STATEMENT OF ARNOLD DUBB, DIRECTOR AND VICE PRESIDENT, PORT PETROLEUM CORP., GREEN ISLAND, N. Y.

Mr. DUBB. My name is Arnold Dubb. I am director and vice president of the Port Petroleum Corp., Green Island, N. Y.

In lieu of a prepared written statement, I would like to present my views to the committee orally, with your permission.

Mr. GOODWIN. Yes, indeed. That is entirely agreeable to the committee.

Mr. DUBв. I appreciate the courtesy extended to me by those who allowed me to precede them today, and I also appreciate the opportunity of appearing before this committee in opposition to Ĥ. R.

4294.

I speak as a jobber in residual fuel oils, being versed only in marketing affairs to do with residual fuel oil. The facilities which our company maintains for the receipt, storage, and distribution of residual oil represents a value presently of approximately $2 million.

Our oil is marketed throughout upstate New York, Vermont, and eastern Massachusetts. Our company has the responsibility of serving under contract for 1 or more years, civilian and defense industry, United States Government agencies, hospitals and institutions, schools and colleges, and municipal and State agencies, including Federal housing authorities.

These categories represent over 90 percent of our volume of residual fuel oil.

In the essential industry category are dairies, which include companies such as Bordens, Sealtest, Dairymens League, and the like, and other independent dairymen and food manufacturers. The General Electric Co. Essential paper and steel and lumber interests.

Our Government contracts include serving the United States Veterans' Administration Hospital at Albany, the United States Atomic Energy plants at Schenectady, the United States Army General Depots at Schenectady and Voorheesville, N. Y., and the Watervliet Arsenal, which I understand is 1 of 5 such arsenals in the country.

Our company is supplied with residual fuel oil which emanates from the Caribbean area. When we were seeking supply when we wished to establish our residual fuel oil business, we found there was no supply available from domestic sources. We therefore contracted for a supply which would come from a foreign source.

The firm supply that we offered the industrial and other firms in our area came as a welcome relief to them from the burdens which were imposed upon them by an erratic supply of coal and domestically supplied fuel oil.

During the past 3 years, our supply of fuel oil to them has been uninterrupted, and we have only been able to assure future supply to them through renewals of our supply contracts with our present oil suppliers from outside of the United States.

We have attempted from time to time to supplement this supply with domestically supplied oil, but we have been unable to obtain it. It has been absolutely and clearly unobtainable when it was needed. We found that these supplementary supplies as demand grew were readily obtainable through importation.

The conversion to oil that I have just spoken about was wrought by pure economies which resulted from increased burning efficiency,

the elimination of erratic coal supply; and that this is an established fact is the inherent testimony that many coal interests in our area have engaged in the sale of fuel oil to replace their falling coal tonnage. The railroads which operate in our area have voluntarily chosen to dieselize their own operations to the exclusion of coal.

An extremely important Government installation in our area, I have just said, is the Watervliet Arsenal. The arsenal has recently changed to residual fuel oil from distillate oil and from coal, purely to increase their operating efficiency, to obtain uninterrupted supply, and to reduce their labor costs. That relative costs of coal and oil are not a factor in such a conversion is attested to by the fact that the installations of oil-burning equipment at the United States Atomic Energy plants, the Watervliet Arsenal, the Army general depots, and so forth, were accomplished at times during the last 3 years when oil prices exceeded coal prices by far. The price, therefore, of either foreign or domestic oil or coal has not been a factor in such conversion. Do not overlook the fact, however, that such conversion, which has ultimately benefited the American taxpayer, could not have been possible if the only source of oil to meet this demand was of domestic origin. From this it must be concluded, then, that the defense effort will be seriously impeded unless a constant supply of fuel oil is made readily available from foreign sources to meet these defense demands. I understand from the news recently that certain oil importing companies have voluntarily reduced their imports starting about 30 days ago. The immediate result was an apparently man-made shortage of residual fuel oil so serious that up to a week ago our company could obtain no spot supplies at the cargo or barge levels of sale anywhere on the eastern seaboard.

