get agreement on with my own mathematicians and economists in my own company. And my company would vary considerably with another company.

I can just imagine the small asphalt plant that gasoline is a byproduct, how he would price his gasoline, and petrochemical plant, à Puerto Rican operation that is going to make petrochemicals and send the excess gasoline into this coast.

I just don't see how you could formulate any type of formula, set up any type of criterion for determining product costing, under the varying conditions that we have. I just don't believe there is any way possible. And I think you have to take this thing on a case-by-case, and analyze any type operation with its different equipment, its different crudes, its different processes, its different investments.

Commissioner MACINTYRE. I wish you would answer my question, though, without reference to that sort of a problem, because maybe that will not prove to be a problem to the Commission when it comes down to considering these final 1, 2, 3, 4 items.

Mr. BRYAN. I thought you started off with that.

Commissioner MACINTYRE. No, no; I did not specify what these are. I said if and when the Commission should do a thing like this, it should list 1, 2, 3, 4, and fully describe and specify what they are. In that connection, before you answer that question, let me also express the view that if and when the Commission would do that, it would not be specifying anything except what the Commission would have already arrived at a judgment fits well within section 5 of the Federal Trade Commission Act, as an unfair practice-whatever they are. It has no authority to do otherwise under the law.

Now, my question-with those limitations and those assumptions, would you prefer thus to be advised or not advised?

Mr. BRYAN. Well, that is a question that is a difficult one to answer, because I don't know what you would be proposing.

Commissioner MACINTYRE. Well, I just advised you we cannot propose anything except what the law already provides.

Now, would you want the judgment of the Commission in advising you what the things are the law provides?

Mr. BRYAN. I think it would be helpful. On the other hand, I point out some difficulties.

You may advise certain practices in pricing, for example, on an area basis. Whether we could follow those and still be competitive, and save our business, might be another matter. And until we knew what these things you were proposing-you might propose a differential between brands as a fair trade practice. Whether we could agree to that and live with it and operate with it would be another entirely different matter.

So for me to answer categorically that we think this is a good idea is impossible, because I would have to know what types of things you were talking about. If you said you didn't think it was the right thing for a major oil company to sell to independents, I might agree with that thoroughly. We don't do that.

Now, if your particular rules fitted my particular situation, it would be wonderful.

Commissioner JONES. You suggest a rather interesting possibility, however, and that is that one might frame some of these guidelines

55-013-66-vol. 1—37

and see how the industry can live with it-make them for 9, 12 months, and reconsider them.

Mr. BRYAN. Well, our experience and I think some of you gentlemen may know it-back in the NRA days was that these things were not practical, they never worked out.

Commissioner JONES. The NRA and the Commission are two different things.

Mr. BRYAN. I just think what you would have just pardon me just a minute.

I think what you would have, that we always have with these sort of things you would have a group that would be very anxious, as we are, to please the Commission, to please the various Government people, to accept the leadership, which we would like to. And this is what we found in NRA days. These people simply left themselves sitting ducks to the people who knew what these particular companies were going to do and how they were going to operate. This only became then an umbrella, so to speak, for the others who would pay no attention to these particular rules, to take the business away, and to create all kinds of problems in the industry. I went through this.

We had a rule that we would not furnish equipment, the dealers would own their own equipment. Well, the major companies, or the big companies, the companies that had a lot at stake in their relationships with the Government, and in industry, followed this rule. But you had all kinds-you had money passing out under the counter, and checks handed the dealer for the equipment, and you had all of these sort of things going on.

The thing finally broke down because this was just used-it put everybody on notice that certain companies were going to do these certain things, and then they could do these other things. Unless you had some force to these particular things, I think all you would do is create more difficulties than you have now.

That is my honest opinion.

Certainly I cannot say positively that these things are not workable. I just do not believe they are.

Commissioner JONES. What you are suggesting is that they may not be workable if they are faced with business reality. Where they don't face that, there is no reason why they could not work.

