. We permitted a description permitted in that passage.

Senator YOUNG. Did it occur to you that the customs service should have changed the classification, rather than you?

Mr. HORAN. The collector of customs does not change the description. The collector of customs accepts the entry from the importer, which states what the merchandise is.

Senator YOUNG. What happens if another customs collector would have made another ruling?

Mr. HORAN. He has got to stay within the clause. It shall be described in such terms. We permitted a description, of wheat, 30 percent or more damaged.

Senator YOUNG. Which is wheat unfit for human consumption. Every customs officer knows that wheat is described in the tariff as wheat, unfit for human consumption.

Senator THYE. Why in the world could you, in good conscience, change the label, "Unfit for human consumption"?

Mr. HORAN. It seemed like a reasonable request to me. The man said it interfered with the sale to the representative of a purchaser in foreign countries.

Senator YOUNG. Was it the purpose of importation of this wheat to use it for feed?

Mr. HORAN. Senator, I don't know what the purpose was.

Senator YOUNG. You know the law of 800,000 bushels of imported wheat for human consumption that is the law, isn't it, and anything over that would be for feed purposes?

Mr. HORAN. That law says that term "wheat," does not include "wheat, unfit for human consumption."

Senator THYE. Where was the duty collected on this wheat that moved in bond from Minneapolis?

Mr. HORAN. I don't know where. I don't know whether it was Duluth or not. All we get we have an open file, of this in bond movement we get from Houston a notice telling us the shipment got there. That is all we get.

Senator THYE. Did you get a cancellation?

Mr. HORAN. Yes.

Senator THYE. Where did you get it from?

Mr. HORAN. Houston, or New Orleans, whichever port.
Senator THYE. Now, you are guessing.

Mr. HORAN. No, sir.

Senator THYE. Where did you get the cancellation from?

Mr. HORAN. On the wheat that moved inbound to Minneapolis, to Houston.

Senator THYE. Where else did it stop besides Houston?

Mr. HORAN. It didn't stop any place.

Senator THYE. The record shows that the Minneapolis office, and another office were going to agree to the type of a telegram that was going to be sent in.

Mr. HORAN. The letter, as I heard it from back there, but that is a false statement if I agreed with anybody to a certain time, or a telegram, or any message of any kind.

Senator THYE. Would you like to have that paragraph read in order that you may be able to refer to it?

Mr. HORAN. I would like to know who the letter is from.

Senator THYE. This wheat went directly to Houston, and when it arrived at Houston, you and the custom official at Houston agreed on the type of telegram to be sent to Washington?

Mr. HORAN. NO, Senator. I have had no contact in regard to wheat at any time.

Senator YOUNG. Or any other customs, in the course of changing this classification?

Mr. HORAN. I wrote a letter at one time to the collector in New Orleans. I have got it here.

Senator YOUNG. Were you in contact with any other customs officials?

Mr. HORAN. No, Senator.

Senator YOUNG. By telephone or otherwise?

Mr. HORAN. No.

Senator YOUNG. Why did you contact the customs collector in Houston, and not the one in Washington, or your superior?

Mr. HORAN. I didn't contact the customs in Houston at all.

Senator YOUNG. Yes.

Mr. HORAN. The customs office contacted us. I will find it in just a moment, I hope.

Senator YOUNG. Will you read the letter?

Mr. HORAN. My letter to the collector at New Orleans.

This is dated September 5, 1951. It is a letter over my signature, T. P. Horan, assistant collector to the collector of customs, New Orleans 16, La.

DEAR SIR: Receipt is acknowledged of your letter dated August 30, 1951, file 216/224-1, relative to certain shipments of wheat that were diverted to your port and entered for re warehouse. While the major quantity of wheat of the type diverted to your port has been withdrawn from warehouses in Minneapolis for transportation and exportation on Houston, a considerable quantity was entered for consumption or withdrawn for whatever use, for consumption, at the rate of 5 percent under paragraph 729.

Samples of wheat were taken from each importation at this port to determine duty status. However, the importers objected to the use of the term, “Unfit for human consumption" as stated in paragraph 729 when the wheat was withdrawn from their warehouse for exportation.

Accordingly the office agrees with the importer, that the statement, "Excess 30 percent damage for exportation purposes," would be substituted for "Unfit for human consumption.'

For the benefit of the other custom collectors, in the case the wheat would be offered for entry and withdrawn for consumption in the United States.

Very truly yours.

Senator YOUNG. Why didn't you make the ruling made by the Duluth office?

Mr. HORAN. Well, I don't know whether I knew the ruling at all. Senator YOUNG. You were requested to make a change, and you certainly were aware of the fact why a change was requested.

Mr. HORAN. I had information from Mr. Vosika that Duluth did not agree to the change.

Senator YOUNG. Did you ever contact Duluth as to why they made the ruling?

Mr. HORAN. No.

Senator YOUNG. Isn't that a bit strange?

Mr. HORAN. No, Senator, it is not strange. Sometimes we do. That is a separate jurisdiction. They run their place of business, and we run ours in Minneapolis.

Senator YOUNG. You are aware some of this wheat was used?
Mr. HORAN. So I have heard.

Senator YOUNG. And you, in one way or the other, were a party to it; weren't you?

Mr. HORAN. No; I don't think I was.

Senator YOUNG. You aided and abetted them; didn't you?

Mr. HORAN. I consider I did not aid and abet them. We have no control over any imported product once it is released from customs. Senator YOUNG. You had little concern over the overall problem involved, but were so willing to make changes without consulting others. Don't you think you have been derelict in your duty?

Mr. HORAN. No, Senator. When the wheat moved inbound to Houston, or New Orleans, it is that office's responsibility.