commodities and I guarantee you that we do not make everybody happy in the processes.

We have the turkey people wanting us to use these funds, one group of them. Another group says we do not want you to.

We have a breakdown here of the funds that we have used. We would be glad to put in the record for you.

Mr. MARSHALL. Does that show this last year.

Mr. BEACH. This shows since April 1, 1957, in the current marketing season, out of CCC acquisitions of dairy products, there were transferred to section 32 outlets 85,325,000 pounds of butter, 46,300 pounds of cheese, and 20,100,000 pounds of nonfat dry milk.

Mr. WHITTEN. I would like to have that placed in the record at this point.

Mr. MCLAIN. We will be glad to do that.
(The information referred to is as follows:)

Purchase of surplus agricultural commodities (sec. 32), fiscal years 1956, 1957, and 1958 through Dec. 31, 1957

1 Includes approximately $500,000 canceled subsequent to Dec. 31, 1957.

Mr. WHITTEN. Mr. Natcher.

CORN AND TOBACCO EXPORTS

Mr. NATCHER. Mr. Chairman, with your permission I would like to have a short statement inserted in the record at this point pertaining to corn and tobacco.

I would like to know, Mr. Secretary, the amount of corn and tobacco moved under our different programs during the fiscal year 1957. Mr. MCLAIN. Into exports you mean?

Mr. NATCHER. That is right, and up to the present time in fiscal

year 1958.

And in this statement I would appreciate it if you would make some general statement concerning your viewpoint as to the future of tobacco and corn as far as surpluses are concerned from here on in, Mr. MCLAIN. Be glad to do that.

(The information referred to is as follows:)

Since CCC does not normally have tobacco in inventory most exports of tobacco are made through commercial channels without Government assistance. There were, however, sales for foreign currencies under title I of Public Law 480 as follows:

Million

pounds

77.5

12. 6

BRIEF SUMMARY OF THE PRODUCTION, CONSUMPTION, AND EXPORT SITUATION WITH RESPECT TO TOBACCO AND CORN

Tobacco

Supplies of all major kinds of United States tobacco are in excess of desirable levels. This accumulation of excess supplies resulted primarily from two factors: (1) The decline in domestic usings which began in 1953 coincident with the publicity linking tobacco with health, and (2) sharp increases in yields per acre. Production in 1957 was significantly below disappearance, and all kinds of tobacco moved in the direction of a healthier balance between supply and demand. There follows a brief appraisal of the situation for the major kinds of tobacco. Flue-cured.-Production of flue-cured tobacco in 1957 was 17 percent below disappearance. The level of production in 1958 is likewise expected to be substantially below disappearance. On the basis of the present acreage allotments, the existing surplus could be absorbed in 3 to 4 years assuming no material change

in production and disappearance. We think some increase in domestic consump tion can be expected, but such increase may be more than offset by increased yields per acre.

Burley.-Burley production in 1957 was 3.6 percent less than disappearance, but since a surplus of more than a half-year's disappearance exists, it would take many years to absorb the surplus at the 1957 level of production and disappearAn increase is expected in the domestic consumption of Burley tobacco as well as increased yields per acre. A further reduction in acreage allotments may become necessary in order to reduce supplies to a desirable level.

ance.

Fire-cured.-Production of fire-cured in 1957 was 20 percent less than disappearance. Acreage allotments for 1958 were reduced 10 percent below the 1957 level. This reduction in allotments together with substantial participation in the acreage reserve program can be expected to result in production well below disappearance again in 1958. Assuming no material change in production or disappearance, the long-standing surplus of fire-cured tobacco could be wiped out in the next 3 years. However, continuation of the long-term downward trend in disappearance and upward trend in yields per acre, is a reasonable expectancy. Dark air-cured. The outlook for dark air-cured is similar to fire-cured. Other kinds. Supplies of other kinds of United States tobacco are reasonably well balanced with demand at the anticipated 1958 level of production except for cigar binder tobacco. In the case of cigar binder tobacco, production in 1957 was substantially below disappearance because of heavy participation in the acreage reserve program. However, effective market demand for binder-type tobacco has declined as a result of the rapid shift toward processed sheet binder.

Attached is a table showing production, supply, and disappearance by kind of tobacco and a table showing tobacco exports in fiscal year 1957 and the first half of the current fiscal year.

Current production, supply, and disappearance of tobacco, by kinds, marketing year

1957-58

1 Total supply equals carryover at beginning of marketing year plus production.
Estimated production based on latest market sales information.
Disappearance for marketing year 1956-57, latest complete information available.

Exports of tobacco, fiscal year 1957 and July-December 1958

Corn

For several years United States supplies of corn have been increasing in spite of programs for curtailment of production. On October 1, 1952, carryover stocks of corn amounted to 487 million bushels. Since that year the carryover stocks have increased as follows: October 1, 1953, 769 million bushels; October 1, 1954, 920 million bushels; October 1, 1955, 1,035 million bushels; and October 1, 1957, 1,419 million bushels. Our estimate of the stocks of corn which may be on hand October 1, 1958, is 1,525 million bushels.

