We believe that it would be an unsound public policy to permit these few companies to increase their domination of domestic production rates and their control over our oil supplies. Through imports, these companies have the power to control price and market outlets-the two elements that I have pointed out that are essential to the expansion of domestic oil activities.

We are today at the point where a choice must be made as to whether our welfare and security as to oil will be placed in the hands of a few companies interested in foreign oil or in the hands of thousands of competitive units of a healthy domestic industry.

In closing I wish to say that I believe that this is a matter of great public interest. The domestic petroleum industry has furnished adequate supplies of petroleum products at low prices over a period of many years. Gasoline is now selling at the filling stations at a price exclusive of tax, that is 9 cents less per gallon than it was in 1920, and at about the same as in 1926, and is 50 percent or more better gasoline. That is because of competition. We must not permit any condition to develop which will destroy competition in the domestic petroleum industry and thus endanger the domestic consumer.

But even of greater importance is the question of national security. We must have petroleum and its products for our national security within the borders of the United States. That cannot be accomplished if imports are to continue at such excessive rates that the domestic producers are unable to carry on the exploration and development work essential to provide adequate supplies of petroleum within our own borders. Accordingly, it seems to me that the time has come when there is a need for congressional action in the public interest. I sincerely hope, gentlemen, that the Congress will act favorably by placing a restriction on imports of crude oil and products into this country.

(The tables referred to follow :)

Relationship of petroleum imports to demand and production, 1935-53

Source: United States Bureau of Mines. 1953 imports based on company estimates submitted to Texas Railroad Commission. 1953 demand and production estimated by I. P. A. A.

Prepared by Independent Petroleum Association of America, March 1953.

United States imports and exports of crude oil and refined products, yearly averages, 1918-52

Source: United States Bureau of Mines and the Petroleum Almanac.

Prepared by the Independent Petroleum Association of America, May, 1953.

The CHAIRMAN. We thank you, Mr. Fell, for your very fine and able statement.

Are there any questions?

There seem to be no questions. We certainly thank you for your appearance and contribution you have made to our information. Mr. FELL. Thank you, sir.

The CHAIRMAN. The committee will now stand adjourned until 10 o'clock tomorrow morning.

(Whereupon, at 3:37 p. m., the committee was recessed, to reconvene at 10 a. m., Tuesday, May 12, 1953.)

TRADE AGREEMENTS EXTENSION ACT OF 1953

TUESDAY, MAY 12, 1953

HOUSE OF REPRESENTATIVES,
COMMITTEE ON WAYS AND MEANS,

Washington, D. C.

The committee met, pursuant to recess, at 10 a. m., in the main hearing room of the Committee on Ways and Means, Hon. Daniel A. Reed (chairman) presiding.

The CHAIRMAN. The committee will come to order.

Public hearings will continue on H. R. 4294. Today the committee will hear testimony from proponents of the provision of the bill which imposes a quota limitation on imports of residual fuel oil.

The committee will first hear from Members of Congress who have requested to appear in support of this legislation.

We are now pleased to welcome as our first witness the Honorable Will E. Neal, of the Fourth District of West Virginia.

STATEMENT OF HON. WILL E. NEAL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WEST VIRGINIA

Mr. NEAL. My name is Will E. Neal, a Representative from the Fourth Congressional District of West Virginia.

The CHAIRMAN. You may proceed. We are glad to have you here. Mr. NEAL. I wish to thank you gentlemen for giving me this opportunity to plead the cause of my constituents, the people of West Virginia, whose welfare is built around and preponderantly geared to the production and marketing of coal.

You will be hearing testimony from witnesses who, with intimate knowledge of past experience and with present difficulties confronting their industry, are much better qualified to present convincing facts and figures upon which your decisions will be made. They will discuss with you competition as it relates to coal; they will tell you what it is, where it comes from, where it goes, what it does, and warn of some of the dangers ahead.

West Virginia is a State of 2 million souls. It is a mountainous area containing more natural beauties than can be found in any equal area in our Nation. Its timber, its oil, and its natural-gas reserves are rapidly vanishing, its arable land is limited. Coal? Coal we have in abundance. It is found in 47 of our 55 counties and geologists have estimated total original deposits at 62% billion net tons, from which we have taken to date since the beginning of mining in our State in 1883 about 5 billion tons. In place, where Providence has put it, it is of no use to mankind. Capitalized and utilized, it

