to other Western Hemisphere sources; and there should be an initial $0.20 perbarrel tariff preference on a quantitatively limited volume of other Western Hemisphere imports into the mainland-the whole in accordance with the following schedule (in barrels per day):

Within these quantities the growth in preferred Canadian imports to District V should be limited by present pipeline capacity, and the growth in preferred Latin American imports to Puerto Rico should be limited to the growth in that island's internal consumption plus future shipments under government agreements already concluded but not yet implemented. Import rights during the transition would be allocated or auctioned and could be sold or exchanged as described in ¶343. The volumetric restrictions on preferred Latin American imports should be removed on July 1, 1972 (July 1, 1973 if no tariff reductions beyond the initial step have occurred), and careful consideration should be given in the comprehensive mid-1970's review to the possibility of widening the margin of preference on this oil. All restrictions other than existing tariffs should be removed on Canadian and/or Mexican imports on July 1, 1972 (July 1, 1973 if no tariff reductions beyond the initial step have occurred) if suitable energy agreements have been negotiated with these two countries or as soon thereafter as such agreements have been concluded. If during the transition period projected imports from the Eastern Hemisphere exceed 5% of domestic demand, the volumetric limits on imports from the Western Hemisphere should be expanded proportionately to forestall such excess imports.

434. Transitional quotas. To ease the impact on specially favored beneficiaries of the present quota system, we recommend declining quotas in Districts I-IV and District V which would be free of all but existing tariffs and would last for three years. We also recommended continuing the present level of crude oil allocations to petrochemical plants at existing tariffs pending the development of detailed transitional arrangements after notice and hearing-to phase out these allocations and phase in a controlled end-use exception from the incremental tariff for feedstocks employed in the manufacture of petrochemical products. Mr. EDMONDSON. The gentleman from Michigan.

Mr. O'HARA. Mr. Chairman, I would like to inquire of General Lincoln with respect to this argument that the oil industry is unique.

General, I suppose the oil industry is unique in the same way that the coal industry is unique, the steel industry is unique, farming is unique. That seems to mean they are unlike, they have certain features that are unlike other industries; is that not true?

Mr. LINCOLN. Well, I would agree with you, I think. But I think I would go a little further in the context of our discussion here and say the oil industry is unique in that it really has been given some special treatment-treated quite specially, that is privileged, by the United States compared to other industries.

Mr. O'HARA. What is really unique is the special status enjoyed by the oil industry.

Mr. LINCOLN. Yes, a special status, I think you are making a correct point. I want to make clear I do not say this at all in criticism.

Mr. O'HARA. As a noted economist, perhaps you can suggest to us in what way a strong petroleum industry is more important in the na

tional defense than a strong steel industry or a strong electric power industry or any other basic industry.

Mr. LINCOLN. I would have difficulty in doing this. Our national security is helped by-well, a strong economy is essential to our national security. Now, when you begin to look at segments of the economy, all of us know that certain parts of the transportation industry, which is a very great industry, have not been doing so well for some time, yet we have not given them too much special attention, I believe. Our task force did conclude-and there were plenty of economists working on the job-that the oil industry in the United States is now so strong and healthy that it could sustain the adjustment suggested and still be a healthy industry.

Also the total impact on the economy would not threaten to impair the national security.

Mr. O'HARA. I hope that in the responsibility that you have now been assigned, General, that you will try to find some way, costing less than $3 to $5 billion a year to American consumers that the national security and the national interest in the possession of adequate oil reserves and oil producing capacity can be guaranteed.

I know that in the task force report you have reviewed alternative methods by which the national security could be protected. And you said in the report that the comparisons were favorable. I hope you have an opportunity to go into that question further, because I am very concerned that we assure an adequate supply of fossil fuels at a reasonable cost to the American people. I think that ought to be one of our prime interests and perhaps there is some way we can reconcile these interests.

Mr. LINCOLN. I recognize your point, sir.

Mr. EDMONDSON. If there is no objection on either side the committee will rise at this time for lunch, returning at 2 o'clock this afternoon.

(Whereupon, at 11:50 a.m., the subcommittee recessed, to reconvene at 2 p.m., this same day.)

AFTERNOON SESSION

Mr. EDMONDSON. The committee will come to order for further testimony by General Lincoln.

The gentleman from Michigan, Mr. O'Hara, had just comleted his questions at the recess. If he returns and has further questions we will return to him.

Mr. FOLEY. Mr. Chairman, a parliamentary inquiry. The hearings are scheduled to take place again tomorrow and on Wednesday; is that correct?

Mr. EDMONDSON. Tomorrow for sure. I do not know for certain about Wednesday, although Wednesday is open to us.

