A-64243, OCTOBER 3, 1935, 15 COMP. GEN. 264

A-64243, OCTOBER 3, 1935, 15 COMP. GEN. 264

AGRICULTURAL ADJUSTMENT ADMINISTRATION - ECONOMIC STUDIES IN VIEW OF THE PROVISIONS OF THE AMENDATORY ACT OF AUGUST 24, 1935, 49 STAT. 750, AND AN ADDITIONAL ADMINISTRATIVE EXPLANATION OF THE PURPOSES SOUGHT TO BE ACCOMPLISHED, THE GENERAL ACCOUNTING OFFICE IS NOT NOW REQUIRED TO OBJECT TO THE TRANSFER OF FUNDS TO THE BUREAU OF HOME ECONOMICS, DEPARTMENT OF AGRICULTURE, FOR THE PURPOSE OF CONDUCTING AN ECONOMIC STUDY OF DAIRY PRODUCTS, FROM APPROPRIATIONS MADE TO CARRY OUT THE AGRICULTURAL ADJUSTMENT ACT. 15 COMP. GEN. 116 MODIFIED.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF AGRICULTURE, OCTOBER 3, 1935:

THERE HAS BEEN RECEIVED YOUR LETTER OF SEPTEMBER 18, 1935, AS FOLLOWS:

ON JULY 29, 1935, THERE WAS TRANSMITTED TO YOU A REQUEST FOR YOUR OPINION AS TO THE LEGALITY OF A PROPOSED ALLOTMENT OF $25,000 TO THE BUREAU OF HOME ECONOMICS OF THE DEPARTMENT OF AGRICULTURE FROM FUNDS APPROPRIATED PURSUANT TO AUTHORITY CONTAINED IN THE JONES-CONNALLY CATTLE ACT, APPROVED APRIL 7, 1934, FOR THE PURPOSE OF CONDUCTING A STUDY RELATIVE TO THE UTILIZATION AND CONSUMPTION OF DAIRY PRODUCTS DISTRIBUTED THROUGH RELIEF CHANNELS. YOUR LETTER DATED AUGUST 9, 1935, HOLDING THAT THE PROPOSED STUDY MAY NOT BE PAID FOR FROM FUNDS APPROPRIATED TO CARRY OUT THE PROVISIONS OF THE JONES-CONNALLY CATTLE ACT AND THE AGRICULTURAL ADJUSTMENT ACT HAS BEEN RECEIVED AND IS RESPECTFULLY ACKNOWLEDGED.

IN VIEW OF THE ENACTMENT BY CONGRESS OF THE ACT OF AUGUST 24, 1935, SINCE YOUR OPINION HAS BEEN RECEIVED, SUCH ACT AMENDING THE AGRICULTURAL ADJUSTMENT ACT, IT IS DEEMED DESIRABLE THAT THE PROPRIETY OF THE PROPOSED ALLOTMENT BE RECONSIDERED. ALSO, IN OUR PREVIOUS REQUEST WE HAVE FAILED TO SHOW CLEARLY THE RELATIONSHIP OF THE PROPOSED EXPENDITURE TO THE PURPOSES OF THE AGRICULTURAL ADJUSTMENT ACT AND THE JONES-CONNALLY ACT.

REFERENCE IS MADE HEREBY TO THE CONTENTS OF OUR LETTER OF JULY 29, 1935, AND TO THE OUTLINE OF THE SCOPE OF THE PROPOSED STUDY CONTAINED THEREIN. IT SHOULD BE POINTED OUT THAT IT IS INTENDED TO DIRECT THE PROPOSED INVESTIGATION PRIMARILY TO QUESTIONS RELATED TO THE UTILIZATION AND ADAPTABILITY FOR HOME CONSUMPTION OF DRIED SKIM MILK AND TO PLACE ONLY MINOR EMPHASIS ON OTHER PHASES OF THE INVESTIGATION SUCH AS WERE INDICATED IN THE OUTLINE.

