Mr. BACHMANN. About a quarter of a million. Mr. MOSKOVITZ. Did they get the rest from Canada? Mr. BACHMANN. They imported their own. Mr. MOSKOVITZ. Did this wheat they bought come from Canada, or was it not Canadian wheat? Mr. BACHMANN. No. Mr. MOSKOVITZ. It was exactly the same kind of wheat they bought from the Bunge Co., was it not, Mr. Bachmann? Mr. BACHMANN. I would have to refer to the man who made the investigation for such details, if I may. Mr. MOSKOVITZ. You have not the information here, have you? Mr. BACHMANN. The details, Mr. King can tell you and he is here, who made the investigation. Mr. MOSKOVITZ. Who is Mr. King? Will you tell us on the record, so that you can refer to him, or would you rely on Mr. King's statement? Mr. BACHMANN. I would like to rely on it, if he has time to dig it out. Senator THYE. Can you lay the record before Mr. Bachmann, sir? Mr. KENNETH KING (Office of Compliance and Investigation, Production and Marketing Administration, U. S. Department of Agriculture, Chicago, Ill.): Yes, sir. Mr. MOSKOVITZ. Is it the same kind of wheat, frost-damaged wheat? Mr. BACHMANN. Yes. Mr. MOSKOVITZ. I am not trying to be technical about this. Senator THYE. How many more questions do you have of Mr. Bachmann? Mr. MOSKOVITZ. Mr. Bachmann brought up this flour transaction and he was very incomplete in his reference to it and I believe it should be cleared up. I am sure that the Senator would really be interested as it involves a very substantial sum of money. Senator THYE. Proceed. Mr. GUINANE. Are you familiar with the details of the flour transaction to which you testified, Mr. Bachmann? Mr. BACHMANN. I reviewed that report myself very carefully because it was the initial report and I knew I was going to get into the matter further. I did not make the investigation. Mr. GUINANE. But you are fully familiar with the investigation as it is disclosed? Mr. BACHMANN. Yes; I was very familiar. It has grown somewhat hazy now. Mr. GUINANE. And you have attempted to tell the Senator what you wanted to about that transaction? Mr. BACHMANN. Yes. Mr. GUINANE. Can you give us the story briefly? Mr. BACHMANN. I couldn't in a minute. Mr. MOSKOVITZ. Let's see if we can develop it. I think the Senator would like to have it. I am guessing that he would. That involved a shipment of 400,000 bags of flour to Germany? Mr. BACHMANN. Do you mean the sale of the Flour Mills of America? 34117-53-pt. 2- -11 Mr. MOSKOVITZ. The sale that Bunge made of 400,000 bags of flour? Mr. BACHMANN. Yes, sir. Mr. MOSKOVITZ. Now, when this contract was made, do you know the nature of it? Mr. BACHMANN. Generally, I know the contract was made with the German Government directly between the Bunge Corp. and the German Government. Mr. MOSKOVITZ. Bunge acted on a commission basis buying that flour? Mr. BACHMANN. I recall that. Mr. MOSKOVITZ. Bunge was doing this on a commission basis for Germany? Mr. BACHMANN. Yes. Mr. MOSKOVITZ. That was made out under the IWA? Mr. BACHMANN. Yes, sir. Mr. MOSKOVITZ. The M. S. A.? Mr. BACHMANN. Originally. Mr. MOSKOVITZ. That was made in the office of New York? Mr. BACHMANN. That is right. Mr. MOSKOVITZ. And New York did what they could to obtain it on the German account? Mr. BACHMANN. Yes; I presume so. Mr. MOSKOVITZ. And when we talk of the German Government, we talk about West Germany, we are talking about that part of Germany? Mr. BACHMANN. Yes. Senator THYE. The question I want to find out is: Is this same flour that you are referring, the flour that a subsidy was paid on? Mr. BACHMANN. That is what I believe Mr. MOSKOVITZ. That is what I want to develop here. That is exactly it. Didn't the Bunge Corp. become the broker here to buy that flour? Mr. BACHMANN. They got the flour, as I recall from 11 different mills. Mr. MOSKOVITZ. I didn't ask you that question. They didn't buy the flour directly from the mills, did they, Mr. Bachmann? Mr. BACHMANN. That is my recollection at the moment. Mr. MOSKOVITZ. Let me refresh your memory. Did they communicate with brokers, regular flour brokers, and order the flour? Mr. BACHMANN. I think that is the way it happened. Mr. MOSKOVITZ. They communicated with Mr. X, Mr. Y, and Mr Z, and not the Flour Mills of America, that is correct, isn't it? Mr. BACHMANN. That is my recollection. Mr. MOSKOVITZ. And they said Mr. X go out and buy some bags of flour at the best