commended that indirect interlocks be prohibited, no law making them illegal in industrial corporations has been passed. However, a host of recent developments have rekindled interest in presently permitted interlocking directorates: growing oil shortage, concentrating of markets in certain regions, closing of 10,000 out of 218,000 service stations during 1973, reduced refinery construction and expansion in the U.S., and increasing importance of financial reserves for domestic expansion. On October 24, 1973, Senator Adlai E. Stevenson (Illinois), who had been conducting hearings on natural gas proposals, wrote to Acting Attorney General Robert H. Bork in regard to interlocking directorates.*. The Senator attached a list of directors of oil and gas corporations and requested the Acting Attorney General to determine whether or not such interlocks were in violation of the law. Four of the individuals on the list are associated with Texaco, Amerada Hess and Standard Oil of Ohio.

In the past, Congress has paid particular attention to bank interlocks since credit, bank loans and terms of financing are crucial to the success of a business. A bank director is prohibited from being the director of another bank. Bank directors or a director of any other business will consciously or unconsciously favor those corporations with which he has connections.

Oil company directors who are directors of banks and other corporations form a cozy and exclusive club where it is convenient for them to reach understandings and agreements which result in common, if not conspiratorial, action. Oil company interests in large banks, particularly where a relatively large number of oil men are bank directors, could generate a multitude of potential conflicts of interests. imagine that the Chemical Bank of New York or Morgan Guaranty or Chase * See Appendix, page 54.

It is easy to

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Manhattan or Bank of America would approve a financing scheme or a line of credit for Exxon or Mobil or Gulf or Texaco or other oil giants, since each of these banks are interlocked at least four times with the major oil companies. Outsiders simply do not know what goes on behind the closed doors of the financial institutions. One can reasonably suspect that in times of tight money the independent oil companies, which do not have interlocked directorships with the major banks, would find it difficult to get financing. The bank-big oil directors might say: "Why should we finance our competitors? Let's keep the major oil companies going. You scratch my back and I'll scratch yours."

In the next few months this nation must make some major decisions on how to control the big oil companies, how to have access to necessary information on their activities, and how to preserve the independent companies which depend on the major oil companies for supplies of crude oil, pipeline and refinery use, and petroleum products. Forbidding indirect interlocking directorates of major oil companies is a necessity, as is divestiture of producing, marketing and pipeline facilities by the major oil refiners. Careful study should be made of the influence on other institutions

by interlocking directorates.

Fuel shortages could be remedied by merely

calling a director of a major oil company, who will find enough to carry an

institution over for the winter or summer.

gains an unfair advantage over competitors.

In so doing the institution

Such hidden influences could

erode the public's trust in our emerging priority system for the allotment

of fuels.

OIL-BANK INTERLOCKS

The following directors of oil companies serve on the Boards of Directors or Advisory Committees of some of our largest American banks:

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Bank of America, largest bank in the U.S.; total directors 16 of whom four are oil men. One is a member of the advisory committee.

E. Hornsby Wasson,, director of Standard of California.

John G. McLean, director of Continental.

Chauncey J. Medberry, III, chairman of Getty 011.

Robert DiGiorgio, director of Union 011.

Prentis Cobb Hale, director of Union 011.

Chase Manhattan, second largest bank in the U.S.; total directors
- 25 of whom four are oil men. One oil man is a member of the
advisory board.

John Kenneth Jamieson, chairman and chief executive of Exxon.

William P. Tavoulareas, director of Mobil.

William A. Hewitt, director of Continental.

Robert 0. Anderson, director of Atlantic Richfield.

John E. Swearington, chairman of Standard of Indiana.

First National City Bank, third largest bank of the U.S.; total
directors 26 of whom three are oil men.

=

Chemical Bank of New York, sixth largest bank in the U.S.; 22 directors of whom four are oil men. Five members of the advisory committees are also oil men.

Ralph Warner, Jr., Chairman of Mobil 011.

James G. Riordan, director of Mobil 011.

T. Vincent Learson, director of Exxon.
Howard W. McCall, director of Texaco.
Monroe Edward Spaght, director of Shell.
H.I. Romnes, director of Cities Service.

William C. Renchard, director of Amerada Hess.

William S. Boothby, director of Getty 011.

Joseph A. Thomas, director of Getty 011.

Other indirect interlocks of the eighteen major oil companies with American banks include the following:

Mellon National Bank and Trust

Bob Rawls Dorey (Gulf), Earl Delwin Brockett (Gulf), James H. Higgins

(Gulf) and John Corcoran (Continental).

Continental Ill. National Bank

William A. Hewitt (Continental), Donald Martin Graham (Texaco) and

Joseph S. Wright (Standard of Indiana).

Bankers Trust, New York

A. W. Tarkington (Continental), Frank Pace, Jr. (Continental)

and Lewis A. Lapham (Mobil).

American Express:

Raleigh Warner, Jr. (Mobil) and Robert V. Roosa (Texaco).

INTERLOCKED DIRECTORATES BY OIL COMPANY

Source: "Standard and Poor's Register of Corporations, Directors and Executives," 1973.

The Major oil companies are listed in the order of assets as reported in "The Fortune Directory of the 500 Largest Industrial Corporations," (May, 1973) and the 1973 Edition of the National Petroleum News Factbook, McGraw-Hill, New York, 1973.

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