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this project he was relieved from his services in the Office of the Oil Coordinator. I am not saying it was because he favored us, but the fact remains that he did not remain there longer.
The next engineer was Mr. Stanley Westlake. Mr. Stanley Westlake came along, and he, too, was going to cooperate with us. Mr. Shinkle and he had some conversations. As you know, Mr. Stanley Westlake is now pipe-line engineer for the Standard Oil Co. of New Jersey. We had some conferences, but Mr. Westlake did not say that he would recommend our project, and shortly after that he was relieved from his duties at the Oil Coordinator's Office and went over to the Standard Oil Co. of New Jersey.
So we went along, trying our best to do something. The week before Pearl Harbor I went to Mr. Davies and said, “What about this situation if Japan attacks us?” That was a week before.
He shrugged his shoulders and did nothing about it at the time. Senator VANDENBERG. You should have gone to Secretary Knox.
Mr. WALKER. We presented this matter to Secretary Knox, and through his offices we were placed in touch with War Plans, and we have in our files a report which favors our project and which comments on the modest steel requirements that we will need for this line.
To get back to the other situation, on December 16, 1941, the Office of Defense Transportation was formed; subsequently Mr. Eastman was made Director of it. In the order pipe lines were clearly placed under his jurisdiction. That is a matter of record; it is in the Executive order. We decided that since we had not been able to do so well through Mr. Ickes we would try Mr. Eastman. So we went to Mr. Eastman, who formed a board that went ahead and heard our case, after about a month and a little bit of pressure that was required to get the board to sit. As I say, the board heard our case. Testimony was put in for a day. We did a beautiful job, Senator, of proving convenience and necessity all the way through. We approached it in the same way we would approach an application to build a railroad in proving convenience and necessity.
Âfter that time some weeks went by, and then an opinion was rendered. The opinion said that the proposition did not have any support from the armed forces, and because there was a lack of steel they did not see how they could grant the necessary permission, and that our application was denied; but the opinion went on for two or three more pages, and it said in the final paragraph:
But we think that this project has merit, and we think that a further study should be given to the whole situation, and that the Trans-American Pipe Line Corporation should have its figures and facts on the table as presented.
It was not a complete turn-down.
There has been no one in this Government who has said "No." We have had letters from Mr. Ickes saying that, because the Office of Defense Transportation had turned us down and because there was no steel, the project was out. But nobody has said "No." We were looking for the man who would say “No."
Mr. Chairman, Mr. Hadlick, who is counsel for Trans-American, came in a little late. There are certain things that he would like to say, if you will grant him the opportunity. .
Senator CARAWAY. We shall be glad to hear from him.
STATEMENT OF PAUL HADLICK, COUNSEL, TRANS-AMERICAN PIPE
Mr. HADLICK. Mr. Chairman and members of the committee, one thing that has not been brought out and that I should like to get before the committee is this: This company is organized as a common-carrier pipe line. Under its charter it cannot be controlled by people engaged in the production of oil.
I want to say that in every conference we had with Mr. Eastman except one, Mr. Eastman's right-hand man, called in for the purpose of the conference, was Mr. Fayette B. Dow. At the hearings on the pipe-lines bill Mr. Dow appeared as the attorney for the interstate common-carrier pipe lines. Those lines are called common carriers because they file rates. They are common carriers in name but not in fact.
A second thing is that the chairman of the board was Mr. B. H. Meyer. Mr. Meyer is a traffic consultant with attorneys in this town, and in a case of record here in the district court on the pipe-lines matter they were attorneys for the Pure Oil Co., the Gulf Refining Co., and the Southeastern Pipe Line.
The people who do not want this line to cross are the people who are looking out for the competitive situation after the war. The Southeastern Pipe Line is owned, as I say, by Gulf and Pure Oil.
Senator VANDENBERG. You would not say that that was Mr. Eastman's modus?
Mr. HADLICK. No; not Mr. Eastman's; this was the board. Appearing before that board and opposing the pipe line on behalf of the War Department was Gen. Walter Pyron, who not very long before that was vice president of the Gulf Refining Co. I just want to bring that out. You can have the testimony and place those facts in the record. I think they are very, very pertinent to the situation as to why this thing has been passed around and passed around. The fact is that everybody in authority to whom the matter has to go in the present bureaucracy is connected in some way with the so-called major controlled pipe lines, and they do not want to see an independent pipe line coming in. That is the nub of this whole thing, Senator.
Senator VANDENBERG. Is that the nub of Mr. Eastman's contention?
Mr. HADLICK. I think Mr. Eastman was following the advice of his people; I do not know whether or not he knows their connections.
