BIOGRAPHICAL SKETCH OF CAPT. AUSTIN C. WAGNER, U.S. COAST GUARD

Born on May 24, 1919, in New York, Austin C. Wagner attended Mount Vernon High School, Mount Vernon, N. Y., Severna School, Severna Park, Md., and Lehigh University, Bethlehem, Pa.

He graduated from the U.S. Coast Guard Academy, New London, Conn., with a B.S. degree and a commission as ensign on December 19, 1941, shortly after the bombing of Pearl Harbor.

During World War II, he served his first assignment on board the Coast Guard combat cutter Campbell on North Atlantic convoy escort duty until June 1943, during which the cutter attacked four submarines and sank a fifth in February of 1943. During the remainder of the war he served first as executive officer and then as commanding officer of the destroyer escort U.S.S. Rhodes (DE-384) in the North Atlantic. He received a commendation ribbon for outstanding duty while commanding that vessel during the rescue of six survivors from oil and gasoline surface fires resulting from the collision between the tankers Nasbulk and Saint Mihiel on April 9, 1945.

Between August 1945 and August 1948, he served as adviser and instructor in the establishment of a Coast Guard for the Korean Government. During the following 2 years, he was director of the Coast Guard Auxiliary and recruiting officer in the Chicago area of the Ninth Coast Guard District. In September 1950, he became executive officer of the Coast Guard cutter Dexter, a 311-foot ocean station patrol vessel operating out of Alameda, Calif.

From September 1951 to July 1955, he was stationed at the Coast Guard Academy as instructor of seamanship and navigation and as sailing coach. He next commanded the 311-foot cutter Castle Rock out of Boston, Mass., on ocean station patrol in the North Atlantic until August 1957. At that time he was reassignel to the first district office in Boston as diretcor of auxiliary and as public information officer.

In July 1960, he was assigned to Coast Guard Headquarters, Washington, D.C., where he first served as assistant chief and then as chief, special services division, office of personnel, for 4 years. His duties in that post dealt with medals and awards, morale and discipline, survivors benefits, and personnel security among others.

Captain Wagner served his next tour of duty as commandant of the cadets at the Coast Guard Academy from July 1964 to July 1967. At that time he assumed his post as commanding officer of the Coast Guard Base, St. George, Staten Island, N.Y.

In June 1968, he became commanding officer, Coast Guard Base, Governors Island, N.Y.

Captain Wagner's World War II campaign service medals and ribbons include the following: American Defense; American Area; European-African-Middle Eastern Area (with three battle stars); Asiatic-Pacific; Navy Occupation for his Korean service, as well as the Navy Commendation Ribbon. He also has the National Defense Service Medal and Ribbon.

He was promoted in rank as follows: Cadet, August 5, 1938; ensign, December 19, 1941; lieutenant (jg.), October 1, 1942; lieutenant, May 15, 1943; lieutenant commander, October 3, 1945; commander, June 1, 1956; captain, July 1, 1963. Captain Wagner was married on August 7, 1942, to the former Elaine C. Wagner (correct) of Delmar, N. Y., a graduate of the Connecticut College for Women. They have three sons, Keith (Feb. 16, 1944); Cort (Dec. 10, 1949); Craig (March 24, 1951).

Nominated for rank of rear admiral, June 5, 1970.

STATEMENT OF DONALD BREWER

Senator HARTKE. Mr. Brewer, do you have a statement you would like to make this morning?

Mr. BREWER. Thank you Mr. Chairman. I believe not.

Senator HARTKE. Mr. Brewer, we are involved in a time in which the Interstate Commerce Commission is the subject of some discussion, especially in light of the recent events concerning the Penn Central Railroad and the potentials of what may happen to some of the other railroads.

Can you tell me why you think you can make a valuable contribution to the Government by virtue of service on the ICC?

Mr. BREWER. Yes, thank you Mr. Chairman. I am delighted to have this opportunity to appear before you and to answer your questions.

I believe and hope that my experience in Government, many years of which was dealing directly with transportation problems, 10 years as a postal inspector throughout the United States and Alaska, as an investigator, and as an administrator for many years, as regional director of the Post Office Department with 1,400 post offices, 18,000 employees in the Rocky Mountain area that was facing very many difficult problems in the transportation of mail, I have ridden many RPO's, talked to many railroad people, negotiated contracts with many star route carriers, buses, and other means of transportation.

Following that, in the financial area as president of a corporation I can see it from the shippers' viewpoint, I know the problems of the small shipper, I know some of the problems of trying to get your products moved and in my company we had a fleet of our own common carrier trucks, private carrier trucks, which seems to me to be some indication of understanding of their problems.

