never established their rates so as to be in a better competitive situation for courting business. They have rendered services only as requested, and then on a basis of costs. They have not bid for or solicited business on a competitive basis.

5. Federal approval stamps should not be applied unless Federal graders and inspectors have in fact performed the work. The public should not be misled to believe that Federal men have examined food when they have not done so. The Department seriously regards its responsibility concerning the use of Federal approval stamps on inspection and grading work. However, whether or not the stamps are applied by our workers or under our supervision and control involves questions of judgment and operations which make impractical the proposal to have a Federal employee actually do the stamping in all cases. At present in all meat and poultry inspections for wholesomeness, and in meat grading activities, only Federal employees handle the stamp of approval or grade. With respect to poultry grading, the situation varies as explained in later comments and we are studying it further. We believe each of the prevailing systems has its respective merits and that approval stamps may be applied under our license to do so provided proper safeguards are established to assure conformity with our standards. We agree that the public should not be misled, and we endeavor to avoid this possibility in all instances. We shall continue to adopt improved and safer methods for applying Federal approval. stamps and will welcome any specific proposals you can offer in this field.

The following comments refer specifically to various items in the report which for purpose of reference are identified by page numbers. Some of these furnish more detail concerning the comments above, and others deal with items in the report not previously commented upon in this statement.

(a) Page 5 of this report indicates that the meat grading program is financed from a trust fund based on cooperative agreements with States. This is an incorrect statement, insofar as meat grading is concerned, since meat grading operations are financed from a trust fund based on a cooperative agreement with the National Livestock and Meat Board.

(b) The report, on page 6, refers to the organizational structure of the poultry grading and inspection activities. While the statements were correct at the time the report was prepared, the organization has since been changed to bring standards and policy responsibility together with the functions of application and administration of these services. Poultry grading and inspection activities are now the full responsibility of the Poultry Branch of PMA.

(c) The comments on page 8 relative to the cooperative agreements for poultry inspection and grading may give one the impression that there is wide variance in the provisions of the agreements and rather limited Federal control of the grading programs at the State level. Actually the basic principles regarding Federal supervision and control of the programs set up under cooperative FederalState agreements are similar in all agreements. There is some variance in the cooperative agreements for performing grading service, but the principal differences are in the financial arrangements which are provided. Of the 50 different cooperative agreements, only 9 are of the State trust-fund type, whereas, all of the others provide for Federal trust funds. All agreements provide for the use of USDA standards and grades and regulations governing the conduct of the work performed under the agreement. Federal supervision is provided through five regional supervisors, State supervisors (and assistants where necessary) in almost every State, as well as two supervisors at the national level. State supervisors in many instances are Federal employees; however, in some States the State supervisors are employees of the State who perform under Federal supervisino from the regional and national level. The qualifications and duties of the State supervisors are the same regardless of whether they are State employees or Federal employees.

(d) The sixth paragraph on page 8 may give the impression that both graders and inspectors may be Federal employees, State employees, or bonded employees of a poultry establishment. We wish to point out that inspectors must be Federal or State employees, whereas graders may be Federal, State, or bonded licensees. At present all poultry inspectors are Federal employees.

As we have previously pointed out, the bonded employees are utilized in the poultry grading program and not for poultry inspection. While it is true that these men are employees of the company whose products are being graded, they have the necessary qualifications for grading and are, therefore, licensed to perform this function. In addition, their work is supervised by Federal or Federal-State employees. The use of bonded personnel has proven to be very

satisfactory since it enables the smaller business to obtain a service which would otherwise be denied them on account of costs. If it is found that a bonded grader is misgrading a product, a determination is first made whether or not the misgrading is intentional. If not, his error is pointed out to him so that his future application of grades will be correct. If it is determined that the misgrading was intentional, then the grader's license is withdrawn, and circumstances warranting, grading service is denied to the plant. This is a severe penalty since without grading service the plant cannot compete in the graded egg and poultry market.

