between Japan and England in the cotton industry. Where do the Japanese buy the principal quantities of cotton?

Mr. OLSEN. The Japanese have been buying a great deal of their cotton more recently from us. In fact, they have become our biggest customer. They take now more than Great Britain does. There has been an astounding development in the Japanese textile industry. But under conditions of favorable price relationships, they take a lot of Indian cotton.

Mr. THURSTON. That situation has developed a political situation within the last year, has it?

Mr. OLSEN. Now, we have also made special studies in the Union of South Africa that are very significant. Take the citrus fruits: The exports of citrus fruits, like oranges, from the Union of South Africa will probably increase from 2,000,000 boxes in 1932 to 3,500,000 boxes by 1937. This means that there will be more competition for California summer orange exports. The increased competition we have found will come in the increase in yield per tree, rather than from the increase in number of acres. The producers in South Africa have developed improved production methods, as well as excellent marketing processes, so that we may expect active competition in citrus fruits.

In the field of fresh deciduous fruits, the exports of grapes, pears, and apricots have increased from 1,000 to 2,000 carloads, and probably will increase by 1937 to 3,000. And of course, these fruits compete with American pears and apples and storable grapes.

The competition in the field of dried fruits is also increasing from South Africa. The exports, chiefly of raisins, apricots, and sultanas reached 11,500 short tons in 1933. The Union of South Africa is the chief competitor with California in the exportation of dried apricots. And the future competition, as we see it there, will depend upon the relative profitableness of growing these fruits compared with other

crops.

We have made similar studies in Europe. The purpose of these studies is to try to determine-to project into the future-the probable competition we have ahead of us in order that we may get to our growers the need of adjusting their plans accordingly.

Now, I think I have taken enough time on this, and while we could discuss foreign services longer, I am willing to pass that subject. Mr. HART. If there is anything further that you would like to submit, you may insert in the record.

Mr. OLSEN. Very well.

Mr. HART. I wish you would insert in the record a statement showing, first, the total value of our imports which are classified as "agricultural" for the most recent year for which authoritative figures are available, and, second, the percentage of these imports that are not directly competitive with our domestically produced farm products, such as rubber, coffee, sisal, bananas, and so forth. A second percentage might be shown for such items as figs, dates, and so forth, that are competitive in a way but not substantially so because of comparatively limited production as yet in the United States. In supplying this information I wish you would elaborate enough so that we can get a rather clear picture as to just how much real competition to our own farm products there is in the total annual importation under this heading

Mr. OLSEN. A statement will be prepared for the record.

(The statement follows:)

IMPORTS OF AGRICULTURAL PRODUCTS IN 1932-33

The total imports of agricultural products, excluding forest products, into the United States in the fiscal year 1932-33 were valued at $611,688,000. Of this total value the commodities which are not directly competitive with are domestically produced farm products, such as rubber, coffee, tea, cocoa, bananas, and raw silk, represented 50.9 percent. Products which are not grown in the United States but which are indirectly competitive with products grown in this country, such as certain vegetable fibers and vegetable oils and oilseeds, represented 7.8 percent of the total imports of agricultural products. The remainder, or 41.3 percent, represents products which are produced in this country, although in a few cases the amount of domestic production is small compared with the amount of imports.

It should be borne in mind that a strict classification of agricultural imports into competitive and noncompetitive commodities is not feasible. While we have, for example, classified bananas as noncompetitive, it is probable that there is some competition between bananas and various classes of fruits grown in this country. For general purposes, however, the classification here given may be helpful.

United States imports of agricultural products, 1932–33

1 Foreign Agricultural Service. Compiled from official records of the Bureau of Foreign and Domestic Commerce]

TUESDAY, JANUARY 30, 1934.

MARKET INSPECTION OF FARM PRODUCTS

Mr. SANDLIN. The next item is:

Market inspection of farm products: For enabling the Secretary of Agriculture, independently and in cooperation with other branches of the Government, State agencies, purchasing and consuming organizations, boards of trade, chambers of commerce, or other associations of business men or trade organizations, and persons or corporations engaged in the production, transportation, marketing, and distribution of farm and food products, whether operating in one or more jurisdictions, to investigate and certify to shippers and other interested parties the class, quality, and/or condition of cotton, tobacco, fruits, and vegetables, whether raw,. dried, or canned, poultry, butter, hay, and other perishable farm products when offered for interstate shipment or when received at such important central markets as the Secretary of Agriculture may from time to time designate, or at points which may be conveniently reached therefrom, under such rules and regulations as he may prescribe, including payment of such fees as will be reasonable and as nearly as may be to cover the cost for the service rendered: Provided, That certificates issued by the authorized agents of the department shall be received in all courts of the United States as prima facie evidence of the truth of the statements therein contained, $389,805.

