August 2, 1938
Mr. A. W, Chambers,
Secretary, Utah State Canning
Dear Mr. Chambers:
Mr, Banks Colllngs of the General Crops Sections reports
having recently attended a conference at Ogden with representatives
of the Utah Canning Qrops Association and the Utah Canners Association for the purpose of reviewing the canning tomato stiuation in
the light of the purchase program which had been proposed to the
Federal Surplus Commodities Corporation.
In reviewing the program which removed approximately 50,000
cases of surplus canned tomatoes from the Utah area during August 1937
we find that the record has not been entirely closed as to the full compliance with the provisions of this purchase. As we recall the request
for purchase made by the Industry more than a year ago, the argument was
presented that such a purchase would be necessary in order that canners
might be able to operate and to pay growers for the current crop, Youd"
doubtless have on file the letter from Mr, J, C. Lattice, representative
of the Corporation, dated August 18, 1937, copy fo which is attached, which
among other thins requested sworn statements from each canner from whom
purchases were made which would show (1) the names of the growers from
whom fresh tomatoes were purchases, (2) the quantity purchased from each
grower, (3) price paid, and (4) date of purchase and date of delivery
of each lot of tomatoes. One copy of such report was to have been forwarded to the procurement officer, Federal Surplus Commodities Corporation, Washington, D. C. We are now advised by the Corporation that
statements to this effect have not been received from any canners participating in the 1937 program,
Mr, Colllngs reports that it was his understanding that
there are growers who have not been paid in full for their 1937 crop
by at least two canning organizations particupating in the purchase program of last year.
It would appear to us that inasmuch as the purchases made
in 1937 did not, as we were led to believe, result in full payment
to growers, we are somewhat reluctant to attempt another such program
unless and until there can be full assurance that growers will be paid.
I think you understand fully that one of the major requirements fo
the use of these funds is that they shall be used for the removal of
agricultural surplus and that agriculture will benefit directly. When
canners or any other group speculate with a farm commodity and fail
to pay for same, even though purchases are made from them with the
understanding that growers will be paid, it behooves us to become more
and more cautious about the continuation of such purchases.