Mr. HESELTON. You are short how much? If you had 26,000,000 cubic feet would there be any difficulty with the Ford factory being down, and would Budd be down? Mr. FINK. The customer contributing to the shortage here is the house-heating customer. We have 85,000 house-heating customers on our line, and it is that customer that is contributing to the peak loads and the peak periods due to this cold weather that is causing this load, not the customer who uses it for baking pies and roasting beef and baking bread, and heating water. Their consumption is relativey so low that it does not play any part in this. Mr. HESELTON. It averages 26,000 cubic feet a year. Right? Mr. HESELTON. Then perhaps I was wrong in that. 26,000,000 cubic feet used by them would only last you 1 day. Mr. FINK. It would not last us 1 day. Mr. HESELTON. 200,000,000 a day. It is only a drop in the bucket. Mr. FINK. That is right. Mr. HESELTON. That is straightened out. Mr. FINK. It is so small, that we have never attempted-we have not discouraged that. Mr. SADOWSKI. Where does Cleveland and Columbus get their supply of gas? Do they get it from Panhandle? Mr. FINK. I think Cleveland is going to be represented here, is it not? They should best testify themselves. As far as I know, they get about 50,000,000 from Panhande and the rest from their own wells. Mr. SADOWSKI. From their own wells? Mr. FINK. Yes. Their own wells; their own fields. Mr. SADOWSKI. Wells in Ohio? Are they local wells? Mr. FINK. I understand they get some from Texas Eastern Pipe Line Co., and the Tennessee Pipe Line Co. Mr. SADOWSKI. I understand that those consumers of gas in Cleveland and Columbus pay a rate about one-half as much as we pay in the city of Detroit. Is that correct? Mr. FINK. I believe Cleveland's rate-I do not know about Columbus-Cleveland's domestic rate is lower than ours. Mr. SADOWSKI. Why should that be if we are getting gas from the same source of supply? Mr. FINK. Because their consumption per customer there is about twice as great as the consumption per customer in our area. Mr. SADOWSKI. Does that account for the price reduction? Mr. FINK. Yes. It is an old-time natural gas distributing company. It has been distributing natural gas there for a great many years. I do not know how many years. But in the last 30 or 35 years, anyway. Mr. MONTGOMERY. 50 years. Mr. FINK. So that they have a far greater number of house-heating customers and every customer uses a great deal more gas than they do with us. That, of course, brings the average cost down. Their consumption per dollar invested is much greater for the same section of main. The customer gives them a great deal more business. Mr. SADOWSKI. It would not be because you are charging too low rates to industrial and commercial users, and too high rates to home owners? Mr. FINK. No, sir. I think you will find that our domestic rates are relatively lower than our industrial rates. I mean as compared with other distributing companies. Mr. SADOWSKI. As compared with other cities? Mr. SADOWSKI. What is the comparative figure? What do I, as a home consumer, pay, for my gas, as compared to one of the large industries? What is the difference in rates to me and to them? Mr. FINK. That depends on what basis the industry buys the gas on. If it buys on a firm basis, if it is on a large volume rate, I think it is 90 cents; about. Mr. SADOWSKI. What is the cheapest industrial rate that you have? Mr. FINK. The cheapest rate is 20 cents a thousand. Mr. SADOWSKI. What is my rate? Mr. FINK. For house heating? Mr. SADOWSKI. Yes. Mr. FINK. 60 cents. Mr. SADOWSKI. And for kitchen stoves? Mr. FINK. That depends somewhat on the amount you use. I would say it would be somewhere around about 70 or 80; somewhere in there. It depends on the quantity you use. It is a step rate, going down. Mr. SADOWSKI. That is quite a difference in rate, from 20 to 70 cents. Mr. FINK. Yes. On this 20-cent rate these customers all have to maintain their own standby plant, and they are all shut off now. They are not getting any gas. They have been shut off since last October. They have to maintain their independent plants so that during the Mr. SADOWSKI. I am wondering how you can deliver to them at 20 cents when you say you are paying 23 cents to the Panhandle. Mr. FINK. There is a margin in there. Mr. SADOWSKI. How? You are selling it for 20, and paying 23. Mr. FINK. Most of that gas is on the base rate. That is gas we get in the summertime. That is 181⁄2-cent gas. Mr. SADOWSKI. You are figuring your margin on the summer rate? Mr. FINK. Certainly. By virtue of the fact of selling them that gas in the summer we establish 181⁄2 cents as the rate at which we can buy the domestic gas in the