the entire transaction? I think the questions that have been askeď at this time have just been trying to establish what this man knows about the entire transaction. You may proceed.

Mr. MOSKOVITZ. That is perfectly appropriate but I don't think the question warrants a conclusion. I think the question should be a question and not an answer.

Senator THYE. We will try to confine it to a question and try to get as much light on this very confused question as we can. You may proceed with the questions.

Mr. GUINANE. Mr. Vosika, you are pretty well versed on transportation; are you not?

Mr. VOSIKA. I think so.

Mr. GUINANE. You are familiar with the railroad permits that were used during that period?

Mr. VOSIKA. Only to the extent that I had to have a permit from Transit Grain Co. in order to send the wheat down to them.

Mr. GUINANE. You couldn't move it without a permit?

Mr. VOSIKA. That is correct.

Mr. GUINANE. These particular permits that you used, who were these issued to?

Senator THYE. Before you answer that question, why could you not have shipped the grain without a permit?

Mr. VOSIKA. The ports, Mr. Senator, become congested with boxcars that pile up to the tune of two or three thousand boxcars that are loaded with grain.

Mr. GUINANE. Do the companies have priorities?

Mr. VOSIKA. They may have; I don't know.

Mr. GUINANE. Is that the only reason they used the Commodity Credit Corporation's permits?

Mr. VOSIKA. That is because the permits of Commodity Credit were being used to ship this wheat. I have used a lot of permits. I merely follow the instructions for shipment requested by the customer, as I stated before.

Senator THYE. Did any other companies ever furnish you with a Commodity Credit permit?

Mr. VOSIKA. No, sir.

Senator THYE. So this was the first time

you a permit?

customer ever furnished

Mr. VOSIKA. The first and only time at the gulf ports.

Senator THYE. So in effect the permits of the Commodity Credit Corporation was the first time that any customers shipped grain that you were ever given such shipping instructions?

Mr. VOSIKA. That is correct to my own knowledge.

Senator THYE. You may proceed.

Mr. GUINANE. This is a telegram which contains your suggestion for a wire by the collector of customs at Houston to the Bureau of Customs in Washington. I will read it:

STONE FORWARDING CO.,

Houston, Tex.:

Reference to Canadian wheat. If necessary our suggestion for wire by collector of customs your expense to Bureau of Customs, Washington, somewhat along following line: "58,059 bushels Canadian wheat shipped in bond from Minneapolis,

Minn., to this port on withdrawal and exportation No. 27, dated Minneapolis, February 27, 1951, and similar index entries from Minneapolis have been tendered at this port for payment of duty at 5-percent ad valorem as wheat unfit for human consumption, paragraph 729, Tariff Act, 1930. Analysis indicates these importations contain more than 30 percent by weight of damaged or frosted kernels and importer here claims proper classification, 'Wheat unfit for human consumption,' basis duty 5-percent ad valorem, authority T. D. 47577, T. D. 44791 (11) and exemption from 'restrictions as provided T. D. 50404 and right to dispose of the wheat without supervision of this office as to its ultimate use.' In view above, kindly advise collect wire, may this wheat be released upon payment 5-percent ad valorem duty with exemption from 'and without supervision this office as to ultimate use made of same." Kindly advise."

Trust that reference to Public Law 211 and 272 T. D. 50983 and 51033 will eliminate necessity of referring to Washington. W. J. VOSIKA.

Did you ever send such a wire to Houston, Tex.? Do you recall that wire?

Mr. VOSIKA. I recall it, but I do not know now whether I sent that as a wire or as a suggested wire. I don't recall that point now. I do know that I wrote it up.

Mr. GUINANE. Why were you advising Scott on what kind of wire to send to the Bureau of Customs at Washington?

Mr. VOSIKA. It was the only wheat that arrived at the gulf over a period of time and then at some particular stage of the game it appears that they wanted to pay the duty on some of this wheat and, from what I understand, it was the first Canadian wheat that had ever been in Texas and this gentleman, Mr. Scott, understood that I was managing these customs matters at Minneapolis for the Bunge Corp., and he was asking for advice.

Mr. GUINANE. Really, what you were trying to do was to get rid of customs supervision?

Mr. VOSIKA. No, sir; we did not eliminate customs supervision at any time.

Mr. GUINANE. Is that what you were trying to do?

Mr. VOSIKA. No, sir; I have never tried to eliminate customs supervision. I can't. Incidentally, the reason for the suggestion of the wire to Washington was instead of my doing anything was that we do not go over the heads of our local collector of customs, that is just the courteous method of handling these matters. That is the reason I suggested handling them in that way.

