may be required to persons processing wheat into food products. Marketing certificates shall be transferable only in accordance with regulations issued by the Secretary.

"(b) Whenever a domestic food quota is proclaimed for any marketing year pursuant to section 380b of this Act, the Secretary shall determine and proclaim for such marketing year (1) the estimated parity price and the estimated farm price for wheat, and (2) the value of the marketing certificate. The value of the marketing certificate shall be equal to the amount by which the estimated parity price exceeds the estimated farm price as determined herein. The value of the marketing certificate shall be computed to the nearest cent. The proclamation required by this subsection shall be made during the month of June immediately preceding the marketing year for which such domestic food quota is proclaimed.

"(c) The Secretary is authorized and directed through the Commodity Credit Corporation to buy and sell marketing certificates issued for any marketing year at the value proclaimed pursuant to subsection (b) of this section. For the purpose of facilitating the purchase and sale of certificates, the Secretary may establish and operate a pool or pools and he may also authorize public and private agencies to act as his agents, either directly or through the pool or pools. Certificates shall be valid to cover sales and importations of products made during the marketing year with respect to which they are issued and after being once used to cover such sales and importations shall be canceled by the Secretary. Any unused certificate shall be redeem by the Secretary at the price established for such certificates.

"MARKETING RESTRICTIONS

"SEC. 380e. (a) Except as provided in subsection (d) hereof, all persons engaged in the processing of wheat into food products composed wholly or partly of wheat are hereby prohibited from marketing any such product for domestic food consumption or export containing wheat in excess of the quantity for which marketing certificates issued pursuant to section 380 of this Act have been acquired by such person.

"(b) Except as provided in subsection (d) hereof, all persons are hereby prohibited from importing or bringing into the continental United States any food products containing wheat in excess of the quantity for which marketing certificates issued pursuant to section 380d of this Act have been acquired by such person.

"(c) Upon the exportation from the continental United States of any food product containing wheat, with respect to which marketing certificates as required herein have been acquired, the Secretary shall pay to the exporter an amount equal to the value of the certificates for the quantity of wheat so exported in the food product. For the purposes of this subsection, the consignor named in the bill of lading, under which the article is exported, shall be considered the exporter: Provided, however, That any other person may be considered to be the exporter if the consignor named in the bill of lading waives claim in favor of such other person.

“(d) Upon the giving of a bond satisfactory to the Secretary under such rules and regulations as he shall prescribe to secure the purchase of and payment for such marketing certificates as may be required, any person required to have a marketing certificate in order to market or import a food product composed wholly or partly of wheat may market or import any such commodity without having first acquired a marketing certificate.

"(e) As used in section 380e of this title, the term 'marketing' means the sale and the delivery of the food product composed wholly or partly of wheat.

"CONVERSION FACTORS

"SEC. 380f. The Secretary shall ascertain and establish conversion factors showing the amount of wheat contained in food products processed wholly or partly from wheat. The conversion factor for any such product shall be determined upon the basis of the weight of wheat used in the processing of such product.

"CIVIL PENALTIES

"SEC. 380g. Any person who violates or attempts to violate, or who participates or aids in the violation of, any of the provisions of subsection (a) or (b) of section 380e of this Act shall forfeit to the United States a sum equal to three times

the market value, at the time of the commission of such act, of the product involved in such violation. Such forfeiture shall be recoverable in a civil suit brought in the name of the United States.

"ADJUSTMENTS IN DOMESTIC FOOD QUOTAS

"SEC. 380h. If the Secretary has reason to believe that because of a national emergency or because of a material increase in demand for wheat, the domestic food quota for wheat should be increased or suspended, he shall cause an immediate investigation to be made to determine whether the increase or suspension is necessary in order to meet such emergency or increase in the demand for wheat. If, on the basis of such investigation, the Secretary finds that such increase or suspension is necessary, he shall immediately proclaim such finding (and if he finds an increase is necessary, the amount of the increase found by him to be necessary) and thereupon such quotas shall be increased or shall be suspended, as the case may be. In case any domestic food quota for wheat is increased under this section, each farm quota for wheat shall be increased in the same ratio and marketing certificates shall be issued therefor in accordance with section 380d of this Act. In case any domestic food quota for wheat is suspended under this section, the Secretary may redetermine the value of marketing certificates issued pursuant to section 380d of this Act.

"REPORTS AND RECORDS

"SEC. 3801. (a) The provisions of section 373 of this Act shall apply to all persons, except wheat producers, who are subject to the provisions of this subtitle, except that any such person failing to make any report or keep any record as required by this section or making any false report or record shall be deemed guilty of a misdemeanor and upon conviction thereof shall be subject to a fine of not more than $2,000 for each such violation.

