Mr. BECKWORTH. I mean just exactly what I asked. Has the Maritime Commission in the past few months or, we will say, since the war was over, disposed of any tankers which you people could be using, advantageously using now for any conceivable purpose?

Admiral CALLAGHAN. Why, no, sir. As long as the ships that we are acquiring are of exactly of the same type as those that the Maritime Commission has sold either to private operators in the United States or for United States flag operation, or those that were sold to foreign citizens, I should say

Mr. BECKWORTH. Of course, no one knows what the future will bring; but in your opinion has the Maritime Commission disposed of any ships that there is a reasonable probability could be advantageously used in the future in the light of the facts that we all have general knowledge of?

Admiral CALLAGHAN. Yes, sir. They have disposed of ships which might have advantageously been used by the United States in the event of a future emergency. However, if I may qualify that a little bit more, the disposals were not made without the full consent of the Secretary of the Navy.

Mr. BECKWORTH. Would you know how many ships that might be; how many tankers or approximately how many, could you give us that? Admiral CALLAGHAN. Yes. They were authorized to sell 133 of these fast T-2 type tankers to noncitizens.

Mr. ANDREWS. That was stopped, was it not, Admiral Callaghan? Admiral CALLAGHAN. No, sir; it was merely reduced from 150 to 133.

Mr. BECKWORTH. Which if I understood you correctly a moment ago you said that even the 86 will not likely be adequate for the needs that the Navy may have in the future, is that true? Admiral CALLAGHAN. That is true; yes, sir.

touch and go with the 86.

We feel that it is

Mr. BECKWORTH. Yes. Admiral CALLAGHAN. Any requirements we have in excess of that we will have to procure on a charter basis from private operators. Mr. BECKWORTH. I assume that you are making efforts to have the needed margin available for any future emergencies, should an emergency arise?

Admiral CALLAGHAN. Well, Mr. Beckworth, all of the tankers that are under United States flag or those under United States control, such as tankers that are owned by United States citizens and corporations and registered under the flag of Panama are available to us in the event of an emergency, under the requisitioning power which the Maritime Commission would use at that time.

Mr. BECKWORTH. That is very true, but with a tight situation existing today for our own domestic needs, plus a very serious emergency that could arise, it behooves us not to lean too heavily on a backlog that already is about in use to capacity. Is that not true? Admiral CALLAGHAN. Very nearly; yes, sir. There are still some tankers that are not in service in the Maritime Commission's laid up fleet in process of being sold.

Mr. BECKWORTH. My hope is this that there would not be a touch and go proposition, even though an emergency of a dire nature should not arise and if the situation is not such today that it could be handled reasonably effectively, I would say that we ought to be making some

new efforts to be sure we have plenty of tankers for all purposes, domestic and otherwise.

Mr. ANDREWS. I agree with you.

Mr. BECKWORTH. And, I for one am muchly in favor of doing that very thing.

Mr. ANDREWS. I might say this in connection with that. In taking these laid-up tankers and putting them back into use, as I said in my statement, they were not put up in moth balls and not a part of a so-called zipper fleet. It is not like taking ships out of storage where they have been stored by the Navy for quick reactivation. It is quite a job to do it. There are some structural changes that have to be made.

Mr. BECKWORTH. Mr. Secretary, may I say this, that while we are watching and trying to alleviate this situation in other sections of the country, let us not let the situation get out of hand in Texas? I am getting letters at this very time from people in Texas that they are cold, too.

Mr. ANDREWs. I understand that.

Mr. BECKWORTH. We have had a lot of snow in Texas recently. Mr. ANDREWs. I understand that we have had a lot of cold weather at home.

Mr. HALE. Mr. Chairman.

The CHAIRMAN. Mr. Hale.

Mr. HALE. Mr. Secretary, were you consulted last June in connection with the sale of tankers to foreign governments?

Mr. ANDREWS. Sir, I was in private business at home last June. I came back to Washington in December.

Mr. HALE. The Secretary was consulted at that time?

Mr. ANDREWS. I shall find out. I am quite sure that he was, but we will make that information available to you.

Admiral Callaghan says he was.

Mr. HALE. Did you participate in that decision, Admiral?
Admiral CALLAGHAN. Yes, sir; I did.

Mr. HALE. I should be very interested to have for the record some recital of the considerations which were in your mind at the time that decision was made.

