employees were seeing those manifests, and there could have been talk.

Now as a matter of fact, our transportation entries, either what we call immediate transportation or transportation and exportation, they are solely used as custom service. The entry portion is prepared by the importer and is filed with the custom service and never leaves the custom service. We mail it to various custom officers. For each carload of grain we will make out a customs manifest in three copies. One copy is retained in our office as our record file. One copy is mailed to the collector at the port of destination, and there is only one copy of the car manifest which goes out of the hands of the custom service. That copy is given to the bonded carrier who receipts for the merchandise and it accompanies the carload to its destination.

At destination the regulations require that the carrier, the railroad company, promptly deliver that manifest back to the collector as notice of arrival of the importation. There is very little chance for any outsider to view these manifests except for railroad employees or perhaps the representatives of the treasury and the importation bureau as I see it.

Senator THYE. A crew switching a car, for instance, if a car came in here and was switched to any one of the processors in the city here, the switching crew would have an opportunity to see it because they would be the last one to put the car on the tracks.

Mr. VAUGHAN. Probably not at all.

Senator THYE. They would not see it?

Mr. VAUGHAN. No; I doubt it very much. The customs officer would have it along with the waybill.

Senator THYE. Someone in the yards here would be responsible for having this car switched in on the car locks?

Mr. VAUGHAN. The railroad manifest will read, "Bulk Wheat in Bond" but the bulk wheat term will not give any record of the merchandise.

Senator THYE. I was just trying to get the record clear so we would know what accompanied the car.

Mr. VAUGHAN. Sometimes they travel in railroad envelopes.

Mr. GUINANE. Did it ever come to your personal knowledge or attention that a letter of credit from a foreign purchaser might require an exporter at the port of exportation to furnish a photostatic copy of the manifest to the bank?

Mr. VAUGHAN. Well, Mr. Vosika, wanted this term removed and I could see no harm in just using the term "wheat" on car manifests moving under transportation and exportation entries. That is merchandise just coming into the United States and intended for export, so I sent a wire to the Bureau at that time.

Senator THYE. Was that wheat that came in at Duluth and the importers stated that it was going to be shipped to a port for ocean shipment?

Mr. VAUGHAN. Yes; just moving through the United States.

Senator THYE. In other words, it was just going through the United States and its port to be exported from was stated in the entire transaction.

Mr. VAUGHAN. That is right.

Senator THYE. So you as a customs collector were considering this grain to be en route?

Mr. VAUGHAN. Just passing through the United States only.
Senator THYE. For exportation purposes?

Mr. VAUGHAN. So on the following day I sent the following telegram to the Commissioner of Customs, Washington, D. C.:

Boatloads of frost damaged Canadian wheat are arriving this port, from which representative samples taken at time of unloading and determination made that wheat contains more than 30 percent by weight of damaged or frosted kernels, classifiable for tariff purposes as wheat unfit for human consumption under paragraph 729. Large quantities this wheat being forwarded under transportation entries for exportation at Texas ports. In view specific provisions section 18.11 (i), Customs Regulations, this office has required that merchandise be described in transportation entries as wheat unfit for human consumption. Importers represent that terminology "unfit for human consumption" is misunderstood by all who see it except those in customs and grain business, and difficulties occurred on arrival last shipments in Texas by reason of such description on conductor's copy of car manifests. Importers desire to describe this wheat in future transportation entries by the term "wheat" only, and request permission so to do. This office would approve of such request provided it is limited to wheat intended solely for export; that the transportation entry be prepared in complete tariff terms, but permit the individual car manifests to describe the commodity only as "wheat." Advice by wire collect is requested.

The Bureau then answered under date of April 27, 1951, as follows: Retel 26 wheat classifiable as unfit for human consumption entered for T. and E. Description must suffice to permit collector to estimate duties if necessary. No objection preparation individual car T. and E. manifests to show commodity as "wheat." Relative statistics, Bureau Census advises schedule A detail not required for T. and E. entries but schedule T permissible, citing census circular letter 125 of February 6, 1951. Notify collect applicant.

Mr. GUINANE. Now at that time, Mr. Vaughan, you thought there might not be any great objection to permitting that to remain on the transportation entries?

Mr. VAUGHAN. The entries, yes.

Mr. GUINANE. Have you changed your mind any after what has taken place with some of these shipments?

