the operator of the farm promised to harvest an acreage of peanuts not in excess of the acreage allotment established for his farm.

Upon execution of the agreement, the farm operator was issued a within-quota marketing card which permitted him and other peanut producers on the farm to market peanuts produced on the farm without payment of a penalty and to receive price support on such peanuts.

The agreement provided that if peanuts were harvested from an acreage in excess of the allotment for the farm, the farm operator would pay marketing penalties due under the law and regulations and also pay liquidated damages to Commodity Credit Corporation for the prospective loss under the program suffered by reason of the selling, on a within-quota marketing card, of peanuts which were ineligible for price support. It was estimated that this loss would be not less than the difference between the market value of the peanuts and the value of such peanuts for crushing for oil, since each pound of peanuts marketed from the farm in breach of the agreement adds to the potential surplus of peanuts which Commodity Credit Corporation in all likelihood has to acquire. Peanuts acquired by the Commodity Credit Corporation that cannot be sold by it for edible purposes at the minimum price prescribed by law are sold for crushing for oil at the prevailing market price for such purpose..

There are legal and practical difficulties involved in enforcing the liquidated damages provision of the agreement. These difficulties would be largely avoided and administration of the price-support program would be simplified if sanctions for breach of such an undertaking by a farmer rested on a statutory basis.

There is attached a draft of an amendment to the Agricultural Adjustment Act of 1938, as amended, which we believe would give the Government ample protection in cases where a noncooperator received advantages of the price-support program and would eliminate the need for an agreement between the Commodity Credit Corporation and the peanut farmer. The proposed legislation provides that if the operator of a farm plants peanuts in excess of the farm acreage allotment but represents in writing that the acreage to be picked or threshed will not exceed the farm acreage allotment, the Secretary then may authorize the issuance of a marketing card to the farm operator permitting peanuts produced on the farm to be marketed free of penalty. It also classifies the farm operator as a cooperator for purposes of the price-support program. If, notwithstanding the prior representation, peanuts are picked and threshed from an acreage in excess of the farm allotment for the farm, the farm operator and other peanut producers on the farm would be liable for penalty at a rate equal to 75 percent of the basic rate of the loan rather than at the 50 percent rate provided under existing law. The increased penalty would be less than the total of liquidated damages and penalty at 50 percent which is due under present circumstances.

The Bureau of the Budget advises that it has no objection to the submission of the proposed legislation and explanatory letter to the Congress for its consideration.

Sincerely yours,

TRUE D. MORSE, Acting Secretary.

CHANGES IN EXISTING LAW

In compliance with subsection (4) of rule XXIX of the Standing Rules of the Senate, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, existing law in which no change is proposed is shown in roman):

SECTION 359 OF THE AGRICULTURAL ADJUSTMENT ACT OF 1938

MARKETING PENALTIES

SEC. 359. (a) The marketing of any peanuts in excess of the marketing quota for the farm on which such peanuts are produced, or the marketing of peanuts from any farm for which no acreage allotment was determined, shall be subject to a penalty at a rate equal to 50 per centum of the basic rate of the loan (calculated to the nearest tenth of a cent) for farm marketing quota peanuts for the marketing year August 1-July 31. Such penalty shall be paid by the person who buys or otherwise acquires the peanuts from the producer, or, if the peanuts are marketed by the producer through an agent, the penalty shall be paid by such

agent, and such person or agent may deduct an amount equivalent to the penalty from the price paid to the producer. The Secretary may require collection of the penalty upon a portion of each lot of peanuts marketed from the farm equal to the proportion which the acreage of peanuts in excess of the farm-acreage allotment is of the total acreage of peanuts on the farm. If the person required to collect the penalty fails to collect such penalty, such person and all persons entitled to share in the peanuts marketed from the farm or the proceeds thereof shall be jointly and severally liable for the amount of the penalty. All funds collected pursuant to this section shall be deposited in a special deposit account with the Treasurer of the United States and such amounts as are determined, in accordance with regulations prescribed by the Secretary, to be penalties incurred shall be transferred to the general fund of the Treasury of the United States. Amounts collected in excess of determined penalties shall be paid to such producers as the Secretary determines, in accordance with regulations prescribed by him, bore the burden of the payment of the amount collected. Such special account shall be administered by the Secretary and the basis for, the amount of, and the producer entitled to receive a payment from such account, when determined in accordance with regulations prescribed by the Secretary, shall be final and conclusive. Peanuts produced in a calendar year in which marketing quotas are in effect for the marketing year beginning therein shall be subject to such quotas even though the peanuts are marketed prior to the date on which such marketing year begins. If any producer falsely identifies or fails to account for the disposition of any peanuts, an amount of peanuts equal to the normal yield of the number of acres harvested in excess of the farm acreage allotment shall be deemed to have been marketed in excess of the marketing quota for the farm, and the penalty in respect thereof shall be paid and remitted by the producer. If any amount of peanuts produced on one farm is falsely identified by a representation that such peanuts were produced on another farm, the acreage allotments next established for both such farms shall be reduced by that percentage which such amount was of the respective farm marketing quotas, except that such reduction for any such farm shall not be made if the Secretary through the local committees finds that no person connected with such farm caused, aided, or acquiesced in such marketing; and if proof of the disposition of any amount of peanuts is not furnished as required by the Secretary, the acreage allotment next established for the farm on which such peanuts are produced shall be reduced by a percentage similarly computed. Notwithstanding any other provisions of this title, no refund of any penalty shall be made because of peanuts kept on the farm for seed or for home consumption. Notwithstanding the foregoing provisions of this subsection (a) or any other law, if the operator of a farm on which the acreage planted to peanuts exceeds the farm acreage allotment represents in writing that the acreage to be picked or threshed will not exceed the farm acreage allotment, the Secretary may authorize the issuance of a marketing card which will permit peanuts produced on the farm to be marketed free of penalty and the farm operator to be classified as a cooperator for purposes of the pricesupport program, and if peanuts are picked or threshed from an acreage in excess of the farm allotment for such farm, the farm operator and the other peanut producers on the farm shall be jointly and severally liable for the penalty on the poundage of excess peanuts at a rate equal to 75 per centum of the basic price support rate (calculated to the nearest tenth of a cent).

