that a dependable supply of residual oil was available, steady growth has been reflected by our sales; and today we are supplying industries, hospitals, dairy-processing plants, schools, convents, public buildings, and State facilities, with this residual oil. Naturally, once in the field, we have aggressively promoted sales so that a substantial enough volume could be built to return our company a profit on the investment which had been made. At the present time we are making an investment of approximately $100,000 to expand the facilities used in handling residual fuel oils at our plant. We are making this additional investment because our demand for the coming year will be between 7 and 8 million gallons, which reflects an increase of about 4 million over the past year. Our company does not anticipate any difficulty in obtaining this amount of product unless the passage of H. R. 4294 would have the effect of eliminating supplies of residual along the eastern seaboard. I would like to make it very clear that I in no way profess to be an authority on the availability of crude supplies, refining capacity, transportation, and so forth. Instead, I am only a small business, operating in an area close to Rochester. However, in my humble opinion, the passage of H. R. 4294 could only have the effect of again activating a scarce supply of oil on the eastern seaboard, and this would bring us back to a picture which we, as independent people, have faced for the past 10 years. If, as small-business people, we do not have a source of supply di rectly at the refinery and are subject entirely to the production of the major oil companies, and if that supply is limited through H. R. 4294, it would seem that we, ourselves, are being very seriously curtailed in our sales of residual oils in Rochester. I would like to thank this committee for the opportunity of presenting my thoughts and opinion on this bill. The CHAIRMAN. We thank you for your appearance here and the information you have given to the committee. Are there any questions? Apparently there are none. Again, we thank you for your contribution. Mr. SAUNDERS. Thank you. The CHAIRMAN. The next witness is Mr. Tom Wallace, of the Louisville Times. Mr. Wallace, we are glad to have you here and if you will give your name for the record we will be glad to hear you. STATEMENT OF TOM WALLACE, EDITOR EMERITUS OF THE LOUISVILLE TIMES; HONORARY PRESIDENT, INTER-AMERICAN PRESS ASSOCIATION Mr. WALLACE. Tom Wallace, editor emeritus of the Louisville Times and past president and at present honorary president of the Inter-American Press Association. I thank you, Mr. Chairman for your courtesy, and I thank the others who are waiting for their courtesy. I address you in opposition to H. R. 4294, introduced by Mr. Simpson, not as a representative of the Inter-American Press Association, but as an individual. My contacts with Caribbean and trans-Caribbean countries arise from an interest in hemispheric solidarity. That interest caused me to become a member of the Inter-American Press Association a good many years ago. Eventually I served as president of the organization because at that time North Americans who were interested were rare. Prior to the founding of the Inter-American Press Association I was profoundly of the opinion that there was no problem that should be of more concern to the United States than that of promotion of good relations between our country and countries south of our southern border. The two continents and the Caribbean isles are exposed equally to the arms and the ideologies of totalitarians whose primary effort is breeding discord between this Republic and nations which the United. States might serve and which might serve the United States. That effort has been extensive and intensive in this hemisphere.. The field of the effort, the seriousness of the project, the diligence of propagandists has been greater than many North Americans have imagined. Nowadays the two political parties in the United States agree that lrastic isolationism is un-Christian, unwise, and for the United States insafe; that isolationism is in all respects error. In this situation we cannot wisely isolate selectively countries in Latin America, through nstrumentality of economic chauvinism; economic throat-cutting practiced by the bearer of the biggest knife and the possessor of the ongest and strongest arm. While we tell the wide world that we are disposed to make our ariff laws more encouraging to foreign producers and traders; while ve declare ourselves ready and willing to aid nations at great distance from us, east and west, and back our declarations by performance, we cannot afford, and we should not dare, to sow seeds of hatred upon he soil of neighboring countries. Should we do so the crop would be ultivated eagerly by those who would like to see this hemisphere a house divided against itself. It is not necessary for me to analyze H. R. 4294. In analysis of bills each of you is my superior. But you know what its major effect would be. It would go about as far as legislation might go, toward obbing our neighbors in Venezuela of capacity to buy in our markets. That