To maintain that strong productive economy and to complete our national security, the continuation of the reciprocal trade agreements program is more imperative, today, than ever. The activities of the states in the Soviet bloc, under Kremlin leadership, in pushing for expansion of their foreign trade and their economic penetration in the free world, evidence their determination to compete in that area. Failure to continue our foreign trade policies as exemplified in the reciprocal trade agreements program would serve admirably to advance the Communists' trade objectives and to undermine our own strength. As one looks over the figures of our export and import trade during the years 1950 through 1957, the flow of products back and forth is powerful evidence of the profitable returns to ourselves and to the nations with whom we have traded. During 1957, our exports mounted to a rate of more than $21 billion, and our imports were in the neighborhood of $13 billion. Roughly, for every $2 of import, there were $3 of exports. From their natural resources and other materials plus productive powers of their working people, these foreign lands fashioned the products which they shipped to us and thereby obtained the dollar exchange which went far to permit them to pay for American products which required the work of approximately 42 million American citizens. We, in our country, secured goods which in many cases are vital to our industry and to our national defense, and which are lacking or extremely scarce in our own country. Other items in our imports enabled our people to enjoy some extra satisfaction in their daily living and to secure more economically what they wanted. Our own exports provided in other lands, even more importantly, needed goods and materials which are essential to daily life and which stimulated their industries. Thus our own Nation and all the nations with whom we traded as a consequence of our reciprocal trade agreements program enjoyed the benefits of the type of partnership from which all benefited and which strengthened all. This has been particularly important to many of the newly independent nations striving for a sound economy in order that their social and political systems may be stable, and that the pressures of a low per capita income will not make their people easy targets for Communist propaganda. This factor is weighty, as well, even in the industrialized nations of Europe. The continuing momentous forces promoting our full national security, and our world security, generated by the Reciprocal Trade Agreements Act must be maintained. It cannot be expected that in this effort for strength, we will not find in the wide expanse of our industries, occasional small pockets of weakness which are exposed in world trade competition just as the free competitive system in our own country has exposed them throughout history during our advances in technology, in development of new products, and in the changing desires of the consuming public. The Reciprocal Trade Agreements Act of 1955 broadened the escape clause procedure to take care of these weaknesses. Yet I want you to consider the record of what has happened for, as reported by the 9th edition of the United States Tariff Commission, Investigations Under the Escape Clause of Trade Agreements, reports as of February 1958, 86 applications for escape clause action were filed with the Commission ever since such investigations were provided, as compared with the 59 applications which I discussed with you in January 1955. Thus, the average number of applications per year during the last 3 years has scarcely changed from those filed in previous years. Some of these investigations have been applied for time and again, and in the past 3 years the Tariff Commission has recommended escape clause action somewhat more frequently than previously, and the President has invoked the escape clause 4 times in the last 3 years as against 5 times in the 6 years prior to 1955. It is apparent from these figures that provable harm has been done to very few industries under the recíprocal trade agreements program. H. R. 9505 has been introduced to provide for aid to workers, industrial enterprises, and communities who are injured or threatened with serious injury as the result of imports into the United States. I am confident that your committee, if such a bill is within your province, can work out adequate legislation to take care of real injury. This would be far better, where necessary, than to sacrifice our national security to the clamor which has been evolved from these very few and relatively insignificant situations. You should not permit such situations to swerve you from continuing the demonstrated benefits which the reciprocal trade agreements program has produced. We should not surrender the world, piece by piece, to economic aggression or subversion to any greater degree than we would yield supinely to Soviet military aggression. In the first case, the stakes would be dollars alone; but in the second, it would be millions of precious lives as well as many, many times more dollars. I just want to interject here. During wartime, men are called up for service in the armed services and, as you know, millions of men have suffered death and injury in the defense of our country. We did not hesitate to do that because the national security of the country was involved, and I think the national security of our country is involved today just as much in this trade fight as it ever has been in wartime. And what the veterans who lost their lives and suffered injury underwent for the security of their country, I think is not too much for some of these industries which may not be able to meet the situation but which, as I have indicated can be provided for through legislation; that ought not to be counted as an obstacle to the continuation of the reciprocal trade agreements program. There is, presently, a further reason for the passage of H. R. 12591 as a minimum in the extension of the reciprocal trade agreements program as it has been functioning. Our foreign trade should not be hampered in any way at a time when there are recessionary forces at work in our economy. Not only would such a curtailment damage our own economy, but it would signal to the world that we were obsessed by fear, and fear is frightfully contagious. Extension of the reciprocal trade agreements program for 5 years would be a signal of courage and a proof of our conviction that as a world leader, our Nation is determined to march ahead. Your approval of H. R. 12591 will strengthen our national security in the broadest terms, in our domestic well-being, in a productive 27629-58-pt. 1—46 economy in our own land, and in the improved stability of all the countries on our side of the Communist Iron Curtain. Thank you very much. Senator FREAR. Senator Bennett? Senator BENNETT. No questions. Senator FREAR. Thank you very much, sir, for your testimony. STATEMENT OF OTIS H. ELLIS, GENERAL COUNSEL, NATIONAL OIL JOBBERS COUNCIL Mr. ELLIS. My name is Otis H. Ellis. I