Petition for Writ of Certiorari — Morrison Milling Co. v. Freeman

Supreme Court brief1967

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Text

ve SERENE TST Otten Slftome s™] .

2 ie : emnt ‘mo e@)! <r, 33, Se : or - I L R D-

hes , es "OCT \17 1966

~ Lars F.. DAMS, CLERK

In the | ; are :

Supreme Court of the United States

|_| OCTOBER TERM, 1966"

eX : ° . ae

| THE Monsison Muzic Ciaran,

‘e

“oe - Petitioner,

we e 2 Ke

ORVILLE i. FueMan AND » Conan Critoer CORPORATION, :

3 ‘Respondents.

BS Petition for « Writ of Certiorar itis United States bake

mt Sirois for the Bie # Columbia Circuit

ea pipe Sai WituiaM D. Neary,

oft Cosas: Cae Pe 3

Jerry L. BucHMEYER, ee ge :

THOMPSON, KNIGHT, Smumons & Butuox, — RG ee

; cs

ad 7 p ‘ ' a

_, WARLICK PRESS, INC.—2263 VALDINA STREET—DALLAS—ME 1-3130 < ;

e soomte (Statutes and Regulations Involved)

1. Statutes—Wheat Support Program under the —

‘1962 and 1964 Amendments to the Agri- —e :

cultural Adjustment Act of 1988, 7 U.S.C.A.. AG es

§§1331-40 and: $51379 aj ae ed.” and y

Gee TR... eee A, a

2, Regulations Processor Wheat Marketing Cer: ~ oS Poe

f Site: Regulation, 7 CPR. TU2-17 oe Oe

(19GB Od.) 2c censreeiean nA Pharie etd ak A-19 oe

: wna (Gon depen Bo} ee ee ee

"1, Opinion TNE cctchincnlaon ise Diespewrureyis neg, | ER

‘>

i. CRTATIONS

eee Holly Hill Frit Product, Tne, neh

822 US. 607 (1944) for intnenemnnnnnnnnn Son,

“FTC v. Son Ol Co Ee SOE PR geer eer res

BTL U.S. 505 (1968) “iy. onsen eee, a

Gould v. Gould’ ats bene wisely site o

aS. renee: i re

Jarecki v. G. D. Searle & Co. AO HOS Caer SRE SS

: 967 WS PB (TOGA) 8a iscipnelatdecenne B.:

‘. 2" ulate siihage 2 Yes SF ieee

-. Richards v. United States ermeinpy dC ccragteay da

960-8. 1 (SOI) tpt, 28

Social Board v. Nierstko oe ee

BOT US, B58 (19K) oecsecseseceseseseessesenee See sill

United States v. American Trucking Asi’ns. at

Ze 310 US. 534 (1940), sstegsisonssnnencene POTTER 2 enn! ee Re

United States v. Oregon ae, pee cate

+ 866, U.S, 648" (1961) oreo S escitteccas conic

-——Agricufbural Act of 1964 00... ree

Food and’ Agricultural Act of 1962 .. Sp taeiaihis in cushacndic: 3

| Food and — Ack Of 1006 25.06.25 Ei hecenger 5,14

SS SCA:

Grain Standard Regulations (for wines 3 ene

(TCR, §$26.101-129 ee eccscicsees bbeiarcsss,, aT

Processor Wheat’ Marketing Certificate Regulations...

BE at abcicechdd ae ee

* 7CFR: Ser Mee Hes #

a, ene ener 8

eS a A, NESSES aa aeer omnes. * ees 8

Ce ei 9

§777.11(a) EE AS Be ROR 2, 4, passim

I ie ie a cae 9, 17, 27

gL RRS SEES Te cad ERT CO en Te Ry 13

I ik ie i ie cl en 7

TSX Eee ane ees PAS RAE Ce aera eee 5

ws _

A RP UR ONE ARE RE OW SO I IN RR NF

} : : eA, week ee a, |

Hearings on H. J. Rei. 234 Before the Senate Cost “

mittee on Appropridtions, 89th Cong., Ist.Sess, ae

pi. 29 (Jamuary 25; 1965) 2... ecccccceecseseecsssseeerseesemseeen 12,21

2 House Report No. 631, 80th Cong,, 1st Sess, eae

ANSI MODS neon seat A

108 Cong. Rec. 1377-78 (June 21, ee) ee i 22,

108 Cong. Rec. 17228 (Aug. 21, 1962) ......... eg ee ct

40 Cong. Rec.:7175 (April 7, WOO ie SS. ae

1964 US. ‘Code Cong. & Adm. News 2142.at 2154. Patines 2

o* | ‘In thie” si

" Supreme Court of the:Un ited States

* —. *_:.}OCTOBER TERM, 1966 -

+ Ta, Mommson Mase Course,

| ef ; ‘en, | :

st Onma L. Pema axo Conon Cam Coonan 3

Pee | | : ES Respondents.

* Petitioner, a

a alee eect Searmenc

of has payne for. the District of Conner Cinvadt 7

¢,

) ‘Wie Morison Milling, Company, Petitionse, prays that

"a writ of certiorari issue ‘o review the judgment of. the

‘United States Court of Appeals for the District of Columtbia _

Sheet mare Ae aie het oc ta, 1966.

_ Opinions ‘Below Nes : ce sae

_ ‘The. opinion of the Spee oe appeals (Agipendis: B, ve

. Pp. B1-10) is not yet officially reported. The memorandum

opinion of the district court is printed at R, 98-99. ae

a onal con nt wa Eee fn esto sop

nine sdditional copies of which have been filed with this Court

* wnder Rule ante? and (4).

cd hi a

‘, ee et eign aaah ga Me

| ~ Jurisdiction. eo 3

Sor - ~The joalguient ‘of the court of appeals. was ae on .

| ry July 18,. 1966 (App. B, p. B-11).. The jurisdiction of this.

‘Court is invoked under B USC. §1254(1). |

as ge aD Question Presented | ce

eee, engaged i in the processing of wheat info human

fee 4c Sood prodicts are’ “required, prior to cuasbbting or removing 4

such food product for sale or consumption, to-purchase from

hae Wa '* Government so-called domestic marketing certificates

‘ quivalent to, the number of bushels of wheat contained in

‘such, product. re US.C.A. §1379d (b) ,* §13798.

_ Regulations issued by the Seoretary of Agriculture (“Sec- . ;

retary”), however, compel, wheat processors to acquire such

marketing certificates “equivalent to the number of bushels 3

of wheat used in processing the food products”, 7 C.F.R. °

‘$777.11 (a); ahd thus impose marketing. certificate. liability’

not only upon the “wheat contained in” the finished foed

. products to be sold and consumed, but also upon (i) foreign

_, substances and unsuitable wheat kernels separated from

the usable. wheat “before processitig, (ii): moisture which

: - evaporates from the wheat during Storage and processing,

¢ (iii) wheat logt in handling, storage and processing, and (i)

5 gome 27-28% of the wheat subjected to processing which is

separated purposely by processing and dispoged of as waste

. OF for animal feed or other, non-food use. hae

The question presented is whether’ such regulations are

invalid ‘because they-$% inconsistent with the controlling

statute and because they are arbitrary, hearers ae ae

Peg without naticnal tiki.

. after cited simply “7 US.C.A: §.

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fae os mitt MOA Sint:

Statutes ‘and Regulations Involved —— °

. The statutes and regulations’ involved in this case aye’ -

lengthy and are, therefore, set forth iff Appendix A, infra, >

ery | iy fuer oe a

_- The particular statutory. provisions which are most criti-

cal, however; are, first, 7 U.S.C.Av-§1379¢(b). which provides -

that as to the 1964 and the 1965 wheat crop marketing -

° z 2 a a . ‘ p : i

“During any marketing year for which a wheat mar-- ,

'. keting allocation program is in effect, (i) all persons

engaged in the processing of wheat into food products.

‘Shall, prior to marketing any such food product or re- .

moving such food product for salg or consumption, ac-

quire domestic marketing certificates equivalent to the °

; number of bushels of wheat contained in such product

*The Agricultural Act of 1938, 50 Stat. 31, 7 U.S.C.A. §1281, a3 >

amended by the Food icultural: Act of 1962, 76 Stat: 605, Dee

44 ed.) and as further -

amended by the Agricultural Act of 1964, 78 Stat. 173, 7.U.S.C.A.

"ees eee ). 2) a Soe

_ Wheat ing Certificate ulatii 7 C.FE.R.

§§7TT DAT (1900 ao ero. ©

the provisions which were applicable to the 1964 and 1965 eco,

years are set forth in A die , infra, pp. A1-18, and are bereits. .

Sees soe

Similarly, the 1966 edition of 7 C.F.R. §§777:2-.17 contains

regulations applicable to the 1965 crop: year. Appendix A, infra, - .

* pp. A 19-33, sets forth the regulations which were applicable to the °

1964 crop - Insofar as is here material, the regulations were ~ &

substantially the same for both years. ft og

July 3 of Ob dated ee ee 80 of ter eek

-designated year une f ensuing year.

7 U.S.C.A. §1301(5), (7) (1964 ed). tee :

—_

4 . 3

and (ii) all persons exporting wheat shall, prior to such

export, acquire export marketing certificates equivalent

aaiataacaldaagta * * *” (Emphasis

added), ee

_ and, secondly, 7 U.S.C.A. $1379f which provides that as to

this marketing certificate liability of wheat processors based —

upon “wheat contained in” such food products which have

been processed and which are ready to be sold and consumed:

which shall b6 used to determine the amount of wheat

contained in any food product. “The conversion, factor

_ for any such food product shall be determined upon the -

basis of the weight of wheat used in the manufacture.

_ of such product.” (Emphasis added.) = See

ie: turer : ‘nig rue

critical is 7 C.F.R. $777.11 (a), which provides that: |

«food processors shall acquire certificates and sur-

-° yender certificates to CCC as provided’ in paragraphs

(b) and (c). of this section and in the manner specified

» in § 777.10. The number of certificates acquired.by the

“food processor and surrendered to CCC shall be equiva-

lent to the number of bushels of wheat used in processing ®

the food products for which certificates must be acquired» -

and surrendered. Such quantity of wheat shall be deter- -

_ mined and reported to CCC as provided in §§ 777.12 to

777-14 on the basis of the weight of wheat used in-proc-

essing the food products or by application of conversion

factors to the weight of food products obtainéd in the

_ @processing operation.” (Emphasis added.) -

2 aed Statement ae .

This controvergy involves the Liability of whicat processors )

: for so-called “marketing ‘certificates” under the provisions ~

3 of the wheat subsidy and support program operative for the

. a hy ene years: of 1964 and 1965.° :

' & :

po Ry 7

: Prior to the commencement of this program (on July 1,

_ 1964) , wheat growers who complied with their acreage <

lotments received price support at an average level of $2.00

per bushel in the form of (i) price support “loans” averaging

$1.82 from the Commodity Credit Corporation (“CCC”) on .

all the wheat, they produced and (ii) additional payments of :

18¢ per bushel from the CCC (R. 74). ° |

; "The wheat schsidy and support program for 1964 and 1965

introduced a much more complicated scheme—but still one

designed to assure wheat growers an average’ price support :

level of $2.00 per bushel. Unider it, a grower who complied.

with his acreage allotments and who devoted the diverted

seronge to aziproved conservation uses was enititled to ro

‘ceive in the 1964 wheat year: |

* And subsequently extended with certain modifications, but with

temp A the same nye statutory 508 es here in issue, for

t crép years of

culture Act o of 1965, 79 ae 1202, 7 US. ve §§1379b, §1379d(b)

‘Aha dette dads; i. ee from the

CCC. at the “loan rate” using the wheat as security. Then, if the

actual market price for wheat exceeded this “loan rate” (or price

support) kept the diference "I however, the market ‘pce was

was

“loan rate”; the grower simply “defaultet” on his

seme: fe

loan fang “forfeited” his ‘wheat to the CCC. 7 CER. $§1421. 50-.78

(1966 ed.).

pores (i) ccc price support loans at the reduced average

rate of $1.30° per bushel on all wheat#actually harvested; -

(ii) wheat acreage diversion payments of 20% of the :

CCC “loan rate” for acreage diverted to approved con-

servation uses, up to a meximum of 15 acres (R. 47).

7US.CA. § 1339 (b) ; 7 C.F.R. 88 728.50-.76 (1966 ed.) ;

(iii) .70¢ domestic marketing certificates on 45% of ,

’ the estimated yield of his alloffed acreage;*

- (iv) 25¢ export marketing certificates on another

45% of the estimated yield of his allotted acreage;*

_ + (v) no marketing certificates whatever—and only

the .avienge: loos. xate 08 $1.90 .per bushel—tor the

_ remaining 10% of his estimated yield and for that: por-

tion of the wheat actually. harvested which exceeded

90% of the estimated yield, 7 U.S.C.A. § 1379c(a).

* These “loan rates” actually varied from 96¢ to $1.63 per bushel,\

w: depending u n the grade of wheat, loeality and other factors, while

: the “nati average loan rate” was $1.30 per bushel (R. 38-39); "a

- 26 C.F.R. §1421.2133 (1966 ed.).

*The Secretary—in order to reduce surpluses and avoid over-

production and depressed wheat prices—was in essence

to limit allotménts to that acreage which would, based: on antici-

pated yield, produce an estimated amount of wheat to be (i).

