Texas allowable by 200,00 barrels a day. I presume you were aware of that?

Mr. HILTS. Yes, sir.

Mr. UTT. And perhaps that his testimony along the lines of some restriction on the importation of petroleum might be different today than before Texas was forced to close down its 200,000-barrel production per day. I do not know whether you had any comment on it or not.

Mr. HILTS. Yes, sir, we understand that. It is our feeling that it is easier to cut quickly domestic production than it is your foreignimport production. They all follow eventually along the same pattern. But it is the logistics of imports that take time to get more or less in balance with the domestic supply. Because of the Texas Railroad Commission, which has the power to act quickly in Texas, they can adjust domestic production faster than the importers can adjust imports. But ultimately they both balance out about the same. That has been our feeling and our knowledge of it.

Mr. UTT. And also it is the case, is it not, that if production is curtailed too much, that it also curtails the exploration for new development in new oilfields?

Mr. HILTS. That has not happened in this country. The discovery of oil and the exploration has gone on even in the face of the imports. Imports have not in any way curtailed the discovery of new oil in this ment in new oilfields?

Mr. UTT. Imports had not reached the terrific proportions until just the past year or two. Of course, when there was no curtailment, naturally the exploration was going on. But if this continued on and maybe there were 2 million barrels a day imported, and another million barrels cut down in the United States, it would definitely hinder the exploration business in the United States.

Mr. HILTS. That has not been the pattern to date.

Mr. UTT. No, I realize that.

Mr. HILTS. You must remember that residual fuel oil is supplementing the domestic supply. Therefore, a goodly portion of your total imports was residual fuel. So the amount of residual fuel oil that comes in certainly would not affect the discovery of new oil, because it is supplementing a supply we do not make here.

Mr. UTT. But the importation has curtailed production in Texas at the rate of 200,000 barrels a day.

Mr. HILTS. I would not say that was true. I would say that a bad winter condition which cut down the demand for light oil forced Texas and other refining areas to cut back. If we have a normal gasoline season and we get into a normal winter demand for light fuel oils, the demand will go far beyond what the reduction was. It is something you just cannot adjust overnight. We have to provide for it because if the cold season comes along and people want oil, you have to have it there.

Mr. UTT. That is all, Mr. Chairman.

The CHAIRMAN. We thank you for your statement.

Mr. HILTS. Thank you, sir.

The CHAIRMAN. The next witness is Mr. Charles A. Lockard, assistant secretary of the Empire State Petroleum Association, Inc., of New York City.

We are glad to see you here. If you will give your name and the capacity in which you appear for the record, we will be delighted to hear you.

STATEMENT OF CHARLES A. LOCKARD, ASSISTANT SECRETARY, EMPIRE STATE PETROLEUM ASSOCIATION, INC., NEW YORK, N. Y.

Mr. LOCKARD. My name is Charles A. Lockard. I am assistant seeretary of the Empire State Petroleum Association, a trade association of petroleum jobbers and distributors in New York State. Our of fices are located at 122 East 42d Street, New York City.

Our people serve the consumers of petroleum products throughout the State of New York. Their businesses have been built and maintained on the basis of a free, competitive economy which gives to the consumer the highest quality products at the lowest cost. We ask nothing more than the continuance of this system which has made possible the position the United States holds today as the industrial leader of the world with the highest standard of living that has ever been known.

Legislation now being considered by your committee would extend the Reciprocal Trade Agreements Act for 1 year but with it we would acquire a quota restriction of crude oil and residual fuel vitally needed to serve our customers and maintain an efficient economical fuel for our industries.

Residual fuel oil is used by many diversified interests, including municipalities, oceangoing vessels, schools, hospitals, hotels, apartment houses, utilities, stores, and many other industrial and commercial installations which provide goods and services to the consumer.

Restriction of imports of residual fuel will place in jeopardy the businesses of many of our members and bring higher prices to col sumers for the numerous products and services dependent upon the us of this fuel. Any attempt to replace imports of this product with domestic residual would price it out of the market. It would also violently upset the percentage yield of products derived from crude oil which has kept pace over the years with the changes in consumer demand.

