have made under the cannon-shot rule and extensions we have made out as far as the National Government has extended the boundaries, on the same theory that the Great Lakes went to the international boundary.

I will go into that later if I may.

Senator DONNELL. I understand that my right of cross-examination is reserved at this time.

Senator MOORE. Attorney General Daniel and Attorney General Clark, this question came up here, I think, from Senator McCarran. He asked if you ought to stay here and examine the Government witnesses.

Mr. Clark, your assistant asked me if we were going to do that. I said I did not know. I had not talked to him. I have not talked to Attorney General Daniel yet. I spoke to the attorney general of California. I did speak to your assistant in advance.

Mr. CLARK. It is a novel procedure. It is hard for a lawyer to examine the witness when he was not in the room when he testified. It is quite all right for them to examine me. I will answer any

questions anybody wants to ask.

Senator MOORE. You have not heard his testimony?

Mr. CLARK. No, sir.

Mr. DANIEL. I do not think it would be fair. I would rather not cross-examine him.

Mr. CLARK. If they wanted to ask any questions, Mr. Chairman, I am here to answer questions.

I want to clarify my position on it and the position of the Department of Justice.

STATEMENT OF HON. TOM C. CLARK, ATTORNEY GENERAL OF THE UNITED STATES

Mr. CLARK. Mr. Chairman, I heard my distinguished attorney general mention the fact that today is the birthday of the Texas independence. While I do not want to take this occasion to make any speech about it, because the bravery and the valor and the accomplishments of Texas and Texans, both living and dead, are known all the way around the world, and I do not need to embellish it here. I do want to thank whoever picked me to come here this day.

I think it is a very appropriate day for me to point out to the committee the pitfalls that are in the legislation that you are considering, and I appreciate this opportunity of being here on this particular day, the one hundred and twelfth anniversary of the independence of my State.

First, I would like to read a letter that is addressed to you by Secretary Forrestal:

MY DEAR SENATOR MOORE: Attorney General Clark and Secretary of the Interior Krug are appearing before your committee this morning, and I have asked the Attorney General to read this letter into the record to express my views on the subject under consideration.

My views with respect to the importance of oil to the National Military Establishment are well known to the Members of Congress. On January 19, 1948, I testified before the Special Subcommittee on Petroleum of the Armed Services Committee of the House of Representatives on this vital subject. A copy of my statement made at that time is attached, and I believe it is unnecessary for me to repeat its substance.

In considering the subject matter before your committee I take as a starting point the fact that the United States Supreme Court, in litigation concerning the submerged coastal lands of California, decided that California did not own such lands and that the United States had paramount rights in, and full dominion and power over, the lands, minerals, and other things underlying the Pacific Ocean adjacent to the State of California.

The suggested relinquishment of Federal rights by S. 1988, would render the task of the National Military Establishment more difficult, because no provision is therein made for oil reserves or for the use of submerged coastal lands for possible defense installations in the future.

On February 12, 1948, in response to the invitation of a member of the staff of the Senate Judiciary Committee, I forwarded a copy of a bill covering the submerged coastal lands which was prepared by representatives of the National Military Establishment and of the Justice and Interior Departments. This proposed legislation was introduced by Senator Barkley as S. 2165 and is to be considered in detail by Attorney General Clark and Secretary of the Interior Krug in their testimony today. This bill more adequately meets the needs of the National Military Establishment and gives it greater assurance that it will, in the future, be able to maintain the security of the United States.

From the standpoint of national security, I call your attention particularly to these provisions of S. 2165—

Senator MOORE. Is that the first bill that was introduced?

Mr. CLARK. This is the one that was introduced by, I think, Senator Barkley.

Senator MOORE. He introduced both of them.

Senator DONNELL. S. 2165 was introduced on February 17, 1948, and S. 2222 was introduced on February 25.

Mr. CLARK. The first bill, yes, is the one with reference to national management. The second bill is what you might call a quitclaim of the interior navigable waters that some of the States have contended the Federal Government claims.

Senator MOORE. The first bill sets up the machinery for the operation of the oil lands of California?

Mr. CLARK. That is right, sir.