Utilized as human food ‘in the United States, (ii) utilized as seed

in the United States, (iii) exported. and (iv) wee as feed

7 US.CA. $1832-34; 7 CFR. -$§728.202-203 © I).+ ay:

in the Uni States; ‘this portion was 45% Tonk canes yield

in 1964. as to that portion of his anticipated yield from his

‘allotment which eho ee

omen sr, Bede

which the Secretary determined shoul bear export certificates in *

‘order to achieve congressi ge ery prices and.

i USCA ‘i

income of wheat 79, ns this _

ey et din 1

of his ES harvest which exceeded the estimated yield, the grower

was entitled to no — cortinentes at all. 7 US. C. A. $1379c(a).

-©

)

ne)

re)

sie

Hho vesis ens inin ttrinaeeusiaaeamn timed sues

-with the exception: that: domestic marketing certificates” .

were priced at T5¥ and export cortifioates, at 30: 7 CFR. :

§777.108 (1966 ed.). :

A portion of the cots ofthis program of subsidizing and

a supporting wheat growers was taxed against processors

2. of wheat. 7 U.S.C.A. § 1379d(b) exacts revenue from persons vas

ie engaged in processing wheat into human food products by re-

quiring such processors, prior to marketing any such food

product for sale or consumption, to “ acquire domestic market- Me

ing - certificates equivalent to the number of bushels of wheat -

contained in such product.” Confirming this, 7 U.S.C.A.’

§ 1379f specifically provides, in mandatory terms, that the

Secretary “shall establish” conversion factors ... that -

such conversion factors . “shall be used” to’ determine “the

amount of wheat contained _in-any food product” ’ (ie, the

| "processors certificate liability under §1379d(b)) .. . and

that such factors. ‘shall be’ determined” upon the’ basis of

the weight of wheat-used in the manufacture of such food

prodaek, : ee ~ ; v" dae

lod this. flan language of § 1379d(b) and § 13798,

the Setar med ogee pli cei tw oF

| quire. domestic marketing certificates “equivalent to

° mumber of bushels of- wheat used in’ pr irs

oo food products.” 7 .C.F.R. §777.11(a). The admitted, and = -

i ae tet See gine ane eng

amounts for the “marketing certificate ademas ®. 27, a

94 at fn. a |

- intended result of this deviation from the statutory language

_was to subject processors. to the marketing . certificate li-

- ability not ‘just for the wheat actually “contained in” the

;

completely processed food products ready for sale and con- ©

sumption, but also for the four items here’ in issue, to-wit:

_ + (i) cleanings and screenings: foreign substances (e.g.,

rocks, sticks, etal scraps, etc.) and unsuitable wheat

(eg, damaged and shriveled kernels) mingled with the =

"raw matter’ acquired, but separated from the usable —-_

wheat before processing (R. 18-23, 41-42);

(ii) shrinkage: moisture contained in the wheat when

acquired, but*lost by evaporation both during storage

.\ “and in processing (R. 18-25) ;

\ @iiy wastage: wheat that is spilled or that clings to

.. bins or is‘otherwise lost in storage, in handling or in

processing (R. 22-24) ; and pee, :

(iv) _millfeeds: the some 27-28%" of the usable wheat

kernels subjected to provessing which is separated pur-

ae: posely in the course of processing operations,"* disposed —

= "The reference in the opinion below (App. B, p. B-4) to the

figure of “18 percent” is, apparently, a typographical error; the

isputed tage is some 27-28% (R. 23-25, 39).

*In the of wheat. into flour, the bran (outer kernel of

the wheat), the wheat “middlings” or “shorts” (coarser portions

of the within the kernel) and the germ (sprouting

section ofthe kernel) are first separated from the fine portion ©:

the of which the flour is. to be made (R. 23-24). The

maturing agents, vitamins, bromates, phosphates, salt, water, ©

etc., may be added for various reasons (R. 24). Thus; by virtue

of the separation of the millfeeds, the food ‘product (flour) which

‘results from the. processing ions contains only (except for

- 9

_of as waste or for animal feed or other non-food use, and :

thus is not part of or “contained in” the finished food

products resulting from the’ processing (R. 23-25, 39).

These regulations thus substantially increase the liability

.. of wheat processors. for marketing certificates beyond the

plain language of §1379d(b) and §1379f. For instance, the

Secretary contended in the trial court that this suit seeks

to recover, on behalf of the somé ‘500 companies in the

wheat processing industry in this country, some $94.5 million

se for the year 1964 alone (R. 39). A similar or perhaps even

‘greater sum would be involved for the year 1965 (when the .

a one eee eee

6 -

— PR onc ates ror

ae amount charged the processors for each domestic marketing

. certificate they were required to “purchase” from the.CCC

_is the same as the face amount of the marketing certificate

te . payments thade to growers (ie., 70¢ per bushel in 1964, 75¢

per bushel in 1965). 7 C.F.R. §§ 728.108, 777.4(a) (1966 ed.).

However, from the framework of-the program, it is mani- ‘

festly evident that—contrary to the misconceptions urged by

the Secretary and.accepted by both lower courts—this sanie- .

ness of the face amount of the certificates “sold” to proces-

" sors and ‘ ‘issued” to growers did not mean that wheat proces- fe:

sors were to'be.required to purchase a 70¢ certificate for each

: 70¢ 70¢ certificate issued to growers. In: particular:

__* Just as in the case of certificate payments to growers, no mar-

Goce imply required “issued” 2! wheat . Seotliy “tow oe the

Boom » | monthly ‘ process- _

p ae monthly “payme ye

Emig liability in conjunction wit such reports (R. 27, 94 at

fn. 1). 7 CFR. a i ac

fe .

10 - ° .

(i) 70¢ certificate payments were not made for

_. each bushel of wheat which the growers harvested and sold

a to processors. Instead, such certificate payments to growers |

were based—not upon actual: harvest and sales—but upon an

_ advance éstimate (scaled down,on a national basis) of the

anticipated yield. from his acreage allotment, an estimate

_ made long prior -to harvest." Furthermore, growers received

70¢ domestic certificate ‘payritents only upon less than one-

pie half of this éstimated yield (and 25¢ export certificates on

"an equal portion and only the $1.30 average loan rate on the

balance) . 47). J

_ (ii) Contrariwise, the niin certificate. liability :

-is ‘hesed upon actuality, not estimates, to-wit: the amount na

. of wheat in fact “contained in” the finished food products

i which the processor is “marketing * * * or removing for —

* gale or " consumption.” 7 US.C.A. 88 13794(b), 13798.

'. (iii) Moreover, the processor must pay _ certificate

levy even though, the wheat ‘ ‘contained in” his’ finished. food

a products was not even subject to the marketing certificate -

program andeven though no grower received certificate pay- Te

ments for such wheat" . . either because it was purchased ©

= fee i tia wi ebb to ethan willy Tee dacs allot

ment . . . or from a ‘grower who refused to devote his

diverted acreage to approved conservation uses ... . or from

ose re certificates are thus based upon an advance.

i ggpen Foe ve actual ° the grower receives

ro te

pe is is low or i$ even. ii

poo nae hy of wheat by nina. are heavy or. light. 7,

USCA. §§1379b, c. '

- Saks scien ainda a pre-164 dia’ or

Heo on Saieetae outeile ot the United States (R. 46-47). 7

TUS.C.A. $§ 1379, d. |

(iv) Because of the iii it is obvious that

under the invalid regulations here in issue there will be an

. extraordinary net profit realized each year from the domestic soe

marketing: certificate ‘program. To illustrate, in 1964 a grower

. wuld receive 25¢ export marketing certificates on 45%

__ of his estimated yield (scaled down on a national basis), —

10¢ doniestic marketing certificates-on another 45% of his

estimated yield, and no marketing certificates at ‘all on the

-Temaining 10% of this estimated yield and on that portion

j of his actual harvest which exceeded. 90% of his estimated

yield. Yet, a processor who acquires all of the wheat harvested

-by this grower is forced by the Secretary’s regulations to pay

70¢ for domestic. marketing certificates on each and every

bushel. Thus, - ‘a very sizable net profit will result if the | -

domestic. marketing certificate levy is imposed. upon the

bushels of raw material purchased by the processors and not

—in accordance with the clear and unambiguous language

of §1379d(b)—only upon the wheat actually “contained in”

the. finiahed, 30th. iwoducth, Indbed, thot decces “eaheden

; by the CCC in 1965 in support of a. request for a general

Supplemental appropriation showed that for the 1964. crop

pee ts ease erent aig lta

certificate payments either becquse they did not com ey with their

otments or because they did not ir

acreage to approved conservation, uses, U.S.D.A. Press Release No. .

1755-64, May 27, 1964, as Exhibit C to Affidayit of

Cyril V. Smith, Jr., filed png ine | 8, 1965 (R. 1) and contained

_ the CCC realized from the ‘saint certificate j program

profit of $75.2 million. Hearings on H. J. Res. 234 Be-

‘ol the. Senate Comniittee on ‘Appropriations, 89th Cong. sy

I. Ast Sess., p. 29 (Jan. 25, 1965).

(v) Finally, the ‘amount of : certificate payments

- made to growers is not limited to (or in. any manner condi-"

tioned upon) the amount of revenue obtainéd by the CCC

from the marketing certificate liability levied upon the wheat

* processors. To the contrary, the CCC may use the revenue

thus obtained from the processors for any purpose and is not a

limited to using it only to make certificate payments to the |

maxes 15 USCA. 88 713a-10, a-11, b, f (1963, —

; 3.

‘ ~The present action was filed by six wheat processors (ine

cluding Petitioner The. Morrisgn. Milling Company). (R. 5)

, _- individually and as a class action-6n behalt-of the some

500 companies in the wheat processing industry’in the United :

" States (R. 6)—seeking a declaration that the regulations: —

" were invalid (i) because they were inconsistent with the

~~ controlling statutory. provisions, ‘including §13794 (b) and

- -§ 13798; and, alternatively (ii) .because they. were arbitrary :

.” discriminatory and without rational basis (R. 7-11).

| Jurisdiction of the féderal district court was invoked be-

-‘causé the cause of action arises under:a law. relating to

commerce, i.e., the Agricultural Adjustment Act of 1938, as”

- amended in 1962 and 1964, and involves an amount in con-

troversy in excess of $10,000, 28-US.C. 88 1331, 1337 .

is against the CCC, 15 U.S.C. § 714b . . “ang is an appeal a3

”

eons a

from final agency ac : 0 foe whic there i no other sdecuate :

_ remedy**;.5 U.S.C. § 1009(c). Some 39 additional processors

subsequently requested, and were granted; leave to intervene

(R. 81-92). : ey ae Secs

‘The case came before the ‘trial court on cross midtions for sae

‘summary judginent (R. 14, 36). The trial court: upheld the aoe.

_-validity of the regulations (R. 98-99), and the court of ap-

ram as he ea Bot PP ick

/ Neti : ? coe Ee

Bul

fhe

tebe

4 A

14]

vit

;

. dollars for each year jn controversy (R. 39.) This question |

._ is, moreover, of continuing vital concern to wheat PTOCESSOTS 9,

EE est eety CRC ap

“ oe

Reasons for Granting the Writ |

This case presents a question of statutory con-

, Struction which is of critical importance to the entire wheat |

"* processing industry in the United's ates: the liability of the -

some 500 wheat processors. for “d tic marketing certifi- “ie

.“ cates” under* the wheat subsidy and support program. for

the 1964: ck 1965 crop years.

Involved are extraordinarily eed i amounts of’ money—

‘estimated by the Government itself to totaksome $95 million ,

*—and the sums of money in dispute will continue to pyramid, .

—under the subsequent wheat > subsidy program" ieee

_ extended the:marketing certificate liability of processors, in

precisely the same operative statutBty language here at issue,

for the wheat crop’ years } 1966 through 1969. And, the.

resolution of this question have immediate public im-.

portance sbeyond: the parties to’ litigation. and even

_ + beyond 500 wheat processors directly affected.

This being a question of first i impression, there i is, no square

conflict: of decisions. However, without action by this Court,

“the opinion below will erode and subvert standard principles —

of statutory construction because (1) it distorts the ordinary,

| ps cn ly agi once sgh apeaap ation ~.

~ § 1379d(b). and § 1379f... (2) despite the fact that such

plain, ordinary meaning of ‘the words ‘used does not reeult,

in abgurd consequences or thwart the purposes of the statutes 4

COR REL ee et ee ee

rect Si} 6s cna 8 79 Stat. 1202, TUSCA.

_§91331-40 d4§13790 -j (1964 ed. and Supp. 1965).

a (3) the ‘sais and ‘npdianiiies leridilive:

material relied upon or (4) the supposed administrative con-

| struction of statutes by. the Secretary. Alternatively,

(5). the : fiohs are invalid because they are arbitrary,

discriminatory and without rational. basis.

; Under these crcumatances, review by this Court jaro

; Ss

| quired. / : eS,

_ As this Court has “often said, ‘the words of statutes—

, ‘including revenue acts—should be interpreted where possible

_ in their ordinary, everyday senses’. Crane v. Commissioner, aid

831 US. 1, 6” Malat v. Riddell, 383 U.S. 569. (1966).

. The “ordinary, everyday” meaning of the language of

. §1379d(b). is evident. In specific, clear and’ nontechnical

_ terms, it requires processors of wheat food produicts, ‘ ‘prior.to -

marketing any such food product *, . ‘© hoe asle'or cine:

“tion” to acquire domestic marketing certificates he aston ore

: ‘to the number of buighels of wheat contained in such product

Uateutih atresia a nies Wy ic cited hanes: .

