of reasons why, and ways to, do what the public interest required. We and Secretary Udall heard recited a litany of national security that droned on like a broken record, without regard to facts and without attention to competing priorities.

And so we were unable to bring this potential avenue of relief of fruition. Then the State of Maine developed the idea of a refinery at Machiasport. It would give us the efficiency benefits of the latest techniques in refining, the transportation economies of the new super tankers, the security of large storage facilities and dispersed production, the economic advantage of a large new industrial complex in an area which needed development, and most important, the use of our fair share of low cost oil imports to benefit consumers and to restore competition to the oil marketplace.

Again we have met a stone wall. The telegrams from the industry have poured into our offices and offices of Cabinet members and their subordinates. Industry speeches and meeting and publications have expressed a common theme: "Stop Machiasport." Industry lobbyists have stirred up Congressional activity at hearings and in conferences with the Executive Branch. Lawsuits-bordering on the spurious have been filed by oil companies and by oil states, all with one purpose "Stop Machiasport." And the sad fact is that "Machiasport" threatened no job in any other state, asked for no advantage that others did not have; it merely asked that New England be given a fair share of oil imports, and a fair share of refining capacity.

I will venture to say that no one in the industry really and truly believes the wild claims that Machiasport will "destroy the domestic oil industry." If that were so, none of us would be here. Nor can anyone really believe that Machiasport could even destroy the oil import controls, although that result may well be justified in the national interest. Nevertheless the industry has chosen to resist this project with all the very considerable forces at its disposal. This is the height of irresponsibility on their part not only to the nation, but in the long run to their own interest.

We have tried to be cooperative and restrained, we have tried to operate within the status quo and according to the industry-designed groundrules. But that has not worked. They have not even been willing to talk about these limited means of alleviating a serious problem. The people of New England are therefore up in arms, and now they are demanding action, and action which will provide a new set of groundrules under which their interests are permanently and fully protected.

I am reminded of the similar activities of the National Rifle Association. We invited them to join us in designing reasonable gun control legislation of a modest kind. If they had cooperated, there probably would have been a broad area of compromise resulting in an extremely limited gun control bill. But the N.R.A. resisted totally. It listened only to itself. It thought that it could prevent any legislation from being passed. However, events created a swell of public opinion which carried to passage a stronger bill than we had ever hoped for, and developed demands for new, even stronger legislation. The N.R.A. was left behind, dishonored in the public eye, discredited even among many of its natural allies.

I predict the same thing will happen here. The oil industry has overreached once too often. It will be haunted by its unwillingness to accept the Machiasport proposal. The people will want to know why large corporations are permitted to band together to prevent the entry of competitors into the market. The people will want to know how it can be within the confines of equal protection and due process of law to let some oil marketers who do not need imported oil have it, while others who need it cannot get it. The people will want to know why the $500 million a year in profits produced by the federal oil import program should go to private industry at all rather than benefitting the public.

I think when those questions are answered, the oil industry will have much more to worry about than stopping Machiasport.

Senator MCINTYRE. I would like to call now Mr. Walter E. Corey III, Federal-State coordinator of the State of Maine, to testify. Mr. Corey. It is my understanding, as I previously said, that you have been intimately concerned with the application from the outset.

Mr. COREY. Yes, Senator. Before we get into that I wonder if I could just relay to you a telephone conversation that I had minutes. ago with Congressman Hathaway, in whose district Machiasport lies.

The Congressman has been confined by his doctor to a sickbed. He regrets very much that he is unable to be here. He tells me he is just as mad as a hornet about the treatment that the trade zone application has received at the hands of the Trade Zone Board and he has a lot to say about it, and he would welcome the opportunity of coming before this subcommittee at a later date to get his feelings on the record. And I would ask that the record show this concern on this part.

Senator MCINTYRE. It certainly will. I talked to the Congressman earlier this morning, and you know, you fellows from Maine had better get back to Maine as soon as you can before you get this flu that seems to be predominant or running rampant down here.

I think as the developments of the morning will indicate, the Congressman will have an opportunity to testify at some later date. Congressman Bates is of the same is Congressman Bates here?

Mr. COREY. I would defer to the Congressman if he would like to testify.

Senator MCINTYRE. Does the Congressman desire to testify here this morning? Thank you, Mr. Corey, for deferring to the Congressman. I didn't realize Bill had come in.

STATEMENT OF WILLIAM H. BATES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MASSACHUSETTS

Mr. BATES. Mr. Chairman

Senator MCINTYRE. Good morning. Delighted to see you.

Mr. BATES. Mr. Chairman, I was just advised of this hearing, and I understand it has taken certain directions with respect to procedures regarding the application to build an oil refinery at Machiasport. Now all of us were led to believe, and had every reason to believe, that we would receive a decision on this matter. This procrastination is something we just cannot appreciate or condone.

