Mr. LEVY. That is for tubular goods, pipes, and so forth. Mr. CASE. The total? Mr. LEVY. Yes. Mr. CASE. The exports of petroleum equipment are proposed to be increased not in the ratio of 1 to 2, but in the ratio of 9 to 34. Mr. LEVY. Of course, we have the value figures there which include the price increase, which is an important factor. Mr. CASE. Yes. Mr. LEVY. That means the actual relationship between quantities is different from that between values. Mr. CASE. But the same thing would be true as between 1938 and 1947 on tubular equipment too. That is what I was trying to get at, something so that we could see the ratio relationship. Mr. LEVY. I would like to make one other point in that connection, and that is to meet this world-wide expansion program of the oil industry, which as I have said is a $13,000,000,000 program, the production of petroleum equipment here and elsewhere must be increased considerably over any figure we have seen up to now. The historical pattern, the 1938 pattern, in this case means very little. We have probably never been faced with a situation where we had to expand petroleum production as rapidly as we must do it now. That is a unique situation. As you probably know the National Petroleum Council investigated this problem and tried to figure out how much steel is required to meet the program of the United States oil industry. The council came out with a study recently which, as I understand it, is now under consideration in the Commerce Depart ment. The historical pattern in a situation like the present one really provides us with not too good a guide on what is going to happen in the future because of the tremendous effort that will have to be made if world production is to be increased as planned. Mr. Case, I also have figures here for exports of tubular goods for the same two years. Mr. CASE. All right. Mr. LEVY. In 1938 the export of oil country tubular goods amounted to 56,000 short tons, and these are total exports, compared with 95,000 short tons in 1947. Mr. WIGGLESWORTH. Are there any further questions on this petroleum equipment item? EFFECT OF OVER-ALL PETROLEUM EQUIPMENT PROGRAM ON UNITED STATES Mr. STEFAN. I know, Mr. Chairman, that our colleague from Texas is worried about the production in the United States as a result of the export of all of this petroleum equipment to these foreign countries. On page F-119 of the justifications there is this statement: While it is recognized that the position in petroleum equipment, especially for certain items such as pipe and certain valves, is tight, it is not believed that the over-all effect of the petroleum equipment program on the United States will be acute. It also states that: Equipment manufacturers have indicated that they are working off their backlogs of standing orders and that they can meet the general level of requirements indicated in the program by the time it has been reduced to engineering specifications. In some cases, manufacturers in the United States have stated that they will shortly be actively engaged in developing foreign outlets for their supplies. Now, Mr. Levy you indicated that this is not the exact truth. You indicated that there is proposed some increased production, and this indicates that there are some bottlenecks. Mr. LEVY. There are certainly some bottlenecks in highly manufactured equipment. The basic bottleneck is steel, of course. That means if sufficient steel is made available the program can probably be met. Mr. STEFAN. It still indicates what the gentleman from Texas is worried about, whether there is going to be enough equipment for American users of this petroleum equipment. Mr. MAHON. He comes back with this thought that by the use of this equipment over there they will produce so much more oil per unit of steel used that perhaps the world picture will be much improved and maybe our economy will have less drain on it. Mr. STEFAN. I still feel from all the evidence that there is going to be a tight situation on petroleum equipment here in the United States, and when the oil people ask for that equipment you will have to tell them that we have to sacrifice that much to produce more oil over there in order to reduce the demand on our domestic production. Mr. LEVY. That is correct. Mr. MAHON. I believe that Mr. Levy would be the first to say that the oil-producing people in this country are quite unhappy because they cannot get adequate equipment for their own operations. Mr. LEVY. Yes; I think it is the job of our licensing people in the Commerce Department to see to it that no equipment leaves this country for which there is vital need here. Mr. STEFAN. That is what I think we set up this Licensing Division for, to see that not only petroleum equipment, farm machinery, steel equipment, and other equipment needed to carry on our program here is not taken away from us. Mr. LEVY. Exactly. Mr. CASE. There was also still a second point that followed that, and that is how much petroleum we would save in the demand made upon the Western Hemisphere, when you testified that we would perhaps get 50 times as much petroleum if we exported this equipment as we would get out of it if we used it here and to meet the demands and necessities, purely our own demands through the naval ships and through the airplanes that we have overseas. Then it might be shown that actually there will be more petroleum available for domestic uses in the United States because this equipment is exported overseas than if we used it here and secured less production. Mr. LEVY. That