In addition to the data obtained at the hearing, the Commission in this investigation utilized information obtained from its official files, through independent research and inquiry, from other United States Government departments, including the Departments of Agriculture, Commerce, and State, and from briefs of interested parties.

This is the Commission's second investigation with respect to dates under section 22 of the Agricultural Adjustment Act, as amended, and Executive Order 7233. The first such investigation was instituted on October 2, 1956, at the direction of the President. On February 5, 1957, the Commission reported to the President that on the basis of its investigation dates were not practically certain to be imported during the 1956-57 crop year under such conditions and in such quantities as to render or tend to render ineffective, or materially interfere with, the Federal date marketing-order program and the Department of Agriculture program for the diversion of dates to new uses, or to reduce substantially the amount of products processed in the United States from domestic dates with respect to which those programs are undertaken.

FINDING OF THE COMMISSION

On the basis of this second investigation, including the hearing, the Commission (Commissioner Brossard dissenting)' finds that dates are not being and are not practically certain to be imported during the 1957-58 crop year under such conditions and in such quantities as to render or tend to render ineffective, or materially interfere with, the Federal date marketing-order program and the Department of Agriculture's program for the diversion of dates to new uses, or to reduce substantially the amount of products processed in the United States from domestic dates for which those programs are being undertaken. The four Commissioners who make this finding submit below their separate views in support of the common finding.5

VIEWS OF COMMISSIONERS SCHREIBER AND SUTTON

We are of the opinion that imports of dates are not tending either to materially interfere with the Department of Agriculture's marketing-order and section 32 diversion programs for dates, or to reduce substantially the amount of products processed in the United States from domestic dates. In the circumstances, we feel that there is no occasion for the Commission to consider whether section 22 of the Agricultural Adjustment Act, as amended can be utilized to protect the Department of Agriculture's programs for dates during the 1957-58 crop year. Accordingly, we disassociate ourselves from any arguments advanced in support of the contrary view.

We arrived at our conclusion in this case principally upon the considerations set forth below.

Area of competition between imported and domestic dates

Imported and domestic dates differ in so many important respects-appearance, physical properties, sugar composition, moisture content, keeping qualities, etc.-that they are technically interchangeable only to a limited degree.

In the United States, dates have two distinct markets in which both domestic and imported dates are sold-the retail trade and the confectionery and baking trade. In recent years, about two-thirds to three-fourths of the imported dates have been distributed through retail outlets as dried fruit in the form of whole dates with pits removed; the balance have gone to industrial users, principally in the form of whole dates with pits removed. Until recently, imports supplied almost the entire industrial market for dates.

Mr. ANFUSO. One last question.

You feel that any interference on our part here would affect this Baghdad Pact in which we are vitally concerned?

U. S. Tariff Commission, Dates: Report to the President on Investigation No. 13 under sec. 22 of the Agricultural Adjustment Act, as amended, 1957 [processed]. In the present report the term "crop year" refers to the 12-month period beginning August 1. The views of Commissioner Brossard are set forth in the section of this report commencing on p. 18. Commissioner Talbot was absent on leave during the hearings in this investigation and did not participate in the Commission's decision or in the preparation of this report.

All five Commissioners who participated in the preparation of this report subscribe to to contents of appendix A and appendix B.

Mr. BROWN. I was informed by an official of the Iraq Government while the 1956 hearings were in progress before the Tariff Commission that the situation was viewed so seriously that the Prime Minister of Iraq had written and was ready to promulgate within 48 hours of adverse Tariff Commission action, a restriction putting all exports from the United States under license and the first thing that would require licenses would be automobiles; and that the news that the United States was interfering with Iraq and Iran with regard to the habitual date imports would spread throughout the entire Arab world and would be used by Russia as the best propaganda that they could get to swing those vital nations into the Russian orbit. It would be a catastrophe.

Mr. ANFUSO. Thank you, that is all.

Mr. HAGEN. Let me ask you this question, Mr. Brown. Is there any differential in the price the consumer pays for imported dates and the price for domestic?

Mr. BROWN. On the average the consumer pays a higher price for imported than domestic. That is true in the package form because of the better keeping qualities.

It is true in the industrial trade because of the difference in variety. The California date is the so-called sucrose variety, the cane sugar variety, and we have never considered California dates sold to industrial purchasers as competition and it goes on year after year and we don't even worry about the price of California dates.