In the last year I have spent a considerable amount of time dealing with transportation problems, particularly in the Four Corners area. I was able to develop a comprehensive plan, a long-range comprehensive plan for the Four Corners Commission.

Among the top priorities of that Commission was development of better transportation system for the underdeveloped areas of the 92county area.

Based upon that I think maybe I would be able, hopefully, to gather together the right kind of information and assess it and make a judgment from it.

Senator HARTKE. Mr. Brewer, have you made any special studies concerning the recent circumstances surrounding the ICC's hearings we had here concerning oversight?

Mr. BREWER. Yes, I have read the hearings you presided over, and I certainly have looked into it as carefully as I could in the time I have had.

Senator HARTKE. Have you come to any conclusions about what changes, suggestions, or proposals, if any, you might have for the Interstate Commerce Commission?

Mr. BREWER. Well, I think it would be probably a little presumptious at this time to say I have come to any definite conclusions.

I have been trying to get an input, as much information as I could. I do believe in all sincerity you have made a valuable contribution in your hearings, from the consumer viewpoint, from the shipper viewpoint, from all viewpoints. I think we are in a crisis in transportation and I would hope that working with the other commissioners I would be able to make a contribution by finding solutions to some of these vexing problems.

Senator HARTKE. Have you studied the ICC staff study on conglomerates?

Mr. BREWER. No, I have not. I do have some views on conglomerates which I will later on try to use when I get on the Commission. Senator HARTKE. What are some of those views?

Mr. BREWER. I think very careful studies have to be made as to whether conglomerates are good or bad, whether they solve anything or whether they don't. I am reminded, as just a background thought, of the Bank Holding Act of 1956, which was created when I was with Western Bancorporation and I have some feeling of whether or not a carrier company should have other interests.

I would want to find out whether there was disinvestment in the railroads, diverting funds into other areas. I don't know this. But these are some of the problems we have, some of the questions I would want to ask. I do not pose as being knowledgeable in this area at all, but I would want to ask those questions and try to get the answers.

Senator HARTKE. Have you read the Nader report on the ICC?

Mr. BREWER. The testimony. I have not read the report in detail, but I read the transcript of his testimony.

Senator HARTKE. Do you have any views as to whether or not there should be a public counsel for the ICC?

Mr. BREWER. The ombudsman type thing?

Senator HARTKE. Well, public counsel, call it what you will.

Mr. BREWER. Well, that is what we use. I don't have any strong views on that. I would like to find out a little bit more about it.

It is my impression that the ICC should be the advocate of the consumer first, and the shipper and of the carrier, keeping in mind all the philosophy of the national transportation policy, which seems to cover rather well and very broadly.

I cannot say at this point whether I have a strong opinion, I do not have, as to whether or not it should have a public counsel.

Senator HARTKE. This appointment is for 7 years, although the vacancy has been open since the first of January of this year, so that means probably a little less. But it is your intention to serve out the complete term?

Mr. BREWER. Yes, sir.

Senator HARTKE. I might remark that the same would apply to Mr. Whitman about the Federal Railroad Administration. I understand he is leaving very shortly.

Mr. BREWER. In view of Senator Baker's statement a few moments ago, I might not be able to serve out the 7

years.

Senator BAKER. Let me hasten to say to the witness that I was being partly facetious. I think as you probably know, that the bill I introduced was to authorize the creation of a commission to consider the feasibility of a consolidation of functions of the CAB, the Maritime Commission, and the ICC. I couldn't resist that jibe, because I have such an admiration for this witness, Mr. Chairman, having had him before other committees.

Senator HARTKE. Senator Cotton, do you have any questions?
Senator COTTON. Yes, I have a few questions, Mr. Chairman.

First may I say that I have gone into your record with some care
Mr. Brewer, and had an interesting conversation with you. I am per-
sonally very much impressed by your background and capability.
Mr. BREWER. Thank you, Senator.

Senator COTTON. Now I assume you have filed with the committee, a list of your investments. As is our custom, that list will not be put into the record of this proceeding but will be retained in the files of the committee.

Mr. BREWER. Yes, sir.

Senator COTTON. That listing of course is open to the inspection of anyone desiring to do so. I have it here.

First, may I ask you if from your point of view you have any investments that might embarrass you or might be regarded as a possible conflict of interest in relation to your duties as an Interstate Commerce Commissioner?

Mr. BREWER. The answer to that is no at this time. I need to qualify that by saying I have looked into this very carefully and in my letter to the Chairman of May 22, 1970, I detailed all of my holdings.

In that I said I would sell Williams Bros. upon my confirmation and I will, because it is almost exclusively a pipeline company. Senator COTTON. A what?