Unless some new approach is taken toward obtaining controls over the production of corn, carryover stocks will continue to increase, since production under average weather conditions will exceed anticipated demands for corn. It is estimated that the oversupply from the 1957 crop will increase the carryover stocks of corn by about 100 million bushels.

Mr. NATCHER. Thank you very much.

That is all, Mr. Chairman.

Mr. WHITTEN. Mr. Horan.

ADMINISTRATION OF PROGRAMS AT THE COUNTY LEVEL

Mr. HORAN. Mr. McLain, one of the columnists this morning had an article in which he said that you had replaced volunteers at the county level with the bureaucrats; is that correct?

Mr. McLAIN. I would say firmly that it is not correct and, of course, I do not always take 100 percent of everything that is said by this columnist and I am sure you gentlemen don't either.

Mr. Manwaring is here and could tell you pretty accurately what has happened in this area. We think we have one of the best functioning systems at the county level that we have ever had and had very little criticism of it.

Larry, do you want to comment?

Mr. MANWARING. Mr. Horan, the one action we took which was different than we were operating before was to ask each county committee in the midwestern area to select an administrative officer and put him in charge of the day-to-day operations in the office.

Now that applied only to the area roughly bounded by Ohio, Iowa, Minnesota, and Missouri, and then south to but not including Kentucky.

This

I think there were 17 States that did not have them before. was no implication that they were not doing an excellent job but it was recognition of the complexity of the programs, the increased number of programs and the increased amount of detail that had to be carried out in those county offices.

They have made that transition in what I consider an excellent manner. We have tried hard to keep the administrative officer from getting into the field of policy determination which is the field of the county committee.

We have tried hard to make it abundantly clear that it was the right of the county committee to select the office manager and the right of the county committee to retain him or not as they saw fit. Mr. HORAN. Then the relationship is not greatly different from that of "farmers home."

Mr. MCLAIN. Well, the relationship is not any different than it was in all the other States before, Larry. That is correct, isn't it? Mr. MANWARING. No; it isn't any different. All the other States were operating on that same basis. As a matter of fact, we think we have given the county committees in some areas more responsibility than they ever had before under the present operation. Mr. HORAN. That is all right.

ADMINISTERING WHEAT AND COTTON EXPORT PROGRAMS

I wonder if you would recite the mechanics of your subsidy, this work's pretty well in the wheat. Just how do you go about it?

Mr. McLAIN. We by announcement a year ago last September indicated to everybody, including Congress, that from then on all exports of wheat would come out of free stocks with 1 or 2 minor exceptions.

Mr. HORAN. By free stocks you mean nonsupported.

Mr. McLAIN. Stocks not committed to CCC or in our inventory. The subsidy for the wheat shipment would then be paid in kind out of our stocks. In other words, as you know, the subsidy on wheats runs from 60 to 80 cents-some places more than that-a bushel.

The exporter then buys the goods in the free market, and stimulates the free market so the farmer gets a better price. The wheat moves into export. The payment then is made not in dollars but in wheat itself.

Mr. HORAN. Do you replace what he shipped?

Mr MCLAIN. We give him wheat for the equivalent of these certificates that he gets.

This has had the effect of keeping a lot of our wheat out of loan. It has had the effect of letting the markets operate the way they ought to. It has had the effect of getting a better market price for the farmer which of course is the important part.

Mr. HORAN. And your proposal is to attempt to use this program in cotton.

Mr. MCLAIN. We have been urged by the chairman of the Senate Agricultural Committee to do it, as well as many other people-producer groups and others.

Again I say to you, Mr. Horan and our chairman here that if it is the wish of this committee that this not be done we would like to have a firm statement from you because we are proceeding on the basis that the industry, the farm organizations, the people that handle cotton and everyone involved, after we have had the experience in wheat would be happy to see us do it.

If that is not so, we want to know it.

Mr. WHITTEN. In that connection, I will be pleased to talk to you further insofar as I am concerned. But, as successfully as your exporting program on the competitive-bid business has worked, and as hard a job as it was to get you to start that program against the opposition of the same crowd that is talking to you now, I start off very suspicious of any such proposal. I would repeat that when we had an export subsidy, the pressures from our State Department reacting to complaints by foreign governments were such that I am convinced that a competitive-bid export program in line with the original Commodity Credit Corporation Act is much sounder than anything that you designate as an export subsidy.

As I stated earlier, I went to the cotton trade in foreign countries with whom we do business, and without exception they like to think that our cotton would be on the counters of the world on a competitive basis.

There was a long period before I could ever get the Department to use its authority to sell competitively on these commodities.