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AFTERNOON SESSION

The CHAIRMAN. Will you come to order.

I am going to ask Mr. Brodtmann to come back to the witness chair. We want to refer to this letter that you had asked us about.

When you first took the witness stand, you asked that a letter might be read into the record.

Mr. BRODTMANN. Yes.

The CHAIRMAN. And we have examined the letter. The letter will become a part of the record. There is no need in taking the time to read it.

Mr. BRODTMANN. Yes, sir.

The CHAIRMAN. And you also had with you some documents which you wanted inserted and to which your letter refers. The documents will become a part of the committee file.

That is all, Mr. Brodtmann.

(The document referred to above is as follows:)

BOARD OF COMMISSIONERS OF THE PORT OF NEW ORLEANS,
New Orleans, La., October 12, 1953.

COMMITTEE ON AGRICULTURE AND FORESTRY,

United States Senate.

DEAR SIRS: With reference to your subpena dated August 12, 1953, instructing me to produce all books, records, and correspondence in the custody of the New Orleans Public Grain Elevator concerning the handling, storage, processing, or commingling and shipment of any wheat owned or controlled by Bunge Corp., Minneapolis, Minn., and/or Bunge Corp., New York, N. Y., during the years 1950, 1951, and 1952, including financial records of all moneys received from Bunge Corp. for such services by or on behalf of myself or the New Orleans Public Elevator:

In an exchange of correspondence between our general counsel, Mr. Eldon S. Lazarus, and your committee, Mr. Lazarus was advised by letter dated September 9, 1953, signed by Mr. E. P. Guinane, investigator, that in lieu of bringing voluminous records to Galveston, Tex., that a compilation or statement of information taken from such records, enabling me to answer any questions concerning the above, would suffice. Therefore, I am attaching photostatic copies of statements prepared by me, as follows:

Sheet No. 1: This statement covers the record of all receipts and shipments for Bunge Corp., Kansas City, Mo., for period January 1, 1950, through December 31, 1950.

Sheet No. 2: This statement covers receipts and shipments for Bunge Corp., Kansas City, Mo., for period January 1, 1951, through December 31, 1951.

Sheet No. 3: This statement covers receipts and shipments for Bunge Corp., Kansas City, Mo., for period January 1, 1952, through December 31, 1952.

Sheet No. 3-A: This sheet refers to consignment received by barge, description of which will be referred to later in this report.

Sheet No. 4: This statement covers receipts and shipments for Bunge Corp., New York City, for period March 13, 1952, through April 29, 1952. These were the only shipments received during the 3-year period in question for Bunge Corp., New York City.

Sheets Nos. 4-A and 4-B: These sheets contain lists of car numbers covering movement of grain, description of which will be referred to later in this report. Sheet No. 5: This statement covers payments received from the Bunge Corp. for the entire period in question.

From reports in the press it would appear that the investigation now being conducted by your committee originated because of the movement of a certain type of grain into the United States from Canada; therefore, your specific attention is directed to sheet No. 3, which lists an item of 40,545/50 bushels of Sample grade Northern Spring wheat. Statement No. 3-A attached furnishes complete details showing the origin and receipt of this shipment by the elevator, and since the grade and percentage of damage were similar to other consignments of wheat that moved into the elevator in 1951 showing Canadian origin, thought it advisable to call your specific attention to same.

Your attention is also directed to sheet No. 4, which lists 64,591/10 bushels of Sample grade Northern Spring wheat and 35,443/40 bushels of Sample grade Dark Northern Spring wheat. In referring to sheets Nos. 4-A and 4-B, you will note that these two consignments moved in railroad cars showing portions of each lot originating at Markham, Ill., and Minneapolis, Minn. Because the grade of, and the percentage of damage to, these two consignments resembled Canadian consignments previously received at the elevator, thought it advisable to direct your attention to same.

Sheet No. 5 contains list of all payments received by the elevator from Bunge Corp. for services rendered that firm. You will note that, in most instances, the amount of the check is in excess of the bills listed. This is due to the fact that the checks also included payment for services on grain other than wheat. We have only listed on statement the bill numbers and amounts covering consignments of wheat.

While the subpena refers to Bunge Corp., Minneapolis, Minn., the records of this elevator show that the shipments of wheat were handled only for account of the offices of that corporation in Kansas City, Mo., and New York City. For your information, no payments or gratuities were ever offered to or accepted by me from the Bunge Corp. or any other parties.

Very truly yours,

S. L. BRODTMANN, Assistant to the Manager.

The CHAIRMAN. The next witness is Mr. Richeson.

TESTIMONY OF LACY D. RICHESON, PRESIDENT, W. L. RICHESON & SONS, INC., NEW ORLEANS, LA.

