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economy in our own land, and in the improved stability of all countries on our side of the Communist Iron Curtain.

Thank you very much.

Senator Freak. Senator Bennett?

Senator Bennett. No questions.

Senator Frear. Thank you very much, sir, for your testimony.

Mr. Otis H. Ellis, National Oil Jobbers Council.



Mr. Ellis. My name is Otis H. Ellis. I am engaged in the gene practice of law in Washington, D. C., maintaining offices at 1001f-i necticut Avenue, and am appearing here today on behalf of the 3 tional Oil Jobbers Council in my capacity as general counsel for d organization.

I would like to state at this time, Mr. Chairman, I will read excei] from my statement in order to stay within the time limits, with request that the whole statement be carried in the record in its c tinuity form.

Senator Frear. Without objection, your complete statement be made a part of the record.

Mr. Ellis. The National Oil Jobbers Council is a trade group cc posed of 30 State and regional associations of independent jobb and distributors of petroleum products. These associations, coveri 37 States, represent the greater majority of the thousands of bona: independent petroleum jobbers in the United States. Following a list of the member associations:

Alabama Petroleum Association, Inc.

Arkansas Independent Oil Marketers Association

California Petroleum Marketers Council (jobber division)

Colorado Petroleum Association

Connecticut Petroleum Association

Empire State Petroleum Association

Florida Petroleum Marketers Association, Inc.

Georgia Oil Jobbers Association

Illinois Petroleum Marketers Association

Independent Oilmen's Association of New England

Indiana Independent Petroleum Association, Inc.

Intermountain Oil Jobbers Association

Iowa Independent Oil Jobbers Association

Kentucky Petroleum Marketers Association (jobber division)

Michigan Petroleum Association

Mississippi Oil Jobbers Association

Missouri Petroleum Association

Petroleum Marketers Association of New Mexico (jobber division)

Nebraska Petroleum Marketers, Inc.

North Carolina Oil Jobbers Association

Northwest Petroleum Association

Oklahoma Oil Jobbers Association

Pennsylvania Petroleum Association

South Carolina Oil Jobbers Association

South Dakota Independent Oil Men's Association

Tennessee Oil Men's Association

Texas Oil Jobbers Association

Virginia Petroleum Jobbers Association

Wisconsin Petroleum Association

Wyoming Oil Jobbers Association

The Jobbers' Position In The Petroleum Industry

independent jobbers distribute approximately 85 percent of the ousehold burning oil consumed in the United States; 35 percent of » gasoline sold and delivered to the service stations; well over 50 Brcent of all petroleum products delivered to farm tanks; and aprosimately 60 percent of the residual oil imported into this country. a order to participate to this extent in the sale and distribution of J'roleum products, it is necessary that jobbers own millions of barrels f storage capacity and thousands of trucks. Fortunately for the rarity of the Nation, these storage and distribution facilities are idely dispersed and form our final tributaries of distribution. It i equally fortunate from an economic standpoint that this widespread toup of truly independent businessmen still exists and actively combtes for the consumers' business. This degree of participation furber ?hows that the jobber is a real party at interest in the outcome lay legislation which would affect the price or supply of petroleum roducts.

The Jobbers' Position On Customs And Tariffs

(The National Oil Jobbers Council has never attempted to take a ttion with reference to the broad aspects of international trade. tfcv have, however, traditionally opposed legislation or proposed Bailments to existing legislation which would specifically restrict Bjiorts of either crude oil or products or which could directly or xiirectly be used for that purpose. The only exception is the lining escape clause provisions which we feel are adequate to afford U protection necessary to insure a healthy domestic industry while t tiie same time affording the President ample means of maintaining Bd improving reciprocity of trade with other nations. hi 1955 we opposed the so-called national security amendment to be Trade Agreements Act. While the jobber is just as interested in wional security as any other citizen or businessman, we opposed this mendment because we believed that the proponents were merely using Ittional security as sex appeal language to obtain support for an Btfndment which could be used to camouflage their real intentions Ikich were directed to the end of erecting artificial barriers for their wnpetition, thus enabling the proponents to sell more of their prodw» or production at higher prices to the American consumer. Our »rs appear to have been justified. While this amendment has not a yrt been officially invoked, it has been used like a pistol to force ffiporters into complying with a so-called voluntary plan of import

It is. therefore, our recommendation that the national security wirndment to the Trade Agreements Act either be eliminated or uglified in such a way as to insure that the discretionary authority framed thereunder be used only to preserve our national security, and ;tat findings in regard to national security are not in reality an excuse ** yielding to pressure groups who have for years sought to have I'Ppn restrictions imposed on competing commodities or products.

