• 1937 CONGRESSIONAL RECORD-HOUSE Lt. Comdr. Joseph Greenspun to be commander with Victor H. Krulak Robert E~ Hammel rank from May 1, 1937; and George C. Ruffin, Jr. Frank C. Tharin District Commander William M. Wolff to be district com Harold 0. Deakin Henry W. G. Vadnais mander with the rank of lieutenant commander from Janu Maurice T. Ireland John W~Sapp, Jr. ary 31, 193'7. Samuel R. Shaw Samuel F. Zeiler The PRESIDING OFFICER. '!he reports will be placed Robert S. Fairweather Lawrence B. Clark on the Executive Calendar. , Joseph P, Fuchs Lehman H. Kleppinger If there be no further reports of committees, the clerk Henry W. Buse, Jr. Floyd B. Parks will state the nomination on the Executive Calendar. Bennet G. Powers John E. Weber POSTMASTER CONFIRMATION The legislative clerk read the nomination of L. Elizabeth Executive nomination confirmed by the Senate June 8 Dunn to be postmaster at Conchas Dam, N.Mex. (legislative day of June 1>. 1937 The PRESIDING OFFICER. Without objection, the nomination is confirmed. POSTMASTER That concludes the Executive Calendar. NEW MEXICO ADJOURNMENT TO MONDAY L. Elizabeth Dunn, Conchas Dam. The Senate resumed legislative session. Mr. BARKLEY. I move that the Senate adjourn until WITHDRAWAL 12 o'clock noon on Monday next. Executive nomination withdrawn from the Senate June 3 The motion was agreed to; and (at 2 o'clock and 45 min (legislative day of June 1), 1937 utes p. m.) the Senate adjourned until Monday, June '1, 1937. WORKS PROGRESS ADMINISTRATION at 12 o'clock meridian. Ron Stevens to be State administrator in the Works Prog ress Administration for Oklahoma. NOMINATIONS Executive nominations received by the Senate June 3 (legislative day of June 1), 1937 HOUSE OF REPRESENTATIVES FEDERAL HoME LoAN BANK BoARD THURSDAY, JUNE 3, 1937 T. D. Webb, of Tennessee, to be a member of the Federal The House met at 12 o'clock noon. Home Loan Bank Board for a term of 6 years from July 22, The Chaplain, Rev. James Shera Montgomery, D. D., 1937. (Reappointment.> offered the following prayer: SECURITIES AND Ex~ANGE COMMISSION Eternal God, our Father, we pray that the silent ministry James M. Landis, of Massachusetts, to be a member of of Thy spirit may have a place in our thoughts; in quiet the Securities and Exchange Commission for the term and in confidence may this fellowship be our strength expiring June 5, 1942. (Reappointment.> today. Give us the help and the undergirding that we WoRKS PROGRESS ADMINISTRATION need, and we shall have but few distractions as we follow Ron Stephens, of Oklahoma, to be State administrator 1n the path of duty. In burden bearing, in temptation, call the Works Progress Administration for Oklahoma, vice W. S. us to the realities which abide-godliness, unselfishness, and Key, resigned. (This nomination is submitted at this time the riches of a wholesome influence. These make up the for the purpose of correcting an error in the nollii?&tion as splendor of character which gives the radiance of the divine submitted to the Senate on May 24, 1937.) to our actions. These will live when the god of covetous Joseph Newman Alderson, of West Vrrginia, to be State ness and the chaff of worldliness shall be no more. administrator in the Works Progress Administration for Bless the Lord, 0 my soul: and all that is within me. bless West Virginia. His holy name. CoLLECTOR OF CUSTOMS For the Redeemer's sake. Amen. John O'Keefe, of Pembina, N. Dak., to be collector of The Journal of the proceedings of yesterday was read and customs for customs collection district no. 34, with head approved. quarters at Pembina, N.Dak.
[Mr. DIES]. In order to give the House the best available 'In this letter he comments on this proposed legislation and information I could about this matter I sent a telegram to states he thinks it ought to be made permanent. Colonel Thompson, of the Railway Commission of Texas. I The SPEAKER. Is there objection to the request of the have a reply signed by Mr. C. V. Terrell, chairman of the gentleman from Texas? Railroad Commission of Texas. The telegram reads as There was no objection. follows: The letter referred to is as follows: Colonel Thompson on his way to Paris, France, to represent THE SECRETARY OF THE INTERIOR, United States at World Petroleum Congress. Approximate number Washington, March 19, 1937. producing wells in Texas this date 71,000, which have a combined Hon. CLARENCE F. LEA, pctential for proration purposes of 34,000,000 barrels daily, but . House of Representatives. these wells allowed only 1,360,000 barrels daily. East Texas field MY DEAR MR. LEA: Replying to your letter of March 9, 1937, re has 22,790 wells, with allowable of 462,825 barrels daily, total poten· questing a report on H. R. 5366, proposing to make permanent the tial east Texas being 13,761,2'75 barrels daily. East Texas has pro· law of February 22, 1935, which regulates interstate and foreign duced approximately 1,000,000,000 of its 4,000,000,000 barrels of commerce in petroleum and its products by prohibiting the ship oil, and field is still in its flowing life, which can be attributed to ment in such commerce of petroleum and its products produced regulated production. Hard to estimate life of any field, as this is in violation of State law. dependent on rate of withdrawals, but believe field should flow 5 or By giving strong support to the oil and gas conservation laws 8 more years under proper withdrawal regulations, and that otl of the oil-producing States, the law of February 22, 1935, gen· will be taken out of field 50 years hence. Pressures in several fields erally known as the Connally Act, has contributed materially to of Texas have actually increased past several months under regu· the advances made during the past few years in the prevention of lated withdrawals, showing splendid condition of fields. avoidable physical waste in oil and gas production and to the resulting increased ultimate recovery of oil. There has been testimony before the committees of the By eliminating contraband oil products from interstate com· merce, the law has been one of the principal factors which have House and of the Senate distorting what Colonel Thompson made it possible for nearly all independent and nonintegrated testified before the House Committee on Interstate and petrole~ refiners to operate without incUrring the substantial Foreign Commerce. I am going to read a letter from losses which threatened their existence immediately prior to the Colonel Thompson. and you can judge its value. enactment of that legislation. The law also has removed one of the most persistent elements HoN. MoRGAN SANDERS, in the vicious ''price wars" which were prevalent prior to the en· Chairman, Texas Delegaticm, House of Representatives, actment of the legislation and which threatened the existence in Washington, D. C. business of numerous independent retailers of petroleum products. DEAR MR.. SANDERS: I understand that a few jobbers have taken The law has made this contribution to the conservation of the incomplete sentences from my testimony before the House Com· Natiqn's oil and gas resources and to the economic stability of mittee on Interstate and Foreign Commerce for the purpose of the petroleum. industry without causing any material increase in making it appear that I do not think that the Connally Act is the retail prices, ex taxes, of gasoline and other petroleum necessary for the effective enforc.ement of our State conservation products. laws, and that I am opposed to a permanent extension of this The law has been supported with uniform success in the Fed· law. Of course, it is possible to take anyone's testimony and eral courts in Texas and Louisiana. isolate certain sentences so as to distort the views of the one In administering this law during the past 2 years, I have re· who testified. I am sure that if my testimony is read as a ceived full cooperation from the oil and gas conservation authori· whole, it will be very clear that I am heartily in favor of the ties of the several States and from the petroleum industry. permanent extension of this very helpful law. Of course, I would The need for the conservation of the Nation's oil and gas re· not presume to tell a committee of the Congress of the United sources is of equal importance in periods of scai·city as in periods States what they should do in reference to the time limit placed of excess supply and, in my opinion, the legislation which sup· upon the bill. but I did clearly state that in my judgment 1t ports the State oil and gas conservation laws should be made permanent by eliminating section 13 of the law of February 22 would be very helpful to make the law permanent. 1935. , I tried to make it clear that insofar as intrastate shipments The Bureau of_the Budget has advised that it has no objection are concerned, Texas is capable of enforcing its conservation law, to the enactment of S. 790, a like bill introduced in the United and I specifically stated, as is shown on page 58 of the report States Senate by Senator ToM CONNALLLY. Hearings on s. 790 of the hearing before the Subcommittee on Interstate and Foreign were held on. February 12, 15, 16, and 17, before a subcommittee Commerce as follows: of the Committee on Finance of the United States Senate. ''The State of Texas is doing, and will continue to do, everything The e.nactment of H. R. 5366 is recommended. within her power to carry out the high policies underlying the Smcerely yours, legislation referred to. In the past she has been greatly assisted CHARLES WEST, by the proper exertion of Federal authority in the form of what is Acting Secretary of the Interior. commonly called the Connally Act, and she believes that the con tinuing of such Federal action 1s essential to the complete success Mr. DIES. Mr. Speaker, I yield 5 minutes to the gentle of her efforts." man from Iowa [Mr. BIERMANN]. May I express the hope that you will communicate this informa Mr. MAPES. Mr. Speaker, I also yield the gentleman tion to the members of the Texas delegation, and use it other· from Iowa 5 minutes. Wise as you see fit. Faithfully yours, Mr. BIERMANN. Mr. Speaker, I am in favor of conser ERNEST 0. THOMPSON, vation of the oil resources of the United States. I am in favor of the producers making money. I am in favor of the Mr. Speaker, one Congress cannot bind another. The refiners making money. I am in favor of their pipe lines whole question in this matter is whether you are going to making money. But I think it is dead wrong to enact a law continue this law for 2 years or make it permanent. I which will accomplish these things at the expense of the personally think it ought to be made permanent. We are little independent fellow at the other end of the line, and going to pass this bill because every Member here believes it is entirely unnecessary to do it at his expense. You can in conservation of the oil resources of the United States, not enact this law to· extend the Connally Act another 2 years, only for present purposes, but for the purposes of war, if and at the same time amend it to protect the little inde we should have one, so I have no thought but what the bill pendent fellow. will pass. Mr. JOHNSON of Oklahoma. Mr. Speaker, will the gen Suppose we pass this bill covering a period of 2 years. tleman yield? Then it is going to bob up here 2 years from now, and you Mr. BIERMANN. I yield. will have to consider it again. If you do pass the bill as an Mr. JOHNSON of Oklahoma. Does not the gentleman extension for 2 years, the next Congress can repeal it if it know the independent operators are enthusiastically SUP wants to. Why not make this permanent and have the thing porting this proposed legislation? out of the way until conditions are such the Congress of the Mr. BIE.RMANN. Oh, no; I do not know any such thing. United States thinks the bill ought to be repealed? Mr. Speaker, I ask unanimous consent to insert at this Let me say I am a friend of this great committee. They point a number of telegrams refuting the statement of the wrote one of the fairest reports on this bill I have read on gentleman from Oklahoma lMr. JoHNSoN]. any bill. Mr. JOHNSON of Oklahoma. It will take a lot of them Mr. Speaker, I ask unanimous consent to revise and ex to refute it. tend my own remarks in the RECORD and include therein a The SPEAKER. Is there objection to the request of the letter quoted in the report of the committee from Charles gentleman from Iowa? West, Acting Secretary of the Interior, which is very helpful. There was no objection. 5316 CONGRESSIONAL RECORD-HOUSE JUNE 3 The telegrams referred to follow: Mr. DIES. The gentleman is talking about jobbers? DEcoRAH, IOWA, May 24, 1937. Mr. BIERMANN. I am talking about the fellows who run Han. FRED BIERMANN, the filling stations, the little jobbers, the kind of people we House of Representatives, Washington, D. C.: have in Iowa. I have heard from scores &nd scores of them Galen Finnegan and Harry Fee, representative Iowa independent oil jobbers, will be in Washington to oppose the Dies bill, H. R. in Iowa who aie being ground down by this law. It is not 5366. Would appreciate your giving them a hearing a.nd opposing necessary. Your people can have the benefits of this law this attempt to ma.ke non-oil-producing States pay more tribute without hurting the rest of the independent marketers. to producing States and monopoly. My amendment proposes that you continue to make money W. E. ScoTT. on your producing and refining and on your pipe lines, but also to allow the independent marketers to make a little CRESCO, IOWA, May 25, 1937. money. lion. FRED BIERMANN, Representative, Washington., D. C.: Mr. DIES. I do not want to take 'QP the gentleman's time, As filling-station operat ors we are vitally Interested in the defeat because he only has a few minutes, but if the gentleman of the Dies bill, H. R. 5366. This bill, if passed, will penalize the him Is consumer. Increased gasoline prices result in decreased consump does not object, I would like to ask this question: not tion, which in turn will reduce the revenue for Iowa road-building the real ground of objection from the jobbers due to the program. fact that they want a larger margin of profit, and instead HowARD CoUNTY PETROLEUM AssOCIATION, of a margin of profit of 2 cents they want 4 or 5 cents? AUREL C. Bmr., Chairman. . is F. E. HOOPMAN, Secretary. Mr. BIERMANN. I think there something in that, but the specific objection we make to this bill is that the Stand ard Oil Co., for example, the Shell Oil Co., the Continental Clmsco, ~owA, May 25, 1937. Han. F'B.ED B!ERKANN, and the other fellows, engage in all four branches of the oil House of Representatives, Washington., D. C.: business and make money on their production, refining, and This department is keenly interested in having the Dies bill, transportation, and lose it on the marketing end in order to H. R. 5366, defeated. Howard County consumes approximately drive out the little, independent, filling-station fellow. 70,000 gallons o! gasoUne and 20,000 gallons of heating oil. If H. R. 5366 is made law, it will increase our operating costs considerably. Mr. DIES. Is not that true of many other industries or We believe you can serve the best interests of all consumers by in fact, is not that true of all the big business in the United defeating this bill. States? L. L. LOWRY, County Engineer, Howard County. Mr. BIERMANN. That may be true; but I am saying it is not necessary in this instance and I think your committee CREsco, IowA, May 25, 1937. will have a much better bill if they amend it to protect these little fellows that I have referred to, and that is all I want. Bon. PRED BIEJLKANN, Representative, Washington, D. C.: Mr. BOILEAU. Mr. Speaker, will the gentleman yield? In special meeting May 24, the City Council of Cresco, Iowa, Mr. BIERMANN. I yield. together with the mayor, passed the following resolution: "We sincerely believe that the Dies bill, H. R. 5366, should be defeated. Mr. BOILEAU. I, too, have received some protests from The consumers of petroleum are now paying a premium for gaso independent distributors. I do not know whether you would line and heating oils, due to the Connally bill, which expires call them jobbers or distributors in the trade but they are June 1, 1937. We do not believe that it would be wise to con men who have an oil business in my home town, for instance, tinue controlled production. The city of Cresco consumes large quantities of heating oil and motor fuel. We solicit your support and sell to a large number of independent filling stations. 