Mr. CURTIS of Nebraska. You were talking about oil, whether or not it would cover all commodities in a trade agreement.

Mr. ELLIS. That is correct.

Mr. CURTIS of Nebraska. You reviewed the predictions of certain oil interests that great injury would come to them if imports were not restricted, and you contend that the record shows that that didn't happen.

Mr. ELLIS. Yes, sir.

Mr. CURTIS of Nebraska. The Simpson bill would put some brakes on the other end of the controversy. You in your statement say that if this is done I find this on page 15-"I believe the proposed bill does not meet your current needs and would cause adverse conditions some of them resulting in damage beyond repair in your lifetime and mine."

In other words, you are predicting irreparable damage that can't be restored in our lifetime if this bill is passed.

Mr. ELLIS. That is right.

Mr. CURTIS of Nebraska. Do you think your guess will be better than the Independent Producers Association of America?

Mr. ELLIS. For the past 3 years I have been contending that their predictions were wrong and I believe the record supports my position today a little bit better than it does theirs. That is the best way I could answer it, Mr. Curtis.

Mr. CURTIS of Nebraska. You suggest what you refer to as “Reverses or changes should not be made until every potential is explored so that our final decisions are based on reasoned judgment." Do you anticipate that the actions of this committee will not be on reasoned judgment?

Mr. ELLIS. No, sir; not in any respect.

Mr. CURTIS of Nebraska. That is all, Mr. Chairman.

The CHAIRMAN. Mr. Simpson will inquire.

Mr. SIMPSON. Mr. Ellis, are you now a lobbyist for the Government of Venezuela?

Mr. ELLIS. I am not and never have been.

Mr. SIMPSON. Have you not been registered?
Mr. ELLIS. I beg your pardon.

Mr. SIMPSON. Have you not been registered?

Mr. ELLIS. As a lobbyist? No, sir. I have never been a lobbyist for Venezuela. I am not now and I will answer categorically that I will never be a lobbyist for any foreign government as to my own Government.

Mr. SIMPSON. I would like to clarify that for you to tell us voluntarily, of course, that you are a legal adviser and consultant. Mr. ELLIS. That is right, sir.

Mr. SIMPSON. As such, I presume you have their interest at heart! Mr. ELLIS. Quite definitely.

Mr. SIMPSON. Are you a no-tariff man, a free-trade man? Mr. ELLIS. No, sir. I guess I am what most people choose to call, or try to be, a middle-of-the-roader.

Mr. SIMPSON. Are you suggesting that the people whom you represent are free traders?

Mr. ELLIS. Not in the sense of the word that all tariff barriers should be torn down as contrasted to the other extreme of protective tariff, Mr. Simpson.

Mr. SIMPSON. Are you suggesting that those among the number whom you represent that supported the Eisenhower administration did so because they thought the Eisenhower administration is a freetrade administration?

Mr. ELLIS. No, no. I said free competitive enterprise.

Mr. SIMPSON. On page 16 you say that "a number of my people looked forward, after January 20, to what they considered as a change from governmental intervention to a return to a system of free, competitive enterprise, unregulated, and unfettered by anything more than reasonable antitrust and fair-trade laws."

Not a word about tariff.

Mr. ELLIS. That statement has nothing to do with it. I was speaking to point out the position of my people in that. We are not the whining type of trade association that is constantly afflicting Congress. Mr. SIMPSON. But you put in antitrust and you put in fair-trade laws in which they believe, that is, the people you represent. You don't mean to imply that they do not believe in tariff protection? Mr. ELLIS. No; not at all.

Mr. SIMPSON. All right. Your statement is not accurate, then, as expressing their opinion.

Mr. ELLIS. We don't believe in tariff protection currently for imported oil.

Mr. SIMPSON. You would like to have the present 5 percent renoved? Are you advocating that?

Mr. ELLIS. I am not asking for it, but I don't think it does any good except as a revenue-producing measure. It certainly does not keep one barrel of oil out of this country, and I don't believe, Mr. Simpson, that even the IPAA or the coal people would state that it currently was keeping any oil out of the country.

Mr. SIMPSON. You are right. Do you advocate increased imports of petroleum?

Mr. ELLIS. Over the current levels? No, sir, Mr. Simpson, I think as a matter of fact that imports have been on the excessive side for the last 3 or 4 months, and I think that they should be cut back. Mr. SIMPSON. You think they should be cut back?