(The witness was sworn by the chairman.) Mr. GUINANE. Give your full name and title.

Mr. RICHESON. Lacy D. Richeson, president, W. L. Richeson & Sons, Inc., ocean freight brokers-forwarding agents.

Mr. GUINANE. Mr. Richeson, you and your father before you have been in the forwarding business for many years in New Orleans? Mr. RICHESON. July 1, 1919; and I came in September 1, 1925. Mr. GUINANE. Do your records show in 1952 you handled a shipment of Sample grade grain for Bunge Corp.?

Mr. RICHESON. Yes.

Mr. GUINANE. How did that grain, how was that grain described when you first received notice through any papers or anything?

Mr. RICHESON. We were first advised by the New York office they would have a ship at New Orleans to lift Northern Spring wheat. Mr. GUINANE. Did they tell you the origin of that shipment? Mr. RICHESON. No, sir.

Mr. GUINANE. They did not?

Mr. RICHESON. No, sir.

Mr. GUINANE. Did they mention anything to you that it was of Canadian origin?

Mr. RICHESON. No, sir.

Mr. GUINANE. Nor did they mention to you the wheat had been imported into this country as wheat unfit for human consumption? Mr. RICHESON. No, sir.

Mr. GUINANE. You had no knowledge whatever?

Mr. RICHESON. No, sir.

Mr. GUINANE. You made arrangements then with the New Orleans public elevator to handle that wheat, did you?

Mr. RICHESON. That is correct.

Mr. GUINANE. And

Mr. RICHESON. As a matter of fact, I might make mention that Bunge's New York office phoned in to the New Orleans elevator also

to see the commitment is acceptable. We only have 2.5 million, and have been busy since 1948. That must be on there a certain time in order for the ship to be berthed.

Mr. GUINANE. Did you receive any instructions from Bunge Corp. so see this wheat was specially handled through the elevator?

Mr. RICHESON. No, sir.

Mr. GUINANE. When you made arrangements for handling through the elevator, what were your instructions?

Mr. RICHESON. Our instructions were to, for all wheat coming into New Orleans, like all other wheat, it would come in and we would keep the stock reports by grade, daily, and follow the instructions for documentation for that steamer as supplied by the New York office. And the New York office does furnish us all instructions for bill-of-lading purposes. I am speaking of documentation. We do not get any from Kansas City Bunge, and all our dealings are with New York on documentation and berthing.

Mr. GUINANE. And there was nothing in those documents received from Bunge New York to show you this was Canadian wheat? Mr. RICHESON. That is correct.

Mr. GUINANE. When you made arrangements with the elevator, there was no special instructions that you gave the elevator? Mr. RICHESON. No.

Mr. GUINANE. Was that wheat shipped out of the New Orleans elevator?

Mr. RICHESON. Yes, sir.

Mr. GUINANE. What grade wheat?

Mr. RICHESON. All wheat

Mr. GUINANE. Beg pardon?

Mr. RICHESON. All wheat out of New Orleans grain elevator. We only handle New Orleans; not Mobile.

Mr. GUINANE. How was that Sample grade wheat shipped out, as such, as Sample grade wheat?

Mr. RICHESON. Well, Mrs. McGann, manager of my grain department, is a witness here also, all the records are here. Some went out as Northern Spring wheat actually under bill of lading.

Mr. GUINANE. Some?

Mr. RICHESON. That is correct. A number of steamers, which were actually Northern Spring wheat steamers and docketed that way. Mr. GUINANE. Can you tell us the cost for storage and handling on the average cost per bushel?

Mr. RICHESON. The average cost per bushel is two and a quarter cents, I think, for elevation, plus inspection, which is paid to the board of trade inspectors for in; and out is the board of trade, which is under the New Orleans Board of Trade. That 24 cents elevation covers weighing in, so many days free time; if any screening is to be done on grades, on grains or corn or any other commodity, and bagging is in addition. The published tariff is set up for the public grain elevator.

Mr. GUINANE. Did your firm have anything to do with transmittal of any money for the Bunge Corp. or any of its representatives to the elevator in addition to the regular storage and handling charges?

Mr. RICHESON. The only transmittal of money that we have is, as you know, all stocks of grain at New Orleans are known as common stocks. I think you are acquainted with what I mean by com

mon stocks, 2 wheat for everybody, 3 wheat, or mixed wheat. And the elevator bad a policy established several years ago, due to the small house, to accept cash collateral for grain advanced by the elevator for an account when the stock was not in the elevator at the time.

Now, that cash collateral covers so many bushels of wheat for a specific steamer. The price of a number of bushels for a cash collateral, the elevator gives us a price and we ask Bunge to transfer to our account to make up for that grain which is not in there, not in their stock at that time but might be in the process of moving, but inland collateral not yet surrendered to the elevator.