1n defeating this measure. · They claim, as the gentleman has stated, that the large con Mayor H. G. AnDIE. cerns make more money on refining and in the other fields Mr. DISNEY. Mr. Speaker, will the gentleman yield? of the industry, and as a result they are able to undersell Mr. BIERMANN. Yes. them and drive them out of business. I have not had an Mr. DISNEY. The gentleman stated be 1s in favor of opportunity to study the gentleman's amendment, but I protecting the little independent dealer at the other end of think the amendment gets right down to the meat of the the line by an amendment to this bill. matter and I believe it would be helpful to the bill. Mr. BIERMANN. Yes. Mr. BIERMANN. I cannot see how my amendment is go Mr. DISNEY. What kind of an amendment would the ing to hurt any legitimate business, and it will certainly protect the little fellows who cannot afford to come here gentleman attach to the bill? and appear before committees. Mr~ BIERMANN. That is a fair question. I propose at Mr. BOILEAU. I think the gentleman's amendment is the proper place to offer this amendment as a new section: a good one. It shall be unlawful for any person or corporation or affiliate Mr. BIERMANN. On page 139 of the hearings you will thereof to engage, directly or indirectly, in interstate commerce, in the marketing of crude oil, or any of the products ther~f. find that the Texas Corporation on February 5 of this year 1! he is engaged in production, refining, and transportation of oil in a statement by Mr. DeGolyer, states, in e1Iect, that that or in any of these activities. company makes a business of losing on its marketing end This amendment does not separate these activities into and of making up the loss in the other three departments. four groups but merely separates the marketing from the This is the kind of practice that we think is unjust about other activities in connection with oil. this bill. Mr. DISNEY. I do not think the gentleman has thought I wish the proponents o:t this bill, who are going to have the matter clear through. The gentleman is not on sound most of the time, would explain to the committee or to the ground there. House what injustice would be dane by adopting this amend Mr. BIERMANN. That may be, but I do nat think the ment. Do not say it is not germane to the bill because. if gentleman from Oklahoma [Mr. DISNEY] or the other SUP you do not object, it will go in. porters of this bill are on firm ground when they propose Mr. DIES. Mr. Speaker, will the gentleman yield? t:> continue for 2 years a law which has ground down the Mr. BIERMANN. I yield. little independent fellows and has driven some of them out Mr. DIES. Would the gentleman be willing to put that of business. same principle into e!fect with respect to all business, pro Mr. DIES. Mr. Speaker, will the gentleman yield? hibiting anyone in the production end from refining or sell Mr. BIERMANN. Yes. ing its own product. Mr. DIES. I have not been able to find an independent Mr. BIERMANN. Of course, that has nothing to do with association in the United States which bas not endorsed this the pending matter. We are just talking about oil now, measure, with the exception of the jobbers or the middlemen. but I may say that for 30 years the law of the United I would like the gentleman to show me any independent States has prohibited companies mining coal from engaging producer or refiner or association-- in the transportation of it. Mr. BIERMANN. I am not talking about producers or Mr. DIES. But would the gentleman be willing to apply refiners. that principle of all business? 1937 CONGRESSIONAL RECORD-HOUSE 5311 Mr. BIERMANN. I am not ready to answer that ques and what the retailer gets for selling it and the jobber gets tion, but would the gentleman be in favor of repealing the and the storage and the tank cars, transportation charges- Hepburn Act, which prohibits the same company mining those are fixed charges which the consumer must pay coal and transporting_it over the railroads? whether oil is 10 cents a barrel or a dollar a barrel-you Mr. DIES. Of course, that has been the law for a long will find that what these jobbers want is more profit. They time. are middlemen in the field. These gentlemen are there Mr. BIERMANN. Would the gentleman be in favor of between the retailer and the refiner and the whole basis of repealing that law? their objection is that they are not getting enough out of it. Mr. DIES. I would like the gentleman to show the simi Mr. SNELL. And the only opposition that I know of to larity between that situation and this measure which only this bill comes from these independent retailers who want applies to the shipment of "hot oil." How could this be con to buy on a distressed market. nected even remotely with the question of monopoly or any Mr. DIES. Not the independent retailers. There are other question of that sort? 52,000 of them in their association who have endorsed this Mr. BIERMANN. The gentleman can call it "hot -oil". bill. According to the testimony of one of these jobbers, but it just means that these five States which happen to have he admitted freely the reason he was opposed to it was this natural monopoly of the oil can curtail production, because when we had cheap oil he could buy it at his own which means setting the price. price. Mr. DIES. No; we have increased the production by 900,- Mr. SNELL. And we are really protecting the independ 000 banels a day, and the President can suspend the act ent producers and aiding conservation by passing this act. the very minute there is any indication of a conspiracy to in Mr. DIES. There is no question about that. The Secre jure the consumer. tary of the Interior is in favor of this and three Presidents Mr. BIERMANN. The gentleman is going to have a lot have been in favor of conservation. of time and I wish he would tell the House what injustice Mr. MAY. Mr. Speaker, will the gentleman yield? would be done if we protected the little, independent, filling Mr. SNELL. Yes. station fellows and the independent jobbers scattered all over Mr. MAY. To ask a question of the gentleman from the country who cannot a.fford to come to Washington and Texas [Mr. DIESJ. Going back to that question of monopoly appear before your committees. and the power of the small producer to operate, it is my Mr. DISNEY. Mr. Speaker, will the gentleman yield? idea that on a stabilized market, say at a dollar a barrel Mr. BIERMANN. I yield. for oil, he can go ahead and operate regularly and run Mr. DISNEY. The amendment the gentleman has goes regularly? into the question of the disintegration of a business by sep Mr. DIES. That is true. arating it into divisions. Mr. MAY. While, if the market is fiuctuating up and Mr. BIERMANN. No; there is no disintegration about it. down from 10 cents to a dollar a barrel, he cannot. My amendment simply provides that a concern engaged in Mr. DIES. No; and the question of stability, while sec ·producing, refining, and transporting oil-all three or one or ondary to conservation, nevertheless is a material factor in two of them~annot engage at the same time in the mar any conservation program. keting of it. Mr. HilL of Oklahoma. Mr. Speaker, will the gentleman Mr. DISNEY. In effect, that is what it amounts to, does yield? it not? Mr. SNELL. Yes. Mr. BIERMANN. I do not think so. Mr. HILL of Oklahoma. In my district there are more Mr. DISNEY. Has the Committee on Interstate and For large producers, more large wells than in any other district eign Commerce gone into this subject and studied the gen of its size. There are hundreds of independent producers, tleman's amendment to the extent they can speak authori but up until this pro-ratio law was enacted, they were tatively upon its effect? driven out of business completely because oil was 10 or 15 Mr. BI£RMANN. I think they can. cents a barrel, but since the pro-ratio law was enacted, Mr. DISNEY. I do not understand that they have. every independent producer joined with the large companies Mr. BIERMANN. The Interstate and Foreign Commerce in maintaining that scale, and today every one of them has Committee, I understand, had an amendment that did pro written or telegraphed me to be here to support this bill. vide for breaking the oil business down into four separate Mr. SNELL. That is the way I understood the situation. activities. My amendment does not provide for that, and The SPEAKER. The time of the gentleman from New is not as drastic as that amendment. York has expired. [Here the gavel fell.] Mr.- WHITE of Ohio. Mr. Speaker, will the gentleman Mr. MAPES. Mr. Speaker, I yield 5 minutes to the gentle yield? man from New York [Mr. SNELL]. Mr. DIES. Yes. · Mr. SNELL. Mr. Speaker, I want to take only a moment Mr. WHITE of Ohio. All up and down every road in or two to ask the gentleman from Texas [Mr. DIES] a ques the United States there are hundreds upon hundreds of tion relative to the support of this bill. As I understand the small filling station men and retailers depending upon proposition, the small independent producers in every part those oil filling stations for their living. How are those of this country are in favor of this legislation. men affected by this bill, in the gentleman's judgment? Mr. DIES. Absolutely, and they have endorsed it by Mr. DIES. This bill has absolutely nothing to do with ·resolution and have urged Congress to pass it. their problem, and whether the bill be passed or not, the .. Mr. SNELL. And a stable market is more to their bene problem of the independent retailer is identical with the fit than it is to the benefit of the large producer. problem of the independent motion-picture producer, who is Mr. DIES. There is no question about that. confronted with 4,000 theaters in competition, where the Mr. SNELL. Because when the independent operators do product is produced and exhibited by the same corporation. have a stable market they go on and build up their busi That problem has nothing to do with this. ness and they ....re not obliged to sell out to the large Mr. WIDTE of Ohio. He is not harmed by this? .operators? Mr. DIES. Not in any sense of the word, unless it is his Mr. DIES. That is true, absolutely, and in connection purpose to use stolen oil. He could go down and buy stolen with the statement about the jobbers, who are now receiving oil at 10 cents and go out and ruin the market for his legiti 2 cents, it must be remembered that even when oil is 10 mate competitor. cents you have certain fixed charges. You have your labor Mr. WHITE of Ohio. Have these people expressed them cost, your taxes, which average over the country over 5 selves on this measure? cents, and the jobbers now are getting half as much as the Mr. DIES. Yes; they have endorsed it. average tax, so that when you deduct your taxes of 5 cents Mr. NICHOLS. Mr. Speaker, will the gentleman yield? 5318 :CONGRESSIONAL RECORQ-HOUSE JUNE 3 Mr. DIES. Yes. In other words, they are doing that just to get rid of the Mr. NICHOLS. Mr. Speaker, in answering the many ques retail end of the business. In my estimation, that is nothing tions which have been asked the gentleman has stated that more than dumping. We have laws against the dumping this law is endorsed by the independent producers and those of foreign products on the American market, and I think generally engaged in the production of oil. The gentleman ·we ought to have laws against the dumping of domestic is slightly in error to this extent, is he not? This law pro products. vides that the ban on the shipment of hot oil through inter I agree with the gentleman from Texas that conservation state commerce shall be extended for 2 years. It is the is a fine thing and we must have it; but, as I said in the be opinion of the gentleman, is it not, that this should be the ginning, it is backfiring on the smaller man. I wish the permanent law and should not be enacted for only 2 years- gentleman from Texas would consider the proposition of that it should be made permanent? . having this cleared up, whereby the small independent jobber Mr. DIES. It is my opinion that this law, if it is a good is gradually being 'put out of business. law---and it has been demonstrated that it is-should be made Mr. DIES. I have no objection to protecting the inde permanent law. but the committee saw fit to extend it for pendent jobber, but this is a matter that absolutely does not only 2 years. remotely affect his problem unless he wants "hot oil." Then, [Here the gavel fell.l if he gets "hot oil", he will put all the independent dealers Mr. MAPES. Mr. Speaker, I yield 2 minutes to the gen out of business. tleman from Texas [Mr. KI.EBERG J. Mr. BIERMANN. Mr. Speaker, will the gentleman yield? Mr. KLEBERG. Mr. Speaker, I only ask for these 2 Mr. LUECKE of Michigan. I yield. minutes for the purpose of interrogating the gentleman Mr. BIERMANN. There is no more justice for saying that from Texas [Mr. Dn:sl on a matter that has not been than accusing the producers and refiners with wrong mo brought out in this discussion. As a matter of fact, when tives, but if a retailer cannot make money on a 2-cent you get down to the rock bottom of this particular legislation margin there is no more reason why he should continue that it means in addition to those things which the gentleman has -Way any more than the producer should produce oil at 10 claimed for it, an increase in production not only for the cents a gallon. If the producer ought to have more money present, which has been shown, but an increase in produc to make a profit, then it is legitimate for the retailer to make tion over the long run in the future; in the future availability more money. of the natural resources? Mr. LUECKE of Michigan. If the independent jobbers Mr. DIES. That is correct. As I said, in the east Texas are put out of business, you and I know that the price of field alone the conservation policy has increased the reserve gasoline is going up, regardless of what price is received at by 2,000,000,000 barrels, according to the most optimistic the wells. The only motive behind this thing is to put these estimate~ little fellows clear out of business so there will be no com Mr. KLEBERG. Now right there, the gentlemen who are petition whatever. Not only will the consumer sutier but complaining in this particular instance of being injured by labor will suffer as well. this bill are interested, not in the features of this bill other The SPEAKER. The time of the gentleman from Michl· than that which applies to the production of illegal oil, gan has expired; all time has expired. which they can buy at a low figure, which illegal oil, if per-· Mr. DIES. Mr. Speaker, I move the previous question on mitted to exist, will defeat the potential purpose of this act the resolution. and the future enjoyment of this great resource? The previous question was ordered. Mr. DIES. Not only that but this illegal oil, sold cheaply, The resolution was agreed to. will be used as a substitute for coal. A vital element will ELECTION TO CO:MKITTEE be wasted in addition to the other problem. Mr. DOUGHTON. Mr. Speaker, I offer a privileged reso- Mr. KLEBERG. I would like to continue this a little lution. · further. The original purpose of this bill and the final The Clerk read as follows: effect of it was to outlaw the production of uncontrolled oil Resolved, That LYNDON JOHNSON, of the State of Texas. be. and. through barring its shipment interstate? he is hereby, elected a member of the standing Committee o! the Mr. DIES. That is correct. House of Representatives on Naval Atf.airs. The SPEAKER pro tempore. The time of the gentleman The resolution was agreed to. from Texas [Mr. KLEBERG l has expired. Mr. MAPES. Mr. Speaker, I yield 5 minutes to the gentle OIL CONSERVATION man from Michigan [Mr. LUEcKE]. Mr. LEA. Mr. Speaker, I move that the House resolve Mr. LUECKE of Michigan. Mr. Speaker, this piece of itself into the Committee of the Whole House on the state legislation has corrected the situation at the wells. There of the Union for the consideration of the bill (H. R. 5366) is no argument against that. It has brought up the price to repeal section 13 of the act entitled "An act to regulate of oil at the wells from 10 cents to perhaps a dollar. That interstate and foreign commerce in petroleum and its prod 1s not in dispute. But as much as we all agree in conversa ucts by prohibiting the shipment in such commerce of tion-and, of course, everyone must agree to that--this bill, petroleum and its products produced in violation of state in endeavoring to conserve the oil supply and do away with law, and for other purposes", approved February 22, 1935. hot oil, has backfired on the independent small jobber. The motion was agreed to. There is no question about that. The gentleman from Texas Accordingly the House resolved itself into the Committee [Mr. DIEs] made the statement that these small jobbers are of the Whole House on the state of the Union for the con complaining because they cannot make over 2 cents a gallon sideration of the bill, H. R. 5366, the oil-conservation bill, on their gas. That is true; but this is the point: That unless with Mr. WOODRUM in the chair. they can get 10 cents a gallon for the ~s. or at least until The Clerk read the title of the bill. the gas is priced at 10 cents a gallon, they come out on the By unanimous consent the first reading of the bill was short end. Not so long ago I went through a town in Michi dispensed with. gan, where I saw a sign "12 gallons for a dollar." All of Mr. LEA. Mr. Chairman, I yield myself 4 minutes. these charges had to come out of that, which in the end Mr. Chairman, in 1935 Congress passed a bill now com means that the most this jobber was making on that gas was monly referred to as the "Hot Oil" Act, which contains in sec about a cent and a quarter a gallon. In addition to that, tion 13 a provision that the act should "cease to be in effect according to the hearings which I have before me, I find this: on June 16, 1937!' The pending legislation as proposed to Integrated companies also at the present time are leasing expen be amended by the committee is to extend the life of this act sive .service stations at rentals of one-quarter to 1 cent per gallon, until June 30, 1939, or substantially 2 years. such ~ations having an average monthly ga.llonage of 3,000 to 8,000 gallons. It is impossible to justify leasing expensive locations for The "Hot Oil" Act was passed after the oil industry had been practlcallY)~lo retum whatever on the investment. in a deplorable condition for several years, as was universally 1931 CONGRESSIONAL -RECORD-· HOUSE 5319 rettgnized. In 1934 Congress authoriZed the Committee ()n outset permit me to state that the Members of the subcom Interstate and Foreign Commerce to make an investigation mittee, the gentleman from Indiana [Mr. PETTENGILL], the of the oil problems of the country. A special committee 'Con gentleman from Tilinois {Mr. KELLY], the gentleman from sisting of the gentleman from Maryland [Mr. CoLE], the gen Michigan (Mr. MAPES]~ and the gentleman from New Jer tleman from Indiana [Mr. PETTENGILL], the gentleman from sey [Mr. WoLVERTON] traveled through the oil fields of lllinois [Mr. KELLY], the gentleman from Michigan IMr. Texas, Oklahoma, Michigan, Kansas, and Pennsylvania, MAP~J. and the gentleman from New Jersey [Mr. WOLVER and other oil-producing States, and .gave a great deal of TON] conducted a thorough investigatinn. That investigatinn time to the big subject before us. We are unanimous in re was so ably and thoroughly done that the work of the com porting this bill, and the entire Committee {)n Interstate and mittee has been a matter of favorable comment throughout Foreign Commerce is