does come in at a higher rate than wheat unfit for human consumption.

Third, we have wheat which has been classified as unfit for human consumption, which comes in without quantitative restrictions and at a lower rate.

The committee is concerned about the fact that while we have a category for seed wheat, and while we feel that it was intended that seed wheat should come in under that category, it is in fact coming in as wheat unfit for human consumption and at a lower duty rate. That is essentially, I believe, our problem?

Mr. Heimburger, would you go into that and see if you can develop it further?

Mr. HEIMBURGER. Mr. Higman, I might start off by asking:

When was a determination first made that seed wheat, which had been treated with a poisonous substance, should be classified as wheat unfit for human consumption?

Do you have the date on that?

Mr. HIGMAN. I could not answer that completely for the reason that we have two situations in the classification of imported merchandise. Of course, the great body of merchandise arrives at the ports of entry classified by the local collector and his staff, and we know nothing about the transaction in the Bureau.

On the other hand, questions are referred to us, and we make decisions here, and sometimes there will be a practice for many, many years before it comes to our attention.

You mentioned, Mr. Heimburger, over the phone, your interest in this date, so we made as full a check as we could in the Bureau of Records, and I believe the first Bureau decision on the question of the tariff classification of imported wheat which was used for seed purposes and poisoned with the various poisonous substances was in 1949. But we cannot say that it had not been the practice in the field to classify that as wheat unfit for human consumption before that time. We are not indicating that it was the practice; we are simply saying that we do not know and could not advise you on that point without an inquiry.

Mr. HEIMBURGER. Now, when wheat comes up to a port of entry for entry into the United States, then the determination as to what classification it is to fall into is made by your customs officer at that point of entry.

Is that correct?

Mr. HIGMAN. That is the initial step; yes, sir.

In accordance with the principles of tariff classification, whatever Bureau rules he has on the subject.

Mr. HEIMBURGER. That was my next question.

What instructions have you given these people at the port of entry as to how they should classify wheat?

Mr. HIGMAN. Are you speaking now of wheat generally, or this poisoned seed wheat?

Mr. HEIMBURGER. I am speaking particularly of the poisoned seed wheat, but I presume that it gets over into the field of wheat, generally.

Mr. HIGMAN. Well, the Bureau of Customs has issued a ruling in 1949 and has had occasion to repeat it since then, that if this wheat

is subjected to treatment by poisonous substances such as-we have a little enumeration here of some of them-tritisan, ceresan, panogen, and semesan, or any other poisonous substance which makes the wheat physically or commercially unfit for human consumption, then it takes that classification under paragraph 729. And of course, on your immediate problem, that exempts it from the quota because it is classified as wheat unfit for human consumption.

Mr. HEIMBURGER. To what extent do your customs people at the port of entry enforce this quantitative quota provision?

How do they know when wheat is offered for entry whether or not the quota has already been filled?

Mr. HIGMAN. Oh, we have an accounting system. We have a unit which keeps track, for instance, on the wheat, the 795,000 bushels, and when the quota is nearing fulfillment, they are advised of that, and the ports are informed that the quota is nearing its limit and that entries after that time are accepted on a qualified basis, and they will only get the proportion that is still within the 795,000 bushels.

Mr. HEIMBURGER. Customs does have the responsibility for enforcing this quantitative quota, then?

Mr. HIGMAN. That is right; yes, sir.

Mr. HEIMBURGER. Now, how specifically and how definitely is it necessary for the importer to declare the use to which the wheat is to be put when he brings it in?

Mr. HIGMAN. Under our regulations, section 10.106, the importer of wheat, for which he is claiming a classification as "Wheat, unfit for human consumption," under paragraph 729, he makes a declaration that it is not going to be used for food purposes or human consumption purposes.

Mr. HEIMBURGER. Now that is the only declaration he makes

Mr. HIGMAN. Then he makes a collateral declaration specifying what it is to be used for.

Mr. HEIMBURGER. Well, how specific does this collateral declaration have to be?

For example, does all wheat brought in under the classification "Unfit for human consumption," indicate specifically how it is to be used when it gets into the United States?

Mr. HIGMAN. The regulation requires that the importer declare the use to which he is going to put it. I should say, describe it for feed use or for seeding purposes or for

Mr. HEIMBURGER. What if he puts it to some other use after he gets it in?

