called the unloading elevator and asked them to check it out, and they couldn't find anything. Then we called the railroad and they had a man close enough to the area that we had him go out and look in the car, and he went out and looked in the car and found the grain.

And so I thanked him for it and really complimented him for it. I said: "Just how much time did that take you to do all that?" He said: "Well, it took me 2 hours of phone calls to trace that thing down," so I told him that I really appreciated it.

Now, that very same company, I got five cars in a row back about 2 or 3 days after that, and the bookkeeping kind of broke down that time because I had two cars out of the shipment that were very close, and the third car was 59 bushels short, and the other one was 160, and the next one was 175.

Senator CLARK. Are they short more often than they are long? Mr. TOMLINSON. Yes. Now, on the first car, the one that had the 85 bushel in it-this gets back into the integrity and the workmanship-probably what happened-because that grain was still there intact. Nobody stole it. It probably got full where the unloader clevator was, and they couldn't get any more in it, so the employee shut the gate, and that was the end of it. It was just very coincidental that we happened to get it back.

By the way, we have gotten grain back in cars many times. This is not just a coincidental thing. Every one of these 11 elevators that we met with a couple of weeks ago received back cars that were supposed to be empty with intact grain in it, and sometimes it was a lot of grain. Now, somebody didn't get paid for that grain.

Senator CLARK. Well, I am sorry to have to say this, but I am going to have to shut you off, but I just looked and have seen that there are 10 more witnesses, and we have got exactly one hour, but I appreciate very much having your testimony, and I think it is valuable to the committee because you have got some specific examples.

Mr. TOMLINSON. Could I make just one last statement?
Senator CLARK. Absolutely.

Mr. TOMLINSON. I feel that when you design-if you work on the situation from a legislative standpoint, I too think that Federal regulations and employees should be kept to a minimum, but one system that I would recommend is what I call a one-on-one approach. If we just had rules and regulations set up and then somebody to administer the rules and regulations, I think we would solve a lot of our problems. For example, when I ship a car, if a guy on the other end was unloading it, if there was a problem, he could just get me on the telephone and talk about the problem. We could eliminate a lot of it. If we couldn't eliminate it, this is when the Federal people should come in and solve the problem. Thank you.

Senator CLARK. Thank you very much. We are going to hear next from Bob Deppe, elevator operator in Ames, and incidentally, since we must end this hearing at 3:30 and we have 10 witnesses, I am going to ask the remaining people to try to limit their testimony to about six minutes so that we don't cut anybody off.

STATEMENT OF BOB DEPPE, AMES, IOWA

Mr. DEPPE. That will be easy for me because Mr. Hall and Mr. Tomlinson said the words almost verbatim that I want to speak..

I don't want to see the inspection services stopped in the State of Iowa.

Senator CLARK. The private inspection agencies?

Mr. DEPPE. Yes. They work so well for us. They are very, very efficient, and I think the strong point of this inspection service is the right of appeal. If we don't like the grade that we have at the private inspection services, we can get a Federal grade and inspection, a reprobe or a reinspection of the sample.

I am not only in the elevator business. I also manage farms, and I own farms in Polk and Story Counties, so I also sell to elevators in Polk County, Story County, Black Hawk County, and Tama County, and Benton County, and I have a lot at stake in this for more than just the grain elevator business in my three small elevators.

The inspection services, as they have been performed in the past, I am not at all dissatisfied with, such as the Cedar Rapids Chamber of Commerce, the Belmond Inspection Services, or the Des Moines Inspection Services. Our problems multiplied when we went direct to the gulf shipments, with no rights of in-line inspection. This I feel hurt us more than anything else, because when it gets down to the gulf, particularly on a rush shipment, the type of thing we went through with the great boxcar shortage of 1972, 1973, 1974, the car got there and you had a club over your head, and they said, "It is such and such." What are you going to do about it? In 1973, with the embargo over our head with the Rock Island Railroad, we had no right at all, or no time to even think about it, because they said, "The grain is spoiling. It is raining on it," and you took 60 cents a bushel for corn that you sold for $1.64, and I have some documentation I will give to you later on that particular item.

Senator CLARK. I wish you would.

Mr. DEPPE. When the local elevator loses the right of appeal, the farmer loses the right of appeal, and if the elevator is going to take less, whether it is a co-op like Mr. Tomlinson runs, an area co-op like Mr. Hall runs, or a little local independent elevator like myself, you are going to pass that loss on one way or another to the farmer. He is going to have to pay for it in more margins.