unanimous in recommending the bill the United States by those who realize the difficult problems extending the present act for a 2-year period instead of of the oil industry. In part, at least, that investigation led making it permanent law. We feel that there are most con to the passage of the "Hot Oil" Act. That same committee vincing reasons for the extension of this bill for a temporary which conducted that investigation served as a subcommittee period only. . The State of Texas where the bill has func to consider this legislation. tioned since its enactment and has the only tender board The pending bill would extend the operation of this law provided for under the bill, has temporary proration "laws for 2 years. The committee has so reported this bill on the at this time which will expire in a little over 2 years. The belief that the act has demonstrated it has so far operated interstate compact to which the oil-producing states are for the benefit of the United States. We believe it can be parties and which Congress ratified at the last session ex.. useful for a further period. It has accomplished two things pires on September 1 of this year and will be before us that practically nobody will deny: First, it has tended to during the present session for further consideration. stabilize the oil industry. This is one of the great industries What I want to impress upon the Members of the House of our country which before this act went into effect it was is that this is primarilY a conservation measure. Indirectly, in a deplorable condition. It is an industry which deals with I have little doubt it tends to stabilize the entire industry. a great natural resource of the country, an industry which It has not, in my opinion, sufficient, if anything, to do with the furnishes an exhaustible supply of oil to the people of the problem of independent labor, to justify its defeat because United States. That is a product we can afford to use of their objections to its passage. beneficially, but not to waste. Second, under the operation Mr. BIERMANN. Will the gentleman yield? of this act the .amount of reclaimable oil in the fields has Mr. COLE of Maryland. In a minute. There were some been materially increased. I do not think there is any independent jobbers from my district and other districts doubt of this. Orderly production has made possible a more who appeared before our committee and submitted amend efficient use of pressure that prevents waste and substan ments such as the distinguished gentleman from Iowa has tially increases the supply of oil that a field will eventually presented. Disintegration of the great petrolewn industry produce. That helps the Nation and the oil consumer as in this country, if this Congress wants to do that, ha,s no well as the producer. place in this legislation. I think my distinguished friend The consumer is involved in this question also~ There will concede it is not germane to ask the House to say that has been no shortage of oil. There has been no withholding pipe lines, production, marketing, and refining shall be of a supply to create high prices by scarcity. The President divorced, one from the other.. in legislation of this char has never found it necessary to exercise the authority given acter. him ln the act to withdraw the Federal support for the Mr. BIERMANN. Will the gentleman yield for a cor enforcement of State laws in ca.se the interests of consumers rection? is jeopardized. Oil will eventually become scarce. Then it . Mr. COLE of Maryland. I yield to the gentleman from may become dear. The time eventually will come when the Iowa. consumer problem in reference to oil is going to be a serious Mr. BIERMANN. My amendment does not provide for one. He may need further protection. Feeling that some the disintegration of these activities. My amendment day more consumer protection may be required by a more m-erely provides that a person or corporation engaged in comprehensive act is one reason this committee is in favor marketing shall not engage in any of the other three ac of continuing this act for a limited time instead of making it tivities. They may engage in all three uf the activities but permanent legislation. not in marketing. [Here the gavel fell.] . Mr. COLE of Mazyland. I think the gentleman will con Mr. LEA. Mr. Chairman, I yield the balance of my time cede the effect of his amendment will be to divorce market to the gentleman from Ma-ryland [Mr. COLE]. ing, and is therefore not .germane to the narrow and well The CHAIRMAN, The gentleman from Maryland is rec defined issue before us. ognized for 56 minutes. Mr. BIERMANN. No. I have not any concealed hopes · Mr. COLE of Maryland. Mr. Chairntan, I ask unanimous at all. consent that in using the balance of the time I may be per Mr. COLE of Maryland. ·Mr. Chairman, the petroleum mitted to yield to {)ther Members. industry is our second largest industry. Speaking con The CHAIRMAN. Without objection, it is so ordered. servatively, I suifpose $15,000,000,000 or more are invested There was no objection. in this great industry. First comes the railroa{fs and then Mr. COLE of Maryland. Mr. Chairman, I yield myself 8 agriculture, if we class agriculture as an industry. You will minutes. find in those three the finest demonstration of Americanism Mr. Chairman. I shall be as brief as possible because of the in connection with the functioning -of the activities they lateness {)f the hour and attempt to shorten the discussion control. I include petroleum in that statement. They are of this bill if it is agreeable to the committee in order that the highest type of men, from the head of some of the in we may conclude in less than the 2 hours. tegrated companies, whom I have met, on down. True, they It was my privilege, as the distinguishro chairman of our are in the business to make money, and they do make lots committee stated a moment ago, in 1934 to act as chai:I'man of money. This country is safe, in my judgment, with the of a committee representing the House to investigate the type of men we find in these three great industries, con petroleum Industry. I am happy, of course, after two elec trolling such a large part of our everyday life. Labor en tions Intervening to find the personnel of the committee of joys a major part in this happy situation. In every phase 1934 still functioning in the House and functioning today as of the oil business it is just saturated with risks of -one kind the subcommittee on oil of the Interstate and Foreign Com or another. merce Committee. The hard and efficient work by my This bill does not guarantee to the producers in Texas, associates on the committee fully justified the confidence Oklahoma, and other producing sections {)f this country that in them which their constituents have for them. At the every time a "wildcat" well is iirilled, every time they spend LXXXI--336 5320 CONGRESSIONAL RECORD-HOUSE JUNE 3 thousands of dollars prospecting, every time they speculate the Committee on Interstate and Foreign Commerce does trying to make new discoveries that they are going to be not favor a permanent extension of it. It does favor, and reimbursed for their loss; neither does it contemplate a has reported, an amendment to the Senate bill to extend similar thing for the transportation or the refining branches the life of the act for 2 years. of this industry. It is well to keep in mind also that before the passage of The independent jobber and the independent marketer the Connally Act the production of oil was in a very chaotic have problems, it is true. All marketers do. But the fact condition. It was practically impossible at that time for they have a problem to solve should not result in this House the State authorities, especially in the State of Texas, to being unwilling to lend a helping hand to any State of this enforce their laws regulating production without the assist Union possessing a resource indispensable as this is to the ance of the Federal Government. The situation in this re people of my district and every part of the country. The spect has greatly improved during the 2 or 3 years the Con Government should be willing to assist toward solving their nally Act has been in force. The testimony before the Com problems. mittee on Interstate and Foreign Commerce of the chairman [Here the gavel fell.] of the Railroad Commission of the State of Texas, which - Mr. COLE of Maryland. Mr. Chairman, I yield myself commission has charge of the enforcement of the State reg 4 additional minutes. ulatory laws, was to the effect that the State might get Mr. Chairman, I am willing to make the statement that along very well now without the assistance of the Connally our petroleum resources as known today have a life of not Act, although he favored the extension of it. over 15 years. We have increased the demand for petroleum Individually, I think the chances of going back to the by 40 percent in this country in the last 3 years, and we are chaotic conditions which existed before the passage of the meeting this demand. Some may laugh at the idea that our act . are too great to justify letting it expire at this time. known resources today have a life, under present demand, of For that reason I am in favor of its extension for 2 years. cnly 15 years. I hope I am wrong. But as one not living in I am in favor of giving it another 2-year trial. I am not in an oil district but who has lived with this problem for some favor of a permanent extension of it. years, I am willing to stand on that prediction. The Secretary of the Interior, Mr. Ickes, who is responsible The highest point of production in this country-about for the administration of the law, favors its extension and 3,560,000,000 barrels of petroleum-reached this week, while testified before the committee in favor of it. I think it 1s two and one-half billion was the figure 3 years ago. I do fair to say that he is one of those who 2 years ago wanted to not like to have some gentlemen say, in order to satisfy a go much further in the direction of Federal control than the few who blindly want to tear down this help from the Fed Connally Act goes. eral Government, we shall not encourage legitimate con The Government has established only one so-called tender servation back in the producing States. Bear in mind that board under the act. It operates in only one field, and that the only way the State of Texas can conserve this resource is the east Texas field. I believe the testimony before the legally is to restrict production in line with waste preven committee was that there are 522 oil fields in the State of tion. That is all according to legal standard. Certainly if Texas alone. There has been no attempt on the part of the that is what they are doing today, if the owner of a well Federal Government to set up a tender board or to assist the can dispute the authority of the orders or the validity of States to enforce the Connally Act in any other state except the orders of the Commission, and does so, if the states do Texas and only in the east Texas field in that state. not follow sound legal theories, we want to encourage such Mr. DIES. That is because of the fact there has not been action. There may come a time when there will be a need any necessity for it in these other oil-producing States. U for this law as a permanent proposition, but I am just as they developed a new field tomorrow, and there was :flush certain in my mind it does not exist today as of any stat-e production. such a board would be established in the State ment I ever made. in which the event occurred. Mr. Chairman, but for the limitation of time, I would incor Mr. MAPES. If the Secretary of the Interior saw fit to porate in the RECORD some of the startling figures as to the ereate tender boards to operate in other States and Con taxes paid by this great industry-by the little fellows and gress saw fit to make the necessary appropriation to meet big fellows, what it means to the Federal Government and the the expense of them, such boards could be established. The State governments through the taxation of many, many dif other States have been able to get along and to enforce their ferent kinds of petroleum products and activities. Finally, own regulatory laws very well without any help from the I ask the Members of the House to go along with the com Federal Government. mittee, which was unanimous in its recommendation for the As the gentleman from Texas well knows, 3 years ago extension of this act for a temporary period until more per when the Cole committee was in his State, the sentiment manency is assured to the Federal Government as to the among the oil producers, and of the State generally, was attitude of the various States, especially the principal pro such that it was difficult if not impossible for the State au ducing States and some sane and necessary program, includ thorities to enforce the State regulatory laws. I under ing definite interest and authority in the Federal Government stand that conditions are entirely different in that respect is considered. now than they were at that time and that the prevailing [Here the gavel fell.] sentiment now even among the producers, is to limit pro Mr. MAPES. Mr. Chairman, I yield myself 10 minutes. duction according to the regulations of the State commis Mr. Chairman, it is welJ to keep in mind that the Con- sion. nally Act in itself does not attempt to restrict the production Mr. DIES. I think the gentleman will recognize the fact of oil. It simply provides, in effect, that the Federal Gov no other State has any such oil field as the east Texas field, ernment shall assist the States, where it is necessary to do and no other State has ever been faced with such a prob so, in seeing to it that oil which is produced in excess of lem. State allowables, so-called-that is, the amount that may be Mr. MAPES. I think that is true, although California and produced lawfully under the laws of the States and the Oklahoma especially, as well as some of the other States, regulations of State authoritie&-Shall not be shipped in produce a good deal of oil. However. the fiushest fields are interstate commerce. That is the gist of the Connally Act. unquestionably in the State of Texas. It has been in effect a little over 2 years, and expires in a Mr. DIES. In answer to the suggestion that perhaps the few days. State of Texas could enforce the law without the aid of This bill, or the amendment recommended by the Com this act, I may call the attention of the gentleman to the mittee on Interstate and Foreign Commerce, proposes to fact they have just fined twenty-some-odd violators a few extend the life of this act for another 2 years. The Senate days ago in Houston, Tex., a-nd that this is going on even bill provides for the extension of the act permanently. I now with the law in effect. Therefore the need for the law am not in favor of a permanent extension of the act, and is just as great now as it has ever been. 193'( CONGRESSIONAL RECORD-HOUSE 5321 Mr. MAPES. Yes; but on the other hand, it shows the of 1935 the so-called Connally biD, which is now existing State of Texas is able to enforce its laws now, which it had law, was adopted to expire at the same time it was antic!· not been able to do when the Connally Act was originally pated that the extension of N. R. A. would expire, June 16, passed. 1937. This explains the reason why this has been continued Mr. DIES. No. as temporary legislation heretofore. Mr. MAPES. I cannot yield to the gentleman further. When the first Connally bill, which passed the Senate I do not want to take too much time. first, came over to our committee, as I recall, it was made There is one section especially in the Connally Act which permanent at that time. The members of our committee, should be kept in mind in the consideration of this bill, however, feared that the pressure of the oil-producing inter· and that is the section which authorizes the President if he ests in the oil-producing States might be such that they finds that production is being unduly restricted at the might take advantage of the situation for the purpose of eJ...rpense of the consumer, to suspend the operation of the driving up the price of oil at the expense of the consuming law. There is, therefore, a double check on any undue States of the Nation. So, as a matter of caution, we put in limitation of production in the fact that the Connally Act the 2-year period and we also put in section 4, which is in attempts only to aid the States in enforcing their own State the bill today, authorizing the President upon the ascertain lews, and the fact that if production is restricted too much ment of certain facts to suspend the operation of the law so the President can suspend the operation of the law. that the producing States of the Nation might not take With respect to the situation of the jobbers, I think it advantage of the consuming States by any price fixing or may be fairly said there has not been sufficient study made monopolistic arrangement. of the oil situation from the standpoint of the consumer. Mr. BIERMANN. Mr. Chairman, will the gentleman Some day I hope that Congress will authorize such a study yield? to be made. However, the jobbers are interested in the Mr. PETrENGILL. Yes; I yield to my friend from Iowa. margin which they receive, the di1Ierence between what they Mr. BIERMANN. That means the President has the have to pay for the refined product and what they receive power, under this law, to open the floodgates to what these for it. This bill, it seems to some of us, in no way affects gentlemen are pleased to call stolen oil. that question and does not, therefore, affect the profit of Mr. PETTENGILL. Yes; he has that power. He has the the jobbers. It has nothing to do with that question. The power to suspend the operations of the Connally bill if he integrated companies will continue to exist whether this finds that the oil-producing States which do prorate produc bill is passed or not. They will be producing, refining, send tion are limiting production below national demand and ing their refined products through their