(1) The United States is given the right of first refusal to purchase at the market price any oil or gas from the submerged coastal lands (section 3 (e)). (2) The President may, after consultation with the National Security Resources Board, withdraw any submerged coastal lands from disposition under the act and reserve them for the use of the United States in the interest of national security (section 3 (d)).

(3) Consistent with the needs of the national economy, the oil and gas deposits in submerged coastal lands are to be conserved as a national asset and the act is to be administered in accordance with such determinations as to national security, conservation or development as may be announced by the President after consultation with the National Security Resources Board (section 3 (b) and 3 (c)).

(4) All leases issued under the act are to permit the Secretary of the Interior to suspend or terminate any lease upon the recommendation of the Secretary of Defense, during war or a national emergency declared after the effective date of the act (section 6 (g)).

Sincerely yours,

JAMES FORRESTAL

It is addressed to the Honorable E. H. Moore, chairman of the Senate Subcommittee on Tidelands, Senate Judiciary Committee, United States Senate, Washington 25, D. C.

I would like to introduce that, Mr. Chairman, to go with the attachment which is a copy of the testimony of Mr. Forrestal before the committee of the House.

Senator MOORE. Do we have that here?
Mr. CLARK. It is attached to the letter.

(The statement follows:)

STATEMENT OF SECRETARY OF DEFENSE JAMES FORRESTAL, WASHINGTON, D. C.

In response to the invitation of your chairman, Mr. Short, I am pleased to have this opportunity to testify on the subject of oil. It is gratifying to those of us who are immediately concerned with the grave resonsibilities of safeguarding our national security to have congressional committee such as yours give us the opportunity to discuss with you problems so intimately connected with national security as those relating to oil. Full knowledge of facts is an indispensable element to successful operations in any field of endeavor, and in the case of this Government of ours, full knowledge of facts is a "must" if we are to have orderly functioning of democratic processes between the executive branch and the legislative branch.

I propose to consider the following four general topics in my testimony today. In the first place, I wish to underscore the importance of oil to the National Military Establishment. Secondly, I will explain the new administrative set-up within the National Military Establishment to handle oil matters. Thirdly, I will outline the National Military Establishment's attitude toward oil production and reserves within the Western Hemisphere, particularly within continental United States; and fourthly, I will give consideration to the National Military Establishment's attitude toward foreign oil outside the Western Hemisphere, particularly Middle East oil.

l'etroleum is the primary source of motive power for military forces. It is the lifeblood of a war machine. In World War II our armament depended on oil. Without oil, our Army could not have marched, our Navy could not have sailed, and our Air Force could not have flown to final victory. There was a time when the major item of supply to a fighting force was food, as Napoleon graphically pointed out when he said that an Army marches on its stomach. In World War II, however, the volume of liquid fuel shipped overseas was nearly 16 times that of food. Petroleum and petroleum products amounted to over 60 percent of the overseas military shipments. During the last war the peak consumption of oil for military purposes and for programs supported by the military was 1,375,000 barrels a day.

[With respect to the future, it is not anticipated that any new sources will soon replace petroleum for military motive power. Indeed, rather than writing down the military value of oil, our future strategic needs of oil must be calculated on the basis of a greater rate of oil consumption than we had during the last war. The maximum military requirements of petroleum in the event of a war emergency are now estimated nearly to double the requirements of World War II. Further, the essential civilian requirements-especially in the light of wide change-overs from coal to oil for domestic and industrial purposes-are anticipated to be appreciably higher than during the last war. It now appears that the United States military and civilian needs for a major war effort would exceed by at least 2,000,000 barrels a day the foreseeable production from the continental United States. The basic fact that oil is an absolutely essential commodity for the fulfillment of the mission of the National Military Establishment is incontrovertible.

The second item of my testimony agenda is to explain the new administrative Set-up in the National Military Establishment whereby oil matters will be handled.

At the meeting of the Munitions Board of January 8, a format for the charter of the Armed Services Petroleum Board and for the charter for the Armed Services Petroleum Purchasing Agency were approved. Briefly stated, the ArmyNavy Petroleum Board is to be reconstituted as the Armed Services Petroleum Board.

