Mr. HARVEY. That is all.

Mr. ALBERT. Have you considered trying to set up a direct barter program where you ship so many tons of one thing for so many tons of something else?

Mr. BERGER. Pardon me for interrupting.

Mr. ALBERT. Yes, sir.

Mr. BERGER. I was just about to read the changes that we have made here recently in the last 2 or 3 months which Mr. Poage mentioned earlier. If you would like, I would read that.

Mr. HOEVEN. Before we get into that, let me ask you a question: I think Congress contemplated a straight out barter as part of the operation of Public Law 480. You say that we have not had a true

barter. Why not? What is the difficulty?

Mr. BERGER. Mr. Hoeven, as our lawyers interpreted the law, the laws under which we have been operating, they have interpreted that it was left open by Congress in regard to barter. They did not stipulate and tie it down, on barter as they did on title I and foreign currency savings. Therefore, they assumed that Congress did want to leave barter a little freer.

Mr. HOEVEN. I would disagree with that. Section 303 says:

A corporation by barter or exchange of such agricultural commodities.
Barter is separate and distinct from exchange, as I see it.

Mr. RAWLINGS. That has not been the way the legal interpretation has been. They have carried that forward one way or the other. I think our counsel has looked at one of the key sentences which is that the Secretary has discretion as long as there are opportunities to protect the fund and the assets of the corporation. When we first started barter in the early days the volume was very low and based on the method which I have just mentioned earlier here, and that is the old program. Mr. Berger will get to the revised program. At that time we were only exchanging material for which the national stockpile had dollars to reimburse us immediately. The picture has changed in the last year or so. That is one of the basic reasons why we are changing, in addition to other reasons. That is the way they

view it.

Mr. HOEVEN. I think the Congress contemplated that among other things there should be an opportunity afforded for straight out-and-out barter where we, for instance, provide so many tons of wheat for so much strategic materials.

Mr. BERGER. The only answer I have, Mr. Hoeven, is that our attorneys interpreted the statute so as to permit greater leeway. I believe that under title I of the law it very specifically states, and Congress was very specific to state, that these soft currency sales could not replace normal cash sales. We have to take normal purchases into account before we sell to a country for its local currency. When Congress got to title III on barter it did not make such a requirement. It was said that had Congress intended to be as tight on barter as it was on title I, Congress certainly would have said so. There was also something in the record on the committee discussions about barter.

Mr. POAGE. The point that bothers me, fault, is the point Mr. Hoeven brought up. that to our attention a few weeks ago.

and I think that is our I wish you had brought We would have probably

corrected it 2 weeks ago, whereas it is probably too late to correct it for a year now. I think it is a fault on the part of the Congress, probably, but as I understand what you are asking, Mr. Hoeven, is why didn't you make some trades.

Mr. HOEVEN. That is right.

Mr. POAGE. You did not trade. In effect you simply figured up monetary values. That is what you did. Why did you not make some trades?

Mr. ALBERT. Will you yield on the question? I think the question could include my question, is there some reason why we should not do that in the future.

Mr. POAGE. That is right. Is there any reason why we should not go to Chile, which has a tremendous amount of copper if we need copper. I know there is argument as to whether or not we need the copper. At times we decide we need the copper and a few days later we decide that it would break our copper mines in Montana and Arizona if we used it. At times we think we need a lot of tin and at other times we decide we don't need it.

During those times, when we think we do need copper and tin, why do you not go to Chile and Bolivia where we are subsidizing the Government to the extent of about $25 million a year or more now and say "It is not dollars that you need for all of these purposes. You can use some cotton goods, you can use some wheat, you can use some canned meats, you can use some cheese." They can use a tremendous amount of the things we have.

Nearly everything you have in surplus can be used in Bolivia because they do not have anything.

Mr. ALBERT. Let him read the statement on that point. Maybe that will help.

Mr. BERGER. I think we have what you want right now but we did not have it in the last couple of years.

Mr. POAGE. I did not understand that. Proceed.

Mr. BERGER. These are the changes made in the barter program. Revisions in the barter program announced May 28 are intended to assure that exports under barter will not be substitutes for cash sales but will, in fact, increase total exports of our commodities. Hereafter, prospective barter contractors must satisfy CCC that a proposed barter transaction will mean a net increase in United States exports of the agricultural commodity involved. Barter contractors must designate in advance of signing the contract the commodity which they will receive from CCC, as well as the country to which the commodity will be exported.

