Senator THYE. I am asking you a question. You had answered the other one. You said no, and that was your answer or statement. I am asking you this question: Why did you elect to write such an explicit explanation? Why did you elect to write such a letter?

Mr. VOSIKA. Transit Grain Co. was a customer of ours. He asked me for some information and I gave him exactly that, no more and no less than I would give any customer on any other problem.

Senator THYE. It was advice to him in your letter? It was positive information as to what he should do?

Mr. VOSIKA. It was not positive what he should do. He had apparently made election to pay some duty. As I stated before, I understand this was the first Canadian wheat that arrived at a gulf port and they asked me for what information or knowledge I possessed as to the character of importing and moving this wheat.

Senator THYE. Proceed with your questions.

Mr. GUINANE. I just would like to repeat another statement in the letter of August 28 on that particular point, where Mr. Vosika wrote to Julian Scott and said:

Prior to payment of duty at 5 percent and release by customs-this wheat is under customs jurisdiction

Caps after that

AFTER PAYMENT OF DUTY, and release it is-FREE WHEAT.

Do you recall putting that in the letter?

Mr. VOSIKA. It is in the letter.

Senator THYE. Was that a specific answer to a question that the firm had asked of you?

Mr. VOSIKA. Well, sir, the most I could say on this waspresumably, it was a general request for what information I had available. I tried to give it to them, sir.

Senator THYE. You may proceed.

Mr. GUINANE. What activity did you take with reference to selling this wheat?

Mr. VOSIKA. I neither buy nor sell wheat.

Mr. GUINANE. What position did you have in Hallet & Carey during this period?

Mr. VOSIKA. I was traffic manager.

Mr. GUINANE. You were not general manager?

Mr. VOSIKA. Transportation manager.

Mr. GUINANE. Who gave you instructions as far as the salesmen of Hallet & Carey were concerned? Who gave instructions to Hallet & Carey salesmen?

Mr. VOSIKA. On what point?

Mr. GUINANE. On selling the wheat.

Mr. VOSIKA. I wouldn't know.

Mr. GUINANE. Weren't you connected with the firm?

Mr. VOSIKA. I neither buy wheat nor sell wheat. I gave no instructions to sell or buy wheat. It is not a matter within my authority or jurisdiction or knowledge, sir.

Mr. GUINANE. But, you did have a great deal to do with submitting documents for clearance of wheat to the customs?

Mr. VOSIKA. That is correct.

Mr. GUINANE. Now, you heard the testimony of Mr. Vaughan here this morning on the certifications that were on the papers that

were supplied him by Mr. Svensson under your instruction, to present those papers to the customs; did you not?

Mr. VOSIKA. Yes, sir.

Mr. GUINANE. Did you know at the time you had instructed him to make out those manifests describing wheat at 21-cent wheat that it actually covered wheat unfit for human consumption and those were false statements in that manifest?

Mr. VOSIKA. Mr. Guinane, I do not agree with you that they were false statements.

Mr. GUINANE. You did instruct them to pay 21 cents duty?

Mr. VOSIKA. That is correct.

Mr. GUINANE. Why did you do that?

Mr. VOSIKA. The wheat that moves from Canada across the United States may be described in the simple terminology of wheat, irrespective of the percentage of damage in that shipment.

Mr. GUINANE. It can be described as wheat?

Mr. VOSIKA. Yes, sir.

Mr. GUINANE. And be assessed at 5 percent ad valorem?

Mr. VOSIKA. No duty is assessed on any shipment moving in bond. Mr. GUINANE. Doesn't Customs insist on it being described as such, when it is entered either in bond or for duty?

Mr. VOSIKA. I might best answer that question by a photostatic copy of a transportation entry and manifest No. 16, dated March 15, 1951. It covers a warehouse withdrawal for exportation from Minneapolis to Houston, Tex. The face of the document reads:

Five thousand two hundred and fifty bushels bulk wheat, excess 30 percent damage, for exportation purposes.

That is the original description on this document and that is the manner in which it was prepared in Minneapolis and presented to us. Senator THYE. It was not labeled from Duluth?

Mr. VOSIKA. To the customs office in Minneapolis.

Senator THYE. Let me ask you this question: That same wheat was not so labeled when it left the port of entry at Duluth? Mr. MOSKOVITZ. Allow the witness to finish.