I understand that the Secretary of Commerce acted, or failed to take affirmative action, without ever having seen the report on the application. So it seems unconscionable to me that now, on these grounds, you have this project set aside when it is of such tremendous importance to New England. The cost of power and fuel in New England is of great concern to all of us. Several of us have been working in many areas, myself in the field of atomic energy, in the hope that somehow we can bring down the cost of power and heat. Because we have no natural resources in the ground-we have no gas, no coal, no oil-all of these fuels must be brought in from long distances and therefore are more expensive.

Whenever other sections of the country wanted hydroelectric plants we, in New England, were of assistance to them. When other freeport zones were applied for, as far as I can determine from the records I have seen, these applications were approved in a routine fashion.

So the dilatory tactics on the part of the Secretary are something I don't understand and deeply regret. It would seem to me that if he is disposed against this project, at least he should act. But in this case no action was taken. Because this important petition is pending and because of the significance of this project to the economic life of New

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England, I submit that we are entitiled to official action in the form of a decision-one way or another.

I don't want to repeat unnecessarily what I presume has been said by others before me, Mr. Chairman. But this is the essence of my thinking. As I indicated, it was only a few moments ago that I knew a hearing was being held. I can well understand the urgency and the short notice and I want to thank you for hearing me. I will gladly cooperate with the committee and with the other members from New England who are interested in this project because of its great significance and great economic importance to the people of New England. Thank you, Mr. Chairman.

Senator MCINTYRE. I want to thank the Congressman. I am aware the Congressman is the ranking member of the House Armed Services Committee, and I have seen questions directed by you concerning refineries as to their effect on our national defense.

So thank you very much for letting us know just how you feel here this morning.

Mr. Corey, if it is not inappropriate on my part, you have been present; you have heard a good deal of the Governor's testimony. I think as chairman of the committee I would like to have you recite from your own memory chronologically the various steps taken and the various incidents and conversations that bear on it, bearing in mind that from your own knowledge and your own hearing you cannot be too repetitive.

STATEMENT OF WALTER E. CORY III, FEDERAL-STATE

COORDINATOR, STATE OF MAINE

Mr. COREY. I understand that, sir. I have asked Mr. Andrew Nixon, sitting here, to join me because he has been most helpful in dealing with the people of the Foreign Trade Zones Board, and I may refer to him on occasion.

I have with me a chronological history of the most significant dates attending upon our application, and it is review and I would be happy to pass it up to the committee if you think it appropriate. Senator MCINTYRE. All right.

Without objection, we will make the chronological history of the Maine Port Authority's FTZ application part of the record. (The chronological history follows:)

CHRONOLOGICAL HISTORY OF THE MAINE PORT AUTHORITY'S FTZ APPLICATION June 19: MPA first submitted its application to FTZ Board.

September 13: Revised MPA application submitted.

September 18: Notice of Hearing published; hearing set for October 10. October 9: Extraordinary Washington hearings announced in Federal Register-no additional notification provided to applicant.

October 9: Rules for conduct of hearings altered-outlawing all oral argument (cross-examination).

October 10: Announcement of 21-day period commencing October 15 for filing of additional information.

October 10: Statements by Foreign Trade Zone members at Portland hearing: "Now, this means that we have analytically a problem of sequence. If we were to defer consideration of the foreign trade zone application until such time as the Secretary of the Interior had made an allocation to a foreign trade zone user,

the foreign trade zone user would not be eligible to make his application, because a foreign trade zone wouldn't exist until the Board had passed on it". "And this is what we've been trying to say all along, that the action taken by the Board in granting or denying this application has absolutely no impact on the decision to be made by the Secretary of the Interior as to whether oil will be brought into the sub zone, and assuming oil were permited to be brought into the sub zone, whether the Secretary of the Interior would permit the oil, once refined, to be brought into the U.S. customs territory. This is entirely within the discretion of the Secretary of the Interior, and not within the authority of the Board. The Board would be under obligation if it had issued a grant, to deny the entry of oil until such time as the Secretary of the Interior had made an oil import allocation, if he were to make one." "Under Presidential Proclamation 3279, on March 10, 1959, as amended, the Secretary of the Interior has been delegated the responsibility for the administration of the mandatory oil import program and the import allocations issued thereunder. It is not the function of this Committee, nor of the Foreign-Trade-Zones Board to consider the question of whether or not an import license should be issued to the proposed user of the Machiasport sub zone, in the event this sub zone is authorized. This Committee may properly concern itself only with the merits of the application, in relation to the criteria provided under the Foreign Trade Zones Act, and the implementing regulations. Accordingly, any action which might be taken by the Board on this application would not constitute an expression of support for, or opposition to, the issuance of a license by the Department of the Interior for oil refining operations in a foreign trade zone".