Senator VANDENBERG. Let me ask you, as man to man, if this project is at all justified in this bill, it ought to go to Wichita Falls, or else not at all; is not that correct?
Mr. WALKER. Not necessarily; no, Senator. Mr. HADLICK. It should go as far as is necessary to fill the line with oil at this time.
Senator VANDENBERG. Did you ever present it to anybody on any basis except that it should go to Wichita Falls?
Mr. HADLICK. No, sir.
Mr. WALKER. I might say, with respect to that, Senator, that I called Mr. Shields, the pipe-line engineer for the Interstate Commerce Commission, and also Mr. Parten's office, and I said that we were, when we got around to it, going to present the necessary applications
to construct to the Tinsley field. I said also that we were very crowded for time, preparing for these hearings, that we did not have a large organization, and that it was impossible to cover everything at once. However, our general conception of building this line from the east coast to the Mid-Continent field is to build the line from the East to the West, and when the line is filled with oil, would it not be logical, in the conservation of steel, that the line should not be extended further than that? The route is laid out. We have never modified our route in any way at all.
When you start drilling an oil well, Senator, you do not start drilling it at the third sand; you start drilling at the surface. You carry that oil well down until it gets some oil. Then, when you exhaust the first sand, you continue drilling until you get to the second sand.
This proposition, with reference to our shortage on the east coast, is nothing more or less than a horizontal oil well. You extend that line through to the West, and when it is full of oil, it is full of oil. The 1234-inch pipe line is limited to a certain carrying capacity.
To continue with the story of what happened to us, we had this hearing before Mr. Eastman, as I said before, and the application was denied on the basis of steel not being available. I should like to bring out at this point that Brigadier General Pyron came down and interrogated our engineer witness and laid great stress upon the fact that there was no steel—that there might be a shortage of steel-along the line of proving our case from the point of view of the shortage of steel.
Mr. Pyron, Senator, was on the same board, representing the Secretary of War, which approved the building of a pipe line from Salem, Ill., to Longview, Tex., a 24-inch line over a distance of some 550 miles and consuming 125,000 tons of steel. He was on the board and represented the Secretary of War. I do not have the hearings of that board, but he was present. Therefore, it would appear that he was the man, as far as the War Department is concerned, who has to do with this field situation. He is an executive of the Gulf Oil Co.
In desperation I will not necessarily say in desperation, but in our ambition to win and our desire to do something, being convinced that we were right, we were able to get some help in Congress, in the House, and the House made this amendment to the canal bill.
Senator VANDENBERG. It was put in on the floor. Mr. WALKER. It was put in on the floor; but I put it in before the House Rivers and Harbors Committee the same type of testimony I am offering now before this committee.
Senator VANDENBERG. Did the committee act on it?
Mr. WALKER. It listened to us very courteously. We told our story. The committee did not act on it. The amendment was put in in the House. Frankly, Senator, I was much surprised as anyone else.
Senator VANDENBERG. I think they were smart to put it in. They wanted votes that day.
Mr. WALKER. I am glad to hear you say, sir, that the pipe line deserves votes.
Senator VANDENBERG. I did not say that; I said it received votes.
Mr. WALKER. That is where we are. There is a great deal more that can be said about this fight that we have been through. However, this is a subcommittee of the Committee on Commerce, and it is not proper here to talk about our grievances. I understand that there. is another committee of the United States Senate that will in time look into this situation quite thoroughly.
That is all I wish to say. Concluding, I hope that the amendment will have the favorable consideration of the committee and that it will stay in the bill as it passed the House. Thank you very much.
Senator CARAWAY (chairman of the subcommittee). Thank you, Mr. Walker.
We shall now hear from Lieutenant Colonel Llewellyn.
STATEMENT OF LT. COL. PAUL LLEWELLYN, RESOURCES BRANCH,
SERVICES OF SUPPLY, WAR DEPARTMENT
Lieutenant Colonel LLEWELLYN. Madam Chairman and members of the committee, my name is Paul Llewellyn. I am assigned to the Resources Branch, Services of Supply.
With your permission, Madam Chairman, I should like to refer to a letter addressed to the committee from the Secretary of War under date of June 29. Time has not permitted me to obtain from the Bureau of the Budget an expression concerning this proposed production referred to in this letter; therefore, nothing I shall say should be construed as a commitment concerning relation to the program of the President.