own pipe lines, and thus unjustly enhancing the price. distributing, with or without the Connally Act. It would Fear has been expressed that the passage of the bill, even seem, therefore, that the question of the divorcement of the for a 2-year period, and despite the safeguard of section 4, integrated companies is not involved in the consideration of will enable the oil producers to reap a rich harvest at the this bill. expense of the consumers. [Here the gavel fell.] As I said, we took that possibility into consideration 2 Mr. COLE of Maryland. Mr. Chairman, I yield 15 minutes years ago. In addition to the 2-year clause and the power to the gentleman from Indiana [Mr. PETTENGn.LJ. to suspend the prohibition of the movement of oil, the fol Mr. PE'ITENGILL. Mr. Chairman, there are just three lowing matters might be mentioned as operating to defend questions before the House. Shall we permit the present the public against monopolistic price raising: Connally Act to expire on the 16th of this month, shall we First. The fact that the Governor of Texas and Colonel continue it for 2 years thereafter, or shall we continue it Thompson have declared themselves very flatly against permanently? Texas being part of any price-fixing arrangement. The bill as it passed the Senate called for the extension of Second. The fact that in Texas itself there are more the present law as permanent legislation. Our committee, in people interested as consumers of gasoline than as pro· considering the matter, decided it would be wise and in the ducers of oil. public interest to continue it for 2 years only, and that is the Third. The fact that price finds oil, and as price rises, bill as it is now before the House, or as it will be with the the drill goes deeper, bringing more oil to the market. committee amendment that will be offered. Fourth. The fact that there is no limitation on imports I think it will be interesting to those who have not followed from abroad and, as price rises, foreign oil in constantly this matter as fully as the members of the committee have greater quantity will pour over the present 21-cent tariff been required to do in the discharge of their duties, if I wall. briefly review the matter historically. Fifth. The fact that this tariff wall can at any time be The National Recovery Act was passed on June 16, 1933. lowered by Congress or foreign oil can be completely restored It had a time limitation of 2 years and was to expire on June to the free list. 16, 1935. Section 9 (c) of the N. R. A. authorized the Presi Sixth. The fact that if Texas interests, through pressure dent to prohibit the movement in interstate commerce of oil politics, did attempt to take an unjust advantage of the sit produced in violation of state law without setting up any uation, other oil-producing States would supply the market. standards to govern his discretion or the exercise of this Seventh. The fact that as price of fuel oil goes up, soft authority. For want of such standards, section 9 (c) of coal and gas, artificial and natural, come back into the N. R. A. was declared unconstitutional by the Supreme Court market. This indicates that there is no practical way in of the United States by a vote of 8 to 1 on January 7, 1935. which the market for petroleum products can be corraled. The question then arose, What s::Jall we do? It was And in addition to all the above, you still have the antitrust feared by many that the same chaotic conditions in the oil laws of the United States, which are available at all times industry, as had obtained before N. R. A. was passed, would for the protection of consumers, and, as is well known, obtain after the Supreme Court knocked out· section 9 (c). actions are now pending in the United States courts in Wis So this bill was written, passed, and approved on February consin for prosecution under the Sherman law. 25, 1935. The difference between this bill and section 9 (c) Of course, if and when the long-anticipated day comes of N. R. A. is that section 9 (c) merely authorized the Presi when there is an actual shortage of petroleum supply, a price dent to prohibit. This bill prohibits. This bill is manda rise then is inevitable. But, in turn, such rise, however seri tory. There is no discretion in it as to its general objective. ous, will have the result of developing oil substitutes from This bill says that no oil produced in violation of State law coal, shale, lignite, and other power sources. This is cov shall be admitted into interstate commerce. ered at some length in my book, Hot Oil, under the chapter The reason it was continued on February 25, 1935, for a heading "The Pinch Hitters." period of 2 years was because it was anticipated then that Now, I am in favor of this bill for two general reasons. N. R. A., which was about to expire the following June, First, it does help to conserve a natural resource which is would be continued for a 2-year period, and so in February exhaustible. 5322 CONGRESSIONAL RECORD-HOUSE JUNE 3 It has been testified that by locking down the east Texas ested to hear the gentleman explain why, in his judgment. field and preventing it from flowing free and thus rapidly if this law is good to prevent the shipment of illegally pro exhausting its underground reservoir energy, the potential duced oil in interstate commerce for 2 years, it is not a good recovery in that field has been increased at least from 600,- protection as a permanent basis? What is the real reason 000,000 barrels up to 2,000,000,000 barrels for the future for limiting this law to 2 years instead of making it per consumers of America. Six hundred million barrels is the manent? equivalent of finding 60 new, average-sized oil fields and Mr. PE'ITENGn.r..,. I think there are several reasons that 2,000,000,000 bjUTels is the equivalent of finding 200 average influenced the committee. One was the statement made by sized oil fields. So that by locking down the east Texas Colonel Thompson, of the Texas Railroad Commission, that field and preventing its reservoir energy from escaping, we he would not oppose a limitation of 2 years, although he have the equivalent of from 60 to 200 average-sized oil wells seemed to indicate he favored it as permanent legislation. found by that operation. The second reason is that the Texas state law has been Mr. BIERMANN. I am interested in the statement that continued for 2 years only. It has been extended to Sep some gentlemen were not so very sure that this locking tember 1939, and our committee felt that we would not down process is a conservation measure. attempt to solve the future problems of Texas in advance Mr. PETI'ENGILL. There was testimony before the com of the time when Texas solved them herself. If and when mittee in 1a34 to the effect that the east Texas oil field was the East Texas field "levels off", as it some time will, there locked down too sharply. There are oil wells there capable probably will not be need for this legislation unless new oil of producing from 5,000 to 10,000 barrels per day, that are fields are discovered which present as acute a problem as locked down to 30 barrels a day, and there was some engi the East Texas field has done. neering testimony to the effect that locking them down too Mr. NICHOLS. And even if Texas failed to pass such tightly might tend to a diminution of total recovery. That legislation, does not the gentleman think that other States is an engineering question that was very much disputed in the United States should be entitled to this protection, and I do not know what the correct answer is. But in any whether Texas had any such law or not? event this bill does not itself limit production of petroleum, Mr. PETTENGn.r..,. That is true, if there were an acute but simply says that no oil which a State forbids to be pro oil problem in any other State of the Union. The only point duced shall move in interstate commerce. Without this where this problem is acute from a Federal standpoint is in · bill oil illegally produced in Texas if it once got by State the East Texas field. authorities could move in interstate commerce, because if Mr. NICHOLS. We have in the Oklahoma City fields an tendered to a railroad or· interstate pipe line, the carrier has acute condition. but not so much so as in the East Texas no option except to accept 2.Ild start its movement, and as field, but it could arise. soon as it reaches the interstate carrier the State law can · Mr. PETTENGILL. Mr. Chairman, the second reason not interfere with its movement, because it is in interstate why I favor the legislation is that it coincides with my commerce. general philosophy of government, to permit the States of Mr. JOHNSON of Oklahoma. Mr. Chairman, will the the Union to solve their own problems if they can, with gentleman yield? the assistance of the Federal Government, rather than Mr. PETrENGn.r..,. Yes. making it difficult for them to solve them, and finally con Mr. JOHNSON of Oklahoma. The gentleman does not centrating the management of all American business in mean to imply that the bill applies only to Texas. Wa.shington, D. C. In addition to helping to conserve a Mr. PE'ITENGILL. In practical operation at the present great natural resource, it also helps to conserve the Ameri time it applies only to Texas, but it could apply to any State can system of government. in the Union that adopted legislation similar to that that The philosophy of this bill is a good deal like the prison now prevails in Texas. labor-made ·goods legislation, the Dyer Act with reference to Mr. HILL of Oklahoma. Is the gentleman aware of the stolen automobiles, and other legislation of that sort. If we fact that Oklahoma had the first proration act of any of the can encourage the States of the Union to solve their own States, and still has? problems and help them police the administration of their Mr. PE'TTENGn.r..,. A number· of States have conserv~ own laws, it will tend to diminish this constant pressure for tion and proration statutes, but we have a Federal Tender the concentration of authority in Washington, D. C. I think Board only in the east Texas field. the general philosophy of the bill is strictly in accordance Mr. HILL of Oklahoma. I understand that is on account with our democratic institutions of State rights as against a of the size of the pool? bureaucratic Federal empire. [Applause.] The CHAIRMAN. The time of the gentleman from Mr. PETTENGTI..J.... Yes; a pool that supplies 15 percent Indiana [Mr. PETTENGILL] has expired. of the national market, as much as Louisiana, Kansas, and Mr. MAPES. Mr. Chairman, I yield 5 minutes to the gen New Mexico together. tleman from Wisconsin [Mr. SAUTHOFF]. Mr. HILL of Oklahoma. And we have the same State Mr. SAUTHOFF'. Mr. Chairman, I am in favor of the act regulating the production of oil, or a similar one. general purposes of this act, namely, to conserve the re Mr. PE'ITENGn.r..,. That is true, and that is true of sources of oil; ·but the working out of the act to date has Kansas and New Mexico and Louisiana and other oil States. had, in my judgment, two serious defects. One of those de Mr. SWOPE. Mr. Chairman, will the gentleman yield? fects has been touched upon by the gentleman from Iowa Mr. PETTENGILL. Yes. [Mr. BIERMANN], and I think his amendment is one that Mr. SWOPE. Does the operation of the present law add should be attached to this bill. anything to the retail cost of gasoline? The second defect I shall take up in the course of my Mr. PE'ITENGTI..J.... I do not think it does. The retail remarks. That is with reference to the use of oil in its many price of gasoline has gone up very slightly in the last 2 different p~es. It has been stated here that within the years, somewhere around a cent, I think, or possibly a last 3 years the uses of petroleum have increased 40 percent. cent and a half, but that is due, in my judgment, to the The report also gives us that data, and I assume it is correct. tremendous increase of the normal demand, the highest It also states that on various estimates the storage of oil now of any time in our history-way beyond the peak of that remains will last about 15 years. If that is true, and 1929. The retail price of gasoline has remained almost level that argument has been used in behalf of this measure, then in the past 2 years. I want to ask what is the purpose of our constantly ship Mr. NICHOLS. Mr. Chairman, will the gentleman yield? ping oil out of this country to the detriment of our own Mr. PE'ITENGIT.L. Yes. people and our own resources? Mr. NICHOLS. I am afraid if we take up too much of the Here are some of the figures which I just took today from gentleman's time he will not get to a question which I would the monthly summary of foreign commerce of the United , like to have the gentleman explain. I am very much inter- States: 1937 PONGRESSION~ ;RE~ORD-.II;OUSE. 5323 Petroleum, erude, shipped out last year, 6,541,238 barrels. : Mr. GWYNNE. No; I cannot now. If I have time I will. This year, an increase, making a total of 7,372,184 barrels. I believe, too, that as far as possible we should allow the Refined oil, last year, 11,142,925 barrels. 1 States to solve their own problems. The principle of this This year, 13,301,207 barrels. t bill, however~ cannot be compared to the Dyer bill or to the Fuel or bunker oil, which is absolutely necessary for war- ·, Milla.rd-Tyd.ings bill, or to the Ashurst-Sumners bill. The ships, shipped out last year, 5,279,529 barrels; this year, Ashurst-sumners bill provides that if my state refuses to 5,385,396 barrels. have prison-made goods sold within its borders the Federal Lubricating oils, absolutely necessary in war for the lubrt- Government will protect it and not allQW prison-made goods cation of all machinery, the mechanization of our Army, last from any State to be shipped in. year shipped out 15,747,132 pounds; this year, 19,334,177 [Here the gavel fell] pounds. Mr. LEA. Mr. Chairman, I yield 10 minutes to the gentle- If you will check this report you will realize that we are man from Oklahoma rMr. BoREN]. steadily increasing our shipments abroad, while at the same Mr. BOREN. Mr. Cb.ai.rm.an, I have arrived at my view time we shut off our own people, at a cost of $300,000 per year. point on this bill not only from the evidence that was pre- I have only taken a few of the outstanding petroleum items. sented to the committee in the hearings, but from living If you will look through the summary of the United States With the oil industry and in the oil fields. I have partici Department of Commerce you will be amazed to see the pated individually in the oil industry~ a laborer in drilling amount of petroleum products, both crude and refined, that for oil, as a laborer in caring for production after it was dis are being_shipped out of this country. I think it is necessary covered, to some extent at least in a. limited way in sponsor to conserve our oil resources. I am one of those who believes ing a. program of drilling wells, leases, royalties, and in a few. strongly in the conservation of oil. If it is necessary to pre- .inStances participating in financing drilling for oil. serve these stocks of oil, then why in the world do we ship This legislation has brought three important services to them out to other countries to use, and to use against us? the oil industry and to the American public. First, the con- A continuance of our present system will inevitably result servation of a great natural resource by providing a prora in the ruination of thousands of retail dealers and the further tion system against waste a.nd dissipation of that natural concentration of our oil resources in the hands of a few resource. Second, it has brought stability to the oil industry powerful companies. Save the retailer by separating distri- a.nd has made of it a business enterprise rather than a bution from production, refining, and transportation. Unless gambling game based on the chance of cutthroat competi~ something of this kind is done the retailer is doomed. · tion between ruthless monopolistic groups. Third, it has And the final result will be that petroleum in all its branches brought a great degree of stability to labor in the oil industry. Will have to be Government owned. [Applause.] This legislation is vitally important to every State that [Here the gavel fell.] has a producing oil well It is particularly important to Mr. MAPES. Mr. Chairman, I yield 5 minutes to the gen- those States that have stripper production, or wells that tleman from Iowa [Mr. GWYNNE]. have to be pumped for the production of oil. In effect this Mr. GWYNNE. Mr. Chairman, I desire to continue in legislation guarantees a market to the small concern, the defense of the independent marketer, who seems to be the for- littl~ man, the man who is not big enough to engage in all gotten man in this legislation. I trust, if we pass this bill, the forms of the oil business, including production, manu which apparently we are going to do, some amendment at facture, distribution, and sale. least will be adopted similar to the one suggested by my col~ There has been some discussion aimed at misguiding you, league [Mr. BIERMANN] for the protection of the independent perhaps, into believing that this leg'..sla.tion means an in.. marketer. crease. in the price of the finished .products of oil. Here is his problem: In Iowa we have a number of inde- Mr. BEVERLY M. VINCENT. Mr. Chairman, will the pendent marketers operating filling stations all over the gentleman yield? State. They must compete with large corporations who pro- Mr. BOREN. I yield. duce their oil, who transport it, who refine it, and who sell it. . Mr. BEVERLY M. VINCENT. Was not the price of crude It is charged in my state that those people, by unfair com- oil about 90 cents a barrel. when this law was first passed? petition with our independents, lose on their marketing and Mr. BOREN. The price of crude oil immediately preced- make it up in other branches of their business. ing the passage of this act in my district got as low as 10 Now, this is called a conservation bill. It strikes me that is cents a barrel. largely a subterfuge. I