available price that you can. Mr. BACHMANN. I am talking about these things and it has been a long time ago. It has been a year ago. Mr. MOSKOVITZ. Would you refresh your recollection; it is highly important. I want the true facts on the record. Mr. BACHMANN. It would be in the New York file and all I have here is the Flour Mills of America report and I don't have the NewYork file on the investigation made in the Bunge office of New York on that point. Mr. MOSKOVITZ. Let's reserve that point for the moment, because I don't want to have you testify about anything you don't know anything about. By the way, would you be in Galveston? Mr. BACHMANN. I was planning to. Mr. MOSKOVITZ. Well, we have until then to develop this. Senator THYE. We will have to obtain the information, and we can get the files on New York as you are now unable to refer to them except from in memory. Mr. BACHMANN. I will get the full details and I will then reply to these questions. Senator THYE. Did Mr. King lay anything before you that would give you any further light on that question? Mr. BACHMANN. He laid before me a confirmation of purchase. Mr. MOSKOVITZ. Is that a Bunge confirmation of purchase for Germany? Mr. BACHMANN. They are the purchasing agents for the German Government. It is a confirmation of 1,455,000 bushels of nonenriched hard wheat, 80 percent extractions, listing the various firms from whom the full quantity was acquired. Mr. MOSKOVITZ. How many firms? Mr. BACHMANN. Eleven of them. Mr. MOSKOVITZ. Now at the time this flour was bought through brokers in the Middle West, this was not an International Wheat Agreement or MSA contract? Mr. BACHMANN. That is right. Mr. MOSKOVITZ. When did the switch occur? Mr. BACHMANN. I don't recall how the question developed or arose. Mr. MOSKOVITZ. You don't recall how the question developed or arose? Mr. BACHMANN. No. Mr. MOSKOVITZ. When did it occur? Was it not a fact, after some of the flour had been shipped? Mr. BACHMANN. That I don't recall. Mr. MOSKOVITZ. Will you check back and refresh your recollection? Mr. BACHMANN. As I stated, I will get all the detail by the time we arrive in Galveston. Mr. MOSKOVITZ. Would you check whether or not those things are true. I can see the statements you have made here, and these statements you have made rather hastily, it is a long time since you have seen the report. We will reserve the questions. We will also ask you if will also check whether or not it was a fact the sugges you tion to change this to a MSA shipment was at the suggestion of the MSA people or the German Government? Mr. BACHMANN. The suggestion was made at the instigation of the German Government or the MSA. The conference that was held with Mr. Cruzy, of the Department of Agriculture, as I recall it, his stand was that he saw no objection to including it under the IWA. Mr. MOSKOVITZ. It was then? Mr. BACHMANN. He saw no objection from transferring it from MSA to IWA. He saw no objection to that. Mr. MOSKOVITZ. It started out as non-MSA and non-IWA shipment? Senator THYE. Wouldn't it be true, that the German Government or the MSA folks-were this wheat a Canadian frost-damaged wheat that was mingled with domestic wheat-would be absolutely innocent, so far as the ordering of the wheat is concerned, that they were then in ignorance of the fact that this was imported feed wheat? Mr. BACHMANN. So they were. Senator THYE. The fact of the matter is, we have got to have this file from the Department that will give us positive information about all of this. We are just consuming a lot of time here this afternoon. We are not able to pin it down to any specific reference or any specific information as the files would disclose it. I don't want to prevent you from developing whatever you want to develop, but I am not going to let this afternoon be consumed by your examination of Mr. Bachmann when Mr. Bachmann does not have the files here. Mr. MOSKOVITZ. I would not have asked Mr. Bachmann one single question if he had described the transaction completely or accurately. Senator THYE. So far as this matter is concerned, Mr. Bachmann will obtain the files that will have all the information. What we are going to do here is to continue to interrogate the witnesses who were subpenaed for this hearing and we are not going to have you use the balance of this day in cross-examination of this