Mr. WELSH. No, except by drying it and each one of these elevator concerns do have drying equipment and that equipment is running night and day drying that corn, taking the moisture out of the corn. Many of the farmers, themselves, are drying their corn.

Mr. POAGE. That is, the soft corn?

Mr. WELSH. That is right, and they are working hard at drying that.

Mr. POAGE. And after they have done that, after they have dried it, then they have got good corn?

Mr. WELSH. That is right. And I may say, Mr. Chairman, that my elevator is filled with that kind of corn that has been dried out, now. However, the corn-drying facilities are not enough, they are not anywhere near enough to take care of not only the wet corn but the wet sorghum grains.

Mr. ALBERT. Mr. Chairman, if I may interrupt; is this corn that is owned by the Government or is this privately owned wet corn?

Mr. WELSH. Most of it, Mr. Congressman, is in the hands of the private producer.

Mr. THOMPSON. And the problem is processing it?

Mr. WELSH. That is the problem now and the proposal because we are getting to the point where we do have an emergency situation with this wet weather.

Mr. POAGE. Let us come back to this emergency, because you did not answer my original question. How long is this soft corn going to last? You said that you can dry some of it. And when you dry it, and as much of it as you dry, then you do not have any emergency? Mr. WELSH. Well, I agree, Mr. Chairman, if it is all dried, you don't have any emergency.

Mr. POAGE. That is right, and as fast as you get it dry you limit the emergency by that amount?

Mr. WELSH. That is right.

Mr. POAGE. And how long then will you have an emergency?

Mr. WELSH. Well, if you can get it into proper storage-but as I say, I think that this thing is going to go on because then you are coming into the wheat crop and that will probably have the same difficulties because it will have excess moisture.

Mr. POAGE. Do you think it is going to rain all summer? Suppose you don't have a wet summer next year. Suppose you have better conditions, a better summer, then we will have less of that soft corn? Mr. WELSH. Well, we will have it continually.

Mr. POAGE. Well, that does not make sense from any point of view that I have heard of in my life, we do not have an emergency every year; do we?

Mr. WELSH. Suppose you ask Mr. Johnson.

Mr. JOHNSON. Well, Mr. Chairman, we used in the operation of that plant before, we used every year a considerable amount of grain that was hauled from Minnesota and as far north as North Dakota and that corn was the butt ends of the outside cribs, that is, the cribs that were open cribs. And you got down about so far [indicating] and then you find that the lower part of the corn is blue and that is what you are going to have at the end of this season for a great deal of that corn, probably 50 percent or more that cannot be used for hog feed and we will use it throughout the winter

Mr. POAGE. The winter is pretty near over.

Mr. JOHNSON. Well, we used some one season and over into the next in the plant and probably one-third to one-half of the corn at times was that type of corn.

Now, what happens is that this corn, as it molds, the proteins are the part that is destroyed and the starch is not affected at all, and we produced as much alcohol out of that corn as we did out of the No. 2 corn; so that, for the purpose of making alcohol in that particular plant which was designed to use that kind of material-and I think it is the only plant in the United States that was designed that way—we can use the corn after it has passed the use for any other purpose, and we can make No. 1 or a high-grade alcohol from it.

Mr. POAGE. But, now, obviously, you cannot get a bill passed before the 1st of May-because if we pass it out this week, out of the committee, then obviously it cannot get to the floor until sometime in the middle of the next month, and it will be the first day of May before we can possibly get legislation under the very best possible circumstances, and then it is going to take you at least 2 months-your estimate is 2 or 3 months, and I never saw any estimate that did not work out long instead of short-but even if we give you the benefit of that estimate then it will be the Fourth of July before you get it in operation.

Now, on the Fourth of July, are you still going to have some of this bad corn?—and I will grant you that you will have; but, as it disappears, by the last of July, you will not have any. Will not all of this corn be physically rotten? Is it going to be here physically?

Mr. WELSH. Mr. Chairman, Senator Young of North Dakota will verify this-and if you have a Congressman here from North Dakota he will verify it also that during the year 1946, when they had sprouted wheat, and there was 100-percent damage of the wheat selling, it was selling for as much as $1 a bushel discount as samples, and when some of that damaged wheat was sent to our Omaha laboratories we were amazed to find that it could produce more alcohol than you could get out of No. 1 wheat, and so we put orders into Minneapolis and in the markets of North Dakota to buy all of the offgrade wheat, and Senator Young will testify, and I have heard him testify, that we raised the price of grain to the farmer in North Dakota that year from 50 cents to $1 a bushel.