In the case of wheat, feed grains or cotton, the commodity can be shipped without any special showing that total exports will be increased to any area of the world where CCC has found United States commercial trade in the commodity to be negligible. The commodity cannot be transshipped from approved destinations, and interest must be paid to CCC on the value of commodities received until such time as materials are actually delivered.

The origin of materials to be delivered to CCC must be specified, and such materials may not be produced or processed in the United States. Relative to the latter provision, if domestically produced or processed materials were delivered to CCC, the contractor would have to pay for them in dollars. Such dollars would be obtained by

the sale of the agricultural commodities abroad and such sale under the barter contract would in effect be replacing a direct cash sale, so that we have attempted to tighten it up.

Mr. POAGE. You are still not getting to the point to which I am talking. You are answering a problem and I think, you are correct on answering the problem but you are not talking about what I am talking about and you are not talking about what I think Mr. Hoeven and Mr. Harvey are talking about. We are talking about why you can't deal in Bolivia instead of the United States. Does the law require you to deal in the United States?

Mr. RAWLINGS. Sir, as a matter of policy, after administration consideration at the highest level, since we didn't feel in Agriculture that our primary function was to be knowledgeable about or to repeat the functions of the Office of Defense Mobilization, as Mr. Berger stated earlier, after interagency consideration of all the departments of the Government and sponsored by ODM, they would put out the list that we could work against. In the specific case of copper it has only been during this period when we were working up this revised program that we have had copper on the list with the exception of a small quantity of oxygen-free high-conductivity copper which is a special deal. For that reason and because of the copper situation in the world-prices used to be from 45 to 47 cents a pound-and because there were other contracts in existence, we did not go to Chile. As to the direct trades, we have had three: One, for ferromanganese where the wheat went to Germany; another where wheat and wool were exchanged for Turkish chrome; and the third was where wheat went to Mexico for fluorspar. Mexico had not been taking any wheat from us whatsoever. Generally speaking, when you tie it down directly to specific countries with the specific commodity going back to that country, we have not been able by experience to work out too many transactions, but, as I stated earlier, if we could send the commodity going to Rhodesia to another country where our commercial trade in the commodity is negligible you would be increasing your cash sales. In the program changes which Mr. Berger just discussed, I believe that we are getting back to the direct type of barter that you had in mind when you mentioned-when you referred to the law. Mr. POAGE. I am not objecting to your making these additional trades, but it does seem to me that there is an opportunity to make a great many more of these direct deals than you have been making. Mr. ALBERT. Will you yield?

The substance of his statement was that if you have a strictly direct program you will have a much more limited program as I understand

it.

Mr. BERGER. That is right.

Mr. POAGE. I did not ask that it be all direct. I am merely suggesting that of course he has to use some indirect movements, too, but I cannot believe that there have not been more than 3 opportunities in the last 3 years to make direct deals.

Mr. HOEVEN. I am a bit surprised because, as I recall the hearings and the discussion in committee at the time Public Law 480 was passed by this committee, we gave a lot of stress to the bartering feature. It was our thought to get rid of surplus commodities for strategic metals in other countries. Again I say I am quite sure it was the intention of the committee and the intention of Congress that we should

enlarge upon a bartering program as such. You are relying on an attorney's interpretation of the law. That certainly was not the intention of the Congress as far as I am concerned.

Mr. POAGE. I think you can assume that the attorney is correct in his interpretation of the law and still the question arises why don't we trade with Bolivia, for instance.

Mr. BERGER. May I attempt to answer you to this extent. You are talking about Bolivia and Chile. We would be tickled to death if someone came in with some proposals and specific materials on the list from either Bolivia or Chile to barter for our agricultural surpluses. One of the big problems is that in neither case would either of the countries absorb much of what we happen to have in surplus in the United States as far as agricultural surpluses are concerned.