"(b) The provisions of section 373 (b) of the Act shall apply to all wheat farmers who are subject to the provisions of this subtitle.

"REFERENDUM

"SEC. 380j. In the referendum held pursuant to section 336 of this Act on the national marketing quota proclaimed for the 1956 crop of wheat, the Secretary shall also submit the question whether farmers favor a marketing certificate program under this subtitle in lieu of marketing quotas under subtitle B. If more than one-half of the farmers voting in the referendum favor such marketing certificate program, the Secretary shall, prior to the effective date of the national marketing quota proclaimed under subtitle B, suspend the operation of such quota and a marketing certificate program shall be in effect for the 1956 and subsequent wheat crops under the provisions of this subtitle and marketing quotas and acreage allotments shall not be in effect for wheat under subtitle B. "PRICE SUPPORTS

"SEC. 380k. Notwithstanding any other provision of law--

"(a) whenever a wheat marketing certificate program under this subtitle is in effect, price support for wheat shall be determined in accordance with the provisions of subsection (b) of this section.

"(b) the Secretary of Agriculture is authorized to make available through loans, purchases, or other operations, price supports to producers of wheat who are cooperators. The amount, terms, conditions, and extent of such price-support operations shall be determined by the Secretary, except that the level of such support shall be determined after taking into consideration the following factors: (1) the supply of the commodity in relation to the demand therefor, (2) the economic feasibility of producing substitute crops on acreage withdrawn from the production of wheat, (3) the price levels at which corn and other feed grains are being supported and the feed value of such grains in relation to wheat, (4) the provisions of any international agreement relating to wheat to which the United States is a party, (5) foreign trade policies of friendly wheat-exporting countries, and (6) other factors affecting international trade in wheat including exchange rates and currency regulations.

"(c) compliance by the producer with acreage allotments, production goals, and marketing practices (excluding marketing quotas) may be prescribed

and required by the Secretary as a condition of eligibility for price support and for the receipt of wheat marketing certificates."

The CHAIRMAN. I notice you have a written statement. If you desire, you may proceed.

STATEMENT OF HON. WAYNE MORSE, A UNITED STATES SENATOR FROM THE STATE OF OREGON

Senator MORSE. Mr. Chairman and members of the committee, the complete statement will set forth our case, if it may be presented without interruption, although I have no objection to interruption. Unless the interruption is needed for clarification purposes, I would like to complete the statement, and then have the questions.

The CHAIRMAN. Very well, you may proceed.

Senator MORSE. Before I start the statement, Mr. Chairman, I mean no flattery when I say that I share the objective point of view which the chairman has just stated in starting these hearings. I have never found the chairman wanting in any cooperation in my 10 years in the Senate when I have come to him to raise an agricultural problem involving the West. It does not mean that the Senator from Louisiana has always agreed with my point of view, but he has always agreed to see to it that I got a full and fair hearing on any problem involving western agriculture.

The record will speak for itself as to the support the Senator has given western agricultural interests. It has been a tremendously powerful support.

I have no hesitancy in saying here this morning that western agriculture is greatly indebted to you, sir, for the objective attitude you have taken on our problems. We have always tried to reciprocate quite properly in regard to agricultural problems that confronted the South and other sections of the country.

The CHAIRMAN. I appreciate that statement very much. I wish also to add to what you have just stated, that ever since I have been here this is my 19th year in the Senate that the membership of this committee, both Republicans and Democrats, have worked, in my humble judgment, for the good of the country. There has been no partisanship that I could denote.

Senator MORSE. That has been my observation.

The CHAIRMAN. All, I believe, have tried to do a good job,

as we could see the light, in order to assist all farmers in every area of our country.

Senator MORSE. If you will permit one other digression, until you mentioned it this morning I was not familiar with the EllenderYoung-Schoeppel proposed bill involving wheat and cotton. I would like very much to have a copy as soon as it is introduced, and I will take it up with the leaders of the wheat growers associations in my State, because if it is a bill which in their judgment will help them meet their problem, you may be sure of my cooperation in the matter. Needless to say, I look to the Oregon Wheat League and to the Oregon Grange and the Farmers Union and the Farm Bureau and other agricultural groups in my State to advise me on the course of action I should follow in the Senate that will best serve the agricultural interests of the State, making it clear to them at all times that

they do not control my vote. I will vote for what I think is in the best national interest, but when I have a specific bill, such as you mentioned, I want to get their professional opinion at once and to cooperate with you in every way that I can in the interests of the bill that will help my wheat growers.