Mr. HIGMAN. I can answer that in only this way: That when that regulation was put into effect back in 1953, we instituted a series of spot checks whereby our agents follow through, select a certain number of entries on a selective basis, and follow through, and find out the-find out precisely and definitely what became of those shipments. And they report in to the Bureau; and in that way we have certainly as complete a followthrough on those shipments, and it is a very special treatment. We do not apply it on merchandise generally. It would be impossible. But on this particular commodity we do. And there is no indication that those shipments are not-those declarations are not active, honest declarations.

Mr. HEIMBURGER. Well now, suppose that I went up to Canada and bought a carload of seed wheat, preferably good Canadian seed wheat, which was eligible for certification, and I said to the grower or man I bought it from, "Now you just leave the certification off this wheat. It is poison, we will bring it in as unfit for human consumption and declare it to be used for feed." Then when I got it into the United States, I actually sold it for seed purposes. Now what action could the Bureau of Customs take under that set of circumstances?

Mr. HIGMAN. Did you mention whether or not the shipment had been poisoned?

Mr. HEIMBURGER. It is poisoned, yes.

Mr. HIGMAN. It is poisoned?

Mr. HEIMBURGER. Yes.

Mr. HIGMAN. Of course, so far as a mere classification of wheat, unfit for human consumption, under paragraph 729 is concerned, there is no requirement that it be used for seeding or for any other specific purpose. The importer, as I have said, simply has to declare that it is not going to be used for human consumption purposes, and that it is going to be used for some other specified nonhuman consumption purpose.

Now then, your qeustion is what would happen if he converted that into flour for human consumption, for example?

Mr. HEIMBURGER. No, what would happen if he sold it for seed after he got it in here?

Mr. HIGMAN. I am trying to follow-what is your thought, thatMr. HEIMBURGER. I am trying to hypothecate a case where seed wheat could be brought in from Canada, without being subject to the provisions of the Federal Seed Act, and the certification of the Secretary of Agriculture, which permits it to come in in quantities of over 100 bushels. What penalty, if any, could the Customs Bureau inflict on a man who brought in perfectly good seed wheat, without any indication or mark that it is seed wheat, who brings it in because it is poisoned as unfit for human consumption, and says he intends to use it for feed, or says he intends to use it in making rat poison, and then when he gets it in here he does actually sell it for Canadian seed wheat, which it is. But he has evaded, I am assuming that by that process he will be able to evade, the examination and the certification required under the Federal Seed Act.

Mr. HIGMAN. That is not my understanding. I am not positive on that and I have not checked on it, but my understanding is that anything which is declared for seeding purposes is subject to the provisions of the Federal Seed Act.

Mr. HEIMBURGER. He declared it simply as unfit for human consumption, which it is.

Mr. JOHNSON. He would get into trouble in most every State in the Union because seed grains require more strict regulations, practically, than anything else—in regard to wheat seed and everything else. They cannot sell it without having the State certification.

Mr. HEIMBURGER. Most of the States, Mr. Johnson, I think merely require that the seed which is in the package shall conform to the claim on the label.

Mr. JENNINGS. That is exactly right.

Mr. HEIMBURGER. And if a man simply sells this as perfectly good Canadian wheat, with no claim as to anything else, I cannot see that he would be violating any law or any regulation of most States.

Mr. JOHNSON. I think he would get in trouble. If you had it in the States, and sold direct, in the seed, you would have to come under the State seed regulation.

Mr. ALBERT. Are there any practical difficulties of the kind that Mr. Heimburger is referring to? Do you think, in practice, this question of enforcing the Federal Seed Act presents any practical problems?

Mr. HIGMAN. Nothing to my experience has indicated there are. I understand all seeds that are brought in for seeding purposes are subject to the provisions of the Federal Seed Act and that is a collateral activity which our people have in force for the Department of Agriculture.

Mr. SMITH. Mr. Chairman?

Mr. ALBERT. Yes, sir.

