you ask what volume they are going to have, and if you do that surely they know that volume times unit costs means money.

Mr. BEACH. The people whom we ask for these estimates are not the people who do the work. We get the volume estimates and then send them to the field offices to indicate to them approximately what workload they will have. We sent our own men out to make these surveys; we go out ourselves. In the Chicago office survey, we invited a Bureau of the Budget man to go out at the same time to see what we were doing. We do our very best to find a way of determining fairly what the workload volume is in these field offices and what is the reasonable cost of doing the job. The only relationship that exists between the program volume and the amount of money we request is that the program volume determines the workload.

ESTIMATE FOR POULTRY BRANCH

Mr. ANDERSEN. May I ask a question of Mr. Beach there, Mr. Chairman?

Mr. WHITTEN. Yes.

Mr. ANDERSEN. Now take eggs, for example, you have done away with the support.

Mr. BEACH. Yes, sir.

Mr. ANDERSEN. What kind of an estimate did your Poultry and Egg Branch give you of the amount of work they will have for the calendar year 1951 compared to the calendar year 1950 when you did have supports? It seems to me there should be practically no work at all relative to egg supports in 1951, should there?

Mr. BEACH. Mr. Andersen, of course, the estimates that we get from the Poultry Branch are estimates of volume of activity, not estimates of volume of work. We anticipate only the activity necessary to wind up this current year's program because they know there is not going to be any support program next year.

Mr. ANDERSEN. In their estimates to you they show a decided falling off?

Mr. BEACH. They show the purchase and sales activity. We started the fiscal year 1951, according to the estimates, with 60,000,000 cases or equivalents of dried eggs. We estimate we will wind up the fiscal year 1952 with no inventory. The only thing then in there for the fiscal year 1952, in essence, is the disposal of the inventory we had to begin with.

Mr. ANDERSEN. Well, let us be specific about butter. You do not own any butter today to speak of. Where is that reflected in your cost as to the difference between having 160,000,000 pounds of butter last July 1, and only 100,000 pounds, or a very small amount, at this date? How much of an estimate do you show for net decrease there in your administrative expense, and how much does storage enter your picture there? Is that part of your administrative cost? Mr. BEACH. No, it is not.

Mr. ANDERSEN. That goes against the product itself?

Mr. BEACH. Yes; that goes against the inventory.

Mr. ANDERSEN. The only thing there would be the actual administrative handling? I suppose most of the manpower is charged against storage in the case of butter?

Mr. BEACH. Yes, the storage and the accounting for the acquisitions and dispositions of the butter.

ALLOCATION OF COSTS IN PROPOSED SHIPMENT OF WHEAT TO INDIA

Mr. ANDERSEN. I was thinking, Mr. Chairman, we could, perhaps, get a clearer picture if we could ask Mr. Trigg to give us the picture of what happens, say, if the Congress decides to give to India 75,000,000 or less bushels of wheat. Where all along the line are the different costs allocated? What happens in such a transaction? Mr. TRIGG. Mr. Brasfield.

Mr. BRASFIELD. It is charged against this limitation, because on December 31 we had 271,000,000 bushels of wheat in our price support inventory. That means, based upon that over-all delivery, that word would go out from Washington to our field offices, allocating to each one of them what they should start to move toward port. That inventory will be in country warehouses and other terminals all over the country. We will start to load that and transport it to the respective ports. When you take that part out of the country warehouses you will give them a loading order for probably about 10 cars of wheat. Then you get a bill of lading for each one of those cars, and you then get a freight bill for each one of them. When it gets to an inspection point you will get weight and inspection certificates for each car of wheat. Then it may go through an elevator en route. Your port may be blocked up. As you go in and out of those elevators you have not only the freight each time, but you have the in-transit freight value balance that must be accounted for. You have your weight and inspection, and in the case of each warehouse it goes in and out of you have the quantity and quality to account for. In the case of every car you have to determine whether that is the correct measure, that you have the same number of bushels of the commodity you started with.