We pay the elevator; Bunge transfers to our account; and we hold that until the elevator calls us for the actual amount, because they may have received more collateral from Bunge through transmittals surrendered to the railroad or the barge lines. So we only want to pay on call. We give a certified check, paid to the Board of Commissioners of the Port of New Orleans, which money is kept separate by the dock board in a special collateral fund, to come back to us, to transmit to Bunge when their stock is filled up.

We will then pay the elevator a certain amount of cash, service collateral, according to what Bunge stocks reflect in collateral surrendered at the time. That comes to us as the stock fills up. We take

a letter to the bank that gives us the check, and we send that money which is going back to Bunge, we deliver it to the bank, that the dock board gives us, transferring back to Bunge, so it is a dollar-and-cents transaction. So, the total amount we could give the elevator on cash collateral would eventually come back to us as the cash comes to be remitted back to Bunge.

Mr. GUINANE. That would all represent wheat that is actually shipped out of the elevator?

Mr. RICHESON. That would be wheat, corn, beans, or any other grain. That, being a State institution, I understand was stopped recently.

Mr. GUINANE. Did you have any instructions from Bunge to see none of this Sample grade wheat was placed on ships under the International Wheat Agreement?

Mr. RICHESON. We were told by Bunge's New York office they had spoken to the elevator that there were certain ships that they did not want such and such grain to go on. Now

Mr. GUINANE. You were told by whom?

Mr. RICHESON. By Bunge in New York. We conclude they are outside IWA. But that information was transmitted to us that Bunge had told the elevator certain steamers-certain wheat could not go on certain steamers.

Mr. GUINANE. Did you give the elevator such instructions?

Mr. RICHESON. No, sir, we didn't.

Mr. GUINANE. I see.

That is about all the questions I have of Mr. Richeson.

The CHAIRMAN. Any questions?

Mr. RICHESON. I'd like to make a statement for the record.

Mr. GUINANE. Pardon me.

You have made up a statement of Bunge wheat, Sample grade wheat, in the elevator now?

Mr. RICHESON. No, sir, we don't. We have all the records here. But I think the elevator has given you the stock and whatever reflects on their books reflects on our stock.

I did prepare for you here all moneys, to save time, as we do a lot of work for Bunge and have for a number of years. It might be cotton piece goods, import or export, and I have this notarized statement of all money and how it was distributed, out bill number, supporting invoice here as well as our ledger sheets to back this up. And I would like to turn this report over.

Mr. GUINANE. We will gladly receive it.

The CHAIRMAN. The report will be received and will be part of the committee file; and, of course, it is referred to in the report now. Mr. RICHESON. I'd also like to make this statement, and won't take but a moment to do it.

We have been in business 34 years in New Orleans. I came in in 1925. We have had a general policy, and it has never been a cash transaction at any time. We have a hard enough time to take care of our employees and keep them. I am making this statement because of a policy we have never had a cash transaction other than bonuses or Christmas, but never to any other person; and we have adopted the same policy my father set up for the firm, and my brother and I are still adopting it; and in the long run, I think it is best.

Senator YOUNG. I think you are to be commended for that.
The CHAIRMAN. Thank you, sir.

The CHAIRMAN. Mrs. McGann.

TESTIMONY OF MRS. JOSIE MEYER MCGANN, HEAD, EXPORT GRAIN DEPARTMENT, RICHESON & SONS, INC., NEW ORLEANS, LA.

(The witness was sworn by the chairman.)

Mr. GUINANE. You are Mrs. Josie Meyer McGann?

Mrs. MCGANN. Yes.

Mr. GUINANE. And you are in charge of the export grain department for Richeson & Sons?

Mrs. MCGANN. Yes.

Mr. GUINANE. You were in that position in 1952 and 1951?

Mrs. McGANN. Yes.

Mr. GUINANE. Do you recall a shipment of Sample grade wheat received for the Bunge Corp., handled by Richeson firm for transmittal to the New Orleans public grain elevator?

Mrs. McGANN. Yes, sir.

Mr. GUINANE. Did you receive any special instructions from anyone relative to handling that wheat in the elevator?

Mrs. McGANN. I did not, nor do I know that the firm did.

Mr. GUINANE. Was that wheat shipped out of the elevator?

Mrs. McGANN. Yes, sir.

Mr. GUINANE. And do you know, do you have the names of the ships on which the wheat was shipped?

Mrs. McGANN. There were a number of ships.

Mr. GUINANE. There were a number of ships?

Mrs. McGANN. Yes, sir.

Mr. GUINANE. Were some of those ships under the International Wheat Agreement, or do you know?

Mrs. MCGANN. I do not know.

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