BREAK-DOWN OF EXPORTS OF CHEMICALS TO ERP COUNTRIES AND THEIR DEPENDENTS

Mr. WIGGLESWORTH. Without objection we will include this table. in the record at this point.

Mr. WIGGLESWORTH. This indicates the shipments from the United States.

Mr. MARKWOOD. Yes.

Mr. WIGGLESWORTH. To the participating countries, in terms of prewar, for fiscal year 1947, and for the 15 months' period April 1948 to June 1949.

Mr. MARKWOOD. Yes.

Mr. NITZE. If I may, I would like to point out one of the difficulties. you might run into from this: You will note that the United Kingdom dependencies, for example, are down here for zero, while the imports were $33,883,000 in 1947.

It is quite clear that the United Kingdom and dependencies will use chemicals. This statement is because the chemicals from the United States, the shipments to the United Kingdom and dependencies are included in miscellaneous commodities.

Mr. MARKWOOD. That is correct; they are covered in the big basket merely.

Mr. WIGGLESWORTH. The biggest increase in percentage is for Austria.

Mr. MARKWOOD. Yes.

Mr. WIGGLESWORTH. Where you give a prewar figure of $149,000, and the 1947 figure of $1,340,000, which is increased to $12,500,000 for the period 1948-49.

Mr. MARKWOOD. That looks all out of proportion, but the thing to remember there is that in prewar Austria was entirely dependent or tied in with Germany as a supplier of chemicals. That has been completely wiped out, so that you can see in 1947 the shipments were appreciably more than prewar, and in view of the other program that Austria is to be set on her feet, she needs that much in the way of chemicals.

Mr. WIGGLESWORTH. There is a substantial increase in Denmark and Greece; also Ireland.

Mr. MARKWOOD. Greece again is a matter of considerable rehabilitation; they will take a lot of insecticides to restore sanitary conditions in the country.

Mr. WIGGLESWORTH. Switzerland shows a big increase. That is not ECA financed, however.

Mr. NITZE. No.

Mr. MARKWOOD. Switzerland also was taking very largely from German supplies, particularly with respect to coal tar chemicals.

FINANCING OF CANADIAN EXPORTS OF CHEMICALS

Mr. CASE. Mr. Chairman, when you were interrogating Mr. Markwood in the early part of the testimony, with reference to chemicals, you raised the question about the discrepancy between the figures involving $67,000,000 worth of exports contemplated for Canada.

Did you mean that that $67,000,000, worth of exports is to come out of some financing from sources other than ECA funds?

Mr. NITZE. No; it is contemplated that $54,000,000 of that might be financed by ECA.

Mr. CASE. In other words, a large part of the reconciliation between the two figures means that the United States would supply the dollars to pay for the Canadian exports?

Mr. NITZE. To pay for a portion of the Canadian exports. That relates to the balance of payment of Canada. She has lost a very substantial amount of gold and dollars during the course of the last year. There is a real problem in connection with financing exports from Canada to the participating countries.

PETROLEUM EQUIPMENT

STATEMENTS OF GILBERT M. SMITH, INDUSTRY DIVISION, OFFICE OF DOMESTIC COMMERCE; WILLIAM H. SHAW, SPECIAL ASSISTANT, OFFICE OF SECRETARY, DEPARTMENT OF COMMERCE; AND WALTER LEVY, CONSULTANT, DEPARTMENT OF STATE Mr. WIGGLESWORTH. I note on table D-4 is indicated exports, over-all, from Western Hemisphere countries of $226,700,000 of petroleum equipment, of which $67,400,000 is to be financed by ECA in the first 12 months.

ESTIMATED DOMESTIC SUPPLY

The present over-all availability table you gave us would seem to indicate an estimated domestic supply, 1948-1949 of $14,101,000,000. Is that right?

Mr. SMITH. That is right.

Mr. WIGGLESWORTH. As compared with the $11,764,000,000, in 1947 and compared with $2,823,000,000 in prewar.

Mr. NITZE. That covers all machinery, not just petroleum equipment. It was impossible to break out the various categories of equipments separately.

Mr. WIGGLESWORTH. The table indicates this is for petroleum equipment, machinery, other. Is that right?

Mr. NITZE. I understand these figures apply not to petroleum equipment alone, but include other equipment that has been listed in the previous amounts.

Mr. WIGGLESWORTH. Which we have already covered?

Mr. NITZE. Yes.

Mr. WIGGLESWORTH. What figures have you for petroleum equipment?

Mr. SMITH. A total of 226.7 million dollars.

Mr. WIGGLESWORTH. What have you that will show the domestic supply estimated for 1948-49 as compared with the prewar and 1947, in estimating the overall exports, percentage wise or otherwise in this year?

Mr. SMITH. Due to the fact that petroleum equipment in most instances is also used in a lot of other industries and is not identifiable as such, therefore the report on exports and the total availability of equipment cannot be accurately broken down to show a very clear picture.

Mr. STEFAN. You mean as to other kinds of equipment.

Mr. SMITH. As to all types of equipment. For instance, tankage and machinery items, pumps, and things of that kind are also under that machinery item.

ESTIMATED PETROLEUM EQUIPMENT REQUIREMENTS OF PARTICIPATING

COUNTRIES

Mr. STEFAN. You have a breakdown here of the requirements in your justification, of drilling, casing, engines, plant, automotive, electrical, manual, structural steel, chemical.

The justifications state that the estimated total petroleum equipment requirements of the participating countries, including the requirements of United States operating within the participating countries and their dependent overseas territories will amount during the fiscal year 1949 to about $685,000,000 and approximately $458,000,000 of these requirements can be provided from the production of the participating countries but that the net requirements for equipment from the United States will amount to $227,000,000. You stated first $226,000,000.

