Mr. BEALE. I agree it is very important that seed wheat, the seed wheat that comes in should not also bring in disease into our country and the chemical treatment prevents that.

Mr. BELCHER. And I doubt whether it is a subterfuge. I believe that there is a very fine technical argument as to why this seed wheat should be classified differently.

Mr. ALBERT. Seed wheat treated only for purposes of getting over this law, is that true?

Mr. BEALE. Not only for the purpose, no, the American farmers are the ones concerned with the chemical treatment and the Department of Agriculture because they want to prevent infestation of our own wheat and in the past the desire on the part of our farmers has been to get certain varieties of rust-resistant seed and certainly it would be unfortunate in that process if we were to import diseases into the country as well as the seed wheat.

Mr. ALBERT. But actually that is treated with chemicals in order to bring it in at this cheap rate. Why do we not treat the other wheat chemically? We bring in 750,000 bushels of millable wheat without treating it and it is subject to being treated very easily.

Mr. BEALE. Well, the chemical treatment, of course, makes it unfit for human consumption and the 795,000 bushels will be millable wheat for human consumption.

Mr. ALBERT. And you say it is made unfit for human consumption so as to pervent infestation?

Mr. BEALE. Infestation.

Mr. ALBERT. And not as a means of bringing it in under a lower rate?

Mr. BEALE. The primary purpose is to prevent infestation.

Mr. ALBERT. I believe our counsel wishes to ask some questions about this matter.

Mr. HEIMBURGER. Thank you, Mr. Chairman.

It seems to me that it might be helpful to our discussion if we could get in some of the provisions relevant to this deal—and just to make the record here now-the Agricultural Adjustment Act of 1933, section 22, provides in essence that when agricultural products coming in from a foreign country will interfere with the price-support program of the Department of Agriculture, that then the Tariff Commission will make a review and will make findings and a recommendation by the Tariff Commission, and then the President may issue such proclamation as may appear desirable to him within the limitations of tariff and quantitative changes.

The Tariff Act of 1930 provides for a duty of 42 cents a bushel, I believe, on wheat. It also provides that wheat which is unfit for human consumption shall come in at 5 percent ad valorem, and I believe that this 5 percent ad valorem has not been changed by GATT. Mr. BEALE. It has not been changed.

Mr. HEIMBURGER. But the basic rate of duty of 42 cents a bushel has been cut to 21 cents.

Mr. BEALE, That is right.

Mr. HEIMBURGER. That is, it has been cut in half.

The tariff act, I believe, is silent on any particular tariff on seed wheat, so seed wheat is only wheat for tariff purposes.

So here we have really two laws involved in this one subject, the matter of tariff and customs duty and the matter of the quotas provided by section 22 of the Agricultural Adjustment Act and that is what makes it so delightfully complicated, even though we are dealing with only one little item.

I thought, Mr. Chairman, if we would put in the record the Presidential proclamations by which we reached where we are now, it might be helpful.

Mr. ALBERT. Without objection, they will be inserted in the record. (The proclamations referred to are as follows:)

EXHIBIT A

A PROCLAMATION BY THE PRESIDENT OF THE UNITED STATES OF AMERICA IMPOSING QUOTAS ON IMPORTS OF WHEAT AND WHEAT FLOUR

Whereas, pursuant to section 22 of the Agricultural Adjustment Act of 1933 as amended by section 31 of the act of August 24, 1935 (49 Stat. 750, 773), as amended by section 5 of the act of February 29, 1936 (49 Stat. 1148, 1152), as reenacted by section 1 of the act of June 3, 1937 (50 Stat. 246), and as further amended by the act of January 25, 1940 (54 Stat. 17), I caused the United States Tariff Commission to make an investigation to determine whether wheat or wheat products are being or are practically certain to be imported into the United States under such conditions and in sufficient quantities as to render or tend to render ineffective or materially interfere with the program undertaken with respect to wheat under the Soil Conservation and Domestic Allotment Act, as amended, or to reduce substantially the amount of any product processed in the United States from wheat; and

Whereas, in the course of the investigation, after due notice, hearings were held, at which parties interested were given opportunity to be present, to produce evidence, and to be heard, and, in addition to the hearings, the Commission made such investigation as it deemed necessary for a full disclosure and presentation of the facts; and

