B-148765, JUN. 29, 1962

B-148765: Jun 29, 1962

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TO DETERMINE WHETHER THE SHIPMENTS AS INDICATED IN THE LOADING ORDERS WOULD RESULT IN HIGHER NET TRANSPORTATION COSTS THAN WOULD HAVE BEEN INCURRED IF RECONCENTRATION HAD BEEN MADE AT OTHER WAREHOUSES OVER ALTERNATIVE ROUTES. A COPY OF THIS REPORT IS BEING FURNISHED TODAY TO THE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS OF THE COMMITTEE ON GOVERNMENT OPERATIONS.

B-148765, JUN. 29, 1962

TO THE SECRETARY OF AGRICULTURE:

BY LETTER DATED MAY 25, 1962, MR. JOHN P. DUNCAN, JR., ASSISTANT SECRETARY, DEPARTMENT OF AGRICULTURE, REQUESTED THAT WE EXAMINE THE LOADING ORDERS AND SUPPORTING DOCUMENTS RELATING TO SHIPMENTS OF CCC OWNED GRAIN RECONCENTRATED BY THE KANSAS CITY AND DALLAS AGRICULTURAL STABILIZATION AND CONSERVATION SERVICE (ASCS) COMMODITY OFFICES INTO THE FOUR WAREHOUSES LISTED BELOW, TO DETERMINE WHETHER THE SHIPMENTS AS INDICATED IN THE LOADING ORDERS WOULD RESULT IN HIGHER NET TRANSPORTATION COSTS THAN WOULD HAVE BEEN INCURRED IF RECONCENTRATION HAD BEEN MADE AT OTHER WAREHOUSES OVER ALTERNATIVE ROUTES.

TABLE

ELEVATOR CODE ELEVATOR AND LOCATION

9-7663 UNITED ELEVATORS, PLAINVIEW, TEXAS

9-8068 PALO DURO GRAIN COMPANY, TULIA, TEXAS

9-8126 ALLIED ELEVATORS, HEREFORD, TEXAS

9-8105 MCSPADEN GRAIN COMPANY, LUBBOCK, TEXAS

THE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS OF THE COMMITTEE ON GOVERNMENT OPERATIONS, UNITED STATES SENATE, FURNISHED FOR OUR EXAMINATION 105 LOADING ORDERS ISSUED BY THE KANSAS CITY ASCS COMMODITY OFFICE, INVOLVING APPROXIMATELY 502 MILLION POUNDS OF TRANSIT TONNAGE, AND 14 LOADING ORDERS ISSUED BY THE DALLAS ASCS COMMODITY OFFICE, INVOLVING APPROXIMATELY 29.5 MILLION POUNDS OF TRANSIT TONNAGE. THESE LOADING ORDERS COVER THE RECONCENTRATION OF THIS QUANTITY OF CCC-OWNED GRAIN INTO THE WAREHOUSES LOCATED AT PLAINVIEW, TULIA, AND LUBBOCK, TEXAS, REPORTED TO BE OPERATED BY BILLIE SOL ESTES AND/OR ASSOCIATES, FROM MAY 1959 TO SEPTEMBER 1961. NONE OF THE LOADING ORDERS COVERED RECONCENTRATION OF GRAIN INTO THE ALLIED ELEVATORS AT HEREFORD, TEXAS.

OUR REVIEW CONSISTED OF A COMPARISON OF FREIGHT COSTS FOR THE TRANSIT TONNAGE APPLIED BY THE TWO ASCS COMMODITY OFFICES TO THE RECONCENTRATION MOVEMENTS, WITH SUBSEQUENT SHIPMENT TO GALVESTON, TEXAS, AS SHOWN IN THE LOADING ORDERS AND SUPPORTING DOCUMENTS, WITH FREIGHT COSTS AVAILABLE FOR THE SAME TONNAGE VIA ALTERNATIVE ROUTES.

OUR EXAMINATION DISCLOSED MINOR DIFFERENCES IN RATES APPLICABLE VIA ALTERNATIVE ROUTES, RESULTING IN HIGHER NET TRANSPORTATION COSTS OF APPROXIMATELY $650.00 FOR 6,679,000 POUNDS OF GRAIN OUT OF THE APPROXIMATE TOTAL OF 531.5 MILLION POUNDS OF GRAIN RECONCENTRATED INTO THE WAREHOUSES NAMED ABOVE.

A COPY OF THIS REPORT IS BEING FURNISHED TODAY TO THE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS OF THE COMMITTEE ON GOVERNMENT OPERATIONS, UNITED STATES SENATE.