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gram with the amount of eligible feed delivered up to the maximum amount shown on the purchase order.

The bill spells out how long in advance of the time the application was approved by FHA that feed dealers will receive credit for feed purchased and delivered, namely, feed actually purchased by the farmer from the dealer on or after the date the Secretary declared the county a designated disaster area eligible to receive emergency feed grains.

The bill also states how long after the expiration of the purchase order or termination of the program that feed dealers will receive credit on purchase orders for feed physically delivered, namely, not later than 12 months from the date the purchase order was issued to the farmer.

In the case of early deliveries, it is apparent that some dealers took a chance that their farmer customers would be found to be eligible for assistance and, as soon as the county was declared a disaster area for the purposes of the program, sold and delivered feed to farmers before the formality of completion and final approval of the application had been made.

This bill would give the Commodity Credit Corporation the authority under regulations approved by the Secretary of Agriculture to grant relief to farmers and dealers in connection with claims arising out of early and late deliveries.

In the case of early deliveries relief would not be granted unless the farmer was subsequently granted an approved application and unless he actually purchased the feed he was entitled to receive.

The bill when passed would limit late deliveries to those made within 12 months from the date the purchase order was issued to the farmer.

Certainly, unless the farmer has picked up his feed from the dealer within a year the sale cannot be considered as having been a bona fide sale at the time the purchase order was certified and exchanged for a dealer certificate. No relief should be granted under such circum

stances.

If, however, the farmer has picked up the feed from the dealer within a reasonable time to use it in maintain his basic herd the program has accomplished what it was intended to accomplish.

About 15 percent of the dealers participating in the programs had been audited prior to December 31, 1956. Based on the audits made and the exceptions taken for early and late deliveries it is estimated that dealers would be relieved of paying claims already established or that may be established on such exceptions by further audits in the aggregate of approximately $250,000 in the event the proposed legislation is enacted.

In those cases where claims based on early and late deliveries have been established and demand made of the dealers who have paid CCC such amounts, it will be necessary to refund to the dealers the amount of such claims collected in case the proposed bill becomes law.

A limited number of dealers who have paid such claims have collected from the farmer concerned his proportionate share of the claim. In view of the status of this type of case, no refund will be made to dealers who have paid their claims and have in turn collected such amounts from farmers.

Only refunds of this nature will be made to dealers who are able to certify that they have not collected and will not collect from farmers any portion of the amount represented by the refund.

In case the proposed legislation is enacted, it is recomended that legislative history show that we intend to handle as outlined above refunds to dealers who have already paid to CCC claims based on early and late deliveries.

Attached are tables identified as exhibit No. 1 and exhibit No. 2. Exhibit No. 1 is a report of the audits performed by area offices of the audit division, CSS, of feed dealers activities under the 1954, 1955, and 1956 emergency feed programs, while exhibit No. 2 is a summary of the audits performed by ASC State office auditors of dealers' activities under the same program.

Each exhibit shows the exceptions taken on the basis of early and late deliveries. We are also attached as exhibit No. 3 a copy of the current FHA application, and as exhibit No. 4 a copy of the current purchase order.

The other principal violations of the emergency feed programs are nondeliveries, underdeliveries and deliveries of ineligible feed. Collection of claims arising in connection with these types of violations are not affected by the proposed bill and will be aggressively pressed. (The exhibits referred to in the statement are as follows:)

Summary of audits and exceptions by Audit Division, CSS, 1954, 1955, and 1956 emergency jeed program, through Dec. 31, 1956

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EXHIBIT 2

Summary of ASC State office audits and exceptions taken by area auditors and referred to ASC State offices

Purchase orders handled in

1954 EMERGENCY FEED PROGRAM, AS OF DEC. 31, 1956

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counties audited

ment Num

county or

tions i

Туре

of

ber

State

taken by

Adjust

ments

State

Number of dealers

Amount

claim

of

office

area

Value

in

of col

in

par

that could

audits

of ex

Col

crease

audited

Total

Non-
de-

lec

crease

tici

be con

and

cep

lec

(+)

tion

(+)

pat

strued by

referred

tions

tions

de

Hun

amount Early Late Ineli- livery

de

ing

dealers as

to State

crease

dredweight

Value

de- de- gible or Other livery livery feed under

crease deal

authorizing

office

(-)

(-)

ers

early or late

de

deliveries

livery

Alabama.

Arkansas.

935

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Georgia.

27

220, 411 $220, 411 $87, 302

$789

$33, 825 $52, 688

$7, 243

$27, 698

1,230

18

Louisiana

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115

Mississippi.

4

4,869

4,869

551

120

$371

60

332

20

38, 094

1,632

North Carolina.

450

None

2

South Carolina.

27, 489 21, 271

-6, 218

65

362, 537

362, 537

63,027

1,099

729 60, 553

646

96

3, 567

670

None

3

32, 418

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Missouri.

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1 Representations (written or oral) made by State or county offices which could be construed by dealers as authorizing early or late deliveries.

259 1, 374, 403 198, 075|| 10, 1431

2 Several dealers stated they received verbal information from county offices that deliveries after expiration of purchase order were eligible,

9, 911 256, 021 113, 103

86, 068-47, 726 10, 300

1955 EMERGENCY FEED PROGRAM, AS OF DEC. 31, 1956

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1956 EMERGENCY FEED PROGRAM, AS OF DEC. 31, 1956

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