Since witnesses representing certain domestic producer groups will be heard by this committee until a subsequent date, I can only that some, if not all, of them will again propose to this committee the same amendments to restrict oil imports as they propoi* to the Ways and Means Committee in the House.

I might add, it is my information that there is a long list of vn nesses who will appear on the last day of these hearings to propc* restrictions on oil imports. Those of us who oppose that position a placed in a very bad position here, because we have to anticipate wli, their proposals will be. And at this time, Mr. Chairman, I would lil to ask the privilege of submitting a statement subsequent to tLe testimony, for the record, in response to their proposals.

Senator Frear. I will inform the witness there has been a clo-'a date for the record, and I will inform the witness—

Mr. Ellis. I do not ask any extension of the closing date for whd ever statement I would have, but it would be within that time, vrhu I understand is July 4.

Senator Bennett. It is interesting that we have a witness who "n sists on having the last word.

Senator Frear. Rebuttal is not always concurred in here, but i want to have your testimony in relation to the bill and not in rebntti of others' testimony.

Mr. Ellis. You understand my position, Mr. Chairman. Usual! the complainant in a lawsuit appears first and the defendant has i opportunity to hear him. In this instance the complainants whose* change are given the position of a defendant.

Senator Frear. I am sure the chairman of the committee will 4 tempt to be as fair as he can within the rules of the committee.

Mr. Ellis. Thank you, sir.

This is a reasonable assumption in view of the fact that represent tives of some of these groups have stated for publication that, despil their failure in the House, they would renew their request for restri^ tions on oil imports in the Senate.


Since the amendments proposed by the coal producers and the » called independent oil producers in the House were identical, it it <A vious that these two groups are again in bed together. This. « course, is nothing new, since the two groups have been besieging tkj Congress, and everyone else who would listen, with their pleas f<^ restrictions on imports of crude oil and residual oil since 1929.

I have listened to and read their arguments so much and so oft« that they have long since taken on the aspect of a broken record. J in turn, find myself in much the same position in responding to ti«l arguments. It becomes embarrassing to me to have to repeat to tia^ committee the false prophecies which spokesmen for these groups hafl made to the Congress for the past 29 years, and to again remind th Congress that their prophecies have proven to be generally erroneoie

As early as July of 1929, Mr. George W. Lewis? legislative ageol of the United Mine Workers of America, in a brief filed with th* committee, recommended a prohibitive excise tax on fuel-oil imports Mr. Lewis at that time stated, in substance, that to permit the continued free entry of millions of barrels of foreign oil would simply mean the wrecking of the great coal industry. Of course, Mr. If failed to tell the committee that the cause of the increase in resid oil imports was principally attributable to the great coal strike i» 1927. It was during that year that industrial users of coal were caused sri-eat and undue hardship because they did not have an adequate supply due to the strike. As a result, they began to look for a new form of fuel that could be supplied with some degree of certainty, and they found it in residual oil, both domestic and imported. It may be recalled that this strike lasted for several months, and as a result the coal industry had 23 million man-hours idle for the year 1927. The coal producers also failed to tell you that at spasmodic intervals thereafter there lias been strike after strike. As a result, industrial users of coal, as well as the operators of large heating facilities, found that coal was not a dependable fuel. Over the years, facilities for the use of so-called residual oil were developed and expanded. In brief, the coal industry itself set in motion a chain ■of events which brought about a necessary competitor. Now they would have you take that competitor from the market place, regardless of the impact it would have on the thousands of companies and persons whose heating units can only be run on residual oil.