(e) Reference is made to the grading of poultry without inspection for wholesomeness on page 9 of the report. In discussing the problem of grading and inspection of poultry it would be well to treat it from two separate types of processing "dressed" and "ready to cook."

Dressed poultry as such cannot be inspected for wholesomeness because the viscera is intact, whereas a wholesomeness determination must be based largely on the appearance of internal organs. Thus grading service is the only service that can be performed with respect to dressed poultry. Even though the trends in poultry processing are in the direction of complete evisceration immediately following slaughter, today more than half of the poultry marketed for food is sold in wholesale distribution as dressed poultry. The Department has graded this product in conformance with USDA standards and grades for more than 20 years. These standards and grades have always provided that poultry with external evidence of disease or other conditions which may render them unfit for food shall not be graded. Serious consideration must be given to the problem before service can be arbitrarily discontinued when such a large percentage of poultry is marketed in dressed form.

The statements made in the first paragraph on page 9 of the report with respect to grading evidently covers both dressed and ready-to-cook poultry. The quantities that have been graded were relatively small in proportion to the amount of the products sold for food. Of the amount graded, a still smaller proportion has been individually grade marked. In the 18 months' period from January 1, 1950, to June 30, 1951, during which ready-to-cook poultry was permitted to be graded without official inspection for wholesomeness, only 4 poultry establishments utilized this service, and the bulk of the product so graded was marketed intrastate. This provision has been changed. Under the currently operative poultrygrading and inspection regulations, ready-to-cook poultry may be graded only if it has been previously inspected by Federal inspectors or by governmentally employed inspectors of an approved State, county, or municipal inspection system. The basis for approving such systems is essentially the same as that with respect to meat grading. At the present time, no ready-to-cook poultry is graded unless it has been previously inspected for wholesomeness by Federal inspectors. While the regulations provide for the grading of ready-to-cook poultry inspected under other approved inspection systems, no product has been graded under this provision to date.

(f) We wish to comment on the third paragraph of page 10 of the report. which reads:

"The Army is especially careful in the inspection of poultry for disease, etc., because the various State, local, and private arrangements made by PMA for poultry inspection and grading have caused officials of the Veterinary Corps to question the adequacy of controls maintained over sanitation and disease in poultry houses."

At the time this report was issued, no State, local, or private arrangements were in effect for the conduct of the poultry-inspection service of PMA. While the regulations which went into effect July 1, 1951, provide for the conduct of inspection service under cooperative Federal-State arrangements involving the use of State employees under Federal supervision as poultry inspectors, to date only federally employed inspectors have been used in performing poultry-inspection service. The Army accepts and utilizes the poultry-inspection service of PMA. As a matter of fact, for a number of years Army purchase specifications for ready-to-cook poultry have required that poultry be eviscerated under the supervision of the poultry-inspection service of PMA.

(g) Certain information on page 21 of the report is now incorrect because it is out of date.

(h) We would like to comment on your reported general statement on page 22 that savings could be effected through a consolidation of field offices and administrative services. PMA is continually moving toward such a goal whenever action can be taken without adversely affecting program objectives. We would

like to point out that consolidation does not necessarily result in savings. In some instances consolidation actually becomes more expensive.

The USDA has recently moved to consolidate county and State offices. As a result, 936 offices in counties have been consolidated and offices in 14 States are in the process of moving.

Over the past 3 years PMA has been continually working toward the consolidation of all PMA activities in each of the 5 regional office cities, that is Atlanta, Chicago, Dallas, San Francisco, and New York. In Atlanta the consolidation is complete. In the other 4 cities 75 to 90 percent of the consolidation has been effected. Also, within PMA the Livestock Branch has had a continuing movement underway to consolidate all that Branch's activities under one roof in every city where such is possible. This move is practically complete. The Poultry Branch is also working toward consolidating their field offices.

Consolidation cannot be effected between many branches because their offices must be located near the point where their work is performed. For instance, in Chicago the Livestock Branch must be near the livestock yards, whereas the Dairy and Poultry Branches must be near the dairy and poultry markets and many miles separate these two markets; therefore, consolidation in such instances is not practical.

