in the introduction of Senate Joint Resolution 92 (78th Cong., 2d sess.). Favorable action thereon was taken by the Senate Committee on Interstate and Foreign Commerce directing the Commission to "inquire into and report to the Congress on various matters with respect to natural gas' Necessary investigations such as that in Docket No. G-580 were clearly within the contemplation of the Congress when it enacted the Natural Gas Act. Section 11 (b) of the act makes it the duty of the Commission to assemble and keep current pertinent information relative to the effect and operation of any interstate compact dealing with the conservation, production, transportation, or distribution of natural gas, and to report to the Congress from time to time the information thus obtained, together with such recommendations as may appear to be appropriate or necessary. Still more broadly, section 14 (a) authorizes the Commission to conduct investigations which may be necessary "to aid in the enforcement of the provisions of this act or in prescribing rules or regulations thereunder, or in obtaining information to serve as a basis for recommending further legislation to the Congress." The investigation was not-and because of the close interrelationship involved could not appropriately be limited strictly to those matters of interstate transportation and commerce with which the regulatory duties of the Federal Power Commission are directly concerned. It was emphasized from the very beginning, however, that the scope of the investigation should not give rise to wholly unfounded fears that the purpose was to extend unduly the regulatory jurisdiction of the Commission to matters properly coming within State regulation under our system of government or to embrace control over the oil industry. The investigation was conducted in a cooperative manner-regarding which there has been much favorable comment-between the Commission, the State regulatory bodies, the natural-gas industry, and the coal, railroad, and labor interests, providing all these and other interested parties an opportunity to present their views so that the Commission could inform the Congress and the public of the issues involved, and, if necessary, recommend to the Congress amendatory legislation if the need for any such legislation should develop. The procedure adopted and announced at the outset of the hearings, which was received favorably by all concerned, provided for submitting the conclusions of the staff report for consideration and comment by all interested parties prior to submitting to the Congress the report embodying our principal findings and recommendations. Under these circumstances, we believe that enactment of any piecemeal legislation before that procedure has been carried out would be clearly inappropriate. Up to this time, five sections constituting approximately half of the staff report have been so released for comments, and other parts will be made available to the parties for comment as soon as they have been completed. Although there was general accord between the Commission and industry regarding this cooperative procedure, the several bills above referred to have been introduced and their passage urged, without any regard for the fact that the investigation is approoaching completion in accordance with the abovedescribed procedure. It is our intention, of course, to present our conclusions in the forthcoming report regarding the matters presented in the proposed bills, as well as other matters which we believe should be brought to the attention of Congress. The present efforts to amend the Natural Gas Act, prior to the filing of our report with the Congress, are designed to prevent the Commission from proceeding in an orderly manner to present to the Congress its comprehensive report on the entire subject matter of the investigation. Furthermore, the case of Interstate Natural Gas Company, Incorporated v. Federal Power Commission, which has been referred to as the principal reason for the demand of oil and gas producers for an amendment of section 1 (b) of the act, is presently pending before the Supreme Court of the United States. Argument in this case is scheduled to be heard about May 1. The amendment of section 1 (b) prior to a decision by the Supreme Court in the Interstate case appears to us to be an unsound procedure. Clearly, the Court should have an opportunity to express its views concerning the statutory questions which have been presented to it, in order that the Congress, the Commission, and all interested parties may have the benefit of the Court's authoritative pronouncement concerning the meaning of the statutory provisions which have been in dispute. Until the Supreme Court has decided this pending matter, there is no certainty that there is any need for considering an amendment of section 1 (b) with reference to production and gathering. There can be no valid objection to following an orderly procedure in settling this matter concerning which there has been so much agitation and misunderstanding. For the reasons above stated, we believe that the amendments to the Natural Gas Act as proposed in the pending bills should not be adopted at this time, in advance of the completion by the Commission of its consideration of all of the matters under consideration in the natural gas investigation and the filing of our report with the Congress. We earnestly suggest that any consideration of amendments to the act should be dealt with comprehensively and deliberately in terms of the broad public interest, without undue haste and pressure, and not merely with reference to certain matters which are urged by those who have a special interest in securing particular changes which would be of advantage to them. The public interest will be better served if the procedure originally contemplated by the Commission is continued to completion, so that the conclusions and recommendations in our report will receive such attention and consideration as they merit. This report will be before the Congress within a few months. There is no emergency requiring immediate action on these bills. No one will be harmed if the Congress