Mr. SMITH. 226.7 million dollars.

Mr. STEFAN. 226.7 million dollars, but you say here $227,000,000. Does the breakdown here agree with those enumerated in the equipment program?

Mr. SMITH. On that table?

Mr. STEFAN. Yes. It does not include tankage?

Mr. SMITH. It does not include tankage.

Mr. STEFAN. Is that about the kind of equipment that you are talking about?

Mr. SMITH. Yes; in that category of the equipment definitely identifiable in the petroleum industry.

However in some of these categories are a lot of machinery items that are also used by many other industries. There are only actually three categories that you can break out as specifically being petroleum equipment. Those are reported as petroleum equipment: Drilling equipment, on schedule B items; other equipment, including refining; pumps, gasoline and oil. We have a comparative table which shows those items identifiable in the same category as listed in this table which you have. However there are still others.

INCREASE IN COST OF PETROLEUM EQUIPMENT

Mr. CASE. Has there been much change in the price of petroleum equipment and the cost of machinery between prewar and today? Mr. SMITH. Yes, there has been an increase in price.

Mr. CASE. So that when we compare these figures as to dollars covering prewar shipments and those of today, and the jump from prewar exports of $3,000,000,000 to the proposed exports of $16,000,000,000, they are hardly correct?

Mr. SMITH. That is for other equipment, petroleum. The petroleum equipment we have considered shows just about the difference in the ratio of dollar value prewar as to what the exports would be today, as to the difference in the cost of the equipment.

Mr. CASE. But the percentage of exports to the total supply would give us a fairly accurate comparison, would it not?

Mr. SMITH. Of exports to total supply?

Mr. CASE. Yes; in the percentage column, the percentage figures give us a truer picture of the relationship between what we are proposing to export now and what was exported prewar than would the dollar figure. Is that not correct?

Mr. SMITH. No, I would not say it was in the case of petroleum equipment, which is included in this figure here.

Mr. CASE. Has there been any change in the price of petroleum equipment?

Mr. SMITH. There has been a change in the price of petroleum equipment, and the price has increased.

Mr. CASE. Then I do not understand your answer. Looking at this table which gives the United States production, imports, and so on, on page 4, under petroleum equipment, including machinery, and considering the item for machinery, other, in column 3, we find the production figure, prewar, of $3,078.500,000 and from April 1948-June 1949, $16,360,000,000.

Mr. NITZE. I am afraid the table that you are reading from, Mr. Case, is misleading. There was added a new column. That $16,000,000,000 item covers machinery, other, of which petroleum equipment is only one part, and probably there should have been another column.

Mr. CASE. Even so, if there has been a change in price, a comparison of the prewar against the present in terms of dollars would not give us as accurate a picture of the proposed exports as a comparison of percentages.

Mr. NITZE. That is correct. I think Mr. Smith's point was that the petroleum equipment which is included in this one item, under a

bigger category, would show a somewhat different percentage figure. Mr. SMITH. That is right.

Mr. NITZE. Of machinery, to the whole figure.

PERCENTAGE OF EXPORTS OF AVAILABLE EQUIPMENT

Mr. CASE. If that is true, percentagewise, the total exports to the participating countries, prewar, was 26.5 percent, and other exports, presumably to nonparticipating countries, was 6.3, or a total of 32.8 percent.

The same percentages for the 15 months' period, April 1948 to June 1949, are 42.2 percent to participating countries and 8.2 percent to other exports, or a total of 49.4 percent.

The point I was making is whether or not that indicates that where we exported 32.8 percent prewar we are now proposing to export 49.4 percent, or practically half of the production?

Mr. SHAW. I do not know whether you have a table with the extra column or not, but column 10, under "Percentage," giving the percentage of tht total supply

Mr. WIGGLESWORTH. It is column 8, is it not?

Mr. SHAW. Column 10 plus column 13, equals column 8.

Mr. CASE. Where is column 13.

Mr. SHAW. It is given on this table [indicating].

Mr. CASE. This table of April 28, 1948, does have a column 13. The one that I had stopped at column 12. Then you would add column 10 and column 13 to get the total percentage of exports? Mr. WIGGLESWORTH. Which, in fact, is column 8?

Mr. SHAW. It is column 8 on that table, with the 13 columns on it. Mr. CASE. Do these prewar figures apply to a full year or to a 15 months' period?

Mr. SHAW. They show for a 12 months' period.

Mr. CASE. It is given for 12 months. Then again we would be at a loss, because the prewar figures show 8.6 percent of the total supply being exported, whereas the April 1948 to June 1949 would be for a 15 months' period.

Mr. NITZE. That would not affect the percentages.

Mr. CASE. Is the production on a calendar-year basis, and the exports on a 15 months' basis?

Mr. NITZE. Both are on a 15 months' basis.

Mr. CASE. Both for 15 months.

Mr. NITZE. For the period April 1948 to June 1949.

Mr. CASE. That makes it clear. Then the comparison is between the exports of 8.6 percent supplies, prewar, and the proposed exports of 13.9 percent of supplies in the 15 months' period.

Mr. NITZE. That is correct, with respect to all machinery; it is not just for petroleum equipment.

UNITED STATES EXPORTS OF PETROLEUM EQUIPMENT BY DOLLAR VALUE TO COUNTRY BY DESTINATION

Mr. WIGGLESWORTH. The table which has just been handed to me, entitled "United States Exports of Petroleum Equipment, by dollar Value, to Country by Destination," will be made a part of the record.

75408-48-pt. 1-46