Mr. ELLIS. Yes, sir.

Mr. SIMPSON. I do, too. By whom should they be cut back? Mr. ELLIS. I think this industry can do it, the importers themselves, as they have demonstrated over the years they have done. We have had temporary incidences of this kind, one of which I am very familiar with. In 1948 and in 1949 I was petroleum counsel for the House Small Business Committee. During the period of time when we spent 15 months on hearings and investigations on the subject, the effect of oil imports on independent producers, I heard all the situation at that time and how critical it was. I submit the excess was greater then as related to domestic production than it is today, but they came out of that one and they will come out of this one. They are temporary things.

Mr. SIMPSON. The Korean war helped us out of that one.

Mr. ELLIS. The Korean war helped us out of that one in some respects, but the Korean war, in my judgment, along with the Abadan. refinery closing down, helped push the amount of imports up.

Mr. SIMPSON. You have agreed with me that at the moment there should be some curtailment.

Mr. ELLIS. Some has been made already, Mr. Simpson, if what I read in the papers is correct.

Mr. SIMPSON. You mean below the 1,100,000 barrels coming in daily?

Mr. ELLIS. I think for a period of a week or so there it was hitting about 1,100,000 barrels. Maybe 1 week it hit an average of about 1,200,000, but it is under 1 million now, I think.

Mr. SIMPSON. I respect your opinion. I would like to know the basis upon which you say that that 1,100,000 barrels is too much today.

Mr. ELLIS. That 1,100,000.

Mr. SIMPSON. Whatever it is.

Mr. ELLIS. I think it is too much not because of the number of barrels it represents but because at the time we are importing that much oil we have shut-in capacity, say, for example, in Texas today of approximately 500,000 barrels of oil, and I think that currently there ought to be a different relationship. I think some of your shutin capacity today could be pushed up a little bit more and a little pulled back on our imports. I don't think it warants imposing a 10-percent formula applied to it when the industry can do it itself. In this oil industry, Mr. Simpson, you can't always gage what is going to happen 3 months from now. It is like a chameleon running across a crazy quilt. I am not a professional in it. I work on the edges. Let's say, for example, they projected last summer their shipments, the oil they would take out of the ground and refine and come to this country during the winter. You get a little mild session, coal goes back, gas goes back, burning oil goes back. They have overestimated. I think the situation has arisen due to that and other circumstances, and I think this industry will take care of it, as it has done.

Mr. SIMPSON. You do see a relationship, then, between imports and production domestically.

Mr. ELLIS. Very definitely so. We can never let imports come into this country over a period of time to such excesses that we jeopardize a reasonable program of exploration for and development of our own properties.

Mr. SIMPSON. Your information is most constructive and I want to commend you for that.

Now, I would like to ask you this: You suggested the need for curtailment of imports. By whom must that curtailment or should that curtailment be provided?

Mr. ELLIS. By the importing companies themselves.

Mr. SIMPSON. We know they are not permitted to get together and make combinations in restraint of trade, and so on. Therefore, they must do it on an individual basis.

Mr. ELLIS. That is correct.

Mr. SIMPSON. I did not hear any testimony today indicating conclusively that they were doing it or intended doing it. In fact, as I recall. there was one who testified that there should be unrestrained importations. If those companies failed doing it, does it follow in your opinion that the Congress should do it?

Mr. ELLIS. If they fail to do it, and if imports of oil come in in such increased quantities as to cause or threaten serious injury to our domes

tic industry, then I think that the Tariff Commission ought to make the recommendation and the President ought to follow through with that recommendation. If he does, we will be perfectly legally in accord with every trade agreement we have.

Mr. SIMPSON. You, sir, have been described to me as a man who knew the business and I want to commend you for the frankness of the testimony you have given us. I say to you as a member of this committee that I am seeking the kind of information you are giving us. It has been helpful.

There is one other point, and this is my last one. You have referred to the coal industry here and the workers in the coal industry and cited the number of strikes and so on in recent years as affecting the supply of coal and also affecting the imports of oil. You used the phrase that we should not be at the mercy of the group, meaning the coal-mining workers. I did not like the actions that went on during the war, but at the same time I have to keep in mind that if I had a choice as to being at the mercy of American citizens here at home I would prefer that to being at the mercy of underpaid workmen thousands of miles away in a country whose friendliness to us is apparently only a matter of dollars. I do not want these men put out of work here permanently by low-paid workers over in the Middle East and Venezuela and elsewhere. I think we have to seek to preserve the great mining industry. I do not disparage the importance of petroleum, but I do see a possible emergency when we must have coal available.