“prior to marketing any such food product ** * for sale or a

_, vonsumption,” the processor is gubjected to certificate linbil-

’ ity. only upon that (heat which is in fact “contained in” the |

finished food product ready to be sold and consumed—and

_» hot upon the tafal amount of raw material which he acquires

for amen such food products.

‘ &

' g:

| That the use of such language was deliberate, not in-

~ advertent, is confirmed by its repetition in § 1379f and its

_ juxtaposition there with the very terminology into. which

ee eer ees Ci ee

atia uae aus dileams Wes cone ot Oe

. &

any’ food product shall. be determined upon the’:

basis of the weight of wheat used in the manufacture

of such product.” (Emphasis added.) .

" Again, the “ordinary, éveryday” meaning of this language

is evident. A conversion factor is used to determine an un-

known from a known. § 1379, in the first sentence, specifies

that the conversion factor shall “be used to determine the

amount of wheat contained i in any food product.” "That, then,

contained in any food product. The conversion factor for ae

is the. unknown. The second sentence states that the factor °

for any food product .shall be. based onthe “weight of

_ ‘wheat -used in the manufacture of such prod ” That is

the known, to which the‘factor is to be applied in order to

determine the unknown—i.e., the “amount of wheat con-

- tained in” the food product. Language could not be clearer.

Nevertheleis, the Secretary has ignored these spetific and

manadatory directions. He has not established eonversion

factors as required by § 1379f. Wheat processors are not -

provided with or permitted to use any conversion factor in

order to determine, from the weight of wheat used in the

processing of their food product, what wheat i is in fact “con-

17-

tained in” such product.* Indeed to the contrary, the only

conversion factors that the Secretary has established are

factors to be applied to the finished food product inorder to of

determine the weight of wheat used in its manufacture or |

Pett 7 CER. §§ 777.13-.14, Appendices II and IIl..

This ig flatly contradictory to the plain language of § 19796.

_ And, this topsy-turvy interpretation simply cannot be justi- |

fied by'the court of appeals’ Summary comment that in light :

of ‘ ‘evidence * ¥ * that this statute was enacted against the

background of conversion factors devised in accordanice with

the Secretary’s approach * ° * the phrasing of § 1379f may

- be reasonably read as the Government contends.” (App. B,

p. B6, fn. 1).

‘bins inl ils “eeclonaal 'in the record is a representation

fhade in thé affidavit of Amnold A. Garthoff that there were -

: “traditional” conversion factors used by the Departnfent of

Agriculture (R. 69). So there were—but, as the Garthoff affi-

* Removal of foreign matter and unsuitable wheat, wastage -and

evaporation of, mnoisture reduces the weight of the raw material

soueed st processing. In addition, some 27-28% of the cleaned

‘and usable . wheat subjected | to processing is rémoved as wastes

io oiemee for or ponwheat Brel mill

and and screenings—what wheat

: is “contained in” the food ee

oo.

‘davit” nett dene: R 67), ssa wines tn ermmindtbien itty the

Department’s flour export subsidy program. And, in fact, the .

conversion factor (not cited in the affidavit) for wheat flour

in the Department’s regulations dealing with this program is

stated as “1.000”. 7 C.F.R. § 1483.222 (1966 ed.). That, of -

course; is quite different from the conversion factor.for flour

given in the Secretary’s regulations here in dispute, to-wit:

; ©2983", 7 CFR. §: 777.14 (c). As is evident, there are many

conversion factors employed for many purposes, There” is,

in‘ short, no “accepted” conversion factor table to which

§ 1379f was referring: and there is certainly no evidence

which would support a summary judgment that it was re-

senting to the Comneesia Sacto tel tas Boeeytney hed -aaee

| in the flour export program. .

1s Mia taad auld teeenaia belli enn tee

of Dig Secor Ss mrmenietaty. eres $30 fo tt hie mo

ee po] R

seen te tet to dieeuaee the ieee Go hoe

used in the manufacture of any food product. The con-

version factor for any such food product shall. be deter-

ee ee ee

food product.”

"This Court has rejected similar attempts of statutory emas-

culation, holding that where a “statute admits a reasonable

* The representation in the Garthoff affidavit (R. 68-69) that the .

"*_ wheats processors “didn not question” and were in :“

: ith the position of the Department of Agriculture regarding con

version factors under §1379% ig far removed from the. truth. ‘The

one Ot pine Mine sae Ga sepratess

processors

ed the t, from the beginning to the present date.

This io Metaled 7 in the- affidavits of Carl R. Pilz (R: 15-17) and

Frederick P. Furth (R. 29-35) and in: the Complaint (R. 10-11).

& . 19 | |

¢ Construction which gives effect to all ‘of its provisions ++ .

we will not adopt a strained reading which renders one: part:

a mere redundancy.” Jarecki v. G. D. Searle & Co. , 367 U.S. |

308, 307-08 (1961).

es ‘Scaaaipliy

Uniquestionably the courts, - in interpreting a statute,

“have some ‘scope for adopting a restricted rather than a

_ literal or usual meaning of its words where acceptance of that

- _ Meaning would lead to absurd results * * * or would thwart. ,

the obvious. purpose of the statute.’ Helvering v. Hammel, _—°

811 US. 504 * * * But it is otherwise ‘where no such con-— |

" sequences would follow and where * ° * it appears to be

- consonant with the purposes.of the Act ¢ 9 099 Commission- \

eru. Brown, 380 U.S. 563, 571 (1965). ae

The two courts below concluded, as the Secretary main- , :

- tains, ‘that the interpretation of the plain language of § :

13794 (b) and § 1379f in its ordinary, usual sense would de =~;

feat the purpose of the 1964-65 wheat subsidy and-support = *

program to maintair the average “income level” of wheat ip

growers at $2.00 per bushel (the pre-1964 level) by compelling -

processors to finance the 70¢ difference between the reduced - ee |

| - CCC average loan rate of $1.30 per bushel and the $2.00 per :

bushel desired (R. 39, 73-75, 97; App. B, pp. B23, 6).

‘This is, without doubt, totally fallacious. First, the fact ce q

_ is obvious that the intended average income of $2.00 per’ ;

Abe htt, oa Sgn) initio fra: RUPE ERA EATS

20 tae cee

the $1.90 idan rate plus the 70/ domestic tharketing levy

imposed upon the processors. Wheat growers received such a

70¢ certificates on less than one-half of their estimated har-

eee vest (in 1964, 45%). ‘Thus,,in order to defermine thé “in- “Fa

mes __.......gome level” of wheat growers, it is necessary ‘toconsiderand

a average all of the four types of price supports and payments

afforded the growers under thig complex: program—CCC

"average loan rate of $1.30 per bushel.on all wheat actually

. harvested, wheat acreage diversion payments of 20% of such

loan rate for acreage diverted up to 15 acres, 70¢ domestic

marketing certificates on 45% of the estimated yield from

: the acreage allotment, and 25¢ export: certificates on another

45% of such estimated yield.

Secondly, the income realized by wheat growers under this,

program would not be-reduced one whit if the processors’

liability for matketing ’ ‘certificates is, as it should be under

eas the plain’ language of § 1379d(b) and § 1379f, limited to the

“wheat contained in” the finished food products. None of

the four types of support afforded to growers will be adverse-_

‘ly affected in any manner by the outcome of this appeal.

' In particular, the 70¢ domestic certificate payments made

to growers are based—not upon’ actual harvests and sales

of wheat—but upon an advance. estimate of the anticipated

= yield from their acreage allotments, an estimate made long

prior to harvest. Thus, the amount of the 70¢ certificate -

Pee ast OR AN, RTE EET

| 21

iii, aia a aia is

_ certiBoates ‘which ;the, grocesnies, ane ‘vetquited to: purchase

increases or decreases.”

| And, as to the purpose of the’ program in imposing a

portion of the wheat subsidy costs upon the. processors, that

is precisely what is at issue in the present case. Any “boot- _

‘strap” argument that the purpose, of the Act was to impose

liability upon the. processors for all of the raw material ac- oo

. quired for processing—and that, therefore, this purpose

would be defeated unless the Secretary’s invalid regulations ~

are approved—is obviously unsupportable. As this Court has

repeatedly. noted, “There. is, of course, no more persuasive

evidence of the purpose of a statute than the words by which

the legislature undertook to give expression to its wishes.”

United States.v. American Trucking Ass’ns ., 310 U.S. 534,

543 (1940) ; Richards v. United States, 369 U.S. 1, 9 (1962).

7 tte oe

a P fe | |

Nor is there any “legislative history” which would justify

_ the emasculation of the ordinary, usual meaning of the clear

and specific language of § 1379d(b) and § 13798:

The legislative material is devoid of any recorded instance

_in which Congress addressed itself to the question of whether

the domestic marketing certificate levy was to be based upon

‘the total weight of the raw, unprocessed material—or, asthe

chosen statutory words plainly indicate, only upon the “wheat

contained in” the finished food products ready for sale and

consumption.” This being: 80, it-must be assumed that the

legislative intent is expressed by the ordinary | meaning of -

the were “used. Richards v.- United. atcee 369 US. 1, 9

_ (1962).

le Gtliciags stick bie “egislative history”

; "Telied upon by the lower courts (and urged by the Secretary)

4 = ‘The opinion below also refers to the , a i

. on: the 1964 amendments to the program pe Ade.

are inconclusive and unpersuasive because they are directed.

0: Shee rontion, 20% tn She single question here in contro

versy. To illustrate: Ke

(i) The opinion below places primary reliance

upon isolated exchanges or statements occurring”during con-

gressional debates, ‘or out-of sentences from commit-

tee- reports, to the effect that the 1964-65 subsidy. program

would not increase the price of wheat from its then price

_ of $200-per bushel-fteomes the ediced COC average sup- Re ESO

“ Most nearly in point on this specific issue are the.

: ieee ee oe

reported in 108 Cone.

1377-78. (June 21, 1962) and 108 Cong. Rec. 17228 (Aug. 21,

of the (Secs ey sipport the 20 poipeieegenermep aadioml

erence to this 1 U.S. Code

at 2154, will show | tte comet of

- and “16”, in the report) which have nothing i Cabre . 2

at issue in this —

Lo ,

_ port lve would be $1.90 andhe processor would be paying :

the 70¢ marketing certificate levy on each bushel of wheat

“4 that he “purchased” or “processed” (App. B, pp. B6-7).

a - (ii) But these. exchanges and statements were not 3 |

| PBS Socks bys: oh 1379d(b) and § 13798,

“despite their plain language to the contrary, imposed the

- marketing ate liability upon the raw wheat “used in ~ .

_ processing”, To contrary, they merely reflected the over-

_ Fiding congern in Congress as twhether the new marketing es,

certificate program would cause an increase in’ the price of |

bread. - : < iry

(iii) ‘Geanie’ of -the program ‘fnaiated that it |

would. Supporters instited that it would: not Thus scattered

- debates and. reports

; through ‘much of the co

' are various figures, and uch .confusion, abou wheat

.. Sosts. But all that the speakers were saying was-that the

processors’ costs would not be increased over the then cur-*

ent $2.00 per bushel wheat cost. And, the simple addition -

of $1.30 CCC loan rate and the 70¢ domestic certificate face’

amount, was all*that had to be done in order to make the

point that'under the new program a processor's cost of wheat

: ‘in no event could be more than the then current $2.00.

(iv) All kinds of figures were bandied about. Finally

Conetourrit. eset cobei Set ak Uae Sins See srpe

=~ using were speculative: te sak:

ore can honestly say, with all the figures available,

ee ne ae en Te

a : ,

“Thiok Ww iid mpeibalhc pn 16s ct A fee

ad .

‘99h

_ The point is that the references in the legislative material

- to’ figures and to the costs of wheat were-rough, illustrative

"figures which no one thoughit of as reflecting what the exact’

scope of the processors’ certificate liability would be—and

- that no one was purporting to deal with the specific question

- of whether. the levy would apply only to “wheat contained =

in” the finished food product ais plainly stated in § 1379d(b) 2°

and § 1879f, or to all of the raw material acquired for

‘PFOCessl in 1 ’ ; : . : : ; ae i | :

Obviously, such legislative history is.unavailing to dictate

a ‘meaning or congressional ‘intent contrary to that revealed

by the statute’s plain language. United States v. Oregon, 366

US. 643, 648 (1961); FTC v. Sun Oil Co,, 371 U.S. 505, 517

(1963). sina scp eae ee

7 oF Oigriedts og 2 ee

The opinion below cannot be justified, as the court of ap-

peals professed,.on the basis of any “special respect” to the

“Secretary's own reading of a statute which ‘Congress has

‘ support price plus carrying charges. ‘Thus, a $1

that the’ CCC. cannot nn of Fa ght than.

re ee e under the as

. i

BESS

;

oP E

;

Fri

PEL

eee

oo 28.

= §

~ B31, Both Cong., Ist Sess, p. 46 (July 20; 1965).

_ » given him-the duty to administer” (App. B, p. B-8)—en in-

. terpretation which’ “was no: sooner made than challenged.”