capacity is not inconsiderable, and willingness of Venezuelans o buy in the United States while they may sell in the United States, annually, more than 100 million barrels of residual oil is unquestioned. Legislation that is designed to aid a sick industry in the United States cannot be enacted without its enactment blazing in headlines from the Rio Grande to Tierra del Fuego. The news would encourage any nation in the world which may want to prove Uncle Sam to be in fact Uncle Shyclock. It would make every Latin American country receptive to anti-U. S. A. propaganda. The coal industry is in trouble because of the competition of other fuels. The butter industry is in trouble because of competition of a commodity which is no longer a horse of another color. A Wisconsin dairyman in a letter to Hoard's Dairyman, the bible of dairymen of the United States, says: Let us stop wringing our hands. If we cannot meet competition we should stop raising cows and grow soybeans. Hoard's Dairyman, in an editorial, says the butter industry must meet competition by the quality and price of its product. A spokesman of the Danish Embassy tells United States audiences that we should let Danish butter into United States markets that United States butter makers might learn to make butter which could be distinguished from both United States butter as it now is made and from oleomargarine. The result he says might be improvement of United States buttermakers' technique and broadening of their market. The coal industry wants protection from competition insofar as legis lation affecting foreign producers of competitive fuel are concerned I am a native of a coal State. My clan was active on the soil that now is Kentucky before that soil was Kentucky, active with the long rifle which became known as the Kentucky rifle. I am devoted to the mountains of Kentucky which produce high gas coal. I was born in western Kentucky which could produce mountain of another grade of coal for a sympathetic market. I can shout as loudly as anyone else "Breathes there a man with soul so dead ***" But to me the idea that the United States should sacrifice opportunity to deal fairly with the great and fruitful south which lies beyond our South, in the hope of serving a sick industry that will not seek, or take, medicine which might mend it, would be st any time and in any circumstances distressing. It is, in the present situation of the world hardly less than horrifying. There are other ways, scientists believe, of selling coal than digging it from the earth at a cost which might please Mr. Lewis, if anything could please Mr. Lewis, loading it on freight cars, for enrichment of coaler roads whose trains are pulled by diesel locomotives, offering it for sale where cost of production and delivery place it at disac vantage in a competitive market and where smog is increasingly unpopular. But if that were not true we should be violating the fundamental principal of cooperation between nations for benefit of mankind if you should recommend, and if Congress should pass, and if the Pres dent should sign, the Simpson bill or anything akin to it. May I add as a postscript that when newspapers were faced by competition of radio and television, they improved themselves with out asking anybody to protect them, and the result was beneficial to them and to their patrons. Out of the mill of competition, competency is ground. I thank you very much. The CHAIRMAN. We thank you very much, sir, for your appearance. Are there any questions? Mr. Simpson will inquire. Mr. SIMPSON. Mr. Wallace, do you believe in tariffs at all? Mr. WALLACE. I believe in the free flow of trade. I admit-no, I don't admit but I am glad to say-and I think most economists are on my side I do not believe in a high protective tariff which stifles the movement of trade between nations. Mr. SIMPSON. Do you consider a 12-percent tariff on American goods high? will Mr. WALLACE. I am not entering into that discussion, if you excuse me, because that is not the thing that I am addressing myself to. You don't deny that this would cut off a great deal of imports et residual oil from Venezuela, do you? Mr. SIMPSON. Are you opposed to tariffs of any kind as they apply to the countries lying south of the United States? Mr. WALLACE. I have not studied that. I came here to discuss the residual oil imports from Venezuela and I have not gone into an extensive study of the whole tariff situation in the world, and I am not prepared to answer your question any further than I have. Mr. SIMPSON. With respect to the residual oil coming in from Venezuela, are you opposed to the present tariff? Mr. WALLACE. I am not opposed to the present tariff. What I am talking about is that they are now in a position to send us oil and I am opposed to restricting that to the point to which they can't do business with us. I don't know what the present tariff is. I don't pretend to know it. I didn't come here to discuss it. I am only talking about what the effect of this bill would be on Venezuela. Mr. SIMPSON. Are you primarily interested in the welfare of the Venezuelans? Mr. WALLACE. I am primarily interested in the welfare of the