Mr. FOLEY. In view of the fact that we have several witnesses and there are varied members attending, would it be appropriate to consider the usual committee practice of a 5-minute rule on questions? Mr. EDMONDSON. I think it would be appropriate to consider it at any time. I am a little reluctant to impose it since I abused it rather

Mr. FOLEY. I was speaking prospectively.

Mr. EDMONDSON. I think the gentleman makes an excellent suggestion but it comes a little late, unless we run into real abuse of it by individual members.

But I think we will profit from brevity on the part of all members, and proceed with that in mind.

I believe the gentleman from Wyoming, Mr. Wold, was next in order of questions of those who were present this morning. The gentleman from Wyoming.

STATEMENT OF HON. GEORGE A. LINCOLN; ACCOMPANIED BY DUDLEY CHAPMAN AND JOSEPH LERNER-Resumed

Mr. WOLD. Thank you, Mr. Chairman.

General Lincoln, this morning you stated, as I understood it, that the oil industry had requested the Presidential Task Force Committee hearings; is that_right?

Mr. LINCOLN. Yes. I am certain that is correct, I do not have the document on this, but I will ask if one of my colleagues here knows the details of this.

Do you know that?

Mr. CHAPMAN. I do not know all of the details, but it is a wellknown fact the industry itself initiated a request for a comprehensive report of the program.

Mr. WOLD. How do you mean, when you say the industry itself? Mr. CHAPMAN. The American Petroleum Institute was the organization that made the request.

Mr. WOLD. Did they write a letter requesting this or was it verbal? Mr. CHAPMAN. I do not know how it was transmitted.

Mr. FOLEY. Will the gentleman yield?

Mr. WOLD. I yield.

Mr. FOLEY. Do you think you could provide the committee with the answer to the question?

Mr. LINCOLN. Let us look into this. I have heard this repeatedly in sessions from the beginning, but I have never seen the document. It may have been an oral request, it may have been written.

Mr. LERNER. It was a letter.

Mr. LINCOLN. We will provide data on this.

Mr. EDMONDSON. I understand General Lincoln wanted to amplify an answer that he gave to Congressman Hosmer at the start of his testimony this morning.

Mr. LINCOLN. Might I be privileged to do this?

Mr. EDMONDSON. Yes.

Mr. LINCOLN. Congressman Hosmer asked me this morning, did I believe we now have more of a domestic industry than is needed for the national security. As I understood his question, it was along the line that, did the committee look into this?

My answer was, the task force report did not answer the question in those terms, but I want to add something more to try to clarify the point.

What the task force study said was that the domestic industry could be vastly more efficient and competitive with imported oil under

Now, I am quick to say that men of wisdom such as those here above me may be able to devise an even better system than that proposed in the report, but the concept of the system in the report was that less production from marginal sources would be involved and would be offset by increased production from more efficient sources.

Now, as to the extent of more efficient production that might be possible, and I have the paragraph numbers, paragraph 229 of the report, concludes that at the price of $2, meaning no important restrictions according to the estimates of the study, that 1975 U.S. production would exceed that of 1968 and 1980 production would be only 1 million barrels per day under 1968.

At the price of $2.50 per barrel, production would in 1980, actually exceed that in 1968. This is set forth, I believe, in paragraphs 229 and 228 (e).

Mr. EDMONDSON. Are those estimates that any oil industry representative endorses and supports?

Mr. LINCOLN. These are the task force study estimates. Now, the extent to which the oil industry would endorse or differ with those becomes a complicated subject. I know certainly they did differ, some of them did differ, and I will just ask my colleagues here if they can be responsive to your question.

Do you know, Joe, what the attitude was on that?

Mr. LERNER. Well, I think in the course of the study there were some changes in even some of the industry views. I do not know where industry finally landed.

Mr. EDMONDSON. All right, you answered the question directly. Do you know of any oil industry spokesmen that accepted these figures? Mr. LERNER. Öf course, I did not work on the task force staff itself, but it is my impression that some of these results are quite consistent with the submissions made by industry to the task force.

Mr. EDMONDSON. I understand the Interior Department people labeled the production estimates as highly optimistic, did they not?

Mr. LERNER. Well, the task force report and I want to emphasize that I did not prepare that report-puts side by side its own projections of output, domestic output, at different prices with those of industry, and in most instances the task force figures are in the same general ball park as those which they received from industry.

Mr. EDMONDSON. One further piece of unfinished business before I yield back to the gentleman from Wyoming, and I thank him for yielding to me.