_ Davies Warehouse Co. v. Bowles, $21 1S. 144, 156. (1944). |

No amount of judicial deference to i ion,

tion can justify-the Secretary's action in ring the ordin- _ y

‘ary, usual meafiing of the plain language 6 § 13794 (b) and see

§ 1379£ which, as indicated above, does not lead to absurd e

‘results or thwart the purpose of the subsidy and support Bae

program. Addison v. Holly Hill Fruit Products, Inc.,322US, << -

607; 617-18 (1944) ; Dixon v. United mre 381 US. 68, Ch a

(1965). . } |

Partial ia this tru with repect to a taxation or

revenue statute like that here involved. The

certificate” label does not change or disguise the (that. ~~

_the domestic certificate liability imposed upon the processors _

is, beyond question, an‘ excise tax levied upon the processing

- of wheat--which compelled processors 40 pay a very sub-

stantial portion of the costs of the wheat subsidy program, .

- thus effectively reducing the amount of money néeded for

’ this purpose from the general tax fund appropriations.“ The

subject of this tax was. specified with certainty, in plain apd fe

unambiguous language (“wheat contained in” processed food

, products ready for sale and consumption). The Secretary has

"no discretion or authority to amend this language and to in-

eS crease, by a total of some $94.5 million or more per year, the

oe SES

ee oe ee a ee ony,

ims:

"~. wheat marketing ceftificate levy imposed upon the provess- *

ors. Dixon v.. aces’ pam Gould, 245 U.S.

161, 153 (1917): 0

5. ek.

’ Moreover, in the alternative, the ‘regulations are invalid

beéause they are arbitrary, discriminatory and without ra- .

tional basis. Aéldison v. Holly Hill Fruit Products, Ine., 322 -

U.S. 607, 617-18 - (1944) ; Social Security Board uv: - Nierotko,

827 U.S. 358 (1946). |

That is, even assuming, Sg Se ie 7

language of § 1379d(b) and §*1379f can be twisted, as the

. regulations ‘da, to require marketing certificates for “wheat |

"used in processing the food products”, the liability would be

for just that’ wheat (ie, wheat kernels) used in processing. — ‘

or Processors thug would ‘not’ be subject to the certificate\levy .

2) upon the. three of ‘the foul items. here in controversy*— xs

4 cleanings and screenings of foreign and unsuitable matter,

| moisture Joss due to evaporation, and wheat lost through

"wastage in handling and“storage—for these are simply not

“> “wheat used in propessitig” within the ordinary, usual mean-

_ ing of that language. Malat v. eg eee pk os saa

“Yet, the regulations purposely impose "the marketing ety

‘tficate Liability ypon cleanings and’ screenings, shinkage and o

Tt i issué—millf eeds, the 27-28% of the :.

wash whoa subjected to mang A iS merpesty ecard 4.

» as” 1

\_ age, wastage) do represerit a substantial monetary claim in. them-

ere ee DN Eris ane .

: a) ae

. wastage, 7 CFR. §§ 777.13--14, Midis a0 and =

in #0 doing result in patently absurd consequences and dis- :

_ eriminations, among which are the following: ig

es afprocessor who is able to purchase high-grade: ;

| o. ‘wheat (with more usable wheat and a lower content

NS a . Of foreign and unsuitable matter and moisture) very °

BS et eae illogically pays a lesser tax than does his unfortunate

ee $ 26.127) ;

. ==

- who has cleaning and drying facilities (R. 19-20) is

- not taxed upon all such foreign and unsuitable material -

and moisture loss, while his unfortunate competitor is.

"hag aha of’ abour, “arhitsty’ ad decbbahuatney

results occasioned by the regulations are eliminated if the

7 _ _ Bis deetbon eaeganes of T0705 (by en WU TOE Ae tien

Piers, SC , aieny, wer nee,

toe oe _Conelusion

*& a he Sept sie i on

| tiorari should be, granted. . : r

is a oS “Waa, D. Neary, ers

| aan — Se 2300 Republic National Bank

ae cy. Building, .

Cer re. ee ae Dallas, Texas 75201,

Mat aera es . Attorney for Petitioner.

i Of Counsel: .. ee

i Jekry L,. BuCHMEYER, SMa

jo THOMPSON, KNIGHT, ons & BULLION, —

Seen Dallas, :

S btiaaigony: “o

a | : ie 2 ° 28 :

a ne : Secsl f Series °

-CountyorDattas - = -——’ |

_ Grave or Texas. do tke Ns

__.- Brrore Mg, the undersigned Notary Public in and for

Dallas County, Texas, on this day personally appeared .

Jerry L. Buchmeyer, who being by me duly’sworn upon oath

1, Jerry L. Buchmeyer, am not a member of the bar of

Supreme Court of the United States; but I am a duly licensed

and practicing attorney and a member of the State Bar of

Texas and have been one of the attorneys of record for peti-

: I further state upon oath that upon the 18th day of Octo-

ber, 1966, I served the foregoing Pefition for a Writ of.

- Certiorari to the United States Court of Appeals for the

District of Columbia Circuit, by mailing copies of such —

Petition, properly addressed, with air mail postage prepaid, |

(i) the counsel for Respondents Orville L. Freeman.

and Commodity Credit Corpération in the court of ap-

- peals below, to wit:.J. William Doolittle (Acting Asst.

_" Atty. Gen.), David G. Bress (U.S. Atty.) and Carb

Eardley (Atty.), Appellate Section, Civil Division,

Room: 3706,’ U.S. Department of Justice, Washington |

6 DC: and. “- ; ' | . Soy

= _ (ii) the Solicitor General of the United States, U. S.

Fer Department: of Justice, Washington 25, :D. C.

Serreerreee 2, Aux, SIPPUTESe eee oe

noo a, : YL. BUCHMEYER

_- SwoRN TO AND SUBSCRIBED before me by the said Jerry L. _

Buchmeyer this the 13th, day of October, 1966. - —»

Cee esereseeergsrecereesesesssersrweseeeeee : eeereewee

-. Notary Public in and for |

Dallas County, Texas

_ Francene Hill —

gry

" APPENDICES 4 gt

Appendix A (Statutes and Regulations Involved)

“

1.: Statutes— Wheat Support Program under the

. ° 1962 and 1964 Amendments to the Agri- |

, cultural Adjustment Act of 1938, 7 .

‘U.S.C.A: §§ 1331-40 and §8§ 1379a-j :

(1964 ed. and Supp. 1965) .......... an:

74 2. Regulations — Processor Wheat Marketing

a 7 a gue agape aaa aed ,

a Siebel seine ba nae aad “aan A-19

Appendix B. (Opinion and Judgment Below)

1. Opinion Below Sbecuicdpioeapeeen ited, eden «B-1

2. Judgment Below eae pare B-ll

; s mae,

ad , ‘ ‘| : -

: ° = ‘ wi )

: fe

> Pe . ry id ee , Yr yet ee

’ * 9 che oh +4 he SP Oa 4PM ate

¢ PEPAG oe Peas Rea ty 2 ties (Coe Oe eh, Coe Sr We +

Bis SST OO RW aR ADT Sle Ff he ee

4 RENN

RNS SORES TAS SIR OLE PEELS AER ES I SSR AIC RC a i Oe Nee ‘ sate

Sec.

1. Statutes—Wheat Support Program nities the 1962

and 1964 Amendments to the Agricultural vAd-

_ justment Act of 1938, .7 U.S.C.A. §§ 1331-40

and §§ 1379a-j (1964 ed. and Supp. 1965)

THE -AGRICULTURAL ADJUSTMENT ACT OF 1938

GENERAL PROVISIONS —

1281. Short title.

_ 1282, Declaration of policy. -—”

Ss eo er

- SUBCHAPTER IL—LOANS, PARITY PAYMENTS,

~ ‘CONSUMER SAFEGUARDS, MARKETING

“~~ QUOTAS, AND MARKETING

: CERTIFICATES _--

A. Dermnrmion, Loans, Parrry Pa , AND

CoNSUMER ‘SAFEGUARDS

1301. Definitions. ) |

(a) Generel definitions. . |

_(b) Definitions applicable to one or more com-.

-(c). Use of Federal statistics.

(d)° Raxisaices of shocke-of cixtain commodities,

3 1301a. References to parity prices, etc., malas gugnicesa

January 3 1950.

1308. Parity payments. 7 .

“1804, Consumer safeguards,

a * * ¢ * aos

_ Part I1I—Marketing Quotas—Wheat

$1331. Legislative finding of effects on interstate and

_. foreign commerce and necessity of regulation

$1332.. National marketing quotd—Proclamation; dura-

tion of program . it aa :

(a) Whenever prior to April 15 in any calendar year the ~

Secretary determines that the total supply of wheat in the’

marketing year beginning in the next succeeding calendar

year will, in the absence of a marketing quota program, -

likely be excessive; the Secretary shall proclaim that a

national marketing quota for wheat shall be in effect for

such marketing year and for either the following marketing

year or the following two. marketing years, if the Secretary.

determines and declares in such proclamation that a two-

or three-year marketing quota program ‘is necessaty to _

“©

(b) If a national marketing: quota for wheat has been

i for any marketing year, the Secretary shall

_ proclaimed cretal

determine and proclaim the amount of the national market-

ing quota for such marketing year not earlier than January

1 or later than April 15 of the calendar year preceding the

year. in which such marketing year begins. The amount of

__. the national marketing quota’ for wheat for any marketing

year shall bean amount of wheat which the Secretary esti- .

mates (i) will be utilized during such marketing year for, .

human consumption in the United States as food, food prod-

ucts, and beverages, composed wholly or partly of wheat,

(ii) will be utilized during such marketing year in the United

States for seed, (iii) will be exported either in the form of .

“wheat or products thereof, and {iv) as the average amount

which was utilized as livestock (including poultry): feed in”

the marketing years beginning in 1959 and 1960; less (A) an

amount of wheat equal to the estimated imports of wheat

into the United States during, such marketing year and,

: o

A-3

(B) if the stoci-of wheat owned bi the Commodity Credit

Corporation are-determined by the Secretary to be excessive,

an amount of wheat determined by the Secretary to be a

‘desirable reduction in such marketing year in such stocks to

achieve the policy of the chapter: Provided, That if the .

Secretary determines that the total stocks of wheat in the |

Nation are insufficient to assure an adequate carryover. for

. the next succeeding marketing year, the national marketirig

quota otherwise-determined shall be increased by the amount

the Secretary determines to be necessary to assure an ade-

quate carryover: And provided further, That the national

marketing quota for wheat for any marketing year shall be

not less than one billion bushels.

_ National emergencies or material increase in demand;

investigation; increase or termination

| (c) If, after the proclamation of a national marketing

| quota for wheat for any marketing year, the Secretary has

reason to believe that, because of a national emergency or

because of a material increase in the demand for wheat, the -

national marketing quota should be terminated or the amount

thereof increased, he shall cause an immediate investigation —

to be made to determine whether such action is necessary.

; ee Oe ee er a ee wedne as toe

wheat. If, on the basis of such investigation, the Secre-

tary finds that such action is necessary, ‘he shall immediately

proclaim such finding and the amount of any such increase

found by him to be necessary and thereupon such national -

marketing quota shall be so increased or terminated. In case

- any national marketing quota is‘increased under this’ sub-

section, the Secretary shall provide for such increase by

increasing acreage allotments established under this part by

a uniform percentage. Feb. 16, 1938, c. 30, Title III, § 332, .

52 Stat. 53; Aug. 28, 1954, c. 1041, Title III, § 307, 68 Stat..

903; Sept. 27, 1962, Pub. L. 87—708, Title 1 ,.§ 311, ge

Stat. 619. yg

§ 1333. National acreage allotment |

Winssistiis Gin'diniiald i daa eatnadel tadsudane ube Vac

. &

AA. a3 i

e *

at the same time shall proclaim a national acreage allotment i

for the crop of wheat planted for harvest in the calendar

year in which such marketing year begins. The amount of the

national acreage -allotment.for any-crop of wheat shall be

the number of acres which the Secretary determines on the

. basis of expected yields and expected underplantings of farm

acreage allotments ‘will,together with (1) the expected

production on the increases in acreage allotments for farms

based upon small-farms base acreages pursuant to section

1835 of this title, and (2) the expected production on in-

creased acreages resulting from the small-farm exemption —

pursuant to section 1335 of this title, make available a supply .

of wheat equal to the national marketing quota for wheat

. for such marketing year. Feb. 16, 1938, c. 30, "Title III, § 333,

52 Stat: 58; June 20, 1938, c. 518, 52 Stat. 775; July 26, 1939,

c. 377, 53. Stat. 1125; July 3, 1948, c. 827, Title II, § 207(b), |

62 Stat. 1257; Sept. 27, 1962, Pub. L. 51-6, Title Il,

§ 312, 76 Stat. 620. ee

§ 1334. Apportionment of national eareien ‘allotment

(a) Apportionment among States; overplanted allot-

ments; special acreage reserve

(b)° ectuimuziie enone open overplanted allot-

ments 4

ments; reductions; notice :

(d) copper co 7 Mae Sea ,

: ‘kia cunaua Wes lees dblbvoredl th the Searclecy ox stored .

Se Pee Pe -

ment of penalty

(e): Increase in acreage allotments and marketing

quotas for class Il durum wheat «.

