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AC sparkplugs cost local commercial stations 51 cents each, and carry a fair trade price of 85 cents. They are sold at exchange service stations for 45% cents each. A similar example is the Ford oil filter cartridge--this item costs commercial stations $1.07 and carries a retail list price of $1.92. The post exchange retails this item for 85 cents. An Exide battery which lists for $21 at commercial stations sells for $16.85 at the PX. A Firestone 6.70–15 first line tire lists at commercial stations at $22.60, plus taxes, whereas the same tire in the post exchange station sells for a total of $16.85, including Federal excise tax, but not subject to the 3 percent State sales tax. It is stated that when the above-referred to post exchange stations are closed for holidays or inventory, commercial stations within that immediate area enjoy almost twice their usual sales. I might also note in connection with the situation at Camp Lejeune that while sales are theoretically limited to military personnel and their dependents, as a practical matter this merchandise is available to civilian employees on the base and to other civilians having access to the installation.

South Carolina.-I have been provided with a very interesting proposal that was submitted to a jobber by Lt. Col. Harold L. Hamilton, exchange officer at Fort Jackson, S. C. Colonel Hamilton advises that the Fort Jackson exchange is interested in the construction of a new service station on the base, and that said service station should be equipped and laid out for the resale of 70,000 to 80,000 gallons of gasoline monthly; that such station "should have at least 12 pumps, 2 lubrication lifts, 2 wash racks, a tire repair room large enough to accommodate 3 vehicles at one time, an office and displav room, a stock room, toilet facilities for both men and women, and a central cashier's booth, either in the gasoline pump line or designed so that it will be easily accessible in the front of the service station." I leave to the good judgment of this committee as to whether an elaborate facility such as this outlined by Colonel Hamilton would be competitive with local commercial stations.

I might note that in addition to this proposed station, Fort Jackson is currently operating a PX gasoline station marketing gasoline at 2 cents per gallon under the local market price, and during 1952 and 1953 this station did approximately $500,000 in sales. There are at least 11.commercial stations within a radius of 2 miles from this Army post, all of which have felt the loss of volume and will suffer even more when the new station is built.

South Dakota.--A particularly well-documented illustration of how the Government is competing with local private enterprise is represented by the situation existing in connection with the operation of the PX station at Ellsworth Air Force Base, Rapid City, S. Dak. Socony-Vacuum Oil Co. built the exchange at Ellsworth Field at a cost of $27,500. There is a contract to supply this station at tank-car price for a period of 5 years. The post exchange pays 1 cent per gallon to the supplier, which is applied to the cost of constructing the station, the theory being that this 1 cent per gallon will pay the construction costs within 5 years. I am informed that during 1 month in 1953 the gross sales in this station were $33,886.97; direct expense charged was $30,383.88; leaving an operating profit of $3,503.09.

Within a radius of a mile and a half of Ellsworth Field there are at least three commercial stations, all of which are fully equipped, located on the main highway leading from Ellsworth Field. The field is 10 miles from Rapid City, S. Dak., and in addition to the commercial stations mentioned above, there are at least four more located on the highway leading into Rapid City,

Texas. We have been informed of post exchange service stations being maintained at 13 Army and Air Force installations within the State of Texas. I might briefly review the marketing situation attendant to a few of these situations. At Čarswell Air Force Base, Fort Worth, the PX service station markets premium and regular gasoline at 2 cents under the posted commercial price and it is estimated that this station is marketing in excess of 65,000 gallons of gasoline per month. At Randolph Field, San Antonio, the post exchange superservice station maintains 12 pumps and gasoline is sold at 2 to 3 cents per gallon below the local price. * In 1952 this station had sales of approximately $330,000, and in 1953 of approximately $472,000.

Based on the foregoing factors and the factual elements which I have undertaken to review, the National Oil Jobbers Council heartily endorses the principle of the legislative proposals before the House Committee on Government Operations, and it is upon these factors that we feel that legislative action is mandatory-rather than relying on the Department of Defense to issue periodic high-sounding regulations that merely nibble at a problem, rather serve to pro

vide a permanent solution to the problem of getting the Government out of business operations that are competitive with private enterprise.

