(2) The charges relating to items of equipment, including the installation thereof, shall be decreased when necessary in order to produce charges not in excess of either the charges in the suspended schedules or those proposed in your application, whichever are lower.

The permission herein granted does not constitute Commission approval of the revised schedules which you may file and is without prejudice to any action which may be taken with respect thereto. Special permission No. 3588 is assigned to this grant. A copy of this letter is being sent to counsel for all other parties to these proceedings.

By direction of the Commission:

MARY JANE MORRIS, Secretary.

Mr. WHITTEN. This increase of $45,000 to the market news service; is that for that purpose?

Mr. LENNARTSON. It is based purely on the rate increases for the leased wire facilities.

Mr. WHITTEN. You do not contemplate any expansion of the market. news service in this budget?

Mr. LENNARTSON. We do not, sir; not this year.

BASIS FOR STATIONS AT PORTLAND AND NORTH PORTLAND

Mr. ANDERSEN. I have just one short question on this teletype system.

Why do you have two stations in North Portland and Portland, Oreg., so close together, Mr. Lennartson?

Mr. LENNARTSON. Offhand, Mr. Andersen, I cannot answer you on that item. I do not know the details but I can furnish it for the record.

I think it has something to do with the State college which is responsible for the dissemination of market news in Oregon. It was necessary to put a drop in the market as well as out at the State college. Mr. ANDERSEN. Put an answer in the record at this point, please. Mr. LENNARTSON. I will, sir.

Mr. ANDERSEN. Thank you.

(The information requested follows:)

LEASED WIRE SERVICE IN THE STATE OF OREGON

Market reports are issued from Oregon on dairy and poultry products; fruits and vegetables; grain, hay, feed, seed, rice, hops, and beans; and livestock and meats. For the most complete and timely coverage, reporters should be stationed as near as possible to the location of trading. In most cities where livestock is sold, the stockyards are located outside the city proper. This is the reason for the leased wire drop at North Portland. Livestock and meat reports emanate from the stockyards at North Portland while data on other commodities are gathered at the terminal market in Portland and the reports prepared in offices in the U.S. customs house.

The leased wire drop at North Portland costs $1,069.20 a year. To provide the service without the drop at North Portland would cost about $3,500, since it would be necessary to have two clerks on the telephone one-half day each day transmitting the data. The chance of error in the latter method is much greater than by the use of leased wire.

The drop at Corvallis, Oreg., is provided for the use of the State extension service and carries data on grain, hay, feed, seed, rice, hops, and beans.

Mr. WHITTEN. I have had my attention called to a number of surveys in connection with the Agricultural Marketing Research Service which indicates that there would be very little use for them.

I would like for you to tell me how many surveys you have had during the past 2 years, how many people are involved.

Mr. WELLS. We will be happy to supply you with the information, Mr. Chairman. We have some 500 or 600 different research line projects going on in the Agricultural Marketing Service and practically all of those involve the collection of information in one way or another. The type of survey which you are evidently referring to here has to do with consumer preference.

CONSUMER PREFERENCE SURVEY

Mr. WHITTEN. On this consumer preference business, could we see the number of those kinds of studies you are actually making, and how many you have had during the last 2 or 3 years. Also, could we have some copies of the questionnaires which were filled out in connection with them?

Mr. WELLS. A problem here is identifying the limited field in which you are interested, for in one sense we have surveys in connection with a great many different studies.

Mr. WHITTEN. I mean, household or consumer surveys.

Mr. WELLS. We will give you a list of those studies, Mr. Chairman. Mr. WHITTEN. It is not that such information is not vital. But there are so many pressures for different things that might be more vital, that the committee would like the benefit of that information in making its determination.

Mr. WELLS. We will supply you with a list of those for the last 2 fiscal years, 1958 and 1959.

Let me say this about consumer preference surveys. We have now for a period of about 10 years been carrying forward consumer preference studies. As I remember the first of these surveys, which involved cotton products, we brought before this committee our questionnaire and our general plan for the survey. This had the strong and almost unanimous support of the cotton industry. It proved to be very useful and has led to several subsequent surveys on other cotton products.

Mr. WHITTEN. Mr. Wells, I know that you do not have anything you are doing that somebody has not requested and which does not have some support for it. But certain folks that are giving you that support are, themselves, facing up to where it would be better to spend the money. There are many other things that they may feel are more urgently needed than some of the things now going on.

Involved here is a matter of direction of effort. And, again, the folks who come to me have been people who are interested in this overall subject, and they are beginning to wonder whether the limit on personnel and funds will affect this. It is a question as to how much will be spent in one direction as against others. So that the committee might have some way of appraising it, perhaps the information requested would be helpful.