(i) On page 23, the report indicates that meat inspectors might be selected and trained to perform small meat-grading assignments at their station in order to save the grader's time and travel cost involved in reaching the station. This problem has been given thorough consideration in times past and the suggested solution is considered impractical from several standpoints. The principal reason is that meat inspectors are not qualified to do meat grading. Among the minimum qualifications required of a meat grader is at least 4 years' experience in the grading of meats on a wholesale basis. (The 60-day course in general food inspection and grading work used by the Army does not meet the minimum requirements for this work which we regard as essential.) Despite the aptitude of some of our meat inspectors for grading assignments, we feel that the time necessary to qualify a meat inspector for this particular work would be much more expensive than paying the travel time of a meat grader to the particular point. Even if time were taken to train a meat inspector to do meat grading, other difficulties would make this arrangement impractical. The meat-grading service requires very special and direct supervision which cannot be supplied by the Meat Inspection Division. Consequently, the meat inspector doing meatgrading work would be attempting to serve two different supervisors. Also, a meat inspector, trained for meat-grading work and located in a position where he might do meat grading, is subject to be transferred at any time. If a regular meat grader is stationed at the new location, the value of his special training would be largely lost. Under normal conditions, that is, in the absence of price ceilings and mandatory grading, there are comparatively few locations where meat inspection is conducted at any considerable distance from the point where a meat grader is stationed.

(j) We regret that the report did not develop further the statement on page 24 to the effect that there is a lack of confidence in the poultry grading and inspection services by public health and consumer groups. Following a recent meeting with a group of public health officials, the Poultry Branch has formed an advisory group consisting of 6 public health officials and 6 industry representatives to discuss and advise on mutual problems. One meeting of this advisory group has already been held and indications are that this cooperative approach will be very helpful in developing a high degree of confidence in these programs. The rapid rate of increase in the use of these two services seems to indicate they have already gained a high degree of acceptance. Such acceptance, it is true, is on the part of commercial poultry interests. However, these interests would not be likely to incur the added cost of these services except to meet consumer demand.

(k) We wish to comment about the label used to identify "dressed" poultry which has been processed under USDA sanitary standards. This is covered in the last paragraph on page 24 of the report. The Department's regulations governing the grading and inspection of poultry require that poultry which bears United States grade marks or United States inspection marks shall have been processed in accordance with prescribed sanitary standards during all stages of processing. Some processors perform all processing functions whereas others prepare only "dressed" poultry. So that such "dressed" poultry may move into plants for further processing under Federal supervision, provision is made for its certification of having been processed under USDA sanitary standards. It

is in connection with this phase of the program that the label is used which reads "Processed under USDA Sanitary Standards--Not USDA Graded for Quality or USDA Inspected for Wholesomeness." The label is intended solely for identification purposes and is applied only to bulk packages or shipping containers of "dressed" poultry. Individual birds or consumer packages are never labeled with this mark. It is highly improbable that the consumer can ever be misled by this label since she will never see it. The Department currently is engaged in further study of poultry grading and inspection.

(NOTE.-Exhibit II, regulations governing the grading and inspection of poultry and edible products, is on file with the committee.)

Senator CLEMENTS. Now, Dr. Carpenter, you may proceed.

STATEMENT OF DR. CLIFF D. CARPENTER, PRESIDENT, INSTITUTE OF POULTRY INDUSTRIES, CHICAGO, ILL.

Dr. CARPENTER. Thank you, Senator. My associate on my right is Frank G. Wollney, Field Service Director.

I am Cliff D. Carpenter, president of the Institute of American Poultry Industries, Chicago, Ill. I am a graduate veterinarian; in fact, the first veterinarian in the United States to have a private practice exclusively limited to domestic poultry. I have been associated with the poultry industry for 36 years. I have served as chairman of the poultry committee of the American Veterinary Medical Association and as chairman of the poultry disease committee of the United States Livestock Sanitary Association.

