Note: These data are from the 1960 census, because differences for corresponding groups from the January 1969 CPS are not statistically significant, even though they tend to show a pattern very similar to that for 1960. (See 1960 report 3A of vol. 2, Women by Number of Children Ever Born, table 37 on income of husband, and table 25 on education of woman.)

Mr. HORTON. I want to join my colleague, Mr. Conte of Massachusetts, and my other colleagues in commending the mayor for taking his valuable time to come here and talk to us about this very critical problem. I realize that this is just one of the critical problems that he faces in a major city such as New York City. And I do want to commend the mayor for the outstanding job that he has done in fighting against almost impossible odds.

And we who have served with you in the Congress, Mr. Mayor, are proud of the way you have worked to solve the very serious problems which have confronted you.

One thing I was interested in. In testifying you mentioned the conference of mayors, and I know you have been very active in the conference. You have demonstrated to us here the critical situation you are faced with in New York City. Is this unique in the country or are you talking about a subject that is not unique, but which affects other major cities, and perhaps even our smaller cities?

Mayor LINDSAY. Congressman Horton, it is not special to New York at all. It involves particularly the east coast. But it is also a Western problem as we see it.

Chairman Swidler is going to talk to you later, Chairman Swidler from New York State. He has been deeply concerned about this. He met with me in my office at city hall not long ago. And we are delighted that he has taken on the chairmanship of the New York State Public Service Commission and is breathing new life into it. It is badly needed. I'm sure that when the chairman testifies that he will tell you how critical he sees this problem for all of the cities of the State.

Your city of Rochester has been really penalized by this national crisis. I think the chairman, who is an expert and a professional in

this area, can talk to you more about the rest of the country, too. He was the Chairman of the Federal Power Commission here in Washington, as you know.

Mr. HORTON. I think it is a situation which is becoming more prevalent throughout the country, and particularly, as you say, in the eastern seaboard. And it is a serious problem right here in the District of Columbia. And it was a difficult problem this summer, and I would expect we will have more problems this fall and winter.

In the event your recommendations are not carried out, what do you see is the future of the situation in New York City, particularly addressing your remarks to this winter; what do you foresee if your recommendations are not carried out?

Mayor LINDSAY. I think if something isn't done that we face the possibility of a very serious crisis. And we don't want to be in that position. That is why, as we became increasingly aware of the problem, we have been sending up more storm signals, meeting with the New York City congressional delegation, having communications back and forth, and correspondence with Congressman Conte, and backing up the leadership that he has taken. All this we have been doing because we are looking down the road. And we wind up with a shortage of fuel.

I am also a practical politician, Congressman Horton. And if we wind up next February with a shortage of fuel I am going to get the blame for it. I am teasing a little bit here now. But the fact is, we don't want to be in a position next winter where we have millions of peoples in homes throughout New York who all of a sudden discover that they are cold.

Mr. HORTON. I think it is important that we listen to voices such as yours in these critical times, and that we pay heed to what the problem is. Sometimes the American public is too willing to minimize its problems, to assume that they are not that serious and that they can be worked out somehow. But too often the experience has been that the problems are getting worse in our big cities. And they will probably be worse next year if something is not done soon.

With more people, more demand, more electrical equipment, the situation is getting progressively worse. Every day that goes by without a solution tends to create additional problems. And that is the point I want to make, that it is important to listen to these voices that are being raised now.

I also would like to have you comment further on your statement with regard to the oil production limitations that are decreed by the Louisiana and Texas commissions. Have you found in your experience that this has been a stumbling block to obtaining these fuels?

Mayor LINDSAY. Well, fuel and its supply are within the province of the National Government, and it has to do with the national wellbeing. Its production and distribution simply just can't be the private property of any single interest or a handful of people. It is too important to the welfare of the Nation. The tremendous powers that those two commissions have in those two States can effect both supply and price. I don't think it is in the public interest for the whole country. And I think that the National Government has a compelling interest in overriding that power.