Mr. BREWER. Williams Bros., a small company in Oklahoma. I

will sell that.

Senator COTTON. What did you say the nature of that company was? Mr. BREWER. It is a pipeline company. It deals with oil pipelines as well as gas. I will sell that as I stated in my letter promptly upon con

firmation.

The other one has to do with Ashland Oil and Refining Company of Ashland, Ky.

I have looked into that very carefully and I have discussed the matter with the General Counsel of the Interstate Commerce Commission as well as my own private counsel. And the answer is that there is not sufficient holdings here to have any great impact. In fact, the de minimus rule as articulated by the ICC General Counsel's office upholds

this.

The shares of Ashland Oil are traded on the New York Stock Exchange, and as of September 30, 1968, there were 5,335 holders of shares of preferred stock, 47,992 holders of shares of common stock. Based on public information available to me, and upon examination of Moody's Industrial of July 1969, Ashland Oil, Inc. had on September 30, 1968, a total of 789,148 shares of $2.40 cumulative convertible preferred stock outstanding of which I hold 2,733 shares and that would indicate that my holdings are very very low. In fact my total holdings of Ashland Oil would be .0001.

The company had outstanding as of September 30, 1968, 20,426,749 shares of common stock of which I hold 1,465 shares and this would again be very de minimus, far less than 1/10 of 1 percent. Accordingly describing my holdings in that company as minimal could be considered as an overstatement.

Examination of the statements of the Ashland Pipe Line Company, the pipeline subsidiary of Ashland Oil, Inc. for the year ended December 31, 1969, as submitted to the Interstate Commerce Commission, indicates that it had net assets of $70,310,861. As to total net assets reported by Ashland Oil, Inc. on a consolidated balance sheet as of September 30, 1969, they were $846,412,000. This would indicate the pipeline company contributes to the consolidate company approximately 8 percent of the total assets of all the companies. The parent company reported in a consolidated income account for the fiscal year ended September 30, 1969, net sales and revenues of $1,151,499,000 and net income after taxes of $52,343,000. The subsidiary reported for the

year ended December 31, 1969, operating revenues of $14,326,709 and net income after taxes of $4,628,375.

Accordingly it would appear that the subsidiary pipeline company contributes to the consolidate company approximately 1 percent of the revenues and 9 percent of the net income of all the companies.

So I am not aware of any other holdings that are subject to the Commission and I would disqualify myself immediately should Ashland Oil Company or any of its subsidiaries become involved in anything before the Commission.

The pipeline regulation, I am told by members of the Commission, is mostly evaluation. Since 1961 only nine pipeline rate adjustments have been protested amounting to 0.00037, so it is mostly evaluation. But the advice I have from the General Counsel of ICC, who talked about the de minimus rule, is there is no way I could benefit myself by casting any kind of a vote in the matter.

Senator COTTON. I don't like to go into these matters too deeply because I think unfair inferences may be drawn, but I gather from your answer that: First, a very, very minimal part of the Ashland Company's activities are regulated by the Commission?

Mr. BREWER. Yes.

Senator COTTON. Second, your stock ownership is a very minimal amount proportionately to the outstanding stock of the corporation? Mr. BREWER. Right.

Senator COTTON. And, third, it would be your intention to disqualify yourself from participating in any case which the Commission might have under consideration involving a pipeline?

Mr. BREWER. Right.

Senator COTTON. I think that attitude is entirely commendable. However, I don't like to see the situation arise where we start having members of a commission in a position where they must disqualify themselves from participating in certain classes of cases. I am not thinking of your situation, because it would be so infrequently that you would have to do it. But a Commission could get into a situation where this or that Commissioner would have to disqualify himself from almost every decision, which could develop into a situation that would be administratively intolerable.

I also gather that although your holdings in Ashland are very minimal compared with the total amount of stock outstanding in the company, they are rather substantial compared with your other holdings? Mr. BREWER. Precisely.

Senator COTTON. And if you had to dispose of that stock, it would be a great personal sacrifice.

Mr. BREWER. A very great sacrifice at this point.

Senator Cook. May I say. Mr. Chairman, along that line, that in all fairness to Mr. Brewer, we Kentuckians are kind of partial to Ashland Oil, a Kentucky-based corporation. I have no idea at what price Mr. Brewer bought his stock, but knowing the activities of the market, he could be in a position that if he were forced to dispose of it, it would mean a very substantial loss at this time.

Senator COTTON. I wasn't suggesting that he dispose of his holdings in Ashland. I am sure that if we need any assurance about the respectability of the company it has been furnished by the Senator from Kentucky.