Mr. WHITTEN. We now turn to the "Marketing research and service" appropriation, and ask that pages 5 through 7 of the justifications be inserted in the record.

(The above-mentioned pages follow.)

Marketing services:

Summary of increases and decreases, 1959

To strengthen enforcement of the Grain Standards Act pursuant
to Public Law 861, approved Aug. 1, 1956_.

To provide mandatory inspection to poultry-processing plants
as required by the Poultry Products Inspection Act_
To provide more effective administration of the Packers and
Stockyards Act.

Decrease due to providing a direct appropriation to the General
Services Administration for certain leasing costs previously
paid from this appropriation___.

Total_

+$40, 000

+5, 390, 000

+225, 000

-12, 100

+5, 642, 900

INCREASE UNDER GRAIN STANDARDS ACT

Mr. WHITTEN. Mr. Wells, we would like for you first to discuss the Grain Standards Act increase where you ask for $40,000 additional. We would like to have any information you have as to how it is working out, how many people you expect to hire, and what you expect to do with the $40,000 in the event you get it.

Mr. WELLS. Do we have Mr. Blood here?

Mr. BLOOD. Yes, sir.

Mr. WELLS. Some time ago, Mr. Chairman, Congress passed an act to strengthen the enforcement of the Grain Standards Act-Public Law 861, approved August 1, 1956.

Before the passage of this act when fraud had been practiced in loading grain tendered for inspection, and someone at some future time, learned of this, there was no adequate recourse against the responsible person or persons.

In Public Law 861 Congress provided penalties for people who may, by one means or another, try to tamper with shipments of grain. This requested increase of $40,000 would be used to employ approximately 6 people who would work with the grain inspection supervisors and investigate cases and try to bring to trial the people responsible for such actions.

Mr. WHITTEN. How many new people do you propose to hire, Mr. Wells?

Mr. WELLS. The total employment would be six people, Mr. Whitten.

Mr. HOLMAAS. Three of the six would be marketing specialists who would investigate and follow up on alleged violations and three would be clerical employees.

Mr. WHITTEN. Where will they be located?

Mr. HOLMAAS. Five of them will be headquartered at, but working out of Washington, and one headquartered in the field. One of the marketing specialists will be located in the field.

Mr. WHITTEN. What will they do in Washington?

Mr. HOLMAAS. They would operate out of Washington.

Mr. WELLS. Complaints may come from any point in the United States, and Washington is probably as good a center of activity as

any.

This is a case where grain is moving throughout the United States in many different ways and these men will have to travel to the points where the problems arise.

Mr. WHITTEN. We had in our investigation report last year a rather comprehensive statement with regard to some of the practices of mixing good and bad grain-mixing just enough bad grain with good to barely get by.

How much have you done in line with our investigation report and what is disclosed?

REVISION OF WHEAT STANDARDS

Mr. WELLS. That particular report I believe concerned grain standards, among other items. About 3 years ago we started holding a series of special meetings with farm organizations, grain trade, and many others to consider possible revisions of the wheat standards. If I remember correctly, there had been no major revisions since 1938. As a result of those discussions, we proposed a set of changes in our wheat standards. Basically, the changes we proposed tightened very materially the mixing and other regulations which applied to the handlers of grain.

The original regulations, so far as the grain delivered by the farmer during the whole season was concerned were not particularly at issue. What happened to the grain after the farmer had delivered it as it moved into commerce was what we were primarily concerned with at that time.

After our discussions and hearings, we issued a set of proposed standards which materially affected the grading of wheat. These substantially restricted the mixing privileges which elevators had. After allowing due time for discussion of these proposed standards we put them into effect about July 1 this last year.

So for several months, we have had time to observe the application of these new standards, and we are quite pleased to learn that grain delivered under the new standards did bring a substantial premium over the old.

We have had some reports-if I remember correctly, we had one from New Orleans-where a considerable quantity of mixed wheat went into the port and none was shipped out as mixed wheat. This would indicate it was blended with straight grade wheat.

Such statistics as were called to my attention a short time ago would indicate that that situation has materially diminished; that where mixed wheat is being received much of it is now being shipped out as mixed wheat.

Mr. WHITTEN. I wish you would enlarge your statement in line with the investigative report and the statements made in it.

I might call your attention to page 95 of last year's hearings, where we outlined some of the factors to be considered in this matter.

DEPARTMENT PROGRAM FOR STRENGTHENING GRAIN INSPECTION AND ENFORCEMENT

Mr. WELLS. We will do that; and as I said, we did put into effect a new set of standards for wheat starting June 15.

We did support the amendment to the Act (Public Law 861). (The amendment is as follows:)

SEO. 9. Any person who shall knowingly violate any of the provisions of sections 4 or 7 of this Act, or any inspector licensed under this Act, or any person sampling grain for inspection under this Act, who shall knowingly inspect, grade, or sample improperly any grain which has been shipped or delivered for shipment in interstate or foreign commerce, or shall knowingly give any false or incorrect certificate of grade, or shall accept money or other consideration, directly or indirectly, for any neglect or improper performance of duty, and any person who shall improperly influence or attempt to improperly influence any such inspector or sampler in the performance of his duty, or shall knowingly or willfully cause, or attempt to cause, the issuance of a false or incorrect certificate of grade under this Act by deceptive loading, handling, or sampling of grain, or by submitting grain for inspection knowing that it has been so loaded, handled, or sampled, or by any other means, shall be guilty of a misdemeanor, and upon conviction thereof shall be fined not more than $1,000, or be imprisoned not more than one year, or both.

Mr. WELLS. That is what we are talking about here, and we are now asking for money to enforce it.

This is a part of a general program that we have been developing over the past 3 years for strengthening our grain-inspection program, and grain-enforcement program.

In addition to tightening the wheat standards effective June 15, we also revised the barley standards effective July 1, 1956. We are now giving attention to possible revisions of the standards for corn, oats, and grain sorghums to make them more suitable for measuring quality in these grains. We instituted the use of a comprehensive cargo loading log that is now used by all grain inspectors at all export markets in the country. This log is a complete record of the grading of the grain at frequent intervals throughout the loading of the entire lot into an export vessel. We stopped the custodianship functions of cleaning, mixing, drying, and binning of grain formerly performed by licensed grain inspectors in Atlantic ports.

We have transferred the employee who directs regulatory functions under the United States Grain Standards Act from Chicago to Washington, where he has closer contact with the Grain Division Director's office and with advisers in the Office of the General Counsel. We have established a better and more systematic reporting system whereby field employees can report apparent violations of the act. Because of the shortage of personnel, we have been unable to give sufficient attention to all the reports received and to investigate further some of them that warrant additional attention. We have written many letters to samplers, inspectors, and grain loaders, but additional personnel is needed to look into alleged violations and to pursue them to logical conclusions.

Mr. WHITTEN. Mr. Marshall.

Mr. MARSHALL. Are you going to use any of the money this year for revision of the wheat standards in any way or is that all revising other grain standards?