THE RELATIONSHIP OF THE PROPOSED STUDY TO THE PURPOSES OF THE AGRICULTURAL ADJUSTMENT ACT AND THE JONES-CONNALLY CATTLE ACT AND THE ECONOMIC REASONS FOR SUCH A STUDY ARE SET FORTH AS FOLLOWS:

SUBSECTION (1) OF SECTION 6 OF THE AGRICULTURAL ADJUSTMENT ACT, AS AMENDED, PROVIDES AS OLLOWS:

"WHENEVER THE SECRETARY OF AGRICULTURE HAS REASON TO BELIEVE THAT:

"/A) THE CURRENT AVERAGE FARM PRICE FOR ANY BASIC AGRICULTURAL COMMODITY IS LESS THAN THE FAIR EXCHANGE VALUE THEREOF, OR THE AVERAGE FARM PRICE OF SUCH COMMODITY IS LIKELY TO BE LESS THAN THE FAIR EXCHANGE VALUE THEREOF FOR THE PERIOD IN WHICH THE PRODUCTION OF SUCH COMMODITY DURING THE CURRENT OR NEXT SUCCEEDING MARKETING YEAR IS NORMALLY MARKETED; AND

"/B) THE CONDITIONS OF AND FACTORS RELATING TO THE PRODUCTION, MARKETING, AND CONSUMPTION OF SUCH COMMODITY ARE SUCH THAT THE EXERCISE OF ANY ONE OR MORE OF THE POWERS CONFERRED UPON THE SECRETARY UNDER SUBSECTIONS (2) AND (3) OF THIS SECTION WOULD TEND TO EFFECTUATE THE DECLARED POLICY OF THIS TITLE,"HE SHALL CAUSE AN IMMEDIATE INVESTIGATION TO BE MADE TO DETERMINE SUCH FACTS. IF, UPON THE BASIS OF SUCH INVESTIGATION, THE SECRETARY FINDS THE EXISTENCE OF SUCH FACTS, HE SHALL PROCLAIM SUCH DETERMINATION AND SHALL EXERCISE SUCH ONE OR MORE OF THE POWERS CONFERRED UPON HIM UNDER SUBSECTIONS (2) AND (3) OF THIS SECTION AS HE FINDS, UPON THE BASIS OF AN INVESTIGATION, ADMINISTRATIVELY PRACTICABLE AND BEST CALCULATED TO EFFECTUATE THE DECLARED POLICY OF THIS TITLE.'

SUBSECTION (3) OF SECTION 8 OF THE AGRICULTURAL ADJUSTMENT ACT, AS AMENDED, PROVIDES AS OLLOWS:

"SUBJECT TO THE PROVISIONS OF SUBSECTION (1) OF THIS SECTION, THE SECRETARY OF AGRICULTURE SHALL MAKE PAYMENTS, OUT OF ANY MONEYS AVAILABLE FOR SUCH PAYMENTS, IN SUCH AMOUNTS AS HE FINDS, UPON THE BASIS OF THE INVESTIGATION MADE PURSUANT TO SUBSECTION (1) OF THIS SECTION, TO BE FAIR AND REASONABLE AND BEST CALCULATED TO EFFECTUATE THE DECLARED POLICY OF THIS TITLE:

"/A) TO REMOVE FROM THE NORMAL CHANNELS OF TRADE AND COMMERCE QUANTITIES OF ANY BASIC AGRICULTURAL COMMODITY OR PRODUCT THEREOF;

"/B) TO EXPAND DOMESTIC OR FOREIGN MARKETS FOR ANY BASIC AGRICULTURAL COMMODITY OR PRODUCT THEREOF;

"/C) IN CONNECTION WITH THE PRODUCTION OF THAT PART OF ANY BASIC AGRICULTURAL COMMODITY WHICH IS REQUIRED FOR DOMESTIC CONSUMPTION.'

THE PROPOSED ALLOTMENT OF $25,000 TO THE BUREAU OF HOME ECONOMICS, IF APPROVED, WOULD BE MADE FROM FUNDS APPROPRIATED PURSUANT TO AUTHORITY CONTAINED IN THE JONES-CONNALLY CATTLE ACT, SECTION 2 OF WHICH, AMENDING SECTION 12 OF THE AGRICULTURAL ADJUSTMENT ACT, AUTHORIZED THE APPROPRIATION OF $200,000,000 AS FOLLOWS:

"TO ENABLE THE SECRETARY OF AGRICULTURE TO FINANCE, UNDER SUCH TERMS AND CONDITIONS AS HE MAY PRESCRIBE, SURPLUS REDUCTIONS, AND PRODUCTION ADJUSTMENTS WITH RESPECT TO THE DAIRY- AND BEEF-CATTLE INDUSTRIES, AND TO CARRY OUT ANY OF THE PURPOSES DESCRIBED IN SUBSECTIONS (A) AND (B) OF THIS SECTION (12) AND TO SUPPORT AND BALANCE THE MARKETS FOR THE DAIRY- AND BEEF-CATTLE INDUSTRIES, THERE IS AUTHORIZED TO BE APPROPRIATED, OUT OF ANY MONEY IN THE TREASURY NOT OTHERWISE APPROPRIATED, THE SUM OF $200,000,000: PROVIDED, THAT NOT MORE THAN 60 PERCENTUM OF SUCH AMOUNT SHALL BE USED FOR EITHER OF SUCH INDUSTRIES.'