The CHAIRMAN. You may rest assured that it will be my purpose to listen to all sides. To my way of thinking, it goes without saying that what we ought to do is at least to encourage farmers to grow commodities that are salable and that will be salable to the general trade, rather than to have them produce it for Uncle Sam. That is, to my way of thinking, one of the little weaknesses we had in this price-support program.

Many people grew wheat, for instance, in great quantities because they knew where they could dispose of it, irrespective of whether or not the millers wanted it or not. Of course, I have heard a lot of rumors about that, but it will be my purpose, as I said, to get both sides. If there is opposition to it, I want to hear it. If there is approval of it, I want to hear that, too.

I can assure you, Senator Morse-and I am sure I speak for every member of this committee-in any proposal we make we will not go off half-cocked. We will hear all sides, in the hope that we can come out with something better.

Senator HUMPHREY. I merely want to add, Mr. Chairman, and I shall not take Senator Morse's time-that the wheatgrowers in our part of the country are deeply concerned with this, what we call second-grade, lower-grade wheat production. The milling, the hard wheat, is in short supply.

The CHAIRMAN. It sells at a premium.

Senator HUMPHREY. Yes, it sells at a premium. We have found ourselves, insofar as the offgrades or the lower grades of wheat are concerned, in the same kind of trouble that Senator Morse finds in his part of the country, where the competition from people who ordinarily are not in the wheat business have gone into this low-grade wheat production and have flooded the market and caused a great deal of the surplus problem.

I have an open mind on this, as the chairman knows. We had a very frank discussion here in an executive session a few days ago. The CHAIRMAN. That is right.

Senator HUMPHREY. I think it is fair to say, just as a matter of making the record clear, that every member of this committee, I think, expressed himself on the desirability of trying to find a method of price support which was an improvement upon what we now have. As the chairman said, until we find something better than the old 90-percent formula many of us in this committee feel that that is at least a workable alternative. But we are seeking better answers-we are seeking answers that are better for the legitimate producer and for the American consumer. And, obviously, for the taxpayer and the Government of the United States.

The CHAIRMAN. That will be our objective from here on out on these various proposals.

Senator MORSE. I want to make one more comment upon an observation you made in your opening statement, if I may, because you deal with constituents with complete frankness, as I do, and I think that

my constituents in this matter should have their attention called to an observation that you made, because, as you can well imagine, there is a great persuasive demand made upon Senator Neuberger and upon me and Senator Magnuson and Senator Jackson to try to get action before adjournment.

I think you made a very significant statement. Frankly, I have no quarrel with it at all, that apparently the decision of this committee is to proceed with these hearings, and then after adjournment to proceed with some field hearings on this whole matter of agricultural prices before you come to any conclusion as to any legislation that you are going to support. If I interpreted your statement correctly, this means you want to get yourself in position so that come January you can have a policy on farm prices that you can fight for in the Congress. Naturally, I am anxious to get some action on my bill. Nevertheless, I think the best way to deal with constituents is with complete frankness, and if we meet a situation in which action before adjournment is impossible, I think it is only fair to tell my constituents that, and it is up to them to help make the best case we can for our bill before adjournment, so that you will have a record to go on when you go into your field hearings.

If I have misinterpreted the implications of the chairman's statement I want him to put me straight.

The CHAIRMAN. I think that was made very clear during our discussion here when we started to hold these hearings. I stated that I felt that it was almost imperative that we hold hearings in the field, that it was the best procedure that we could follow. We did it in the past. We got good results.

I took this position, I am frank to say it openly, because in all probability if we went to Congress with just a simple renewal of the law that has now been so severely attacked from every corner the chances of enactment would be made doubtful; do you not see?

In my humble judgment, even though we passed it, I doubt that the President would sign it. We could make a bold effort and say, "All right, we will try to pass this bill," and then meet with failure, I think that would be a loss of time. We have quite a few months to hold hearings in Washington and then go into the field to get the reaction of the people themselves. Then we can come loaded up with maybe a lot of new ideas which will make it possible for us to retain supports at 90 percent of parity and follow through with a lot of changes here and there, whereby we will be able to get quite a few more votes in Congress than we now anticipate.

I want to be frank in saying that I made a canvass of the Senate and I doubt very seriously that the law could be reenacted and put on the statute books as written or as it used to be. I may be wrong in that, but I have been on this committee for many years-this is my 19th year and I do know from experience that this committee has given much study to all of the problems that it has considered. As a matter of fact, except for last year, we came out with almost unanimous approval of any legislation that was presented. Of course, this changed last year in that there was quite a division. To my knowledge that is the first time it happened. I do not want it to happen again. What we want to do is to try to get a lot of these good Republicans that are against us now to maybe go out there and