(b) The provisions of this part shall not apply to peanuts produced on any farm on which the acreage harvested for nuts is one acre or less.

(c) The word "peanuts" for the purposes of this Act shall mean all peanuts produced, excluding any peanuts which it is established by the producer or otherwise, in accordance with regulations of the Secretary, were not picked or threshed either before or after marketing from the farm.

JUNE 3 (legislative day, MAY 13), 1954.-Ordered to be printed

Mr. AIKEN, from the Committee on Agriculture and Forestry, submitted the following

REPORT

[To accompany S. 3207]

The Committee on Agriculture and Forestry, to whom was referred the bill (S. 3207) to amend section 8a (4) of the Commodity Exchange Act, as amended, having considered the same, report thereon with a recommendation that it do pass without amendment.

This bill would remove the limit of $10 on fees for registration of commission merchants and floor brokers, as is more fully described in the following letter from the Department of Agriculture.

DEPARTMENT OF AGRICULTURE,

The honorable the PRESIDENT OF THE SENATE.

Washington, March 23, 1954.

DEAR MR. PRESIDENT: Transmitted herewith for the consideration of the Congress, is a draft of a proposed bill to amend section 8a (4) of the Commodity Exchange Act, as amended, so as to authorize the Secretary of Agriculture to fix and establish reasonable fees for registrations, renewals, and copies of registration certificates issued to futures commission merchants and floor brokers. The present language of section 8a (4), enacted in 1936, authorizes a maximum registration fee of $10, which is insufficient to recover the aggregate cost of registration activities under the Commodity Exchange Act. The proposed amendment would enable the Department of Agriculture to establish a schedule of fees and charges which, taking into account the value to the registrant and the public interest, would recover to the fullest extent possible the aggregate cost of registration activities.

The Bureau of the Budget advises that, from the standpoint of the President's program, there is no objection to the submission of this proposed legislation and explanatory letter to the Congress for its consideration.

A similar letter is being sent to the Speaker of the House of Representatives. Sincerely yours,

E. T. BENSON, Secretary.

CHANGES IN EXISTING LAW

In compliance with subsection (4) of rule XXIX of the Standing Rules of the Senate, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, existing law in which no change is proposed is shown in roman):

SECTION 8A OF THE COMMODITY EXCHANGE ACT

SEC. 8a. The Secretary of Agriculture is authorized

(1) to register futures commission merchants and floor brokers upon application in accordance with rules and regulations and in form and manner to be prescribed by the Secretary of Agriculture; and

(2) to refuse to register any person if such person has violated any of the provisions of this Act or any of the rules or regulations promulgated by the Secretary of Agriculture hereunder for which the registration of such person has been suspended (and the period of such suspension shall not have expired) or has been revoked; and

(3) to suspend or revoke the registration of any futures commission merchant who shall knowingly accept any order for the purchase or sale of any commodity for future delivery on or subject to the rules of any contract market from any person if such person has been denied trading privileges on any contract market by order of the Secretary of Agriculture under the provisions of paragraph (b) of section 6 of this Act and the period of denial specified in such order shall not have expired; and

(4) to fix and establish from time to time reasonable fees and charges for registrations and renewals thereof and for copies of registration_certificates [ not to exceed $10 for each such registration, renewal, or copy]; and

(5) to make and promulgate such rules and regulations as, in the judgment of the Secretary of Agriculture, are reasonably necessary to effectuate any of the provisions or to accomplish any of the purposes of this Act; and

(6) to communicate to the proper committee or officer of any contract market and to publish, notwithstanding the provisions of section 8 of this Act, the full facts concerning any tractions or market operation, including the names of parties thereto, which in the judgment of the Secretary of Agriculture disrupts or tends to disrupt any market or is otherwise harmful or against the best interests of producers and consumers.