of

1960, by and between hereinafter called Purchaser,

WITNESSETH:

hereinafter called Seller and

That Seller hereby agrees to sell and convey to Purchaser the following premises situated in County, Texas, owned by Seller described

more particularly as follows, to wit: This Agreement and Contract is further conditioned upon the following terms, conditions and covenants herein agreed upon by and between the parties hereto :

1.

day of

-9

It is understood by and between the parties hereto that the Purchaser owned certain land in County, Texas, to which was allotted acres of cotton under the United States Department of Agriculture ASC Cotton Allotment Program, and that on the 19, a Federal, State or other agency, having the right of eminent domain took over Purchaser's land in said County, Texas, and that the allotted cotton acres on said land were placed in an allotment pool under Purchaser's name. Purchaser understands that he has the right to remove said cotton acres from the allotment pool and to transfer same to other land owned by him. It is the understanding of the parties hereto that the Purchaser is purchasing the land in County, Texas, hereinabove described in order that he may remove his said cotton acres from the allotment pool and transfer same to County, Texas, and Purchaser hereby agrees that he will make such application for transfer as soon as reasonably possible and will urge such transfer with all diligence. It is, therefore, agreed by and between the parties hereto that in the event Purchaser herein is unable to transfer said acres, or the ASC Committee passing on said transfer refuses to grant Purchaser's application to transfer said acres, then Purchaser shall reconvey the premises hereinabove described to Seller and the note so executed by Purchaser shall be cancelled and there shall be no personal liability against any of the parties to this Contract as a result of the sale and conveyance of said property. It is specifically agreed that said Purchaser shall reconvey said premises within fifteen (15) days from the date that his application to transfer said acres is refused and that in the event Purchaser refuses to reconvey such premises or fails to do so within the time herein specified that the Seller shall have all right and remedies as provided by law and may enforce this Contract against Purchaser and may recover from Purchaser such damages as may be incurred by Seller.

2.

The purchase price to be paid by the Purchaser to the Seller shall be the total sum of $_____. The said consideration shall be evidenced by the execution and delivery by Purchaser to Seller of one Vendor's Lien Non-Negotiable Note of even date with the Deed of conveyance as hereinafter provided, such note bearing interest from the date thereof until paid at the rate of six per cent (6%) per annum, the principal on said note being due and payable in four (4) equal installments, the first such installment being due and payable on or before the 1st day of December, 1961, and a like installment on or before ---- of each succeeding year until said note is paid in full, the interest on said note being payable annually as it accrues on the due date of the principal installment and in addition thereto, said note being payable to the order of Seller in Reeves County, Texas, and containing the usual acceleration of maturity and ten percent (10%) attorney fees clauses. It is understood and agreed that there is no down payment required to be paid by Purchaser in the purchase of the property hereinabove described.

3.

Seller hereby agrees that within (30) days from the date of the execution of this Contract that he will convey the premises hereinabove described to Purchaser by General Warranty Deed, and shall warrant to Purchaser good and merchantable title to said property. It is further agreed by Seller that the land hereinabove described is cleared for cultivation and has sufficient water to grow said cotton crop or that said land will be cleared and prepared for cultivation and will have sufficient water prior to the time that said crop is to be planted. In this connection it is understood that it may be necessary for Seller to perform

some of the work on said premises after the execution of the Deed of conveyance and that in the event same is necessary Seller agrees to be personally responsible and liable for all expenses incurred in the performing of said work and to hold Purchaser harmless for all work done on said premises by Seller. Purchaser agrees that on the date of the execution of the Deed of conveyance to Purchaser that he will execute and deliver to Seller the Vendor's Lien Note hereinabove described, together with a Deed of Trust additionally securing said note, containing the usual and customary provisions.

4.

The parties hereto desire to further enter into an Agreement whereby the Seller herein shall farm the premises hereinabove described for Purchaser. It is therefore agreed that in the event Purchaser is successful in transferring his cotton acres to County, Texas, and placing same on the property conveyed to him by Seller then Purchaser hereby agrees to lease said premises to Seller for a period of three (3) years, such term beginning on the 1st day of January, 1961, and terminating on the 31st day of December, 1963. Seller agrees to pay to Purchaser as consideration of this lease Agreement the total sum of $-per year for each year of the leaseterm. It is specifically specified that twenty per cent (20%) of the first year's lease rental is to be placed in escrow in the Bank at

