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I would have to have a compilation made to give you the exact figure on that.

Mr. CLAY. I may be wrong, and I would like to correct myself on the record as to the exact figure, but I would say, Mr. Congressman, that the War Claims Commission staff as of today has been reduced by 30 personnel of the original number of War Claims Commission personnel that existed on June 30, 1954, the date of expiration of that Commission.

DATE OF EXPIRATION OF COMMISSION

Mr. ANDREWS. Do you have any idea as to when this Foreign Claims Settlement Commission will expire?

Mr. CLAY. It is, under the present legislation, considered to be a permanent Commission.

Mr. ANDREWS. Permanent?

Mr. CLAY. Yes.

Mr. ANDREWs. I want to ask you if you are familiar with this testimony on page 872 of the record last year.

Mr. CLAY. Let me clarify this. There is presently, Mr. Congressman, before the Congress, or there will be soon, legislation involving property funds of Hungary, Rumania, and Bulgaria. Then there is the Lombardo agreement for which the Republic of Italy has deposited with the United States $5 million to compensate American claimants not otherwise compensated under the Italian Peace Treaty with respect to claims arising outside of the territorial limits of the Republic of Italy. Then there is the Litvinov assignment fund in the amount of $9 million. These were various assignments that were collected within the Department of Justice and now comprise a fund of approximately $9 million.

Mr. ANDREWS. What percentage of the claims or damage do you pay?

Mr. CLAY. These are property claims as distinguished from prisoner claims. On the dollar-award basis in Panama we paid about 92 cents, and under the Yugoslav arrangement about 85 cents.

Mr. ANDREWS. Were those claims from appropriated funds?

Mr. CLAY. No, sir. In both cases they were funds which were created by negotiation of the Government of the United States with the several foreign countries involved. In the case of Panama it was a fund created in the amount of $400,000, and in the case of Yugoslavia it was created out of the blocked assets of Yugoslavia in the amount of $47 million, of which $17 million was withheld for the purpose of creating a claims fund.

Mr. ANDREWS. Under Public Law 744 will you pay any claims for damages to property?

Mr. CLAY. No, sir, we will not.

Mr. ANDREWs. What about under 615?

Mr. CLAY. No, sir.

Mr. ANDREWs. Claims under those two laws will be paid from appropriated funds?

Mr. CLAY. No, sir, none of those claims will be paid from appropriated funds.

Mr. ANDREWS. What type of claims will they be which will be paid from appropriated funds?

Mr. CLAY. They will be for freeing prisoners of war and civilian Americans captured in Korea. The Public Law 744 funds will not be appropriated, but they will be derived from the war claims fund. Mr. ANDREWS. Will they cover claims for damages to property? Mr. CLAY. No, sir, they will not.

Mr. PHILLIPS. The only thing you have had to do with the Philippine part was with these sequestration claims? We also have a Philippine War Damage Commission.

Mr. CLAY. That has been terminated.

Mr. PHILLIPS. That is out?

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Mr. CLAY. Yes, sir, that is out. At the present time the only thing we have in the Philippines is this present program.

Mr. THOMAS. Thank you very much, gentlemen.

SUBCOMMITTEE ON DEPARTMENT OF AGRICULTURE
APPROPRIATIONS

JAMIE L. WHITTEN, MISSISSIPPI, Chairman

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EZRA T. BENSON, SECRETARY OF AGRICULTURE