Admiral CALLAGHAN. As you probably know, sir, there was no demand for the purchase of tankers by United States citizens in any great number, throughout the year 1946 and up until about October, September or October, of this past year.

In March or April-I have forgotten the exact month, but I know that it was either one of those two months, of 1947, the Maritime Commission, in compliance with the provisions of the Ship Sales Act of 1946, which requires the Maritime Commission to consult with the Secretary of the Navy before making a determination about the sale of vessels to noncitizens, asked the Secretary's views with regard to disposing of additional high speed tankers to noncitizens. They mentioned at the time that they had on file applications from some 84 noncitizens. The Secretary of the Navy asked the Chief of Naval Operations to refer that to the Joint Chiefs of Staff for their comment and reviews, before he made his own reply.

The Joint Chiefs of Staff after studying the situation suggested or recommended that not more than 35 tankers be sold to noncitizens. I might mention here, sir, that they had previously sug

gested, a year before, that the total number of high-speed tankers to be sold to foreign buyers should not exceed 50 out of the entire stock of those ships that the United States had at the end of the war. So that that 50, plus the 35 additional then recommended made a total of 85.

The Secretary of the Navy, acting on advice of the Joint Chiefs of Staff, so informed the Maritime Commission that in his opinion the sale of not more than 35 would not be detrimental to the national security and could be sold.

While that correspondence was still

The CHAIRMAN. Might I ask right at that point the date to which you are referring?

Admiral CALLAGHAN. As I recall, sir, that was the 20th of June that the Secretary advised the Maritime Commission that the sale of the tankers, 35, would not be detrimental to the national defense; but at the same time there were very strong representations made by the State Department and Department of the Interior, and by the Department of Commerce, that the Secretary should increase his approval, increase the authorization, to a total of 100 tankers. That is, 100 in addition to the 50 of the previous year.

This matter was discussed also in the Cabinet and received, at least I understand it received, the approval of the President. Secretary Forrestal, who was the Secretary of the Navy at that time, finally agreed to the release of a total of 100 tankers to noncitizens.

Now, while that sales program was being effectuated, I think, as you gentlemen know, the matter was taken under investigation by the Small Business Committee of the Senate, and the sales were stopped until an opinion could be received from the Attorney General regarding the validity of thest sales to noncitizens in view of the very large number of applications which had in the meantime been received from prospective domestic purchasers.

As a result of the discussions that went on at that time and the final opinion of the Attorney General regarding the validity of the negotiations which the Maritime Commission had entered into with regard to these prospective foreign buyers, the total number of 100 was finally reduced to 83.

Mr. ANDREWs. It was from 150 to 83.

Admiral CALLAGHAN. No, from 100. That makes a grand total of 133 tankers of the T-2 type that have been authorized for sale, foreign. Fifty of the original allocation in 1946 were included, and 83 in this recent action of the Maritime Commission.

Mr. HALE. Do you agree as a matter of hindsight that the decision. was incorrect?

Admiral CALLAGHAN. No, sir; I do not think it was incorrect. Mr. HALE. I should be very interested to hear you develop that point.

Admiral CALLAGHAN. You see, sir, the British and other nationals, other foreign nationals, were using some of our tonnage which they chartered from us on short-trade hauls in the Western Hemisphere in order to make the least drain on their dollar resources. Consequently, they were withdrawing oil from the Western Hemisphere to supply the United Kingdom requirements instead of running tankers into the Persian Gulf where they had their own refineries. They contended, and with a great deal of merit, that if they had tankers under

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their own flag where sterling expenditure only was involved, they would put those tankers in the Persian Gulf run and relieve the drain on the Western Hemisphere, and that was one of the primary considerations which governed the Secretary in his approval of the sale to noncitizens.

Mr. ANDREWS. That resulted then in the withdrawal of oil from the Middle East rather than the withdrawal of oil from our Western Hemisphere.

Mr. HALE. So that you think it was a correct decision, and you think that the result of the decision has been on the whole fortunate rather than otherwise to the domestic fuel-oil consumers?

Admiral CALLAGHAN. I consider that it was a proper decision.
Mr. ANDREWS. Certainly, in the light of the circumstances.

Mr. HALE. Of course, the figures that have been given us, I do not recall, but not very many relatively of those 83 tankers were sold to the Bristih, were they?

Admiral CALLAGHAN. Thirty-one, as I recall, sir.

Mr. HALE. Some were sold to Peru and Turkey and some to other countries.