The imported dates are of the Hallawi or Sayer varieties, the invert sugar varieties and they do not break down and the price is about the same as the California date.

Mr. HAGEN. You made a reference to a foreign stabilization program. Could you describe the nature of that?

Mr. BROWN. Yes. The Iraq Government started it in 1937 and gave the worldwide export market of the Basrah area dates to a London firm called Andrew Weir & Co. in return for their agreement to pay a minimum price for the entire edible Basrah area crop.

Five years ago they organized the growers and packers of Iraq, they organized The Iraq Date Trading Co., and the Government became stockholders through the date association and the monopoly was changed to their own native control.

The Iraq Date Trading Co. controls the entire crop of the Basrah area and buys that crop and a minimum price is paid to growers and it controls the export. The Iraq Date Trading Co. today-45 percent of the stock is owned by the Iraq Government and 4 of the 7 members of the board of directors are Government officials.

Mr. HAGEN. Now, in effect they have got a scheme over there to charge the American consumer more for those dates?

Mr. BROWN. Definitely so, and it has been very benefical, in that it has given the Iraq Date Trading Co. and the packers a sufficient margin of profit where they could grade and pack under the standards of quality which are far higher than they were when the monopoly was started in 1937.

Mr. HAGEN. It is very similar in some aspects to the marketing orders we have in this country?

Mr. BROWN. Yes; but the export is being controlled by the one body. It has been a very simple matter to induce them to employ the

necessary techniques to fumigate and inspect every case that comes to the United States and Canada and it has been effective.

Mr. HAGEN. As an importer, you would be in a rather different position if there were no Iraqi monopoly; would you not?

Mr. BROWN. I would say it would have no effect.

Mr. HAGEN. Pardon me?

Mr. BROWN. I would say it would have no effect

Mr. HAGEN. You would have higher prices if there was no American competition.

Mr. BROWN. From California, you mean?

Mr. HAGEN. Yes.

Mr. BROWN. No; I do not think that any of us who have spent our lifetimes in the date business consider that the California industry is in competition at any level.

I was formerly with the Dromedary Co. and we were without dates for years during World War II and we would not buy a single box of California dates for our Dromedary package-it just will not hold up on the shelf.

I would say it would have no effect and I would say it would have very little effect on the consumption of California dates if Russia took over the Middle East and we could not get the dates from that area.

During war years the California industry had a wide-open market for the reason that the British Government bought dates from Iraq because sugar was under rationing and anything which could be used for making puddings and desserts and anything else that did not require sugar was worth its weight in gold.

The California industry today mistakenly believes that if they curtail imports they could get up to $1 a pound like during the war, but they will never get it unless there is another war and sugar is short.

Mr. HAGEN. In what areas are dates produced?

Mr. BROWN. The only large areas of the world where dates are produced are North Africa, Algiers, and Tunisia, they produce the DegletNoor variety and export them to Europe and the Deglet-Noor variety of dates which we have tried to make the California people realize, the Deglet-Noor variety of dates on the European market commands a premium, practically double the price of the Iraq and Iran, it is better eating, it is a bigger, nicer-looking date and it is used for the fancy holiday trade.

There is a very small production of dates in Egypt and the Sudan, used for local consumption.

Mr. HAGEN. How about Israel?

Mr. BROWN. I have never heard-there may be some, the date palm grows in that area, but the only export countries have been the two north African provinces and Iraq and Iran.

Mr. HAGEN. Do you have any problems with insecticides or pesticides?

Br. BROWN. They fumigate it.

Mr. HAGEN. Fumigate?

Mr. BROWN. The danger of infestation of dates from the Basrah area takes place not on the trees but after harvesting, after the dates were allowed to fall on the ground, if that happened, and they fell on the ground they could become infested with the egg of a moth that flies over them.

Therefore the first step taken to control the infestation is to supply the dategrowers with wooden boxes in which the dates can be placed as they are picked. They are then transported to the packing stations where they are fumigated. They are selected and graded and then they are fumigated again after packing in the final cases.

Mr. HAGEN. Is this fumigant dangerous to human beings?

Mr. BROWN. No, not at all. They use ethyl formate or they use chlorosol or they use a vacuum process passed by the Food and Drug Administration and absolutely harmless.

Mr. HAGEN. All right, I thank you very much.