This clearly indicates to the residual buyer, who is apparently well versed in oil markets, that the limitation of imports of residuals at any time during the next year in any way, shape, or manner, would seriously affect the availability of supply. It would hamper the planned expansion of oil companies storage and distribution facilities, it would be a deterrent to the normal natural growth of the jobber element in this country, and it would have a direct effect on consumer prices which are considered by industry to be fair at this time.

I strongly urge the committee and the Congress to favorably consider the President's recommendation that the present Reciprocal Trade Agreements Act be extended for 1 year without change. The CHAIRMAN. Does that conclude your statement?

Mr. DUBB. Yes, it does, sir.

The CHAIRMAN. We thank you very much for your appearance. Are there any questions? Apparently none.

Again, I thank you for appearing.

Mr. DUBB. Thank you, sir.

The CHAIRMAN. The next witness is Mr. Earl B. Saunders, Independent Gasoline & Oil Co., of Rochester, N. Y.

We are vey glad to see you here, sir. You are not very

hometown.

far from my

If you will just give your name and the purpose of your appearance here, we will be glad to hear your statement.

STATEMENT OF EARL B. SAUNDERS, PRESIDENT, INDEPENDENT GASOLINE & OIL CO., ROCHESTER, N. Y.

Mr. SAUNDERS. My name is Earl B. Saunders, and I am from Rochester, N. Y. I am here to represent the Independent Gasoline & Oil Co., of which I am president and major stockholder, and two other aflililated companies, of which I am also an officer.

I started in the petroleum business in 1935 as a service station attendant in Olean, N. Y., where I was born and raised.

In 1936, I went to Rochester, N. Y., to start my own petroleum business. Our company today operates the largest water terminal in Rochester not owned by an integrated or major oil company. We are one of the largest, if not the largest, marketer of distillate fuel oil in the Rochester area.

We operate a group of service stations, a large water terminal, and a fleet of trucks engaged in serving several thousand domestic and industrial fuel users.

Our facilities represent an investment of approximately $1 million. This investment is necessary because water transportation to Rochester via the barge canal is interrupted during the winter months because of our below-freezing temperatures in that area. It is necessary that a supplier in our area have sufficient storage to carry in inventory a supply of oil equivalent to his customers' needs during the 5 months frozen-in period.

Until 1951, we had stored and supplied only distillate oils in Rochester. The decision to enter the residual market was given a great deal of thought and study because of the investment required. However, the decision to enter this field was made in 1951, and a 55,000-barrel tank was put into residual fuel service.

Incidentally, one of the major factors contributing to this decision was a visit to our office by two officials of the General Foods Corp., who were requesting a local source of supply of residual oils for use in one of their food-processing plants. One of the biggest problems our first year in the residual business was obtaining a supplier for the small amount of 2 million gallons of residual fuels. In fact, this problem was solved only by splitting this business between two seaboard suppliers.

With the exception of General Foods, our first year's business came almost exclusively from distillate users, who at that time had equipment capable of burning residual oils, but who had not done so because of no local dependable supply.

I would like to stress this point, because from the observation and experience of our company that it has had over the past 2 years, we feel that a very large percentage, at least in our area, of the increase in residual demand has come directly from the distillate field, and only in a small way in the conversion from coal to oil.

In 1952, our demand had risen to 4 million gallons, and we were unable to obtain this small amount of oil on the eastern seaboard without first agreeing to trade back to our supplying company 2 million gallons of No. 2 distillate fuel.

This very scarce supply picture was true up until 2 weeks after the start of last summer's steel strike, when large amounts of residual fuels came into the seaboard market. As soon as it was known in Rochester

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 directly 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 drastic isolationism is un-Christian, unwise, and for the United States unsafe; that isolationism is in all respects error. In this situation we cannot wisely isolate selectively countries in Latin America, through instrumentality of economic chauvinism; economic throat-cutting practiced by the bearer of the biggest knife and the possessor of the longest and strongest arm.

While we tell the wide world that we are disposed to make our tariff laws more encouraging to foreign producers and traders; while we 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 the soil of neighboring countries. Should we do so the crop would be cultivated 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 robbing our neighbors in Venezuela of capacity to buy in our markets. That capacity is not inconsiderable, and willingness of Venezuelans to 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.