natural gas from waste; and in fixing the distance from wells within which mining operations shall not be conducted.

The public service commission is given jurisdiction over all public utilities with respect to rates, measuring devices, operating regulations, practices, service, and accounting; and the power to require utilities to secure a certificate of convenience and necessity and consent in advance of sale, purchase, and merger with another utility.

That the State has, through its department of mines and public service commission, successfully and justly supervised the gas industry is apparent from the fact that, notwithstanding the comparatively high price of our gas in the field, West Virginia has the lowest average domestic gas rate of any of the States.

From the foregoing, it is quite obvious that if natural-gas production is to maintain its vital place in the economy of the State, it will in turn be necessary for us, as a matter of State policy, to encourage by every proper means we can employ, the continued venture of private capital into the exploration of new territory and to make certain that gas in proven strata is conserved and withdrawn by the most scientific and efficient procedures and techniques.

The interests of West Virginia, for the purposes of this hearing, require that careful thought be given to the nature of coal, oil, and natural gas, their similarities, their relationships to each other and particularly their relationships to the industrial and governmental economy of the State. These three mineral substances-coal, oil, and natural gas-are basically alike in that each is a fuel. Upon them depends the industry of the world. They are alike, too, in that each exists and is produced in West Virginia in quantities that far exceed the demands of our citizens. They are alike, also, in that the industry pertinent to each represents a principal repository of investments of capital in the State and affords a primary opportunity to our people for jobs and family subsistence. They are alike in that the expansion and extension of governmental functions of the State in the interests of the welfare and convenience of West Virginians are for the most part dependent directly upon the contributions of taxes they yield to the cost of State government.

These three industries undeniably constitute one of the chief factors upon which the economy of the State is based. The importance and weight of each to the economic structure of the State is such that any manipulation tending to favor one to the disadvantage of the other would inevitably destroy the existing equilibrium, and tend to create confusion in the industrial, social, and business pursuits and relationships of our people, and render disorderly the processes of State government. This equilibrium was not achieved by chance or in a moment; it was achieved largely by the operation of the natural law of supply and demand, tempered by wise State regulation. In proportion as these resources and their related industries occupied ever greater importance to our people, the laws of the State, including that creating the public service commission in 1913, have been pointed to the purpose that all benefits derived therefrom, including opportunity for access to, and use of, the products thereof be extended to as many of our people as geography, terrain, and locale of population have made possible. The present prosperity and contentment of our people and the high favor with which issues of our State obligations are received on the securities market bear ample and convincing testimony that development of these industries under natural laws and benign regulation thereof in the common interest, solely by State administration of State laws, has succeeded.

It has never been seriously considered that the American conception of dual sovereignty, except in grave national emergencies, contemplates displacement by the Federal Government of the powers of the State to regulate the production, transportation, distribution, or sale of commodities produced, distributed, sold, and consumed within the State. To the extent that such displacement may be attempted, whether by law, by regulation, by subtle encroachment, or beguilement, every such attempt will be met by every available, lawful means within the power of the State to employ.

While the people of West Virginia do not need the gas produced in other States because of the ample quantity and superior quality of that produced in their own, they gladly grant and actively aid in the establishment and operation through their own State of pipe lines for the transportation of gas produced in other States and to convey to markets beyond our borders any excess of gas above our needs. We would, if it is possible, and it has not been shown that it

is not possible, prefer to supply the needs of our State with gas produced in our own State delivered through our own lines, before any of that gas shall be mingled either in fact or in law with gas in interstate shipment in interstate lines. We see, in any other practice, the unwelcome tendency of encroachment by the Federal Government upon the inherent, sacred, and constitutional right of West Virginia to administer the government of her internal and intrastate affairs under her own laws.

There is, after West Virginia's needs for gas are satisfied, abundance of gas for transshipment across our boundaries. West Virginia cherishes her high privilege of being able to share with the peoples of her sister States the overplus, and in national emergencies, all, whether or not there be excess, of her rich heritage of natural gas. But in so doing, she will exercise vigilance lest other authority by regulations treating transportation, distribution, or sale, or by artful fixing of rates contrive to minimize our own powers over our own resources in our own State.

West Virginia will, by every lawful means within her power, endeavor to circumvent or prevent the stultification of the industries of this State which are built upon these resources. But any assumption or attempted usurpation, whether directly or by indirection, by any agency not subject to our laws or responsible to the suffrage of our citizens, of any power or attribute, however great or small, that rightly and legally is within the realm of her sovereignty, our State will resist. To such effect, as we understand the meaning of dual sovereignty, from 1789 to this time, the Constitution and the laws of Congress have been intended.