Whereas the Commission has made findings of fact and has transmitted to me a report of such findings and its recommendations based thereon, together with a transcript of the evidence submitted at the hearings, and has also transmitted a copy of such report to the Secretary of Agriculture: Now, therefore, I, Franklin D. Roosevelt, President of the United States of America, do hereby find, on the basis of such investigation and report, that wheat and wheat flour are practically certain to be imported into the United States under such conditions and in sufficient quantities as to tend to render ineffective and materially interfere with the program undertaken with respect to wheat under the Soil Conservation and Domestic Allotment Act, as amended, and to reduce substantially the amount of flour processed in the United States from wheat produced in the United States. Accordingly, I hereby proclaim that the total quantities of wheat and wheat flour originating in any of the countries named in the following table which may be entered, or withdrawn from warehouse, for consumption in any period of 12 months, commencing May 29, shall not exceed the quantities shown opposite each of said countries, which quantities I hereby find and declare shown by the investigation to be necessary to prescribe in order that the entry of wheat and wheat flour will not render or tend to render ineffective or materially interfere with the program undertaken with respect to wheat under the Soil Conservation and Domestic Allotment Act, as amended, or reduce substantially the amount of any product processed in the United States from wheat produced in the United States:

I find and declare that the total quantity of wheat or wheat flour which may be entered hereunder with respect to each of the countries named herein is not less than 50 per centum of the average annual quantity of wheat or wheat flour, respectively, which was imported from each of such countries during the period from January 1, 1929, to December 31, 1933, both dates inclusive, and that during the period named no wheat or wheat flour originating in any foreign countries other than those enumerated in the foregoing table was imported into the United States. No wheat or wheat flour originating in any other foreign country shall be permitted to be entered, or withdrawn from warehouse, for consumption during the effectiveness of this proclamation.

As used in this proclamation, "wheat flour" includes semolina, crushed or cracked wheat, and similar wheat products. Except as used in the first paragraph, "wheat" and "wheat flour" do not include wheat or wheat flour unfit for human consumption.

This proclamation shall become effective on the 29th day of May 1941.

In witness whereof, I have hereunto set my hand and caused the seal of the United States to be affixed.

Done at the city of Washington this 28th day of May, in the year of our Lord nineteen hundred and forty-one, and of the independence of the [SEAL] United States of America the one hundred and sixty-fifth.

By the President:

FRANKLIN D. ROOSEVELT.

CORDELL HULL, Secretary of State.

EXHIBIT B

A PROCLAMATION BY THE PRESIDENT OF THE UNITED STATES OF AMERICA SUSPENDING QUOTAS ON IMPORTS OF CERTAIN WHEAT AND WHEAT FLOUR

Whereas, pursuant to section 22 of the Agricultural Adjustment Act of 1933 as amended by section 31 of the act of August 24, 1935 (49 Stat. 750, 773), as amended by section 5 of the act of February 29, 1936 (49 Stat. 1148, 1152), as reenacted by section 1 of the act of June 3, 1937 (50 Stat. 246), and as further amended by the act of January 25, 1940 (54 Stat. 17), I issued a proclamation on May 28, 1941 (No. 2489), limiting the quantities of wheat and wheat flour which may be entered, or withdrawn from warehouse, for consumption; and

Whereas the United States Tariff Commission has made a supplemental investigation pursuant to said section 22 with respect to certain wheat and wheat flour and has made findings with respect thereto; and

Whereas the Tariff Commission has transmitted to me a report of such findings and its recommendations based thereon, and has also transmitted a copy of such report to the Secretary of Agriculture: Now, therefore,

I, Franklin D. Roosevelt, President of the United States of America, do hereby find and declare, on the basis of such supplemental investigation and report, that circumstances requiring the provisions of my proclamation of May 28, 1941, with respect to the wheat and wheat flour hereinafter described do not exist. Accordingly, pursuant to the aforesaid section 22, I hereby proclaim that the provisions of my proclamation of May 28, 1941, are suspended, effective immediately, insofar as they apply to the following wheat and wheat flour:

1. Wheat and wheat flour for experimental purposes

(a) Samples of wheat or wheat flour in lots of 10 pounds or less, for use by research or scientific organizations or by milling or baking laboratories for testing, experimental, research, or other scientific purposes.

(b) Wheat or wheat flour in lots of more than 10 pounds, for use by research or scientific organizations or by milling or banking laboratories for testing, experimental, research or other scientific purposes, whenever the written approval of the Secretary of Agriculture or his designated representative is presented at the time of entry, or whenever bond is furnished in a form prescribed by the Commissioner of Customs, in an amount equal to the value of the merchandise as set forth in the entry, plus the estimated duty as determined at the time of entry, conditioned upon the production of such written approval within 6 months from the date of entry.