The thing we have not been able to find yet is any machine that will take a group of warehouse receipts that call for No. 2 wheat of a certain protein content, perhaps, and get the cars out of that elevator and show the comparison of quantity and quality per the weight and inspection certificates. You have to sit down and compare those in order to find out whether that elevator operator owes you money for that wheat or shipped wheat out of the identical kind. He does not store your wheat separately and apart from other wheat. You have to pay him an out charge. In other words, he bills you for each loading order. The documents that would support the shipment of that 10 cars would probably be somewhere in the neighborhood of 50 documents, taking each weight and inspection certificate and each bill of lading, and the billing on each item that goes into that and then comes back and that the country warehouseman properly ships it, that he gives you the equivalent in bushels, and to do that we have to go back and determine that quantity and quality on each and every car that he ships. A carload of wheat is about 2,000 bushels, and a boat load is about 300,000 bushels. So, you can see the number of cars required to make up each one of those boats. You can see the mass of documents that must be inspected and compared, and we have that worked out mechanically to the maximum extent that we can work it out, but we just do not have a machine that can take a group of warehouse receipts and audit them and project them forward to the point where it furnishes you the complete answer as to whether that warehouseman has properly

accounted for the grain or not. When you take into consideration the weight and inspection certificates and the pricing by quality, and the documents representing the product that you are delivering you can see what is involved. Each one of those consists of following that car of wheat across the country.

As I say, this inventory-management problem runs our administrative cost up. Now, that cost is coming out of this limitation. If our wheat was sold from storage at its present location there would not be anything like the administrative cost involved that it takes to put that wheat on the boat bound for India or for any other destination. In other words, the disposition of these inventories, the storage of the commodity and inspection and checking on the sales quantity and quality are the things that take most of the people that we are talking about. The same thing would be true of cotton.

In the case of wheat, you are talking about an asset that was worth to the Government something in the neighborhood of $650,000,000 in December 1951. Also we had the greatest amount of corn that we have ever had, $617,000,000 worth, that we have got to pay storage on. Now, it may be sold locally, and that is the present trend of the program as to corn. If it is sold locally it will be sold in carload lots, and perhaps as small as truckloads to an individual farm operator that comes there for it. You have to record the documents all the way through channels on each individual sale that you may make, except that we we can group such documents at PMA Commodity Office. That minimizes that to the greatest possible extent. You do not have as much work on that type of sale as you have on this other type of sale.

Mr. ANDERSEN. Whatever work the PMA puts in on this in their office is chargeable to this administration?

Mr. BRASFIELD. No, sir, not at the county level.

Mr. ANDERSEN. Not at the county level?

Mr. BRASFIELD. It is at the State level and it is at the PMA commodity office.

Mr. ANDERSEN. Then at the county level it is chargeable against the so-called soil-conservation payments of the farmer?

Mr. BRASFIELD. No, sir.

Mr. ANDERSEN. Where is that paid?

Mr. BRASFIELD. That is paid by the Commodity Credit Corporation in reimbursement of the PMA fund for local administration.

Mr. ANDERSEN. Then all of this paper work, these thousands of tickets, whatever you call them, in order to get a car across the continent to the boat, all of that goes into the regional office of the Commodity Credit Corporation?

Mr. BRASFIELD. That is right.

Mr. ANDERSEN. There would be, you say, 300,000 bushels in an average cargo ship?

Mr. BRASFIELD. That is right.

Mr. ANDERSEN. That would mean if 75,000,000 bushels of wheat were sent to India we would have about 250 shiploads, the way I figure it.

Mr. BRASFIELD. I think that is right.

Mr. ANDERSEN. Do I understand you to say that all administrative work from the country points to the seaside has to be paid, in the case of such transaction, has to be paid for out of their limitation?

Mr. BRASFIELD. Yes, if we use price-support wheat, and that is the stock that we have on hand at this time, the 271,000,000 bushels which I mentioned.

Mr. WHITTEN. Are your administrative funds deducted in your payment back to the farmer in case of a loan?

Mr. BRASFIELD. Actually in the case of the price-support commodity used for supply purposes we charge the market price on that wheat. If it is delivered at port it would include recovery of the administrative expenses, but we cannot use it for that purpose.

Mr. WHITTEN. You just use it as a credit for the Commodity Credit Corporation?