THE FIRST PARAGRAPH OF SUBSECTION (A) OF SECTION 12 AND SUBSECTION (B) OF SECTION 12 OF THE AGRICULTURAL ADJUSTMENT ACT, AS AMENDED, REFERRED TO IN THE ABOVE QUOTATION, APPROPRIATE FUNDS TO BE AVAILABLE TO THE SECRETARY OF AGRICULTURE FOR VARIOUS PURPOSES, INCLUDING "PAYMENTS AUTHORIZED TO BE MADE UNDER SECTION 8.'

SECTION 6 OF THE JONES-CONNALLY ACT AUTHORIZED THE APPROPRIATION OF $50,000,000 AS FOLLOWS:

"THERE IS AUTHORIZED TO BE APPROPRIATED THE SUM OF $50,000,000 TO ENABLE THE SECRETARY OF AGRICULTURE TO MAKE ADVANCES TO THE FEDERAL SURPLUS RELIEF CORPORATION FOR THE PURCHASE OF DAIRY AND BEEF PRODUCTS FOR DISTRIBUTION FOR RELIEF PURPOSES, AND TO ENABLE THE SECRETARY OF AGRICULTURE, UNDER RULES AND REGULATIONS TO BE PROMULGATED BY HIM AND UPON SUCH TERMS AS HE MAY PRESCRIBE, TO ELIMINATE DISEASED DAIRY- AND BEEF- CATTLE, INCLUDING CATTLE SUFFERING FROM TUBERCULOSIS OR BANG'S DISEASE, AND TO MAKE PAYMENTS TO OWNERS WITH RESPECT THERETO.'

THE PROPOSED EXPENDITURE OF $25,000 BY THE BUREAU OF HOME ECONOMICS HAS A DEFINITE RELATIONSHIP TO A SURPLUS REMOVAL PROGRAM, FOR THE PURPOSE OF WHICH PAYMENTS BY THE SECRETARY ARE AUTHORIZED IN PARAGRAPH (A) OF SECTION 8 (3) OF THE ACT. IN ORDER THAT THE AGRICULTURAL ADJUSTMENT ADMINISTRATION BE IN A POSITION TO PROCEED IN AN EFFECTIVE AND EFFICIENT MANNER IN THE PURCHASE AND DISTRIBUTION OF DAIRY PRODUCTS, IT IS ESSENTIAL THAT THE ADMINISTRATION HAVE AVAILABLE COMPLETE KNOWLEDGE CONCERNING (1) THE USES TO WHICH SUCH PRODUCTS AS HAVE BEEN DISTRIBUTED HAVE BEEN PUT, (2) THE EFFECT ON THE CONSUMPTION OF OTHER COMMODITIES AND PRODUCTS, AND (3) THE MOST DESIRABLE AND EFFICIENT MEANS OF PACKAGING AND DISTRIBUTING DAIRY PRODUCTS. SUCH INFORMATION IS ESPECIALLY ESSENTIAL IN THE CASE OF DRIED SKIM MILK, CONCERNING WHICH SPECIAL EMPHASIS IS TO BE PLACED IN THE PROPOSED STUDY, SINCE PERTINENT DATA RELATING TO THE UTILIZATION OF THIS PRODUCT IN THE HOME ARE LACKING. HERETOFORE, DRIED SKIM MILK HAS BEEN USED CHIEFLY AS AN ANIMAL FOOD IN SPITE OF THE FACT THAT IT IS A VERY NUTRITIOUS FOOD AND IS ADAPTABLE FOR HUMAN CONSUMPTION. KNOWLEDGE CONCERNING ITS USE IS THEREFORE LIMITED. INFORMATION RELATIVE TO THE MANNER IN WHICH THE DRIED SKIM MILK WHICH HAS BEEN DISTRIBUTED IN RECENT MONTHS TO RELIEF FAMILIES HAS BEEN UTILIZED WILL SERVE AS A GUIDE IN FORMULATING FUTURE SURPLUS REMOVAL PROGRAMS. THE QUESTION OF WHETHER THE FUNDS THAT MAY BE EXPENDED WITH RESPECT TO THE PURCHASE AND DISTRIBUTION OF DRIED SKIM MILK AND OTHER DAIRY PRODUCTS WILL "BE FAIR AND REASONABLE AND BEST CALCULATED TO EFFECTUATE THE DECLARED POLICY" CANNOT BE DETERMINED FULLY UNLESS SUCH INFORMATION AS THE PROPOSED INVESTIGATION IS EXPECTED TO YIELD IS AVAILABLE.