Mr. HORTON. Thank you very much.

Mr. SMITH. Mr. Hungate.

Mr. HUNGATE. I would like to join my fellow members of the committee in congratulating the mayor on his statement, on his

recognition of the seriousness of the problems and his challenging suggestions as to how we might work to meet them.

And in addition to the public interest, I appreciate his statement as to the practical politics involved in it. And we are concerned with it in that way too. And we recognize that he is a leader of one of the branches of the Republican party. But we think that when the lights go out a few years from now he may be a Democratic leader also.

We appreciate his contributions to good government and his willingness to work on behalf of the public interest wherever that path leads.

It was a great privilege to serve with you, mayor, on the Judiciary Committee. And we miss you there. But we welcome you and appreciate your efforts where you are.

Thank you.

Mayor LINDSAY. Thank you very much, Congressman.

Mr. SMITH. Mr. Mayor, in closing I want to say that we appreciate your helping to point out the extreme importance of this energy crisis. And Mr. Evans mentioned the TVA feeding into helping New York City. Some people apparently have just now discovered, due to the brownout and the blackout, that if we have that, there is such a thing as needing peaking power. TVA and some of these others were established and constructed back in the 1930's for another reason, and we have been using that public power for our peaking power. But that source has run out, because it has been used as a steady source of energy. And so, except for Dickey Lincoln there just isn't much place to get any peaking power in the near future in the East. And you have been through a number of crisis up there. And, of course, garbage smells badly, but that is not as bad as being cold.

Mr. ADDABBO. Wait until December.

Mr. SMITH. But I do want to thank you again, and also for pointing out, no one else could as well as you, that at the working level you have found that there is no assurance of any Federal agency doing any planning or having any real policy for energy reserves or energy sources in this country. So I want to wish you well on your next crisis,

Mayor LINDSAY. Thank you.

Mr. SMITH. Next we will take Mr. Herbert Stein, Council of Economic Advisers, Executive Office of the President.

Mr. Stein, we are glad to have you today. I think you were here during the rest of the hearing, so you know the preliminaries.

And without taking more of your time, would you proceed as you desire.

TESTIMONY OF HERBERT STEIN, COUNCIL OF ECONOMIC ADVISERS, EXECUTIVE OFFICE OF THE PRESIDENT, ACCOMPANIED BY EDWARD MITCHELL, COUNCIL OF ECONOMIC ADVISERS, AND ANTHONY SMITH, OFFICE OF EMERGENCY PREPAREDNESS

Mr. STEIN. Thank you very much, Mr. Chairman.

I have with me Edward Mitchell, of the staff of the Council of Economic Advisers, and Mr. Anthony Smith, of the staff of the Office of Emergency Preparedness. And I appear here this morning as a substitute for Mr. Paul McCracken, Chairman of the Council of Economic Advisers, who unfortunately had to be out of town today.

In August the domestic affairs council-which is a cabinet level council in the administration-created an energy subcommittee with Paul McCracken, Chairman of the Council of Economic Advisers as its chairman, to study the problem of possible fuel shortages this winter and to recommend actions that would avert them. This committee under Mr. McCracken will also study the problem of shortages at least 5 years ahead. And this committee is now at work on this problem with the intention of having a report at the end of January.

So I would say, in response to some of the things that have been said earlier this morning, that we do have at this moment a body, including all the knowledgeable and interested agencies of the Federal Government, engaged in developing a longer run fuel and energy policy.

However, I want to talk this morning only about

Mr. SMITH. May I ask a question here? Perhaps I should have waited until later.

Will this group be in a position to coordinate with other parts of the Federal Government?

Mr. STEIN. Well, this is a group which includes the Council on Environmental Quality, the Department of State, the Department of Interior, the Federal Power Commission, the Office of Emergency Preparedness, the Department of Commerce, and the branch of HEW which is concerned with the pollution problem, and perhaps others, the Department of Transportation, so that it in itself will produce a report which represents the knowledge and findings of these agencies.