This new board is to be established as a joint board of the three service departments and will consist of six members. Three of the members will be designees respectively of the Chief of Staff, United States Army; of the Chief of Naval Operations; and of the Chief of Staff of the Air Force. The remaining three members will be the Quartermaster General of the Army; the Chief of the Bureau of Supplies and Accounts of the Navy; and the Director of Maintenance, Supply and Services of the Air Force, or their alternates.

The Armed Services Petroleum Board is to be charged with a dual responsibility. First, it is to be responsible to the three Secretaries for interservice planning and coordination of efforts in the field of petroleum. Secondly, the Board is to be responsible for making recommendations to and performing such

services, duties, and functions in petroleum matters as may be required of it by the Munitions Board, the Joint Chiefs of Staff, and the Research and Development Board as they exercise their respective statutory functions for the Secretary of Defense.

The new board will be responsible for its own internal regulation and administration, and personnel and facilities requirements will be met by the three military departments.

A word would appear appropriate on the reason for the reconstitution of the Army-Navy Petroleum Board. Briefly, the reorganization of the Military Establishment by the National Security Act of 1947 prompted the reconstitution of the Army-Navy Petroleum Board. It was felt that the old board could not adequately coordinate petroleum activities among the agencies and departments in the National Military Establishment. To keep in step with the changes effected by the National Security Act and to carry out the congressional mandates expressed in the act, the Armed Services Petroleum Board is being organized. Because of the particular importance of petroleum to all military operations in war and peace it was determined that there is still a need for some agency under the three secretaries which will assist them in the day-to-day performance of their duties with respect to petroleum products. It was also believed that the new petroleum board would be a convenient and economical vehicle for obtaining coordinated recommendations from the Departments for use of the Munitions Board, Research and Development Board and the Joint Chiefs of Staff.

The Armed Services Petroleum Purchasing Agency is to be established as a joint agency of the three military departments and is to be responsible for all purchase functions relating to petroleum and petroleum products within the National Military Establishment. This agency will consist of the Quartermaster General of the Army; the Chief of the Bureau of Supplies and Accounts of the Navy; and Director of Maintenance, Supply and Services of the Air Force. As in the case of the Armed Services Petroleum Board, the budgetary, staff, space and facilities requirements of the Petroleum Purchasing Agency will be met by the Departments of the Navy and Air Force.

The Petroleum Purchasing Agency will have all the powers necessary for it to fulfill its purpose of streamlining the purchasing of petroleum and petroleum products for the armed forces. For example, it will solicit and analyze bids, negotiate, award, execute and administer contracts, obtain all necessary clearances in connection with any of its contracts, and so forth.

The creation of the Petroleum Purchasing Agency is also prompted by the National Security Act of 1947. That act has as one of its objectives the coordination of procurement activities among the armed forces. The Petroleum Purchasing Agency has been determined to be the means whereby such coordination is to be achieved so far as petroleum and petroleum products are concerned. The Agency will provide a single point of contact between the petroleum industry and the Departments of the National Military Establishment with respect to purchase.

The third point which I propose to consider is the National Military Establishment's attitude toward oil reserves and production within the Western Hemisphere, particularly within the continental United States. The strategic importance of the location of oil can hardly be overemphasized. During the last war we enjoyed the tremendous military advantage of possessing on our shores or close to them a vast fund of oil. The difficulties which we encountered in the early days of World War II with German submarines in the Caribbean area, which is relatively close to home, is a forceful reminder of the urgency of maintaining ourselves as self-sufficient as possible in our petroleum needs, and such self-sufficiency is the primary goal of the petroleum policy of the National Military Establishment.

In terms of accessibility of petroleum resources, those within the continental limits of the United States are obviously first in importance. The latest estimate of proved crude reserves for the United States is 21,000,000,000 barrels plus, which is about 31 percent of the total proved reserves of the world. The proved reserves of the rest of the Western Hemisphere amount to about 11,000.000,000 barre's, or 16 percent of the total proved reserves of the world, and roughly three-fourths of this amount are concentrated in Venezuela and 10 percent in Mexico. In connection with the oil of Mexico, Venezuela, and other countries in this hemisphere, it is our hope that exploration of the subject at the forthcoming Bogota Conference will lead to further development of petroleum resources of the Western Hemisphere.