Mr. BRYAN. These kind of rules are usually followed by certain companies. And other companies simply take advantage of these rules to prey on the business.

Chairman DIXON. With respect to your number of dealers, you use the figure of 3,000 that are either company and salaried operators, together with what you called a commissioned operator. And then you used a figure of 20,000.

In your written statement you talk about 31,000 retail outlets owned by Humble. Is that correct?

Mr. BRYAN. No-are served by Humble.

Chairman DIXON. They handle Humble products?

Mr. BRYAN. Handle Humble products.

Chairman DIXON. You have 31,000 dealerships of some description? Mr. BRYAN. That is right.

Chairman DIXON. Now, do you not own Oklahoma-the Oklahoma Oil Co. ?

Mr. BRYAN. Yes. It is not called that any more.
Chairman DIXON. What is it called?

Mr. BRYAN. It is called Humble Oil & Refining Co.

Chairman DIXON. You sell a brand of gasoline called Oklahoma. Mr. BRYAN. No, no longer. We merged that into the Humble operation, and it is now called Enco.

Chairman DIXON. Are you selling any private brands?

Mr. BRYAN. We have one or two historical accounts that represent less than a quarter of 1 percent.

Chairman DIXON. One-quarter of a percent to you might be pretty good size. What does that mean?

Mr. BRYAN. It may mean-I have not figured it out. But we have about 300,000 barrels a day of gasoline.

Chairman DIXON. That is a lot of gasoline.

Mr. BRYAN. The figure 300,000 barrels a day of gasoline represents Humble's approximate total sales of gasoline to distributors and dealers. About 998 barrels a day of this total is sold to private branders. And they are all confined—and they are all accounts that we have had for a number of years.

Chairman DIXON. What are their names?

Mr. BRYAN. I do not really know.

Chairman DIXON. Is one of them named Pate?
Mr. BRYAN. No, that is an Enco branded account.
Chairman DIXON. Is one of them named Carter?

Mr. BRYAN. No, that is Enco branded. We have converted all of those companies

Chairman DIXON. Will you find out what those two names are, and furnish us with the names, and where they operate, where they are located, and we will make that a part of the record, also.

Mr. BRYAN. We will be glad to.

Chairman DIXON. Do you operate in Newcastle, Ind.

Mr. BRYAN. No, sir.

Wait a minute. I don't know where Newcastle, Ind., is so I can't answer the question.

Chairman DIXON. I don't either.

East of Indianapolis.

Mr. BRYAN. We operate in Indiana, but we have a very scattered representation.

Chairman DIXON. You don't even know where it is. It wouldn't do me any good to ask you the question of what brought about the market disruption there last week.

Mr. BRYAN. I would not know.

Chairman DIXON. Something happened there last week. It seems like we hear about it the day it happens.

You were talking about stamps. You were being questioned with respect to stamps.

Now, in your company salary stations, if stamps are to be used there, the company makes that decision?

Mr. BRYAN. That is right.

Chairman DIXON. In your commission distributor, if that is what you call it, you make that decision, also?

Mr. BRYAN. We would make that decision jointly with the commission agent, or the manager.

Chairman DIXON. Jointly or not-whether he liked it or not, you tell him what to do? This is a funny kind of a joint arrangement. Mr. BRYAN. We would have that right, yes.

Chairman DIXON. It is like owning a hundred percent of the stock of a corporation, and voting yourself a stock option-it was a good meeting.

Mr. BRYAN. Yes, sir.

Chairman DIXON. I remember Commissioner MacIntyre asked you something-I believe it was him—that led to this exchange practice. How do you know, or do you know, what your competitors will have to pay for exchange gasoline?

Mr. BRYAN. An exchange gasoline is exactly what the word says. It is exchanging some of one company's product for another company's product, to give each the freight savings that are possible as a result of not having to crosshaul.

Chairman DIXON. It is like swapping marbles. There is no money value?

Mr. BRYAN. Unless there is a difference in specifications. This is based on the difference in values on the marketplace for octane differences. And then there is usually a bargaining arrangement as to how the transportation, if there is any difference, might be worked.

