The American oil companies engaged in foreign operation were invited by the Director of ODM to participate in this emergency action immediately after the plan received the final approval of the Attorney General.

On October 31 the Suez Canal was blocked; on November 3 the pipelines through Syria were put out of operation. On November 30, the plan was put into action.

These facts are all in the record, and so are these: Under the circumstances the great, urgent, overriding problem when the emergency struck was this: to get as much oil to Europe as we could, and to get it there as fast as we could.

The problem had to be solved with the resources at the Government's command. I am aware of no existing law by which the Government could seize the oil industry. The Government had to rely on the existing voluntary agreement and on the provisions of the Defense Production Act of 1950, as amended.

The Middle East oil crisis is of such importance that it is, of course, of the greatest concern to the American people, to the Members of Congress, and to every individual in the administration.

There is no question that because of the emergency plan oil has been moved to Europe that would not otherwise have been moved there. But the Committee's action under the plan is only 10 weeks old. Some weaknesses have developed; steps have been taken to correct them. Undoubtedly other weaknesses will turn up. If so, steps will be taken to correct them.

As an encouraging indication of the accomplishments under the plan, I would like to submit to this committee a report which I received last evening from Mr. Ralph Fowler, director of the plan of action, and Assistant Director of the Office of Oil and Gas of the Department of the Interior.

This report is on figures projected by the OEEC for the first quarter of this year, figures which tentatively answer this question: Assuming that there will be no change in the present supply conditions, how does the volume of oil products which will be available in Europe compare with the volume of the normal demand?

According to these figures, and these are the best European source of information about the plan's effectiveness, it is estimated that in the first quarter the available supplies will come to 76 percent of the normal demand for gas and diesel products; they will come to 79 percent of the normal demand for fuel oil; they will come to 87 percent of the normal demand for motor gasoline; and, finally, they will come to 80 percent of the normal demand for all types.

I would like to emphasize that these are normal demands, not just Europe's restricted requirements under rationing.

These figures are the most significant answer we have to an overriding question: Exactly how much has the plan helped Free Europe? But there are also questions which concern our own domestic economy. Although we have no authority to require that information be presented to us concerning the cost of producing, refining, and transporting petroleum products, although we do not have access to the information on which the oil industry makes its pricing decisions, the matter of price is inevitably of continuing interest and concern to every American citizen.

The MEEC, however, has no function with respect to the price of oil and gas. The Committee was created under a voluntary agreement made and approved under section 708 of the Defense Production Act prior to the 1955 amendments to that section of the act.

The voluntary agreement deals with supply and requirements and does not authorize any sort of voluntary joint action on prices.

I am advised that vountary agreement on oil prices generally could not now be entered into by reason of the 1955 amendments to the Defense Production Act which forbid new agreements except among defense contractors with respect to their military production.

There are other principles which have guided us. On December 14 of last year, in my remarks before the National Petroleum Council, I said, and I quote:

A few principles have guided our efforts to date and will continue to guide our efforts until oil from the Middle East flows normally again.

The first principle is: Let the industry handle this problem to the maximum extent possible with the least Government interference consistent with the national interest and Federal law.

The Middle East Emergency Committee was created to meet a Government need. The plan of action under which it operates was developed jointly by Government and industry, and approved by Government, as a means of permitting the industry to take actions to supply oil to Europe.

Government gave industry extraordinary freedom-including certain immunity under the antitrust laws. Government has an obligation to review the actions of the Middle East Emergency Committee. We gave the American petroleum industry tools to help solve a mutual problem. At the same time, the Govern ment holds the "checkrein."

The second principle is: The increased flow of Western Hemisphere oil to Europe and the rest of the Free World must not result in petroleum shortages in the United States. The American petroleum companies represented on the Middle East Emergency Committee must be constantly alert to the effect of their proposed actions on the supplies of oil for the American people.

And I continued:

The third principle is: Efforts will be made to keep to a minimum the adverse effects on the various segments of the petroleum industry.

Here, the administration has only limited authority granted by the Congress. You in the petroleum industry must by your own actions ward off adverse effects on other segments of your industry.

A question frequently raised is: "What will happen to prices?"