Mr. VAUGHAN. We haven't changed our minds but the Bureau has issued specific instructions now, this year, that this type of grain shall be described in the manifests as being grain "unfit for human consumption."

Senator THYE. That was after the first hearing?

Mr. VAUGHAN. That was on July 14.

Mr. NICHOLS. I wonder if you would ask the witness what term, "T. & E." means?

Senator THYE. I don't know either. I am glad you raised that question. I had the question in mind while he was reading the telegram.

Mr. VAUGHAN. A T. and E. entry is an abbreviation for what is termed a "transportation and exportation" entry. That is, this grain is being entered for transportation through the United States and subsequently exported. It is just moving in bond through the United States.

Senator THYE. Where could the error slip in on that sort of a transaction? I mean where could the error enter in that they are allowed under bond to come in and be transported?

Mr. VAUGHAN. Now the error is to what, Senator Thye?

Senator THYE. Now would you know whether it would come in and stop somewhere en route at Kansas City or go to Omaha, Nebr. How would you know?

Mr. VAUGHAN. These car manifests are made in triplicate and they are receipts from the railroad company for receiving this grain. We hold a copy; one goes with the car; one is mailed to the collector at destination. When the merchandise is received he will have the certificate. He will therefore have two copies, the mailed copy and the railway copy, and on one he will certify that the merchandise has been received.

Senator THYE. In other words, it would have to go through because if it stopped en route the man that is placed in that responsible position at some port city to which it was designated, such as Houston or New Orleans, would need to have a certain length of time to notify your office that this assignment of grain had not arrived.

Mr. VAUGHAN. The collector at the destination would do that. It would be possible also on the T. and E. entry to have it diverted en

route.

Senator THYE. Will you restate that, please?

Mr. VAUGHAN. It would be possible also on the T. and E. entry to have it diverted en route and entered at some other port for consumption and warehouse.

Mr. GUINANE. Duty would have to be paid then.

Mr. VAUGHAN. Duty would have to be paid unless an in bond T. and E. entry were made.

Senator THYE. If you permitted a carload of grain to move out of Duluth and it was designated to go to Galveston, they could have changed that in the course of the transportation?

Mr. VAUGHAN. Yes, yes, it could be diverted.

Senator THYE. Diverted?

Mr. VAUGHAN. Yes, yes.

Senator THYE. In other words, you would have to be notified?
Mr. VAUGHAN. Yes, would have to be notified.

Senator THYE. Because there would be no one else who would be receiving that except you yourself.

Mr. VAUGHAN. We would probably have an order that would be filed with the collector at intermediate ports and we would advise all the control officers concerned.

Senator THYE. Yes. In other words, there was no question about that if they wanted to send it on to Omaha, Nebr., they could have sent it?

Mr. VAUGHAN. That would be under a T. and E. entry.

Senator THYE. But just under the T. and E. entry they could have diverted it and it could have gone to Omaha?

Mr. VAUGHAN. Yes.

Senator THYE. Did you have any such experience?

Mr. VAUGHAN. We had, I recall, only three T. and E. entries out of Duluth made by Kellogg to Commodity Credit Corporation made to Transit Grain Co. which were diverted into customs custody in Minneapolis. Those were the only three that I found didn't go through to the original destination in the transportation entry filed in Duluth.

Senator THYE. It was supposed to have gone to Houston but it was diverted to Minneapolis?

Mr. VAUGHAN. Yes.

Senator THYE. You may proceed, Mr. Guinane.

Mr. GUINANE. You had additional contacts with Mr. Vosika at different times on not permitting the phrase "unfit for human consumption" to remain on the document?

Mr. VAUGHAN. I believe he called me once and then the time he came to my office.

Mr. GUINANE. I have just missed some of the answer, did you go into the extent they used it?

Mr. VAUGHAN. Well, they still insisted that the T. and E. transportation entries read "Wheat." They filed some T. and E. entries naming "Wheat at 21 cents a bushel." So when I found that out I immediately ordered a rubber stamp, a rather large one, reading, "Wheat, unfit for human consumption," which I said I would stamp on all of the transportation manifests.

Mr. GUINANE. You want to show us one of those? Perhaps you have copies of some of those entries. Perhaps you could look at these.

Mr. VAUGHAN. I have a similar one here.

