STATEMENT OF THE MANAGERS ON THE PART OF THE HOUSE

The managers on the part of the House at the conference on the disagreeing votes of the two Houses on the amendments of the House to the bill (S. 203) to increase the equipment maintenance of rural carriers 1 cent per mile per day traveled by each rural carrier for a period of 3 years, and for other purposes, submit the following statement in explanation of the effect of the action agreed upon by the conferees and recommended in the accompanying conference report:

The bill as passed by the Senate provided for an increase of 1 cent a mile in the equipment maintenance allowance of rural mail carriers, such increase to be in effect for a temporary period of 36 months.

The House struck out all of the Senate bill after the enacting clause and inserted substitute language. The language inserted by the House, however, was identical with the language of the bill as it passed the Senate, except that it provided that the temporary increase should be in effect only for a period of 1 year.

Under the conference agreement the increase would be effective for a period of 2 years.

The amendment to the title contained in the conference agreement merely conforms the title to the text of the bill as agreed upon by the conferees.

EDWARD H. REES,

WILLIAM C. COLE,

ANTONI N. SADLAK,

TOM MURRAY,

JOHN E. LYLE,

Managers on the Part of the House.

MARCH 9, 1948.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. HESELTON, from the Committee on Interstate and Foreign Commerce, submitted the following

REPORT

[To accompany H. J. Res. 323]

The Committee on Interstate and Foreign Commerce, to whom was referred the joint resolution (H. J. Res. 323) to temporarily prohibit the exportation of petroleum and petroleum products, having considered the same, report favorably thereon with amendments and recommend that the joint resolution as amended do pass.

The amendments are as follows:

Page 2, in lines 6 and 7, strike out "petroleum or petroleum products from the United States to any foreign country." and insert in lieu thereof the following:

kerosene, gas oil and distillate fuel oil, or residual fuel oil, from the east coast or Gulf coast of the United States to any foreign country; except that

(1) exports of any such product necessary for use by the armed services of the United States may be made; and

(2) this joint resolution shall not require reduction of exports so as to reduce the imports into the Dominion of Canada from the United States below amounts conforming with the voluntary import-reduction program heretofore undertaken by Canadian authorities and Canadian industry.

Amend the title so as to read:

Joint resolution to prohibit temporarily the exportation of certain petroleum products.

30-DAY EMBARGO ON KEROSENE, GAS, OIL, AND DISTILLATE FUEL OIL, AND RESIDUAL FUEL OIL EXPORTS

Despite assurances last summer by the oil industry that, in general, demands for heating oils this winter would be met with only occasional spot shortages, the eastern seaboard and Middle West have undergone a very serious situation. Homes have been cold, industries have been closed down, schools have been closed, and hospitals seriously threat

ened-all for lack of fuel oil. Only by dint of strenuous efforts through joint industry, local, and State cooperation in the distribution of quantities of pooled fuel oil has the situation in many areas been prevented from becoming catastrophic.

In the meantime, substantial exports of fuel oils have been made. Such exports in 1947 were materially over those in 1946. In the categories of kerosene and lighter fuel oils, they reached some 35,000,000 barrels.

These exports are under the control authority of the Department. of Commerce through delegation from the President under various laws starting with Public Law 703, Seventy-sixth Congress.

On December 19, 1947, after hearings, this committee in a committee resolution called for the exercise of this control authority

to place such prohibitions or curtailments on the exportation of fuel oil and other petroleum products for such period of time as may be necessary to alleviate such shortages.

On January 2, the Office of International Trade of the Department of Commerce announced that a quota of 12,000,000 barrels of petroleum products had been established for the first quarter of 1948 for licensing to those countries to which exports were under license control. In the press release the Office stated:

This quota continues the policy of restricting exports of major petroleum products to the maximum extent possible until the current domestic shortages are alleviated.

The 12,000,000-barrel-figure quota compares with shipments of more than 17,000,000 barrels in the first quarter of 1947.

Analysis of these quotas, however, made by the committee indicated that far from evidencing a reduction in the ratio of 17 to 12, the quotas established for the critical categories of kerosene, gas, oil and distillate fuel oil, and residual fuel oil represented a reduction from actual shipments in the first quarter of 6,650,000 to 5,900,000 barrels. The firstquarter quota furthermore represented a reduction in these critical categories of only 100,000 barrels from the fourth-quarter quota of 6,000,000 barrels.

It was further developed in the committee hearings last December that shipments to Canada were not under export-license control and, in fact, for the first 9 months of 1947 had represented startling increases over the same period in 1946, such as 2,695,816 barrels of kerosene compared with 109,309; for gas and distillate fuel oils of 4,618,785 compared with 1,183,331, and for residual fuel oils of 1,720,395 compared with 1,364,106.

The Department of Commerce on January 2 also announced that as the result of a conference between Canadian and American authorities, the petroleum industry of Canada had agreed to reduce its imports of finished kerosene stove oil, furnace oil, and Diesel oil from the United States during the month of January 1948 to 50 percent or less of the monthly average of imports in the first quarter of 1947. It was developed by the committee that such reduction was deemed possible in view of the relatively greater stocks on hand of these oils in Canada than prevailed in inventories on the east coast.