The administration has no authority to control prices. The industry must be fully aware of and is responsible for the effects of any price changes it makes. The fourth principle is: To meet the objective without burdensome controls over the petroleum industry.

The administration believes and hopes that this can be done through the voluntary cooperative action of Government and industry.

The fifth principle is: The Federal Government will not encroach upon States rights.

In the solution of this petroleum problem, the Federal Government will rely on cooperation and support of the oil regulatory bodies of the States. There is no reason to believe that the States will not by their own individual actions render maximum support to this program.

I feel certain that the American people will welcome any solid and factual information on this entire subject. In particular I believe it would be helpful to know just exactly what the effects of price control would have been on the small independent oil producers, as well as on the supply to Europe.

It goes without saying that I believe that if there have been any antitrust violations, those guilty should be prosecuted to the fullest extent of the law. I am personally happy that a Federal grand jury is undertaking a review of this subject.

In the effort to bring out reliable public information on this subject, I feel certain that every official in the Government is ready to do his part. I need not emphasize that there are risks in a public official's expressing an opinion on a subject on which he has no information or inadequate information; his statement, as you well know, can be mistakenly assumed to be authoritative and therefore true.

But I have never told a subordinate not to answer the questions of a committee of the Congress. Beyond mentioning the above precaution, I should say that I am for the fullest and freest possible exchange of factual and accurate public information. I have consistently taken this position, as a member of both the legislative and executive branches of the Government.

Thank you very much, Mr. Chairman, for the opportunity to make this statement here today.

Senator O'MAHONEY. May I say, Mr. Secretary, that in your relations with me before Congress had assembled, you have adopted the precise attitude which you describe in the closing remarks of your statement. You have shown every desire to cooperate, to make any changes that might be necessary. When I did suggest some changes, namely, that the MEEC should not be solely a committee of one branch of the petroleum industry but should include independent producers and independent refiners, you immediately gave directions that steps should be taken to bring independents into the organization. The Frontier Refining Co. was invited, and did accept. It was the only one that did. Your Department made every effort, through Secretary Wormser and Mr. Stewart, to bring in independent producers. But the Independent Producers Association of America, as testified here by Mr. Brown the day before yesterday, felt that the interests of the independent producer were so at variance with the interests of the integrated companies that it chose not to be represented upon the committee.

You have, however, succeeded in obtaining consultative services from some independent producers and some independent refiners, I think. Perhaps it would be well at this point in the record to have the whole list of those who have accepted assignment, as independents, placed in the record.

Secretary SEATON. We will see that that is done, Mr. Chairman. Mr. Chairman, I am advised that list is on its way; it has not yet gotten here and, with your permission, we will see that it is provided. Senator O'MAHONEY. Yes. That, of course, will be done.

Senator O'MAHONEY. The Chair has received a letter from Senator Gordon Allott, of Colorado; and Senator John A. Carroll, of Colorado, a member of this committee, has received a letter from George A. Cavender, councilman of district 2 of the city of Denver. Both of these letters are designed to present for the consideration of the committee a resolution which was adopted by the city council of the city and county of Denver, memorializing the Congress to inquire into the rising price of gasoline and the profits of the oil industry. Since the request was made by both these Senators, it will be made a part of the record at the close of today's proceeding. Of course, the committee has been doing precisely what is requested.

Senator Dirksen?

Senator DIRKSEN. Mr. Seaton, I do not know how closely you have had a chance to follow the proceedings of this committee, but I think

it is rather fair to state that, as we have gone along, there has been a very considerable emphasis on the fact that the companies who operate in the international oil field were put on the MEEC. Then there has been some emphasis on the fact that some of them are in the toils of the Department of Justice under pending antitrust suits.

Now, it may not have been explicitly expressed, but I think at least there was an inference that perhaps this was not quite the way to proceed, and that Interior and ODM might have proceeded in another fashion, namely, to put this under the direction of the Government itself, and to staff some kind of a committee with governmental appointees and let them run the show.

I believe I raised that question with Dr. Flemming, and I asked him specifically the other day, if he had followed that plan, how long it would have taken to put an effective organization in the field. And I believe his reply was, about 6 months.