Mr. WELLS. That pertains to the second thing I wanted to mention. We have been faced, in the last 3 years, with the same amount of marketing research funds, and the budget request is for the same amount next year. Consequently, during the last several months Mr. Herrmann and Mr. Trelogan have been carrying forward a complete reevaluation of our program in the market research field to find out how much we are completing in the way of projects and

studies, and how much turnaround room we have to undertake new work.

We have just finished advisory committee hearings. Mr. Trelogan and Mr. Herrmann are now confronted with the problem of having far more demands than they can take care of.

Mr. WHITTEN. May I say that I do not believe that research has any stronger supporters than the members of this subcommittee.

At the same time, whatever we might recommend has to run the gantlet of the Congress. Yet, I have had many folks come to me, in spite of the fact that research funds have been increased more than a hundred percent in 7 years, and they want still increased amounts for various fields which they feel need more research results and attention. Yet, on my questioning in a few instances, can they tell us what you are doing now?

As hard as I try to work on this committee, I cannot tell them what you are doing now, because it is too broad and comprehensive for me to know. But I have told them that, in view of our present predicament, I thought the committee was not going to listen to anyone who asked for more money unless he could tell us what was being done in the field, why what is being done is not sufficient, and why some redirection of effort would not work. If they showed us that they made that kind of study, then we would be more inclined to feel that they had a basis on which they proposed extra work.

My purpose is not to oppose. The purpose of all of this is to get research results.

I explored earlier with Dr. Shaw the possibility of cooperative research between the Department and private industry, where private industry might make personnel and funds available, and through that approach enlarge this activity, which we all agree is vitally needed.

Mr. WELLS. We have endeavored to make consumer preference surveys only where there is evidence that industry groups are willing to follow them up and use them effectively to improve merchandising and selling.

Mr. WHITTEN. We recognize there is some value in everything that is being done. But we also know from the requests we have that there are a lot of things not being done that are badly needed, too. Again, our purpose is to get as much information as possible in trying to determine in which direction the primary need may be.

Of course, the civil service system and the organizational structure lends itself to "stay-at-homes" with certain activities, because jobs are dependent on it and the size of a man's position as the head of an agency is dependent on it. You also get into the question of everybody wanting a cut of the cake-you all know that is human nature, but against which you have to guard in trying to get the maximum results. That is the necessity we now face.

Mr. MILLER. We agree with that philosophy, Mr. Chairman.

(The information requested on consumer market surveys will be found on pp. 1416–1431.)

PACKERS AND STOCKYARDS ACT

Mr. WHITTEN. Turning now to the Packers and Stockyards Act, which resulted from Public Law 85-909, passed last September, could we have a rather comprehensive statement on what your work con

sists of, how many yards have been posted, and how many additional yards for 1960 are proposed, and what new positions are requested? This is a new work, and we would be interested in knowing the full story.

Mr. LENNARTSON. We have a prepared statement on that, if you would like to insert it in the record, Mr. Chairman.

Mr. WHITTEN. We would be glad to have you present it, if you like. Mr. LENNARTSON. Mr. Chairman, I do not suppose there has been a time in the history of the Packers and Stockyards Act when there has been as much deep interest reflected concerning the act—what it is supposed to do and what the Department is planning to do with respect to it-than prevails at the present time.

This stems from a number of things.

First, with the increased funds this committee provided us during the past 2 years, we have been able to step up, quite substantially, our activities with respect to the fair-trade practices on the part of packers and between packers.

Secondly, in the last session of Congress, as you know, there was a very deep interest reflected by producer groups, market agencies, and others in the amendment to the act.

Thirdly, additional interest has resulted since the modifications made to the act, in that the act now has expanded the area of responsibility to practically all livestock yards and livestock dealers in the country. Terminal markets and the larger auctions were fully covered under the criteria set forth in the original act, but the amended act now makes practically every country auction, every country sales place, subject to the act by virtue of the fact that practically all of them are engaged in interstate commerce.

Mr. WHITTEN. Mr. Lennartson, let me interrupt to ask that you include at this point the pertinent provisions of the act, including the amendments.

Mr. LENNARTSON. I think that would be appropriate, Mr. Chairman. (The information follows:)

SUMMARY OF PERTINENT PROVISIONS OF THE PACKERS AND STOCKYARDS ACT OF 1921, AS AMENDED

The act was passed by Congress in 1921 to regulate interstate and foreign commerce in the meat packing and livestock marketing industries. It is essentially a fair trade practice act. It is an attempt by Congress to set up a code of ethics for these regulated industries, and is an attempt to eliminate from this portion of our economy those business practices that are considered unfair, deceptive, unjustly discriminatory, and which result in restriction on competition, monopolies, unfair advantages, and similar bad business practices.