Senator THYE. Don't instruct me what I am going to do, and I am asking the questions, and let this gentleman answer me the question. It is true that this wheat was labeled other than that when it left the port of entry in Duluth?

Mr. VOSIKA. The document at Duluth read, "wheat unfit for human consumption."

Senator THYE. Exactly. Now will you answer the question? Mr. VOSIKA. I can't answer when there are 2 or 3 people talking. Mr. MOSKOVITZ. I am sorry.

Mr. VOSIKA. The statement I read is the original description entry No. 16, and is filed with the United States Customs. After the Department of Agriculture had checked the contents of these cars and made a return to the United States Customs Office, somebody beyond doubt, it was the Customs Office themselves, added to these documents another statement and it reads:

Frost damaged less than 30 percent. May be withdrawn for consumption in the United States.

Mr. GUINANE. That supplements what was on the Duluth tests made by grain inspectors up there and they had passed some cars as

being in excess of 30 percent damage and when it got down to Minneapolis, this car and how many other cars were there containing less than 30 percent and should never have come into the consumption of the United States?

Mr. VOSIKA. Just a minute, the wheat came into Duluth by boat in a large volume. From the boat the wheat was loaded into individual cars with more than 30 percent damage in Duluth-we might say 31 or 32 percent. Upon the check by the Department of Agriculture at Minneapolis, it had a fraction less than 30 percent of damaged wheat and therefore the Customs endorsed these papers and said they could not bring this wheat into the United States and pay the duty on it.

Mr. GUINANE. Do you know that this wheat was not entered for duty in the United States?

Mr. VOSIKA. I would not know.

Mr. GUINANE. That is all I have of Mr. Vosika, Senator.

Senator THYE. Do you have some other questions, then, Mr. Guinane?

Mr. GUINANE. No, that is all I have. Do you have some questions of Mr. Vosika?

Senator THYE. No. The next person we will call on is

Mr. MOSKOVITZ. May I ask the witness one question, Senator? Senator THYE. Yes.

Mr. MOSKOVITZ. All wheat that is entered at Duluth whether it is entered for consumption or not, is always tested by the Department of Agriculture, to determine the contents?

Mr. VosIKA. Yes, that is correct.

Mr. MOSKOVITZ. And whatever the Department of Agriculture finds, it reports to the Bureau of Customs; is that correct?

Mr. VOSIKA. That is correct.

Mr. MOSKOVITZ. And the Bureau of Customs decides as to the tariff classification?

Mr. VOSIKA. That is correct.

Mr. MOSKOVITZ. That is correct?

Mr. VOSIKA. Yes.

Mr. MOSKOVITZ. Thank you, Senator.

Senator THYE. Mr. Dodge will be our next witness. Mr. Dodge, if you will take the chair, please, you were sworn yesterday so we will not swear you again and for that reason you can proceed.

TESTIMONY OF B. J. DODGE, HALLET & CAREY CO., MINNEAPOLIS, MINN. Resumed

Mr. GUINANE. Mr. Dodge, what is your position with Hallet & Carey?

Mr. DODGE. I am milling wheat salesman.

Mr. GUINANE. And from whom do you receive your instructions? Mr. DODGE. Mr. Kibler.

Mr. GUINANE. Who is Mr. Kibler's supervisor or supervising officer?

Mr. DODGE. He is the head of Hallet & Carey at Minneapolis. Mr. GUINANE. Did you operate as a separate and distinct company from the Bunge Corp.?

Mr. DODGE. Yes; I think so.

Mr. GUINANE. What position or connection with Hallet & Carey in connection with Canadian grain, unfit wheat that was imported by Bunge and Kellogg, did you have?

Mr. DODGE. We had nothing to do with the bringing of this wheat in as far as Hallet & Carey is concerned. I sold wheat.

Mr. GUINANE. Didn't Hallet & Carey sell a lot of wheat?

Mr. DODGE. Yes; we sold a lot of it.

Mr. GUINANE. You made quite a trip throughout the Southwest, after this wheat was brought in, attempting to sell it?

Mr. DODGE. Yes, sir.

Mr. GUINANE. And you sold a great deal of the wheat?

Mr. DODGE. Yes; I sold quite a little.

Mr. GUINANE. What instructions did you have as to notifying purchasers as to its origin, as being of Canadian origin and the fact that it was labeled "unfit for human consumption"?