Your estimated obligations for 1934 are $371,340, and the estimate for 1935 is $389,805. That difference is due to the 5-percent increase, I suppose?

Mr. KITCHEN. Yes, sir; that is right.

Mr. OLSEN. The following statement is presented for inclusion in the hearings:

Increase, Budget 1935, compared with estimated obligations, 1934....

18, 465

Budget estimates, 1935...

The reduction of $110,481 in the 1935 estimate of $389,805 below the appropriation of $500,286 for 1934 consists of:

The reduction of $1,161 in working funds for 1935 under Inspection of Fruits and Vegetables will be effected in the item for rents by obtaining space in Federal buildings.

WORK DONE UNDER THIS APPROPRIATION

The inspection and grading services of the Bureau cover fruits and vegetables (including canned fruits and vegetables), dairy and poultry products, meats, hay, beans, seeds, rice, peanuts, tobacco, and other products. This service is permissive in character, the Federal inspector performing the service only at the request of a financially interested party. Certificates are issued which constitute prima facie evidence in the courts of the United States as to the quality and condition of the shipments inspected. These certificates serve as a basis for trading as well as for the settlement of disputes.

Shippers use the service extensively in making f.o.b. sales to distant buyers, who have shown a preference for standardized products which it would be difficult to obtain without official inspection. Since the passage of the Perishable Agricultural Commodities Act, the inspection certificates have increased in value

on account of being received as prima facie evidence in hearings resulting from complaints filed under the act.

The inspection service plays an important part in marketing American fruits in foreign markets. The British embargo of 1930 prohibiting the importation of low-grade American apples has been made permanent. The Export Apple and Pear Act, approved June 10, 1933, requires that, with certain minor exceptions all shipments of apples and pears in export must be accompanied by a certificate showing that the shipment meets the minimum quality requirements established by the Secretary of Agriculture for exportation of these commodities. The inspection service conducted under this item serves to enforce that act. The recent French quarantine, which prohibits the entry into France of apples grown in the United States which are infested with San Jose scale, makes it necessary for shipping-point inspectors to examine 2 percent of the fruit in each lot concerned before it can receive the French sanitary certificate issued by the Bureau of Plant Quarantine.

The grading of canned fruits and vegetables is of special value to canners who have need of an official determination of quality. It is also used largely by the purchasing agencies of the Government. This project grades samples from lots of canned fruits and vegetables stored by public warehousemen licensed under the United States Warehouse Act. The statement of grade on Federal warehouse receipts is particularly important, as the warehouse receipts are used extensively as collateral for loans by cooperative associations of canners and others.

The service includes the grading of dairy and poultry products in terminal markets and at shipping points for class, grade, quality and conditions; supervision of the inspection of dressed poultry for condition and wholesomeness at canning establishments; and the inspection of live poultry for crop and health condition (cooperative work in New York City). The grading service now rendered at a number of important markets is a very esssential part of the machinery of distribution as it is the accepted "official" grading service in these cities.

Hay inspection is being continued. Bean and soybean inspection work has grown rapidly in both producing and consuming districts. Special commendations have been received on the inspection of soybeans for export. The service includes the verification of dealers' records on seed in order that certificates may be issued showing the State of origin. This service makes it possible for farmers to obtain seed which is adapted to their section of the country.

The meat-grading service is made available to commercial interests and to purchasing officers for Federal, State, and city institutions. In addition, a specialized type of service is rendered at slaughtering and packing establishments by which beef and lamb carcasses are graded and stamped with a roller stamp in such a way that the grade appears on the retail cuts.

The grading service on tobacco is made available on auction markets, to cooperative tobacco growers' associations, and to tobacco dealers. On auction markets tobacco graders are authorized to inspect the tobacco on warehouse floors previous to sale, and to certify United States standard grades on the sales coupon. The grading service places the farmers on a more even basis with the buyers. The tobacco-grading service furnished to cooperative associations consists of inspecting and certifying grades on each farmer's tobacco as delivered to the association, which grade is made the basis for the advance to the growers. This is followed by a reinspection and certification of the tobacco as it goes into the hogshead, the certificates forming the basis of financial arrangements. The tobacco-grading service supplied to dealers consists of certifying grade on samples of hogsheads of tobacco intended for export.

