Mr. JENKINS (presiding). Mr. Jennings, you have made a very splendid statement.

I presume you would like to have included with your remarks the charts that you have there?

Mr. JENNINGS. I included those charts for the convenience of the readers. The figures have been covered largely in the text.

Mr. JENKINS. You will want those to be inserted with your statement?

Mr. JENNINGS. I would like them to be, yes, sir.

(The material referred to appears on pp. 1227-1228.) Mr. JENKINS. Are there any questions?

Mr. Simpson will inquire.

Mr. SIMPSON. Mr. Jennings, do you believe that imports should be permitted of both crude petroleum and residual oil without limitation?

Mr. JENNINGS. I stated in my paper that I believed at the present time we didn't have to make that decision. I feel that there is no demonstrable need for limiting those at the present time.

Mr. SIMPSON. Will you not give me your opinion? Do you believe that oil importation should be permitted without limitation by law! Mr. JENNINGS. I do at the present time, yes, sir. I would like to say that it is conceivable that at some future time conditions might be quite different, in which event such limitations might be appropriate. I think they are undesirable. I think any time you put artificial restrictions on free commerce, it is a bad thing, and my view is that it should only be done if you can demonstrate a real need for doing so. Mr. SIMPSON. From that I conclude that you do not believe those supporting this part of the bill have demonstrated serious loss to our industry in this country in the coal-mining area?

Mr. JENNINGS. I don't doubt that the figures they have given on the effect on the coal-mining industry and on the railroads have been as stated. I don't share the view that those injuries have been greater than the injuries that would result from what is proposed here. I think it has got to be viewed in the total national concept.

Mr. SIMPSON. Do you think that the injury which you admit they have proved has not been serious enough to justify relief?

Mr. JENNINGS. That would be my view; yes, sir.

Mr. SIMPSON. How serious do you think their injury should be before they should be given relief? I mean, representatives of great railroads come here, and representatives of great coal-mining companies, and representatives of labor unions come here, and tell us that from their point of view the loss is serious to their interests, and they ask relief. They demonstrate to my satisfaction that it is a result of unlimited or unrestricted imports of crude oil and residual oil. And I ask you: Do you have any remedy to suggest? Or would you just disregard it?

Mr. JENNINGS. I would like to perhaps amplify my previous remarks to this extent: That the suggestion in the testimony that I heard here this morning was that all of the reductions in coal production and in coal transportation were due alone to imports.

I feel that, as I stated a little while ago, there are many other contributing factors, and the damage that would be done by the imposi tion of these drastic reductions in imports, the ill effects resulting from that, would outweigh the beneficial effects on the other industries.

'35 36 37 38 39 '40-' '41

'46 47 48 49 50 51 52 53 (EST.)

3000

1000

Mr. SIMPSON. Where would that damage be demonstrated? Mr. JENNINGS. On the many consumers that use fuel oil and that require it. As far as crude oil production is concerned-I take it your remarks are addressed to coal and not crude oil production restrictions there are many users of fuel oil who are quite dependent on it, and if it were not available to them, their costs would go up materially. In some cases they would have great difficulty in converting.

Mr. SIMPSON. Well, with respect to residual oil, what is your comment on that?

Mr. JENNINGS. That was in respect of residual oil, that if the residual oil is not available to the consumers who are using it now as fuel

Mr. SIMPSON. And in the case of the consumers, you have enumerated in there the larger operators. I mean, it is not the private home. Mr. JENNINGS. Not the private home; no.

The apartment dweller gets it indirectly. Shipping is a very important segment that uses fuel oil and is completely dependent upon it. Mr. SIMPSON. Does your company produce in the United States? Mr. JENNINGS. Oh, yes, sir.

Mr. SIMPSON. And also abroad?

Mr. JENNINGS. Yes.

Mr. SIMPSON. And percentagewise, what are the percentages? Mr. JENNINGS. Oh, our production in the United States is over twice what our production from foreign sources is. Our business is primarily in the United States.

Mr. SIMPSON. Am I incorrect in saying that 49 percent of the total production of the Socony-Vacuum Oil Co. in 1952, as compared with only 19 percent in 1946, was foreign production?

Mr. JENNINGS. I don't quite understand.