President Eisenhower has already formally requested Congress to extend the Reciprocal Trade Agreements Act for 1 year without change. Empire State Petroleum Association is in complete accord with this request and strongly opposes any restriction of imports of petroleum and its products.

The attempt by the National Coal Association and other coal groups to bolster their position by artificially restricting the use of competi tive fuels denies the right of the customer to choose the most economi cal and efficient fuel to serve his function. In other words, the coal interests are not willing to enter a free competitive market to sell their product but are seeking legislative assistance as a substitute for consumer acceptance.

According to the most recent figures of the coal industry itself. residual fuel oil is replacing less than 5 percent of the bituminous coal production. This hardly bears out the claims of the coal people of the impact that the imports of residual fuel have had on the coal

business. The advent of the Diesel locomotive and the domestic oil burner has had a far greater effect. For instance, the Association of American Railroads reports that class I railroads in 1952 spent $195,746,000 for bituminous and anthracite coal, a reduction of $81,266,000 compared with 1951. On the other hand, expenditures for diesel fuel oil totaled $261,796,000, an increase of $32,903,000 compared to 1951.

On the home heating front, the Bureau of Mines reports that in 1935, fuel oils were used for 9.6 percent of all residential uses and for commercial space heating and that this increased to 28.2 percent in 1951. During the same period, solid fuels declined from 80.1 percent in 1935 to 43 percent in 1951. In other words, the hurt to the coal industry has taken place in the home heating field and in the use by the railroads of diesel fuel rather than in the use of residual fuel oil. The proposed import restrictions would in no way reduce the output. of diesel fuel and home heating oil. The tendency, however, would be to increase the price for both of these products.

To summarize, the coal industry would like to see their competition artificially throttled. The independent oil producers have, we believe, joined in this move in order to eliminate the price balance that the importation of crude oil has furnished. Higher prices for crude oil would please the independent producers but it should be borne in mind that higher prices for crude will be reflected in higher prices for petroleum products at the consumer level.

The members of the Empire State Petroleum Association, as marketers serving many thousands of consumers of petroleum products, vigorously oppose the imposition of these artificial supports and urge your committee to recommend the approval of the President's request for an extension of the Reciprocal Trade Agreements Act without change.

I thank you very much for this opportunity to appear before you. The CHAIRMAN. Does that conclude your statement?

Mr. LOCKARD. Yes, sir.

The CHAIRMAN. We thank you very much, sir, for your appearance. Are there any questions? The Chair hears none. We thank you. Mr. LOCKARD. Thank you, sir.

The CHAIRMAN. The next witness is Mr. Richmond F. Meyers, MidHudson Oil Co., Poughkeepsie, N. Y.

If you will give your name and the capacity in which you appear for the record, we will be very glad to hear you.

STATEMENT OF RICHMOND F. MEYERS, MID-HUDSON OIL CO., POUGHKEEPSIE, N. Y.

Mr. MEYERS. I am Richmond F. Meyers, Mid-Hudson Oil Company, Poughkeepsie, N. Y.

Thank you, Mr. Chairman, and the committee, for allowing me the privilege of appearing here today.

The CHAIRMAN. We are very glad to have you.

Mr. MEYERS. I apologize for not having a written statement. Our stenographer was sick this week and I did not get around to getting it down. I have some notes here.

32604-5392

We are a small company. We serve an area of about 30 miles surrounding Poughkeepsie, which is located on the Hudson River halfway between New York City and Albany.

We started our company in 1935 with two 20,000 horizontal tanks for which we gave stock, because we did not have the cash, and a used 1,800 gallon truck. I remember driving that truck up from New York. I bought it at a used-car yard, and the driveshaft fell out as I got to Poughkeepsie.

We started this business to meet what we felt was an obvious demand for what was then considered an acceptable fuel. There was real public acceptance, we found, once we got going. At the same time, other folks got into the business and grew with us. I know one competitor, our principal competitor, was in the coal business for 50 years and he joined in this oil business, and has been very successful at it.

I cannot help but think that he did not give up his coal business without a struggle. As a matter of fact, I know he did not.

We did some selling, but the acceptance of oil as a fuel made it easy for us. Our chief selling was done merely to get our share of the market which was available as against our competitors.