(f) Voluntary surrender of acreage allotment

g) Plantings in excess of allotments or where no

ent is established es |

) Omitted

\ a AS a ; je :

(i) haariees fn ‘acreage allotments for any kind of.

wheat in short supply; storagé reduction and land-use |

provisions inapplicable to ‘such wheat . | |

‘(j) Inerease in California. acreage allotments and

.marketing quotas for 1958 through 1963 crops of durum —

wheat; land-use provisions inapplicable to such wheat ©

(k)) Transfer of farm wheat acreage allotments in case

of natural disasters ; FR ite a SARS 2

‘§ 1334a. Summer fallow crop rotation}, adjustment of -

“a acreage allotment ce bat \ °

-. $1384b, Designation of Sjates outside commercial wheat +

§ 1335. Small-farm ‘exemption; émall-farm base acreage;

_ election; acreage. allotment; land-use provisions;

" price support; wheat marketing certificates |

§ 1336. Referendum si

§ 1337. Repealed.

§ 1338. Transfer of quotas

"$1339. Land, use—Diverted acreage; producers eligible

for -certificates; conservations uses; amount; an-

nual identity; grazing Le eee eee

(a) (1) As a condition of eligibility for wheat market-

_ ing certificates with respect to any farm, the producers’ on

such farm shall be required to divert from the production of

- wheat to an approved conservation use an acreage of crop- -

land on the farm equal to the number of acres determined

_ by multiplying the farm acreage allotment by the diversion

factor, and to participate in any program formulated under

subsection (b) to the extent prescribed~by the Secretary.

- : Such diversion factor shall be determined by dividing: the

number of acres by which the national acreage allotment is

reduced below fifty-five million. acres by the number of actes

* in the national acreage allotment. os eae

ayment program for 1964 and 1965 crops; terms and ‘

conditions; amounts; additional diverted acreage; con-

servation and soil-conserving uses; adjustments; -

knowledge of exceeding acreage allotment; acreage

allotinent not exceeded by delivery to Secretary of

farm marketing excess or storage in accordance with

regulations to avoid or postpone payment of penalty —

or by farms exempt from marketing quota; new farms

ineligible for payments; sharing and medium of pay-

, mulate and carry

out .a program with respect to. 1964 and 1965 crops of |

wheat: under which, subject to such terms and conditions

as he determines are desirable to effectuate the purposes of *

this section, payments may be made in amounts not in excess

of 50 per centum of the estimated basic county support rate

_ for wheat not accompanied by marketing certificates on the

normal production of the: a¢reage diverted taking into ac-

_count the income objectives of the chapter, determined by

the Secretary to be fair and reasonable with respect to acre-

age diverted pursuant’ to subsection (a) of: this section.

Any producer who complies with his 1964 farm acreage allot-

ment for wheat and with the other requirements of ‘the

program shall be eligible to receive payments under the pro- .

_ gram for the 1964 crop of wheat: The Secretary may permit

producers on any farm to divert from the production of .

wheat an acreage, in addition to the acreage diverted pur- >

, Suant to subsection (a) of this section, equal to 20: per cen-

tum of the farm acreage allotment for wheat: Provided,

That the producers on any farm may, at their election, di-

- vert such acreage in addition to the acreage diverted pur-

suant to subsection (a) of ‘this section, as will bring ‘the.

total acreage diverted ort the farm to fifteen acres. Such

_. program: shall require’ (1) that the diverted acreage shall

be devoted to conservation uses approved by the Secretary;

(2) that the total acreage of cropland on the farm devoted ’

i. otal.

land but excluding the acreage diverted as provided . above,

shall be not less than the total average acreage of cropland ,

_ devoted to soil-conserving uses including summer fallow and

jidle land on the farm during’ a representative period, as de-

termined by the Secretary, adjusted to. the extent tHe Sec-

retary determines appropriate for (i) abnormal weather con- -

ditions or other factors affecting production, (ii) »established

_’ crop-rotation practices on the farm, (iii) participation in

other Federal Farm programs, (iv) unusually high percent-

- Meee ten thks poealh af eetaltichian 4 tee and ounilalic

_ soil-conserving acreage for the farm; and (3) that the pro-

ducer shall not knowingly exceed. (i) any farm acreage allot-

ment in effect for any commodity produced on the farm, and

(ii) except. as the Secretary may by regulations prescribe,

s with the farm acreage allotments on any other farm for any

- crop im which the producer has a share: Provided, That no

producer shall be deemed to have exceeded a farm acreage

allotment for wheat if the entire amount of the farm market- °

= ing excess is delivered to the Secretary or stored in’ accord-

ance with applicable regulations to avoid or postpone pay- . .

ment of the penalty: And provided further, That no producer

shall be deemed to have exceeded a farm acreage allotment

for any crop of wheat if the farm is exempt from the farm

quota for such crop under. section 1335 of this

title. The producers on a new farm shall not be eligible for

payments among producers on the farm on a fair and equi- -

eee ee es

(d). Advance payments

(e) Diverted acreage ‘ial as cai of certain —

crops; rate of payments; imitation on rates price support _ pe

unavailable for onan weeps

(f) Additional terms and conditions

ee IE beers te: The Secretary is authorized to ae a such reg-

ak. Eee) ‘ © 32 °* ulations ‘as may be avczees to carry out, the provisions of -.

\ ee “i sen ae i

oh el My : - Commodity Credit Cikginention’ funds and appropriations

= ERY . ’., for payments and: administrative expenses

+o) ) The Commodity Credit Corporation is authorized to i:

af tele its capital funds and other’assets for the purpose of |

ae | — SR BS ttn en eh a

Peso er ce i Shoriend to. be paca such pa chat as aiarsg neces- ©

ah aa oa ath Beige cacy gn gra ager Reson rm ge“ “

‘.- 16, 1988, c.30, Title ITT, §339, as added Sept. 27, 1962, Pubs ‘

= iced ie | L.-87-708, Title ITE, $318, ‘76 Stat. 622, as amended Apr. 11,

Pye y hy e 1964; Pub. L. 88-297, Title II, $202 .(7)—(9), 78: Stat. 179,

Ook a : Am AS32e.. iar programs; Fa faith pirforinanons aa

eple § isa0, eaee diversion ae, redline 4 in Sr

ede State, county and synced

ee ia has? 5 ments for wheat | ee

ea a Gs ae “418996. Feed grains- Sheeweldin’ ‘progtains. ie "1964 and

om Ee eee ‘subsequent years; feed grain acreage considered _

GAN Dt tes oe _ wheat acreage and whet Sereage’congilered fred -

Pie, Ae ne Haga. Seppicceent seistiline! Ti nog to wheat mar-

=a, tl aa ae ee keting quotes paaricting penalty for rice; crop —

; : - + , *

é sen BM 82-9 * Are a «

of ot ove page - : eee

, *o- Swe eX. it-

ASE

° , » bad

-£ 8 6° @.:

Pe A

——_ ¥ “

- ° ’ . ile

; ne emi ae ie a bP s. * ‘a

ree . WHEAT MARKETING ALLOCATION

Faces mean Ney 3a

i: ae AS Wein dn obablin te beiey o:has foil fo t'el to

r ae Ne, =; | great export, a t: anmcee — and. ‘its produc-

Aes. te | fixe ; e Af

i amie es & . % : ae . : x ‘é # Ae ; a ode f

ean : 4 bs .

q . . Skies

“y=? < ‘L - é ars ‘ : ed .

. : . a A 3

fe ne e we “sae a ae ie

weet S47. e tae : *

. ar > ’ . oy . ‘

ae 7 e- ‘ e . yy" ae = game ‘oS °

Cy a * é a ° a . 4 wd . ‘

ch ident viieeenlenunaie AS a SE EE :

. * ‘ = "os va " DE a —

A-9

» tion for domestic consumption and ‘for export is necessary

to the maintenance of a sound national economy and to the

- general welfare. The movement of wheat from producer ‘to

. consumer, in the form of. the commodity or any of the |

products thereof, is preponderantly in interstate and foreign

commerce. Unreasonably low prices of ‘wheat to producers

impair their purchasing power for nonagricultural products

and place them ih a position of serious disparity with other’: -

industrial” groups. The conditions affecting the production

‘of wheat are such that. without Federal assistance, producers" -

cannot effectively prevent disastrously low. prices for wheat.

.. It is necessary, in order to assist. wheat: producers in obtain- -

ing fair prices, to regulate the :price of wheat uséd for do- ~

. mestic food, and for exports.in the manner provided in sec-

-tiohs 1379a—1879j of this title. Feb. 16, 1988, c. 30, Title .

oll, § 379a, as added Sept. 27, 1962, Pub. L. 87—7038, Title

- ° TI, § 324(2), 76 Stat. 626. a) |

_ § 1379b. "Wheat marketing allocation for 1964.and 1965;

_ + 5 “gmount; national allocation percentage: © -__—

ae. wheat’ marketing. allocation. program as provided in sec- -

-. tions 1379a-1379j of this title shall be in effect for the mar-

> keting yedrs for the 1964 and 1965 crops. Whenever a wheat

_ marketing allocation program is in effect for any -markéting |

..° year the Secretary shall determine (1) the wheat marketing

allocation for such year which shall be the amount of wheat.

ie he estimates will be used during such year for food products

- . for ‘consumption in the. United States’and that\portion of.

* the amount of wheat which he estimates will be exported in ae

» La : ‘e , ° < :

» te ed \

A-10 3

farm shall receive a wheat matketing allocation for such -

rae marketing year: equal to the number of bushels obtained |

. . by multiplying the number of acres in the farm acreage allot-:.

ment for wheat by the normal yield of wheat for the farm

_as'determined by the Secretary, and multiplying the result-

ing number of bushels by the national allocation percentage.

Feb. 16, 1938 c: 30,. Title ITI, §3796; as added Sept. 27, 1962, _

Pub. L. 87-708, Title III, §39A (2), 76 Stat. 626, as amended

Apr. 11, 1964, "Pub: L.: 88-297, Title II, $202 (10), 78 Stat.

179. - : .

hi /

. § 1379¢.' Marketing sesttindatatan toi amount; redue-

tion; sharing among eo domestic and ex-

certificates

‘port

(a) oak ooipiits Sie en iescnce ol het

marketing certificates for each marketing year for which a -

wheat marketing ,allocation program is in effect for the

purpose ‘of enabling producers on any farm with respect to

® which certificates: are issued to receive, in addition to the

™ Ee ee oe

es the value of such certificates. The wheat marketing. certifi

‘cates igeved with respect to any farm for any marketing year

shall be in the amount of the farm wheat marketing alloca- .

tion for such year, but not to exceed (i) the actual acreage

ape eates ae in teste Se Seventies Se cee

year inrwhich the marketing asleep by the

shares in the wheat crop produced on the farm, or

te ocd there. "The Sortary hl in accordance

" oS t

. m ° 4 .

A-11

sii il sais Wi ies aia illite tan ie

-issuance of domestic marketing certificates for the portion.

of the wheat ‘marketing allocation’ representing’ wheat used

- for food: products for consumption in the United States and |

, for the issuarice of export marketing certificates for the por-

tion of the wheat marketing allocation used for ports. |

Producers eligible for certificates; storage conditions

' '. (b) No producer shall be eligible to receive wheat market-_-

‘nn cacallgian Wah damheck 4 aie hacia tar we anon 4,

year in which’a marketing quota penalty is assessed for any

‘commodity on such farm or in which the farm has notcom-.

plied with the land-use requirements of section 1339 6f this |

title to. the extent prescribed by the Secretary, or in which, _

except as the Secretary may by regulation prescribe, the

producer. éxceeds the farm acreage allotment on any other —

ies fot coy coals 6 le bs ee

" producer. No. producer shall be deemed to have exceeded a

farm acreage allotment for wheat if the entire amount of the

farm marketing excess is delivered to the Secretary or stored .

in accordance with applicable regulations to avoid or post- -

pone payment of the penalty. No producer shall be deemed

to have exceeded the farm acreage allotment for wheat on

- any other farm, if such. farm is exempt from the farm mar- -

keting quota for such crop under. section 1335 of this title.