As I said, the specific instance of the grain company which I am part owner of, northeast of Nevada on the Rock Island, in 1973 we shipped 11 cars as part of the unit train to Pike Grain Co. in New Orleans through a merchandiser here in Des Moines. They were supposed to be shipped on a rush unit train, and unloaded within some 11 or 12 days.

They got down there. The first thing they did was shut the whole town down for the Mardi Gras, and these cars got shoved back and other cars got unloaded in front of them. They claimed that the damage just couldn't have been that bad, like I say, if you don't have the dollar value established in Iowa in in-line inspection, once it gets in the port you are really at the mercy of the people down there.

One other thing. I will leave most of this out. One thing that I would like to hit on-I haven't heard it yet today in this thing-is the lack of competition within the grain companies themselves, and if I were to make one appeal today, I would make an appeal for antitrust action to be implemented in the grain industry.

Senator CLARK. I am glad you brought it up, because I think it is a good point. I made brief reference to it in saying that the Foreign

Relations Committee was looking into that aspect of it, but not really antitrust questions, only the foreign affairs aspect. I think antitrust is an appropriate subject to consider.

You want to keep the system as it is in Iowa but, as I understand it, you would have some questions about continuing the system as it exists at the ports, or would you keep those as they are?

Mr. DEPPE. I am not sure if you could clean the system up in the ports with a double inspection system, where one can step in on the other one and one cross-checks with the other one.

Senator CLARK. That is what we have now.

Mr. DEPPE. Well, there has been no attempt to clean it up, though. All we have had is an investigation and publicity regarding it.

Senator CLARK. If you had one person watching every person, if you have so much duplication there, why not just have a Federal system, rather than a private-Federal in which you have got one Federal watching every private?

Mr. DEPPE. I guess I feel that without one working in a counterbalance system, that you could buy off a Federal employee just as you could a private.

Senator CLARK. You want to have two systems?

Mr. DEPPE. Yes.

Senator CLARK. Thank you very much. We appreciate it.

Ray Turner, Rockwell City, then Donald Newby and William Schermer and A. F. Wallstein, then Thatcher Johnson, Delwin Cross and Glenn Clark.

Mr. Turner, please proceed.

STATEMENT OF RAY TURNER, ROCKWELL CITY, IOWA

Mr. TURNER. I can make mine quite brief, Senator. The first point I would like to state is that my position here is of an individual farmer. I haven't heard one today. I represent nobody specifically for this but myself, and what I am trying to describe is the position of the individual farmer.

The whole series starts with the first transaction; namely, when the producer takes his grain to the local elevator. When he does that now, as an example corn, the approximate price today is $3 cash for 152 percent moisture and within the maximum foreign matter. With that $3 price on that, if his corn has 1712 percent moisture, he is deducted approximately 18 cents, 3 cents for each percent times the dollar value.

However, in this time of year, in many years or almost average years, corn will run down-if it was held properly, the moisture would run down to around 13 percent, 132. If he delivers 1312 on this $3 basis, with a penalty of 18 cents if it runs 17, he should have a bonus for this additional 18 cents because he is under the base of 15%.

Practically all farmers are familiar with that. They complain about it, so I am bringing this message to you today.

Senator CLARK. I think it is an excellent point, but let me just carry that a little further. If one farmer brings in grain with moisture at 1312 percent and another farmer brings it in at 1712 percent, one is docked for it, but can't the elevator operators just blend those together and get 15%?

Mr. TURNER. He does that, and my complaint is that he is taking money, 18 cents from the man who delivered 13, and he awarded it to the man who delivered 172, and I understand and agree that that would make additional work on him, but at the same time that is the place to start this, so that each man will have his award if he deserves it, and he will be deducted for his penalties.

That makes a difference, see, of 36 cents a bushel between the good, or well held, and the other, and in addition to that, he is gaining other bushels.

Senator CLARK. Certainly that elevator operator, if he sells it down. the line, is going to be docked if it is high on moisture.

Mr. TURNER. Yes, sir. If he sells it on down the line and he is 152, he is even.

Senator CLARK. What I am saying is that it is only the farmer that is in effect not rewarded for delivering the low moisture corn, because the moisture content is going to be checked at every point after that, und the payment is going to be made in part on the basis of that.

Mr. TURNER. But my point refers to the farmer himself. Those others do him no good. He does not get that.

Senator CLARK. Yes.