Under the Packers and Stockyards Act the Department has exclusive administrative jurisdiction over all transactions of packers in commerce as defined in the act. The Department also had jurisdiction with respect to livestock transactions of persons other than packers. However, this jurisdiction was limited to activities at posted stockyards (i. e., stockyards consisting of 20,000 square feet or more). Registration was required of persons engaging in business at posted stockyards.

The amendment places all livestock transactions in interstate commerce under the exclusive administrative jurisdiction of the Department with discretion in the Secretary of Agriculture to require registration of persons engaging in the business of conducting such transactions away from posted stockyards and places in the Federal Trade Commission exclusive administrative jurisdiction

over all products handled by meatpackers other than livestock, meat, meat food products, livestock products in unmanufactured form, poultry and poultry products.

Title I of the act defines terms, including commerce.

Title II of the act as amended is applicable to meatpackers engaged in interstate commerce as to their business in livestock, meats, meat food products, livestock products in unmanufactured form, poultry, and poultry products. This title sets forth the practices that are prohibited and made unlawful. Briefly, it provides that a meatpacker shall not engage in any unfair, unjustly discriminatory, or deceptive practices or devices in the conduct of his business; shall not give undue or unreasonable preferences or advantages; shall not restrain commerce, create monopolies, restrict competition, manipulate or control prices, or conspire or combine with others to apportion territory or engage in any of the aforementioned practices. The prohibitions against meatpackers engaging in these practices are by amendment to the act made applicable to any live poultry dealer or handler engaged in the business of buying or selling live poultry in commerce for purpose of slaughter. The legal procedure to be followed in formal actions against meatpackers and penalties for violations of orders by the Secretary are set forth in this title.

By amendment to the act, approved September 2, 1958, the Federal Trade Commission has jurisdiction over all transactions of a meatpacker in oleomargarine and retail sales of meat, meat food products, livestock products in unmanufactured form, and poultry products and such items as ice cream, leather, sporting goods, and other such items not connected with the meatpacking operations generally and not within the primary jurisdiction of the Secretary. Primary jurisdiction of practices of packers in the slaughtering of livestock and the processing and wholesaling of meat and meat food products remains in the Department. It is provided in the amendment that either the Federal Trade Commission or the Secretary may in certain instances when it is necessary in connection with an investigation or proceeding initiated pursuant to the primary jurisdiction, continue the investigation or proceeding into the area assigned to the other agency. Provision is made for giving notice from one agency to the other that this is to be done.

Title III of the act is applicable mainly to stockyard operators and owners, market agencies who are buying or selling livestock on a commission basis, and to dealers operating in commerce in the buying and selling of livestock. This portion of the act treats stockyards in commerce as public utilities for the purpose of regulating the rates and business practices of those operating a stockyard or doing business thereon as a market agency or dealer. The term "dealer" has been interpreted to include a packer buyer. Stockyard operators and commission men are requireed to file tariffs within 60 days after notice has been posted at the stockyard that it is subject to the act. These rates and charges in their tariffs must be just, reasonable, and nondiscriminatory. Provision is made in this title for the procedure in determining the reasonableness of rates and charges and for penalties for violation of any order by the Secretary establishing such rates. Each market agency and dealer doing business in commerce must register and furnish a reasonable bond with the Secretary to assure payment for obligations incurred in the buying and selling of livestock. It is declared to be unlawful for any stockyard owner, market agency, or dealer to engage in any unfair, unjustly discriminatory, or deceptive practices or devices in the conduct of his business. The Secretary may issue a cease and desist order against anyone violating these provisions and may issue an order suspending the registration of a market agency or dealer for a reasonable specified time.

Title IV of the act contains general provisions requiring among other things that every packer, stockyard owner, market agency, and dealer shall keep proper books and records; shall make such records available to the Secretary at all reasonable times for inspection and copying and by incorporation of certain provisions of the Federal Trade Commission Act gives the Secretary power to require the filing of annual and special reports by those subject to the act, the authority to require the attendance of witness under oath to give testimony and produce documents at hearings and in connection with investigations under the act, the authority to publish reports and to subpena witnesses. Provision is made for penalties for any person who refuses or neglects to testify in obedience to a subpena issued by the Secretary, or who willfully makes or causes to be made false records kept by any person subject to the act, or who willfully mutilated or falsified any documentary evidence of such person, or who will