. For purposes of this section, but not for purposes of diversion

| Payments. under subsection-(b) of section 1339_of this title,

“shall be deemed: not ‘to have exceeded the farm

farm scwipngpy diloletianh cde. ik acabedl 4 cite adndanes eh thes

farm acrerge allotment and the amount of wheat. produced

on the acteage.in excess of the farm acreage allotments is

stored in accordance with regulations issued by the Secre-

tary: The amount of wheat required to be stored hereunder

shall be an amount equal to twice the normal yield of wheat

per acre established for the farm-multiplied by the number

of acres of such crop of wheat on the farm in excess of the,

farm acreage allotment for such crop unless the producer. |

in aoorance with regulations practi by the Socary as

a ee Se Se, RS ee :

- A-12

- gatinlection cf the Secretaty the actual, production of such

- crop of wheat on the farm. If such actual production is so

‘+ legtablished, the amount of wheat required to be stored shall. :

; be such actual production less the actual production of the

farm wheat acreage allotment based upon the average yield

perpacre for the entire wheat acreage on the farm: Provided

- however, That the, amount .of wheat required to be stored _

. shall not be larger than the amount by whiclr the actual pro-

duction so established exceeds the normal production of the

- farm wheat acreage allotment. At the time and to the extent

_, of any depletion in the ‘amount, of wheat so stored, except

depletion resulting from the release of wheat from storage on

account of underplanting or underproduction, as provided .

below or depletion resulting from some cause beyond the

control of the producer, the producer shall pay an amount —

to the Secretary equal to one and one-half times the value

of the wheat marketing certificates issued with respect to

the farm for the year in which the wheat on the acreage in

excess of the allotmen t was produced. Whenever the planted —

acreage of the then current crop.of wheat. on the farm is _

Jess than the farm acreage allotment, the total amount of

' wheat from any previous crops stored hereunder or stored

__in-order to avoid or postpone a marketing quota penalty

shall be reduced by that amount which is equal to.the normal

production of the number of acres by which the farm acreage .

po gate a Agen lige ps and whenever the

ae reduced by that amount which together with the actual pro- =

duction of the then current crop will equal the normal

production of the farm acreage allotment. _

’ Face value -. 7a

Sey "Thn Siciiety ihe ilethan’ sll palais toe onc

. marketing year the face value per bushel-of wheat market

, ing certificates. The face value per bushel of domestic. cer-_

Uficate dual tio tite -eainctunt ty Which the level of aise Ss

ee ee ee

ah Statement or form of certificates and transfers.

i A-13 Z aed ; 6 |

bushel of export certificates shall be the amount by which

"the level of price support for wheat accompanied by export _ .

certificates exceeds the level of price support for noncertifi-

cate wheat. ee ibe |

€

" (d) Marketing certificates and transfers thareod shail be

.. Tepresented by such documents, marketing cards, records, ac-

counts, certifications, or other statements or forms ‘as the

+. eS ae ray \ P re gate

ceeds the level.of price support for wheat not accompanied -

by.certificates (noncertificate wheat) ; and the face,value per’

Secretary may prescribe. Feb. 16, 1988, c. 30, Title III, .

§ 379c, as added Sept. 27, 1962, Pub. L. 87-708, Title III, -

88-297, Title II, § 202(12)-(14), 78 Stat. 180, 181.

§.1379d, Marketing restrictions—Transfers of | certifi-

cates; purchases. by Commodity Credit Corpora-

__-§ 824(2), 76 Stat. 627,-as amended Apr. 11, 1964, Pub. L.

(a). Marketing ‘certificates shall be transferable only in’

with regulations prescribed by the Secretary.

Any unused certificates legally held by any person shall be —

refunds or crédits for certificates; exemptions ~

| purchased by Commodity Credit Corporation if tendered to

_ the Corporation for purchase in accordance with the regula-

tions prescribed by the Secretary.

(b) During any. marketing year for which a wheat mar-

_ keting allocation program is in efféct, (i) all persons en-

gaged in the processing of wheat into food products shall,

- prior to marketing any such food product or removing such

‘food product for sale or consumption, acquire domestic mar-

- ‘keting certificates equivalent to the number of bushels ‘of

wheat, contained in such product and (ii) all persons export- ..

ie att

ing wheat shall, prior to such export, acquire export market-

ing certificates equivalent to the number of bushels so éx-

ported. In order to expand international trade in wheat and

- wheat flour and promote equitable and stable prices there-

for the Commodity Credit: Corporation shall, upon the ex-

portation from the United States: of any wheat or wheat

flour, make @ refund to the exporter or allow him a credit

against the amount payable by him for marketing certificates,

in such amount as the Secretary determines will make

United States wheat’ and wheat flour generally competitive |

in the world market, avoid disruption of world market prices,

- and fulfill the international obligations of the United States. _

- 'The-Secretary may exempt wheat exported for donation .

abroad and other noncommercial exports of wheat and wheat

processed for use on the farm where grown from the re--

quirements of this subsection. Marketing certificates shall

be valid to cover only or removals for sale or consump-

a ci cemnily

exportations made on or after the date co determined by —

RO) Upon the giving of a bond or other undertaking satis-

factory to the Secretary to secure the purchase of astd pay-

= A 82

“ment for such marketing certificates ae may be required,

4 and subject to such regulations as he may prescribe, any

person required’ to have marketing certificates in order to.

market or export a commodity may be permitted to market _

ren fro otguia acicce cite, anita reales

“Food products” defined

product. Feb.16;:1938, c. 30, Title IIT, §379d, as added Sept.

' 27, 1962, Pub. L. 87-703, Title III, §324(2), 76 Stat. 628, as

amended Apr . 11, 1964, Pub. L. 88-297, Title I, $202(15)-

Re 78 Stat. 181, 182.

- § 1379. ‘hela ta piedadk ail sale of marketing .

_° . eertificates; regulations; alntinistrative ex-

penses; interest

Wie ib walenns. dk Gata hd pial as :

_ marketing certificates, the Commodity Credit Corporation

is authorized to issue, buy, and sell marketing certificates in

_ accordance ‘with regulations prescribed by the Secretary.

Such regulations may authorize the Corporation to issue

and sell certificates in excess of the quantity of certificates —

_ which it purchases. Such regulations may authorize the Cor-

poration in the sale of marketing certificates to charge, in ad-

dition to the. face value thereof, an amount determined by |

-the Secretary to be appropriate to cover estimated admin-

- istrative costs in connection with the purchase and sale of

the certificates and estimated interest incurred on funds of

the Corporation invested in certificates purchased by it. Feb.

16, 1938, c. 30, Title III § 379e, as added Sept. 27,. 1962,

Pub. L. 87-708, "Title III, #324 (2), {ee OP ; =

3 § 1379f. Conversion factors . ,

dul bowel to dterin the anou of wheat cota

| | of ok eo <

~ 5, j A-16 : ar ¢ Hy) :

Be in any food product. The conversion factor for any such

food product shall be determined upon the basis of the weight _ als

of wheat used in the manufacture of such prod) Feb.

. 16, 1938, c. 30, Title III, § 379f, as added Sept. 27, 1962,

Pub. L. 87-708, Title III, § 324(2), 76 Stat. 629. |

_ § 1379g. Authority to facilitate transition

The Secretary is authorized to take such action as he de-

" * termines to be necessary tocfgeilitate the transition from the: |

program currently in.effect to the program provided for in.

‘sections 1379a-1379j of this title. ereilenupramg Aa other

_ provision of such sections, such authority shall include, but

. ghall not be limited to, the authority to exempt all or a por- |

tion of the wheat or food products made therefrom in the

channels of trade on the effective date of the program under

_ guch, sections from the marketing restrictions in subsection

(b) of section 1379d of this title, or to sell certificates to

issued by ‘Commodity Credit Corporation. Feb. 16, 1988, c.

30, Title IJI, § 379g, as added’ Sept. 27, 1962, Pub. L. 87-

703; Title III, § 324(2), 76 Stat. 629.

§1379h. Applicability of provisions to designated per-

. sons; reports and records; examinations by the _

A-17

7 chtnining, teliaiialiats duiidiattin tated it tiny wgink,

‘but. not so furnished, the Secretary is authorized to examine

such books, papers, records,: accounts, correspondence, con-—

tracts, documents, and memorandums as he has reason to

believe are relevant and are within the control of such person.

Feb. 16, 1938, c. 30, Title HII, § 379h, as added Sept. 27,

1962, Pub. a 87-708, Title Il, § 324(2), 76 Stat. 629. |

§ 1379i. Pestaltice—Feltelinnes amount; civil action !

(a) Any | pérson who. violates or attempts to ‘violate or

who participates or aids in the violation of any of the pro-

visions of subsection (b) of ‘section 1379d of this title shall

forfeit to the United States a sum equal to two times the

' face value of the marketing certificates involved in such

violation. Such forfeiture shall be recoverable in a civil action

Ne Oe

Misdemeanors; punishment

(b) Acs ‘pedionansebh y otieaes ti Als domestic '

producer, who violates or attempts to-violate or who partic-

ipates or aids in the violation of any provision of sections

1379a-1379j of this title, or of any regulation, governing the

acquisition, disposition, or handling of marketing-certificates

_ or who fails to make any report or keep any record as required

by section 137h of this ite shall be deetned guilty of a mis

demeanor and upon convictiori thereof shall be subject: to a |

fine of not more than $5,000 for éach violation. |

Forfeiture of right to receive: cortificatess payment ,

. . Of face value ;

ingly violates or attempts to violate.or participates or aids in

the violation of any provision of sections -1379a-1379j of this

oe + Oita or of any regulation, governing the acquisition, dispo-

sition, or handling of marketing’ certificates or fails to make

any report or keep any record as required by section 1379h

of this title shall, (i) ee re. 7

ing certificates to be forfeited or the amount to be paid by

such producer shall take into consideration the circumstances

relating to the act or default committed and the seriousness

of such act or-default. F =

’ Felonies; punishment

- 1988, c. 30, Title III, € S7Oi: an added Sent. 27, 1962, Pub, E.

87-708, Title TH, $ 324(2), 76 Stat. 629. |

§ 1379j. Regulations | de

The Secretary shall prescribe such regulations as may be

y to carry out the provisions of section 13794-1379}

A-19

2. Regulations —Processor Wheat Z

“7 CFR, § § 777.2—.17 (1965 ed.) I |

PROCESSOR WHEAT MARKETING CERTIFICATE

. REGULATIONS

Authority: The provisions of this Part 777-iasued under

secs. 379a to 3793, 52 Stat. i, as amended by 76 Stat. 625

and 78 Stat. 179; 7 U.S.C. 1379a-j. ¢

a . $777.2 Administration.

| $777.3 Definitions.

dese dh Ge’ vaiieliin in ils taken lh

structions, forms, ug Phe documents hereto, the

words and phrases defined. in this: section’ have the

peel asia oc nh acct aegeng malas

(a) “Wheat” means wheat Canin A tats wn

duced in‘ the. United States), as defined in the Official Grain

Standards of the United States or any wheat contained in

any mixed grain or in any: other mixture, which if not con- |

SE ee eee ee

(b) “Food product” means:

: (1) Aay quote ‘guises’ ix winks or in. pat

wheat, irrespective of whether such product is actually

3 pony aa canst boicemndparl gee tagger, Bw

herein as non-food products. Such food products shall, ex-.

cept as provided in, péragraph :(c) (3) ofthis eto, cd :

. but not be limited to the following:

(i) Flour, as defined herein. ; :

(ii) i a Racha ar steeped, or commer

'” - qially sprouted.

(iii) Any breakfast cereal.

(iv). Any beverage.

“(b) ‘Pet 166d sn pouizy| toad; ~*

for human ion;

_-. (d) Any product marketed or removed seat toda the plant foe:

8) Any ientienlw iliguic to sandbetins stoi So 4

. | (4). Any product, being ‘mantifactured as a food product a

‘sainal feed or tier nonfood products spectid inthis

paragraph. _

“(Bach other sinodinets Gestalt Goan Weel op are

Administrator may determine tg be men Sod poets. a

pa pelo dong yh ntne ye l

Bere eos prereset rites to ge

ee 3 ;

e-°

"means the twelve months ‘beg \

pres May 18, 1964, as ardnded at 29 FR. 964, .

_June 24, 1964, 29 F.R. 11643, Aug. 14, 1964; 29 FR. 12471, :

Sept. 30, 1964, 29 F.ii, 17087, Dec. 15, 1964 —

3 1174 Applicabitisy of certificate requirements

Any person who has registered

nee

ey’

9 AB

"the processor qualifies for scalitop certificates under S778.

The cost of domestic certificates\for the marketing year. :

ae > ee eee eee

(2) Wheat processed in bond * * *- rie

(3) Custom or toll Processing Av the Department of

Agriculture OPER Le

(4) Processing by educational ‘nstiititions or. pram pert et

§ 777.5 Registration of processors.

., (a) Time of registration. Any person who processes wheat,

| ither into a food product or non-food: product, except a

“sons for purposes of student raining, ‘experimentation, re- ee

~ search, analysis or

[29 F.R. 6272, May 13, 1964, as amended at 29 FR. 7984, |

. , June 2, 1864, 29 FR. 11668, Aug. 14, 1964; ES. el.

| ‘Sept. 30, 1964] | a,

person who processes wheat solely for use on the farm where =

grown or an individual who processes wheat in his own home

for family yse in‘his home, shall register with the Director ¥

(see paragraph (1), §

later. date as may be approved by the Director in wtiting. .

- Any such person who begins processing operations sub-

sequent to May 20, 1964, ‘ who is not registered, shall

the Director and who

771.3)—by-making

-\by paragraph -(b) ‘of this section by May. 30, 1964, or such ae

mag his operations, such as by opening or closing plants, -

r beginning te_process food products, ‘subsequent to the. -

date of hie régisieation, notice-of

‘such-change to

irs the Director not later than Sos sdigeh pan these ee

* (b) Method of registration yh oe

Sue bushel on certain wheat produced and stored in

—<——

- [29 FR. 6272, May 13, a as amended at 29 FR. 11643, ay

Aug. 14, 1964]. | :

- § 7776 Transition. _- .

(a) Claldvad Ti hes ‘oun: Golbiaiiid indy ts

tate the transaction from the 1968. program to the

allocation program by reducing the cost of

mastic cortfcates from 70 centa per bushel to 18 cents p

the U:

leben RORY Gontaaaed take Sot yeodicts onan after J

1, 1964. Such reduced cost certificates, shall hereinafter be

Re caiecs to as “transition certificates”.

~ (b) Eligible persons * he ee

(a) Transition certificates * * * | : ee,

(e) ‘Submission of reports * *“*.