Texas, on the date of the execution of this agreement and shall be paid over to Purchaser together with the balance of the first year's rental at the time the transfer of the allotted cotton acres has been approved in every respect by the proper officials and authorities. The rental for the second year of the term shall be payable on or before March 1, 1962, and the cash rental for the third year of the term shall be due and payable on or before March 1, 1963. In this connection it is mutually agreed that in the event Purchaser is unable to transfer his acres to County, Texas, then this Agreement shall become null and void and the money placed in escrow by Seller shall be returned to him and none of the parties hereto shall incur any liability whatsoever in connection with this Lease Agreement. It is further understood and agreed that in the event the Purchaser is unable to make the first annual installment on the Vendor's Lien Non-Negotiable Note as hereinabove provided, that Purchaser may reconvey the property described herein to Seller and Seller will at such time cancel the indebtedness owing by Purchaser on said note plus interest and shall release said Purchaser from any and all claims which he may have against him as a result of Purchaser's default on said note. In the event, however, the Purchaser fails to reconvey the premises to Seller within thirty (30) days after said default or on or before January 1, 1962, the Seller shall have the right to proceed with foreclosure on said premises and may hold Purchaser personally responsible and liable on said note and for all damages incurred by Seller in this transaction. It is specifically agreed however that in the event Purchaser defaults in the payment of the first annual installment on the Vendor's Lien Non-Negotiable Note due and payable on or before December 1, 1961, and in the event Purchaser reconveys the property herein described to Seller as provided in this paragraph, then Purchaser shall be entitled to retain the consideration paid to Purchaser for the lease of the premises for the first year of the term as herein provided. The parties hereto agree that on the date of the execution of the Deed, Deed of Trust and Note as herein provided they will also enter into and execute a Lease Contract specifying the terms, considerations, and conditions of said lease as set forth herein. It is understood and agreed that such lease shall be a cash lease and that the Lessee who is the Seller herein is responsible for all expenses incurred in the growing of said crop including the maintenance of all wells and equipment used in the growing of said crop.

5.

It is agreed and understood by and between the parties hereto that the Bank, as escrow holder, shall be responsible only for the safekeeping of said funds, and in the event of a controversy between the parties hereto as to the disposition of said funds, the said Bank shall hold said funds until such dispute or controversy is determined by agreement of the parties or by a Court of competent jurisdiction at the expense of the parties hereto.

6.

In the event the Purchaser reconveys the premises hereinabove described to the Seller, it is understood that the expense involved therein, inclusive of recording fees, is to be paid by the Seller; it is further agreed that the Seller is to pay all taxes for the year 1960 and the year 1961.

Mr. KAMERICK. This memorandum of December 20, 1960, according to the officials of the Department, should have halted any transfers of the type in which Billie Sol Estes was involved.

Again, according to these officials, this memorandum should have been circulated to the county committees for their guidance. Certain county committees, including Pecos County, Tex., deny ever having received this memorandum.

There is no record in existence which clearly refutes these denials; however, there are other factors and circumstances which raise serious doubts concerning these denials. All of Estes' transfers were approved both at State and county levels after this date.

The CHAIRMAN. Let me ask you one thing, Mr. Kamerick, which I think would be important.

Is this the form that Estes used on which his contracts were made? Mr. KAMERICK. We understand that it is, and all we have seen were of that exact form.

The CHAIRMAN. In other words, this exact form that was disapproved, we will say, by the Department of Agriculture when it was first presented, is the same form on which the Estes contracts were made.?

Mr. KAMERICK. That is correct; yes, sir.

The CHAIRMAN. Very well. Proceed.

Mr. KAMERICK. On January 16, in Dallas, Tex., there was a meeting

Senator MUNDT. What year are we in now?

Mr. KAMERICK. The top of page 7.

Mr. O'DONNELL. 1961.

Senator MUNDT. January 16 of what year?

Mr. KAMERICK. 1961. I am sorry. It was after December 1960. There was a meeting attended by certain officials from Washington, D.C., including a representative from the General Counsel's Office, with State officials from Texas, New Mexico, and Oklahoma.

The purpose of this meeting was to discuss the transfer of pooled cotton allotments and at that meeting it was clear in everyone's mind, according to those in attendance, that the key to the legitimacy of transfer of pooled cotton allotments was the good faith of the transfer of ownership of the land.

Most of those in attendance at this meeting have stated to us that they believed at the time that they had stopped the Estes-type transfer.

As a matter of fact, almost all of the approvals by the county and State offices in Texas occurred after this date.

It is very difficult to attribute this entirely to organizational breakdown; it is difficult not to suspect bad faith.

Among the decisions reached at this meeting was a decision to clarify the regulations; to require the alleged purchaser to appear in person at the county office covering the newly acquired land and in addition specifically to require State office approvals of any transfers.

This had been required in a general way prior to this time, but specifically in this regulation it was made clear and categorical.

This regulation was, in fact, printed in the Federal Register February 17, 1961

The CHAIRMAN. You have January in the statement.

Mr. KAMERICK. Statement says January, but the January date is in error. The correct date is February 17, 1961.

Senator MUNDT. Do you have that Federal Register regulation? Mr. KAMERICK. Yes, sir; we have reprints of it.

Senator MUNDT. Would that be too long to put into the record as an exhibit? Is it a long one?

Mr. KAMERICK. It is fairly lengthy, Senator.

Senator MUNDT. It would seem to me it is fairly pertinent, Mr. Chairman.

The CHAIRMAN. It is in the Federal Register.

All right; it may be extracted from the Registera nd made exhibit 4. I do not know that it has to be printed. It is quite lengthy. I have no objection to putting it into the record, but all I am trying to do is not burden the record with surplusage.