This is not intended to be a body to operate the national fuel and energy policy in the future. Whether there should be such a body. other than now exists is something as to which they may offer recommendation. May I digress to say as a suggestion, that whenever any subject comes up it is always that we don't have a body which combines all of the agencies of Government that are concerned with this problem. And of course it is very difficult to organize the Government in such a way that all aspects of any problem are consolidated into one body. I remember Rex Tugwell, who was one of Franklin Roosevelt's principal brain trusters, saying that President Roosevelt had this idea of organization, that all aspects of any problem should be in one agency. And Mr. Roosevelt thought that there ought to be a department of life in which would be bureaus of wildlife, childlife and nightlife which is somewhat akin to the problem of putting all aspects of the energy problem in one agency.

Anyway, I'm going to talk this morning about the winter problem, because this is the aspect of the problem in which this committee has offered some findings and recommendations.

In a press conference on September 29, Chairman McCracken and Gen. George Lincoln, Director of the Office of Emergency Preparedness, issued a joint statement announcing actions to be taken, and actions that have already been taken, to head off the problem. In my testimony today I would like to discuss the background of this situation, how these potential shortages came about, and the actions the administration is taking to deal with them.

The first point to be made is that all of the major energy sources, oil, coal, natural gas, and atomic energy, are to some extent substi

tutable. In the long run an electric utility, for example, may choose among all these sources. In the short run many existing facilities are capable of shifting from one fuel to another. Thus, the unmet demand for any particular fuel is inevitably transmitted to the other fuels and a particular shortage tends to become a general shortage. This is what is happening right now. The electric power that was expected to have been generated in atomic plants is behind schedule. The 10 atomic plants that were expected to have been on line by this winter, but which are not as yet, have a generating capacity greater than all atomic plants now in operation. If this shortfall in atomic energy is translated into equivalent coal production we are talking about 20 million tons of coal this winter, or just about the increment of this year's domestic supply over last year's.

This is not to say that coal will actually be the fuel that will take the place of atomic energy in the areas of these uncompleted atomic plants. The translation I gave is purely illustrative. The amount of residual fuel oil necessary to make up this shortfall could also have been calculated. The point is simply that a shortage in one fuel will have repercussions on other fuels.

The supply of natural gas has also been growing at a rate below what had been hoped for. This appears to be the result of inadequate incentives to explore for, and develop, natural gas wells. As a result some industrial users will find their supplies interrupted from time to time this winter in order to meet home heating and other demands and they will have to switch over to other fuels on these occasions.

In the short run, that is, for this winter, there does not seem to be very much that can be done about obtaining significant additional supplies of atomic energy and natural gas. The Federal Power Commission has been authorizing and will continue to authorize emergency interconnections of gas (and also of electric power). But this does not increase total supply; it merely redistributes it so as to alleviate localized problems.

Private industry, public utilities, and other consumers of energy have recognized this and focused their demands on two fuels, residual fuel oil and coal. The markets for these two commodities have therefore felt the brunt of the current demands, and prices in these fuels have risen sharply. The administration in taking its action has also recognized that these are the areas where additional supplies are available; the major steps announced deal with residual fuel oil and coal.

Up to now I have discussed the fuel shortage without mentioning the world outside the United States. If the markets for residual oil and coal outside the United States had been "normal," that is, with a supply-demand balance similar to what has existed in the past, our domestic fuel problems might have been solved by dipping into those markets a bit more heavily. Unfortunately, events outside the United States have resulted in a very unfavorable world supply-demand balance. There has been a rapidly growing world demand for residual fuel oil, especially low sulfur residual oil to meet air quality standards. Oil production cutbacks in Libya and the interruption of an oil pipeline in Syria have caused a shortage of tankers, since tanker runs from the Mediterranean have had to be replaced by runs several times as long from the Persian Gulf around Africa.