(f). Transition Records: to be retained by food proces-

Sor * +. e

(h) Poikre to oct in gid Yoke CEH... 2 ie gat

13, 1964, as

gS heitioes =

§ 771.7 Refunids or eredite for flour exports :

(a) General ***. | |

(b) Exports under GR-262 oye

' (c) Exports of food products other than oe . oes

te 7

§ 777.8 Penalties.

(a) Violation of marketing soetrictliinie-<ihailatnaiok. Any .

person who violates or; to violate or who -partici-

Feom e aids in the yidcttor of Sy’ of the proviaced of

these regulations with regard to the acquisition of certificates,

, ee

or uses such falsely made, issued, altered, forged or counter- .

- feited certificate, shall be subjeé to the provisions of section. 7

''379i(c) of Agricultural Adjustment Act of 1988 which state

that such person shall be deemed guilty of a felony and upon 7

" , » [29 FR. 6273, May 13, 1964] _

A2 °°.

) of the Agricultural Adjustment Act of 1988

provides for the forfeiture to the United States by

be recoverable iri a civil action brought in the name of the

United States. ven i ¢

_ than five thousand for each violation. |

ion shall be subject to. * -

___ Such person of a stim equal to two times the face value of the _

certificates involved in such violation: Such forfeiture shall .

_(c). Fraudulent_use of marketing certificates. Any person

who person

falsely makes, issues, alters, forges or counterfeits any

certificate, or with fraudulent intent possesses,

conviction thereof shall be subject to 4: fine of not more

than ten thousand dollars orimprisonmient of not ‘more than

ten years, of -both.. - “— i

Lite Aprenpx Ty

ProGesson WHEAT MARKETING CERTIFICATE -

i nA MRO Sc ge

Instructions to Processors for Preparation of

' Wheat Transition Report Forms

a Bos See ee

[29 FR, 6273, May 13, 1964, ag amended at 29 FR. 7964, -.°

ee SL ee eee

‘97779 Semi-procegsed wast sigh, LAS

mel

. [29 FR. 7985, June 24, 1964, 29 FR, 11643, Aug. 14 1966 BY

~ 2 FR 13471, Sept. 30, 1964]

$777.10 Wheat Marketing’ C

by.CCC, or a certificate credit

certificate will be identified as “domestic,” will show date

Of issuance, bushel’ quantity, face value and: name and ad-

: - dress gf ‘person ‘person to whom issued;\and will bear the signature

of a. representative of CCC authorized to sign certificates.

“(b). Sale by CCC */* *

(a) Surrender ‘ off certificates to CCC.*.** .-

nO) Purchases by CCC. Any valid Form: ‘CCC-145 cer-

tes legally held by: any: person will be purchased by

CCC at face valu it presented for purchase to the Kansas

City. Commodity Office.

{29 F.R. 7985, June 24, 1964] -

$777.11 Time and mainer of soquiring and surrender aS

_ ing certificates.

(a) General, ‘Food processors shall. acquire certificates

| “and surrender certificates to CCC as provided in paragraphs \

(b) and (c), of this section and in the manner specified in

$777.10. The number. of certificates: acquired by the food

processor and surrendered to CCC shall be equivalent tothe ,

a Ee ne eT eee

bs at Marketing. Certificates | (Domes-

rein cat “domestic certificates® or “certificates,” ~

vs . Tepresented by Form CCC-145, Wheat Marketing oe

he _-—Certificate (Domestic) i

2 : established by CCC. in favor of a food processor ‘for cer-

tificates purchased from C€C. pursuant to these regulations.

_ Form CCC-145 is ‘a ‘serially numbered form entitled “1964

Wheat Marketing Certificate.” A Form CCC-145 domestic.

a i

. '- weight of wheat used in: processing

A-27.. °

| sit iat ita ic

- Such quantity of wheat shall be. determined. and reported

to CCC as provided in §§777.12 to 777.1 14 on the basis

the.

. fv agerersie gsc ine ewin ew henseeh hg al

with COC provided inthis pamgraph and gomplce with suc

a) Purchase if catttncate in cbetrice of wdertoking”(1)

certificates to CCC on or before the 15th calendar day after

the end of the processing report period, or such later date

oun be Soneoved in wean ere oe

- cause shown, for all food products sold and removed for sale

_ Or consumption from the processing plant, covered by the

processing. report, during the processing report period. The

cost of certificates acquired from CCC shall be as provided

a in ubparagraphs (2), (8), and (4) of this paragraph.

(a) Wheat ccquired from CCC for it flour under

—GR-2***

[29 F.R. 7985, June 24, 1964, os amended at 29 FR. 1164, ‘

Aug. (14, 1964, 29 F.R. 17087, ‘Dec, 15, 1964] °

$777.12 ‘Food ‘poilscdillt reports.

ity €

‘defined in 8777.3 (f). Descriptions of the processing reports

7 oe ae Oe eee ee

= sooner ity tere

_ ing operations which cameras shail cover shall be —

ep macuneae e ,

4 or 5 weck perio in combination.

(iia) nee

(d) Basis of tanta Oe |

fom een tA fr nd cs So .

the basis of reporting.

“oe mere” EME EEE

}®. Number of report periods for which submi a :

(g) Corrected processing reports * * * | abe,

. Q) ' Reports from persons engaged in ‘in sanceaning ey

- wheat, primarily f for student training, ame cceaaaaa tad

_ gearch analysis or testing ** *

[29 FR. 7986, June 24, ‘1964, os amended at 29 FR. 11643,

. Aug: 14, —, 13471, Sept. 30, 1 ai 29 FR. 17087,

$777.13 Weight of wheat basis of reporting:

(a) Food cod processors reporting the quantity of wheat proc-

we. !

| ened into fond peocacts on the baae of the weight of whee .

Oi pert cert’ Determinations of the weighs: of whect pressed

food products shall be made jn the manner prescribed in

Se ae

wheat. ee

[29 FR. 7986, June 24, 1964] |

aie ‘977744 Convérsion factor basis of reporting.

(a)! ' Report form, Food. prdpemiacy jepaeting tha 3 ay

_-of wheat processed into food products on the basis of the

- application of conversion factors to the weight of food prod-°

ucts obtained in the processing operation (herein called “food. =.

‘product conversion factor Kasis”) shall complete Form: — ...

159, Processing Report-Conversion Factor Basis, for each 1g,

ay ‘porting * period. Ses Mole

(b) Additional ingredients. Ut the food product conversion”

factor basis of reporting is used to determine the quantity of

> the wheat processed, such quantity may be reduced by the —

weight of any additional ingredient included in the weight -

of. the food products which was introduced during the course -

of processing. “Additional ingredient” for purposes of this

paragraph.means:

Ae (1) Any. flour and other food. products including’ clears

and malted wheat flour, which were produced prior to July —

to 1964, or fot which certificates have previously been ac- .

S quired and surrendered to CCC by the processor or.for which

-ortificates are required to be acquired ‘and surrendered ‘to

See ee er eee

: wheat equivalent of each food product named column A.

”\ shall be the number of bushels prescribed as the 5 caendon

Teh ft Sock potas fa colenen Bh

NG wa : dhs PeotBS :

: rete ast oe eecaae Bushels

: pret yas Pr: aa. sat

+ (conversion factor)

Whole Due —_ or ens Sout ; irk Wael Sie, A

_-Flour (inchiding® clears) derived from conventiorial ua

milling practices which are generally accepted .

in the milling industry in the United States as:

Tepresenting a'72 percent extraction operation’ sialon 2.283

£ t flour . i eS a ae Sa piincbhcerecionee me:

AOI se TTT CAR ee eee?

Bulgur._ ........ ep Bae ELS Pesce cera et AR WM SC ae 1.916

Rolled wheat ....02.00.00c..0000c0000 ree eet a ees G 1.800

Cracked wheat . (wheat grits), “ground shail “ae

«SAMMI IRIN A tse erandent nat sev centorpriocitcsonsonensbosvbees 1.700

iets laut Sud B-Gaeuction iajeinmsily A0 nee

percent heavy bran and 50 percent’ flour)? .:.............. 1310 --

" Heavy bran, wm, tbe B (deimection approninataly £7 -

percent’heavy bran and 32 percent flour)*’.............. , 1.640

-, Whole wheat cereal; including fines (e depart

proximately 80. prevent cereal and - oe

’ fines)? Py, SRS Atk ae 21) I Se Re OL .. 2.09

. Wheat-bits ooreal, incuding fines (extraction ap-

a proximately, 68 percent cereal and a7. perce

SMM Sade ceria outerones tees onsbectenien ie et hati than ee 2.44

ere. “hess pede pe be ge extinétion

approximately 59 percent cracked wheat and 27 ~

percent fimes)? 0.0.0.0... poh “SSO tae CNL EIST 2.80

‘applicable to'a 72 patank operation. -_- .

When certificates are acquired for these products based on the.

conversion f. tors specified, certificates will be deeméd to have been: .

coquived te Gis Sieg Seine Ss comuction Gaseeeh

ey -

a dl

coud - Aa

‘factor for any additional food product or flour of other rated

of extraction. § . .?

(2) ‘king petacn Wid ‘leben to gallos Ge the wea e

ment of>a conversion factor for foad products other than |

.. flour shell submit to the Administratdr:

(i) The name and a détailed deScription of the food prod-

suet, alld a oe

i) The conversion factor which is considered to’be ap-. .?

(Such factor is to be based ypon the quantity of eters

t, prior to deaning, that is required to produce 100 .

pounds of the particular. food product), and acti

Sey _ (ii) “Bvidence to substantiate Ye recommended conver-

: (8) Any person who wishes to petitin for the establish- foo

\ ment of a conversion factor for flour of other rates of extrac- °

‘tion shall submit to the Administrator the rate extrac-. ~

tion for which he desires the establishment of a conversion. .

Spots. 1028 9. seamen fn eines: Oak Ne. wap Ant x

'- such rate of extraction. sa

-(e) Preparation. of the report. esianthtien for the prep- -

. aration of Forms a ented wonton beer IIT.

of this part. ak

[29 FR. 7987, June 2, 1964; 29° F.R, 11644, how. 14, 1964,

29 F.R..17087,, Dec. 15, 1964] - ;

§ 777.15 Records. ie ® aud et

Food peoceseots shell esteblish and niaintain tor exch jeoc-

. essing plant or approved combiriation of plants accurate rec- |

, ords and documents which are necessary (a) to determine .

the. total quantity of wheat processed into food products - »¢

based: upon the weight of wheat used in processing food

ok ee ee

—

A-32

upon the application of conversion factors to the weight ~~

of food products: obtained in the processing operation as

§ 777.14 and Appendix III, whichever is appli-

cable and b)-to support all reports thereof made to.the Kan-

sas City Commodity Office. A food processor shall. establish

o -- ahd maintain accurate records of all sales of food products

+ and removals of food products for sale and consumption from

the processing plant unless he-elects to have all wheat proc- -

- essed during-each reporting period considered as ‘having

been sold or removed for sale or consumption during such —

reporting period. The food processor’s. failure to maintain

. such gecords shall constitute his election to have wheat |

- processed during each reporting period considered as having

been sold or removed for or consumption during such re-

porting period. Represefitatives of the U. S. Department

of Agriculture may examine the foregoing records and docu-:

ments and the stocks of wheat and food products in storage ‘

or in the processing plant at any time during normal business °

Le ee Ee eee ee

a: period of three years.

[20 FR 7967, June, 1964)

§ 777.16 Gaelite: losses.

‘QC shell moke.a refund to the food processor or allow him

a credit against the amount payable for certificates' to the

extent of the value of certificates acquired and surrendered

- to CCC on any food products which the food processor estab- .:

- lishes to the satisfaction of the Administrator was destroyed

_ or rendered unmarketable for use as a food product as a

ee SS ee ee

; moval for sale or consumption. -

(29 FR..7987, June 24, 1964]

; 5 777. 17 ee | in dispute.

. Thet -of a payment to: CCC for certificates, or the *

surrender Of certificates to CCC by a food processor, or the -

making of an undertaking by the processor pursuant to §777.

. a ee ee

: jgalight otherwise have to eisert 0. daita inthe event of a.

_ dispute as to the number of certificates, if any; required to

ya nailed sad! aldecead te Es te Ot ce ke

~refunds or credits against the cost of certificates to. which

pela onncingacicnios eanaaabs ra sliesatieaal

." [29°F.R, 7987, June 24, 1964]

, APPENDIX. II—PROCESSOR WHEAT MARKETING =

i CERTIFICATE REGULATIONS .

INSTRUCTIONS FOR THE PREPARATION OF THE PROCESSING —

‘ReporT—WEIGHT oF WHEAT Basis

* * aK “® wi

| 2.

[29 F.R. 7987, June 24, 1964; 29 FR. 10495, July 29, 1964] .

APPENDIX III—PROCESSOR WHEAT MARKETING —_

.. «CERTIFICATE REGULATIONS -

"INSTRUCTIONS FOR THE PREPARATION OF THE Processinc

> REeportT—COoNvERsION Factor Basis

* *.# * ’*

[29 FR. 7988, June 2A, 1964) a8

EEE aa lllt— ae &,

a et A So ee _ Ay aiciy vhest er ox ahs

FERRERS PAPI I GINGER CALLE GEREN tae el Ra

Dae A pI ARES ith Pita ia wk Oia yr Nhat s 3

ai es 5 Rs 2 aig ae eB sae de eect e i soit SUT ee

RASA N Sieh iG ie Le

g ag B-1 ee

1. Opinion Below |

— Muited States Gouri of Appeals

‘FOR THE DISTRICT OF COLUMBIA CIRCUIT .