Senator MUNDT. If a pertinent part is available, you might read that instead of putting it into the record.

Senator CURTIS. Here it is; four pages double spaced.

The CHAIRMAN. Gentlemen, do you want it in the record?

Senator MUNDT. Yes.

Senator CURTIS. Yes.

The CHAIRMAN. How about you?

Senator MUSKIE. I have no objection.

The CHAIRMAN. There is no objection. Print it in the record. (Document referred to was marked "Exhibit No. 4" and follows; and may also be found in the files of the subcommittee.)

EXHIBIT No. 4

[Handbook 3-FA-Amendment 11]

UNITED STATES DEPARTMENT OF AGRICULTURE

COMMODITY STABILIZATION SERVICE

FARM CONSTITUTION AND ALLOTMENT RECORD REGULATIONS

(Reprinted from Federal Register of February 17, 1961 (26 F.R. 1396)) CHAPTER VII-COMMODITY STABILIZATION SERVICE (FARM MARKETING QUOTAS AND ACREAGE ALLOTMENTS), DEPARTMENT OF AGRICULTURE

(Amdt. 11)

PART 719-RECONSTITUTION OF FARMS, FARM ALLOTMENT, AND FARM HISTORY AND SOIL BANK BASE ACREAGES

TRANSFER OF ALLOTMENT FROM THE POOL

Basis and purpose: This amendment is issued pursuant to section 375(b) of the Agricultural Adjustment Act of 1938, as amended (7 U.S.C. 1375(b)) and 88201-61-pt. 1—3

section 124 of the Soil Bank Act (7 U.S.C. 1812) and interprets and applies section 378 of the Agricultural Adjustment Act of 1938, as amended (7 U.S.C. 1378). The purpose of the amendment is to make the procedures for the transfer of allotment from the pool under 7 U.S.C. 1378 more effective in preventing the sale of allotments from the pool or the transfer of allotments from the pool for the benefit of some person other than the displaced owner.

Since applications under 7 U.S.C. 1378 are now pending and many more will be filed in the near future, it is hereby determined that compliance with the notice, public procedure, and effective date requirements of the Administrative Procedure Act (5 U.S.C. 1003) is impracticable and contrary to the public interest, and this amendment shall become effective upon publication in the Federal Register.

Section 719.12 (d) (2) (23 F.R. 7694) is amended to read as follows:

(2) Transfer of allotment from the pool. Upon written application by the displaced owner by August 29, 1961 or within three years after such owner is displaced, whichever is later, to the county committee of the county in which the farm which is to receive allotment from the pool is located, the county coinmittee shall determine whether the transaction by which the displaced owner claims to have acquired the farm to which it is requested that the allotment be transferred and the requested transfer is for the purpose of reestablishing the farming operations of the displaced owner or is a scheme or device to sell the allotment or to transfer the allotment for the benefit of some person other than the displaced owner.

The application for transfer shall contain a certification by the applicant that he has made no side agreement with any person for the purpose of obtaining an allotment from the allotment pool for a person other than himself. Before an application is acted upon by the county committee the applicant shall personally appear before the county committee after reasonable notice and bring with him all pertinent documents for examination by the committee and answer all pertinent questions bearing on the proposed transfer, unless the State committee determines from facts presented to it on behalf of the applicant that the applicant would be unduly inconvenienced by such an appearance on account of illness or other good cause and an appearance by the applicant before the county committee would serve no useful purpose.

If an allotment is transferred hereunder and it is later determined by the county committee that the transfer was obtained by misrepresentation by or on behalf of the applicant the allotment for the farm shall be reduced by the amount of the transfer for each year the transfer purportedly was in effect and if the time for withdrawal from the pool has not expired the amount of the reduction shall be returned to the pool.

The action of the county committee in approving or disapproving an application or in reducing the allotment for misrepresentation shall be effective only upon approval of the State committee or its representative and the issuance of an appropriate allotment notice under the applicable commodity regulations.

If the county committee determines what the transaction by which the displaced owner acquired the farm to which the allotment is to be transferred and the proposed transfer is for the bona fide purpose of reestablishing the farming operations of the displaced owner and is not a scheme or device to sell the allotment or to transfer the allotment for the benefit of some person other than the displaced owner the county committee shall determine the allotment or increase of allotment to be transferred from the pool to such farm. The allotment to be transferred for a commodity shall be no greater than an amount required to establish an allotment comparable with allotments determined for other farms in the same area which are similar except for the past acreage of the commodity, taking into consideration the land, labor and equipment available for the production of the commodity, crop-rotation practices, and the soil and other physical factors affecting the production of the commodity: Provided, however, That the acreage transferred from the pool shall not exceed the allotment most recently established for the farm acquired from the applicant and placed in the pool. When all or a part of the allotment placed in the pool is transferred and used to establish or increase the allotment for other farms owned or purchased by the displaced owner, all or the proportionate part of the past acreage history for the farm from which the owner was displaced shall be transferred to and considered for purposes of future allotments, to have been planted on the farm for which an allotment is established or increased under this section.