wintertime. Mr. SADOWSKI. You are not doing that to hold on to some good customers? Mr. FINK. No. We have not solicited them, either. Our trouble is to keep them off. Mr. SADOWSKI. You are not doing that in order to hand them over to the Michigan-Wisconsin Pipe Line Co.? Mr. FINK. No. That is quite wrong. Mr. SADOWSKI. We will have to ask the Commission just why there should be such a difference in rates to the public consumers and to the industrial users. It seems to me there ought to be a little better adjustment for some of us people that are suffering with these inflated prices here, and we cannot make ends meet. We have to try to cut down on all kinds of bills now. Gas might be one of them. Mr. HALE. All your rates, of course, are regulated by the Commission? Mr. FINK. Yes, sir. Mr. HALE. Both to industrial and domestic users? Mr. FINK. The retail rates are regulated by the Public Service Commission. The great rate, the price at which your pipe line delivers gas to us is regulated by the Federal Power Commission. Mr. HALE. This case that was tried before the Federal Power Commission in 1941, was any explanation ever given as to why there was no decision? Mr. FINK. No. There was none. We finally withdrew the application toward the close of the hearing of the Michigan-Wisconsin pipe line case. I have never heard of an explanation. I am not too well acquainted to discuss the details in connection with that hearing because at that time I had no part in it, and was quite removed from that field of activity. Mr. HALE. I do not understand what you mean. Were you not with the company? Mr. FINK. I was with the company. I was superintendent of production at that time. Mr. HALE. Mr. Jonkman has some questions that he would like to ask you. Mr. JONKMAN. Thank you, Mr. Chairman. I learned this morning from Mr. White that we in western Michigan cannot expect any relief from this gas shortage until 1951, when the Michigan-Wisconsin pipe line is completed. Mr. FINK. Was that not the end of 1949? Mr. JONKMAN. Close to 1951. It does not make any difference for the purpose of my question. Mr. FINK. I understood you to say the end of 1951. Mr. JONKMAN. No. In 1951. Mr. FINK. The end of 1949. Mr. JONKMAN. What is there to prevent us from getting some benefit from this 140-mile pipe line that you are putting in from Detroit to the Austin field? That is going to take the gas into the Austin field, is it not? Mr. FINK. Yes. Mr. JONKMAN. Is it because Panhandle refuses to sell gas to anybody but the consumers in Detroit? Mr. FINK. Panhandle has voiced an objection to it. Panhandle has voiced an objection to using Panhandle gas in areas outside of the Detroit district. Mr. JONKMAN. And that notwithstanding the fact that it is not a question of supply of gas, that the supply of gas is practically inexhaustible, is it not? Mr. FINK. I do not think anything is inexhaustible. As far as I know, they have an ample supply of gas. Mr. JONKMAN. Would it be partly because Detroit at all events will consume the gas, the additional gas that you can store in the Austin field? Mr. FINK. No. We can store more than Detroit will consume. That is, under the present situation of restricted sales. Mr. JONKMAN. Then we are being deprived of relief, at least in the winter of 1948 and 1949, merely because of this arbitrary position of the Panhandle company; is that right? Mr. FINK. I would say that that would be the case, yes. Mr. JONKMAN. And if I understand you correctly, the MichiganWisconsin line would never have been started if it was not for the fact that the Panhandle would not take notice of the progress of the Detroit area-let us confine it to the Detroit area-and the progressive need of gas, and they would not sell you more gas until you would turn over your industrial customers to them, and supply the consumers for heat purposes. Is that right? Mr. FINK. That is correct. Mr. JONKMAN. So you were driven in that position to take care of your customers. Mr. FINK. That is correct. Mr. JONKMAN. That is all. Mr. HALE. Captain Fink, in this annual report for 1947, on page 16 is what they call a projection, showing the miles of main in 1947 and 1952, and the number of customers, and then the gas sales and therms. The gas sales and therms seem to mount from 576,000,000 to 997,000,000. It is stated as follows: According to the company's expectations, 1952 will be the first full year during which ample supplies of gas will be available for our communities. Careful estimates have been made of the number of customers we will then serve, the miles of main which will be required, and the amount of gas which will be used by families, stores, and factories in our districts. Does that have reference to