might well be the case. Mr. CASE. Well, is it the case, you testified we would get 750 barrels Mr. LEVY. Per ton of steel used. Mr. CASE. Per ton of steel, as compared with what? Mr. LEVY. As compared with Mr. KEEFE (Interposing). Compared with about 30,000 barrels, as I remember it. Mr. LEVY. Yes; about that. Mr. CASE. About 30,000? Mr. LEVY. I am not quite sure whether it is 30,000, between 10,000 and 20,000. I would like to check this figure. Mr. CASE. Let us have that in the record. Mr. LEVY. Yes, I will put it in the record. Mr. CASE. Also indicate what would be the Army's demand upon Western Hemisphere supplies if they were not supplied through the source to which this equipment is to be exported. (The information requested is as follows:) In fiscal 1949 the armed services of the United States expect to obtain from offshore sources of supply about 100,000 barrels a day of petroleum products, of which about 70,000 barrels a day will be obtained from Middle East sources. Mr. LEVY. I would like to correct those figures so as not to leave any wrong impression. According to a statement made by the former Secretary of Commerce Mr. Harriman before the Senate Small Business Committee, it is 6,000 barrels per ton of steel in the Middle East compared with 100 barrels per ton of steel over here. That is the correct figure. MISCELLANEOUS COMMODITIES STATEMENT OF CHARLES P. KINDLEBERGER, SPECIAL ADVISOR TO OFFICE OF FINANCIAL AND DEVELOPMENT POLICY, DEPARTMENT OF STATE Mr. WIGGLESWORTH. We will take up item No. 48 which is entitled "Miscellaneous Commodities," which apparently contemplates the shipment of $1,900,000,000 of miscellaneous commodities from the Western Hemisphere which are to be financed in the first 12 months by ECA to the extent of 239.6 million dollars. Do you have some general statement on this miscellaneous item? GENERAL STATEMENT Mr. KINDLEBERGER. Yes; I have a few copies of some tables, sir, with a brief general statement. I think it is proper to say that this miscellaneous commodities items is a catch-all. Mr. WIGGLESWORTH. It is a pretty big catch-all, according to the figures given here. Mr. KINDLEBERGER. Yes, sir. The category covers all the commodities that pass between in trade among industrialized countries; there are thousands of separate items. We have isolated 47 groups of items which are most important to the European recovery and which are most important in terms of the supply situation in the United States. These items account for 85 percent of European imports from the Western Hemisphere. The remainder which appears large in bulk consists of thousands and thousands of small items of all types. Our estimates on this have been derived from the import figures of 16 countries. It might be appropriate, if you had the time, to listen to the individual country experts who calculated these figures to give you an indication of what goes into them. MISCELLANEOUS IMPORTS AND EXPORTS OF PARTICIPATING COUNTRIES FROM AND TO WESTERN HEMISPHERE On the assumption that your time does not permit of such an intensive investigation I have attempted to prepare a table which puts together the imports and exports of the participating countries to and from the Western Hemisphere for the 15-months' period, broken down as between the United States and other Western Hemisphere countries. In addition, I have attempted to give a very rough indication in the following table of the breakdown for the fiscal year 1949 of miscellaneous imports of these countries from the United States as between certain general classes. I must emphasize that this breakdown is extremely rough because it is based primarily upon the trade figures of the separite countries themselves. These are rough figures, and in frequent cases they are only estimates because of the fact that it is difficult from the foreign-trade statistics of the 16 countries to get a classification which is comparable and which can fit into our records. Mr. WIGGLESWORTH. Without objection we will include tables I and II at this point in the record. (The matter referred to is as follows:) TABLE I.-Miscellaneous imports and exports of the participating countries from and to the Western Hemisphere [In millions of dollars] Exports, Exports, Imports, other Exports, other Imports, other Exports, other Imports, Imports, United Western United Western United Western sphere, 1948-49 June 1948 April June 1948 April United Western Hemi- States, Hemisphere, 1948-49 sphere, 24.0 TABLE II.-Miscellaneous imports of the participating countries from the United States, fiscal 1949 Mr. WIGGLESWORTH. Now, will you explain in a little more detail just what this table 1 is? Mr. KINDLEBERGER. We did not put the miscellaneous commodities together in the brown book at any point. Hence the desirability of the table. The figures are entirely in millions of dollars, since the category consists of a hodge-podge of commodities which cannot be given in quantity figures. Mr. WIGGLESWORTH. Column No. 1 represents the imports by the participating countries from the United States for the 3-month period April, May, and June, and column 2 represents imports from the other Western Hemisphere countries for the same period? Mr. KINDLEBERGER. Yes, sir. Mr. WIGGLESWORTH. And column No. 5 shows the total importations by the participating countries from the United States of $1,055,800,000. Mr. KINDLEBERGER. Yes, sir. Mr. WIGGLESWORTH. That is for the fiscal year 1949? Mr. KINDLEBERGER. Yes, sir. Mr. WIGGLESWORTH. Twelve months estimated? Mr. KINDLEBERGER. Yes, sir. |