CONCLUSION Owing to time limitations and a desire to refrain from unduly burdening the committee with statistical data, I have only quickly reviewed the highlights of what is becoming an increasingly aggravated situation. Before concluding there is one other aspect of this problem to which I would like to refer. The preferential position and near monopoly enjoyed by the exchange operated service stations not only affects local businessmen competitionwise, but also enables the PX stations to buy gasoline and other products at prices equal to or less than the prevailing wholesale price. This enables the PX station to obtain gasoline at a price from 2 to 4 cents per gallon less than the price paid by the average retail service station operator, and being freed from many of the cost problems and the impact of taxation suffered by private enterprise, the PX station has become a substantial demoralizing factor in the marketing areas concerned.

Independent gasoline dealers and independent jobbers have enough difficulties in the conduct of their business affairs with the competition of large integrated oil companies, coupled with ever increasing costs, Federal and State regulations, and the ever present tax structure.

We feel, and apparently many other industrial and commercial spokesmen are of the same mind, that the military should get out and stay out of business operations that are competitive with private enterprise. To date appeals directed to the military along this line have produced nothing but high-sounding principles followed by fine print directives that serve to accomplish an operating pattern that appears to be diametrically opposed to the press release principles and the flag waving. We in industry are getting fed up with the delay and subterfuge and the Esau-Jacob approach to this problem that the military authorities have apparently adopted.

În conclusion we respectfully request that this committee take affirmative, direct action to cope with this problem and that all possible effort be extended toward obtaining the necessary legislation that will provide the lines of demarcation as to what are appropriate business-type activities for operation by govornment organizations.

I thank the committee for the privilege of making this statement and request that my prepared remarks be made a part of the hearing record.

EXHIBIT A
ATLANTA REGION

Exchange

Sales, 1952

Sales, 1953

Price basis

Do.

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$370, 515. 16 Terminal posted.

56, 571. 41
136, 046.85

Do.
414, 636. 79 Posted tank car.
159, 430. 86 Do.

39, 223. 41 Do.
249, 994. 65 Tank wagon less $0.0225 per gallon.
65, 187. 54

Do. 209, 562.17 Posted dealer less $0.023 per gallon. 88, 772. 46 Tank car less $0.05 per gallon. 35, 974. 50 Posted tank car. 117, 399.88 Dealers tank wagon less $0.0175 per gal

lon. 59, 947.93 Tank wagon less $0.02 per gallon. 153, 870. 19 Posted tank car. 109, 362.83 Tank car. 134, 835. 26 Tank wagon less $0.0228 per gallon. 272, 514. 41 Terminal price less $0.0025 per gallon.

4, 122. 74 Do. 263, 568. 10 Posted transport truck delivered,

Posted tank wagon, Biloxi, less $0.025, 329, 767. 83

regular. Posted tank wagon, Biloxi, less $0.0275,

premium. 213, 243. 70 | Termin 1 plant, Tampı, Fla., for spot

t nk car and transport truck de

livered.
303,346. 32 Tank car less $0.0055 per gallon.

65, 188. 80 Do.
106, 530. 22

234, 785. 93

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Do.

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$44, 128. 54 | Posted dealer tank wagon. 95, 691. 38

Do. 87, 726. 67 Posted terminol, Tampa, less $0.0025

per gallon plus freight. 123, 204.08 Posted terminol less $0.0025 per gollon. 89, 988. 24 Tank cr at Fort Evergl des less

$0.005 per gllon plus freight. 129, 051. 35 Terminal transport truck. 141, 256, 25 Tank wagon less $0.028 perg llon, 129, 380.27 Scheduled derler tank wagon less

$0.015 per gallon. 54, 486. 62

Tenk car. 197, 527.02 Terminposted less $0.0055 per g llon, 18,300. 77 Posted transport truck delivered price.