It is

Mr. GUINANE. I want to read a letter dated April 17, 1951, headed "Bunge Corp., Minneapolis, Minn." It is signed, "Walt." addressed to "Dear Bob."

Mr. VOSIKA. May I see that, please?

Mr. GUINANE. Who is "Dear Bob"?

Senator THYE. I was just going to ask that question.

Mr. VOSIKA. Bob happens to be Mr. Robert Henderson.

Mr. GUINANE. Are you sure?

Mr. VOSIKA. Oh, definitely. That is an interoffice communication or memorandum.

Mr. GUINANE. So you gave this to Mr. Henderson for his information?

Mr. VOSIKA. That is correct.

Mr. GUINANE. You sort of being an expert on Canadian imports

Mr. VOSIKA. No; I don't profess to be an expert on anything, not even transportation.

Mr. GUINANE (reading):

DEAR BOB: In re Canadian wheat imports. Tariff Act of 1930, as amended by favorable nations treaty.

Paragraph 729, wheat, 21 cents per bushel of 60 pounds.

Paragraph 729, wheat, unfit for human consumption, 5 percent ad valorem. Twenty-one cents-per-bushel wheat is subject to maximum quota of 795,000 bushels per year.

Five percent ad valorem wheat is tagged with inappropriate tag and does not mean what its clear English might imply to the unversed in this particular business. This wheat has been specifically excluded from the quota.

Now what do you mean "tagged with inappropriate tag"?

Mr. VOSIKA. The only place that I would know of is where there is a description reading "Unfit for human consumption," under the Tariff Act of 1930.

Senator THYE. Where Congress put it.

Mr. VOSIKA. That is correct, and the Treasury decision which seeks to interpret and construe that statement that 30 percent or more of damaged kernels is the criterion as to whether it goes one way or the other way.

Senator THYE. So you thought Congress inappropriately described this wheat?

Mr. VOSIKA. I still do.

Senator THYE. Why?

Mr. VOSIKA. Well, sir, when the statement was put in the Tariff Act the customs officials had to go to the Department of Agriculture to find out just what they meant and the Department of Agriculture made an investigation and a determination and said the criterion would be 30 percent or more of damaged wheat kernels. And 30 percent or more of damaged kernels does not always make the wheat unfit for human consumption.

Senator THYE. But the wisdom of Congress as it was written into that law has not been changed by any amendments has it? Therefore, the Department of Agriculture will stick by its findings.

Mr. VOSIKA. The proclamation of the President each year very specifically says that the wheat classified as 5 percent ad valorem is not included in the quota and there may be imported grain which is "unfit for human consumption."

Mr. GUINANE. That is right.

Mr. VOSIKA. We did import some of this grain that was held as "unfit for human consumption.'

Mr. GUINANE. Until some changes were made?

Mr. VOSIKA. The only changes that were made were not made in bonded wheat.

Mr. GUINANE. Now the letter has a P. S. "When quota declared in May-we will watch to be sure again excluded."

What official, did you, or official of Bunge Corp. or Kellogg Milling Co., what efforts did you make to make certain that the wheat "unfit for human consumption" was excluded from the quota? Mr. VOSIKA. No attempt was made at all.

Mr. GUINANE. No attempt at all?

Mr. VOSIKA. No.

Mr. GUINANE. There was a memorandum?
Mr. VOSIKA. Yes, sir.

Mr. GUINANE. Reading further:

T. D. 44791 (11) of April 17, 1951, defines the term "Unfit for human consumption" as used in paragraph 729 of the Tariff Act of 1930 as "commercially unfit for use as human food or for the production of human food," and they further define "Commercially unfit" as wheat with 30 percent or more damaged kernels as commercially impracticable for milling except in minor proportions.

The percentage of damage-30 percent or more-is a line of demarcation between 21 cents per bushel wheat and 5 percent ad valorem wheat. The use to which the wheat is put is not the determining factor.

The law provides this 30 percent or more damaged wheat may be imported on payment of 5 percent ad valorem duty-with damage determined through Grain Supervisory Office of the Grain Division, Department of Agriculture. When customs is advised wheat is 30 percent or more damaged kernels by weight-they accept 5 percent ad valorem duty-and release wheat to importer. The wheat is released without any strings attached. The customs has no interest in what you do with the wheat or how you use it.

Now why did you underline this particular portion and indicate so clearly to him that when duty was paid customs supervision ceased? Mr. VOSIKA. Customs supervision did cease when the duty was paid on the wheat.

Mr. GUINANE. Why was it so important for Mr. Henderson or to whom this letter was sent to, why was this so very important?