Mr. GUINANE. The one I am looking at here is dated:

April 23, 1951, transportation entry and manifest of goods subject to customs inspection and permit, port of Duluth, Minn., date: April 23, 1951, 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. Notify Stone Forwarding Co., Houston, Tex. Foreign port of lading: Fort William, Canada.

Now this particular T. and E. entry shows 30,000 bushels of wheat, gross weight 1,800,000 pounds, at the rate of 21 cents per bushel or duty of $6,300.

Does that purport to show that this is wheat that is quoted at 21 cents under the Tariff Act?

Mr. VAUGHAN. That is the way they wanted it entered.

Mr. GUINANE. What was the actual cargo?

Mr. VAUGHAN. On that boat the wheat was unfit for human consumption.

Mr. GUINANE. And it was over 30 percent damaged or frosted kernels?

Mr. VAUGHAN. That is right.

Mr. GUINANE. That document was presented to customs?

Mr. VAUGHAN. That is right.

Mr. GUINANE. You have several documents with you, have you not?

Mr. VAUGHAN. Yes; covering many similar ones.

Mr. GUINANE. That meant that the importer paid 21 cents a bushel on that wheat then? Would you permit it to enter under these documents?

Mr. VAUGHAN. He would not have been able to pay the duty because the quota was closed at that time.

Mr. GUINANE. So you would not have permitted entry?

Mr. VAUGHAN. I would have turned them back.

Mr. GUINANE. You would not have permitted entry of the wheat if it was wheat dutiable at 21 cents per bushel?

Mr. VAUGHAN. It couldn't be entered for consumption as the quota was closed.

Senator THYE. The only way it could have been entered was for the purpose of being transported across the United States?

Mr. VAUGHAN. If it was good wheat.

Senator THYE. It could be entered as designated to go out to some other port?

Mr. GUINANE. You took the manner in which these documents were made up with someone in Duluth, with Mr. Theodore W. Svensson?

Mr. VAUGHAN. Yes; I told him I wanted the transportation manifests made out in tariff terms.

Mr. GUINANE. What reason did he give for making it out otherwise?

Mr. VAUGHAN. He said that the orders from Bunge Corp. were to be made out, "Wheat, 21 cents a bushel."

Mr. GUINANE. Would that constitute a false statement to the Government in making out these documents in that manner?

Mr. VAUGHAN. Well, the people in the grain trade would know, and we in the customs office would know.

Mr. GUINANE. I notice here that these documents are signed. Are most of them?

Mr. VAUGHAN. Yes; I have a similar document to the one you have and this one is signed by Mr. Sassman.

Mr. GUINANE. That is George A. Sassman?

Mr. VAUGHAN. Yes.

Mr. GUINANE. Who is he?

Mr. VAUGHAN. He is an importer in Duluth, representative of the Hallet & Carey Co.

Mr. GUINANE. A subsidiary of Bunge Corp.?

Mr. VAUGHAN. I don't know that.

Mr. GUINANE. Of Hallet & Carey of Duluth?

Mr. VAUGHAN. Yes; although he signed on behalf of the Kellogg Milling Co. here.

Mr. GUINANE. Although he is of the Hallet & Carey Co. in Duluth? Mr. MOSKOVITZ. I think it is very important to keep these names correct and I don't think it is appropriate even though it is inadvertent to switch back and forth from one name to another.

Mr. GUINANE. If these were made by Kellogg Milling Co.Senator THYE. May I make an inquiry? The copy that you are reading from, is that a copy of that record over there?

Mr. VAUGHAN. I don't believe so. Mine is T. and E. No. 5.
Senator THYE. What is yours?

Mr. GUINANE. This is No. 4. I have No. 5 here. I have Nos. 4, 5, 6, and 7.

Senator THYE. You do have the same copy then, the third?
Mr. GUINANE. I am reading from the third; yes.

Mr. VAUGHAN. The third, I can't find that one.

Mr. MOSKOVITZ. I know Mr. Guinane didn't mean that, but that is what is in the record. I don't want the record to be confused. Mr. GUINANE. I will clarify that.

Senator THYE. Let's clarify that, I want the record as clear as it is possible to get it. Therefore, I thought that if reference was made it could be made to the copy number.

Mr. GUINANE. On entry No. 4, I am reading from it:

Date: April 23, 1951. Importer: Kellogg Milling Co.

I truly declare that the statements contained herein are true and correct to the best of my knowledge and belief.