56, 145. 51 230, 126.01

17, 184.62

5, 335, 081. 20

5, 070, 355. 20

BALTIMORE REGION

[graphic]

$26, 290

Tank wagon. 193, 444 Tank wagon less $0.0225 per gallon. 8, 526

Do. 2, 303 108, 136 Tank wagon less $0.0175 per gallon. 79, 608

Tank wagon. 157, 734 Tank wagon less $0.015 per gllon. 264, 587 Tank we gon less $0.02 per gallon.

94, 724 Tank wagon less $0.0203 per g llon. 235, 160

Tank wagon less $0.015 per gallon. 45, 867

Do. 15, 422

Tank wagon, 18, 048

Do. 12, 084 Do. 347, 455 Tank wagon less $0.015 per gallon,

regular 59, 229 Tank wagon less $0.0165 per gallon,

premium 22, 084 74,910 11,989 152, 444 Tank wagon less $0.015 per gallon,

regular; tank wagon less $0.0175 per

gallon, premium.
62, 134
149, 453 Tank wagon less $0.0175 per gallon.

29, 302 Do.
118, 398 Tank wagon less $0.0225 per gallon.

84, 826 Do. 102, 705 Do. 232, 919 Do. 130, 472

Do. 3, 673 Do. 141, 117

Do. 67, 814

Tank wagon. 228, 866 Tank wagon less $0.02 per gallon.

7, 204 Tank wagon less $0.0225 per gallon. 58, 563

Tank wagon. 11,527 40, 444 Tank wagon less $0.0175 per gallon. 05, 377 Tank wagon less $0.0125 per gallon. 55, 777

Do. 1, 285 142, 612 Tank wagon less $0.015 per gallon.

26, 867 Do. 124, 935 Tank wagon less $0.01 per gallon.

38, 692 Do. 108, 302 Do.

Do. 15, 493 Tank wagon less $0.0175 per gallon. 93, 691

Do. 48, 111 Tank wagon less $0.01125 per gallon. 276,751 Tank wagon less $0.015 per gallon.

11, 013 224, 737 | Tank wagon less $0.02 per gallon.

Do

Do
Fort Monroe
Camp Pickett.
Hanscom Air Force Base
Dow Air Force Base
Grenier Air Force Base
Griffiss Air Force Base
Limestone Air Force Base

Do.
Suffolk Air Force Base 1
Mitchell Air Force Base

Do..
Otis Air Force Base

Do...
Sampson Air Force Base.

Do.
Stewart Air Force Base.

Do
Presque Isle
Langley Air Force Base
Olmsted Air Force Base
Wright Patterson Air Force Base.

1 Not in operation.

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$156, 456.84 Posted transport truck, Colorado

Springs. 98, 766. 32 Posted transport truck. 48, 481. 14 Posted transport truck, Kansas City. 119, 348.79 Posted transport truck.

31. 729. 18 Posted transport truck, Battle Creek. 185, 835. 95 Posted transport truck. 462, 680, 79 Lowest bidder semiannually, always

below transport truck. 120, 704.17 | Transport truck, Evansville, Ind. 286, 841.63 Posted Wall St. Journal, Chicago

edition. 88, 992. 32 Do. 20, 386, 19 Transport truck for locality. 71, 917.95 Transport truck, Indianapolis locality. 26, 619. 39

Tank wagon. 46, 309, 66 Spot tank car or transport truck. 164, 013. 55 Posted dealer tank wagon less $0.035

per gallon. 69, 484. 30

Do. 285, 944. 18 Spot tank car or transport truck. 253, 306. 63

Lowest bidder semiannually, transport

truck or usually less. 61. 988. 87 Do. 61, 735. 03 Tank wagon less $0.01 per gallon. 119, 681.75 Spot transport truck delivered price.