On January 31, 1955, a representative of the bituminous coal industry testified before the House Ways and Means Committee as follows:

* • * The increasing flood of oil displaces coal and destroys its market, causes mines to close, impairs the capital investment of the coal industry; retards domestic exploration and development of new oilfields; decreases potential traffic for American railroads; reduces opportunity for livelihood for thousands of coal mine and railroad workers; threatens the existence of thousands of small-business men; and imperils the Nation's security by building up unwise dependence on foreign oil sources.

At that time this same representative advocated:

* • * Restrictions on the total quantity of crude petroleum and products, including residual fuel oil, which may be imported for consumption within the United States to not more than 10 percent of the annual domestic requirements.

Despite the fact that no significant restraints have been imposed on residual oil imports, the coal industry in the years following that presentation saw enormous increase in productivity. Instead of the mine fields being littered with the bodies of starving miners, the situation became quite the reverse and the mines were again full of miners with full bellies who were digging coal with all their might to meet unprecedented demands. It is true there has in recent months been a drop from this peak of productivity in the same manner as our total business economy has dropped. 1 he point I am making is that the record for more than 29 years does not reflect that restrictions on residual oil imports are necessary for this country to maintain a healthy domestic coal industry.

The record of the prophecies of the independent producers is equally as bad, although it is admitted that at the present time our domestic crude oil-producing segment is suffering temporary pains which we believe will be alleviated by the natural course of events in the same manner as the temporary pains complained of by the coal industry in 1953 and 1954 were remedied.

The independent producers, for the past 29 years, have also been predicting doom and destruction for the domestic industry and the Nation as a whole if oil imports were not restricted. Their campaign for restrictions has been even more consistent and persistent since 1948. In the years 1948-49, a subcommittee of the House S Business Committee held exhaustive hearings on the "Effect of Imports on Independent Domestic Producers." During these h ings, represesntatives of the stripper well producers repeated t traditional prophecies that unless imports were restricted, they wr be forced out of business and billions of barrels of oil woulii wasted, since such quantities still existed to be milked from the ea in relatively small dribbles. "We also heard about drilling rigs be stacked and rusting; we heard of the unemployment which was n pant in the oilfields; we heard of tax losses in the various oil-pro: ing States because of reduced production allowables; we heard of depleted number of geophysical and seismograph crews; we he about the inability to obtain capital to continue with an aggrKv program of exploration and development of oil and gas proper; we heard about the giant international oil companies who were ft ing this Nation with oil—all of which would result in economic a in the producing segment of the industry and, of more significi the drastic predictions of the impact of these conditions on our tional security. The lamentations and wails of the independent ducers that were committed to the record were enough to melt hardest heart and to force the most liberal freetrader to copious re Again in 1953 and 1955, when the Trade Agreements Act Wa fore you for consideration, substantially the same groups were again pleading for important restrictions in order to save the tion from economic chaos and military insecurity. Let us look a moment at the cold, hard record between 1948 and the present cite no other authority than the general counsel for the Indepeiu Petroleum Association of America, who has stated on page 107' the Compendium of Papers on United States Foreign Trade Po recently collected and published by the staff of the Subcommitte. Foreign Trade Policy, Ways and Means Committee, as follows

For example, during the period from 1948 to 1957, the domestic oil-proil industry found and develoi>od more than 35 billion barrels of oil in the I." States, or 50 percent more thnn the amount produced during that period, capacity to produce oil in the United States was expanded from less th. million barrels daily in 1948 to an estimated 10,150,000 barrels daily in an increase of about 70 percent. This expansion of capacity exceeded t crease of 60 percent in consumption of oil in the United States.

In the face of dire predictions to the contrary, the producing ment of our domestic industry has this fantastic growth record the period referred to. What other industry in the United St can point to a similar record of achievement and growth, much one that persisted that it was in the throes of a struggle for survi Not only did those years produce fantastic profits for the produ segment but, in addition, it provided the funds which enabled industry to achieve new records in drilling activities every with the exception of 1957. In addition, it also provided the fi that enabled many of the small-and middle-sized companies to ture into exploration and development of crude oil and gas proper in Canada, South America, and the Middle East.

As I reflect on the verbiage which has been expended on this a over the years, there comes to mind a portion of a statement ms< the Ways and Means Committee in May of 1953 by a small oil jjo from Pine Bluff, Ark. This jobber, who began his existence in

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