Mo Fs os Se

THE Morrison MILLING ComPany, et al., APPELLANTS

- so We

Orvittz L. Freeman, et al., APPELLEES —

*. No. 19,795

ee anit

PoE be Nationa Biscurr Conaasnt: and

o THE cease! Oars CoMPANY, APPELLANTS,

Vv.

— Orvirre L. FREEMAN and | .

Coimonrry CREDIT CoxPoration, ‘APPELLEES .

Appesis from the United States ee >

, for the District of Columbia |

Decided July 18, 1966

Mr. Jerry L, Buchmeyer for The Morrison Milling Com-.

pany, and certain other appellants in No. 19,794. tae

B-2 ee i

* Mr. Brice M. Clagett, witli: ‘whican Meio. Howard. C.

Westwood and Cyril V. Smith, Jr., were on the brief,’

for General Mills Inc, and certain other appellants in No.

“19,794, and appellants in No. 19,795. re Pes

-— Mr. Carl Eardley, Attorney, Departrient -of pg “with

_ whom Messrs. J. Willias *

of Justice, and David'G. ress, United States Attorney, were

on the brief, for appellees. Messrs. Alan S.:Rosenthal and °

' entered appearances for apéllees. . a

Before BazELon, Chit Jute; Danas and McGowan, me

Circuit Judges."

protey Circuit Judge: iia sei tet ins WAS

trict Court involve an attack by a number of wheat proc-

essors upon regulations issued and observed by the. Sec- -

retaty of Agriculture under the Agricultural Act of 1964.

78, Stat. 177, as amended, 7 U:S.C. §§ 1301 et seg. The reg-

_/alations ‘are asserted to be in direct conflict with the statute

_ and, in any event, arbitrary. and capricious. These claims

_ were unavailing in the District Court which, on cross-motions

-for summary judgment, granted that relief to appellees. The

issues raised before us relate solely to the merits; and, for —

a a we affirm the District

; sT Has “

~ ies aclidaiiae ta pamela tks iii te Cle

‘gress in the method of providing financial support for the

_ Kn wha ome Immediately prior to July 1, 1964—

the effective date of the ‘statute here in issue—the grower

could:count on $2.00 per bushel. This was available in the

form of (1) a price support loan of $1.82 and. (2) a Com-

' modity Credit Corporation payment of 18¢. Under the new |

scheme, the loan level was reduced to $1.30, and a system of

marketing certificates was set up. That scheme provided for

an estimate by the Secretary of the national marketing quote

of wheat. This included, among other things otimnates of |

Richard S. Salzman, Attorneys, hears of J =. -£

the amount pNaear in the einer ee of food products

_ for human consumption in the United States and of the

' amount to be exported. When the market quota was de-

termined, the, Secretary estimated the acreage ‘required to

an produce it. Certificates of two kinds—domestic and export—_

iad were then issued to growers, who met the acreage allotment

‘The critical language ss Seg cite eatin the

: liability ‘of processors for the certificates is the following,

" TUS.C. § 1379d:

(b) During any marketing’ year for which a wheat

minttostilie allocation program is in effect, (i)' all per-

Sons engaged’ in the processing of ‘wheat into. food

products: shall, prior to marketing any such food product:

or removing such.food product for sale or

» acquire domestic marketing certificates equivalent: to the

niamber of bushels of wheat in. such product

_ and (i) all persons exporting t shall,"prior to such

“abet; attain alae con tian omc

Bee tye ironic ee

"Under an express grant daombere in the Act, § 137% Be

disposition

" prescribe “regulations governing the acquisition,

_ or handling of marketing certificates,” the Secretary issued

this regulation, 7 C.F.R. § 777.11 (1965):

Time and manner of gequiring and surrendering certificates.

(a) ‘General. Food processors shall acquire _certifi-

- cates and surrender certificates to CCC as provided in

paragraphs (b) and (c) of this section and in the man-

ner specified in § 777.10. The number of certificates <

. Si

“5 sa supplied).

ial neste alle teoe her a skin |

number of bushels _—

Thece is ties furthee circearstence that e bushel of wheat ax

delivered to the miller customarily contains impurities and

. defective kernels. which must be screened out, and moisture —

which is lost both while awaiting processing and in the course ;

| - Of processing, itself.

spellane dincihc WirOa:ciche ustabibiled tay’ the Wentatecs

"’ for computing the amount of wheat for which the

processors

must buy certificates. The argument to us is, first, that the

- yeasonably: and arbitrarily limited the permissible deduction

Se ee ee :

turn. : i SS \ 3

f ft: ; A ‘s

I :

ee eee ee ee a a

= Viiaeraunetcemans eantiiat ruta vie

. BS

" United States v. Missouri Pac. R. Co., 278 U.S. 269 (1929),

. and our own statement of this proposition in Elm City Broad-

casting Corp. v. United States, 98 U.S. App. D.C. 314, 319, .

235 F. 2d 811, 816 (1956). rye ta doctrine which reflects.

a highly optimistic view of the-human capacity to communi-

cate precise meaning by: the written word. There are. surely

occasions where its invocation is. justified, particularly where

a @vert:look may indicate that the appeal from one set of

words to another is not very illuminajing. It is rare indeed,

however, ‘that particular words patently preclude all but one

meaning; and courts should be slow to spurn such enlighten-

_ Ment as. may be available from any’ authentic source.

We do not believe that the statutory reference to bushels

of wheat “contained in” flour in this context is as clear in

its signification as appellants: assert: It is not. wholly idle. -

in terms of bushels of wheat “used in” making flour, as

the regulation assumes. It would not be a bizarre )

_ of ordinary speech for a housewife to say that three quarts —

of cherries were “contained in” jam, although, when.

cross-examined about the stems and the pits and s0 on, she

might readily agree that she had in reality “used in” making

: the jam three quarts of cherries. We think that, contrary

to appellants’ claim, an ambiguity lurks in this statute which -

authorizes us to look beyond its four corners for help in re-

solving this substantial dispute about its meaning.

Our first look, however, is not outside the Act of which -

Section 1379d(b) is a part. Domestic marketing ° ¢ertifi-

cates are provided for in Section 1379c. Tlie’ Secretary

is directed to arrange “for the issuance of domestic marketing

certificates for the portion of wheat marketing allocation

representing wheat used for food products * * *” (Emphasis

_ supplied). The Secretary is also directed to fix as the value’

of domestic marketing certificates, the difference between _

‘ the support level of certificate wheat and the support level -

of non-certificate wheat. These respective levels as set by

7 ,

the Secretary were $2.00 and $1.30, respectively, leaving the .

value of a certificate, as defined in the statute, at 70¢*

‘The scheme of the ‘statute. is that. the Secretary was to

estimate in advance how many: bushels of the annual crop

_ would go into domestic processing. A certificate was to be.

_ issued in respect of each bushel in this estimate. A processor

mugt acquire a certificate for each bushel bought by him for

processing. The: _of that bushel was paid 70¢ by

he Goverment. If the Governmént was not to be out of.

pocket, the processor must pay 70¢ for the cértificate.

’ been thinking in ‘terms of a rough equivalence between what 3

; had to be paid out to the farmers in respect of the certificates, —

and what would be received from the processors for the .

certificates. We agree. The. Congressional plan seems ‘to us to ~

be. preoccupied with bushels of wheat moving from farm to *

E Be

Ral

gee

ft.

Fee

bis

H ii

-«

‘a

Ba a . ae :

* "mittee report on th 196 legato. 1964 U.S. Goin Cobia,

& Ap. News 2142. Characterizing the effect of the proposed

" ‘Jegislation as being “to require a. certificate on‘all wheat —

pemained fete wach. (S009) products *." '*,” the Committee

_- also said:

“Wheat | oe dumnaiite Sond ann, howevee, would be priced -

at about’$2, including the’ value of the certificate: This

is the level it’ has been moving at in recent years and

the bill would not result in-any increase, in the price

‘ of wheat: to flour millers and should therefor by: itself

:” haye ‘i elfeck whatsoever on the price paid for brad

: _ by consumers.” Ibid.

"Tia Jegiclative! tecord, in. our’ view, ‘ineluctably leads to.a

tion, including the millers themselves, were under .no mis- ,

_ apprehension that, if enacted, one buying a bushel of wheat

"from a farmer to make flour would have to pay 70¢ for a

_ certificate.’ . i

. \Feotnote iii ‘Gaase’ piikositing sad’: * | nice

" present price level .at: all. This bi i ae i to. prevent

the price of wheat from: dropping, ony Repth ert Ae

ME hexton: BGs if someone wan to buy 1,000. bushela

of wheat, he would have to have 1, 0 TO-cent certificates. Aa? oF

—Mr: M§Govern. Yes."

ee 4

orem. ping, wheat*at: Chicago today is -approxi-

"But the purpose of the statute appears to be. to reg-

price of wheat for the benefit of 2° grower, sant

i o (Footnote ‘continued, on following page)

é .

‘@

’ —

; own, reading of a statute which Congress has given him the

. duty to administer. Administrators are not always right in

their .divinations of the legislative will;.but anyorie who is

at all familiar with the closeness of the jonship between

tion by the latter ofta change in a major statute administered

al periscope a? dopo

_ formed. In any event, the courts haye accorded them a special

° respect. FTG.v. Mandel Brothers, Inc.} 359 U.S, 385 (1959) ;

Power Reactor Development Co. v. International Union, 367 . *

US. 396 (1961); and see especially Judge Prettyman’s com-

~ ment on this matter in California Company v. Udall, 111 U.S. ..

App. D.C. 262, 266, 296 F..2d 384, 388 (1961).

| i processing, One “was on the basis of the weight of the

| eee wheat used, and. other by the application of conversion:

case of the former, the regulations further provided for a_

(Footnote continued from pri page) > - ee :

federal power relied upon is: the ‘Clausé. The bill was

sé net handled in either chamber asa tax; and the,.revenue raised

¢ is for the achievement of 9 regulatory arid-not to coptribute

to the funds of the . Even if considered ‘as a tax-

ing measure, it is unlikely that Cong would fix a 50¢ rate to

,support a 70¢ outlay. . =. .

: 3

Evert without this explicit evidence of Congressional pur-

pose, we would, of course, be slow to reject the Secretary's |

ng? a c wit abot io bead i ved, sd the pr

centage of dockage in the sample is deducted whole. -

ai tae cig of ceccuacieg- Gok peuaiing ae Oe

ance for processing loss would-be neither arbitrary nor capri-

cious, Appellants, presumably because of their view of the

gtatute, Larsen lump the two types of moisture loss to-

| _-gether in their argument that the allowance is inadequate, . -

- and have made’ no attempt to differentiate between\the two ,

~ kinds of losses. Thus, the Secretary’s contention as to normal

shrinkage losses during storagé is largely unchallenged, be- _

- cause appellants are proceeding on a different set. of assump- .

-_ tions—assumptions which we have rejected in our treatment

a statutory construction argument: In any event; the

" Socretary’s allowance by regulation of 0.6 peroent for moisture.

” Joss is unreasonable:*

wach Goverment aida ewerts that thi allowance, wae, xd

| ‘after consultatjen with industry spokesmen who advised that

it it was adequate tsoflct any invisible low occurring during stor=

28 ‘- (Footnote continued on _— page)

With velgioce ‘to’ wastage: Ran aE ere

the record that the tions do not require marketing ..

certificates in respect of t which, because of some flaw

in processing, fails to become a food product removed from —

the plant or marketed as such. And insofar as-this claim

rests upon the amount of ‘wheat lost in handling and storage,

this loss does not appear to be either of such 4 magnitude or —

= go licking #i velationship to tho peoceming of the wheat as

_ to compel holding: the regulations arbitrary. — :

The judgment of the District Court is. | ai ee

its ° | : | ~ Ay :

Tiicsiistha wikiciill Asis ndtinaesotien) .

in the usual course of -operations.” An affidavit for appellants,

oe no limit.on moisture —

B-11

2. Judgment. Below

UNITED STATES COURT OF APPEALS

For ae District of Calemniite Circuit

eee ery September Term, 1965

: No. 19,794.

THE Morrison MILLING CoMPANY, . a 2 3

Skis nie f United States Court '- .

ein a

Onvaiiz L. FRmeMAn, ot pl, Huot July 16"

. Fa

oe 2 ‘Appellees. ‘ e

-¢e .. Ne 19,795 ° She Be Civil 352-65

- NATIONAL Biscurr CoMPANY and

- ‘THE QUAKER Oats CoMPANY, _

fe toe ene — Appellants, .

CommMonpiTy CREDIT CORPORATION,

3 eS Appellees.

hosadi from the United States District Court *

for. the. District of Columbia

: Before: : Bazelon, Chit Judge, and Danaher and McGowan,

: | .é Circuit Judges. " | : :

a .* JUDGMENT

| These cases came on to be heard on the record on

\, fom the United States Distiot Court for the Distt of

Columbia-and were argued by counsel.

ON CONSIDERATION WHEREOF, it is ‘ened and.

+ Coa tie Nee et, 8 6 ate oi

aehfrke Court appealed from in these cases & affirmed.

_ Dated: July 18, 1966.

ae Circuit Judge McGowan.

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