vested in the Secretary of Agriculture under Title IV of Executive Order 9250 * is vested in the Administrator.

THE WHITE HOUSE, March 26, 1943.

FRANKLIN D. ROOSEVELT.

[F. R. Doc. 43-4699; Filed, March 26, 1943; 3: 45 p. m.]

8 F. R. 3807.

EXECUTIVE ORDER NO. 9334

WAR FOOD ADMINISTRATION

Executive Order No. 9322 of March 26, 1943, entitled "Centralizing and Delegating Authority with Respect to the Production and Distribution of Food," is hereby amended to read as follows:

"By virtue of the authority vested in me by the Constitution and the statutes of the United States, particularly by the First War Powers Act, 1941, as President of the United States and Commander in Chief of the Army and Navy, and in order to assure an adequate supply and efficient distribution of food to meet war and essential civilian needs, it is hereby ordered as follows:

"SECTION 1. The Food Production Administration (except the Farm Credit Administration), the Food Distribution Administration, the Commodity Credit Corporation, and the Extension Service, together with all their powers, functions, and duties, are hereby consolidated within the Department of Agriculture into a War Food Administration, to be administered under the direction and supervision of a War Food Administrator. The Administrator shall be appointed by the President and shall be directly responsible to him.

"SEC. 2. All powers, functions, and duties of the Secretary of Agriculture (a) under Executive Order No. 9280 of December 5, 1942, (b) under Title IV of Executive Order No. 9250 of October 3, 1942, (c) which relate to labor and manpower under orders of the Economic Stabilization Director or the Chairman of the War Manpower Commission, (d) which relate to or which have heretofore been exercised through or in connection with the agencies, including corporations, consolidated by section 1 of this order, and (e) which relate to personnel, property, and records transferred by section 3 of this order, are transferred to and shall be exercised and performed by the War Food Administrator (in addition to the powers, functions, and duties conferred upon him by Executive Order No. 9328 of April 8, 1943); but the Secretary of Agriculture shall continue as chairman of the inter-departmental committee set up by section 7 (a) of Executive Order No. 9280, as a member of the War Production Board as provided in section 7 (b) of Executive Order No. 9280, and as the American representative on the Combined Food Board. The War Food Administrator shall be a member of the said inter-departmental committee, which shall be advisory to him. He shall also be alternate American representative on the Combined Food Board.

"SEC. 3. For use in connection with the exercise or performance of the powers, functions, and duties consolidated and transferred by this order, so much of the unexpended balances of appropriations, allocations, and other funds available to the Department of Agriculture for such purposes, as the Director of the Bureau of the Budget shall determine, and all of the personnel, property, and records used primarily in the administration of such powers, functions, and duties are hereby transferred to the War Food Administration.

2 Title IV of Executive Order 9250 reads as follows: "1. The prices of agricultural commodities and of commodities manufactured or processed in whole or substantial part from any agricultural commodity shall be stabilized, so far as practicable, on the basis of levels which existed on September 15, 1942, and in compliance with the Act of October 2, 1942. 2. In establishing, maintaining, or adjusting maximum prices for agricultural commodities or for commodities processed or manufactured in whole or in substantial part from any agricultural commodity, appropriate deductions shall be made from parity price or comparable price for payments made under the Soil Conservation and Domestic Allotment Act, as amended, parity payments made under the Agricultural Adjustment Act of 1938, as amended, and governmental subsidies. 3. Subject to the directives on policy of the Director, the price of agricultural commodities shall be established or maintained or adjusted jointly by the Secretary of Agriculture and the Price Administrator; and any disagreement between them shall be resolved by the Director. The price of any commodity manufactured or processed in whole or in substantial part from an agricultural commodity shall be established or maintained or adjusted by the Price Administrator, in the same administrative manner provided for under the Emergency Price Control Act of 1942. 4. The provisions of sections 3 (a) and 3 (c) of the Emergency Price Control Act of 1942 are hereby suspended to the extent that such provisions are inconsistent with any or all prices established under this Order for agricultural commodities, or commodities manufactured or processed in whole or in substantial part from an agricultural commodity."

"SEC. 4. In addition to the powers and authority granted by this order, and in order to carry out its purposes, the Secretary of Agriculture and the War Food Administrator, to the extent necessary to enable them to perform their respective duties and functions, shall each have authority to exercise any and all of the powers vested in the other by statute or otherwise; and the exercise of any such power by either of them shall be deemed to be authorized and in accordance with this order, and shall not be subject to challenge by any third party affected by the exercise of the power on the ground that the action taken was within the jurisdiction of the Secretary of Agriculture rather than the War Food Administrator, or vice versa.