In view of the relatively small reduction in export licenses of petroleum actually proposed in these critical categories by the Department and further in view of the apparent fact that in the case of Canada where information was obtained regarding stocks, it was evident that

a substantial reduction in exports from this country could be made without serious impairment of the economy of the foreign countries, and further in view of the increasing severity of the shortages in fuel oils on the eastern seaboard, the committee on January 24 recommended the immediate cessation of the exportation of all petroleum products.

In this connection, the committee said:

It is evident that the shortage of petroleum products in this country, especially of distillate fuel oils, is presently exceedingly severe. The various estimates of their abilities to meet the critical situation, particularly in New England and the Midwest, given to us by different companies in the oil industry were predicated upon there being a normal winter without any undue cold spell. The increasing evidence on shortages indicates that the estimates as to supplies and weather were much too optimistic.

Exports of distillate fuel and residual oils continue.

It appears that the situation is now so grave that exports should be stopped completely until it can be determined whether further exports are damaging to the economy of this country.

Such recommendation was predicated not only on the expressed short supply of these critical fuel oils in this country, but also on the need for diverting additional tankers to plying the domestic trade routes in moving such supplies as were available.

On January 27 the committee heard testimony by the Department of Commerce on the actions which it had taken to curtail exports. In this connection, the committee pointed out that the January 2 announced quotas for the first quarter in effect had meant little reduction in the critical fuel categories. The committee further was unable to develop a clear picture of the extent to which these exports were required by the countries to which they went; of the degree of screening given by the Department of the needs of these various countries, of the stocks on hand in these countries, of their other sources of supply, or of the conversions to fuel oil that might be taking place-giving rise to the increased imports from here.

On January 30 the Department of Commerce announced a further reduction in the first-quarter quota in petroleum products to the countries under export license control, expressing this in press releases as a "18% percent" reduction from the first announced quota. This second announced quota represented the first substantial reduction in the fuel-oil categories, amounting to 1,600,000 barrels less than the 6,000,000-barrel fourth quarter 1947 quota.

In addition, during testimony by the Department of Commerce and by representatives of the Army-Navy Petroleum Board, the committee developed that concerning the 2,025,000 barrels of fuel oils initially authorized by the Department to be shipped during the first quarter by military authorities to the occupied areas of Japan and the Ryukyu Islands, there had been presented no supporting justification for this substantial amount. On January 30, the Department announced that a 1,500,000-barrel reduction in gas, oil, and distillate fuel oil shipments to the above areas had been determined upon as able to be made.

The Department of Commerce also at this time reported to the committee that negotiations were almost completed for a continuation of the agreement with Canada whereby the reduction in effect during January would be continued through the succeeding 3 months.

In the light of the various reductions that thus were effectuated upon the insistence of the committee, it appeared to the committee that further reductions well were in order. This opinion was based on the fact that most of the reductions already initiated had been made, seemingly, without any complete knowledge on the part of the Department of Commerce of the essential needs, stocks, and sources of supply of the countries involved. The committee, accordingly, pressed for further reductions in view of the continuing seriousness of the situation in this country.

The Departments of Commerce and State followed by seeking cable advice from our various embassies abroad on the minimum needs of those countries during this critical period at home. A tabulation of the replies received showed that further reductions were deemed feasible amounting to some 1,198,000 barrels in the first quarter to the countries under which exports were under license control. The Department of Commerce, however, then instituted arbitrary reductions amounting to only some 50 percent, or 599,000 barrels, of this indicated practical reduction.

In the meantime, cold weather continues in the shortage areas with the fuel situation still grave. It is felt that this gravity might be mitigated, in view of the passage of most of the winter, by the receipt. in these areas of four or five tanker loads in addition to those projected. It appears, therefore, to the committee that the only way in which further reduction of exports can be effectuated, in view of the attitude of the Department having jurisdiction, is through a temporary embargo. It appears that a temporary embargo would alleviate the situation here at home. This situation must be corrected. On the other hand, while it might be argued that the domestic situation must be met regardless of the effect abroad, it appears on the basis of facts as presented to the committee regarding the current basic requirements of the foreign nations, no especial injury would occur to them. The embargo at this time proposed by this joint resolution covers only the fuel oils. This limitation is a result of the fact that tanker availability is much better at this time than several months ago so that restrictions on other products to force diversion into fuel oils

now seem unnecessary.

The embargo now proposed further relates only to the Gulf and east coast inasmuch as it now seems with the practicalities of time limitations and supply at this time there is no need for restrictions on exports from the west coast.

The embargo does not apply to shipments for use of the military services abroad. It does not apply to the relatively small shipments made to localities across and adjacent to the Mexican and Canadian borders. With respect to the entire Canadian export situation, it proposes no change from the present understanding regarding rates at 50 percent of last year.

This joint resolution, as amended, would impose an embargo on the shipments of kerosene, gas oil, and distillate fuel oil, or residual fuel oil from east and Gulf coast ports in the United States to foreign destinations for a period of 30 days from its enactment. It would, however, exempt any shipments required to fulfill our military services' needs and, also, would not affect the voluntary arrangements which have been entered into for a 50-percent reduction on exports to Canada of these petroleum products, now effective until March 31.