Mr. VOSIKA. That was written on the theory that when we had Public Law 211-272 in force and in effect in the United States we made affidavit of the ultimate use to which the commodity was put and under the Tariff Act, paragraph 729 there are no such provisions which I call policing provisions.

Mr. GUINANE. Policing provisions?

Mr. VOSIKA. That is right.

Mr. GUINANE. And isn't it a fact that you were pointing out that customs supervision ceased so they could do anything they wanted with the wheat after they paid the duty on it?

Mr. VOSIKA. Mr. Guinane, you must understand that interoffice communications are not to be as complete as some other communications. Certainly, any letter I wrote at any time was not any authority for anybody to go and violate any of the laws of the United States. Mr. GUINANE. Not authority, but they could be advised to violate

it.

Mr. VOSIKA. Now, it wasn't

Mr. GUINANE. Getting back into the letter a little bit more.

Mr. VOSIKA. I was going on to make it clear that the law as it is written requires something of a sort of policing or is that an erroneous interpretation?

Mr. GUINANE. I think it is an irrational interpretation. [Reading:] Let me illustrate: Public Law 211–272 granted free importation certain grains for feeding purpose-policing regulations requiring affidavit proof that it was so utilized.

Five percent ad valorem wheat is not subject to any policing regulations-it is released free of strings. Sixty days after entry is liquidated-the subject on that particular entry is closed forever (barring fraud which is absent on this wheat). Of course, if this was D. L. Q. wheat

What is "D. L. Q. wheat"?

Mr. VOSIKA. I think it is distinctly low quality";
Mr. GUINANE. "Distinctly low quality.' [Reading:]

Of course, if this was D. L. Q. wheat-then it would be subject to check of the Federal grain supervisor as to its possible disposition and the pure food laws might come into play. No such wheat is involved so that question is not herein involved.

34117-53-pt. 2

The attached correspondence supports the above statements and indicates we should have plenty of opportunity to know of any change in the above that would effect our right to import and the disposition made thereof. WALT.

(Signed)

Now, would you say that was a memorandum from an employee of a ligitimate American business firm trying to live within the law? Mr. VOSIKA. It definitely is.

Mr. GUINANE. Or is it pointing out any loopholes?

Mr. VOSIKA. It is not pointing out any loopholes.

Mr. MOSKOVITZ. I must ask, Mr. Guinane, that you do not make any conclusions as to the law.

Senator THYE. I think it was very leading and suggestive but if the counsel hadn't asked those questions, I would have.

Mr. MOSKOVITZ. I was just curious as to point of law.

Mr. GUINANE. Has he answered your question?

Senator THYE. He answered it.

Mr. GUINANE. Mr. Vosika, before we get away from this letter, are you sure it is not another "Bob" who is an employee of transit grain? Mr. VOSIKA. No; I don't know of any other "Bob," or does Transit Grain have a "Bob?" I believe there is a Bob Bryant in Transit Grain. But definitely, it is Mr. Robert J. Henderson.

Mr. GUINANE. To the best of your recollection it is Bob Henderson? Mr. VOSIKA. Well, sir, I say it definitely is.

Senator THYE. We will continue just 3 more minutes.

Mr. GUINANE. Do you want me to proceed? I have several more questions.

Senator THYE. You have several more, so we can't get through in 5 or 10 minutes.

Mr. GUINANE. No, sir.

Senator THYE. We will take time out for lunch and reconvene at 2 p. m. unless you gentlem en can be back at 1:30 o'clock?

Mr. MOSKOVITZ. How about 1:45 p. m.?

Senator THYE. That will be all right. We will reconvene at 1:45 p. m.

Mr. MCGOWAN. I would like to ask a question.
Senator THYE. Yes, Mr. McGowan.

Mr. McGowAN. There has been a lot of conversation about wheat "unfit for human consumption." We know that it is simply a designation that this wheat cannot be ground into flour, that it is lir ited to feeding purposes. I think that is what the newspapers mean, "wheat unfit for human consumption" not because he wouldn't like to call it "30 percent damaged kernels" for they are both exactly the same thing. You are definitely using the definition as correctly applied by the customers.

Senator THYE. Definitely, Mr. McGowan, insomuch as this wheat that might be used for milling for human consumption could not enter because that would be recognized to be a milling wheat, and the quota is exhausted and milling wheat could not be entered. Therefore, it has to be wheat unfit for human consumption that does

enter.

Mr. McGoWAN. You are right, but there is still a question in my mind that that wheat was not unfit for human consumption.

Senator THYE. That is irrelevant because the quota was filled if it was fit for human consumption. It would be disqualified and dis