Regarding the quantity of reserves as a fund which supports a certain optimum withdrawal, it is clear that the National Military Establishment favors policies which will promote discoveries of new petroleum reserves. In line with this point of view, the National Military Establishment wishes to support the development of the great area of Alaska. Discoveries and development of large crude pools in Alaska could have a heavy impact on the efforts to balance the availability of petroleum with requirements in the event of war. Alaska has shown considerable promise in respect to petroleum resources. I believe that continued Government support of the exploration being conducted at Naval Petroleum Reserve No. 4 in Alaska under the sponsorship of the Office of Naval Petroleum Reserves is well warranted.

Naval Petroleum Reserve No. 1 in California is also of military value because of its strategic location on the west coast. Naval reserves other than the two I have just named should be returned to the Department of the Interior, and steps to effect such return are going forward.

In the commercial field, it is believed that exploration for new pools still represents great potential for increasing our petroleum productivity capacity. The tidelands areas in particular are believed to hold great promise in adding oil to our available resources. It is the view of the National Military Establishment that development of the tidelands areas should proceed as rapidly as possible and that all necessary action should be taken to permit rapid development of these areas. Delays in the development of the oil potential in the tidelands is considered contrary to the best interest of the United States from the viewpoint of national security. I do not mean to imply that the National Military Establishment would in any way condone or favor practices that are contrary to sound conservation principles, but I do wish to emphasize that undeveloped oil fields provide no power for the machines of either war or peace. The National Military Establishment, together with the Department of Justice and the Department of the Interior, is currently engaged in drafting a statute dealing with the tidelands, and it is my hope that this statute will be ready for your consideration in 30 to 60 days.

The production story of the Western Hemisphere in 1947 is here briefly summarized. The United States accounted for slightly over three-fifths of the world's production, and the rest of the Western Hemisphere another fifth. As with petroleum reserves, production in Western Hemisphere countries other than the United States was concentrated in Venezuela, with over 14 percent of the world's petroleum production, and Mexico, with slightly less than 2 percent. In terms of barrels, the latest estimates for 1947 production are as follows: The entire Western Hemisphere, 2,433.000.000 barrels; continental United States, 1,855,000,000 barrels: the Western Hemisphere, exclusive of continental United States, 578,000.000 barrels; Venezuela, 433,000,000 barrels; and Mexico, 57,000,000 barrels. To be sure, these figures by themselves sound imposing, but let us now reconsider our anticipated petroleum demands in the event of an emergency. As I stated earlier in my testimony, the United States military and civilian needs for a major war effort would exceed by at least 2,000,000 barrels a day the foreseeable production of the United States. The daily average production for the United States last year was a little over 5,000,000 barrels. Emergency demands for petroleum, therefore, would require United States production to be stepped up by at least 40 percent or would require heavy reliance by us upon foreign oil. The magnitude of a 40-percent or more increase is reflected in the fact that 1947 production was an increase over 1946 production by only 7 percent. The daily production of crude oil for the entire Western Hemisphere last year came to 6.666,000 barrels.

The current petroleum supply situation has also been unsatisfactory from the viewpoint of the services. During the past year considerable pressure has had to be placed upon industry by the military services in order to secure commitments to fill the purchase requirements. In August 1947 the Navy considered it necessary to issue instructions to reduce all operational activities to the essential minimum. At the same time the Air Force allocated extremely limited amounts of aviation gasoline to its commands. Tightness of the supply situation has been relieved to a certain extent and it appears that our military commitments will probably be met for the balance of fiscal 1948. However, in view of the increasing demand for petroleum, it is certain that continued pressure will have to be placed on industry if military requirements are going to be It is appropriate to note here that the current military demands total 343,000 barrels a day. Of this amount, 244,000 barrels come from continental United States, 39,000 barrels from other sources in this hemisphere, and 60,000 barrels

met.