believe in conservation. I believe it Mr. BEVERLY M. VINCENT. Is it not now about $1.35? is a sad commentary on this Congress that we have not before Mr. BOREN. It is about $1.11. this adopted some national policy of conservation. But this Mr. BEVERLY M. VINCENT. And if this legislation is bill does not do that. All this bill provides is that if Texas continued for 2 years, is not the prospect that it will go to puts a. limit upon the amount of oil produced there, the Fed- $2 a barrel? eral Government will say that no more ca.n be shipped in Mr. BOREN. I think that it might reach probably $1.20. interstate commerce. In fixing this limit they may be moti- I think the argument I was a.bout to advance will answer vated by a desire to conserve. They may be motivated by a the gentleman's question and his supposition that an in desire to produce taxes or to maintain a price down there at crease in the price of gasoline will result from an increase a profitable figure. in the price of oil at the well. The facts are contrary ·to Secondly, it strikes me this is no conservation measure, that opinion. It is evident that the price of gasoline is in because we daily export 350,000 barrels of crude oil and the hands of integrated companies. import 150,000 barrels. It is purely a price-stabilizing bill. There is only one protection that can come to the con Like all that kind of bills that we have passed in the last few sumer of gasoline, and that protection lies in the d.iSinte yea.rs, it is a price-boosting bill. If you do not believe it, I gration of those companies which are the sole producers, think you can get some little indication as to what will hap- the manufacturers, the distributors, and the sales agents pen in the future by what has already happened this year. for that product. But that question has no relation to this The first of the year there was an increase in the price of bill. I may add further by way of personal illustration of crude oil of 10 to 12 cents a barrel. what I mean this: When oil was 10 cents a barrel at the Recently there was an increase of 8 cents a barrel. This well the price of gasoline was just as high as it is today, makes a total for the consumers of this country to add to lacking perhaps a quarter- or a half-cent advance that is their oil bill of $191,000,000. I am interested in the sugges- due to the natural increase in demand. The conditions at tion made by the gentleman from Indiana and I am inclined the well at· this time have no relation to the price of gaso to accept entirely his view of government as he stated it line to the ultimate consumer. here. This bill is a conservation measure with attendant bene- Mr. FLETCHER. Mr. Cha.irman. will the gentleman yield fits to the public, which I pointed out with reference to the for a question? '· stability of the industry and stability for labor. lbere are 5324 _CONGRESSIONAL RECORD-HOUSE JUNE 3 three groups who oppose the passage of this measure: First, Mr. CoLB. That you submit it to us as early as possible. to Mr. BoREN. I w1ll do that. That 1s all I have this morning, Mr. the chiseler, the man who wishes evade the law, who Chairman. builds his markets under the protection of a twilight zone STATEMENT OJ' HON. LYLE H. BOREN, M. C. (CONTINUED), APRIL 27, 1937 which will exist and which has existed without this law. Mr. BoREN. Mr. ChaJrma.n, I would like to offer for the consid The second group in opposition to the bill is composed of eration of this committee an amendment to H. R. 5366: those whom I might term scalpers; that is the fellows who "No person. firm, or corporation engaged in the drilling for, have the wealth and resources su.ffi.cient to drive out the production of, or transportation of crude petroleum in interstate .commerce shall employ, or cause to be employed, any worker for little producer if the independent producer is not protected more than 40 hours in 1 week, nor more than 72 hours in any from evasion of State control. The third group is the dis 2 consecutive weeks, nor more than 16 hours in any 2 consecutive tributor who prefers to purchase foreign oil, who wishes to days: Provided further, That no person, firm, or corporation en gaged in the drill1ng for, production of, or transportation of crude benefit personally at the expense of American production petroleum in interstate commerce shall pay less than $5 per 6 and American labor. This law in e:ffect simply places this hours for dally employment." protection around the la.w-abiding citizen within the state · In offering this amendment to H. R. 5366 I am doing so in the and permits the capture of the outlaw company which belief that stabllity in the oil industry should provide stabil1ty in labor conditions in that industry and that legislation aimed to would take advantage of the twilight zone lying in the dis aid the producers of oil should take into account the workmen pute of control where more than one State is concerned. engaged in that production. It simply assures . the State that the Federal Government I represent one of the greatest on-producing districts in Amer ica. I am acquainted first-hand with the situation that has ·will arrest this fellow if he attempts to carry his contraband existed in that industry during the last 10 years as affecting labor, goods in interstate commerce. oil production, oil marketing, and to some degree oil consumption Despite what has been said to the contrary, I wish to and production control. point out that this law is an exact parallel to legislation I have seen crude oil sell as low as 10 cents per barrel in my home county. I think I ·have some first-hand knowledge of the dealing with the transportation of stolen automobiles. This chaotic conditions that have existed in the marketing fields, both measure is aimed at the oil thief. Without this law the in the crude marketing and retail marketing of the fi.nished prod company that would steal oil from its neighbor, once it got ucts. But, also, I am keenly aware of the labor conditions that have existed in the oil fields for the past 10 years. I have seen the stolen oil in movement in interstate commerce could not the 12-hour day as a common practice; then, under the N. R. A. be arrested. May I say at this time I introduced in the code, as low as 6-hour day. I have witnessed the effect of unem committee an amendment aimed at greater stabilization of ployment and observed the general condition of the country where the industry for the benefit of labor. oil is produced, both under the long-hour and the short-hour day system. I want to point out to this committee that perma Mr. DIES. Will the gentleman yield? nent legislation for the oil industry should take into account the Mr. BOREN. I yield to the gentleman from Texas. laborer in that industry. Mr. DIES. The gentleman made a very fine fight for his The necessity for this amendment is clearly pointed out by the fact that oil has gone up from 10 cents to t1.27 a barrel in my amendment to stabilize the industry so far as labor is con district; that is to say, that the price of oil has increased more than cerned by assuring to laboring people the benefits, but since 1,000 percent, but the pay of the workmen has increased far less that time the President's message came before the House than 10 percent on an average. and that is going to be accomplished in a general bill? The evidence 1n my home county would indicate that employ ment has not increased at all with the increase in the market Mr. BOREN. That is my understanding. price of oil. Of course, I cannot point out specific figures, but I Mr. COLE of Maryland. Will the gentleman yield? could give you numerous examples from my general acquaintance Mr. BOREN. I yield to the gentleman from Maryland. with the personnel engaged in the production of oil in my district. Labor Department figures indicate that there has been an 8-per Mr. COLE of Maryland. The gentleman's amendment was cent reduction in employment ooncurrent with a 900,000-barrel presented several weeks before the President's message was dally increase in crude production. sent up here but covered about what the President's mes I want to point out that there are certain integrated companies sage covered? maintaining operation on a 36-hour workweek and at reasonable minimum rate of pay. I think it is safe to say there is a fair Mr. BOREN. Yes. May I say in connection with the percentage of the companies engaged in oil production that are amendment presented that a study of the hearings will show operating now on the basis that would be set up under the terms that what I said about the three phases of this bill is correct. of my proposed amendment. Their experiences under theN. R. A. May I say further concerning that amendment that since it .brought them to the conclusion that this operation was the wisest policy. was the majority sentiment of the committee that it was However, there is a large percentage of the operators who have questionable on the ground of not being germane to the bill already gone back to long hours, which, in turn, means less men and since that time a President's message has called for leg on the pay roll and workmen engaged for longer hours without islation along the lines I indicated there, my intention is to proportional increase Jn compensation. This means that the 12-hour day in crude production is finding present that amendment as a part of the program for gen its way back into the producing fields. This condition, while not eral labor. And I announce to this body my intention to common, is of su.mcient strength to act as an example frequently call for a 36-hour week and a minimum wage for labor in pointed to by those in the industry who are attempting to be reasonably fair. the oil industry. And my remarks from this point on will · It is evident -that operators working under the code provisions, be a repetition of the committee hearings on my amend while facing the competitive factors relating to hours and rates ments, which are as follows: of pay, must see stability and uniformity in hours of labor and rates of pay, or natural economic laws will cause them to lengthen STATEMENT OF HON. LYLE H. BOREN, A REPRESENTATIVJ: IN CONGRESS hours and bring their rates of pay down to a figure comparable FROM THE STATE OF OKLAHOMA to this type of competitive operation. Mr. BoREN. Mr. Chairman and gentlemen or the committee, I My understanding or H . R. 5366 or S. 790, making permanent want to cffer for the record later a prepared statement substantiat the Connally hot-oil bill, is that in the name of conservation it ing my proposal here, but I would like to propose to this committee seeks to establish, among other things, a uniform price. The bill that it add to H. R. 5366, at the conclusion thereof, after the word has as its purpose economic values to the operators, involved ''repealed" these words: with, of course, an element consistent with the general welfare "And following section 2 of sa!d act add: involved in the economy affecting this great natural resource. "'No person, firm, or corporation engaged in the drilling for, Since this legislation 1s 1n fact an economic stabilizing measure, production of, or transportation of crude petroleum in interstate it is important that we should establish economic stabilization commerce shall employ or cause to be employed any worker for for the workers involved. It is upon this principle t hat I have more than 40 hours in 1 week nor more than 72 hours in any 2 submitted for your consideration the proposed amendment. consecutive weeks nor more than 16 hours in any 2 consecutive Mr. CoLE. Thank you. days: Provided. further, That no person. firm. or corporation en gaged in the drilling for, production of, or transportation of crude Colonel THOMPSON was to go on next; but 1f you are willlng to $5 6 give way to Mr. Fremming, who has to leave this afternoon for petroleum in interstate commerce shall pay less than per Chicago, Mr. Thompson, we will hear him._ hours for daily employment.' " In substantiating this amendment, Mr. Chairman, I would like Mr. THoMPSON. I will be glad to give way. to offer later for the record a prepared statement, and due to the Mr. CoLE. He has a statement which he does not think will fact that the committee has other witnesses here who desire to be take more than about 5 minutes. heard this morning I wlli not take up more of your time. Mr. THOMPSON. I Will give way with pleasure. Mr. CoLE. Might I suggest, that 1n order to have the hearing Mr. CoLE. Before we hear him, the committee has considered printed, and· I assume you would want your statement to !ollow whether it will meet this afternoon or tomorrow morning. Mr. what you have said here this morning-- MAPES is on another committee which requires his appearance th1s Mr. BoREN. Yes. afternoon. 1937 .CONGRESSIONAL RECORD-HOUSE 5325
Mr. THoMPSoN. 'Ib.at will suit me much better. .consumer requirements because of the competitive picture within Mr. CoLE. And after Mr. Fremming's statement we wiD adjourn the industry-that at that time it agreed upon a code of fair until 10 o'clock tomorrow. competition which had for its purpose regulation of labor rela Mr. THoMPsoN. Ten o'clock tomorrow morning. tions within the industry as applied to maximum hours and Mr. CoLE. Yes. We may go on tomorrow afternoon and Thurs minimum rates of pay. Most of the substantial organizations ln day afternoon, if we find it suits the convenience of the com the industry have maintained the interest; but we still have our mittee. chiselers, if I may use the common expression, Mr. Chairman; Mr. Fremming, we will hear you now. among them, men, or corporations, who benefit not only from .STATEMENT OF HARVEY C. FREMMING, PRESIDENT, INTERNA'l'IONAL ASSO the economic factor, but from all other stabilizing factors that CIATION OF OU. FIELD, GAS WELL, AND REFINERY WORKERS OF have come as a result of that original code. The Morgans and AMERICA the Du Ponts-1! I may be permitted to refer to them-the Mr. CoLE. Give your full name for the record. Morgans, the Du Ponts, and the Mellons are outstanding in that Mr. FREMMING. My name is Harvey C. Fremming. I am presi particular situation as regards long hours and low rates of pay; dent of the International Association of Oil Field, Gas Well, and and who in fact, within the internal operation of the industry Refinery Workers of America, and I appear here on behalf of that itself, are imposing hazards and hardships against maintaining association. The theory of the association has from the inception stab~d conditions of employment and rates of pay which in of the recovery in the industry attempted to contribute to certain turn reflect themselves in consumer purch.a.sing power that main defined economic standards in the petroleum industry through its tain our national economy. organization and its relationship to the industry and through its That is all I have to say this morning, Mr. Chairman. We hope association with the industry. you will see fit to accept the amendment presented by Mr. BoREN. My appearance, Mr. Chairman, has no immediate bearing on the Mr. CoLE. Thank you. May I ask if this amendment you ap bill, although I am not unmindful of the tremendous value of con prove, as suggested by Mr. BoREN, is in any legislation now pend servation, but may l be pardoned for saying that I do not look ing before the Labor Committee? upon this as solely a conservation measure. I cannot bring myself Mr. F'REMMING. No; and it is not contemplated. Incidentally to think of this as a conservation measure. It is purely an eco there is in the general legislation provision for 40 hours a week, · nomic measure, and the use of the term "conservation" here to my and we have a different situation in this industry which has mind is in fact a misnomer. We are not unmindful of the pur given every evidence of its willingness-- pose of the bill and the desire to have it continued for the eco Mr. CoLE (interposing). I mean generally. nomic reasons involved, but at the same time we appreciate the Mr. F'RE.MMING. The general legislation is for 40 hours. efforts being made to maintain the price structure through this Mr. CoLE. Is that included here? instrumentality, and we offer the suggestion that there is another Mr. F'REMMING. That is not included 1n this. I understand your factor involved and that is the human factor in the industry itself. point. But the general bill will provide for 40 hours, and that And that is the reason, the only purpose of appearing here, not bill is to come from the executive branch, as I understand it. .to oppose the purpose of this bill itself but to call attention to But it does not provide for 36 hours which this amendment the fact that there are some 85,000 workers in the petroleum in would. dustry, some of whom, by reason of unfair practices, are not going Mr. CoLE. The general bill, you understand, Will come from the to benefit in the price structure value of this bill because some executive branch? have failed to maintain reasonable competitive conditions in the Mr. F'R.EMMING. Yes. production of oil. So that we have here the cost problem; we Mr. CoLE. Would that be satisfactory to you? have the uneconomic situation of crude production, and it is our Mr. F'REMMING. No; it just means 4 more hours per day, which purpose, gentlemen, to ask for an amendment to the bill which in turn means a reduction 1n employee load in the industry. will provide for maximum hours, regulation of maximum hours, Mr. CoLE. All right. and minimum rates of pay as just previously introduced by Con Mr. PETrENGILL. As I understand you, you said that a great gressman BoREN, of Oklahoma. We support his amendment and many of the companies had maintained the labor standards of we support it for many reasons. I am not going into a lengthy theN. R. A. discussion because of the courtesy of this committee in extending Mr. F'REMMING. Yes, Mr. PE'rrENGILL; in the petroleum code. time to permit me to be heard this morning. There are many Mr. PETrENGILL. Yes; the Petroleum Code. What were the reasons why this can be appreciated, not only in this one branch hours provided in the code? of