witness. Mr. MOSKOVITZ. I want to make it clear so you will have an open mind on this particular transaction. I think it is clear that Mr. Bachmann has not given the full details of this transaction. Senator THYE. We will proceed with the hearing at this time. Mr. MOSKOVITZ. There was no transaction between the wheat we bought and the flour we sold, and we will disclose it when it is fully developed. Senator THYE. I am not satisfied that they are innocent of it. Mr. GUINANE. There is one question I would like to ask Mr. Bachmann. Senator THYE. Go ahead. Mr. GUINANE. Do you have any information that the flour purchased by Bunge Corp. from the Flour Mills of America contained purchased Canadian wheat? Mr. BACHMANN. Yes; it did contain Canadian wheat. Pardon me, Mr. Guinane: That is flour purchased by Bunge from the Flour Mills of America that contained Canadian wheat flour. Mr. GUINANE. Was that manufactured from Canadian wheat? Mr. BACHMANN. The specific flour that was sold, that my mind is not clear on, I would have to check. I misunderstood that. Your question was whether or not the Flour Mills had manufactured flour from Canadian wheat, that was my understanding of the question. Mr. GUINANE. My question was whether or not your division had evidence that the flour which was purchased under this contract by Bunge from Flour Mills of America contained flour which had been manufactured from Canadian wheat. Mr. BACHMANN. I am not sure. Mr. GUINANE. You don't know and we will just pass it up then. Mr. BACHMANN. I don't know at the moment. I would want to check. Senator THYE. We must get the file so we cease guessing at the question. We are going to have the facts here, as the files will disclose them. Are there any other questions. Mr. GUINANE. Mr. Moskovitz read this letter from Stone Forwarding Co. of Houston to Bunge Corp. wherein Stone Forwarding Co. states: As we mentioned, the Transit Grain Co. of Fort Worth have had a quantity of this Canadian wheat shipped here in bond. In error the Houston Public Elevator called for a withdrawal of grain for mixing and the quantity mentioned above was mixed in the grain loaded in the above-named steamer. This was an oversight on the part of the elevators since the Transit Co. were not making delivery to the vessel as the entire quantity was supplied by the Uhlmann Elevator Co. of Texas. Does your division have information that a certain amount of money had been paid to the elevator operators at Houston for mixing this Canadian grain? Mr. BACHMANN. Yes, sir. Mr. GUINANE. What was the amount paid to the superintendent? Mr. MOSKOVITZ. What does this have to do with us? Mr. BACHMANN. The amount that was paid was $118,700. Mr. GUINANE. Have you any information on the Stone Forwarding Co. giving any moneys to the elevator operators? Mr. BACHMANN. Yes, sir. The Stone Forwarding in 1951, $4,800. Mr. GUINANE. Did Uhlmann Elevator pay any money to the Houston Elevator? Mr. BACHMANN. Yes; from 1948 to 1952, Uhlmann Elevator paid the Houston Elevator $16,900, to Mr. Fellrath. Senator THYE. Is that all of the questioning? Mr. GUINANE. That is all. Senator THYE. That is all of the questions. Mr. Robert J. Henderson will be called next. Mr. Henderson has been sworn, so you may proceed with your questions. TESTIMONY OF ROBERT J. HENDERSON, VICE PRESIDENT AND MANAGER, BUNGE CORP., MINNEAPOLIS, MINN.-Resumed Senator THYE. Proceed. Mr. GUINANE. You were assistant to Mr. Kellogg in 1951 and part of 1952? Mr. HENDERSON. That is correct, sir. Mr. GUINANE. Did you have anything to do during that period with making arrangements with Forwarders at Galveston, Tex., or with elevator operators in Galveston, Tex., to mix out Bunge wheat? Mr. HENDERSON. No, sir. Mr. GUINANE. You had no direct connection at all with them? Mr. GUINANE. As far as you know were those negotiations carried on by your Kansas City office? Mr. HENDERSON. I would think so, sir. Mr. GUINANE. Do you have any personal knowledge that money was paid to Forwarders or to a Galveston elevator by Bunge Corp. for mixing out this Canadian wheat? Mr. HENDERSON. No, sir. Mr. GUINANE. As far as you know, were those negotiations carried on by your Kansas City office? Mr. HENDERSON. I would think so, sir. Mr. GUINANE. You do not? Mr. HENDERSON. No, sir; that is about all I can say. Mr. GUINANE. That is about all I have to ask Mr. Henderson. |