We are aware already of the possibilities, latent in the very nature of Federal regulatory power, to favor not only one of these industries within the State at expense of another, but to favor a part or parts of the same industry in one section of the State against a similar part or parts at another section of the State. This we conceive to be fraught with danger to the democratic principle of equality before the law and an implement by which these great industries may be divided, rendered impotent, and reduced to a state of dependence upon manufacturing industries beyond our borders.

The State must not, and will not, be derelict in her duty to do all in her powerto enable the industries resting upon these resources to enter with dignity and independence into the markets for their products on a footing of equal opportunity with their competitors both within and without the State. It would be consistent with her duty to oppose and strike down as unlawful and usurpatory any regulatory measure, not imposed by her own authority, that may restrict or tend to restrict production within our State below the demand of the market, that would compel production, transportation, and sale of our gas beyond the State at a price that would prevent a fair profit, or that would prevent free competition in the market for gas of the peculiar qualities of our own.

So far as West Virginia, her people, and her economy are concerned, we refuse to recognize any ideology which, no matter by what means or in what guise it may be presented, is purposed or may tend to involve our natural-gas industry in what some people call nationalization, others socialization, of industry. It is denied that there exists any basis of comparison between governmental processes, geography, practices, or philosophy, in short, our way of life, with those of some other peoples who have taken or entered upon that course. If time shall ultimately make advisable adoption of that expediency, that remedy may then be considered; but that time in this Nation and in this State is not now, nor is it likely to arrive at any time that vigilance and prudence can foresee.

Take our surplus at our borders and regulate it as you find the common weal requires. But so exercise the powers of regulation that the effects thereof shall not reduce or affect adversely the well-being of the people of our own State, or discriminate against or prevent the marketing of our gas both within and beyond our State at prices which will provide at once a reasonable return to the owners of the gas in place and to the producers and distributors thereof. The rights of our own State to administer, under our own laws, within our own State, this great industry in the manner we find best to achieve the greatest benefit for the greatest number of our people, and to exercise such rights in a manner that will encourage continued exploration for this elusive but plenteous resource must remain inviolate.

The CHAIRMAN. Mr. Rizley, may I have just a word or two with you with respect to the future. It would seem to be necessary for the Members of the House to be present this afternoon on the floor,

or a portion of the afternoon in the consideration of some legislation to be brought before the House. I think under the circumstances it would be better if we adjourned until 10 o'clock tomorrow morning. Do you have any thought that you wish to express on that matter?

Mr. RIZLEY. We had one other witness. I know the situation which the chairman describes, but we had Colonel Thompson from the Texas Railroad Commission, and he was anxious to get away. I have not had a chance to confer with him.

Mr. THOMPSON. I certainly want to accommodate the wishes of the committee, Mr. Chairman.

The CHAIRMAN. I might say that this committee has been favored on many occasions by the appearance and the testimony given by Colonel Thompson from Texas. We have always looked with a great deal of interest upon any views that he has expressed over a period of years. If the statement is not too long, we may be able to continue until at least there is a call of the House that would require us to adjourn. Therefore we will hear you at this time.

STATEMENT OF ERNEST 0. THOMPSON, CHAIRMAN OF THE RAILROAD COMMISSION OF TEXAS

Mr. THOMPSON. My name is Ernest O. Thompson. I am now and have been continuously a member of the Texas Railroad Commission since June 1932. At present I am the chairman of the commission. This is an elective body composed of three members with terms of 6 years, one member being elected each 2 years. The commission elects its own chairman.

The Texas Railroad Commission was created in 1892 to regulate the railroads of Texas. Later, regulation of gas utilities and motor carriers for hire and then regulation of oil and gas production and pipe line transportation and butane and propane handling were added to the duties of the railroad commission.

Texas was opposed to the creation of additional boards, bureaus, and commissions, and always has been, so the legislature simply added other regulatory duties to the railroad commission as the need for additional regulation arose rather than create new boards, bureaus, and commissions.

I here read a letter from the Governor of Texas addressed to this committee.

My familiarity with the oil and gas business, by experience as a member and as chairman of the Railroad Commission of Texas, and my interest in the conservation of our natural gas resources and the welfare of one of my State's principal industries, prompts me to recommend your favorable consideration of this proposed legislation.

I appeared at a witness at the Houston, Tex., hearing of the Federal Power Commission when it was conducting its investigation of the natural gas industry under its docket No. G-580. I pointed out to the Commission the importance, from both State and national viewpoint, of amending the Natural Gas Act so as to insure the original intent of the Congress at the time the act was adopted: That the several States should exercise exclusive regulation and control in the fields of conservation, producing, gathering, and local distribution of natural gas. Administrative action of the Commission, sanctioned by divided court approvals, have made these proposed amendments imperative. State conservation efforts have been handicapped by administrative policies of the Federal Power Commission. It has invaded the proper sphere of State sovereignty and has contributed to an inadequate field price for this valuable natural resource. A continuance of such policies will be detrimental to both producer and consumer. The situation requires congressional action.