TRUE D. MORSE, UNDER SECRETARY OF AGRICULTURE AND PRESIDENT, COMMODITY CREDIT CORPORATION

WESLEY A. D'EWART, ASSISTANT TO THE SECRETARY OF AGRICULTURE

ROBERT L. FARRINGTON, SOLICITOR

JAMES A. McCONNELL, ADMINISTRATOR, COMMODITY STABILIZATION SERVICE

WALTER C. BERGER, ASSOCIATE ADMINISTRATOR, COMMODITY STABILIZATION SERVICE

PRESTON RICHARDS, DEPUTY ADMINISTRATOR, PRICE SUPPORT, COMMODITY STABILIZATION SERVICE

FRANK R. McGREGOR, DEPUTY ADMINISTRATOR, OPERATIONS, COMMODITY STABILIZATION SERVICE

R. P. BEACH, ASSISTANT DEPUTY ADMINISTRATOR AND BUDGET OFFICER, COMMODITY STABILIZATION SERVICE

JOSEPH C. WHEELER, DIRECTOR OF FINANCE AND BUDGET OFFICER, DEPARTMENT OF AGRICULTURE

Mr. WHITTEN. Gentlemen, we are glad to have you with us for the hearing before this committee on this supplemental item. We shall first insert in the record House Document No. 59. (The House Document is as follows:)

[House of Representatives, 84th Cong., 1st sess., Document No. 59]

DRAFT OF PROPOSED PROVISION PERTAINING TO THE DEPARTMENT OF AGRICUL TURE-COMMUNICATION FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING A DRAFT OF A PROPOSED PROVISION PERTAINING TO THE FISCAL YEAR 1955 FOR THE DEPARTMENT OF AGRICULTURE

THE WHITE HOUSE, Washington, January 10, 1955.

The SPEAKER OF THE HOUSE OF REPRESENTATIVES.

SIR: I have the honor to transmit herewith for the consideration of the Congress a draft of a proposed provision pertaining to the fiscal year 1955 for the Department of Agriculture.

The details of this proposed provision, the necessity therefor, and the reasons for its submission at this time are set forth in the attached letter from the Director of the Bureau of the Budget, with whose comments and observations thereon I

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SIR: I have the honor to submit herewith for your consideration a draft of a proposed provision pertaining to the fiscal year 1955 for the Department of Agriculture, as follows:

DEPARTMENT OF AGRICULTURE

COMMODITY CREDIT CORPORATION

The limitation under this heading in the Department of Agriculture and Farm Credit Administration Appropriation Act, 1955, on the amount available for administrative expenses of the Corporation is increased from "$18,000,000" to "$25,290,000". An increase of $7,290,000 will be required in the administrative-expense limitation of the Commodity Credit Corporation to provide for increased administrative costs as a result of increased loan volume and to perform storage, inspection, maintenance, accounting, and other work in connection with the management and disposition of inventories acquired by the Corporation under the price-support program.

The Corporation has the task of managing and disposing of large inventories of agricultural commodities which have accumulated during the past few years and at the same time making settlements with thousands of producers, elevators, warehousemen, and others, incident to the acquisition of additional inventories from past-year crop operations. In addition, the Corporation must be in a position to provide price support through loans, purchases, and other means on currentyear crops. The need for this increase arises principally out of an underestimation of (1) the complexity and amount of work involved in managing the disposing of huge inventories of agricultural commodities acquired under the price-support program, and (2) the volume of loan work in connection with 1954 crops of pricesupported commodities.

On July 26, 1954, I apportioned the amounts available to the Commodity Credit Corporation for administrative expenses in the fiscal year 1955 on a basis which would indicate a necessity for an increase in the administrative-expense limitation. This action was reported to the Speaker of the House of Representatives and to the President of the Senate by my letters of July 26, 1954, in accordance with the provisions of paragraph 2 of subsection (e) of section 3679 of the Revised Statutes, as amended.

I recommend that the foregoing proposed provision be transmitted to the Congress.

Respectfully yours,

ROWLAND HUGHES, Director of the Bureau of the Budget.

Mr. WHITTEN. We shall insert in the record at this point pages 1 through 8 of the justifications, table 1, and pages 9 through 15 of the justifications.

(The information is as follows:)

DEPARTMENT OF AGRICULTURE, COMMODITY CREDIT CORPORATION
Administrative Expenses, Commodity Credit Corporation

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The increase of $7,290,000 consists of (a) an increase of $6,392,000 due to the estimated increase in the volume of price support activity over the volume of activity upon which the 1955 Budget Estimates were predicated and, (b) an increase of $898,000 for increased responsibilities and workload of the State Agricultural Stabilization and Conservation Offices. Almost ninety percent of the total increase requested is due to changes in estimated program volume and is sharply demonstrated by the comparison of the volume upon which the 1955 Budget Estimates were predicated with current estimates of program volume.