THE PROPOSED EXPENDITURE ALSO HAS A DEFINITE RELATIONSHIP TO ANY PROGRAM DESIGNED TO EXPAND DOMESTIC MARKETS, FOR THE PURPOSE OF WHICH PAYMENTS ARE AUTHORIZED IN PARAGRAPH (B) OF SECTION 8 (3) OF THE ACT. AS NOTED ABOVE, DRIED SKIM MILK HAS BEEN USED LITTLE AS A HUMAN FOOD PRIOR TO ITS DISTRIBUTION BY THE FEDERAL SURPLUS RELIEF CORPORATION. THIS HAS BEEN DUE CHIEFLY TO A LACK OF KNOWLEDGE ON THE PART OF CONSUMERS CONCERNING ITS USES IN THE HOME. THE LIMITED DIRECT CONSUMPTION OF THIS PRODUCT IS EVIDENCED BY THE FACT THAT IT IS RARELY SOLD BY RETAIL ESTABLISHMENTS. THIS HAS BEEN DUE IN NO WAY TO A LACK OF SUPPLIES. ON THE CONTRARY, A VERY LARGE QUANTITY OF FLUID SKIM MILK, WHICH IS A BYPRODUCT OF BUTTER PRODUCTION AND THE PROCESSING OF FLUID CREAM FOR CONSUMPTION AS CREAM, IS ANNUALLY WASTED BECAUSE OF A LACK OF DEMAND FOR THE DRIED PRODUCT BY THE CONSUMING POPULATION. FURTHERMORE, IN COMPARISON WITH PRICES OF OTHER COMMODITIES, THE PRICE OF DRIED SKIM MILK HAS BEEN LOW. IT IS BELIEVED THAT KNOWLEDGE AMONG CONSUMERS CONCERNING THE USE OF THIS PRODUCT WOULD RESULT IN A STIMULATION OF CONSUMPTION, IN AN INCREASED DEMAND, AND IN A WIDER MARKET FOR IT. THE RESULTS OF THE PROPOSED STUDY, EMBODYING INFORMATION RELATIVE TO THE NUTRITIOUS QUALITIES, RELATIVELY LOW COST, AND USE OF DRIED SKIM MILK WOULD BE MADE AVAILABLE TO, AND DISSEMINATED AMONG, THE CONSUMING POPULATION OF THE UNITED STATES.

IT IS BELIEVED THAT THE DISSEMINATION OF INFORMATION SUCH AS WOULD TEND TO STIMULATE CONSUMPTION IS A FEASIBLE AND EFFECTIVE METHOD OF CARRYING OUT A MARKET-EXPANSION PROGRAM WITH RESPECT TO DRIED SKIM MILK. FURTHER, SUCH A PROGRAM WOULD TEND TO ENHANCE THE PRICE THAT PRODUCERS RECEIVE FOR WHOLE MILK, SINCE IT WOULD CONSERVE AND UTILIZE A BYPRODUCT YIELDED IN THE PROCESS OF CONVERTING SUCH WHOLE MILK INTO CREAM AND MANUFACTURED DAIRY PRODUCTS.

IN VIEW OF THE FOREGOING FACTS AND CONSIDERATIONS, IT IS RESPECTFULLY REQUESTED THAT YOU RECONSIDER THE OPINION GIVEN IN YOUR LETTER OF AUGUST 9, 1935.

IF ANY ADDITIONAL INFORMATION IS DESIRED, IT WILL BE GLADLY FURNISHED.

IN VIEW OF THE AMENDMENT TO THE AGRICULTURAL ADJUSTMENT ACT BY THE ACT OF AUGUST 24, 1935 (49 STAT. 750), AND OF THE EXPLANATION OF THE OBJECTS TO BE ACCOMPLISHED BY THE PROPOSED INVESTIGATION, THIS OFFICE IS NOT REQUIRED TO OBJECT TO THE TRANSFER OF $25,000 TO THE BUREAU OF HOME ECONOMICS FROM FUNDS APPROPRIATED FOR CARRYING OUT THE AGRICULTURAL ADJUSTMENT ACT AS AMENDED.