I would like to read to you a cable we received from our manager in Paris, Mr. Gerard Emler, who went to Warsaw recently, last week I believe.

Mr. Geidwitdz had to stress the point that it would be difficult in the present circumstances and in view of the big publicity made against Cook to explain to his own authority the conclusion with Cook of big contracts like we have had in the past. Nevertheless, he hopes since the cargo seems to be of average quality that once completed the discharge situation should go back to normal. I believe personally that whatever happens there will still be in his mind a bitter feeling because of all the trouble he had to go through due to the Rysy II.

Mr. Cook. In addition, we have been damaged by allegations which are, if not criminal charges, at least charges of negligence. I think this committee is rightfully concerned about this because you have legislation before you to turn all grading over to the people who made these charges or on whose work these charges were based.

We at Cook Industries are seriously concerned about these charges because the company's reputation has been severely damaged, and even more concerned of course about these charges, are the buyer, the Polish Government, who paid for the largest single cargo of No. 3 Yellow corn ever shipped from New Orleans.

In summary, let me say that upon arrival in Poland, the Rysy II cargo 2, was sampled and graded jointly by the Polish Government Agency Polcargo and the Superintendence Company. Let me note in passing that U.S. Government employees had agreed to examine the Rysy II on its arrival in Poland. Let me make a charge at this time. They set about their examination in a biased way and eventually abandoned efforts to obtain samples which were representative of the cargo as a whole. I think I know why they abandoned their efforts.

The fact of the matter is that the Rysy II unloaded at 5.1 percent BCFM, which statistically means that when loaded, the BCFM content was lower than the 4 percent required to obtain a grading of No. 3 Yellow corn.

The fact of the matter is that the corn loaded on the Rysy II was No. 3 Yellow corn and not a 25-foot pile of garbage; and the corn loaded on the Rysy II was Grade No. 3 Yellow corn. We are satisfied as to the results and I anticipate that the Polish Government will be satisfied as to the results.

The only ones who, I suspect, remain dissatisfied are those who brought about this unfortunate situation.

I believe that the people of this country expect Government officials to speak the truth and to act in a fair and equitable way. I am confident that this committee, when it reviews all the facts, deserves and should even demand an explanation from the officials involved. The facts speak for themselves.

At this time, I would like to go just a bit beyond the Rysy II—I will not go beyond the Rysy II; I would just put it in my statement in the record at this time, as time is running short. That basically concludes my prepared statement, sir.

Senator HUDDLESTON. Mr. Cook, I am not clear as to what the explanation is, despite the charts and information you have given us, why there would be such a variation in the tanks of this ship as compared to other tanks.

Mr. Cook. Well, I think I can explain that to you.
This is a rough drawing of the ship.

If I can show you, using the drawing, what this corn went through when it was loaded, when this ship was loaded, you have something on this order.

At the elevator; the boom is 33 feet above the deck of the ship. The Knebel letter calls it a "dead box"; it is more appropriately known as a tanker box, in which grain falls on grain. That is the cushion. Then it fell on the bottom of the hold, another 67 feet at the beginning. So you have a total maximum falling of something on the order of 100 feet.

You have an 8 millimeter projector?

It does not work?

Well, I wanted to show you a picture of the inside of the ship. It is full of ladders and baffles and catwalks; there are decks down there which are horizontal baffles, holes in them through which the corn falls and strikes steel all the way down.

It is our opinion that this is the basic reason for the high FM content in some of the tanks.

Senator HUDDLESTON. The difference in the distance that it is falling.

Mr. Cook. Yes, sir; because this formula, the

Senator HUDDLESTON. How much difference is there in the portside and the center tanks, for instance?

Mr. Cook. The wing tanks I think they said were in pretty good shape. I think even the USDA said it was good corn.

I think if you look at the ship and the construction of the ship, it appears to us that the breakage seems logical.

Senator HUDDLESTON. But the samples were not taken all the way to the bottom of the ship where the greatest fall would be?