Now, then, you talk about the amount available or that will be available.

Let me tell you this, that we went on into Canada and the cost of getting it in Canada and shipping it to Omaha, the cost of course, the war was on, the war emergency situation was on, and we got hundreds of thousands of bushels of frozen wheat, and we made as much alcohol out of it as we did out of the good wheat.

I am trying to indicate to you, Mr. Chairman, that wheat need not be good in order to make this alcohol; and also to indicate that wet corn is not the only problem.

Mr. POAGE. Well, I understand that, of course, and you are trying to put me in the wrong light because I would like to say that this whole program of using these commodities is all right and I am for it, but unfortunately the committee is here this morning for an entirely different purpose, and I want to clear it up.

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I want it clear that I am not opposed to the program that you are talking about. I am for it. But the subject of this committee hearing this morning, for which this committee was called into extraordinary session this morning, was to consider an emergency program about this wet corn that is now in existence, and the purpose is not to consider the whole program. To do that we have to rearrange our schedule of hearings differently.

Mr. WELSH. I understand, Mr. Chairman.

Mr. POAGE. And the question was that we were to consider, what could we do with this Omaha plant right now in order to give relief to the soft corn that is already in existence.

Now, you tell us that much of it is dried, and I understand that the minute that it dries it has the characteristics of good corn.

You also tell us that, if it stays out there, much of it will spoil. Now, let me ask you this. How fast does it spoil and can you keep wet corn throughout the summer? We cannot do it down south; maybe you can but we cannot keep it. Can you keep it?

Mr. WELSH. I think that Mr. Johnson was trying to tell you that even though it was wet and even though it was spoiled, there will be spoiled corn available to us throughout the year and we could make as much alcohol out of it as from the other corn.

Mr. POAGE. And the question that I have been trying to get answered and that I have been asking is: Will that corn physically remain there or will it spoil and disappear?

Mr. WELSH. Starch will remain there.

Mr. POAGE. The what will remain?

Mr. WELSH. The starch will remain there. The starch is not destroyed. The proteins are destroyed by the corn going out of condition.

Mr. POAGE. Well, it is my observation if you leave it out very long, through our winter, it is going to be gone, the rains will wash it off, there won't be anything there for you to pick up, nothing to put into your cribs.

Now, I do no say that you cannot do it; I am just saying that we cannot. Let me ask you, Does your corn actually stay there, does the grain stay there?

Mr. JOHNSON. Well, Mr. Chairman, we are not talking about a theory. We went through this during the war and we did use that wet corn all the year around, what we call wet corn, and there is enough moisture in it for the corn to mold but it will not destroy the starches. The proteins will deteriorate. That corn will yield, per 100 bushels of corn, 60 pounds per bushel-from that corn we get about 234 gallons of alcohol per bushel and out of No. 2 good cornwe get as much out of that wet corn as we do from the No. 2, as was said before, because as it went out of condition the proteins would deteriorate but the starch was not affected; and we found that we got as high as 3 gallons of alcohol on 60 pounds of corn because we were getting more starch in that 60 pounds, and that condition prevailed all through.

Mr. POAGE. Is it your testimony that this corn will not deteriorate in such a manner so that it will interfere with your use of it in the alcohol plant and that the corn will be there, next summer? That

this corn will be there in September and October also, that it will still be usable to make alcohol out of, is that what you are telling us?

Mr. JOHNSON. That is right.

Mr. WELSH. I think there is enough spoiled or what you call spoiled grain-you don't seem to get the idea, the starch that remains within it is available for alcohol, and there is enough of it available within a 100-mile circle of that plant to keep the plant in operation continuously. That is my testimony. Does that answer your question? Mr. POAGE. That is exactly what we want to know.

Mr. JOHNSON. And I know that from the experience we have had. Mr. POAGE. Do any committee members wish to ask questions?

Mr. JOHNSON. Also, Mr. Chairman, if I may add, I am certain that there is not enough dry corn available to take care of 25 percent of this wet corn.

Mr. WATTS. I would like to ask, if the bill is enacted and the plant is put in operation to make industrial alcohol-is that what it is going to make, just industrial alcohol or is it also going into drinking alcohol purposes?