the industry but because of the human factor as well. This, Mr. F'RE:MMING. Thirty-six hours per week. Mr. Chairman, is not merely a question of regulating the ship Mr. ·PE'ITENGILL, Thirty-six? ment of contraband oil; that is, oil produced in excess of State Mr. F'REMMING. Yes. I should repeat there, Mr. PE.TrENGILL, the allowables. It goes much beyond that, as very aptly appeared from manner in which Congressman BoREN presented his amendment the inquiries here this morning by members of this committee. to the committee. The 40 hours he gave means not more than 40 The right to regulate maximum hours of employment and mini hours in any 1 week, and not more than 72 hours in any 2 weeks, mum rates of pay is no longer a fancy or a theory advanced by and not more than 16 hours in 2 consecutive days. theorists that appear before committees of Congress, but the fix Mr. PETTENGILL. Was that taken from the N. R. A. code? lng of m,inim.um rates of pay and maximum hours of employment Mr. F'REMMING. That is verbatim, almost verbatim from the code are now regarded within the rights of Congress in regulating in itself, and for 2 years we operated splendidly under that code. terstate commerce. And certainly commerce is affected materially Mr. PETrENGILL. Had the rates of increase in pay to labor been where human conditions obtained within the industry itself, and 1n proportion to the benefit of this increase of about 27 percent that leads us to the labor factor, the human factor in the industry. on crude oil at the well head? It 1s upon that princ1ple, and that principle alone, that we ap Mr. F'RE.MMING. I would not say that they would equal 27 per pear here this morning and urge that this committee amend the cent. The wages were mcreased, for the most part, in the indus present bill to establish maximum hours and minimum rates- of try, and for the most part we still have the benefit of some in pay as provided 1n the amendment introduced by Congressman crease by reason of this legislation. But they an did not go BoREN this morning, and I am going to limit my statement this along. We still have, in some sections, 12 hours a day. That morning to the suggestion contained in that amendment, although was ellm.inated in 1933 by the code. When you speak of bene I think some day this committee could give consideration to the fits, you mean in dollars and cents? study of whether or not the subterranean movement of oil from Mr. PETrENGILL. Total dollars per person. . day to day, although it may not reach the top of the crown, has Mr. F'RE:MMING. Yes, sir; they have benefited. I do not say to some value 1n a consideration of what interstate commerce is, the extent of 27 percent, but I do not think 27 percent is the although our understanding of it today is largely due to the fact whole story, Mr. PE'rrENGILL, 1f it be remembered. how they were that the movement in interstate commerce, for the purpose of up here asking for relief from this 10-cent oil, 15-cent oil, and regulation, must be of articles on top of the ground. It is our 20-cent on throughout the industry. I think it must b.e re theory that some day we may develop the proposition that sub membered that the 27 percent does not represent the benefit re terranean movement of certain commodities up to the point of ceived by this industry; it merely means that on the average, but the law of capture affects interstate commerce. that does not represent the whole truth, and we should not be Mr. Chairman, I think there are plenty of reasons, plenty of confused by it at all. reasons, and certainly economic reasons for this committee to con Mr. PETTENGILL. The 85,000 workers you represent, the greatest sider favorably the amendment presented by Mr. BoREN to this bulk of them, have had wage increases, have they? measure, to this bill. 11 it is to be a stabilizing factor in the field Mr. F'RE:MMING. Yes. o:t' economics.. We are, of course, interested in that, but we are Mr. PE'rrENGILL. Commensurate with the increase in price of equally interested 1n the human equation, of reducing that com crude? petitive factor in the production of petroleum. That is the prin ciple underlying our support, and that is the main principle upon Mr. F'REMMING. Not necessarlly commensurate with that, but they which I wanted to discuss this with you this morning. That is have had increases, substantial increases. an I have to say. we· could enter into a lengthy disctisston of this Mr. PE.TrENGILL. Some of them have not been increased as much as principle, but the facts are known to you, and I think we all 27 percent, but they have had increases? understand that the purpose today is one of stabilization in the Mr. F'REMMING. Yes; I would say most of them, except 1n the industry, with all due respect to the statement made by the dis chiseler group. tinguished Secretary this morning, but the human equation is Mr. PETTENGILL. Out of the 85,000 total number represented by there and we must give consideration to that in maintaining the you, how many thousands do you think, to use your expression,. are proper economic relation today. at the mercy of the chiseler? I am somewhat discouraged by the conduct of the industry it Mr. F'REMMING. Oh, I should say not to exceed 25 percent; not in self. When we met here in Washington in the bleak stormy days excess of that. It is just about the same percentage that runs in July 1933, the industry itself lay prostrate; in fact, the in throughout the whole industry. dustry was so concerned with price---e.nd was concerned with Mr. PETTENGILL. Yes. 5326 _CONGRESSIONAL RECORD-HOUSE JUNE 3 Mr. FREMMING. About the same group that runs the "hot oil". the the limitation will act as a brake upon the price of oil and chiselers, who will not pay their workers. constitute a checkrein upon the ultimate price to the con Mr. PE'rrENGILL. Thank you. Mr. WOLVERTON. Mr. Chairman. sumer. If an abuse should develop anywhere in the course Mr. CoLE. Mr. Wolverton. of production, refining, or distribution within the next 2-year Mr. WoLVERTON. Does the proposed amendment of Mr. BoREN period, Congress can allow the law to expire. The President, relate only to the production, or does it include refining and market ing employees? under the existing law, has the right, which will be continued, Mr. FREMMING. Only the producing end. We have no special to suspend the operation of the effective provisions of the law ditHculty in refining, and never have had; it is only in the producing if he should find a lack of parity between supply and demand, and the transportation end. but so far as the refining branch of the industry is concerned, we have never had any quarrel on that ques resulting in high prices. The limitation will be an added tion; 36 hours is maintained in the industry and there is no charge safeguard for the consumer. The extension of the Connally of chiseling with respect to the refining end. Act is needed to conserve our oil resources. If you were in As to the marketing end today, it 1s the most chaotic that we have attendance before the Interstate and Foreign Commerce ever had. For your information, we are now working on that branch of the industry and are very earnestly trying to be helpful Committee at the time the original bill came up for hearing, insofar as the worker problem is concerned. The regulation of you saw there photographs of the conditions surrounding hours of employment fixed at 40 hours a week. obtained in the code. operations in the east Texas fields. You were appalled at Mr. WoLVERTON. I was unfortunately engaged otherwise and did not hear the amendment. the waste of oil which smeared the surface of the oil areas. Mr. F'REMMING. Yes. Inordinate quantities of oil gushed from the wells and were Mr. WoLVERTON. Is it different from the one which was presented wasted. Oil and natural gas were dissipated to an alarming to the Senate? degree. Oil overfiowed and dripped from tank cars. Large Mr. F'REMMING. It is the same; it 1s the·same. Mr. WoLVERTON. I! I remember correctly, in your amendment you lakes of oil were accumulated above ground awaiting ship ask for the base of 36 hours a week and the rate of pay to be ment of the contraband. So great was the waste in the east fixed at $5 as a minimum rate. Texas fields that it became a real threat to the oil reserves of Mr. F'REM:MING. That is right, yes; that 1s correct. Mr. WoLVERTON. And that relates only to those engaged in the the country. Besides being a danger of consequence in case production end? of fire or flood, the extravagant method of handling threat Mr. F'REMMING. Yes; drilling, production, and transportation. ened our future supply of oil and constituted a menace to our Mr. WoLVERTON. Is that limited only to States that have the national defense. benefit of the Connally Act? Mr. F'R.EMMING. No. Perhaps no one in our Government·has given greater study Mr. WoLVERTON. Has employment increased over the period of to this matter than the Secretary of the Interior. and I 3 years? would like to read very briefly from the statement of Secre Mr. F'R.EMMING. To the contrary, it has decreased. Mr. WoLVERTON. The figures presented to us would indicate that tary Ickes made before the subcommittee in charge of this 900,000 more barrels per day are being produced,· and yet I under bill: stand you to say that at this time it is a fact tpe number of The oil reserves of the United States are limited, and oil is an employees has actually decreased? 1Ireplaceable resource. Petroleum and its products are essential Mr. F'REMMING. That is correct, in the last 3 years. to our happiness and well-being as citizens and absolutely in Mr. WoLVERTON. How do you account for that fact? dispensable to our national defense. The United States 1s using Mr. F'REMMING. One of the special factors is the improved method up its oil reserves faster than the rest of the world, and an oil of petroleum recovery, today, through technical development mak shortage in the United States may be expected long before there ing it possible to bring a well 1;o production at a much shorter is an oil shortage elsewhere. As a nation, we should not exhaust period of time than it took in the past. For example, for the east these resources a.nd be forced to depend upon the more costly Texas field, to which reference has been made here on several substitute fuels in advance of the rest of the world or be required occasions, the sum total of drilling time to 3,500 feet, usually to pay the higher price for oil which foreign producers will de 3,500 feet being the average, runs about 15 days. Seven or eight mand when our production falls to meet our needs. I! we are to years ago that was an unheard of thing. avoid this penalty for our past and present extravagance, we Mr. PETTENGILL. How many days? . should make certain that our present and future reserves of oil Mr. F'REMMING. Fifteen days, full time, full drilling, including will be developed without waste and that our supply of this cementing time and everything, the construction of the derrick. irreplaceable resource will be made to meet, so long as possible. spudding, and bringing the well to production, in 15 days. and at reasona.l;>le prices, the needs of t_he Nation. Mr. PETTENGILL. That means drilling more than 200 feet a day? Mr. F'R.EMMING. Oh, yes; it is proper to say in that connection I cannot help but agree with the Secretary in that state there are certain drilling hazards elsewhere that do not obtain in ment, and I do not believe anyone can reasonably disagree east Texas. For instance, in the Kettleman Hills field, for exam ple to bring in a well to production would take approximately 6 with it. moi:tths; they may be able to drill in less time than 6 months; It has been said by some that this is not a conservation bill but if they can bring in a well in 90 days, it is a happy con but a stabilization bill or a bill to raise the price of oil. dition. Mr. WoLVERTON. What has been the percentage of decrease 1n Even on that ground I think the bill should be passed in employment? order to prevent the chaos that existed in the oil business. Mr. F'R.EMMING. It will be-the Bureau of Labor Statistics indi Of course, we who live up in New Jersey are very often cates that the reduction has been running about 8 percent since glad when an oil war is on. I remember back in the cam the code became effective. Of course, there was a. tremendous increase in the eii)ployee roll when the code became effective in paign of 1932 we bought gas for 9 cents a gallon, and that September 1933; but since that time there has been about an state of affairs continued for an appreciable length of time, a-percent reduction in the crude production, in the drilling end. but it did not have a wholesome effect. Many of the dealers not the refining end of the industry. up there had to sell below cost-those who did not get the Mr. WoLVERTON. I understand. What accounts for this decrease 1n the production end? benefit of the ''hot oil." As a consequence. some had to let Mr. F'REMMING. That 1s chiefly based upon improved methods of their help go. others would not meet their taxes and other production, based principally upon the technical development 1n obligations and became embarrassed financially. The con dr1111ng equipment, primarily. Mr. PETTENGILL. What about the refining branch? sumer is not unreasonable, and prefers to pay a fair price Mr. F'R.EM.MING. They have increased employment in that end, if it prevents chaos and makes for stabilization now and in due to the requirements to take care of this 900,000 barrels of the future. crude, and the consumer demand has increased proportionately, Our people have come to realize that the struggle to as we understand it. There was about a 22-percent increase ln. consumer demand last year. conquer the virgin soil of our country has been won-won Mr. CoLE. Is that all? without the statesman, financier, or economist realizing it Mr. PETTENGILL. I have nothing further. until very recently. We can now produce easily more than Mr. F'REMMING. Thank you, Mr. Chairman. Mr. COLE. Thank you. The committee will stand adjourned enough of nearly everything for everybody. The present until 10 o'clock tomorrow morning. problem is to make adjustments accordingly; to conserve; to (Thereupon, at 12:20 p. m., an adjournment was taken until stabilize; to square all. 10 a. m. of the following day, Wednesday, Apr. 28, 1937.) [Here the gavel fell.] Mr. COLE of Maryland. Mr. Chairman, I yield 5 min Mr. MAPES. Mr. Chairman. I yield 5 minutes to the utes to the gentleman from New Jersey [Mr. KEID{EYJ. gentleman from Pennsylvania [Mr. MosER]. Mr. KENNEY. Mr. Chairman, I am in favor of extending Mr. MOSER of Pennsylvania. Mr. Chairman, I would the life of the Connally or "hot oil" bill,_and believe it is wise like to inject for the benefit of the Committee some of the to put a limitation upon the duration of its operation. I feel experiences that I have personally noted in connection with 1937 CONGRESSIONAL RECORD-HOUSE 5327 the so-called operation of the Connally "hot ofi"' bill. I shall phases he thinks this biU will aeeomplish, and they have not attempt to go into statistical matters, nor shall I at likewise been discussed by other members of the committee tempt to refer to the legislation that was passed before I and other Members of Congress. became a Member of this body_ In that respect I am There are one or two things regarc!:ing the· question of placed in the same category as the late and lamented Will proration which I want to discn:ss that have not been dis Rogers, who once said, "All I know is what I rea_d in the cussed. Proration was first commenced in the State of. papers." But I am familiar with what was expressed in the Oklahoma. The first proration laws we had were passed papers at that particular time. about 6 or 7 years ago, when the great oil pool was discov With the inception of this act in 1935, the Sun Oil Co. ered within the limits of Oklahoma City. At the hearings in its: operations in Pennsylvania proceeded to the inde of the State legislature the same contention was made and pendent variety gas stations and threatened each dealer the same opposition arose against proration that are being they would cut off theil" supply of gas if they did not eliminate used by the opponents of this measure here. The State the independent pump from which the cheaper grade of gas finally adopted its proration laws. It was then the pro was sold in competition with them .. It was to that pump ducers of oil commenced to put their oil through hidden the farmer went to obtain his supply of gas for his tractors, pipe lines into interstate commerce, and this gave rise tn gas engines, and whatever he used on the farm. Every what is called "hot oil." The State of Oklahoma was help.. independent dealer had to carry that particular type of less to protect the owners and operators of oil wells in gas in order to operate his business and supply the demand. that pool. He obtained that supply of gas from the independent pro Shortly thereafter the east Texas pool was discovered, ducers, who kept that gas level at a price of about 12 or 13 and the same conditions arose there. When these condi cents a gallon. tions arose, the Governors of the two States got together It has been stated here that the price of gas has not and commenced the consideration of a character of pro advanced in this period of time. Those gas pumps are ration laws which would protect the people, which would putting out gas now at 16% cents a gallon. I call attention protect the owners of royalties and the leaseholders. It to the fact that is the direct result of the operation of this was from this beginning there grew up the law which is act. now o.n the statute books of the Government. No one state It was stated then that the SUn Oil Co. intended to pull by itself could enforce proration without getting into the those pumps and when they pulled those pumps they would compact all the oil wells in that field or in that general put that particular gas dealer out of business so far as the country. Therefore, Kansas, Oklahoma, Texas, Louisiana, distribution of that type of gas was concerned. and New Mexico, all contiguous States~ joined fn this com Mr. DIES. Will the gentleman yield? pact, With the ·result we afterward secured passage of the Mr. MOSER of Pennsylvania. I cannot yield now. Connally Act. Mr. Chairman, the Sun·Oil Co. did proceed to pull those This is a conservation measure, no matter what those pumps. They transferred the tanks underground to suc who are opposed to it may say. All of the owners of the ceeding oil companies. But they did pull those pumps. land were receiving royalties of 12 Y2 percent, one-eighth They took a licking in 1935. In 1936 Mr. Pew, head of the · of the oil produced. When the hot oil was being stolen Sun Oil Co., became exceedingly active in the campaign in from their premises and through pipe lines put into inter... Pennsylvania and may I say to gentlemen on this side of the state commerce, no report . was made of it. to the State House none of us would be here from Pennsylvania if Mr. , authorities, who lost the State taxes on oil; in om: State Pew had his way. a 3-percent gross production tax. The royalty owners lost I may say to my colleagues from Pennsylvania, as well as all of their interest in the royalty and have never secured to the members of this committee, that in the operation of 1 it from that day to this. This measure concerns the. intei these particular groups of oil companies 1 know of not one ests of the royalty owners, it. stabilizes the industry, and single instance where a major oil company has anything to does not raise the price of the oil that is marketed out in state in opposition to this bill. Iowa or in any other state or community. Heretofore, when In the name of conservation we are bringing about a oil was selling for 10 cents a barrel in Oklahoma City, gaso situation of extermination. These particular independent. line was just as high as it is now. [Applause·.