Mr. HORTON. The testimony of Mr. Simon-and that is the way I understood it was that Executive Order 11703-maybe we ought to have that in the record-assigned the Oil Policy Committee functions on this program to the Deputy Secretary of the Treasury.

Mr. SIMMS. That is correct, sir; that has already been accomplished, as of the date of the Executive order.

Mr. HORTON. Not to the Secretary, but to the Deputy Secretary?

Mr. SIMMS. It has been transferred to the Deputy Secretary has been made the chairman of the committee in place of the Director of OEP. That has already been accomplished. It has nothing legally to do with Reorganization Plan No. 1 of 1973.

Mr. HORTON. I wasn't arguing that. The point I was making was that I thought you said that it had been transferred to the Secretary. Mr. SIMMS. No.

Mr. HORTON. It was not transferred to the Secretary; it was transferred to the Deputy?

Mr. SIMMS. That is correct.

Mr. HORTON. The Deputy Secretary of the Treasury directly. Is that right?

Mr. SIMMS. That is correct, sir. And what I am saying is that section 232

Mr. ROBACK. But there is another function, Mr. Horton, to go to the Treasury, and apparently that function was not transferred because that function was not invested in the President yet.

Mr. SIMMS. That is correct. And that cannot be transferred until at least July 1.

Mr. HORTON. And when the reorganization plan goes into effect, then that function would go to the President, and then it would be transferred to the Secretary. Is that right?

Mr. SIMMS. That is correct, sir.

Mr. HORTON. Is that consistent or inconsistent with what has been done here now?

Mr. SIMMS. No, sir. The Oil Policy Committee that is being transferred is a function separate and distinct from the investigations in the section 232. That could involve any material or any type of import. In the past, they have investigated textiles, miniature bearings, and things of that nature. It may be totally unrelated to oil.

Mr. ROBACK. But it is conceivable-and maybe likely that Mr. Simon will get that assignment?

Mr. SIMMS. Once more, I cannot predict what the Secretary of the Treasury might do.

Mr. ROBACK. What other components in the Treasury deal with import policy?

Mr. SIMMS. I would have to defer on that.

Mr. SIMON. The antidumping and countervailing in the Assistant Secretary's office.

Mr. ROBACK. I am sorry, I didn't get the sense of the reply. Mr. SIMMS. There is an antidumping program that the Treasury now conducts, and it might go to the Assistant Secretary, who is performing the antidumping investigations.

Mr. SIMON. But that is speculation: this has not even been discussed. I would have no idea what would happen in July.

Mr. ROBACK. Does the Treasury have any function relating to import policy that requires a determination of the national security aspects before this plan takes effect?

Mr. SIMON. Yes; the adjudication of countervailing duty laws and antidumping is in the area of national security. And we have been quite active in that area recently, as you know.

Mr. ROBACK. The antidumping is a security matter? Does that not require some economic determination?

Mr. SIMON. Well, it is an economic determination. And I think we can translate there again an economic determination into national security.

Mr. SIMMS. It should be recalled, Mr. Roback, that if you look at the section 232, most of the criteria for determining what affects the national security are economic considerations. In other words, the maintenance of the mobilization base within the United States, the ability to meet future emergencies, and so forth, so that the sectionI think it is "C" of section 232-expressly spells out that you shall take into account the economic impact of imports. So you cannot separate economics from national security. And the Congress has said to consider the economic aspects.

FUTURE OF OIL POLICY COMMITTEE

Mr. ROBACK. Mr. Simon, do you conceive that the Oil Policy Committee is a temporary institution which would be subsumed in an energy policy agency if it were established?

Mr. SIMON. I didn't understand that question.

Mr. ROBACK. Let's assume that the President recommends, and thereis established, an energy policy agency. That is one of the options that is kicking around. And if such were established, would that absorb the Oil Policy Committee?

Mr. SIMON. I wouldn't wish to speculate on what the President might determine as far as coordination

Mr. ROBACK. You can speculate on the logic rather than the intent. Mr. SIMON. I am going to go ahead as if the Oil Policy Committee will continue to function in its present form, period. And that is the mandate the President has given me. And until he changes that mandate, I wouldn't speculate on that.

Chairman HOLIFIELD. Thank you for staying over. We didn't expect you to have to stay this long, Mr. Simon.

Mr. SIMON. Thank you, Mr. Chairman.

Chairman HOLIFIELD. The questioning sometimes becomes rather long. And the chairman can't always control the verbosity of the members, or even of himself.