Mr. DODGE. I had instructions of telling them it was Canadian wheat and it could not be used in International Wheat Agreement operation.

Mr. GUINANE. And you were to notify purchasers that it was Canadian wheat?

Mr. DODGE. Yes, sir.

Mr. GUINANE. And in all contacts, you did so notify purchasers? Mr. DODGE. Yes, sir.

Mr. GUINANE. Did you ever do it in writing?

Mr. DODGE. Apparently I did not, most of the sales were made on the telephone after these preliminary trips.

Mr. GUINANE. If several of those purchasers, say they were not so notified, they are either in error or telling a falsehood, are they definitely?

Mr. DODGE. Yes, sir, I told every single person that I sold wheat to that they could not break this and ship it out and collect subsidy. Mr. GUINANE. You had some general understanding of the International Wheat Agreement and the subsidy program, did you?

Mr. DODGE. Generally, I think everyone in the grain business has that.

Mr. GUINANE. You knew this Canadian wheat or flour manufactured from Canadian wheat could not go into subsidy, did you? You knew that?

Mr. DODGE. Yes, sir; I knew that.

Mr. GUINANE. Did you meet with some opposition on this wheat? Mr. DODGE. Well, I wouldn't say too much, naturally you have

some.

Mr. GUINANE. Did some of the companies contacted tell you they wouldn't touch the wheat because they didn't want to take a chance on violating the International Wheat Agreement, Mr. Dodge?

Mr. DODGE. There were some companies I contacted that I didn't sell, but I don't think I was ever told that, sir.

Mr. GUINANE. In your memorandum to Hallet & Carey on May 14, 1951, where you state:

At Wichita Consolidated Milling Co., Mr. Russell Payne, buyer, * * * they will not touch the frost damaged wheat, but our prospect of spring wheat is good.

What was the reason they would not touch it?

Mr. DODGE. I say, perhaps this certain type of flour or this blend of Canadian wheat would not be satisfactory to work in with their wheat for that certain type of flour.

Mr. GUINANE. Did they mention subsidies?

Mr. DODGE. They didn't mention subsidies to me, no, sir.

Mr. GUINANE. Another paragraph:

Also called on Wichita Flour Mills, a young fellow, Fred Merrill, is now their wheat buyer and he requested a 5-pound sample, which is being sent today. This account will again depend on the outcome of the Kansas crop and the possibility of new subsidies and export business.

What did you mean by that?

Mr. DODGE. Naturally, the Southwest mills do a tremendous export business in flour. That is one of their largest outlets for their four normally, as they sell export flour and they use wheat they have in their own territory for the export flour, and buy other feeds to fill in their domestic sales.

Mr. GUINANE. Is there any export business in particular outside of the International Wheat Agreement and the MSA and other Government agencies?

Mr. DODGE. I imagine there was. I wouldn't have any idea how much there was.

Mr. GUINANE. In the last paragraph—

there has been a big crop in Oklahoma, Kansas, and Nebraska. I think Texas is the best field. Removal of subsidies has hurt the flour business.

What did you mean by that?

Mr. DODGE. The general flour business.

Mr. GUINANE. The flour business?

Mr. DODGE. The subsidies hurt the flour business.

Mr. GUINANE. Why?

Mr. DODGE. Of course, they were able to sell flour under subsidies, but that they would not be able to sell in competition with Canada and other countries who manufacture flour.

Mr. GUINANE. I want to read a letter dated September 30, 1950, addressed to Red Wing Milling Co.:

I am sending you, under separate cover bake-size samples on Canadian frosted wheat.

Mr. MOSKOVITZ. Will you identify the letter, please, for us? Mr. GUINANE. It is a letter from Mr. Dodge to the Red Wing Milling Co., dated September 30, 1950.

Mr. MOSKOVITZ. Thank you.

Mr. GUINANE (reading):

I am sending under separate cover, bake-size samples of Canadian wheat, one marked 5 and the other marked 6. We will appreciate it if you can bake these up for us and advise us as quickly as possible what your results are. Apparently some of the mills have bought some Canadian wheat as there is one cargo in transit in Duluth and Buffalo that we know of.

You will no doubt recall we have had frosted wheat that worked out very well. Of course, the only way we can tell is to bake it up, so will appreciate it if you will advise us what you think of this particular type of wheat. We can't give you anything definite at what it can be bought at yet but should be able to within the next day or two.

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