For example, it doesn't always fit evenly 50-50 on transportation. Chairman DIXON. I believe you said that you were not worried about the incremental barrel, because among other things you used all of your production-I must assume that. You said you even didn't have a hundred percent

Mr. BRYAN. We purchase about 5 percent of our gasoline.
Chairman DIXON. Well, do you sell any crude?

Mr. BRYAN. We have to buy crude. Of course, as you understand, with crude, it is not always in the same location as your refinery. Chairman DIXON. That is the reason I asked you.

Mr. BRYAN. We sell crude, but we have to buy crude in other locations. We are a net buyer of crude.

Chairman DIXON. You are a net buyer of crude?

Mr. BRYAN. Yes, sir.

Chairman DIXON. You are limited on your importation of crude, foreign crude?

Mr. BRYAN. Yes, sir. We have the lowest of any company on a percentage basis in this United States. That is because we followed the voluntary program of imports, and we have no historical position.

When the mandatory imports went in, we went on the sliding scale, and with our volume, we got the lowest percentage. There is no way we can change that. And we certainly would not purchase a lot of crude to get a 51/2-percent import quota.

Chairman DIXON. You would have to buy a whole lot?

Mr. BRYAN. Yes, sir.

Chairman DIXON. How do you arrive at an equitable price or any reasonable price for your gasoline if you have no idea of its cost?

Mr. BRYAN. What we do is attempt to set what we call target prices based upon the going markets. I am talking about the gulf market.

For example, we use the gulf market as a base. If the cargo price in the gulf happens to be 102 cents, we would add transportation to the New York area, or to the Washington area, terminal costs, trucking to the local plant or barging to the local plant, and that would become plus our distributing margin-would become our so-called tank-wagon price.

Chairman DIXON. That would still be rather arbitrary, if it was your own oil that you were hauling, wouldn't it?

Mr. BRYAN. That is the way we set up our function, on that basis. Chairman DIXON. Go ahead.

You set it up to that point, and then what does that give you? Mr. BRYAN. What that gives us is, sometimes it is above what the competitor is willing to sell it for, so we have to meet the competition. In effect, competition sets the price.

Chairman DIXON. There is no argument or debate about the fact that Esso is the leading company in the eastern market.

Mr. BRYAN. Well, I am glad to hear those nice words.

Chairman DIXON. Are you telling me you are following somebody in this market?

Mr. BRYAN. Most of the time in the last few years we have been following somebody.

Chairman DIXON. You are the leader, though. You have the greatest share of the market.

Mr. BRYAN. The leader is the man who sells at the lowest price. Chairman DIXON. That is one way to call it leadership. But if he doesn't sell very much-what is your percentage of this market? Mr. BRYAN. Well, it varies from State to State.

Total U.S. market, we have about 8 percent. In the east coast, in the Northeast States, we have about 14 percent. In the Southeast we have about 18 to 19 percent. Some markets we are practically nil. Some markets we don't operate in.

Chairman DIXON. I have heard you referred to in the East as the leader.

Mr. BRYAN. We like to think we are the leader in good business practices, the kind of stations we run, and the volume we do.

Chairman DIXON. On page 7 of your statement, your Humble statement, you stated that the marketing division operates at a profit. Again I come to how do you know, unless you know what costs are? Mr. BRYAN. This is based on the markets. We charge our refineries the posted price for crude. We have to, because such a large percentage is purchased. We charge our marketing department the going cargo prices of the wholesale markets that exist in the gulf, and that is the basis for billing between our functions, it is a basis for transferring values, as we say, between our functions. These are not cost figures. These are market figures.

Chairman DIXON. You made some reference to these different type arrangements you had with your station operators. I believe you were asked directly the question, do you have any consignment stations, and you said "No"; is that right?

Mr. BRYAN. That is correct.

Chairman DIXON. Well, what is the difference between a commission station operator and an operator of a station that is getting its gasoline and products on consignment?