Mr. SMITH. I do not think we have our eye on the draw here. Now what is to prohibit a Canadian, with a semitrailer truck, putting 60 bushels of wheat on it and driving it up to the port of entry and saying "this wheat is not satisfactory for human consumption," and he takes this down to Fargo, N. Dak., and sells it to an elevatorthe elevator man dumps it in his bins, the farmers of that area know it is there and they go down and say: "Have you any of that feed wheat that is unsatisfactory for human consumption," can that be used for it? He says "yes." "How much do you want for it?" He takes it. Now he does not say anything to the farmer as to "What are you going to do with it?" The farmer takes it out and plants. Now that is the practical matter of this whole thing. Now there is not any law, as I understand, that will stop that practice. That is what this bill is about, to stop that sort of thing. There isn't anything to keep that man from loading up his semitrailer truck with wheat, 600 bushels, which is a common load of wheat, driving it across the border, taking it to Fargo where the elevator man puts it in his bin. Now that is what this controversy is about, as I understand it. We are not buying seed wheat, we are buying just ordinary wheat that is unfit for human consumption.

Mr. ALBERT. I would like to ask this one question. If wheat is certified as seed wheat, and yet it is unfit for human consumption by reason of the treatment that it has had, and the importer declares it as seed wheat, and if you have a specific regulation which governs the importation of seed wheat, why isn't it classified as seed wheat, where you have a definite category that fits it, rather than as wheat unfit for human consumption?

Mr. HIGMAN. Well, I think the answer to that probably is this, that whereas under the Federal Seed Act, in the regulation, there is a definite category of seed wheat, there isn't such a category in the tariff act, so far as assessment of duty, for free entry or modified rate, however you want to view it is concerned. Wheat, whether it is seed wheat or whether it is not seed wheat, is provided for in paragraph 729 of the tariff act. It is not something which, so far as we know, falls under any of the seed paragraphs of the tariff act-being more specifically provided for in 729 as wheat.

Mr. ALBERT. Under the Executive orders, isn't there a special category for seed wheat for tariff purposes? Mr. HIGMAN. No, there is not, sir.

there is

Mr. ALBERT. Only for quota purposes?

Under the Executive order

Mr. HIGMAN. Only for quota purposes. It comes out of the tariff commodity known as wheat, certain quantities of it become certified seed wheat, exempt from quota. But it does not attach to any type of wheat a category of seed wheat. I think there is no tariff category for seed wheat.

Mr. HEIMBURGER. In other words, Mr. Higman, when you are given the responsibility of classing wheat for tariff purposes, you have only two categories in which to put it: either "Wheat" or "Wheat, unfit for human consumption"?

Mr. HIGMAN. That is right.

Mr. HEIMBURGER. It still is a little unclear to me why, faced with a shipment of wheat which the importer declares is going to be used for seed, which has attached to it the certification of the Canadian Government official saying it is going to be used for seed, that you should classify it as "Wheat, unfit for human consumption."

Mr. HIGMAN. We would not, unless it is poisoned.

Mr. HEIMBURGER. Even so, you are faced with a choice there.

Now, the seed wheat was never intended for human consumption; so that does not seem to be a very important factor in whether or not it should be classed as "Wheat" or classed in as low a category as "Wheat, unfit for human consumption."

Is there any wheat unfit for human consumption brought in, to your knowledge, for any purpose other than seed?

Mr. HIGMAN. Oh, yes

Mr. HEIMBURGER. Except the seed wheat?

Mr. HIGMAN. It is brought in for industrial uses. There are many uses to which wheat is subjected other than for human consumption purposes. They use it in making flour for molds-well, I do

not

Mr. HEIMBURGER. Actually, the wheat which we are talking about is indicated by the importer as wheat to be used for seed.

Is that correct, Mr. Higman, since he has to state the end use of it? Mr. HIGMAN. Yes, that is correct.

Mr. JENNINGS (presiding). Did you ever get an observation to your question?

I think you hit the nail on the head, but I never

Mr. SMITH. I have not heard that answer.

Mr. JENNINGS. I have not, either, and I would like to have an answer to it, or an observation to the question; because I think that Congressman Smith got to the crux of what we are considering here. Mr. HIGMAN. I wonder if I could have that question again, so as to see if I could answer it from the basis of my information. Mr. SMITH. That is the practical matter.

The border between Canada and the United States is wide open. I can go up into Canada and get a truckload of 600 bushels of wheat, drive up to the port of entry and say: "This is unclassified. It is not fit for human consumption."