am engaged in the general practice of law in Washington, D. C., maintaining offices at 1001 Connecticut Avenue, and am appearing here today on behalf of the National Oil Jobbers Council in my capacity as general counsel for that organization. I would like to state at this time, Mr. Chairman, I will read excerpts from my statement in order to stay within the time limits, with the request that the whole statement be carried in the record in its continuity form. Senator FREAR. Without objection, your complete statement will be made a part of the record. Mr. ELLIS. The National Oil Jobbers Council is a trade group composed of 30 State and regional associations of independent jobbers and distributors of petroleum products. These associations, covering 37 States, represent the greater majority of the thousands of bona fide independent petroleum jobbers in the United States. Following is 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 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 household burning oil consumed in the United States; 35 percent of the gasoline sold and delivered to the service stations; well over 50 percent of all petroleum products delivered to farm tanks; and approximately 60 percent of the residual oil imported into this country. In order to participate to this extent in the sale and distribution of petroleum products, it is necessary that jobbers own millions of barrels of storage capacity and thousands of trucks. Fortunately for the security of the Nation, these storage and distribution facilities are widely dispersed and form our final tributaries of distribution. It is equally fortunate from an economic standpoint that this widespread group of truly independent businessmen still exists and actively competes for the consumers' business. This degree of participation further shows that the jobber is a real party at interest in the outcome of any legislation which would affect the price or supply of petroleum products. THE JOBBERS' POSITION ON CUSTOMS AND TARIFFS The National Oil Jobbers Council has never attempted to take a position with reference to the broad aspects of international trade. They have, however, traditionally opposed legislation or proposed amendments to existing legislation which would specifically restrict imports of either crude oil or products or which could directly or indirectly be used for that purpose. The only exception is the existing escape clause provisions which we feel are adequate to afford all protection necessary to insure a healthy domestic industry while at the same time affording the President ample means of maintaining and improving reciprocity of trade with other nations. In 1955 we opposed the so-called national security amendment to the Trade Agreements Act. While the jobber is just as interested in national security as any other citizen or businessman, we opposed this amendment because we believed that the proponents were merely using national security as sex appeal language to obtain support for an amendment which could be used to camouflage their real intentions which were directed to the end of erecting artificial barriers for their competition, thus enabling the proponents to sell more of their products or production at higher prices to the American consumer. fears appear to have been justified. While this amendment has not as yet been officially invoked, it has been used like a pistol to force importers into complying with a so-called voluntary plan of import quotas. Our It is, therefore, our recommendation that the national security amendment to the Trade Agreements Act either be eliminated or modified in such a way as to insure that the discretionary authority granted thereunder be used only to preserve our national security, and that findings in regard to national security are not in reality an excuse for yielding to pressure groups who have for years sought to have import restrictions imposed on competing commodities or products. Since witnesses representing certain domestic producer groups will not be heard by this committee until a subsequent date, I can only assume that some, if not all, of them will again propose to this com mittee the same amendments to restrict oil imports as they proposed to the Ways and Means Committee in the House. I might add, it is my information that there is a long list of witnesses who will appear on the last day of these hearings to propose restrictions on oil imports. Those of us who oppose that position are placed in a very bad position here, because we have to anticipate what their proposals will be. And at this time, Mr. Chairman, I would like to ask the privilege of submitting a statement subsequent to their testimony, for the record, in response to their proposals. Senator FREAR. I will inform the witness there has been a closing date for the record, and I will inform the witness Mr. ELLIS. I do not ask any extension of the closing date for whatever statement I would have, but it would be within that time, which I understand is July 4. Senator BENNETT. It is interesting that we have a witness who insists on having the last word. Senator FREAR. Rebuttal is not always concurred in here, but we want to have your testimony in relation to the bill and not in rebuttal of others' testimony. Mr. ELLIS. You understand my position, Mr. Chairman. Usually the complainant in a lawsuit appears first and the defendant has an opportunity to hear him. In this instance the complainants who seek change are given the position of a defendant. Senator FREAR. I am sure the chairman of the committee will attempt 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 representatives of some of these groups have stated for publication that, despite their failure in the House, they would renew their request for restrictions on oil imports in the Senate. 7. THE PROPONENTS OF OIL IMPORT RESTRICTIONS Since the amendments proposed by the coal producers and the socalled independent oil producers in the House were identical, it it obvious that these two groups are again in bed together. This, of course, is nothing new, since the two groups have been besieging the Congress, and everyone else who would listen, with their pleas for restrictions on imports of crude oil and residual oil since 1929. I have listened to and read their arguments so much and so often that they have long since taken on the aspect of a broken record. I, in turn, find myself in much the same position in responding to their arguments. It becomes embarrassing to me to have to repeat to this committee the false prophecies which spokesmen for these groups have made to the Congress for the past 29 years, and to again remind the Congress that their prophecies have proven to be generally erroneous. As early as July of 1929, Mr. George W. Lewis, legislative agent of the United Mine Workers of America, in a brief filed with this 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. Lewis failed to tell the committee that the cause of the increase in residual oil imports was principally attributable to the great coal strike in |