Now, I note that you put the emphasis on getting oil to Europe just as quickly as possible, and with that I thoroughly agree. Have you some opinion as to whether any alternative plan, other than the one which was followed, would have gotten oil there more quickly and in larger quantities, or would there have been a delay and difficulties of one kind and another which would have impeded rather than accelerated progress under this plan?

Secretary SEATON. Well, Senator Dirksen, I would have to reply to that on the basis of the advice which I received from appropriate officials in the Department of the Interior and Dr. Flemming.

The matter was discussed several times, I understand; and it seemed to me then, and it seems to me now, that the burden of proof was all in the direction that, if we had attempted to proceed with a Government organization such as you indicated that it very conceivably could have resulted in considerable delay.

I was under the impression then, and now, that it was necessary to get this oil to Europe, as I said in my statement, as much as possible and as quickly as possible.

I also understand that in all the proceedings of the committee, that the Government participates. The Department of Justice is there in all the meetings of the full committee, and I believe of the various subcommittees.

I also understand that there is a postoperative audit which is conducted purely by the Government, and I am under the impression that the national and the public interests are being thoroughly protected, sir.

Senator DIRKSEN. I have no further questions.

Senator O'MAHONEY. Senator Wiley?

Senator WILEY. I want to compliment the Secretary on what I call a succinct, clarifying statement, at least for me.

Unfortunately I have been absent from the committee for a number of these hearings, having to be present at the joint committee sessions which passed upon the resolution proposed by the President for the Middle East.

I get from your last answer that, in your opinion, no alternative could be found under the circumstances as they existed, as presented in your statement, which could have done as good a job as was done. Secretary SEATON. Yes, Senator; that is what I intended to say, sir.

Senator WILEY. Now then, is there anything which indicates that the oil companies have fallen down, under the facts and circumstances as they existed, in their meeting head on the challenge in Europe?

Secretary SEATON. So far as the Middle East Emergency Committee is concerned, I am not aware of that; no, sir. We have not achieved a hundred percent of the target that we set out to achieve, but we have come very close to it. And, of course, the companies by themselves cannot control the entire production and transportation facilities.

Senator WILEY. I understand that you are not in position to pass upon the rise in price.

Secretary SEATON. No, Senator; I don't think I am. I do not think I am in possession of the facts which would warrant my giving an opinion on that subject.

Senator WILEY. I think, Mr. Chairman, that is all.

Senator O'MAHONEY. Senator Barrett?

Senator BARRETT. I came in a moment late this morning, and I did not hear all of your statement. But I believe you testified that the normal requirements for Western Europe, particularly as to crude oil and fuel oil and distillates, and so on, have been met upward to 80 percent; am I correct on that?

Secretary SEATON. On the average, that is right; yes, sir. Some of those individual items are higher.

Senator BARRETT. I noticed in the press this morning where the president of Standard of New Jersey made a similar statement.

I am very curious to know how it is that certain officials in the Department of the Interior had been advising this committee and the public generally that only 50 percent of the normal requirements for Western Europe had been met.

Secretary SEATON. Well, Senator Barrett, I do not know that that is in the record, and I do not know that it is not, either, sir. But about 10 days or 2 weeks ago, Mr. Fowler was sent to Europe by the Department of the Interior, specifically by the office dealing with this subject, to bring back with him the latest accurate figures on the European oil situation.

I have every reason to believe that those figures which he provided me last night, and which I quoted in this statement, are correct.

Now, I am sorry I am not in position to explain any discrepancy in testimony, because I did not hear it; much of it I have not seen. I am not trying to evade your question. It is just simply I do not know.

Senator BARRETT. The point I would like to be enlightened on is this: General complaint has been heard that the industry has fallen down on its commitment to supply the requirements for Western Europe as best they could; and what I am curious to know now is, did all this complaint arise because of the fact that European nations were clamoring that the crude oil and oil products have not been forthcoming? Where did it originate?

Secretary SEATON. I am sorry, Senator, what originated?

Senator BARRETT. Who made the complaints? Did the European countries say this oil is not coming over? Where did the complaints come from?"

Secretary SEATON. As I understand it, they came from a variety of sources, Senator, both in and out of the Government. I think one of