becomes the Black Giant of innumerable miracles. Upon its production and marketing West Virginia must largely depend for the wellbeing of her citizenry, the operation of her economy, the administration of her schools, and revenues for State and local government. With an existing productive capacity of 160 to 175 million tons per annum, which could be expanded year by year, the State will this year fall short of 120 million tons. Already penalized adversely by differentials in freight rates, in the last 5 years we have witnessed an increasingly unfair and destructive competition by cheap residual fuel oil admitted to this country from foreign refineries. It is systematically priced to encourage its use as a substitute for coal. Its continued importation at prevailing rates of import duty, in rapidly mounting quantities, together with the vast volume of natural gas carried by pipelines, being relatively laborless fuels and having no welfare royalty tax attached to their costs of production, will further serve to drive coal from the fuel markets of the country. Furthermore, there is the added competition by Government sponsored and financed hydroelectric power (built with or by some of the taxes the coal industry has paid) and the not improbable adaptation of atomic energy to domestic uses for heat and power. If these competitive elements, fuels, and forces continue to be permitted, unfairly we assert, the economic results will be disastrous, culminating in further and more widespread abandonment of mines and entire whole coalfields, cessation of employment and a total loss of vast capital investments. Closed mines deteriorate very rapidly. Mines no longer in condition to meet the unusual demands for coal in emergencies such as we have experienced during the past 35 years would indeed cripple our defense efforts.

The so-called captive mines are now producing the greater part of our Nation's steel, but they are fast exhausting their resources. Even in peacetime they must depend upon commercial production to augment short supplies. Should our coal mines be permitted to deteriorate and in such condition be unable to meet the demands for fuel during an emergency of unusual character, to what prime source may we be expected to turn to supplant the Nation's fuel shortage?

Section 13 (a) (2) of H. R. 4294 is designed to afford some relief from competition with foreign residual fuel oil which, in the period 1946-1952, inclusive, has resulted in the tremendous influx that is so disastrous to coal mining and allied industries in our country.

Self-preservation, gentlemen, is the first law of nature. As West Virginians, depending as we do upon the coal industry for our welfare, we naturally are intensely interested in the matter. But our anxiety reaches far beyond the borders of our State, because we realize that upon the ability of the coal industry to meet demands of national emergencies, the national security likewise depends. Without security at home, national security as it applies to our relations abroad will have little meaning. Security to West Virginians means opportunity for employment. Unproductive coal mines deprives them of this opportunity.

This section of H. R. 4294, if approved, will limit the import of residual fuel oil, and this limitation will materially help toward the preservation of the industry so vital to our Nation. I hope the committee will see the advantage of doing so.

The CHAIRMAN. Does that conclude your statement?

Mr. NEAL. Yes, sir.

The CHAIRMAN. We thank you very much for your fine statement. Mr. Jenkins will inquire.

Mr. JENKINS. I wish to say this: Dr. Neal is a resident in West Virginia, and, as a lifelong resident of West Virginia, his opinion is worth something to me. I agree with everything he has said.

Doctor, I want to ask you one question: In my district I have been over the coal sections of my State and I find a good deal of distress and a good deal of unemployment. What is the situation in your coal-mining sections?

Mr. NEAL. The situation has been growing progressively worse for the past 2 years. Mines throughout the whole area of West Virginia have had to close. Not only some of the smaller ones but many of the larger ones have had to close for want of markets for their coal. It is purely a lack of markets that has caused this condition. About the numbers of people that have gone out of employment because of these closures, I am not quite able to give you, but they will be given to you in later reports.

Mr. JENKINS. That is all, Mr. Chairman.

The CHAIRMAN. We thank you for your statement. You have made a fine contribution here.

Mr. NEAL. Thank you, gentlemen.

The CHAIRMAN. We will now hear Hon. Robert C. Byrd, of West Virginia.

STATEMENT OF HON. ROBERT C. BYRD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WEST VIRGINIA

Mr. BYRD. Mr. Chairman, in view of the importance of H. R. 4294 (Simpson bill) concerning the extension of the Trade Agreements Act with its attendant provisions to protect American industry and American labor, I wish to submit this brief statement confirming my support of the bill.

My interest stems primarily from the fact that in this bill there is an overall quota established for 10 percent in crude petroleum and a general proviso of 5 percent on residual fuel oil based on domestic demand for this fuel in the corresponding quarter of the previous year. West Virginia is the premier coal-producing State in the Union. There are workable seams of coal underlying 49 of West Virginia's 55 counties, and at the present time there are active mines in 37 of these counties. In the last century and a half more than 5 billion tons of coal have come from the rich veins of this State, yet less than 10 percent of the original recoverable supply has been taken from the ground.

Coal is West Virginia's basic industry, and the welfare of most of our other industries and nearly all of our 2 million men, women, and children is directly dependent upon the economic well-being of the coal industry.

For the information of this committee I offer the following table showing how much coal has been produced in the United States in