} dealers who are confronted with the -difficulty of obtaining [Here the gavel fell.] their oil and their gas must now proceed to seaboard at Mr. COLE · of Maryland. Mr. Chairman, I yield 5 min Wilmington and actually beg to buy it in tank-car lots. utes to the gentleman from Oklahoma [Mr. DISNEYl. They- have to buy from the major oil companies at prices Mr. DISNEY. Mr. Chairman, I am indeed sorry the Com .. which are fixed, because the independent producer is wiped mittee did not see fit to make this law permanent. · If it. out of existence. was a good thing to. maintain for 2 years,' and that it should I believe sincerely there is no ground for saying that if I be the law for 2 years more, this seems to me, except for possessed on the little farm I own a field of oil, and if I the fact that Texas has riot established her proration laws should dig down into the ground and produce oil, as we for more than 2 years, a sound reason it should be made have done in times past in PennSylvania under the law of permanent law now. It would be no less trouble to repeal capture, which was in effect from the very inception of the this statute than to repass it after 2 years. I hope the discovery of oil in Pennsylvania, to the effect that the· man gentlemen on the committee in the conference between the who ~covered the oil owns it, the oil should be called "hot Senate and the House will be liberal and not put the task oil" or "stolen oil." It is true it might be seeping from a on us of trying this out again in the House within 2 years pool that might be on same man's adJacent property,. but if they can avoid it. under the laws of Pennsylvania if the man on the adjoi.n.ing With reference to monopoly-! know gentlemen are in.. property also dug1 and he hit the. same pool, it would be terested in it, and I am interested-there is something in his oil as well as mine. what gentlemen have said. But let me remind you wheat Those are conditions which I cannot conceive should be fo!ks that, regardless of what the price of wheat is, it makes in existence at this time. I believe this law should not con little difference in the pri-ee of a loaf of bread. While the tinue beyond the 2-year period. Certainly, I think there is parallel is not exact and complete, it applies here in that the sufficient warrant to defeat the bi11 at this time because m price of crude oil is not wholly determinative of the price the name of emergency we have brought about destruction. of gasoline. As the gentleman from Indiana [Mr. PETTEN [Applause.] GILL] has stated in his remarks, the price of gasoline is [Here the gavel fell.J lower now than it has been for same time. Use that as a Mr. COLE of Maryland. Mr. Chairman, I yield 4 min paraiiel. utes to the gentleman from Oklahoma [Mf. HILLJ: There are some things in what the gentleman from Iowa Mr. HILL of Oklahoma. Mr. Chairman, my colleague the rMr. BIERMANN] has said about cne company having four gentleman from Oklahoma very carefully discussed the three or five di.tferent functions, but when you try to attack that 5328 CONGRESSIONAL RECORD-HOUSE JUNE 3 condition by such an amendment as he has offered, it is like among the independent retailers and they make a profit tying a binder twine to an elephant's tail. You can cover now on the other ends. So I think that while we have cured that in some · separate legislation if it is necessary. Let us one side of it, we have now caused another evil that must be be frank about i Do not drag a red herring around, even cured, and I do not think this will be cured by prolonging innocently, because an attempt at such an amendment iS the life of this measure. [Applause.] just a slap on the wrist, if it is germane. If it is proper to [Here the gavel fell.] do that, do it at the proper place at the proper time with Mr. COLE of Maryland. Mr. Chairman, I have no further the proper kind of a bill, where it has a proper place, and requests for time. after full bearings are had. The CHAIRMAN. The Clerk will read. Proration has grown as the result of the experience of Mr. BIERMANN. Mr. Chairman, I would like to ask how men. The independent oil men are those who brought about the time stands or how much time has been used. proration in the States, and they have driven these big The CHAffiMAN. The time, as the gentleman under companies to it. These companies did not willingly go; the stands, is under the control of the gentleman from Mary independents drove them. The impetus behind the pro land and the gentleman from Michigan. ration laws which five States have passed has been the in Mr. BIERMANN. Mr. Chairman, a parliamentary in dependent oil men. To get a better price for their product? quiry. Yes. How will all of you fare if the second largest indus The CHAIRMAN. The gentleman will state it. try is fiat on its back? You were all alarmed in 1933 when Mr. BIERMANN. I understand that as a general propo we were in that shape, and we do not want to be that way sition the time is supposed to be equally divided between the again. proponents and opponents of the bill. I have asked the 1\fr. DIES. Did we not vote to stabilize the coal industry gentleman in charge of the time for the proponents and on a permanent basis? · the opponents for some time. There must be 40 or 45 min Mr. DISNEY. Yes; and there is also the A. A. A. Every utes left. Both of the gentlemen have denied me time, and thing was centered early in this administration on how we I would like to know whether in my own right, as an op could stabilize prices of all products, so the farmer, the ponent of this bill, I may have 15 minutes. producer, and the refiner could get a good price for his Mr. COLE of Maryland. The gentleman will recall that product. he asked for 10 minutes, and the gentleman obtained 10 Mr. ZIMMERMAN. Mr. Chairman, will the gentleman minutes on the rule instead of in general debate, and, per yield? sonally, I thought the gentleman was satisfied with the allo Mr. DISNEY. Yes. cation of time which the gentleman from Texas [Mr. DIES] Mr. ZIMMERMAN. Then, as a matter of fact, this is a gave him. · price-stabilizing measure and is not a conservation measure. Mr. BIERMANN. I talked with the gentleman about time, Mr. DISNEY. No; do not put words in my mouth that both on the rule and on the bill, and I obtained my time on I have not used. This is a conservation measure primoo-Uy the rule from the gentleman from Texas and the gentleman and its result is to stabilize prices. from Michigan, and I asked the gentleman for 15 minutes, Mr. ZIMMERMAN. If it is a conservation measure to and I recall distinctly that the gentleman said that when I preserve oil for future generations, as the distinguished got up I should ask the gentleman on the other side for gentleman from Indiana stated a while ago, why are ex some time. ports of oil to foreign. countries increasing from year to Mr. COLE of Maryland. I did not know until the gentle year? man took the :floor that he was not satisfied with the time Mr. DISNEY. That is a marketing matter, an interna obtained on the rule. I believe I have 3 or 4 minutes re tional matter, and public sentiment in this country would maining. I ha.ve no requests for further time, and if the not permit this Congress to stop completely either imports gentleman wants it I will be delighted to yield it to him. or exports. Just try it once. Mr. BIERMANN. Mr. Chairman, as an opponent of the Mr. ZIMMERMAN. Then if you would call this a price bill-- fixing measure we would all understand the import of it Mr. PETrENGILL. Mr. Chairman, a parliamentary in and the measure would not be masquerading under another quiry. name. Mr. BIERMANN. I am submitting a parliamentary in Mr. DIES. The gentleman voted for the coal bill? quiry. Mr. DISNEY. Yes. In a nutshell, all this bill does is Inasmuch as about twice as much time has been given to that its functions are ancillary to the proration laws of the the proponents as the time given to the opponents, I ask States which experienced oil men, refiners, marketers, and that I may have 15 minutes in my own right. all have put on the statute books of the States. · The CHAIRMAN. The Chair will state to the gentleman [Here the gavel fell.] that the rule adopted by the House divides the time equally Mr. MAPES. Mr. Chairman, I yield 3 minutes to the between the gentleman from California [Mr. LEA] and the gentleman from Tilinois [Mr. MAsoN]. gentleman from Michigan [Mr. MAPES] without regard to Mr. MASON. Mr. Chairman, I want to summarize a little whether they are for or against the bill. the evidence that has been produced here on both sides of Mr. BIERMANN. Is it possible, Mr. Chairman, under a this question. rule of that kind, to bring about a situation whereby the The claim that this is a conservation measure does not proponents of a bill may almost monopolize the time? square with the facts that have been brought out that there The CHAIRMAN. That is a matter the Chair cannot has been an increase in consumption of about 40 percent and millions and millions of barrels have been shipped out of control. The House fixed the time by the adoption of the the country. These two things do not go together. rule. This measure, when it was passed 2 years ago, was aimed Mr. PETTENGILL. Mr. Chairman, I should like to ask to stop. the cutthroat competition in the production field how much more time is under the control of the gentleman and it was, as has just been stated, largely brought about by from Michigan. If there is any additional time, I hope the the independent or small producers as a protection for gentleman from Michigan [Mr. MAPEs] will Yield additional themselves. This situation has been cured by this bill, but, time to my good friend the gentleman from Iowa [Mr. BIER on the other hand, we have beard that the cure, perhaps, in MANN]. some cases, is worse than the disease. These large producers Mr. MAPES rose. now produce, refine, transport, and retail and they are now The CHAIRMAN. Does the gentleman from Michigan imposing upon the independent retailers instead of the in yield to the gentleman from Iowa? dependent producers, and as a result of this, they now lose Mr. MAPES. Mr. Chairman, I do not care to take any on the retailing end in order to effect their competition of the time of the gentleman from Iowa, but if he will sus- 1937 CONGRESSlONAL RECORD-HOUSE 5329 pend a moment and will 'allow me to yield myself 1 minute, Mr~ BIERMANN. Here is a part of a letter I got from an I would like to make a statement. independent dealer in my .State~ who says: Mr. BIERMANN. Yes. Our company has been in busine·ss for the past 12 years a.s Mr. MAPES. I think the gentleman's assumption is in distributors of petroleum products and was 'able "to show '8. reason correct. I have not kept .any record of the time allowed to able profit for the first 10 years, but in the past 2 yea.r.s, -since the Connally Act has been in effect, it has shown a loss which in those for or oppnsed to the bill, but my impression is I have time, if this law is allowed to stay, will wipe out the entire -as:rets yielded more time to those opposed to the measure than I cf our company• have to those who are in favor of it. I have yielded to every .Our company, with the other independent oil jobbers "Of the State of Iowa, is protesting vigorously against Senator CONNALLY's one opposed to it who has asked me for time, including the bill, 8. 790, as we do not wish to be fol'ced out of 'business, if we gentleman from Iowa. can help it, by the major oil companies. · Mr. BIERMANN. The gentleman has not yielded me any Another jobber says: time on the bill. Mr. MAPES~ The enormous losses reported by the marketing subsidiaries -of I yielded the gentleman time on the rule, some of the major companies, and subsidized by the parent com and I have yielded time and taken care of everyone, both pany, is clear evidence that this narrow margin of profit estab on this side and on that side, who has asked for time, lished between the tank-car and the tank-wagon price on gasoline whether he opposed the bill or not. has for its purpose the annihilation of the independen~ jobber. Mr. BIERMANN. As long as I yielded to the gentleman Mr. Chairman, I appreciate the fact that this -amendment I would like to ask him if he thinks it an equitable way to that I propose to offer is likely to be held not germane, and distribute time, when there are at least 40 minutes of time under the rules probably it is nat germane, but there is left, to refuse to allow a man to speak for 15 minutes in nothing in the world to prevent this Committee from fore opposition to the bill? going the point of germaneness in order that we may pro Mr. MAPES. If the gentleman will permit, I think he has 1 tect the marketer while enriching the other three branches been pretty well taken care of. -of the industry. Mr. BIERMANN. Then, the gentleman thinks he ought The CHAIRMAN. The time of the gentleman from Iowa not to yield any more time to me when there are 40 to 50 bas expired. The Clerk will read. minutes undisposed 'Of? The Clerk read as follows: Mr. MAPES. I yielded time to the gentleman on the rule, Be it enacted, etc., That section 13 of the act entitled "An act -and I do not feel disposed to yield to the gentleman any to regulate interstate and foreign commerce in petroleum and its further. products by prohibiting the shipment in such commerce o! The CHAIRMAN. The gentleman from Maryland [Mr. petz:oieum and its products produced in violation of State law, and for other purposes".. approved February 22, 1935, is hereby CoLE] has 5 minutes remaining. repealed. Mr. COLE of Maryland. Mr. Chairman, I Yield 4 minutes t'O the gentleman from Iowa [Mr. BIERMANN]. With the following committee amendment: Mr. BIERMANN. Mr. Chairman, one of the proponents of Page 2. line 1, strike out the words "hereby repealed", and insert "amended by striking out 'June 16, 1937' " and inserting .in the bill made the statement that this bill is not the proper lieu thereof "June 30, 1939." place in which to take care of the marketers of oil. If this bill takes care of the producers and the refiners and the Mr. COCHRAN. Mr. Chairman, I move to strike out the owners of pipe lines, it seems to me proper to take care of last word. the little fellow at the other end of the line. What we are , Mr. COLE of Maryland. Mr. Chairman, will the gentle- asking for, at least those of my mind here, is that we shall man yield to me for a moment? · not under this bill enrich the producer and the refiner and Mr. COCHRAN. Yes; provided it is not taken out of my the owner of pipe lines and allow them to cut down on the time. little fellow in the corner filling station and drive him out Mr. COLE of Maryland. There is just one section to this of business. That is all. My amendment merely proposes bill. Several amendments are proposed, and I am wonder to protect the independent jobber and marketer while we ing if we cannot agree on time to close debate. I ask are insuring the profits of the producers, refiners, and unanimous consent that debate upon all amendments thereto owners of pipe lines. close in 15 minutes. Mr. DIES. Mr. Chairman, will the gentleman yield? Mr. BOILEAU. Mr. Chairman, reserving the right to ob Mr. BIERMANN. I yield if the gentleman will get me ject, I think it .should first be determined what disposition mere time. the Chair will make of the Biermann amendment. If that Mr. DIES. Just to ask the gentleman to explain why Js held germane, I am sure many Members on both sides 52,000 independent service stations through their present would want to be heard. association have endorsed this bill. Mr. COLE of Maryland. I will withdraw that request Mr. BIERMANN. I do not know anything about that. for the moment, Mr. Chairman. But allow me to read to the gentleman some of the people I ask unanimous consent that all debate on the com- who do not endorse it. Mr. T. 0. Baucum, of the Kentucky mittee amendment close in 10 minutes. Petroleum Marketers' Association, testified against the bill; The CHAIRMAN. Is there objection? Mr. William Eade White, attorney of the Dixie Interstate, There was no objection. an independent which operates in 10 States, testified Mr. COCHRAN. Mr. Chairman, of course, we all are in against the bill; Mr. H. F. Remington, service station dealer, favor -of the conservation of oiL I do not propose, however, 'Of Reading Pa., eame down here and testified against the to subscribe to the logic of the gentleman from Indiana bill; W. C. McCain, of the Missouri Independent Oil Jobbers' [Mr. PETTENGILL], or the gentleman from Oklahoma r.Mr. Association, testified against the bill; Mr. Paul E. Hadlick, DISNEY], when they say that the price of -gasoline i.s nm; of the National Oil Marketers' Association, testified against affected in any way by the price of crude oil. As the gen the bill; Mr. Fred E. Bergfors, of the New England Oil Men's tleman from Oklahoma[~. Hn.L1 said a few moments ago, Association, also testified .against the bill. they were selling crude oil in Oklahoma for 10 cents. Every Mr. SHORT. Mr. Chairman, will the gentleman yield? -one remembers when the Governor 'Of Oklahoma, a former Mr. BIERMANN. Yes. Member of this House, called out the militia to stop that. I Mr. SHORT. I have received many telegrams and letters .never want to see that day return. from not only my own district but from all over my stat~ If this bill is passed, what will happen? What :is the opposing this measure. price of oil today? No one can say the cost of production Mr. MASON. And so have I. 