Mr. Cook. Well, you had 33 and 67 feet; you have the coning effect, too. You see, this ship is not open at the top. There is only one place where most of the corn is loaded and that is through the big boy which is 4 feet wide.

When you move over to the butterworths, they are only 18-22 inches wide which is why they put a plate of metal around it, because the hole is too small for the end of the spout to get in as I understand it. Senator HUDDLESTON. How much difference is there, say procedure. from various tanks

Mr. Cook. Well, I have a chart here somewhere which gives you the range.

Senator HUDDLESTON. Some tanks checked out very well?

Mr. Cook. I have a chart here somewhere where we broke down the sample by sample. It did not look too bad to us.

RYSY II: A COMPARISON OF FMBC VARIABILITY AT LOADING AND DISCHARGE, PERCENTAGES

Mr. Cook. Here is the cable on which the 5.1 percent BCFM is based.

MARCH 9, 1976.

New averages CK/FM: 1 center 51 samples av. 4.69; 2 center 51 samples av. 6.74; 3 center 51 samples av. 7.47; 4 center 36 samples av. 4.31; 1 port 32 samples av. 4.01; 1 starboard 32 samples av. 4.64; 5 port 35 samples av. 4.01; and 5 starboard 36 samples av. 3.50.

No. 2 wing tank coming out TMW. Still No. 4 center TK. Others complete. Talbot/Lyster/Bozley Wednesday p.m. Warsaw. Thursday PRS. Saturday Flight U.S.A. Cartmill/Wood remain here final work. Collect DOCS and thank friends.

Should arrive Warsaw Friday p.m. but will advise any changes. Understand Jacky not coming.

CARTMILL.

I talked to Bob and told him why we decided not stir. One more reason is today's averages of 2/3 centers, 51 samples 6.74/7.47 JB. Average percentage B.C.F.M. at unload 5.1.1

Mr. Cook. Another thing you asked about early in the testimony is how long grain would keep.

Here is a little chart if you would like to have it which shows at certain moisture and temperature levels how long corn will keep. If it is 30-percent moisture, it will only keep about 2 or 3 days at 70 degrees Fahrenheit.

Senator HUDDLESTON. Are there any temperature controls in these tanks?

Mr. Cook. No, sir; not to my knowledge there are none.

[Short pause.]

Mr. Cook. I am sorry I am taking so long; but I have a recapitulation of the different tanks.

Senator HUDDLESTON. Well, I think as far as the

Mr. Cook. Let me supply that later if you do not mind.

Senator HUDDLESTON. As far as the length of fall by the grain, the sampling would come from exactly the same, I think? Mr. Cook. I do not follow that.

Senator HUDDLESTON. The sample, you can lay it down 12 feet from the top?

1 Weighted average of 324 samples each representing 250 tons.

Mr. Cook. That is correct.

Senator HUDDLESTON. Assuming that you could fill at the top level that portion of the grain being sampled fell exactly the same distance?

Mr. Cook. Well, I do not follow it. I am sorry. I am not getting it. Senator HUDDLESTON. The coning effect plus the breakage is the argument you are making, based upon the studies which I read from-but breakage, as far as the falling, if all the tanks were filled to this level and you can only sample 12 feet under that, they have all fallen the same distance from the top.

Mr. Cook. That is correct.

Senator HUDDLESTON. That is correct.

Mr. Cook. And that shows, in the Agricultural Research Service formula, that shows that it should pick up 2.5 percentage points. Then you have the coning effect where all of the fines tend to concentrate in the center with the 1.7 percent on the outside near the walls, here and up to 24-plus, would be about 26, 27 percent in the center of the cone is what you would statistically expect to find.

Senator HUDDLESTON. Based on the testimony we heard yesterday, does your company have a policy, has it ever issued a directive or any indication to your employees that you move the grain at any cost, not to be deterred by environment and procedures?

Mr. Cook. Mr. Chairman, our instruction to our companies are that they should do nothing illegal, immoral, or unethical. Every time I have caught anybody in 25 or 26 years that I have had the authority to do it, found somebody doing that and it has been established to my satisfaction that it is true, I have fired them.

