194. Minutes of a Cabinet Meeting, White House, Washington, January 21, 1955, 10:10 a.m.–12:10 p.m.2
[Here follows a list of participants. The President presided at the meeting.]
Energy Resources Report (CP–19)3—Dr. Flemming noted the work of the task force and then stressed the need for keeping this paper confidential until decisions were reached on what publicity would be given to it.
Dr. Flemming read in full Recommendations 1 and 2 on regulation of natural gas. In discussion, the President singled out the phrase that the Administration would recommend that Congress should enact legislation. Mr. Flemming believed the Executive Branch should take a positive position on any bills taken up by Congress even though not introduced by the Administration. The Attorney General believed the Administration should limit itself to commenting on bills on which it is called to testify. In subsequent discussion, it was made clear that the Administration would not itself recommend legislation but would stand prepared to testify on legislation which may be introduced by the opposition. Under Sec. Anderson suggested substitute language for Recommendation 1 a, which had the effect of deleting the Administration commitment and substituting a general policy statement on which legislative initiative could be taken by anyone so desiring. The Vice President took note of pressures on the Texas Senators particularly for such legislation and suggested that the Administration should leave the initiative to Sen. Lyndon Johnson.
The President believed that any public statement should stress the need for continued exploration in the long-range interest of the [Page 510] consumer, otherwise supplies may run short and the price be increased far beyond the modest cost of continuing exploration. Mrs. Hobby believed an entire preface should be prepared for the purpose of establishing consumer interest as the purpose of these policies.
Amb. Lodge asked whether these policies would relieve from regulation by either Federal or state government any activity presently regulated. Dr. Flemming indicated that there would be such an activity, which was now being regulated by virtue of the Supreme Court decision on the Phillips case. The Attorney General pointed out that it would be subject to state regulation if the states desire to do so. Mr. Brownlee noted that most State Power Authorities would be unhappy with this policy since they would believe it did not effectively control the price of gas to consumers in their states.
Sec. Mitchell noted that Paragraph 1a, (2), was not entirely consistent with current plans for a wartime emergency. Sec. Humphrey suggested that the final clause (“because Federal jurisdiction, etc.”) should be knocked out. It was so agreed.
Recommendation 3 was accepted without comment.
In regard to Recommendation 4 on oil imports, Under Sec. Hoover emphasized the desirability of voluntary controls as the best means of accomplishing the State Department’s very difficult problems involving friendly countries; the Attorney General cautioned, in the interests of the anti-trust laws, that any discussions by Government officials with officials of private oil companies must be limited to merely pointing out the consequences of failure to limit imports voluntarily; Sec. Humphrey forecast that voluntary action would eventually be ineffective because of increasingly bad situations in domestic energy industries, but he agreed that the recommendation here was the best now available; Sec. Wilson cautioned against any rapid changes toward over-reliance on foreign oil, though he did believe it might be better to slow down on the use of our own exhaustible oil resources. The President believed the policy to be the best “middle of the road” solution. Mrs. Hobby wished to soften the language committing the President to propose appropriate action, and to substitute the word “review”. Messrs. Humphrey and Flemming and the President believed a mere promise of review would be inadequate to the present situation. Sec. Wilson suggested a revision to state that the President will propose appropriate action, deleting the final clause. Mr. Flemming agreed.
Sec. Weeks took great exception to the inclusion of residual oil in this recommendation. He believed inclusion constituted a limitation upon the ability of private concerns to improve their efficiency by converting from one form of fuel to another. He believed some alternative program should be found for helping the coal industry.
[Page 511]The President believed he did not have sufficient information on which to base rejection of the Committee recommendation, whereupon Sec. Weeks stated his acceptance of the recommendation now, so long as the subject is open to periodic review.
Mr. Flemming again cautioned on the need for avoiding any public indication of this policy until the Department of State had ample opportunity to effect necessary discussions with foreign countries.
Recommendations 5 through 8 were accepted without discussion.
On Recommendation 9, Sec. Weeks noted the relationship to the work of the Transport Policy Committee and asked that this section be held in abeyance until his Committee completed its work. He did not foresee any conflict. Mr. Flemming agreed to work out with him the appropriate handling of this particular point.
Secretaries Weeks and Wilson opposed Recommendation 12, j, on the grounds that it would open the door to innumerable pressures for similar action for any product in a depressed situation, for discrimination favoring one item over another depending on political influence, and other abuses. Sec. Weeks asserted the policy would not increase the quantity of coal used but would increase its cost. The President believed the situation would not differ from similar practices such as tariffs and quotas. Mr. Wilson suggested that there would not be a great increase in the need for coal in any future war. In the ensuing discussion, Mr. Humphrey apparently made the more convincing case for a considerably increased use. Mr. Humphrey also believed this proposal did not involve any new principle of Federal action to protect an industry necessary to mobilization and national security. The President concluded that this policy would of course have to be administered on the basis of good judgment.
In a discussion as to publicity on the paper as a whole (except for the part on natural gas already decided), the President emphasized the need for obtaining the views of people expert in their knowledge of Congressional viewpoint. Gov. Adams spoke on the need for an early public statement. It was agreed that the Committee would therefore take the report back in order to prepare recommendations on publication, to be cleared with Cabinet members and, if possible, submitted to the White House for discussion at the Legislative Leaders Conference next Tuesday. Dr. Flemming announced that the Cabinet Committee would have a 9:00 A.M. meeting on Saturday, January 22nd.
[Here follows discussion of unrelated subjects.]