Mr. TURNER. The other point that I would like to make is to supplement Mr. Goeppinger's point about the Government inspection. Now, as far as handling it. it is entirely possible-and what I am doing, what I wish to do, is to offer proof that it can be done, and that proof is the experience that we had when we used to deliver grain. In those cases the grades were determined by the personnel for the CCC, and it practically always ran above the local elevator grades, and there was a bonus for this dryer corn, as I illustrated.

Senator CLARK. I see.

Mr. TURNER. It wouldn't hurt the elevator men, and I am not reflecting upon the good elevator men. We have a lot of them, individuals. As a matter of fact, in our area we have some dandies. individuals.

Senator CLARK. But you say that if you produced a higher qualityin other words, a low moisture corn at 12 or 13 percent-that you ought to be rewarded for that.

Mr. TURNER. That is right.

Senator CLARK. Very good. We appreciate very much hearing from you.

[The following statement was subsequently received for the record:]

Chairman DICK CLARK,

ROCKWELL CITY, IOWA, August 15, 1975.

Senate Grain Marketing Committee, U.S. Senate

DEAR SENATOR: Submitted herewith is representative cash grain (corn-soy beans) producers version of this matter.

The scandalous practices thru which our grain is marketed that has recently come to light is an activity in need of overhaul--more accurately replacement. It is of utmost importance to Iowa because it involves our very economic life. There is nothing that will contribute to "Iowa Development" like the replacing this system with a fair one.

The replacement should start with the very first transaction---the sale/delivery by the producer to the local elevator. The "Rip-Off" begins here-The weight; The price; The grade are the buyers-the seller has little choice he is at the buyers mercy. A point of illustration-the general practice of deducting for

moisture over say 15% percent on corn, 13 percent on beans, but not crediting for dryness. An example in the cash grain area is $3.00 corn 171⁄2 percent (2 percent over 151⁄2 percent deduct 2 cents each 1 percent times price makes 12 cents discount per bu or $2.88. On same basis 132 percent moisture total price not $3.12 as would be with same bonus rate as discount. Before Mr. Butz "took the government out of the grain business" and we had price supports the dryness was awarded upon delivery on loans. This unjust practice is right out where it is visable and done thus hence it is easy to understand how bad things are that are out of sight thru out the system.

It was a basic intent in the establishment of our government "-to establish justice". The present system of grading grain is and has been found grossly dishonest-saturated with conflict of interest. In our national game of baseball from the cow pastures and sandlots of the little leagues thru the world series. Not the pitcher-Not the batter but THE UMPIRE calls throws to the batter. The same human traits prevail in grain inspection/grading. This is why we urge the Congress to "establish justice" by providing fair grading and weighing in the grain marketing system. We urge the Congress to identify who is against "Umpire" grading. If they are now grading fair why object to review? Respectfully submitted.

RAY TURNER.

Senator CLARK. Donald Newby, who is from Bondurant.

STATEMENT OF DONALD NEWBY, BONDURANT, IOWA

Mr. NEWBY. Thank you, Senator. I am a local farmer just up north of here, and I am one of the guilty individuals, I guess, that farm between the rock and the hard spots and gather some of each to put in the grain we are complaining about.

I am wondering in my own mind if the value of these rocks and hard spots that we get in the grain, which has little or no value except as Mr. Hall stated, the screenings, and I am wondering if we shouldn't have zero tolerance on it, and that way there would be no effort on anybody's part to reach the minimum grade standards. I can't see how you can keep blending down hill all the way from the time it leaves the farm. When I combine, I go through the potholes, weed patches. It is all blended in one wagon load.

At the elevator it is blended into one pit, and then one large grain bin. Then it is reblended and reblended, and it loses its identity, and as a fellow from New Orleans stated this morning, they unload what is in the elevator on the ship. Naturally, they have to. That is all that is there, and they stamp some sort of a grade on it.

If we could establish a grade standard and give no value whatever, perhaps screen it out, make it mandatory to screen out the stuff of no value, you will just simplify the grading standard.

Senator CLARK. You would suggest that we look at the possibility of changing the grain standards themselves?

Mr. NEWBY. That is right.

Senator CLARK. So you reward from the very highest to the lowest and have stricter or less tolerance so that you discourage blending in of the lower quality to meet the minimum standards within any one grade?

Mr. NEWBY. That is right, yes; because I think it is foolish to ship over 10 percent foreign material. That will just be thrown to the dump when it gets over there, because it would have no value.

Senator CLARK. I really see this whole problem in three lights, and I am not at all sure that I am right, but I think on the one hand we have got to look at the grading standards themselves. In other words,