Mr. HALL. You have other shipyards who say business is so good now we do not want to build 2 or 3 ships, give us an order for 6 or 10 ships.

By and large we have a good American shipbuilding industry, the people in it are fine people.

and

On the other side of the coin, they have to come up with some degree of reality, and recognize that they are going to have to adjust to meet these kind of problems.

Let me make this clear-I know they are aware of the problem, and we are not unaware of this problem.

This is why we recommended for an ongoing committee, Mr. Lott.

It does not mean we have agreed with everything they have said, but at least we have taken cognizance of the potential problem, and I think we will be able to work it out.

In addition to that, the question comes up as to the improvement of the present yards, this is why this legislation is important now. This is what attracts investors.

This legislation does allow for the possibility that we could not possibly supply the bottoms, or that the bottoms are not available. The Secretary of Commerce can waive the requirement when vessels are not available.

I repeat that we have found that that is a good system. I know that some of the oil companies argue, well, how are they going to appeal the Secretary's decision.

Well, the buck has to stop somewhere, and we have found that having the buck stop with the Secretary of Commerce in an identical situation, on dry cargo has been a good system.

Mr. LOTT. I am not advocating any amendment at this time, but I do want to comment with regard to the mentioning of the Environmental Protection Agency and the Office of Occupational Health and Safety.

If I felt like this bill might go the route administratively as regards to regulations that those two met, I think I would try to find some amendments to try to prevent that from happening.

I think it is a different world, and I do not think we can necessarily relate the two.

Mr. HALL. Well, we were trying to give an example of administrative process, and I would point out to you, Congresman, we have been very fortunate over a period of years now, and we are on record publicly for this, that the Maritime Administration, as we know it, is a very competent Administration.

We think they can administer any part of maritime law. We think they are an outstanding Administration. We think that they are trying to, and in fact, are applying the existing 1970 act in a good manner.

Let me say again they are a great group of people, and we feel sure that they can administer it.

Mr. LOTT. One quick statement, and one more question, and I will be through.

I have been very much concerned all along about effective control, and most of my previous questions have been directed to that.

I want to thank you for your remarks in that regard, and they cause great concern, particularly your mentioning this executive order of the President of Liberia, that really bothers me, that they would take that attitude, and what attitude they might take in the future bothers me.

On the cost you say we do know that there would be a savings to the American people if oil were carried on American vessels.

You are saying that what you might gain in wages for the crews and the shipbuilders, and so forth, would more than offset any increase that might come as a result of requiring them to be brought over in our flag vessels.

Mr. HALL. No question about it. Absolutely no question about it, Mr. Lott.

Mr. LOTT. Thank you, Mr. Chairman.

Mr. CLARK. Mr. Sarbanes?

Mr. SARBANES. Mr. Chairman, I know the bells have rung, so I shall be brief.

Mr. Hall, I want to thank you for a very forthright, and a very perceptive statement.

I was particularly interested in your point here that we must remember, in talking about who controls the carriage of oil imports, that we are talking about the multinational companies. In fact, as you point out at the bottom of page 10, the companies are really trying to reserve for themselves, for their foreign-flag fleet, that share of our oil imports which ought to be carried in the U.S. merchant marine.

I am curious, in light of the 1970 act with its construction and operating subsidies, and also in light of your answers to Congressman Murphy with respect to stability in the labor field and the continuity which has developed there, why it ought to matter to the companies whether they would have to use American-flag ships, rather than foreign-flag ships if the economic differences are to be evened out through legislation.

The labor situation has resolved itself, and I am inclined to think it may well come down to the point you make on page 17. There you say this bill should be passed if for no other reason than to provide the capability for a cost monitoring system, so as to give the people and the Government an opportunity to get into an area shrouded in secrecy.

Why should the oil companies care whether they have to sail under the American flag if the costs have been equalized under legislation that we have passed, and if you continue to develop this stable and continuous labor situation?

Mr. HALL. You know, Congressman, that is a question that has puzzled a lot of people.

I have opinions. I have the privilege of knowing some of the oil people, unfortunately not enough of those in positions of responsibility, but I always had the impression that in talking with the oil people, that they really do consider themselves in a world apart. They refer to it, in fact.

It is like as has been stated in this committee in reply to some of your questions, and others, about the taxless world, and things of this nature.

I guess when people get into big corporate structures of this sort, they tend to think that way.

I hold that beging under the American flag would be beneficial to them, certainly as Americans, but you see, unfortunately, a lot of these fellows do not think of themselves really in that term, because when you become an American, or a British or whatever the case may be, incidentally then you no longer are an oil man.

Now, ordinarily you would say, "so what!" That is the guy's philosophy, but not only as to why it comes about, but what the results of it can be is most important of all.

There is an old saying that everybody loves a winner, and nobody loves a loser.

I think that is true in more ways than one, and I think today in the country because of the oil corporate structure we are the loser. Witness here what has happened. I do not have to tell you at every gas pump you have a potential fistfight.

Look at what has happened in this country.

Incidentally, I sat on several commissions, and I had an opportunity on occasion to talk with Mr. Simon, and hearing him describe what they are doing to meet the situations, and to me, while he is a very intelligent person, and a very competent man, it is sort of ridiculous.

I was telling one of my friends what he is trying to tell us what to do, is how to take enough butter, which normally we spread on one slice of bread, and how we ought to take it and spread it on six pieces of bread.