defers its consideration of amendments until there can be before it the Commission's forthcoming comprehensive report on the problems as a whole. This report has been cleared with the Bureau of the Budget in accordance with the provisions of Budget Circular A-19. In this connection, a letter from the President, dated April 9, 1947, a copy of which is appended hereto, states that "It seems to me that the position of the Federal Power Commission, with respect to this proposed legislation, is an appropriate one." Hon. NELSON LEE SMITH, By FEDERAL POWER COMMISSION, THE WHITE HOUSE, Washington, April 9, 1947. Chairman, Federal Power Commission Washington, D. C. MY DEAR MR. CHAIRMAN: I have your letter of April 3, 1947, transmitting a proposed report of the Federal Power Commission on certain bills (S. 734, H. R. 2185, H. R. 2235, H. R. 2292, and H. R. 2569) to amend the Natural Gas Act of 1938. The proposed report calls attention to a comprehensive investigation of the natural gas industry, now well underway by the Federal Power Commission, and expresses the view that until the completion and filing with Congress of the results of this investigation, there will be no adequate basis for a sound evaluation of the various proposals contained in the above-mentioned bills. The proposed report on these bills also calls attention to a case (Interstate Natural Gas Company, Inc. v. Federal Power Commission) now pending in the United States Supreme Court, with hearing set for about May 1, the determination of which by the Court will supply an answer as to the meaning of certain provisions of the Natural Gas Act which have been in dispute. For the reasons thus set forth, the Commission recommends against the enactment of any of these bills at this time. It seems to me that the position of the Federal Power Commission, with respect to this proposed legislation, is an appropriate one. Sincerely yours. Hon CHARLES A. WOLVERTON, (S) HARRY TRUMAN. FEDERAL TRADE COMMISSION, Chairman, Committee on Interstate and Foreign Commerce, MY DEAR MR. CHAIRMAN: In response to your letter of March 24, 1947, the Commission submits herewith in triplicate the report of its general counsel in the matter of H. R. 2185, H. R. 2235, H. R. 2292, and H. R. 2569, Eightieth Congress, first session, bills to amend the Natural Gas Act, approved June 21, 1938, as amended. Pursuant to regulations, this report was submitted to the Bureau of the Budget on April 7, and in a letter of April 9, 1947, the Commission was informed that there would be no objection to the submission of this report to your committee. The report is dated April 4, 1947. By direction of the Commission. Sincerely yours, GARLAND S. FERGUSON, Chairman. MEMORANDUM FOR THE COMMISSION Re H. R. 2185, H. R. 2235, H. R. 2292, H. R. 2569-bills to amend the Natural Gas Act, approved June 21, 1938, as amended By letter dated March 24, 1947, the chairman of the House Committee on Interstate and Foreign Commerce referred to the Chairman of the Federal Trade Commission copies of the above-numbered bills for report, together with such comment as the Chairman of the Commission may desire to make. In requesting the comments of the Federal Trade Commission on these bills, the chairman of the committee apparently was under the impression that within the past 2 years the problems dealt with in the bills has been the subject of an investigation by this Commission. That has not been the case. The Commission, of course, did conduct an investigation into the public-utility field which resulted in its report on utility corporations in 1935, and this report was responsible for the passage of the Natural Gas Act, in 1938, but since that time this Commission has made no study and has submitted no report concerning any phase of the natural-gas industry. It is understood, however, that the Federal Power Commission, acting in cooperation with the State regulatory bodies and the naturalgas industry, has recently conducted a rather comprehensive investigation into all aspects of this industry, particularly in relation to the provisions of the Natural Gas Act and their administration, and this may have been the investigation the chairman of the committee had in mind. This investigation was instituted by an order of the Federal Power Commission issued on September 22, 1944. Inasmuch as the Federal Trade Commission has had no experience in the administration of the Natural Gas Act, and since it is not informed at this time on any of the questions of public policy that may be involved in the various proposals contained in these bills, the Commission is not in a position to comment either favorably or unfavorably on any of these proposals. Respectfully submitted, APRIL 4, 1947. W. T. KELLEY, General Counsel. FEDERAL TRADE COMMISSION, HON, CHARLES A. WOLVERTON, Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: This is in further reply to your letter of April 8, 1947, with which you enclosed a copy of the bill H. R. 2956, to amend the Natural Gas Act, approved June 21, 1938, as amended, for report, together with such comment as the Commission may desire to make. It is noted that the bill H. R. 2956 is one of several bills that have been introduced in the Eightieth Congress to amend the Natural Gas Act. In response to your previous request for a report on four of the others (H. R. 2185, H. R. 2235, H. R. 2292, and H. R. 2569), the Commission, in its letter dated April 10, 1947, advised you that it is not a position to comment either favorably or unfavorably on the various propositions contained in these bills, and has also informed the clerk of the committee that it does not desire to be represented at the hearing to be held on Monday, April 14, 1947, to consider the bills. In view of the foregoing, and inasmuch as the Commission possesses no information that would be of material assistance to the committee in its consideration of the bill H. R. 2956, it is requested that the Commission's letter of April 10, 1947, relating to the bills H. R. 2185, H. R. 2235, H. R. 2292, and H. R. 2569 be considered as applicable also to the bill H. R. 2956. By direction of the Commission. Yours very sincerely, GARLAND