In the first year we were in business we had a call from away out in the country for some No. 4 oil. I had hardly heard of No. 4 oil. but I looked into it and found that we could get some and took care of that demand for this school. It was a school over in Pawling, N. Y. Our No. 4 business grew from there out. Today there are probably 65 accounts using No. 4 oil in our area.

As you know, No. 4 oil is one of the residual oils. Four years ago, the International Business Machines Co. at its own choice installed oil-fired equipment to burn No. 6 oil, and I was called in to see if I could supply them. Again I was in new territory. I investigated the matter and found out that I could at that time with some maneuvering get the oil. I had no facilities, so I went out and got a us truck and arranged to haul the oil from a refinery down in Jersey direct to the customer.

It was not long before other industries in our area caught on to the economy of the use of No. 6 oil and the potential grew. With this potential, we were encouraged to build a storage plant and handling facilities in Poughkeepsie. That plant has been in operation now for about 2 years. One of our principal competitors did the same thing, and he has grown with us.

In a short space of 4 years since we hauled the first load of bunker oil into Poughkeepsie by truck, there are now 37 consumers of bunker oil in our area. Adding the 65 No. 4 accounts and the 37 No. 6 a0counts, we have a total of 102 accounts-not all ours, I am including the share that our competitors have-using residual oils in our area. These accounts include industries, housing developments, hospitals. churches, and a myriad of public institutions.

Now, the expert testimony to which we have all listened in the last 2 days convinces me that the enactment of that section of the Simpson bill that would restrict importation of residual oil would make it difficult for us to obtain needed supplies of both No. 4 and No. 6 oils In turn, this would work a hardship on the consumers of these residus oils. Therefore, I strongly oppose restricting the import of residua oils, not only for myself and my competitors, but mostly in behalf of

the consumers who depend on this type of oil for efficient operation of their heat requirements.

As an added point, may I state that a number of No. 4 consumers were once users of distillate oil and switched to No. 4 because of the lower price. Also, many of the folks who were using No. 4 oil switched to No. 6 oil for the added price advantage.

To my knowledge, none of the users of No. 4 or No. 6 can convert back to coal or any other fuel without exceedingly high conversion costs. Most of them in the last 4 to 10 years have spent high costs in converting to oil.

It seems that the issue, looking at it broadly, is between the coal industry versus hundreds of thousands of consumers. I have faith that your committee and Congress will recognize this and take the appropriate action.

Three years ago we were threatened by the introduction of natural gas into our area. Many other oil distributors were threatened likewise. Gas cut deeply into the potential market available to us. But we feel very strongly that we can handle this problem ourselves at a local level without asking for legislative relief. We feel that other fuel interests should and could do the same thing.

Thank you very much, gentlemen, for letting me make this state

ment.

The CHAIRMAN. We certainly thank you very much for your appearance here, and the information you have given to the committee. Are there any questions?

The Chair hears none, and we thank you again.

Mr. MEYERS. Thank you, sir.

The CHAIRMAN. The next witness is Mr. R. H. L. Becker, managing director, Oil Heat Institute of America, Inc., of New York City.

STATEMENT OF R. H. L. BECKER, MANAGING DIRECTOR, OIL HEAT INSTITUTE OF AMERICA, INC., NEW YORK, N. Y.

Mr. BECKER. My name is R. H. L. Becker. As managing director of the Oil Heat Institute of America, Inc., 500 Fifth Avenue, New York City, I appear here today in behalf of this national trade association which represents all segments of the automatic oil-heating industry.

The membership of this institute consists of three divisions. The manufacturer division is made up of producers of residential, commercial, and industrial oil burners and oil-fired boilers and furnace units. The accessory division is provided for manufacturers of components, accessories, tanks, and other equipment essential to installation, service repair of equipment; and fuel-oil delivery. The distribution division represents dealers in oil-heating equipment and fueloil jobbers through 38 chapters located in marketing areas from coast to coast. Total membership represents some 2,000 individual companies which are generally individually owned and operated.

The industry within itself is highly competitive; and it also is competitive with gas and coal. Many coal dealers are now also fuel-oil dealers because of a public demand for automatic heating. Many consumers converted their heating systems to oil firing even when coal was cheaper than oil because of the many advantages oil gave them; convenience, labor-saving, cleanliness, controlled temperatures, and