The best interests of our country will be served by leaving to the several States exclusive control over conservation, production, and gathering and local distribution activities. Confine the jurisdiction of the Federal Power Commission to the interstate movement and sale of gas for resale. I urge your favorable recommendation of this proposed legislation.

The long range welfare of both producer and consumer will be serve by the enactment of this law.

Yours most sincerely,

BEAUFORD H. JESTER, Governor of the State of Texas.

The Texas Railroad Commission is the oil and gas conservation agency of our State.

We have a railroad section, a motor transportation division, an oil and gas division, a pipe-line section, a gas-utility division, and a light petroleum gases sections. But the three commissioners actively run the whole, deciding the cases under the very precise standards set up by our legislature, setting up our limits of authority definitely in the Statutes of Texas.

As we have progressed through the years we have constantly requested and received more and more definitions and limits in our

statutes.

I have here a copy of the oil and gas laws of the State. and the decisions that have been handed down on those particular rules and regulations and statutes.

The CHAIRMAN. That will be filed for the information of the committee.

(The volume, Texas Gas Conservation Laws and Oil and Gas Regulations, was filed for the information of the committee.)

Mr. THOMPSON. As fast as court decisions made apparent clearer definitions and more specific statutes, the legislature promptly spelled out exactly what they wanted us to do or not to do in the various fields of regulations entrusted to us as the administrators for the legisla

ture.

We are an administrative agency with only those powers specifically set out in the statutes.

We operate through notice and hearings with our orders based upon findings of fact based upon the evidence adduced at the hearings. Our supreme court has repeatedly sustained our orders when supported by substantial evidence.

The court has said that they and the Railroad Commission of Texas were working partners in the conservation of oil and gas. And I take it as a great compliment to our work, Mr. Chairman and gentlemen of the committee, that the court and Railroad Commission of Texas were working partners in the conservation of oil and gas.

I am glad to gratefully acknowledge the help received through the years since 1933 from the chairman and other members of this committee in the past in making possible the retention of State control of oil and gas production and the assistance given to us in the formation of the Interstate Oil Compact Commission. It was a long struggle but this committee steered us through the course to sound conservation practices, and I would be derelict if I did not pay that tribute to the long and untiring efforts of the Cole subcommittee of which the chairman was a member.

Congressman Wolverton, now chairman of this committee, spent several years of the most intensive study as a member of the Cole sub

committee on oil and gas. He was always helpful in defending the sovereignty of the states.

Through all these years, Chairman Wolverton successfully sought to help us defeat all efforts at Federal control of oil and gas production, and constantly sought to show us how we could improve our efforts at conservation within the States.

I am glad, sir, to be able to report that your work helped Texas oil in World War II to the extent of 80 percent of all the petroleum used by our country in the war effort on land, on the sea, and in the air.

The Interstate Oil Compact, formed in 1935 by consent of the Congress with five original States signatory to this oil and gas conservation convention, has flourished and grown 'till it now has 19 member States:

Nineteen member States and one associate State. Georgia has already passed laws covering oil and gas which they expect and hope to bring in soon. The compact provides that States that are expecting oil and gas production to come in their State, can pass a law with the aid and help of the other members and become an associate member.

Throughout the 12 eventful years of its existence the compact has grown in strength and effectiveness.

The compact has no power except that of enlightened public opinion which, after all, is the greatest force on earth.

Through the exchange of the latest ideas and developments in conservation efforts, laws, orders, and opinions, one State with all the others and all the other States with the one, we are pushing ever onward toward the elimination of avoidable waste and the greatest possible utilization of the reservoir energy in each oil-producing pool in the member States.

Then, too, we are constantly carrying the story of conservation to other oil States not members but where oil is presently produced or where oil and gas are expected soon to come into production.

We suggest the passage of adequate oil and gas conservation and waste prevention laws by a State even before oil production becomes a problem. We actively assist any State so interested by going into that State with our film story of oil production-our literature or primer on oil conservation. We have a beautiful film on the story of oil production, paid for by the compact and sent free for showing anywhere that people are interested. Members of our legal committee willingly appear before legislative committees or the whole legislature of any State interested in conserving her resources.

This work is done without any charge, in a spirit of conservation evangelism.

The compact States, through the compact commission's aggressive action, seek to occupy fully that hitherto no man's land between State and Federal jurisdiction in matters affecting the production and conservation of oil and gas. The Congress' consent to the compact perinitted the States so to do as far as regulating or interference with or