The work under the rice-grading project consists of conducting rice grading for the benefit of the rice industry in connection with commercial transactions, in rough, brown, and milled rice. This work is being conducted under the provisions of joint agreements between this Bureau and State departments of agriculture in California, Texas, and Louisiana. Under these agreements the initial inspections are made by State officials under the supervision of the Bureau. Appeals from initial inspections are handled by the Bureau direct.

Cooperative agreements with State agencies in 46 States are now in effect and informal cooperation is maintained with a very large number of public and private agencies.

Branch offices are maintained at the following points: Albany, N.Y.; Atlanta, Ga.; Baltimore, Md.; Boston, Mass.; Buffalo, N.Y.; Chicago, Ill., Cincinnati, Ohio; Cleveland, Ohio; Columbus, Ohio; Denver, Colo.; Des Moines, Iowa; Detroit, Mich.; Duluth, Minn.; Fort Worth, Tex.; Harrisburg, Pa.; Hartford, Conn.; Houston, Tex.; Indianapolis, Ind.; Jacksonville, Fla.; Kansas City, Mo.;

Los Angeles, Calif.; Louisville, Ky.; Memphis, Tenn.; Milwaukee, Wis.; Minneapolis, Minn.; National Stock Yards, Ill.; Newark, N.J.; New Haven, Conn.; New Orleans, La.; New York, N.Y.; Norfolk, Va.; Omaha, Nebr.; Philadelphia, Pa.; Pittsburgh, Pa.; Portland, Oreg.; Providence, R.I.; Rochester, N.Y.; St. Louis, Mo.; Salt Lake City, Utah; San Francisco, Calif.; Seattle, Wash.; Sioux City, Iowa; Springfield, Mass.; Trenton, N.J.; Tulsa, Okla.; Washington, D.C.; Wichita, Kans.; and Wilkes-Barre, Pa. At a number of these points the inspectors spend only part time on inspection work, while at others a large staff is employed. Cooperative shipping point inspection work is carried on at many additional points as well as inspection and grading work for other branches of the Government.

INSPECTION OF FRUITS AND VEGETABLES

Mr. SANDLIN. We will take up the first project under this item, Inspection of Fruits and Vegetables. That is the largest amount in this project statement.

Mr. KITCHEN. This is the item under which we conduct what is known as the "farm products inspection service", and the service on fruits and vegetables is the oldest and largest of the services conducted under this item.

For the second time in 8 years we suffered a decline in the number of inspections made last year. The service, however, is still very substantial, as we inspected 260,777 cars as compared with 335,649 the previous year. This decline in the number of inspections was due to generally unsettled conditions, to increased consignments, and to greater movement of these commodities by motor truck.

Mr. SINCLAIR. Where do you have these inspections made, Mr. Kitchen; prior to shipment or in some concentrated market?

Mr. KITCHEN. The service is in two parts. Inspections are made at point of shipment under cooperative agreements with 44 States and Puerto Rico. Then we have inspectors, who in most cases are the exclusive employees of the Bureau of Agricultural Economics, stationed in about 44 of the principal receiving markets.

Mr. SINCLAIR. Who makes this inspection prior to shipment, thenlocal inspectors or State inspectors?

Mr. KITCHEN. It is done in this way, Mr. Sinclair: We enter into an agreement, usually with the State department of agriculture. The State department employs the inspectors, and they are issued a license by the Federal Department, so that the certificates issued are prima facie evidence in court, and the work of the licensed inspectors is supervised by an employee of the Federal Bureau.

Mr. SINCLAIR. That is somewhat similar, then, to the inspections of grain?

Mr. KITCHEN. Yes, sir.

Mr. CANNON. You say that one of the contributing causes of the decline in inspections is the use of the motor truck. That is for the reason that it is impossible for you to keep check on motor-truck shipments as accurately as you do on railroad shipments?

Mr. KITCHEN: Yes, sir; and in many cases motor-truck operators will go through the country and buy lots of fruits or vegetables and they do not ask for inspection. You see this service is rendered only upon application. There is nothing mandatory about it, except in a few States where the State has made it mandatory. But so far as our authority goes, we inspect only upon application of some interested party.