Senator HUDDLESTON. You have set procedures to check on the operation?

Mr. Cook. Yes.

Mr. Cook. You mean internal audit?

Senator HUDDLESTON. Yes.

Senator HUDDLESTON. Internal supervision?

Mr. Cook. Yes, sir.

Senator HUDDLESTON. To have an actual process of work?
Mr. Cook. Yes.

Senator HUDDLESTON. Do you have any knowledge or have you ever found a case where instruments have been rigged to feed the grain around the sampling point?

Mr. Cook. No, sir. When I heard about that—well, sir, when I heard about that in connection with the indictment of the St. Charles elevator-for example, I immediately called my engineer, the people in New Orleans, to see if we had anything like that down there and they assured me we do not and to the best of my knowledge, we do not have any devices like that whatsoever.

Senator HUDDLESTON. Senator Dole, do you have any questions? Senator DOLE. First, I would like to have placed in the record, following the testimony of Mr. Rosen yesterday, based on a statement made on the first paragraph of page 5, an article which appeared in the Des Moines Register, July 6, 1975, entitled "Grain Deals and Politics," by James Risser.1

1 See Grain Inspection, part 6, p. 45, U.S. Senate Committee on Agriculture and Forestry, March 11, 1976.

Senator HUDDLESTON. If no objection, it will be made a part of the record.

Senator DOLE. Mr. Cook, has this been the first experience you have had of this kind with the USDA?

Mr. Cook. No, sir; we have had I believe a case on a vessel called the Struma, in which they made quite a fuss; and that ship sailed and I have a report, arrival report on that ship in my files. I will be glad to give it to you, but the ship arrived in good shape and, to the best of my knowledge, we have not heard any more about that ship since then.

Then we had one other ship

Senator DOLE. When was this Struma; what was the approximate date?

Mr. Cook. Let me get that and I can tell you. I put a copy of the outturn report in the exhibit-October 1975.

The ship arrived and-I believe it went to Germany-it was sampled on arrival-I think it was-here is the-by the way, the original document on grain breakage caused by commercial handling methods, published by the U.S. Department of Agriculture, that has all of those formulas.

Here is the Struma right here.

The vessel discharged in Hamburg, with an outturn weight gain of 216.5 long tons, or 0.0046 percent over loading weight.

The vessel grade at discharge was No. 4 yellow corn, as compared to No. 3 yellow corn at loading The grade difference was due to an increase in the foreign material from 3.3 percent at loading to 4.5 percent at discharge. This increase is due to the fact that the discharge sample is taken after the vacuvators have removed the corn from the holds.

Hold No. 2, which was in question, outturned No. 2 yellow corn, cool and sweet, with no detection of odor.

We have no feedback from the USDA personnel which attended the discharging. However, it would be interesting to get their report. There is the whole file on the Struma.

Senator HUDDLESTON. Do you want that part of the record?
Mr. Cook. Yes.

[The material referred to above follows:]

To: The file (Bayside).

From: W. R. S.

Date: October 15, 1975.

Yesterday we had a problem with USDA and the Destrehan Board of Trade regarding barges #UMC 1415 and #CI 506.

On October 3 the Destrehan Board of Trade sampled these two barges and one-half the sample was given to Cook. Our people looked at the sample and decided the grain was good enough quality to be loaded on the M/V Struma. At the time of loading, we had not received the Destrehan Board of Trade's report. However, the grain was loaded and a pelican sample was used to sample as the grain was being loaded on the vessel. The grades were #2 and #3 Yellow Corn, respectively.

About 4 to 5 days later, the condition report from the Destrehan Board of Trade of the sample made while the barges were in the river was available, and the fact that the Destrehan inspection showed the condition of the one barge of corn to be musty, and one barge musty and heating. As a result of this disparity, we are told that a clean certification for the grain loaded aboard the vessel could not be obtained.