2. Seed wheat

(a) Certified or registered seed wheat for use for seeding and crop-improvement purposes, in bags tagged and sealed by an officially recognized seed-certifying agency of the country of production, in lots of 100 bushels or less.

(b) Certified or registered seed wheat for use for seeding and crop-improvement purposes, in bags tagged and sealed by an officially recognized seedcertifying agency of the country of production, in lots of more than 100 bushels, whenever the written approval of the Secretary of Agriculture or his designated representative is presented at the time of entry, or whenever bond is furnished in a form prescribed by the Commissioner of Customs, in an amount equal to the value of the merchandise as set forth in the entry, plus the estimated duty as determined at the time of entry, conditioned upon the production of such written approval within six months from the date of entry. 3. Distress diversions of wheat and wheat flour

Any shipment of foreign wheat or wheat flour which, because of military, naval, or other emergency, act of God, or governmental act, has, in the course of its movement to a foreign country, been diverted to the United States or to any of its territories or possessions, whenever the Secretary of Agriculture or his designated representative advises the Commissioner of Customs that the shipment of such wheat or wheat flour to a foreign destination is not practicable.

In witness whereof I have hereunto set my hand and caused the seal of the United States of America to be affixed.

Done at the city of Washington this 13th day of April in the year of our Lord nineteen hundred and forty-two, and of the independence of the [SEAL] United States of America the one hundred and sixty-sixth.

FRANKLIN D. ROOSEVELT.

By the President:

SUMNER WELLS, Acting Secretary of State.

(NOTE.

EXHIBIT C

PARAGRAPH 729 OF THE TARIFF ACT OF 1930

The rates of 42 cents, 10 percent, and $1.04 have been reduced by trade agreement to 21 cents, 5 percent, and 52 cents, respectively.)

PAR. 729. Wheat, 42 cents per bushel of sixty pounds; wheat, unfit for human consumption, 10 per centum ad valorem; wheat flour, semolina, crushed or

cracked wheat, and similar wheat products not specially provided for, $1.04 per one hundred pounds.

Mr. HEIMBURGER. The first of these was Proclamation No. 2489, issued by the President under section 22 on May 28, 1941, and after declaring that an unlimited amount of wheat coming in will interfere with the Department of Agriculture price support or production program it sets a quantitative quota on wheat which can come into the United States.

The quota for Canada is 495,000 bushels. There are smaller quotas for other places, including Rumania, which had 1,000 bushels and which would bring the total up to 800,000 bushels of wheat which can come into the United States.

Then apparently after this action was taken by the President it was called to somebody's attention that it might be desirable to bring into the United States certain classes of wheat. So very shortly thereafter on April 12, 1942, the President issued Proclamation No. 2550, which said that:

Accordingly, pursuant to the aforesaid section 22, I hereby proclaim that the provisions of my proclamation of May 28, 1941, are suspended, effective immediately, insofar as they apply to the following wheat and wheat flour.

And there are two categories. Category No. 1 is wheat and wheat flour for experimental purposes; and category No. 2 is seed wheat and with respect to seed wheat, this order provides for, first, that certified or registered seed wheat for use for seeding and crop-improvement purposes in bags can come in and be sold by officially recognized seed certifying agencies of the country exporting it in quantities of less than 100 bushels.

In other words, there is no quota or no restriction of any kind on the importation of certified seed wheat in lots of less than 100 bushels.

Item (b) under seed wheat provides for lots of more than 100 bushels of this same certified wheat may come in whenever the importer has the written approval of the Secretary of Agriculture or his designated representative.

Mr. BELCHER. Would it be treated?

Mr. HEIMBURGER. No; this is not treated. This is wheat and it comes in as wheat and it pays-it was then 42 cents a bushel and now it is a 21-cent duty.

But there is no quota limitation whatever on seed wheat. It can be brought in, in unlimited quantities if they want to take the trouble to ship it in, in lots of less than 100 bushels, it can be brought in, in whatever quantity the Secretary of Agriculture deems desirable and if it comes in larger shipments, and I am informed by representatives of the Department of Agriculture that the Secretary has never refused the admission of seed wheat except a list of certain varieties which will not be permitted entry, those varieties being the ones that the Department has listed as undesirable, except for these named undesirable varieties there has never been disapproval by the Secretary of Agriculture to permit these coming into the United States.

I think it was pointed out and I would be glad to have your comments of you gentlemen of the State Department-that the GATT agreement to which Canada is a party was signed in 1947.