LOAN FEES

Mr. BRASFIELD. It is a credit to our sales account, but not to our administrative limitation.

In the case of the producer he pays a fee when he gets a loan. All that is used for expenses at the county level to make up its expenses. The fee for making the loan, that money does not come to the Commodity Credit Corporation. That money is set aside to be used in the county administration fund except for that portion that is used to pay insurable losses on farm-stored commodities.

Mr. WHITTEN. Your presentation there, I think, has a real basis. In looking at this year's operation, I have stated that I can see the same basis, at least, for additional funds in view of the volume of work this year. But I cannot see beginning with July 1, how you can expect to have anything like the volume you have had this year. Mr. BRASFIELD. Mr. Andersen said that we are practically out of butter. That is true, insofar as the commitment of it is concerned. On December 31 there was an inventory of 106,000,000 pounds of butter. Now, that means handling sales administratively, collecting the money, and so forth.

Mr. ANDERSEN. Like Mr. Whitten says, will not most of it be out of the way by July 1?

Mr. BRASFIELD. Yes; most of the butter will be out by July 1. How much wheat and corn we will have on hand on July 1 probably depends on the food shipped abroad and other factors.

Mr. WHITTEN. I think you could handle all of it for $17,000,000 instead of $20,000,000.

Mr. BRASFIELD. Well, except

Mr. WHITTEN. I will tell you what I would like to have you do. I am not cutting off further questioning here, but when you come up here on these other programs, be prepared to discuss the administrative requirements for each program that goes through the consolidated account. And I want a copy of the consolidated account for 1952. Off the record.

(Discussion off the record.)

FORTY-HOUR WEEK

Mr. WHITTEN. Mr. Trigg, the PMA offices and the Commodity Credit Corporation are under the regular 40-hour week?

Mr. TRIGG. Yes; those are the regulations, Mr. Chairman.

Mr. WHITTEN. The employees are controlled the same as other civil-service employees?

Mr. ROBERTS. All of the employees of PMA except the county committees and the employees of the county committees, are under civil-service regulations.

Mr. TRIGG. Mr. Chairman, I heard you questioning the Secretary the other day, and then I read what you had to say on the floor about this business of people working only 40 hours. I would like to say, as far as PMA is concerned, that we have had a stand-by staff on Saturday in State offices and in Washington ever since the emergency started.

Mr. WHITTEN. I am going to say that this statement was not directed against your Department any more than any of the others. I think the effect of your Department being on a 40-hour basis is worse back home because of the relationship with the farmers. You and Mr. Brannan are not responsible for it, but most of the time they tell me that the folks handling the problem are not available until Monday. It is a Government-wide problem, and is something that we are going to have to face if we are going to have mobilization. I just cannot believe that 8 hours a day 5 days a week is all we need.. But, again, that is not your responsibility any more than Mr. Bran

nan's.

I certainly want my remarks to indicate that I have reference to all departments, not just this one.

BUREAU OF AGRICULTURAL ECONOMICS

WITNESSES

0. V. WELLS, CHIEF, BUREAU OF AGRICULTURAL ECONOMICS SHERMAN E. JOHNSON, ASSISTANT CHIEF, BUREAU OF AGRICULTURAL ECONOMICS

S. R. NEWELL, ASSISTANT CHIEF, BUREAU OF AGRICULTURAL ECONOMICS

RAY C. SMITH, ASSISTANT CHIEF, BUREAU OF AGRICULTURAL ECONOMICS

WILLIAM T. WOLFREY, JR., ASSISTANT TO THE CHIEF, BUREAU OF AGRICULTURAL ECONOMICS

EMILY E. CLARK, BUDGET OFFICER, BUREAU OF AGRICULTURAL ECONOMICS

D. B. DeLOACH, ASSOCIATE HEAD, DIVISION OF MARKETING AND TRANSPORTATION RESEARCH, BUREAU OF AGRICULTURAL ECONOMICS

H. C. TRELOGAN, ASSISTANT FOR MARKETING, AGRICULTURAL RESEARCH ADMINISTRATION

JOSEPH C. WHEELER, ASSISTANT DIRECTOR OF FINANCE, DEPARTMENT OF AGRICULTURE