This letter, addressed to the Honorable Josiah W. Bailey, chairman of the Committee on Commerce, United States Senate, states:
It has come to the attention of the War Department that there is now pending before your committee an act, H. R. 6999, to promote the national defense and to promptly facilitate and protect the transport of materials and supplies needful to the Military Establishment by authorizing the construction and operation of a pipe line and a navigable barge channel across Florida, and by deepening and enlarging the Intracoastal Waterway from its present eastern terminus to the vicinity of the Mexican border.
The War Department is opposed to the enactment of that part of the act which provides for a pipe line from either Charleston, S. C., or Savannah, Ga., to the Tinsley oil field located in the vicinity of Yazoo, Miss.
The Department's objetcion to that pipe line is that there is at the present time an acute shortage of all types of steel and new and used pipe of the size required to construct the proposed line from the State of Mississippi to the Atlantic coast, and every present known fact leads to the conclusion that this shortage will become more acute as the efforts of our armed forces increase against the enemy. It is estimated that for the line from the Tinsley oil field to Savannah, Ga., a distance of 580 miles, there would be needed approximately 41,600 tons of steel and 14 pumping stations to deliver 24,000 barrels of crude oil per day in an 8-inch pipe line; approximately 68,200 tons of steel and 14 pumping stations to deliver 45,000 barrels of crude oil per day in a 10-inch pipe line; and approximately 76,700 tons of steel and 14 pumping stations to deliver 66,000 barrels of crude oil per day in a 12-inch pipe line. If the line runs from the Tinsley oil field to Charleston, S. C., a distance of 634 miles, it is estimated that approximately 45,500 tons of steel and 16 pumping stations would be needed to supply 24,000 barrels of crude oil per day in an 8-inch pipe line; approximately 74,600 tons of steel and 16 pumping stations to supply 45,000 barrels of crude oil per day in a 10-inch pipe line; and approximately 84,000 tons of steel and 16 pumping stations to supply 66,000 barrels of crude oil per day in a 12-inch pipe line.
Enough used or oil-line pipe, equipment, and terminal facilities can be made available from existing stocks to construct an 8- or 10-inch pipe line between Port St. Joe and Jacksonville, Fla. To obtain the necessary steel for the pipe and other facilities to construct the proposed pipe line from the Tinsley oil field to the Atlantic coast would require that the steel be diverted directly from
its use in the production of material and weapons needed by the Army and Navy of the United States.
The Department therefore recommends that the act be amended by striking out that part of line 23, page 2, which commences with the word “Provided,” all of lines 24 and 25 on the same page, lines 1 to 6 on page 3 and so much of line 7 on that page as precedes the words “For the.”
There has not been time to ascertain from the Bureau of the Budget the relationship of the amendment proposed above to the program of the President. This letter, therefore, involved no commitment as to such relationship. Sincerely yours,
Secretary of War. I shall be very glad to speak to the details of that letter and its import.
Senator VANDENBERG. The letter speaks for itself, as far as I am concerned.
Senator CARAWAY. Yes; it speaks very well for itself. Do you care to hear anything further?
Senator VANDENBERG. I thought that it covered the matter.
Lieutenant Colonel LLEWELLYN. The best example that I can give of the proof of shortage of steel is the fact that the pipe mills are not running at capacity today because they do not have sufficient metallics to operate them, the metallics having been diverted to other uses which are deemed more advisable to produce for the war effort. Naturally the metallics would have to be diverted to pipe mills from the other uses in order to produce pipe for this purpose.
The production of steel is running at the rate of approximately 5,300,000 tons of finished products a month. The lend-lease quota, which was decided upon yesterday, will use slightly over 1,000,000 tons of the 5,300,000 tons in the next 3 months. That reduces the steel available for our use to 20 percent. So the situation is really more critical than it was on the date this letter was written, the 29th of June.
Senator VANDENBERG. Is that increase in the lend-lease steel quota ?
Lieutenant Colonel LLEWELLYN. Yes; roughly about double what it has been.
Senator CARAWAY. Have you anything further to say?
Lieutenant Colonel LLEWELLYN. Not unless you have some further questions. Senator CARAWAY. There seem to be none.
We thank you. Lieutenant Colonel LLEWELLYN. Thank you very much. .
Senator Lucas. Madam Chairman, may I say just a word in .connection with the amendment I offer to this bill?
Senator CARAWAY. Yes.
Senator Lucas. Unless you cross-examine me, Senator, it will be very brief; but, of course, I am satisfied that you will not do that. STATEMENT OF HON. SCOTT W. LUCAS, UNITED STATES SENATOR
FROM THE STATE OF ILLINOIS Senator Lucas. Madam Chairman, the distinguished Senator from North Carolina who is chairman of the committee, called me this morning with the request that I appear before the subcommittee and speak in behalf of the amendment that was offered to this bill on