"SEC. 5. Any provision of any Executive order or proclamation conflicting with this Executive order is superseded to the extent of such conflict. All prior directives, rules, regulations, orders, and similar instruments heretofore issued by any Federal agency relating to matters concerning which authority is vested in the War Food Administrator by this order shall continue in full force and effect unless and until modified or revoked by orders or directives issued by or under the direction of the War Food Administrator pursuant to authority vested in him."

THE WHITE HOUSE, April 19, 1943.

FRANKLIN D. ROOSEVELT.

[F. R. Doc. 43-6329; Filed April 23, 1943; 2: 39 p. m.]

8 F. R. 5423

STATEMENT OF J. B. HUTSON, PRESIDENT, COMMODITY CREDIT \

CORPORATION

The CHAIRMAN. We have with us this morning Mr. J. B. Hutson, president of the Commodity Credit Corporation. He needs no introduction to this committee. We are glad to have you, Mr. Hutson. I understand you have a prepared statement that you would like to submit to the committee. The committee would be glad to have your statement without interruption, and, of course, we will desire to interrogate you later.

Mr. HUTSON. Before beginning on the prepared statement I would like to recall to the committee that 2 years ago when the Commodity Credit Corporation item was up before this committee there was also pending in Congress a bill, S. 262, relating to warehousing and storing and reconcentrating of cotton held by the Commodity Credit Corporation. That was one of my first jobs with the Commodity Credit Corporation, to study that proposal. I did give the matter considerable attention and I reached the conclusion that both groups, or both points of view, strange as it may seem, had a great deal of merit. I mean simply this, that the warehouse charges on cotton with the insurance rates that they were paying did appear to be relatively low and at the same time it appeared that the Commodity Credit Corporation was paying more in total than it ought to pay.

I would like to report just how we worked through that problem. A new contract was negotiated effective February 1, 1942, under which the warehousemen were not obligated to insure the Government-owned cotton and the storage payments by the Commodity Credit Corporation were reduced to the extent of the warehousemen's cost of insurance based on a $50 bale of cotton. As you will recall, one of the causes of the squeeze which they were in was that cotton had advanced from about $50 a bale up to $85 and $90 and some of the cotton even up to $100 a bale. The risk of loss on the cotton from fire previously insured by the warehousemen was assumed by the Commodity Credit Corporation.

In the first year of the operation under this contract the saving to the warehousemen because of the insurance provisions was approximately $600,000 and in addition the reduction in the storage paid by the Commodity Credit Corporation was about $300,000 in excess of the fire losses. We adjusted the matter by giving them a proposition that allowed them somewhat more and at the same time cost us less and both of us gained because the insurance item on Governmentowned cotton was a substantial item.

I would like to discuss some of the important activities of the Commodity Credit Corporation that have been undertaken in recent years. This is by no means an all-inclusive statement. I am going to touch upon certain questions that have been raised by the members of the committee and discuss some of the particular projects concerning which questions have been raised. I shall not today cover the lending operations with respect to the so-called basic commodities and a number of other questions of that kind which have been discussed before the committee previously. I shall be glad to discuss that on another day if the committee wants a review on it. I would like to say in that connection that the majority of the activities of the Commodity Credit Corporation are still devoted to the loans on our important domestic crops to the extent of something over half of all of the total operations. That can be seen from a copy of the last annual report which is before you, or a copy of this statement of loans and commodities owned which is attached to the copy of the report.

It has been generally recognized that in protecting the prices of farm commodities some losses would be incurred by the Commodity Credit Corporation. Provision has been made by Congress for an annual appraisal to determine the amount of these losses. Some now call such losses subsidies. Until recently the net income from governmental operations was called profits and the net outgo was called losses. Payments made by governmental agencies were sometimes called subsidies by those who did not approve of them and industries protected by tariff barriers often were said to be subsidized.

During the 8-year period from 1933 to 1941 Commodity Credit loans and purchases amounted to about $2,000,000,000 with realized and appraised losses of about $172,000,000. During the past 2 years loans and purchases have amounted to about $4,000,000,000 with losses of less than $25,000,000.

Mr. BALDWIN. Is that just on farm commodities?

Mr. HUTSON. These are farm commodities; yes, sir.

You will note this figure of $172,000,000 for the 8 years as contrasted with the figure that Mr. Davis gave you of $144,000,000 for a 9-year period. There was a profit from the operations of the Corporation of about $28,000,000 during the year ending March 31, 1942. and that accounts for the difference in the $172,000,000 and $144,000,000.

I do not believe that the losses in relation to volume will be as great during the coming year as during the first 8 years of the life of the Corporation-no suggestion was made that such losses constituted "subsidies." As a matter of fact, they have been less during the past 2 years.

Mr. BROWN. Pardon me right there, but during those years of losses you have some commodities on which you have made profits, such as cotton, for instance.

Mr. HUTSON. That is correct; a part of it is appraised.

