May I say, Mr. Chairman, further, that, as we view it, this additional language does not change the purpose or intent of H. R. 2185, but clarifies, by making a specific negation, namely, that it does not include these subclauses. Both of those subclauses, A and B, represent situations that have actually arisen.

"A" has arisen particularly where a local company builds a stub line from its system up to the line of the pipe-line company within the same State. It has to do that to get the gas. And yet that stub line has been made as the excuse, or pretext, for the local company to be declared to be engaged in the transportation of gas in interstate commerce which we believe is not the intent of Congress at all, and in at least one case in the State of Illinois, others that we have cited in other States, the company has been declared to be a natural-gas company subject to Federal regulation where the entire operation is within one State and is subject to effective control within the one State.

Subclause "B" refers to the matter of where one distribution company receives some gas and exchanges part of it with another distribution company in the same State, both companies being fully and effectively under State regulation. We do not believe Congress intended to take the jurisdiction of either of those companies away from the States for that reason. This clause is merely to make that point clear.

The CHAIRMAN. Mr. Henry, you have made a very complete, wellconsidered statement on this question of Federal jurisdiction, as conflicting with State regulatory bodies. The data which you have presented, both from the report of the committee, when the original legislation was presented in 1938, as well as the statements that were made by the respective chairmen of the Senate and the House committees, certainly gives you a basis for the views that you have expressed. This amendment which you have suggested, as I understand it, is merely to carry out what was believed to have been the original intent of Congress when the legislation was passed.

I confess that frequently there has come to my attention as a member of this committee, on which I have served for so many years, action taken by Federal regulatory bodies on the basis of justification of the intent of Congress, that I have been astounded to realize the intent was so different in their opinion from what I knew would be the intent when the original act was passed.

Probably it was due to lack of proper expression in the legislation. When you construe intent I know of no one who is better able to express an opinion as to that than those who assisted in the drawing. of the particular piece of legislation, and it is in that connection that I have frequently been surprised that regulatory agencies of the Government have construed the intent of Congress to be so different from what I knew was the intent when the legislation was passed. Therefore I look upon this statement that you have made this morning as of important character that deserves the careful consideration of the committee.

Did I understand that there was someone who had a statement that they wished to introduce on behalf of the State of Indiana?

Mr. HENRY. Mr. Chairman, I know a member of the Indiana commission is here. Commissioner Cannon, of Indiana.

The CHAIRMAN. While we are waiting for Mr. Cannon, I wish to take this opportunity of expressing to our colleague in the House. Mr. Rizley, of Oklahoma, our appreciation of the very helpful service that he has rendered to the committee in arranging for the witnesses' appearance who have already appeared. While all the members of the committee are cognizant of the splendid help that he has given, I think as chairman I am probably in position to appreciate it even to a greater degree because I have had such close contact with Mr. Rizley. He has acted intelligently and very helpfully in presenting this side of the question to the committee.

Mr. Rizley, I want you to know how the committee feels with reference to the service you so kindly rendered to us, and also the service that has been rendered by Mr. Carson, one of the cointroducers of the bill, and who is a member of this committee, who likewise has constantly advised and counseled in the presentation of the sponsors of this legislation in a way that I appreciate.

Mr. RIZLEY. It is very kind of you, Mr. Chairman. I appreciate it.

Mr. CARSON. Thank you, Mr. Chairman.

The CHAIRMAN. Mr. Cannon has not returned. I was informed that his views were similar to those as expressed by Mr. Henry. If such is not the case, I will see that a proper statement is made.

Mr. CARSON. Mr. Chairman, I understand that Mr. Steiner, of Canton, Ohio, has already presented a statement this morning, and Mr. Donze, vice president of Timken Roller Bearing Co., will bear on more or less the loss in the employment in my district during the gas shortage during the last several years. I think their statements are here, and I would like to ask at this time that they be made a part of the record.

The CHAIRMAN. You have that permission.

DISCUSSION BY J. C. STEINER BEFORE THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE CONCERNING H. R. 2235, A BILL TO AMEND THE NATURAL GAS ACT APPROVED JUNE 21, 1938, AS AMENDED

Mr. STEINER. My name is J. C. Steiner, and I live in Canton, Ohio. I am what is known as an independent operator and producer. I own a natural-gas producing business located in Summit, Stark, Medina, and Columbiana Counties in Ohio. My producing gas wells number 65. I also operate drilling equipment with which I drill my own wells and sometimes wells for other operators. As trustee of the C. W. White estate, I operate and manage another group of 20 wells in this same area. Since my properties are located along the transmission lines of the East Ohio Gas Co., I sell all of the gas from these properties to that company.

I started my business in 1929 with a small capital, less than $10,000I drilled my first well in Stark County and it proved to be a good producing well, and with the proceeds from this well I was able to expand my operations. In the course of the next 5 years I drilled 22 wells, of which 18 were productive and 4 were dry holes. These dry holes cost me in all $28,000 and if I had not been able to get a satisfactory price for these wells that were productive I would have had to

quit business almost as soon as I began. In the next 12 years my record was 43 productive wells and 20 dry holes.