Several members of the committee have requested, General Lincoln, biographical sketches for the record on yourself and the two staff people on whom you apparently are depending considerably for advice and counsel on this program. Could those be supplied?

Mr. LINCOLN. Those will be provided, sir. May I say that there are other members of my staff on whom I depend, as well as other people of staffs of other departments because, as chairman of the Oil Policy Committee, I feel I have a call on all of the oil expertise in Government, including, for instance, Secretary Shillito's experts sitting behind me, who are here to support him.

Mr. EDMONDSON. Yes, sir.

(The biographical sketches above referred to follow :)

BIOGRAPHY OF Brig. Gen. GEORGE A. LINCOLN (RETIRED), DIRECTOR, OFFICE OF EMERGENCY PREPAREDNESS, EXECUTIVE OFFICE OF THE PRESIDENT

Born July 20, 1907, Harbor Beach, Michigan.

Schools: University of Wichita, Kansas 1924-25; United States Military Academy 1925-29, B.S.; Oxford University (Rhodes Scholar, Magdalen College) 1929-32, B.A.; 1938, M.A Economics, Politics and Philosophy.

Military service and Government background: Mr. Lincoln was a professor in the Department of Social Sciences, United States Military Academy, West Point, N.Y. since 1947 and department chairman since 1954.

His military service also includes assignments as Special Assistant to the Secretary of Defense (1951-53); Deputy to the Under Secretary of the Army (1948-49); Military Advisor to the Secretary of State, Paris Peace Conference (1946); Defense Advisor to U.S. Representative of Temporary Council Com mittee of NATO (1951-52); U.S. NATO Delegation-Rome and Lisbon (195152); DOD representative on interdepartmental committee drafting first Mutual Security Program (1951)

Service also included assignments to the War Department General Staff (Chief, Strategy and Policy Group, of the World War II Operations Division as head of plans for General Marshall (and later for General Eisenhower when he was Army Chief of Staff)); Chief, Control & Planning Branch, G4 Hqs, Services of Supply, of the European Theatre early in World War II; head of the Army Orientation Program, which was the first major troop information and education program; Executive Officer, 36th Regiment of Combat Engineers, and other staff and troop assignments in the Corps of Engineers.

Panelist for the Gaither and Rockfeller reports (1957-58); Coordinator for the President's Committee to Study the Military Assistance Program, Draper Committee (1958-59); member of the Visisting Committee, Department of History, Harvard University (1962-68), member of the President's Advisory Panel, National Academy of Foreign Affairs (1962); Special Advisor to the Administrator, Agency for International Development (1964-65); and is a member of the Advisory Board, Inter-American Defense College.

Served as consultant to the U.S. Arms Control and Disarmament Agency (1961-65) and to the Woodrow Wilson School of International and Public Affairs, Princeton University.

Awards and decorations include the Distinguished Service Medal (1945); Legion of Merit (1943) with Oak Leaf Cluster (1947); Honorary Commander, Order of the British Empire (1945); and Honorary Doctor of Laws (1968), University of Pittsburgh.

Publications: Books (in collaboration): Background for Our War (1942); Economics of National Security (1950) and a new book with the same title (1954) : International Politics (1954); Dynamics of International Politics (1962), rev 1967; Improving AID Program Evaluation (1965); also articles and contribution of chapters to books.

Statutory member of the National Security Council, which includes the President, Vice President, and the Secretaries of State and Defense.

Married in 1936 to the former Frederica Bellamy of Denver, Colorado, and the couple has four children. The oldest, Frederica, is head of the English Department of an international school in Teheran, Iran. A son, Captain Daniel Lincoln, is now with the 25th Division in Viet Nam. Two other daughters, Joyce and Lorna, are graduate and undergraduate students, respectively, at the University of Michigan and Colorado State University.

Herbert J. Ashman, born Sept. 24, 1921, Baltimore, Md. The Johns Hopkins Univ.; B.S. Economics. 1951-1965 Shell Oil Co., Market Economist, product pricing and distribution. 1966-1967 Bureau of Labor Statistics, Wholesale Price Index-Fuels and Utilities. 1967-President, Office of Emergency Preparedness. Joseph Lerner, Born June 22, 1921, Baltimore, Md.; Loyola College 1939-41; B.A. Economics, John Hopkins University 1943; M.A., Ph. D. Econmoics, Harvard University 1948, 1951. Fiscal Economist, U.S. Bureau of Mines 1951-55, "Federal Mineral Taxation", "Excess Profits Exemption and Adjustments for Strategic Mineral Mining", "Canadian and U.S. Taxation of Mineral Production and Transactions in Mineral Properties", "Yields of Oil Payments and Overrides";