Mr. SIMPSON. Does 49 percent of your production come from abroad today?

Mr. JENNINGS. I guess that is about right; yes, sir. But where our refinery operations in the United States are concerned, which the running of oil which we produce in the United States and oil that we purchase in the United States, they far outweigh our foreign business. Our production in the United States is now around two-hundred-thousand-some-odd barrels a day, and our purchases of oil in the United States

Mr. SIMPSON. But I am talking about production.

Mr. JENNINGS. Yes; our foreign production would be about equal to our domestic production.

Mr. SIMPSON. Where is your foreign production?

Mr. JENNINGS. Some in Venezuela, some in the Middle East, in Arabia, Iraq.

Mr. SIMPSON. Do you not have in Venezuela and these other countries modern equipment and so on?

Mr. JENNINGS. We do not refine in Venezuela. We have refineries in Europe. We do not refine in Venezuela at the present time.

Mr. SIMPSON. Well, did you mean to say that if better equipment were installed in those areas, such as, for example, Venezuela, there would not be as much residual oil left there?

Mr. JENNINGS. I didn't say that. I said that the trend in the United States, Mr. Simpson, had been to install equipment to reduce the yield of heavy fuel. I made no comment as to the character of refinery equipment in Venezuela.

Mr. SIMPSON. Is it a fact that if they had better equipment down there, they would not have as much residual oil?

Mr. JENNINGS. We don't refine there, but my understanding is that the character of a good part of that crule oil that is produced there is such that it would be very expensive to materially reduce the fuel-oil production from it.

Mr. SIMPSON. That was my understanding.

So that it is not practical to further refine that, and that which they ship in then as residual oil represents that which is left after what is more easily got is taken off?

Mr. JENNINGS. I think that is correct, sir. It wouldn't be economically practical to refine that more deeply.

Mr. SIMPSON. Now I want to ask you one question on this international picture.

You have commented that Venezuela buys a half a billion dollars' worth of goods from this country. And they do that, of course, by using dollars they get for their oil principally. We have a lot of people here in the mining areas, railroadmen and others, who are out of work and not able to buy those very products which the citizen is able to buy in Venezuela. To the extent that this committee is persuaded that the unrestricted importation of residual fuel oil accounts for unemployment here, I cannot justify sending dollars abroad to raise the other people's standards, at the expense of the coal miners and railroad men here. Can you?

Mr. JENNINGS. I find that a difficult question to answer.

Mr. SIMPSON. I know it is.

Mr. JENNINGS. In principle, surely we must give first consideration to the people in our own country. But so many of these things have a reverse effect. They benefit one group, and they perhaps harm another group.

Mr. SIMPSON. That is right.

Mr. JENNINGS. It seems to me that the responsibility of our Government is to weigh those relative advantages and disadvantages and do the best it can.

Mr. SIMPSON. That is what this committee is weighing right now. Mr. JENNINGS. Yes, sir; I appreciate that. And I am in complete sympathy with the problem that you are dealing with and your way of dealing with it.

Mr. SIMPSON. Now, you mention reciprocal-trade agreements and the GATT agreements which have been made.

Is it your position that the agreement having once been made, nothing can be done or should be done to correct errors therein?

Mr. JENNINGS. No. The way you state the question, I would have to say that is not my view. I would suggest, though, that we should back out of those agreements only with the greatest reluctance, and only under the greatest pressure.

Mr. SIMPSON. But you do agree with me that the Congress has powers to modify those agreements if in our judgment we see fit?

Mr. JENNINGS. It is my understanding that you have, and that the agreements provide that the United States can withdraw from them on appropriate notice. I believe that is correct. I am not an expert on those treaties.

Mr. SIMPSON. You are correct. We do have that authority and provision in the agreement. But short of withdrawing from it, we should, I think, be able to give relief to an industry where it is proved to the satisfaction of the Congress that relief is needed as a result of injury done by cuts in the tariff.

Mr. JENNINGS. I would think so.

Mr. SIMPSON. That, of course, is the basis for these hearings today. That is all I have.

The CHAIRMAN. Any other questions?

We thank you, sir, for your very fine statement which you made to the committee, and the information you have given us.

Mr. JENNINGS. Thank you.