There are some who would call any releases of commodities at less than loan values plus carrying charges, and any sales at less than purchase or acquisition prices, subsidy operations. I do not object to this terminology so long as all of us understand it and are consistent in its use. However, if we accept it we should understand that practically all operations undertaken by Commodity Credit Corporation potentially qualify as subsidy operations, since whenever prices are supported above the market, whether through loans or otherwise, losses may be incurred. There has been no recent change in policy. Recent operations are in line with the early operations.

1934-35 COTTON

In 1936, when the Corporation permitted cotton producers, upon payment of an amount smaller than that owing on loans to redeem $34 and 35 cotton held under loan, approximately 2,740,000 bales were released, which resulted in losses of approximately $14,000,000.

EARLY CORN OPERATION

In the fall of 1938 the Corporation undertook a similar release program with respect to corn, under which producers were allowed to redeem 1937 loan corn upon payment of less than the amount due on the loans. Approximately 8,000,000 bushels of such corn were released with a loss of approximately $1,000,000.

1938 WHEAT

In the spring of 1939 similar action was taken with respect to 1938 loan wheat. Approximately 50,000,000 bushels of such wheat were released to producers, with a loss of approximately $4,000,000.

1937-38 CORN

Beginning July 1940, the Corporation released 1937 and 1938 loan corn to producers, upon payment of amounts smaller than the amounts due on loans. At the same time we also authorized extension of loans on farm-stored 1938 and 1939 corn below the amounts originally owed on such loans. Approximately 225,000,000 bushels of corn were released or resealed at a cost of approximately $8,500,000. Mr. SMITH. You mean at a loss.

Mr. HUTSON. At a loss of approximately $8,500,000. These losses are all included in the earlier statement of losses to which I referred at the beginning of the statement.

At the time that these operations with respect to cotton, wheat, and corn were carried out they appeared to be in the public interest and the best way to meet the problems. In the minds of some people such operations would be considered subsidies.

LEGISLATION RELATING TO COTTON

By section 381 (c) of the Agricultural Adjustment Act of 1938, as amended, Congress prohibited the Commodity Credit Corporation from selling any of its stocks of cotton unless the proceeds of such sale were at least sufficient to reimburse the United States for all

amounts (including any price-adjustment payments) paid out by any of its agencies with respect to the cotton so sold. In addition, section 381 (c) limited sales of cotton by the Corporation to not more than 300,000 bales in any calendar month or more than 1,500,000 bales in any calendar year. In so prohibiting the sale of cotton below cost, Congress appears to have recognized the right of the Corporation, in the absence of statutory limitation, to sell commodities without reference to their cost.

Well-informed people differ as to the merits of this legislation with respect to cotton. Probably book losses are less than they would have been without the limitation. Yet stocks have accumulated and much of these stocks consist of the less desirable qualities of cotton. In the end losses may be greater than they would have been if we could have sold more of the less desirable grades without price or quantity limitations.

But regardless of the merits of the legislation I do not believe that anyone would propose seriously similar restrictions with respect to other commodities. Cotton can be stored for a longer period of time than most other farm commodities.

A cotton man told me yesterday cotton can be stored indefinitely. I would have said, "almost indefinitely" but he used the stronger phrase. Most other commodities cannot be stored indefinitely. As a matter of fact some of them cannot be stored for a very long time.

Stocks of some grain crops would accumulate until other grains were used up, if similar provisions were applied to grain. That is, if you had a similar limitation with respect to release of future grain crops you would find some of them moving out and others being held back. The net effect of this would be reduced production of livestock products because of the unbalancing of the ration of livestock.

PRICE SUPPORTS

Congress has from time to time directed that loans be made on cotton, corn, wheat, tobacco, rice, and peanuts at specified levels without regard to whether such levels were above market prices.

In 1941 when Congress extended the life of Commodity Credit Corporation a provision was included which carried the chairman's name and which is known as the Steagall amendment. This provides that whenever during the existing emergency it is found necessary to encourage expansion of production of nonbasic agricultural commodities, the funds of the Corporation shall be available through loan, purchase, or other operations so as to support the price of such commodities at not less than 90 percent of the parity or comparable price. As directed by this act of Congress, price supports have been announced at specified levels for certain nonbasic commodities the expanded production of which has been encouraged.

The commodities for which such price supports have been announced include hogs, eggs, chickens (excluding broilers and chickens weighing less than 3 pounds live weight), and turkeys; butter, cheese, dry skim milk, and evaporated milk; the 1943 crop of specified varieties of dry peas; the 1943 crop of specified varieties of dry edible beans; the 1943 crop of soybeans for oil; peanuts for oil; the 1943 crop of flaxseed for oil; the 1943 crop of potatoes; and the 1943 crop