I

Mr. POAGE. They have not been absorbing much and consequently whatever you sell in Bolivia is lagniappe. I think Mr. McIntire was in Bolivia 2 or 3 years ago and reported the need for simple cotton sheeting in their hospitals there. There was a little cotton mill there that said they would process the cotton if they could get the cotton. We know that Bolivia has mineral resources that we could use. recognize that from time to time this tin has just been like copper. Nobody knows whether we need it or not until we get into a war and then we all know that we need it. If we are actually going to stockpile these things we ought to be stockpiling. Of course, the Congress had in mind that that is what we would do. I understand the pressures that prevent that sort of thing but tin is not the only metal produced down there, although it is the foremost one.

Has there not been any time that the smart men decided that we needed tin or have they decided that we do not need it?

Mr. ALBERT. Is it on the list? That would answer the question.
Mr. RAWLINGS. It is not on the list given to us by ODM.
Mr. POAGE. Has it been on the list in the last 3 years?

Mr. RAWLINGS. No, sir. The amount of tin going into a can now is, I understand, one-fourth of the amount that it used to be, and it is still in better shape. They even tell you that you can store food in the icebox in the can and without fear of poisoning. ODM itself in its planning has kept a certain relationship between the strategic and supplemental stockpile. In the supplemental they have looked at it from the standpoint of added security. The strategic stockpile is what is required by the Joint Chiefs of Staff for an out-and-out war. Mr. POAGE. This tin deal it seems to me cannot interfere with any American mines.

Mr. RAWLINGS. No, sir.

Mr. POAGE. I do not know of any one mining tin in the United States, do you?

Mr. RAWLINGS. No, sir. If there is any, it is negligible.

Mr. POAGE. It seems to me that that is a good illustration of something we can bring in without hurting anybody in the United States.

Mr. HARVEY. Would the chairman yield?

Mr. POAGE. Certainly.

Mr. HARVEY. I believe it was contemplated in the thinking of our committee and indicated that these strategic materials could be used not only for our own country's use but also in implementing both the NATO and SEATO treaties, that they could be reassigned to other

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friendly countries who were allied with us, such as in NATO, for part of their military buildup. As I recall, that was applied to many types of strategic minerals. There is nothing so far that I have had from your statement that would indicate that that has been in the picture at all.

Mr. RAWLINGS. Sir, I worked with the stockpile committee some years ago. I do not recall the Government ever taking that position. It has been talked about on a number of occasions, but I don't believe they came out with the position that they would stockpile more than what was required for the United States. They have talked about whether we should supply materials that we might have to furnish to our allied in the event of war but the thinking has been changed in the last few years because of the change in pattern of the concept of war. We have always followed the policy that we would not take anything unless we could turn it over to some Government agency. Maybe that is not a satisfactory answer.

Mr. POAGE. Mr. Heimburger.

Mr. HEIMBURGER. Section 303 of Public Law 480 which did not provide additional barter authority, but provided a new policy under which this program has been operating, stipulates three items that surpluses are to be used for. Item (a) is strategic materials entailing less risk of loss through deterioration or substantially less storage charges. That is what we have been talking about.

Item (b) is materials, goods, or equipment required in connection with foreign economic and military aid and assistance programs, which is an entirely different category. They don't have to be strategic materials or stockpiled but something that would be useful to a foreign country that we are assisting. I think it is that category that Mr. Harvey spoke of where there is no question of stockpiling involved. Have there been any deals of that kind?

Mr. RAWLINGS. Yes; we have a few. One is classified. I would prefer to give that in executive session.

Mr. POAGE. On what date did the Washington Post cover the report of this classified material? I always find that, if I will read the files of the Washington Post, probably it was reported about 6 to 9 months ago in great detail. I don't mean to ask you to give us any classified material, but that classified stuff is the pure bunk and we fully recognize that. We read the papers, too, and know that you generally can find the classified article in Sears, Roebuck's catalog if you take a careful look at it.

Mr. RAWLINGS. The one I am talking about, sir, has not been in any papers, though there may be others.

Mr. POAGE. Don't go into the detail here; we do not want to get any classified material, but we would like to know when it comes out in the papers, because we know it will.

Mr. RAWLINGS. We do keep in touch with both the Department of Defense and AEC and the ICA, and of course we are dependent upon the materials they say may be procured through barter. have attempted to acquire everything that they have told us was available for barter procurement. We have done some barter. can give you the figures later.

(The data referred to above is as follows:)

We