COMMITTEE ON THE JUDICIARY

JAMES O. EASTLAND, Mississippi, Chairman

SUBCOMMITTEE TO INVESTIGATE THE ADMINISTRATION OF THE INTERNAL SECURITY ACT AND OTHER INTERNAL SECURITY LAWS

JAMES O. EASTLAND, Mississippi, Chairman
THOMAS J. DODD, Connecticut, Vice Chairman

J. G. SOURWINE, Counsel

BENJAMIN MANDEL, Director of Research

SUBCOMMITTEE TO INVESTIGATE THE
ADMINISTRATION OF THE INTERNAL SECURITY ACT

AND OTHER INTERNAL SECURITY LAWS
OF THE COMMITTEE ON THE JUDICIARY,
Washington, D.C.

The subcommittee met, pursuant to notice, at 10:40 a.m., in room 2228, New Senate Office Building, Senator Kenneth B. Keating presiding.

Present: Senator Keating.

Also present: J. G. Sourwine, chief counsel, Samuel J. Scott, assistant counsel; Benjamin Mandel, research director; and Frank W. Schroeder, chief investigator.

Senator KEATING. The subcommittee will come to order.

We are fortunate in having with us today Mr. Samuel Nakasian, an outstanding expert on the subject of Soviet oil.

At my request he has done a great deal of work to bring testimony which he gave in 1954 before this committee up to date. I know we will benefit significantly from his presentation today.

Soviet oil exports are the latest and in some ways the most effective weapon the Soviets have found in their well-stocked arsenal of weapons against the free world.

Ever since the Soviets came to power in 1917, they have looked for methods to undermine the free world. Economic warfare is especially well adapted to their aims of worldwide conquest. Khrushchev has threatened to bury us on more than one occasion.

It is now becoming increasingly evident that he would also like to drown us in a sea of oil if we let him get away with it. The Soviets are dumping oil at bargain prices throughout the world. This is not dumping for economic reasons but for political and military reasons. They are using oil to buy valuable machinery and know-how from the West. They have even succeeded in exchanging oil for the pipelines, valves, and tankers which they must procure from free world sources in order to produce and distribute oil at a rapidly accelerating

rate.

If these tactics continue to succeed, there is danger that Western countries will become increasingly dependent on Soviet oil supplies for vital defense as well as industrial activities. The danger such a situation would pose to the security of the free world cannot be overstated.

Another target of the Soviet oil offensive are the underdeveloped countries, where the Communists offer not only cheap oil, but also

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expert technology and know-how. The Russians offered to develop a national oil monopoly in new countries, teach the newly independent peoples how to run an oil operation, and incidentally how to throw out the private enterprise efforts of the West. Nationalists from Ceylon to Chile are tempted by Soviet promises. Once the Communists get a foot in the door, the political system and independence of the countries become easy prey to subversion.

The free world, while concentrating on Communist military threats, appears to be largely oblivious to these Soviet economic threats. As long as we maintain a military stalemate with the Reds, the economic aspects of the cold war actually may be a more decisive factor in determining whether freedom or tyranny will prevail than the military aspects. Cuba would fall in a month if Soviet oil supplies were cut off. This is just one example of the awesome consequences of this situation.

We must give more attention to these difficult problems of international economics if we are to combat Soviet tactics effectively and realistically. These hearings will serve as a valuable case history on Soviet economic warfare.

Mr. Nakasian will attempt to define the problem for us. We must proceed from that point to determine what the United States is doing and should be doing to meet the problem.

I have looked into this matter at some length, and would offer a number of suggestions for consideration.

In my judgment, the North Atlantic Treaty Organization community must develop uniform policies, not only with regard to Soviet oil imports, but also with regard to the supplying of oil transportation pipeline or other equipment to the Soviets. There must be more public disclosure of Soviet tactics to alert the underdeveloped nations to the extent to which Soviet tactics are injuring them. Finally, there must be a more determined effort to expand oil reserves in other parts of the free world to prevent any undue dependence on Soviet oil in a time of international crisis.

These are some measures we can take. I am sure there are others that will also be necessary if we are to meet the Soviet threat effectively.