Senator THYE. Is that the only question that you would care to ask, Mr. Moskovitz?

Mr. MOSKOVITZ. There are a couple of other questions I would like to clear up on general practice. This T. and E. entry that you defined that only applies in in-bond shipments? You wouldn't use that form of entry for merchandise which has had the duty paid on it, would you?

Mr. VAUGHAN. No, sir.

Mr. MOSKOVITZ. This change of destination only applies to the T. and E. entry?

Mr. VAUGHAN. Yes.

Mr. MOSKOVITZ. That means it applies only to in-bond shipments? Mr. VAUGHAN. That is right.

Mr. MOSKOVITZ. What is an in-bond shipment? Can you ship American grain in bond?

Mr. VAUGHAN. No, but it might be possible. It might be possible if they were-it might be possible.

Mr. MOSKOVITZ. How would it?

Senator THYE. I don't know how it would be possible, because American grain would not be subject to duty and American grain would not be subject to quota, therefore American grain could not go in bond in my humble opinion. It could not go in bond because there was no reason for you to bond it unless it involved an unpaid obligation.

Mr. VAUGHAN. Sometimes we have American merchandise which they are exporting as a drawback with an alcohol tax on it. Sometimes they will move it in bond.

Senator THYE. That is what I meant by an unpaid obligation. Mr. VAUGHAN. Yes.

Senator THYE. But the fact that struck me in the entire transaction was when the grain came in from the port of entry in bond and the description was changed, and then it was going on in bond again. That is the thing that struck me, and it hasn't been cleared up in my mind.

Mr. NICHOLS. Maybe this gentleman can clear it up.

Senator THYE. Maybe he can, but I don't think so.

Mr. MOSKOVITZ. When you say in bond, it doesn't involve any kind of drawback that you know of?

Mr. VAUGHAN. Not that I know of.

Mr. MOSKOVITZ. So the use of the word or term in bond just means that they are bonded to make certain that the grain is to be transported across the continent to an outgoing port.

Mr. MOSKOVITZ. Maybe I didn't make myself clear.
Senator THYE. I am just letting you make it clear.

Mr. MOSKOVITZ. When the grain is shipped in bond it is customs satisfied?

Mr. VAUGHAN. Yes.

Mr. MOSKOVITZ. When it is shipped in bond it can only be Canadian or foreign grain that is shipped in bond?

Mr. VAUGHAN. In grain, probably, yes.

Mr. MOSKOVITZ. One other thought or question, when you wrote these letters to the Bureau did you consider that you had fully informed them of the situation as it actually existed?

Mr. VAUGHAN. Yes.

Mr. GUINANE. Mr. Vaughan, on the question of this in-bond business, do you understand that after this grain was consigned to Commodity Credit Corporation in care of Transit Grain Co., did you ever receive notice that a considerable quantity of that arriving at Houston, Tex., had been withdrawn and classified as "wheat unfit for human consumption" and 5-percent duty paid on it?

Mr. VAUGHAN. We have no knowledge as to that. Naturally our certificate of delivery is from the shipper to the point of destination and is delivered into customs custody at this port.

Senator THYE. Any other questions?

Mr. VAUGHAN. Was there some document you wanted me to compile?

Senator THYE. I can't see the need of it to be perfectly frank. We know what came in.

Mr. MOSKOVITZ. I think you read those letters of the total into the record; did you not?

Mr. VAUGHAN. Yes.

Mr. MOSKOVITZ. I can't see any point of repeating them again. Senator THYE. I can't see that it would be of any help, either. Mr. GUINANE. I do think it would be helpful if we had one sample of this consular invoice of merchandise.

Senator THYE. Yes, this document should be made a part of the record.

Mr. VAUGHAN. Supposing I give you one of the triplicate copies. I can't surrender any of these others because they have the stamp and seal of certification on them. This one is typed in.

Senator THYE. It is typed in "unfit for human consumption"?

Mr. VAUGHAN. Yes, "Unfit for human consumption, for feeding purposes only, not to be used for seeding," has been typed in.

Mr. GUINANE. If possible we would like to have it for the record. Mr. VAUGHAN. You may have it.

(The matter referred to is as follows:)

Senator THYE. That will be all. Thank you, Mr. Vaughan. (Witness excused.)

Senator THYE. We will now call Mr. Svensson, Mr. Theodore W. Svensson.

TESTIMONY OF THEODORE W. SVENSSON, DULUTH, MINN.

Senator THYE. Are you Mr. Theodore W. Svensson?

Mr. SVENSSON. Yes.

Senator THYE. We will swear you in, Mr. Svensson.

(Witness sworn.)

Senator THYE. Will you state your full name, please?

Mr. SVENSSON. Mr. Theodore W. Svensson, S-v-e-n-s-s-o-n.
Senator THYE. What is your title?

Mr. SVENSSON. I am a customhouse broker.

Senator THYE. You may proceed.

Mr. GUINANE. Mr. Svensson, you are a licensed customhouse

broker, are you?

Mr. SVENSSON. Yes, sir.

Mr. GUINANE. You are located at Duluth, Minn.; is that right? Mr. SVENSSON. That is right.

Mr. GUINANE. During the period of 1950, 1951, and 1952, you handled considerable business for the Bunge Corp., didn't you? Mr. SVENSSON. Yes, sir.

Mr. GUINANE. Did you also handle business for the Kellogg Milling Co.?

Mr. SVENSSON. Yes.

Mr. GUINANE. Also for the Hallet & Carey Co. of Minneapolis? Mr. SVENSSON. You are talking about wheat unfit for human consumption?

Mr. GUINANE. Yes.

Mr. SVENSSON. I don't recall that I did for Hallet & Carey.

Mr. GUINANE. It was just for Bunge Corp., and Kellogg Milling? Mr. SVENSSON. Yes.

Mr. GUINANE. Do you recall when the first contact was made by you on behalf of the Bunge Corp. or Kellogg Milling in regard to this wheat unfit for human consumption from Canada?

Mr. SVENSSON. Well, my first entry was October 2, 1950.
Mr. GUINANE. 1950?

Mr. SVENSSON. Or it would be a few weeks preceeding that.
Mr. GUINANE. What conversation took place at that time?
Mr. SVENSSON. The first gentleman I saw was Mr. Robert Hender

son.

Mr. GUINANE. Mr. Henderson, who was then assistant vice president?

Mr. SVENSSON. I don't know his capacity or his title, but he was with the Bunge concern.

Mr. GUINANE. Of Minneapolis?

Mr. SVENSSON. Yes. He came to my office. As I recall, he had a copy of T. D. 47577, that is the Treasury decision, at which time he informed me that he thought it would be feasible to enter this as Canadian No. 5 Feed Wheat, instead of under the classification of wheat unfit for human consumption, at 5 percent ad valorem. That is all the conversation amounted to.

Mr. GUINANE. Did he tell you he was going to use it for feed wheat or for milling purposes?

Mr. SVENSSON. He made no indication as to the use of the wheat. Mr. GUINANE. Did you know before that, that you could bring this wheat in that was unfit for human consumption at 5 percent ad valorem?

Mr. SVENSSON. No, sir; I never knew that.

Mr. GUINANE. Then he asked you to handle those business papers and prepare those documents?

Mr. SVENSSON. Yes.

Mr. GUINANE. Did he ask you anything else?

Mr. SVENSSON. No; that was the end of the conversation.

Mr. GUINANE. When were you next contacted by anyone from either of these companies?