this matter. At least, that was the way I took it. Every time I pointed out that we were gradually building up production throughout the rest of the world of wheat and cotton and other things by holding an umbrella over it, I was hit by the fact that the State Department and our foreign policy required such a policy. I got permission to visit with our military, agricultural, foreign-aid, and political people in Europe. I went to almost every country in Europe and spent the month of October there. I attended a meeting of the agricultural attachés in Paris, and there was not one who knew we had authority to sell or what price we would take. I did not find a man representing the United States Government in Europe who knew we had authority to sell competitively.

What are Great Britain and Holland doing to move their commodities into export? Do you know how much they are spending to move their commodities into export as compared to what the local people pay or what the cost is? Do you know?

Mr. MORSE. I would be glad to have any information that you can furnish us.

Mr. WHITTEN. It has been estimated that England's bill for that work is about 385 million pounds annually. But the point I want to make is, high officials in England and in Holland said "A great rich country like the United States should not try to sell what it has and does not need on world markets." But our agricultural people in Europe are like you are, they do not know enough about what Holland and England are doing to argue back.

Mr. MORSE. As you know, the agricultural attachés have just been moved into our jurisdiction, and I think we will have a different situation.

Mr. WHITTEN. When I went over there I did not expect to find anything wrong with our people over there. I thought the trouble was here in Washington, but I thought the evidence was over there. Until you in Washington change, it will not help a bit, because until you give them that information they cannot help.

You have stated we have no policy of offering it on a competitive basis, but we are cutting the American farmers back and back and back to absorb the world's increased production in these very commodities, and the crux of it is the State Department.

Mr. ANDERSEN. Would you yield at that point?

Mr. WHITTEN. Yes.

Mr. ANDERSEN. I want to be fair. I am critical of the Department in some points, but I do not think we can blame the Department of Agriculture for the failure in getting rid of our surplus production, because I think it was the overall policy of the Government as a whole not to sell it abroad. I do not think we can blame Mr. Morse or Mr. Benson or the Department of Agriculture because we know an Iron Curtain has been set up by the State Department against exportation. I think Mr. Whitten has done a splendid job for agriculture in the past few years in urging that this Iron Curtain be broken. Mr. WHITTEN. May I say I do not charge that the present policy or lack of policy is the one that the Department of Agriculture would choose. But I know that the Commodity Credit Corporation charter authorizes the sale of these commodities on a competitive bid basis, and I know that wheat importers in Germany told me they would buy at least 2 million tons if we would meet the French price, which is $6 per ton lower than ours. And we will not do it.

I feel it is time, if it is not the Department of Agriculture's fault, that you point out whose fault it is. Why are you using Public Law 480, that makes you run the gantlet, instead of using the authority in the charter that lets you do what you please? The American farmer is entitled to an answer. Whoever made that decision must have a reason, and I would like to hear it. But the American farmer is entitled to an answer.

Mr. MORSE. We have a great stake in the stability of the agricultural markets in the world in behalf of the American farmers as well as all citizens.

Mr. WHITTEN. Do you not think you would have trouble selling that to folks who have been cut below 5 acres?

Mr. MORSE. If they understood the situation, I think they would recognize the soundness of the statement I am making. We cannot move too rapidly in these situations. The activities under Public Law 480 by its provisions are not supposed to disturb the normal channels of trade, so that when we go as far as we can and the trade is going as far as it can in the sale of these commodities, and we develop the possibilities of selling for foreign currencies above that, that is when Public Law 480 comes into operation.

Mr. WHITTEN. The American trade cannot sell in world markets below the American support price, can they?

Mr. BERGER. Sure, they can.

Mr. MORSE. If they want to.

Mr. WHITTEN. These exports have to be at the support level or better in the United States, do they not?

Mr. MORSE. Except in the case of wheat.

Mr. WHITTEN. We have an international agreement. But except for wheat it means any export we may have has to be at the support level. It invites every country with 30 cents a day labor to go into production. As long as you have commodities and will not offer them for sale competitively, you are promoting the increase in production in every country and you are contributing to cutting the American farmer farther and farther back, are you not?

Mr. MORSE. We hope that will not be the trend.

Mr. WHITTEN. Can you not see that that is the effect?

Mr. MORSE. In the case of cottor we are expecting exports to be up 10 percent this year, which is considerable.

Mr. WHITTEN. It has been stated that this is essential for the recovery of Europe and other countries. I made a check to see what the status of those countries are. Economic recovery in Western Germany since 1948 has more than tripled as compared to 1936. Export trade is 20 times its 1947 level. In France it is 150 percent above prewar. In Italy agricultural production is 124 percent above prewar and industrial production 160 percent.

Also, in Belgium, industrial production was 142 percent of prewar levels. In addition, Belgium carried a large surplus with the European Payments Union in the amount of $235 million, as of April 4. In the Netherlands, industrial production rose to 163 percent of prewar levels in 1953, and in December 1953 she carried a surplus of $370 million with the European Payments Union.

Productivity in the United Kingdom has increased well above. prewar levels, and industrial production is 127 percent over 1938. Her gold and dollar reserves have almost doubled since 1951.

The answer has been given that we could not sell because of a shortage of dollars. So, I got those figures, and I would like to have this table placed in the record at this point. It contains a wealth of information which will be of some help.