Mr. WELSH. Do you know the difference?

Mr. WATTS. No sir, I don't.

Mr. WELSH. There is no difference.

Mr. WATTS. Well, that is what I have heard.

Mr. WELSH. That is right.

Mr. WATTS. Will it be confined to industrial alcohol?

Mr. WELSH. It will be confined to industrial alcohol and it should be confined, of course, to industrial alcohol; and another agency of the Government is buying more than twice the capacity of this plant each year and last year I understand that the price was around 47 cents a gallon and I think that you can take this deteriorated corn and Mr. POAGE. What agency?

Mr. WELSH. The Defense Department.

Mr. WATTS. In other words, the bill, as I read it, does confine it to industrial alcohol?

Mr. WELSH. Well, I did not read the bill, I never saw it until this morning but it should, of course, provide that it go into industrial uses and that is what the whole program is for, to use the starches and the grains so as to make the industrial alcohol and you can make synthetic rubber out of it and you can make practically all of the plastics, the same as you can make them out of petroleum.

Mr. WATTS. Do you have to do anything to it before you grind it? Mr. WELSH. Well, the first thing, when you grind the grain to make alcohol, you mix it with water and then you grind it.

Mr. HAGEN. Let me ask you this question. Why did you lose that battle to the oil industry during World War II?

Mr. WELSH. Why did we lose it?

Mr. HAGEN. Yes.

Mr. WELSH. We did not have the subsidy that the oil people did and do have.

Hr. HAGEN. And can you produce alcohol as cheaply as the oil people can?

Mr. WELSH. No, we cannot. However, I think that if we had proper research-could I go on, Mr. Chairman?

Mr. POAGE. Just a minute, Mr. Simpson has a question, let Mr. Simpson ask his questions first.

Mr. WELSH. All right.

Mr. SIMPSON. Thank you, Mr. Chairman. Now, we had a bill several years ago before the Congress to dispose of these Governmentowned alcohol plants and the committee studied those bills and the question of those Government-owned plants. Now, what has happened to that and why was not this plant disposed of according to that legislation? Let me ask you, is this the only one that has not been disposed of?

Mr. WELSH. There are two plants still owned by the Government, the alcohol plant at Omaha, Nebr., and the butadiene plant at Louisville, Ky.

Mr. SIMPSON. They were all sold but those two?

Mr. WELSH. They were all sold but those two and it was attempted to sell all of them.

Mr. SIMPSON. Another question. In my area we have a heavymoisture content corn, about 20 percent moisture content and this wet corn is not eligible for Commodity Credit loans. Are you talking about corn that is not in the Commodity Credit Corporation or in it or spoiled corn in storage?

Mr. WELSH. I think we are talking about both corn owned by the farmer not in the program and the corn that was not eligible.

Mr. SIMPSON. Well, if it is owned by a farmer who is not in the program and who could not get a loan on this heavy-moisture corn, why has it not been fed to high-priced hogs?

Mr. WELSH. Ask the farmer.

Mr. JOHNSON. There is so much more corn available than stock to be fed that we could not think of feeding all of the corn that we have in the crop in Nebraska at this time.

Mr. SIMPSON. Could you afford to deliver, ship, and deliver this corn from Illinois to these two plants?

Mr. WELSH. I think we could but I don't think it will be necessary. I think we can get it nearer.

Mr. SIMPSON. Well, then it will not take care of the Illinois corn; is that right?

Mr. WELSH. Let me answer this way. During World War II the Government shipped potatoes from Maine to us, but that was during the war, and I cannot answer your questions on transportation problems.

Mr. SIMPSON. I do not understand how this corn with the heavymoisture content can still be available the year around to your plant. In my area, my farmers are going to feed that corn to hogs or cattle.

Mr. WELSH. Well, that is a fine thing if they can do it. We cannot do it in Nebraska or Iowa. I am not an expert on that, but I think that that would be true.

Mr. SIMPSON. And you gentlemen say that you will have this heavymoisture corn available for your plant the year around from the

farmer?

Mr. WELSH. As the heavy-moisture-content corn gets out of condition it can still be used for the making of industrial alcohol.

Mr. SIMPSON. Do you mean to tell me that the farmer is going to keep that corn until September, that old wet corn?