the Wisconsin-Michigan pipe line? Mr. HALE. And not to anything else? Mr. FINK. No. Not to anything else. Mr. SADOWSKI. The only thing I do not like about the program, as you have explained it to Congressman Jonkman, was that you contemplate a continuation of this restricted use of gas, natural gas. Why do you have to speak about a continuance in restriction of the use of this gas when we will have two pipe lines servicing this area? Mr. FINK. There will be no restriction after that. As I understood Congressman Jonkman's question-and I think I interpreted it correctly he had reference to the time between the completion of the Austin field pipe line and the completion of the Michigan-Wisconsin line. That is a span there, as we have referred to as two summers. It is approximately 2 years. Mr. HALE. Thank you very much, Captain Fink. You will be here tomorrow, will you not? Mr. FINK. I am required to be in New York for three board meetings. But Mr. Montgomery will be here. I think he can answer any questions you want. Mr. HALE. Mr. Willis Hall is here and would like to be heard. STATEMENT OF WILLIS H. HALL, MANAGER, INDUSTRIAL DEPARTMENT, DETROIT BOARD OF COMMERCE, DETROIT, MICH. Mr. HALL. Yes, Mr. Chairman. You gentlemen have been here a very long time. This is a brief statement representing the industrial companies of Detroit. I might say that I have been manager of the industrial department of the Detroit Board of Commerce for 15 years. My first experience with this natural-gas situation was as secretary of the natural-gas committee of the Board of Commerce in 1934 and 1935. I have listened to all of the debates and discussions before the common council, and the resolutions that the Congressman mentions as coming out from the council. We have made statements from time to time to the common council of Detroit about the position that we think that the city should take. Over 100,000 workers are unemployed in the Detroit industrial area because of the current shortage of gas for industrial use. Daily production of millions of dollars of manufactured products is stopped. Unemployment will increase as continued stoppage of parts suppliers affects more subassembly and final production lines. I think that is important, that this unemployment today, unless we get relief, is going to continue to spiral upward. This current condition is caused by three factors: Unusually cold weather, shortage of oil and oil transport needed for the operation of manufactured gas facilities, and inadequate pipe-line capacity to supply Detroit's rapidly increasing gas consumption. The solution of Detroit's gas shortage falls into three time stages: Immediate, intermediate, and long-term. Now for the immediate, and you gentlemen have been asking all day what can be done for the immediate: The current industrial shutdown can be ended if Panhandle Eastern Pipe Line could deliver an additional 25,000,000 cubic feet of gas per day to the Michigan Consolidated Gas Co. Detroit and Michigan officials have joined with Detroit industry and the gas company in urging the Federal Power Commission to order the diversion of this amount of gas to Detroit. Warmer weather and increasing supplies of oil for manufactured gas facilities will give partial relief. Both State and Federal officials are doing an excellent job in assisting the gas company to obtain larger supplies of oil. For intermediate, the winter of 1948 and 1949, 1949 and 1950: The gas supply for Detroit during next winter can be greatly increased if the Austin storage field is fully utilized. The Michigan Consolidated Gas Co. has a pipe line under construction from this storage field to Detroit. We will need the cooperative action of the Panhandle Eastern Pipeline Co. and the Federal Power Commission to insure an adequate volume of gas for storage this summer. For the long term, the long-term solution of Detroit's gas shortage will be met only when Detroit has both the Panhandle Eastern pipe line, the Michigan-Wisconsin pipe line, and the Austin storage field available to meet our rapidly growing domestic, commercial, and industrial demand. No pipe-line company should seek a monopoly on service to this great industrial area. We will need all the gas that can be made available from both lines. Mr. SADOWSKI. I want to compliment you on that statement. That, I believe, represents the unanimous opinion of every citizen from Detroit, and certainly the letters that I have received regarding this gas situation bring this point out continuously. Mr. HALL. The next paragraph I think will emphasize it more fully. Over 100,000 Detroit homes want gas heat now. Current estimates indicate new construction of more than 100,000 homes during the next |