(The matter referred to is as follows:)

1. TOTAL UNITED STATES EXPORTS

4. UNITED STATES EXPENDITURES IN EUROPE (INCLUDES MILITARY, DEFENSE SUPPORT, AND OFFSHORE PROCUREMENT

5. TECHNICAL ASSISTANCE IN EUROPE, INCLUDING GREECE AND TURKEY

Mr. WHITTEN. This table shows that in 1954 for military defense support and offshore procurement we spent in Europe, including Greece and Turkey, $2,603 million. This year it is estimated that we will spend $3,284 million-and I am talking about dollars that these countries will have.

Now, if you will analyze it further, figures on world trade, which are shown in this table, show we are selling a lot of things for dollars over there.

The only thing here is we are not selling agricultural commodities. Why? Because we do not offer them for sale on a competitive-bid basis. It is just as simple as can be.

Either that is your policy or it is the policy of the Government which comes from a source higher than you-one or the other.

Now, is that your idea of a sound policy, or is it one which is being forced on you by the feelings, maybe completely sincere, of others? Mr. MORSE. In the first place, I believe that we are entirely together, Mr. Chairman, in that we believe in moving these commodities and selling them, and moving them out. So, there is no difference in objectives, if there appears to be any difference. It is a question of how fast we move on it, and the methods by which we move.

Now, as I have indicated, we have felt that we were making very encouraging progress. The disposal program is moving more rapidly in many instances than we had anticipated would be the case, even earlier this year.

Mr. WHITTEN. Mr. Morse, they have the dollars in Europe. They are 150 percent above prewar levels. We have held our commodities off so other people could have the markets, to the point that they now argue about whether we have a right to go back and sell. It has reached that point.

Mr. MORSE. Those arguments are beginning, I think, to disappear, because we are getting into the world market competitively.

Mr. WHITTEN. The place for this matter to be handled is right down. here on Pennsylvania Avenue.

The people over there will buy American commodities if we will match the price.

Let me repeat again that you do not have to sell government to government. We can offer these commodities on a gradual basis, and I think it might be best to wait until the present crop is moving. I have not had a chance to study what effects an immediate action would have. However, if these commodities were offered for sale periodically on a competitive-bid basis to American exporters for export, do you not think you could help needy people of the world by making what we have available to them?

Would it not be better to make it available to them than hold our products back and make them harder to get from some other place? Do you not agree with me on that?

Mr. MORSE. We would be glad to reexamine this matter of export subsidies by differentials

Mr. WHITTEN. Now, you are trying to smear it, Mr. Morse.
Mr. MORSE. No, sir; but I would call it a differential.

Mr. WHITTEN. If you had 3 cars, and did not need 1 of them, and sold it for less than what you paid for it, would that be a subsidy? Mr. MORSE. We will call it

Mr. WHITTEN. I am asking you that question, based upon that illustration. Would that be a subsidy?

Mr. MORSE. If someone else had to make up the difference thereMr. WHITTEN. Does not the United States Government own these commodities?

Mr. MORSE. The United States Government would come in to pay the differential.

Mr. WHITTEN. Just answer me, Mr. Morse: Does not the United States Government through the Commodity Credit Corporation own title to these commodities?

Mr. MORSE. Yes, sir.

Mr. WHITTEN. And since the Government owns them, is it smart for us to hold them and take these losses and cut the American production back, or to sell them and at least get 75 percent out of the dollars which we have invested?

Mr. MORSE. That becomes a matter of policy, and relationship to our program.

Mr. WHITTEN. Would it be smarter to take the whole loss and cut the American farmer back, as this record will show, or to sell these. commodities, and make them available to those who need them, and perhaps get 75 or 80 cents out of a dollar of the investment?

You cannot tell me which would be the wiser policy to follow? Mr. MORSE. The other approach has been examined and reexamined. It has been reexamined in relation to some other commodities since Congress was in session here. We have been trying to get the very best judgment on it which we could secure, and we would be very glad to get that information to you.

Mr. WHITTEN. I am sorry that the record will have to show that you do not know which one of those is the wiser course. I asked your opinion on that in a question.

Mr. MORSE. We feel that we are doing what is best under the circumstances, and also in the light of the laws, and the intent of the laws.

Mr. WHITTEN. Which law do you have reference to?

Mr. MORSE. I have reference to Public Law 480, and all of the laws under which we are operating.

Mr. WHITTEN. Well, let us read here, briefly, the Commodity Credit Corporation charter, and see if you are following it:

Section 5 (f) authorizes the Corporation to export or cause to be exported, or aid in the development of foreign markets for, agricultural commodities. Under the Charter Act, these commodities may be commodities acquired under pricesupport programs or specifically procured for export purposes.

The Charter Act contains no restrictions on the prices at which commodities may be sold by the Corporation.

Section 407 of the Agricultural Act of 1949, as amended, does establish minimum prices at which the Corporation may sell commodities owned or controlled by it, except in the case of sales for certain specified purposes. Sales for export, however, are specifically exempt from the application of this minimum price restriction.

Why do you suppose the Congress, in writing the very charter of the Corporation itself, authorized the sale of its commodities without restriction in world trade for export? Why do you suppose they wrote that in there, unless they meant to use it when we needed it?

Mr. MORSE. That was to give us authority, and we have been using it. We have liquidated most of the oil stocks which we held, and I believe we have done it without disturbing the world markets. In fact, the reduction of our oil stocks have, I believe, contributed to some

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