This meeting stands adjourned until 2:30 p.m.

(Whereupon, at 1 p.m., the meeting was adjourned, to reconvene at 2:30 p.m., the same day.)

AFTERNOON SESSION

Chairman HOLIFIELD. Without objection, Congressman Davis' statement will be included in the record at this point.

(Mr. Davis' prepared statement follows:)

PREPARED STATEMENT OF HON. JOHN W. DAVIS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA

Mr. Chairman and members of the Subcommittee on Legislation and Military Operations, I am glad to have this opportunity to appear before you and take just a moment to address the subject of Federal science reorganization.

As Chairman of the House Subcommittee on Science, Research and Development, I have, over the years, developed a keen appreciation for the benefits this nation derives from its investment in science and technology. It has been my privilege to take an active role in the strengthening of our technological capabilities through the promotion of science education, healthy government-industry relationships and frank discussion of our needs and goals in terms of science, research and development and technology.

It is, therefore, with some alarm that I view the abolition of the Office of Science and Technology and the centralization of scientific advice for the Executive in the National Science Foundation.

As you know, the Office of Science and Technology was created in response to our lagging scientific effort of the fifties. The offices of Presidential Science Advisor and OST Director were lodged in the White House structure and were intended to give technical advice of the sort not otherwise readily available because of proximity and security considerations.

It is my feeling that these offices offered an important area of counsel to our Presidents and despite my very highest regard for Dr. Guyford Stever and the National Science Foundation, I am reluctant to see Executive science advice confined to the NSF to the exclusion of a voice in the White House.

Various observers in the press and scientific community have stated that Reorganization Plan No. 1 of 1973 is merely a recognition of the de facto situation. The argument is put forth that the influence of scientists has been in decline since the mid-1960's and that it is time to recognize this present state of affairs officially.

One argument on behalf of this persuasion is highly evident-the trend of total U.S. investment in R&D which peaked at slightly over 3% of our GNP in 1964 and has declined to our present rate of about 22% of our GNP. (Table 1)

I make this point simply as an introduction to the remainder of my statement, which will show that our domestic policies related to science and technology do not operate in a vacuum, and instead have a very real and tangible impact on our ability to maintain our society successfully.

We operate in a world marketplace, and an increasingly important part of international trade is represented by technology-intensive manufactured products. It is no secret that we have not done well in world trade in recent years. The U.S. went from $6.1 billion in the black in 1965 to $1.5 billion in the red for 1971. Preliminary figures for 1972 indicate that this deficit has nearly quadrupled to $5.8 billion. (Table 2)

TABLE 2.-STRUCTURAL CHANGES IN U.S. MERCHANDISE TRADE,1 SELECTED YEARS, 1960-71

The commodity breakdown in this table slightly differs from that presented in Secretary Stan's testimony of July 27, 1971.

In the category of technology-intensive products, those which are sensitive to R&D investments, our trade surplus remained nearly constant between 1965 and 1970, and then declined from $9.6 billion in 1970 to $8.3 billion in 1971. It seems that the 1972 surplus will be about $6.6 billion, a dramatic decrease for oneyear.

These changes may very well be the result of our decreased R&D effort. The Japanese and West Germans, for example, are spending significantly more than we are for civilian R&D. In fact, if one adds the capitalized value of purchased foreign technology to actual R&D expenditures in order to obtain an estimate of the total effort for civilian R&D, both of these countries, our toughest competitors,. are spending about twice as much as we are, expressed as a percentage of GNP. (Table 3)

1 Both sets of estimates are in U.S. cost equivalent values ("official exchange rate dollars" adjusted for the relative purchasing power of the dollar across the board-GNP-and in R. & D. in the United States vis-a-vis the other countries). 2 Adding capitalized value of purchased foreign technology.

Our trade pattern with Japan is especially disturbing. In 1970 we had a deficit of $1.0 billion in our trade with Japan in technology-intensive manufactured products, and this had risen to $2.1 billion in 1971. It seems clear that the increase in our trade deficit with Japan is due to that nation's domination of trade in high technology products. (Table 4)

TABLE 4.-TRADE IN TECHNOLOGY-INTENSIVE MANUFACTURED PRODUCTS, BY REGION

One other comment about international trade is appropriate at this point. One of the most technology-intensive sectors of the U.S. economy is agriculture. Here we find a constantly increasing surplus in international trade, reaching $2.9 billion in 1972 according to preliminary figures.