Admiral CALLAGHAN. I believe I have the exact figures here.

Mr. HALE. These figures appear on page 92 of the record of our hearings in December, December 16. Apparently, 1 tanker was sold to Turkey, 11 to France, 4 to the Netherlands, 16 to Italy, 2 to the Union of South Africa, 7 to Greece, 4 to Canada, 6 to Norway, and only 1 to Peru. Was the sale of the tanker to Peru particularly constructive?

Admiral CALLAGHAN. I think so; yes, sir. If that tanker were not in the Peruvian service, it would probably mean that the United States-flag tanker would have to be diverted down to that area to supply the needs of Peru.

Mr. ANDREWs. Or at least we would have the demand on us, whether we would be able to comply with the request or not, I do not know. I think that this part of the questioning is getting more close or closer to the Maritime Commission's role, probably, in this hearing, and we are perfectly willing to give you all of the answers that we have, but it would seem that they would be more affected.

The CHAIRMAN. May I say that the Maritime Commission officials are present in the room, and it is our intention if the time is available to have their testimony today. I am also aware of the fact that I do not know anything that could be more embarrassing than to ask an admiral of the Navy to disagree with the Secretary of the Navy and the Cabinet and the President.

While there would be many questions in my own mind with respect to the matter, I would not hestitate to recognize that embarrassment. Mr. HALE. The admiral does not disagree in his statement.

Mr. ANDREWS. These are second guesses that we are making. You have made that point.

Mr. HALE. In December we had the advantage of having one of the Maritime Commissioners here, and we went through this whole matter with him, and I was very interested to get the Navy point of view. To summarize the matter, you would say, I take it, that it is one world as far as tankers are concerned, and that whether the tankers are under our flag or not they have got to be busy doing the world's job. Is that the gist of the matter?

Admiral CALLAGHAN. That is an excellent summary of the situation;

yes.

Mr. HALE. That is very interesting to me, and I am sure that I have not encouraged you to be guilty of insubordination.

Mr. KEOGH. May I ask the admiral one question in connection with the decision to approve the transfer of the sales foreign? It is not a fact that at the time that approval was sought the representatives of the industry were testifying to the fact that at that time the American operators had absorbed all of the tanker tonnage they could? Admiral CALLAGHAN. That is absolutely correct. In June, for example, when that letter was sent from the Secretary of the Navy to the Chairman of the Maritime Commission, there were, as I recall, only about eight tanker applications on file with the Maritime Commission, that is applications for purchase by United States citizens for operation under the United States flag.

Mr. ROGERS. Mr. Secretary, I would like to get your judgment and opinion on this question that I am about to ask you. Do you think the restoration of rationing and price control on fuel oils would contribute to the solution of this shortage which we have now?

Mr. ANDREWS. I am not qualified to make that statement, sir. I have been a private citizen in my own business, and now I am confronted with many problems. I spent 5 years in the Navy and I know some of the Navy problems, but I do not know them all by any means and really I am not qualified to express an opinion.

Mr. ROGERS. You have got no opinion at all then on that subject? Mr. ANDREWS. I am just not qualified to express an opinion.

Mr. SADOWSKI. How does the Navy's consumption of petroleum products for 1947 compare with the Navy's consumption of petroleum products for the prewar years of 1939-40?

Mr. ANDREWS. We can get those figures for you, sir. I think that there would be some distorting factors that would have to be taken into account, the size of the Navy in 1939 and the size of the Navy in 1947.

Mr. SADOWSKI. Would you be able to give the figures of the combined consumption of all of the armed services for 1947 as compared with 1939 or 1940?

sir.

Mr. ANDREWs. I think that we can get that information for you,

The CHAIRMAN. I might say to the gentleman from Michigan that it is the intention to have before the committee later this week the representatives of the Army and Navy Petroleum Council, from whom I think that we can obtain those figures.

Mr. ANDREWS. That is the source from which those figures should It is their situation.

come.

Mr. SADOWSKI. You have no idea whether it is 5 to 1 or 6 to 1 or what it is?

Mr. ANDREWs. No; we could get them for you.

The CHAIRMAN. Are there any further questions?

Mr. HESELTON. I have in mind your admonition and that you planned to have the Maritime Commission here. On the other hand, I would be interested to know which source, the Navy or the Maritime. Commission, knows where these tankers actually are at this stage. Do they know or should we inquire of the Navy?