S. FERGUSON, Chairman. INTERSTATE COMMERCE COMMISSION, HON. CHARLES A. WOLVERTON, Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. MY DEAR CHAIRMAN WOLVERTON: Your letter of February 26, 1947, addressed to the Chairman of the Commission and requesting a report and comments on H. R. 2185, introduced by Congressman Rizley, to amend the Natural Gas Act approved June 21, 1938, as amended, has been referred to our legislative committee. After careful consideration by the committee I am authorized to submit the following comments in its behalf: The subject matter of this bill does not pertain to the duties of the Interstate Commerce Commission, and for that reason we are unable to express a helpful opinion with respect to its merits. Respectfully submitted. WALTER W. M. SPLAWN, Chairman, Legislative Committee. JOHN L. ROGERS. STATEMENT OF HON. ROSS RIZLEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OKLAHOMA The CHAIRMAN. The first witness will be our colleague, Congressman Rizley of Oklahoma. Mr. Rizley, we are pleased to have you with us this morning and we will ask that you proceed. Mr. RIZLEY. Thank you very much, Mr. Chairman. I want the chairman and the members of the committee to know that I deeply appreciate the fine treatment that I have been accorded thus far in connection with this, what I believe to be, one of the most important bills that will come before the Congress because it affects not only the natural-gas industry, but it affects every segment and phase of that industry, including millions of people as consumers who are anxious, ready and willing, and waiting to be able to get hold of some natural gas. I want to say, Mr. Chairman, preliminarily, that this statement I am sure will seem unduly long, but because of the various important phases of this legislation and the fact that we have undertaken to deal with the Natural Gas Act in toto, I apologize in the beginning if this presentation seems too long, but I just did not seem to be able to cover what I think is important for the committee to have, and the history that should go with legislation of this kind, in any shorter period, and I shall direct my remarks, of course, to H. R. 2185, which is a bill that I introduced several weeks ago. And to companion bills introduced by my colleagues, Congressman Carson, of Ohio, and Congressman Davis of Tennessee. Mr. Chairman and gentlemen of the committee, the Natural Gas Act became a law June 21, 1938. Since then the Federal Power Commission, and the courts which have reviewed the Commission's action, have interpreted and applied the act differently from what the Congress intended in several important respects. In the face of the clear provisions of section 1 (b) that the act shall not apply to the production and gathering of gas, the Commission has adopted, and the courts have sustained-always by a divided courtcertain regulations which have had both a direct and indirect effect upon the production and gathering of gas. Highly technical and un convincing reasoning has been employed to circumvent the congressional intent. The Commission has at times even asserted the power under this act to say for what purpose natural gas may or may not be used. It has formulated a distinction between what it terms "inferior" and "superior" uses of gas. It has undertaken to weigh the economic interest of the Nation in the use of one class of fuel as against another and, thus, to envisage dictation by a Federal administrative agency of who may use natural gas as fuel and for what purpose it may be used in the national economy. The Commission has attempted to extend its authority over local distribution companies already subject to State regulation, contrary to the real intent of Congress, and merely because those companies take gas from an interstate pipe line. The slow and cumbersome regulations adhered to by the Commis-. sion in administering the certificate provisions of the act have resulted in great delays, confusion, and public inconvenience. The Commission has prescribed no definite or satisfactory standard for segregating property and business over which it has jurisdiction from that over which it does not have jurisdiction in cases where a concern engages in both jurisdictional and nonjurisdictional operations. The uncertainties, doubts, vacillations, and delays that have arisen in the administration of this act make it imperative that it be amended. It should be amended so that the Commission's jurisdiction, powers, and functions may be readily determined with precision and definiteness, and to the end that the Commission, the persons who are subject to its provisions and the courts may know what the act covers and what it means in all of its material aspects. H. R. 2185 will amend the act so that there can be no doubt in any quarter that production and gathering of gas and sales incident thereto are not subject to regulation thereunder. The point where the Commission's jurisdiction begins and where it ends will be clearly defined. It will simplify the certificate provisions of the Act so that the unnecessary and cumbersome procedure now employed may be eliminated and essential public service expedited. H. R. 2185 will make it clear that the Commission shall not have the power to control the purposes for which the public may use natural gas. Manifestly, if the Commission were possessed of the power to specify by whom and for what purpose natural gas may be used, then through the exercise of such stupendous power it could say to the consuming public what fuel they must use, and by such indirection control the energy resources of this great industrial Nation. In order to accomplish the primary objectives to which I have just referred, the proposed amendments supply the appropriate definitions and standards which are not now in the act. At the outset let it be understood that I endorse fully Federal regulation of the transportation of natural gas between the States and the sale for resale of gas so transported. I would neither sponsor nor support any measure which would nullify regulation of those activities. But I believe that Federal regulation should go no far |