If I had a choice as. between being at the mercy of the American workingman and the workingman down in Venezuela or in the Middle East, I will take the American workingman.

That is all I have, Mr. Chairman.

The CHAIRMAN. Any other questions?

Mr. COOPER. Several times, Mr. Ellis, during the course of the questions here, you referred to other material. Is there anything else that you would like to include in the record?

Mr. ELLIS. Not for the moment. I think I have about covered it. The CHAIRMAN. We thank you for your appearance and the information you have given to the committee.

Mr. ELLIS. Thank you.

The CHAIRMAN. The next witness will be Mr. J. P. Gwaltney.
Will you state your name and the capacity in which you appear.

STATEMENT OF J. P. GWALTNEY, ON BEHALF OF THE NORTH
CAROLINA OIL JOBBERS ASSOCIATION

Mr. GWALTNEY. My name is J. P. Gwaltney, from Durham, N. C. I am what is known in the oil industry as an independent jobber of petroleum products. I own my own bulk storage plant and transport facilities-the latter being used to distribute gasoline, kerosene, and fuel oil to the filling stations, farms, and homes in the area which I serve. There are hundreds of jobbers like me in the State of North Carolina, and thousands of others throughout the United States. We employ thousands of people and we, with our bankers, have many millions of dollars invested in our businesses.

I am appearing here today as chairman of the imports committee of the National Oil Jobbers Council, as well as speaking on behalf of the North Carolina Oil Jobbers Association.

The membership of the National Oil Jobbers Council consists of the following State associations.

With your permission, sir, I will not read that, since each of you has a copy of those names.

First, I would like to read to you some excerpts from the report of the NOJC imports committee, which report was unanimously adopted by the representatives of the 25 State jobber associations at our meeting in Montgomery, Ala., on March 27, 1953:

Our recommendations for immediate action, together with some supporting statements, are as follows:

That the officers, directors, and general counsel be authorized and directed to take such steps as are legally permissible and deemed necessary to oppose passage of any legislation seeking to impose restrictions on crude oil and petroleum products.

That a recommendation be made to the proper congressional committees and the Congress to the effect that if it is deemed necessary to impose import restric tions on crude oil and products, that current depletion allowances on coal and crude-oil production either be reduced or, in the alternative, before such allowances are granted as tax reductions, satisfactory evidence shall be submitted to show that the amount of such deduction either had been spent or was obligated to be spent on the exploration and/or development of oil- or coal-producing properties.

In keeping with this mandate, I am recommending to this committee that if you see fit to reduce imports of oil, that you also give consideration to reducing the depletion allowance, for the reason that this allowance would not longer seem to be necessary as an inducement to find oil.

Opposing unreasonable restrictions on imports of oil is not a new policy for the jobbers of this Nation-the National Oil Jobbers Council has opposed such restrictions since its inception in the early 1940's, and I dare say we will continue this opposition with all vigor in the same manner as we oppose other legislation which would seek to impose Government control on the operation of our business and our industry. As I see it, this bill, H. R. 4294, would provide a double-barrel approach to restricting oil imports. One part of the bill would impose specific restrictions on imports of crude oil and products, with a special provision for residual oil. The other language of the bill would amend our present laws to the point where it would be a simple matter to come in and get the same restrictions through the Tariff Commission. While I can understand that shooting 2 barrels at once, rather than 1 barrel, would improve the chances of dropping the bird, I am a little confused over the inconsistency of what the bill, as a general proposition, would do. It is my understanding that if the existing law is amended by this bill, it sets up standards and procedures whereby an injured industry can get relief by going to the Tariff Commission. If these standards and procedures are considered adequate, then why is it necessary to put in special amendments which would do what the Tariff Commission is supposed to do?

Frankly, I am not too worried over what your action will be on these quota provisions because I simply cannot believe that the Congress would ever agree to any law which specifically limits imports of crude oil and its products for the simple reason that such a law would result in a shortage of crude oil and products, higher prices to the consumer,