Mr. SISK. Mr. Chairman, I would like to ask Mr. Brown:

I find myself in almost complete disagreement with so much that you have said, and I do not want to take the time of the subcommittee to explore it all, but actually in this legislation we have before us now, it has nothing to do with limitation or imports, it has nothing to do with the Tariff Commission or import duties, but simply requires the standards of quality, of cleanliness and purity on imported products as required on domestic products. Is that not right?

Mr. BROWN. I have no doubt of the honesty of your belief, Honorable Representative, but I suspect the motives of those who induced the Department of Agriculture to introduce this legislation.

I have never before heard of the Food and Drug Administration charged with doing a lax job of inspection from the health standpoint.

Mr. ANFUSO. Will you yield?

Mr. SISK. Yes.

Mr. ANFUSO. Just to correct the statement, the Department of Agriculture has not requested this legislation.

Mr. BROWN. No, I say, but they were requested by the California industry.

Mr. ANFUSo. That is correct.

Mr. SISK. And if the quality of your imports is as good as you have testified, I cannot understand why you have such grave fears of being required to meet the same standards of quality.

Mr. BROWN. Well, I will give you an illustration, a concrete illus

tration.

The standards of quality and grade set up for the California industry go far beyond the question of infestation and impurities and otherwise go into size and color and texture.

It was a very simple matter, apparently, for the California date industry to induce the Federal Government that they should buy dates under the grading standards set up for the California industry. One of those standards which cannot be met by the Iraq or Iranian dates is that the date must be not over 55 to the pound. The Iraq dates will run 65 or more to the pound and we cannot and have not for years been able to sell any dates to the Federal Government because of that size restriction.

I submit that there is no health hazard involved in eating a date that runs 80 to the pound, but I also submit it would be a very simple thing and I fear it would happen to have standards of any kind set up in the disguise of quality control that have no relation to health. Mr. SISK. One comment. I will say, you mentioned the fact that this kind of thing would tend to hurt our reciprocal trade.

I would like to assure you, Mr. Brown, that the very conditions that exist in the imports of some of these products is going to hurt the possibility of our reciprocal trade a lot worse than if we could get some kind of escape clause, because a great many of us who have supported reciprocal trade down through the years are very seriously reconsidering our position in view of the fact that we can get no consideration apparently of the complete destruction of some of our local areas of agriculture.

Mr. BROWN. Mr. Sisk, could I comment? While I should say there are many areas in which that is true, the Tariff Commission after a full investigation reported to the President that the date imports have not increased and they reported also in their conclusions that the Department of Agriculture was using section 22 as a means of curtailing the normal, historical imports and was departing from the intent and purpose of the Congress in doing so and I am fearful that they would do the same thing if they were given a foothold in quality control.

Mr. HAGEN. Thank you. We certainly appreciate your very informative statement.

Our next witness is Mr. Walter S. Halliday, of the National Biscuit Co.

STATEMENT OF WALTER S. HALLIDAY, JR., ASSISTANT GENERAL
COUNSEL, NATIONAL BISCUIT CO., NEW YORK CITY

Mr. HALLIDAY. Mr. Chairman, I have a prepared statement.
Mr. HAGEN. Would you identify yourself for the record?

Mr. HALLIDAY. Yes, sir. My name is Walter S. Halliday, Jr. I am assistant general counsel of the National Biscuit Co. with general offices in New York City. I appear on behalf of that company.

Mr. HAGEN. Would you care to submit your statement and then comment on it informally?

Mr. HALLIDAY. I would prefer to read it if I may do so because I think it might cover some ground that was not covered, I believe there were some gaps left.

Mr. HAGEN. Very well, proceed as you wish, Mr. Halliday.

Mr. HALLIDAY. The Dromedary Co., division of National Biscuit Co., and its predecessor, the Hills Bros. Co., began importing dates from Iraq in the 1890's, 30 years or more before commercial production of dates began in California. The oldest and largest importer of dates in the United States, it has been selling packaged imported dates under its famous Dromedary Brand since 1906 and has spent over $10 million in advertising and promoting the sale of that fine product. There are hundreds of varieties of dates, and most of them differ widely in quality, flavor, and consistency, ranging from those that are too soft and moist for wholesale distribution to those that are dry enough to grind into date flour. In commercial practice, dates are classified into "soft" and "dry" varieties, with some dates falling into an intermediate or "semidry" class. The dry varieties, which usually contain only a little moisture when ripe, can be stored almost indefinitely, whereas the soft and semidry varieties, which contain a considerable amount of moisture, are usually highly perishable unless they are dried by either natural or artificial means.