The Institute of American Poultry Industries is a nonprofit organization, chartered by the State of Illinois nearly 31 years ago. Its membership includes processors and distributors of poultry products, and in addition, producers, breeders, hatcherymen, and other allied interests. More than 90 percent of our processor members are smallbusiness men, many of them family operations which have developed through the years and grown up with the industry.

We favor Senate bill 3588. In our opinion, sound, mandatory poultry-inspection legislation will benefit consumers, producers, and the poultry industry in general, because it will provide the consumer with added assurance that the poultry she buys is a wholesome product that has been prepared under sanitary conditions. We also feel that the increasing volume of poultry shipped interstate has heightened the need for uniform regulations governing such movement which will receive recognition by the various States and municipalities.

Several years ago, the institute established a study committee on mandatory inspection for wholesomeness. This committee unanimously recommended to the institute's board of directors that we take a position for mandatory inspection for wholesomeness. The directors adopted this recommendation unanimously, it was referred to the entire membership, and 95 percent of the votes from members supported the directors' recommendation. That resolution is herewith quoted

verbatim :

The Institute of American Poultry Industries continues to encourage and support one of its chief, original objectives, namely, the utilization of every sound means to give the consumer a better product and the producer a better market. In furtherance of this longstanding objective of the institute, its board of directors and its members favor the development and adoption of sound, mandatory inspection for wholesomeness programs for all poultry and poultry products, provided such programs are paid for from Federal and State funds.

This action in itself demonstrates the poultry industry's keen interest in both the consumer and the producer. However, I would like to present some additional background information on the type of work performed by the institute and the activities supported by its members, which further indicate industrys' longstanding interest in wholesome, high-quality products.

Going back to the early days, the institute played a prominent part in helping the industry convert from the shipping of live poultry across the country to distant markets to the New York dressing type of operation. This advance brought the consumer higher quality poultry and reflected a greater return to the producer. Later, through still greater technological advances, the poultry industry moved from the New York dressed era to the fully eviscerated, readyto-cook, modern type of operation, until today about 90 per cent of our total output is fully eviscerated before it reaches the retail store, restaurant, or other institutional user. Much of this progress was made, too, under the most difficult conditions existing during the 4 years of World War II, with its serious shortages in manpower and equipment.

During the 10 postwar years, the poultry processors of this Nation, on a voluntary basis, have invested an estimated half-billion dollars in modernizing and improving their plant facilities and operations. We are currently spending about $212 million a year for voluntary Federal poultry inspection. In fact, this industry has probably spent more than any other food industry in attempting to give the consumer a wholesome product and one in which she can have complete confidence. Our purpose here today is to get an adequate, sound, and competent inspection program under mandatory Federal legislation. In changing from New York dressed to ready-to-cook, poultry processors have assumed a responsibility and task that formerly was undertaken in the consumer's kitchen. The institute has always vigorously promoted sound sanitation in the processing plant, and today's modern operation is kitchen clean, with modern equipment, tile walls, cement floors, and adequate drainage, ventilation, lighting, and cleaning and other sanitizing procedures.

All of these improvements made by the processors, along with the tremendous strides made by growers, feed manufacturers, breeders, and the refrigeration industry, have been instrumental in virtually doubling the per capita consumption of poultry during the past 17 years. The high consumer acceptance of this increased output of poultry products certainly indicates that the public has been getting a fine product and not, as some claim, one of questionable whole

someness.

From an era of a "farmyard operation" the poultry industry has moved into perhaps the fastest growing major food enterprise in the Nation. Poultry products now reflect the third largest agricultural income in the country. Three of the ten fastest growing food items in the American market basket today come from the poultry industry; in fact, frozen and canned poultry have become the second fastest growing food item in the United States. Sales of poultry products at the retail counter are valued at more than $6 billion a year. Out of every consumer's food dollar, eleven and a fraction cents are spent for poultry products.