During most of this period I joined with various partners in leasing acreage and drilling wells. Sometimes I would have 1 or 2 partners, and sometimes 10 or 12. I found that if people who invest in a well and do well on it they were willing to go along on another well but if it turned out to be a dry hole they were pretty reluctant about going forward again.

I think my experience is like that of the 30 or 40 other independent operators drilling and producing in Ohio. Ohio production is very spotty and each well is a gamble. A good many of the operators I knew 10 years ago are out of business because they happened to be unlucky in their drilling for gas.

Now in all of these operations I have had to keep my overhead at a minimum, and limit bookkeeping, legal, and similar expenses as much as possible.

I have been much concerned about the gradual expansion of the activities of the Federal Power Commission over the production and gathering of natural gas. I understand that if some of the recent cases were applied, my business would become that of a natural gas company under the jurisdiction of the Commission, with my gas prices and bookkeeping subjected to the Commission's jurisdiction. I also understand that all the Commission would allow me is a price of 6 to 62 percent on the cost of those wells which proved productive, with perhaps some allowance for dry-hole expense. I can assure you from my own personal experience that under those limitations I would never have been able to build up my business, take the risks which I have taken, and produce the many hundred millions of cubic feet of natural gas per year which have been produced and sold from the wells in which I have been interested and have managed since 1929.

Finding gas in Ohio and elsewhere is a risky business. We independent operators cannot afford a lot of bookkeeping and legal expense or filing of voluminous reports and cannot operate under a price for gas which does not in the long run let us get out of the wells an ample return to cover all our losses in dry holes, lease rentals, and other expenses which result in the production of gas. What that price must be is in my opinion a local matter dependent on local costs and exploration experience. I can't see how a regulatory body in Washington can fix the price of gas by Nation-wide rules and I do not see how we independent operators could survive under Nation-wide rules and all of the red tape, bookkeeping and legal expense that goes with it. For the above reasons, I believe in fairness to me and many other independent operators like me that this committee should vote for Mr. Carson's bill to amend the Natural Gas Act.

STATEMENT OF ALBERT M. DONZE, VICE PRESIDENT, TIMKEN
ROLLER BEARING CO., CANTON, OHIO

- Mr. DONZE. My name is Albert M. Donze and I live in Canton, Ohio.
I am vice president of the Timken Roller Bearing Co. in charge of
manufacturing.

The Timken Roller Bearing Co., which employs 18,000 people, operates plants in five cities in Ohio. The main plant and home of oper

1

ations is located in Canton and the other plants are located in Columbus, Mount Vernon, Wooster, and Zanesville.

My company manufactures tapered roller bearings which are used in nearly all industries which employ revolving parts, such as the automotive industry, the farm implement industry, the machine tool industry, the road-building-machinery industry, the steel industry, and the plant fabricating industry. The bearings we make range in size and weight from 111⁄2 ounces to 41⁄2 tons.

Coal is used in the Timken Co. plants primarily, and almost exclusively, for space heating. Approximately 400 to 450 tons per day are used for this purpose.

Natural gas is available in all our plants and we consume about 314 billion cubic feet of gas per year in our operations. It is used for all types of processing of our products, not only the processing of bearings but the processing of alloy steels which we make for our own use and for the use of others, and for the processing of rock drill bits manufactured by our company. The use of natural gas varies with the operations in our different plants. At our Mount Vernon, Ohio, plant we manufacture only rock drill bits and use natural gas for forging and heat treating only.

At our main plant in Canton, Ohio, we use it for all types of heating, for steel processing, for the heat treating of bearing parts, for annealing, for forging, for the protection of atmospheres, for tempering, and so on. All of this work requires very fine precision and the control of temperatures in all of our operations is highly important in order to achieve the desired results. Natural gas has better turn-down features, better control of temperatures, better levels of temperature in a given furnace for instance, a very minimum of cool spots-and less camaging effects on the superior surfaces of our products. For these reasons, borne out by our experience extending over many years, we find natural gas more desirable than any other fuel. We have used other means of heating materials for our various operations but not with the success we have derived from the use of natural gas.

During the entire 27 years of my employment with the Timken Roller Bearing Co. and for some years prior thereto, natural gas has always been available in all our plants. I do not know what we would do to replace it.

There are times, including periods of natural-gas curtailment, when the Timken Co. uses oil to the extent of possibly 30 percent of its total capacity for the consumption of gas.

The Timken Co. pays an average of 37.88 cents per thousand cubic feet to the following companies from which it purchases natural gas: The East Ohio Gas Co., Ohio Fuel Gas Co., the Industrial Gas Corp. We are dependent upon natural gas in many of our operations, and any limitation in supply will affect them materially.

It is our understanding that the proposed amendment to the Natural Gas Act will eliminate the possibility of the control of end use and will aid considerably in providing adequate natural gas in the areas in which we operate, and we are therefore in favor of its passage, because the severe curtailments of natural gas which we have experienced in the last number of years has had a deleterious effect on production

and employment. Furthermore, we believe that industry should be permitted to choose the fuels that are most desirable for its operations and should not be subjected to governmental regulation in its choice. The CHAIRMAN. The committee will now adjourn until tomorrow morning at 10 o'clock.

(Thereupon, at 1:45 p. m., the committee adjourned, to reconvene the following day, at 10 a. m.)