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Loans Made.-When the 1955 budget estimates covering the administrative expense limitation of the Commodity Credit Corporation were prepared they were based on a program volume relating to crops most of which were not even planted. The Crop Report released on November 10, 1954, indicated that production prospects are again at a near-record level. In addition, the latest report of the volume of 1954 grains placed under price support indicates that these grains are going under price support at a higher rate than occurred during the previous years. Consequently, except for corn, the production of which has been reduced by the recent drought, the estimates of the amount of grain to be placed under price support have been revised upward. A 24-percent increase in cotton loans over the previous estimates is also indicated.

Acquisitions.-The estimated increase in acquisitions is primarily due to (1) the greater volume of collateral forfeited in connection with prior year loan programs for corn and cotton, (2) the likelihood that the decrease in the support price of certain of the 1955 crops will result in increased takeover of 1954 crops of wheat and other grains, and (3) a larger volume of dairy products to be purchased as a result of a larger production of milk than previously estimated.

Dispositions.-The estimated increase in dispositions results primarily from a more aggressive sales policy implemented by a number of recent legislative enact

ments which considerably broadened the disposal authority of the Corporation. These include (1) title I of the Agricultural Trade Development and Assistance Act of 1954, which authorizes the sale of surplus commodities for foreign currency. It is estimated that $400 million worth of commodities will be disposed of in connection with this program. (2) Title II of this same act which authorizes the use of CCC surplus commodities in meeting famine or other urgent relief requirements of friendly nations. It is estimated that $120 million worth of commodities will be disposed of in connection with this program. (3) Barter and exchange activity which has been emphasized and implemented by new legislation, particularly section 303 of the Agricultural Trade Development and Assistance Act of 1954. During the fiscal year 1954, $29,436,781 worth of commodities were involved in the barter and exchange programs of the Corporation. It is anticipated that this program will increase to $200 million in the fiscal year 1955. (4) An amendment to section 416 of the Agricultural Act of 1949 permits donation of commodities to prevent waste and authorizes the Commodity Credit Corporation to pay reprocessing, packaging, transporting handling and other charges. Cost value of donations of butter, nonfat dry milk, cheese and cottonseed oil are estimated at $262 million, which is an increase of $47 million over the original estimate. (5) An amendment to section 407 of the Agricultural Act of 1949 authorizing the donation of commodities to distress and disaster areas in the United States. It is estimated that $64,430,000 worth of feed grains will be disposed of in connection with the current drought program.

A summary of the $7,290,000 proposed increase is as follows: (a) Due to changes in estimates of program volume:

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(3) Washington divisions and their field offices.
(4) Printing-

Total, due to changes in program volume.

(b) Due to increased responsibilities and workload of the State
offices:

(1) Supervision of county offices....
(2) Grain storage Structure Program..

Total, State offices__

Total increase_

727,755 217, 000

6, 392, 000

710, 000
188, 000

898, 000

7, 290, 000

It is estimated that the corporation's administrative expense limitation will be fully obligated in March.

(A) DUE TO CHANGES IN ESTIMATE OF PROGRAM VOLUME

Commodity Office Increase.-The major portion, or $5,157,445, of the increase of $6,392,000 will be required by the CSS Commodity Offices. The workload and expenses of these offices vary directly with the volume of commodities handled and are estimated on the basis of a detailed work measurement reporting system. The major portion of the workload is comprised of the transactions relating to the acquisition, management, and disposition of inventories and consists of the negotiation and allocation of storage space, inspection of storage facilities and commodities, payments of warehouse charges and amounts due on settlements of loading orders, issuance and control of loading orders for the disposition and reconcentration of commodities, handling of bills of lading, payment of freight bills, and negotiations, payments and billings in connection with the purchases and sales of the commodities. These inventory management activities and the related accounting activities comprise approximately 70 percent of the total workload of these offices. Tables 1 and 2 attached reflect the estimated volume of program operations for the fiscal year 1955 and the volume in terms of man-year

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