'Of crude oil has increased 8 Dr 10 cents a barrel since the Mr. HOUSTON. And I have had letters and telegrams bill passed the Senate, but still the cost of crude oil bas and telephone calls from people all over my State who are advanced 8 or 10 cents a barrel since that time. The price in Iavor of the bill 'Of crude oil now, I understand, is $1.2~ I .am in favor of 5330 CONGRESSIONAL RECORD-HOUSE JUNE 3 conserving the on supply of this country, but I am not in This bill is not open to any amendment, because it simply favor of passing any bill, whether it is hot or cold, if it is extends an existing law. If it was possible to amend so that going to peg the price to somebody that some of us here the independent jobber and distributor would get better ought to be thinking about, and that is the consumer. The treatment, I would favor such 3.n amendment. We are try trouble with this country today is that there is too great a ing to get out of this depression and I do not want to im spread between the producer and the consumer on every pede the progress we are making by crippling one of our thing that is produced. Now we have this situation: Is this greatest industries. I repeat, Mr. Chairman, what happens bill going to result in another increase in the price of crude in the future as to the ;>rice of crude oil and gasoline will oil, and if it is are we going to find an increase in the certainly be reflected here in the event of an increase. and cost of gasoline? It is true they say gasoline has not in it will be well for those who want this bill passed to remem creased in cost recently. Can it be that somebody is waiting ber that. until we pass this bill before they send up the price again? [Here the gavel fell.] We all know how the price of gasoline is increased and The CHAIRMAN. The question is on the committee decreased from time to time~ amendment. The antitrust laws, the Federal Trade Commission, nor The committee amendment was agreed to. any other Government agency has been able to reach those Mr. BIERMANN. Mr. Chairman, I offer an amendment. who control the price of gasoline. When the price of gaso The Clerk read as follows: line goes up, every one of the large corporations sends it Amendment offered by Mr. BIERMANN: At the end of the bill up, not only the same day but the same minute. Are we insert a new section as follows: going to be foolish enough to believe there is not some "SEc. 14. It shall be unlawful for any person or corporation or a1filiate thereof to engage, directly or indirectly in interstate com agreement in advance between the large producers of this merce, in marketing crude aU or any of the products thereof 1! country with reference to increasing and decreasing the he is engaged in production, refining, and transportation of oil price? Of course, the middleman is having his trouble. or in any of these activities." Aside from the middleman and the jobber and the inde Mr. COLE of Maryland. Mr. Chairman, I make a point pendent oil merchant, it is up to us to once in a while think of order against the amendment. of the consumer. In this instance the consumer is the goat The CHAIRMAN. Does the gentleman from Iowa desire if we pass legislation that will result in an increase in the to be heard on the point of order? cost of gasoline. We all know it is high enough today. Mr. BIERMANN. My only thought, Mr. Chairman, is We are assured that the price of gasoline is not going to that this bill deals with the entire oil business from the advance. location of the oil in the ground until it reaches the ulti I have the utmost faith in Mr. Ickes, the Secretary of mate consumer. The bill in its present form, dealing with the Interior, and I am· going to vote for this bill, and I am the production, refining, and distribution of oil, makes me going to vote for· it because I have faith in Mr. Ickes. I believe that an amendment dealing with the last operation, feel he is going to protect the consumers of this country. marketing, is germane also. If this bill does result in an increase in the price of gaso The CHAIRMAN. The bill under consideration amends line to the consumer, I am sure Mr. Ickes will come here only one section of existing law in one particular. The and tell us to take some action that will protect the con amendment of the gentleman adds a new section to existing sumer, and you can be assured I will be one to do every law, and is, therefore, clearly not germane. thing in my power to see that some kind of legislation is The Chair sustains the point of order. passed to control the price. Mr. BIERMANN. Mr. Chairman, I offer another aelend Mr. DIES. Mr. Chairman, will the gentleman yield? ment. Mr. COCHRAN. I yield. The Clerk read as follows: Mr. DIES. How can the gentleman explain the official Amendment by Mr. BIERMANN: After section 12 of Public, No. 14, figures which show that gasoline has decreased from 25 Seventy-fourth Congress, insert the following new section: cents in 1919 steadily downward to 14 cents. While there "SEc. 13. In order to further conserve deposits of crude oil situ ated in the United States, all tari1Is on crude oil and all o! its has been a small increase since conservation went into products are hereby repealed." effect, that increase is less than the increase in the price of everything else. Mr. COLE of Maryland. Mr. Chairman, I make a point Mr. COCHRAN. I will ask the gentleman in his own of order against the amendment. time to explain to this House why it is that the price of The CHAIRMAN. Does the gentleman from Iowa desire crude oil has jumped from 8 to 10 cents a barrel since this t0 be heard on the point of order? bill passed the Senate? I would like to hear the gentleman Mr. BIERMANN. I do not, Mr. Chairman. explain that in his own time. The CHAIRMAN. The amendment offered by the gentle Mr. Chairman, I know that many members were sur man from Iowa seeks to deal with matters not only not prised when I stated that I intend to vote for this bill. The germane to this bill but over which this Committee has no Texas law expires in 2 years. This bill, which provides for jurisdiction. extension of the present law fol 2 years, is to provide Gov The Chair sustains the point of order. ernment cooperation for that period. Government officials Mr. BIERMANN. Mr. Chairman, I move to strike out the tell us that it is necessary that the law be extended and last word. Members from the oil-producing States assure us there will Mr. PETTENGILL. Mr. Chairman, I ask unanimous con be no increase in the price as a result; that the extension sent that the gentleman from Iowa be granted an addi will stabilize this great industry, will enable millions em tional 5 minutes in o~der that he may fully present his point ployed to be paid a decent wage, and that the "Producer will of view. get a fair profit over the cost of production. I warn those The CHAIRMAN. The gentleman from Indiana asks from the oil-producing States that Congress can undo to unanimous consent that the gentleman from Iowa may pro morrow what it does today, and I am one who will help to ceed for 10 minutes. Is there objection? repeal this law, and further than that, help to control the There was no objection. price, if that be possible under the Constitution, if the con Mr. BIERMANN. Mr. Chairman, as I said in the begin sumer is going to suffer by an increase in the cost of gaso ning, I am in favor of doing anything within reason to line as a result of the passage of this bill. The producer secure a just profit to the producer of oil even when the must play fair with the consumer. The price of crude oil producer of oil is John D. Rockefeller, Jr.• the Shell Oil Co., and gasoline is high enough now and it must not be the Continental Oil Co., or any other oil company. I am in increased. favor of the producers of oil having a fair profit, of the Secretary Ickes has shown in the past that he looks after refiners having a fair profit, of the owners of the pipe lines the interests of the masses, and being confident he will do having a fair profit; but I am against a bill or a law that so in this instance I am going to support the bill. allows them to take the profit they make in producing, in 1937 (JONGRESSIONAL RECORD-HOUSE 5331 refining and from their pipe lines, and to use those profits The question is on agreeing to the amendment. to offset marketing losses in order that they may drive The amendment was agreed to. the little independent jobber and marketer out of business. The bill was ordered to be engrossed and read a third time, There is plenty of testimony in the hearings to show that and was read the third time. that has 'been the effect of this law. I have inserted in the The SPEAKER. The question is on the passage of the bill. RECORD and have read several telegrams and excerpts from The question was taken; and on a division (demanded by letters showing that that is the experience of the independ Mr. BoiLEAU) there were--ayes 75, noes 37. ent jobbers and marketers in my own State. The gentle Mr. BIERMANN. Mr. Speaker, I object to the vote on the man from Missouri [Mr. SHORT] and several other Members ground there is not a quorum present. have said that they have received letters and telegrams of The SPEAKER. Evidently a quorum is not present. similar import. The Doorkeeper will close the doors, the Sergeant at Arms It was my hope that the members of this committee would will notify the absent Members, and the Clerk will call the forego a point of order on the amendment I offered, in order roll. that this bill might be for the benefit of all four factors in The question was taken; and there were-yeas 189, nays the oil industry, but they did not see fit to do so, and now 94, not voting 149, as follows: we have a bill to extend a law that is exclusively for the (Roll No. 81) producer, the refiner, and the owner of transportation lines, YEAS--189 and very largely for the big ones engaged in these busi Aleshire Evans Kitchens Pearson nesses. Allen, Del. Faddis Kleberg Peterson, Fla. Allen, La.. Farley Kniffin Petteng1ll This has been called a conservation measure. I think Arends · Ferguson Kocialkowskl Pfeifer there are good grounds on which to controvert that state Arnold Fitzpatrick Kramer Plumley Atkinson . Flannery Lambeth Polk ment. I have never thought, however, that it was of any Bacon Fleger Lanham Powers use to accuse people of anything other than the best of Barden Fletcher Lea Rabaut motives unless one has to. As was pointed out by the gen Barry Fuller Lesinski Ramspeck Bloom Gambrlll Lewis, Colo. Randolph tleman from Wisconsin [Mr. SAUTHOFF], we are shipping Boehne Garrett Lewis, Md. Rayburn out of this country vastly more oil than we are importing. Boland, Pa. Gearhart Long Reece, Tenn. tari1f Boren Gildea Luce Rees, Kans. There is a tartli of 21 cents a barrel on crude oil and a Boyer Goldsborough McAndrews Rich of 2 cents a gallon on gasoline. If you want to conserve our Boykin Greever McFarlane Richards oil supplies in the United States, let us repeal these tariffs Brooks Gr11Hth McKeough Rogers, OklL Buck Griswold McReynolds Sanders and let this foreign oil come in; let us use it and save our Bulwin.kle Guyer McSweeney Schaefer, DL own. That was the purpose of my last amendment. Carlson Halleck Mahon, S. C. Schulte Mr. DIES. Mr. Chairman, will the gentleman yield? Cartwright Hamilton Mahon, Tex. Simpson Case, S. Dak. Hancock. N. Y. Maloney · Sfrovich Mr. BIERMANN. I yield. Casey, Mass. Harlan Mapes Snyder,PL Mr. DIES. Would the gentleman be willing to repeal the Church Hart Martin, Colo. South Cochran Harter Massingale Spence tariff on other things, particularly those things produced Colden Havenner Maverick Sumners, Tex. 1n the gentleman's State, in order that the rest of us may Cole, Mel. Hendricks Mead Sutphin buy them more cheaply? Cooper Hennings Meeks Thom Costello Hill, Ala. Merritt Thomas, N.J. Mr. BIERMANN. I am willing to repeal tariffs. The Cravens Hill, Okla. · Michener Thomas, Tex. tariffs have cost the farmers of my State billions of dollars, Crawford Hobbs :Mllls Thomason, Tex. Crosby Honeyman Mitchell, m. Thompson. Ill. and the tariffs on the farm products of Iowa have been a Crosser Hope Mosier, Ohio Tolan mockery. Tariffs have raised the prices of what Iowa Crowe Houston Matt Towey farmers have bought, and finally American tariffs caused Crowther Imhoff Murdock, .Arf.Z. Transue Cullen Jarman Murdock, Utah Turner foreign countries to retaliate so effectively as to almost DeMuth Jarrett Nichols Umstead destroy the foreign market for American farm products. Dicksteill Jenkins, Ohio Norton Vinson, Fred M. Dies Johnson.Luther A. O'Brien, ru. Warren Mr. DIES. On everything. Will the gentleman make Dingell Johnson. Lyndon O'Connor, N.Y. Welch that general, on wheat, corn, and so forth? Dirksen Johnson, Okla. O'Day Whittf.ngton Mr. BIERMANN. The gentleman is a very skillful crim Disney Johnson, W.Va. O'Leary Wilcox Ditter Jones O'Toole Wolcott Inal lawyer and cross-questioner and it requires the very Dockweller Kelly, ru. Palmisano Wolfenden best of criminal-lawYer talent to defend this iniquitous Dondero Kennedy, Md. Parsons Wolverton Doughton Kennedy, N.Y. Patman Woodru.fl measure which he has brought in here. I say to the gentle Doxey Kenney Patrick man it seems to me It would be very easy for a Democrat Duncan Keogh Patterson coming from a cotton-producing State to favor the abolition Engel Kirwan Patton of a tariff. NAYs--94 Mr. BOILEAU. Will the gentleman yield? Am.lle Drew, Pa. Luecke, Mlch. Bautho1f Biermann Dunn McCormack Shannon Mr. BIERMANN. I yield to the gentleman from Wis Bigelow Eckert McGranery Sheppard consin. Binderup Eicher Martin, Mass. Short I in Bland Forand Mason Smith, Maine Mr. BOILEAU. think the gentleman this afternoon Boileau Frey, Pa. May Smith, Va. two of his addresses has just about knocked into a cocked Bradley Gehrmann Mitchell, Tenn. Sparkman hat any argument that this is a conservation bill Brewster Gregory Moser, Pa. Stefan Brown Gwynne Nelson Swope Mr. BIERMANN. I thank the gentleman. Buckler, Minn. Healey O'Connell, Mont. Taber The pro-forma amendment was withdrawn. Burch Higgins O'CoJ,Ulor, Mont. Taylor, S. 0. Burdick Hildebrandt Oliver Tetga.n The CHAIRMAN. Under the rule, the Committee rises. Cannon. Mo. Holmes O'Neal, Ky. Thurston Accordingly the Committee rose; and the Speaker having Citron Hull O'Nelll, N.J. Tobey Clason Hunter Owen Vincent, B. M. resumed the chair, Mr. WOODRUM, Chairman of the Commit Claypool Izac Pace Wallgren tee of the Whole House on the state of the Union, reported Cluett Jacobsen Peterson, Ga. Wigglesworth that that Committee, having had under consideration the bill Coffee, Wash. Jenks, N.H. Rankin Williams Colmer Johnson, Minn. Reed, m. Withrow (H. R. 5366) to repeal section 13 of the act entitled "An act Culkin Kinzer Rigney Wood to regulate interstate and foreign commerce in petroleum and Daly Knutson Rogers, Mass. Woodrum De en Kopplema.nn Romjue Z1mmermall its products by prohibiting the shipment in such commerce of Dorsey Leavy Rutherford petroleum and its products produced in violation of state law, Dowell Lemke Ryan and for other purposes", approved February 22, 1935, pur NOT VOTING-149 suant to House Resolution 216, he reported the same back to Allen, m. Ashbrook Bernard Cannon, Wla. the House with an amendment agreed to in Committee. Allen, Pa. Bates Boylan, N.Y. Carter Anderson, Mo. Beam Buckley, N.Y. Celler The SPEAKER. Under the rule, the previous question is Andresen, Minn. Beiter Byrne Champion ordered on the bill and amendm~ ~ final pa8Saie. Andrews Bell Caldwell Chandler 5332 CONGRESSIONAL RECORD-HOUSE JUNE 3
Chapman Gavag:m McGrath Seger Mr. Hook with Mr. Connery. Clark, Idaho Gl1ford McGroarty Shaler, Mich. Mr. Quinn with Mr. Haines. Clark, N. C. Gilchrist McLaughl.ln Shanley Mr. Kloeb with Mr. O'Brien of Michigan. Coffee, Nebr. Gingery McLean Smith, Conn. Cole, N.Y. Goodwin McMillan Smith, Wash. The title was amended to read as follows: "A bill to con Collins Gray, Ind. Maas Smith, W.Va. tinue in etiect until June 30, 1939, the act entitled 'An act to Connery Gray, Pa. Magnuson Snell Cooley Green Mansfield Somers, N.Y. regulate interstate and foreign commerce in petroleum and Cox Greenwood Millard Stack its products by prohibiting the shipment in such commerce Creal Haines Mlller Starnes of petroleum and its products produced in violation of State Cummings Hancock, N.C. Mouton Steagall Curley Harrington O'Brien, Mich. Sullivan law, and for other purposes', approved February 22, 1935." Delaney Hartley O'Connell. B. L Sweeney The doors were opened. Dempsey Hill, Wash. O'Malley Tarver DeRouen Hoffman Peyser Taylor, Colo. The result of the vote was announced as above recorded. Dixon Hook Phillips Taylor, Tenn. Mr. COLE of Maryland. Mr. Speaker. I ask unanimous Douglas Jenckes, Ind. Pierce Terry consent for the immediate consideration of the bill