OFFICE FOR EMERGENCY MANAGEMENT, [For immediate release, October 10, 1941.] A comprehensive investigation of the Mid-Continent crude oil situation has been begun by the Office of Price Administration in cooperation with the Office of the Petroleum Coordinator, Leon Henderson, Office of Price Administration Administrator, announced today. The study was undertaken as result of suggestions from several leading MidContinent producers that a general price increase is desirable. The investigation will cover analysis of data submitted by the producers and studies of the cost of producing oil. Basic economic considerations and the role of petroleum in national defense also will be explored. The producers have been advised that no general change in Mid-Continent crude prices should be made pending completion of the survey. [Advance release: For Sunday morning papers, December 7, 1941.] OFFICE OF PRICE ADMINISTRATION A comprehensive study of crude-oil production costs throughout the United States is being undertaken by the Tariff Commission at the request of the Office of Price Administration, it was announced jointly today by Raymond B. Stevens, chairman of the Commission, and Leon Henderson, Administrator of the Office of Price Administration. The study is an expansion of the investigation of Mid-Continent crude-oil production costs announced recently. Field work and subsequent compilation of the data will be done by the Tariff Commission which has conducted a similar study of the industry in the past. Staffs of the Petroleum Coordinator's Office and the Office of Price Administration will cooperate with the Tariff Commission staff in making the study. Data collected will be used by the Office of Price Administration in formulating price policies on crude petroleum. Questionnaires are being sent today to approximately 10,000 crude-oil producers in the United States, accounting for an estimated 95 percent of crude-oil production. By far the bulk of those receiving the request for data will be small independent producers. An endeavor is being made to send questionnaires to every producer in the United States wishing to submit data. If anyone should be omitted, it is requested he obtain forms from either his local association or by writing the Tariff Commission at Washington, D. C. It is hoped that all the smaller producers will return the questionnaires promptly as, among other matters, a study will be made as between large and small producers and flush and stripper wells. Material asked for includes information on costs entering into the production of crude oil and the discovery of new crude-oil reserves, engineering and oil reserve data, and earnings data. The questionnaires are to be completed and returned not later than January 31, 1942. It is hoped, however, that much of the data will be submitted before that date in order to complete the study as rapidly as possible. STATEMENT OF DR. E. W. SHEETS, SECRETARY, UNITED STATES LIVE STOCK ASSOCIATION, SEWARD, NEBR. Senator BROWN. I thought Senator Butler wanted to be here when you presented your statement. Dr. SHEETS. I think I can handle the situation if you will give me a few minutes. Senator TAFT. He is probably persuaded already. Dr. SHEETS. My name is E. W. Sheets. I am secretary of the United States Live Stock Association, with headquarters at Seward, Nebr., of which Mr. D. M. Hildebrand is president. I represent also the American Pork Producers, Associated, of which F. Alvin Park, of Peoria, Ill., is president; the American Soy Bean Association, of which Mr. David G. Wing, of Mechanicsburg, Ohio, is president; American Fats and Oils Producers, including among others, cottonseed, soybeans, and livestock; the commissioners, secretaries, and directors of agriculture, through a committee of five from this organization, being represented in Washington by Commissioner H. K. Thatcher, chairman, of Arkansas. I have a telegram from the president of the United States Live Stock Association, Mr. D. M. Hildebrand, which reads as follows [reading]: Dr. E. W. SHEETS, Washington, D. C.: Secretary of Agriculture Wickard claims present war will be won by producing more food. Our farm and livestock producers are confronted with a labor shortage and higher production costs, and should be given the same protection as labor and industry, and if a ceiling on agriculture and livestock commodities is necessary same should be on a basis that is fair to those that are providing the food to carry on. I also have a letter from Mr. David G. Wing, president of the American Soy Bean Association, reading as follows [reading]: The American Soy Bean Association takes the stand that since we have a national emergency in fats and oils, and since our supplies are very likely to be cut off from the Philippines, and since Department of Agriculture has encouraged an increase in the production of soybeans for 1942 that price of soybeans and its two chief products-oil and soybean meal-should be set at a level high enough to be in line with industrial prices and labor. The soybean grower and farmer does not object to necessary price ceilings, but we demand treatment on a basis in keeping with accorded labor and other industries. I also have a telegram from Mr. Alvin Park, president of the American Pork Producers, Associated, which is as follows [reading]: Please appear before Senate Banking and Currency Committee in behalf of American Pork Producers Association protesting price ceilings on lard. We pork producers ask only equitable prices for our products equal with other groups. If we were paid union wage scale for hours put in producing pork, what would the price be? Clearly it could then never be a lease-lend item. Government cannot force proposed price ceiling and also ask us to increase production. Fork, lard, and pork products are one of our best energy-producing foods, not only for Army but also for civilian workers. Cannot understand why ceiling is placed at proposed figure. If food will help win the war, help write the peace, and be of tremendous value in post-war period, we must have more favorable consideration. With your permission, Mr. Chairman, because of the lateness of the hour, if I may submit a brief statement for the record I will take this opportunity in a few minutes to summarize and to point out specifically the matters to which I wish to direct your attention. Senator BROWN. Do you want to make a brief oral statement and then submit a written statement? Dr. SHEETS. Yes; to follow.. Senator BROWN. That is entirely satisfactory to us. Dr. SHEETS. One of the points to which I wish to call the attention of the committee, and which I know has not escaped your attention, is the fact that for the purpose of testimony practically all witnesses have referred to August 1939, as the starting point, as if all prices during August 1939, were normal and as if farm products had attained so-called price parity, and that everything which has happened since that time should be labeled "inflation.” With much of this testimony I cannot agree. Neither with the purpose for which it was presented nor with the assumptions which have been arrived at and presented, because the measure before your committee frankly and honestly recognizes parity price as the basic measure or starting point from which inflation is to be measured. In that connection I would like to submit the facts and figures from Government statistics to bear out that contention. It is important to examine the price structure back for a period of at least 5 years to determine at what point or points prices received by farmers were on a par with prices paid by farmers, that is, points or dates when price parity existed. I have here a table showing by the use of index numbers prices received by farmers for seven important groups of farm products, together with index numbers of prices received for "all farm products" and prices paid for "commodities purchased." The last column shows ratio of prices received to prices paid. The data in the table covers each month from January 1937 through September 1941. (The table referred to and submitted by the witness is here reproduced as follows:) |