He is not talking about the root problem. And that is the whole damn thing that brought about this situation. We do not have enough butter for enough pieces of bread.

Let us take the same thing, for example, who would have thought that in World War II those of us who were in England and watched the British people who were so courageous, and who stood up, who would have ever thought that the Arab sheiks, with the lack of pressure from the multinational oil corporations, could do something to our Western allies that Adolf Hitler could never do with all of his legions and all of his planes and his pocket battleships.

Well, the sheiks brought the British to their knees. We have determined in our country we were in time of need in the Mideast. It was our country's decision, and there are differences of opinion, but at least that was this country's position, and these guys did something to our allies that Adolf Hitler was never able to do.

When you really see such drastic results, and I am only dealing with part of the situation, the whole economy is loused up over this, but the same people still do not realize they are living in the same world that you and I are.

I regret, and I want to make this clear, that it is not this administration. It is the Government over a long period of time, without regard to what administration is in power. They have allowed the oil companies to do this.

This is what concerns me again with Mr. Simon. There is no curiosity or digging in on the causes of this. He is dealing with just the manifestation of the illness, and not the illness itself.

What needs to be done in this industry is a total restructuring of it, because unless there is, you are going to see worse things happening.

You see what happened, I noticed the other day, we are told by the principal owners that if they did not up the price of oil in Japan, they are going to get cut back. That is a cold blooded threat against the nation, against and independent nation, and a big industrial

power.

They were told you either raise your price up, or off goes your head.

I think these guys have got to learn. Let me tell you what I think is going to happen. You know, those of us, as seamen, who used to go into some of the other countries and see the relationship between some of the people and the major companies, it was not a good situation.

Well, you know, when a guy gets everything his way, when he can bag it all, sometimes he abuses that power, and look at what is happening to them all over the country.

You remember when Mossadegh got killed over in Iran and the Shah took over, he up to now has been pretty cooperative, but there is no guarantee he will be cooperative in the future.

The Government, because of oil, in Venezuela has changed several times.

Look at what has happened to the seizure of these oil companies' stocks and businesses. I do not think to this moment they can translate that information right here.

I predict that is going to happen in this country through due process, of course. Those of us who have talked about the multinational oil companies in this committee and other committees, it has not mattered to many people, but what has happened now is that that argument has been taken to the gas pump in Baltimore, New York, and every other city.

When you have the Governor of the State of Maryland hollering and complaining to get a little more gas, and only when it is needed, and when you have the big cities like New York, I tell you it has come to a bad end for these oil companies.

This is really too bad. They have the ingenuity.

Let me also say when talking to Mr. Simon when he appointed the first committee to review and advise, they only appointed the oil company representatives.

I said why in the hell did you only appoint the oil guys?

Mind you, I have a high respect for his intellect.

He said these people know the business. He said who could be better able to advise?

I said that sounds very good, but in America it is not just business, not just management, not just government, that is the whole heart of democracy, and that is everybody has to get into it.

Maybe we could not sit and give them figures, and tell them how to cut the oil, but we could tell them about how to use it at home, and drive their cars.

I think they missed the whole point, that this is a matter that is the property of the people, and had it not even been the property

of the people, then there is no question as of this moment it is the property of the people, and it has us on the verge of being in a very terrible situation.

I never thought I would live to see the day when I would hear the heads of the labor movement calling for the nationalization of any industry, so when you hear that from responsible people in this country, the nationalization of a major industry, it means by God, the people are fed up, and they are frustrated, and not just disturbed. No one has ever held the oil companies accountable. No one has ever told them you have to have somebody here other than just the oil people.

Mr. Chairman, we all have an equal interest in this.

Mr. Congressman, I realize that is a little vague.

Mr. SARBANES. Well, I want to thank you very much, Mr. Hall, for a very thoughtful presentation.

Mr. CLARK. Mr. Anderson?

Mr. ANDERSON. Thank you, Mr. Chairman.

Mr. Hall, on page 15 you state that the oil companies assert, and would have us believe that enactment of H.R. 8193 would definitely increase the price of oil to the American consumer, then you say the oil companies have provided this committee with no proof of this assertion.

Further you say that the testimony before this committee, when similar legislation was being considered in 1972, proved conclusively that the price charged consumers for petroleum products was not related to the cost of operating vessels, and in fact, was not related to the rates charged for carrying the oil.

Furthermore, you say that there would be a savings to the American people if oil were carried on American vessels.

Mr. Stanley Ruttenberg, in his testimony, stated that the total direct benefit to the consumer would be 68 to 91 cents per barrel, and he concluded that the net effect of the passage of this bill would be a savings to the consumer apprpoximately 1-cent-a-gallon of gasoline.

I do not expect you to endorse these specific figures, but, would you agree that this would be a pretty good general conclusion to draw?

Mr. HALL. I know Mr. Ruttenberg is a very competent analyst and research guy.

Mr. Anderson, I am a sailor. I do not know his figures. I do not know the whole thing, but I would certainly endorse anything that he said.

In my point of view, it would be difficult to have money on this kind of an issue, I would suggest, but if he says so, and can substantiate it, of course, that is another story.

Now, I would not attempt to comment on his testimony, other than to support it.

Mr. ANDERSON. Mr. Ruttenberg does substantiate it with some figures.

First; he says that the total direct benefit to the consumer would be 68 to 91 cents per barrel; therefore, this could result in a net direct benefit to the consumer of approximately 1 cent per gallon.

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