October 15: Special hearing in Washington; Congressman Hathaway and Kyros and Governor Curtis were denied the right to testify.

October 20: Transcript of hearings due-actual receiving date of transcripts, November 14-poor quality and inexplicable delays-why?

November 5: Scheduled closing of Record-postponed to December 6. November 15: Acting Secretary of the FTZ Board was quoted: "Although we have experienced a delay in receiving the transcript, this should have no effect on our meeting our target date on December 31." Representative William D. Hathaway said he, too, had been in touch with Hull and has been "assured the Board would reach a decision before the end of the year".

December 5: Assurance given by Treasury member of Board of Alternates that December 31 deadline would be met.

December 11: Issuance of proposed rules and regulations by Department of Interior.

December 12: Statement by Assistant Secretary of Commerce McQuade : “... an application for a foreign trade zone must be considered by law on its merits under the Foreign Trade Zones Act and not, as some appear to have argued, on the issue of what might be decided under the oil import control program". "The Oil Import Program is separate and apart from the Foreign Trade Zones law..." "Thus, when an application to establish a foreign-trade zone that will be used in whole or in part for petrochemical production involving imported oil is presented to the Board, the Board cannot make any assumptions in its deliberations on that application as to whether or not the Secretary of Interior will grant or deny an import allocation for use in the zone". "But the vital fact is that the Foreign-Trade Zones process and the Oil Import Program processes are separate laws separately administered".

December 13: Press release from Commerce Secretary C. R. Smith: application poses "far-ranging policy implications". "Policy questions center over an oil refinery". This contradicts previous statements by Commerce Department officials that a decision would be delivered by December 31.

Senator MCINTYRE. All right, Mr. Corey, proceed in your own fashion.

Mr. COREY. Let me start at the beginning. You will see as you look at the chronological history the first two dates of June 19 and September 13. On the 19th of June the Maine Port Authority submitted its first application to the Foreign Trade Zones Board. This is a most relevant date because it marked the culmination of just about a year of negotiation with the Foreign Trade Zones Board to the end that they would accept the port authority's application.

Senator MCINTYRE. Are you telling me that beginning in June of 1967 the first contacts were made with Commerce or with the Board? Mr. COREY. That is precisely so, sir.

Senator MCINTYRE. I see. So this is June 19, 1968, when it first submitted its application.

Mr. COREY. That is right. Its first application.

Senator MCINTYRE. But negotiations had preceded this for 1 year? Mr. COREY. For approximately 1 year.

Well, after the Board looked at that first submission the Board was quite horrified and said that it just wasn't good enough and that we would have to do considerably better.

On August 17 Mr. Nixon and I came down to see the Board with what was eventually our final application. It took the Board approximately a month-that is the time between August 17 and September 13, 1968-to determine that this application in the Board's own view was technically perfect and in apple pie order.

Senator MCINTYRE. This is on September 13 you were so informed? Mr. COREY. That is right, Senator. It may be of more than passing interest to know that at that time we were informed by the staff of the Board that they were really quite surprised that such a decent job could be done in so short a time. Evidently they had anticipated that this period of acceptance would be considerably longer than it turned out to be.

On September 18 notice of hearings at Portland were published in the Federal Register, and the hearings were set for the 10th of October.

On the 9th of October, as the Governor pointed out, announcement of extraordinary-and I think we ought to underline "extraordinary"-it was just unprecedented-Washington hearings were announced in the Federal Register. No additional notification was made to the applicant. We learned about it just days-less than a week before that Washington hearing on the 15th.

At about that same time, October 9, the rules for the conduct, that is the procedure of the Portland hearings, were altered. We were denied the right of direct confrontation with opponents of our application who came to Portland and prepared to discuss oil, and not to discuss foreign trade zones. This denial was in the face of an earlier precedent established by the Board in similar circumstances allowing an applicant at another hearing in another State to cross-examine opponents of its application.

The Governor and I went down to see Assistant Secretary McQuade, and the Governor said at that time that it was his reading of the jurisprudential system that people concerned in the outcome of a hearing have a right to direct confrontation to parties adverse to their position, and I certainly have that view.

On October 10 the announcement of a 21-day period commencing on October 15 for the filing of additional information was made. So that this 21-day period was supposed to begin running on October 15, and then it would expire on November 5.

If you turn to the second page, Senator, and look at November 5, you will see that that date, November 5, which was the initial date for closing the record on the hearings, was postponed until December 6, over a month later.