57, 067. 29 Posted transport truck. 144, 516. 96 Do. 142, 554. 76 Net posted spot tank car. 10. 478 46

Do. 125, 330. 65 Posted dealers prices. 244, 878. 71 Spot tank car or transport truck, Chey.

enne, Wyo. 44, 435, 67 Contract dealers price for tank car or

transport truck. 85. 48 Local posted tank wagon. 93, 147.67 Posted dealer tank car price. 3, 643, 750. 28

256, 955. 46 224, 167. 23

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$90, 318. 02

175, 055. 11

Ardmore Air Force Base... Brooks Air Force Base... Bryan Air Force Base Carswell Air Force Base. Clovis Air Force Base. Connally Air Force Base. Ellington Air Force Base Good fellow Air Force Base Harlingen Air Force Base.. Holloman Air Force Base. Kelly Air Force Base Kirtland Air Force Base. Lackland Air Force Base Lake Charles Air Force Base Reese Air Force Base. Laredo Air Force Base.. Perrin Air Force Base Laughlin Air Force Base.. Randolph Air Force Base Gary Air Force Base.. Sheppard Air Force Base. Tinker Air Force Base. Vance Air Force Base...

56, 857. 81 207, 180. 80 40, 586. 47 13, 190.00 75, 716. 66 158, 216.15 169, 653. 02 239, 216.05 94, 948. 32

$5, 736.87 Bulk plant less $0.02 per gallon. 101, 823. 12 Transport.

48, 883. 82 Tank wagon less $0.015 per gallon. 188, 806. 55

Do. 34. 906. 15

Bulk plant. 50, 108. 28 Tank wagon. 208, 944. 47 Tank wagon less $0.01 per gallon 50.073. 41 Bulk plant. 67, 153. 46 Transport. 106, 663. 82

Bulk plant. 139, 654. 87 Transport. 168, 795. 68

Bulk plant. 289, 848. 10 Transport. 136, 312.11

Bulk plant. 38, 421.81 Do. 47, 955. 09

Tank wagon. 81, 803. 99

Tank car. 147.01 Transport. 471, 930. 45

Do. 122, 797.05

Tank wagon. 83, S26. 23 Transport. 37, 375. 29

Do. 49, 717. 88 Dealers tank wagon less $0.005 per

gallon. 151, 004. 26

Tank wagon. 86, 461. 06 Transport.

63, 320. 16

328, 794. 38 111, 128. 31 76, 927. 57

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5, 289, 697. 13

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25, 936. 35

6. 523. 55 33, 603. 20 217, 899.35

Tank wagon less $0.025 per gallon,

premium. $0.02 per gallon, regular. 12 cent extra for truck and trailer, Delivery.

Do.
Do..
Do..

Do.
Camp Cook 1
Fort Douglas.

Do...
Camp Hanford.
Fort Huachuca!.
Fort Lawton..

36, 816.73

8, 671.85 32, 517.03 290, 148.87

535. 79 26. 690. 47 14, 430, 44 22. 105. 95 14, 677. 79 82, 515.34

40, 373. 48 11, 410. 42

9, 017. 99 134, 560. 19 97,938. 36

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Tank wagon.
Tank wagon less $0.02 per gallon.

Do.
Do.

Do.
Tank wagon less $0.02 per gallon; on

truck and trailer. Delivered less $0.03 per gallon, Tank wagon less $0.025 per gallon; on

truck and trailer delivered less $0.03 per gallon.

Do. Tank wagon less $0.0326 per gallon off on truck and trailer delivered.

Do. $0.018 off tank wagon at Hunter Lig.

gett USDB and $0.023 off if truck and trailer delivered.

Do.

Do.
Tank wagon less $0.02 per gallon,

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Tank wagon less $0.03 per gallon off

truck and trailer. Tank wagon less $0.025 per gallon off

truck and trailer. Tank wagon less $0.0225 per gallon,

premium; $0.0175 per gallon, regular; add $0.0025 for truck and trailer

delivered.
Tank wagon less $0.02 per gallon.
Tank wagon less $0.0275 per gallon.
Tank wagon less $0.02 per gallon.
Tank wagon less $0.034 per gallon.
Tank wagon less $0.015 per gallon (Two

Rock Ranch).
Tank wagon less $0.03 per gallon,
Tank wagon less $0.02 per gallon.

3, 724. 83 377, 280.21

6, 302. 19 123, 987. 51 286, 637. 66

5, 272. 42

438, 141.85

385. 12 153, 855. 90 282, 465. 01

4, 420.03

83, 810.24 43, 903.52

63, 832. 31 172, 207.78

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