world, and I think that if we do not treat our neighbors south of our South in such a way that they will feel disposed to collaborate with us other nations that don't want them to collaborate with us will come in-I don't say butt in-but they will come in on the opportunity that we present them and nose us out of markets and out of the friendship of all of the people of Latin America. Mr. SIMPSON. Would you feel that way even though it means the breakdown of an American industry here? Mr. WALLACE. I think American industry has to succeed just as I have mentioned that newspapers are succeeding by making their product salable in a competitive market, and that the whole effort of the United States as a do-gooder in other countries is a bluff and a failure if we at the same time pass laws that prevent people from trading with us. Mr. SIMPSON. To the extent a tariff limits that trading, you oppose the tariff? Mr. WALLACE. I am a free trader. Mr. SIMPSON. Right. Thank you, sir. The CHAIRMAN. Mr. Eberharter will inquire. Mr. EBERHARTER. Mr. Wallace, on page 4 of your statement you have these words: Enrichment of coaler roads whose trains are pulled by diesel locomotives. Mr. WALLACE. Yes, sir. Mr. EBERHARTER. That interested me. Are there some of these railroads whose main traffic is in coal and which are using diesel locomotives? Mr. WALLACE. Yes, sir. The L. & N., for instance, pulls coal out of eastern Kentucky, and it has bought a whole lot of diesel engines, and all of the railroads that haven't gotten them are going to buy diesel engines. It is a practical thing. They don't apologize to the coalfields. They just use the diesel engines. Mr. EBERHARTER. They use the diesel engines even though their main haulage is coal? Mr. WALLACE. Surely. They just use diesel engines, period, regardless. They are looking out for the railroads. It is more economical to use diesel engines, just as it is more economical to use some other kinds of fuel in many situations than it is to use coal. People aren't going to be bluffed into using something they don't want by subsidy of the industry that produces it in the form that it should not be produced. Mr. EBERHARTER. Thank you, Mr. Wallace. The CHAIRMAN. We thank you, sir. The committee stands adjourned until 1 o'clock. (Whereupon, at 12 o'clock noon, the committee was recessed, to reconvene at 1 p. m. the same day.) AFTER RECESS (The hearing resumed at 1 o'clock p. m.) The CHAIRMAN. The committee will come to order. Without objection, I wish to insert in the record a statement in opposition to H. R. 4294, from the National Congress of Petroleum Retailers, Inc. (The statement is as follows:) NATIONAL CONGRESS OF PETROLEUM RETAILERS, INC., Subject: Statement in Opposition to H. R. 4294. House of Representatives, Washington, D. C. GENTLEMEN: The National Congress of Petroleum Retailers, Inc., is the national trade association of service-station operators and gasoline retailers across the country and is comprised of 67 affiliated associations in 38 States. We are opposed to the Simpson bill, H. R. 4294, particularly because of the provisions contained in section 13 of such bill creating new section 322 of the Tariff Act of 1930, as amended, which new section imposes import quotas for crude petroleum and residual fuel oil. This effort to upset the present supply-demand balance in oil by restricting supply can only result in shortages of petroleum products and higher prices. The incidental benefit which may accrue from such shortages and higher prices to a few producers or to the coal industry as a fuel competitor cannot be justified in terms of the cost to the American economy. As retailers, we are deeply conscious of our responsibilities to supply our customers with the petrolelm products which they require at the lowest prices which are fair and reasonable. This is good business for us as well as for our customers. When the quantity of the products which we sell is artificially restricted so that there is not enough to go around, we are the victims along with our customers of financial hardship and squeezeout shortages. For many years, America has moved forward on a sea of oil. Efforts to choke a giant stream which feeds that sea and make the sea shallow in parts will founder the ships of our prosperity and national strength. Because H. R. 4294 will restrict America's supply of vital petroleum products and increase the cost of those which are obtainable and because this bill rips the existing reciprocal trade laws to shreds and raises so many questions which have not been fully explored or satisfactorily answered, we ask your committee to discard this measure in favor of President Eisenhower's proposal for extension of the Reciprocal Trade Agreement Act of 1951 for 1 year with a commission to study needed changes in reciprocal trade laws and agreements. Very truly yours, NATIONAL CONGRESS OF PETROLEUM RETAILERS, INC., By WILLIAM D. SNOW, General Counsel. The CHAIRMAN. The next witness will be Mr. William A. Weber, Alcoa Steamship Co., Washington, D. C. Mr. Weber, if you will state your name and the capacity in which you appear for the record, we will be glad to hear you. |