Mr. TREADWAY. Well, we are interested in the explanation. But there are States, you know, Mr. Franklin, that have gotten that tax up to 7 cents a gallon. We don't want to intrude on some field of taxation that the States feel they should have, and at the same time this balancing of the Budget is a very serious proposition. Would you suggest that the States ought to more or less withdraw from that field and give it to the Federal Government?

Mr. FRANKLIN. I doubt whether the States would listen to any suggestion I might make in that direction, but I can not see but what the Federal Government is taxing the same things that the States are taxing. For instance, I pay income tax to the United States Government, but I have to pay one to the State of Massachusetts also.

Mr. TREADWAY. Well, the States followed the Government in establishing it.

Mr. FRANKLIN. Then that ought to be a good example for the United States to follow the States once.

Mr. TREADWAY. Then, as I get you, in your opinion a gasoline tax at the station where you purchase for your individual car should be placed by the Federal Government in this present emergency? Mr. FRANKLIN. I don't pretend to any expertness in this direction. Mr. TREADWAY. We are looking for information.

Mr. FRANKLIN. But it seems to me that would be the least burdensome tax you could put on.

Mr. TREADWAY. Just one other question, if I may. In the opening of your remarks you referred to this fuel item which we are considering to-day as being a burden on the New England States of something like $17,000,000, and on industry within that area of $11,000,000. How do you reach those figures?

Mr. FRANKLIN. Well, I reach those figures by the number of barrels that were consumed in the good years. I think the consumption of New England naturally is something like 18,000,000 barrels, and of industry about 13,000,000 barrels. That multiplied by 84 will give you approximately these sums.

Mr. TREADWAY. I think we ought to extend the field a little more than into New England. This is a question of fuel consumption along the Atlantic border, not just in our little neck of the woods up there. The whole Atlantic border is affected by the importation of foreign oil, or the supply of domestic oil being brought there. Can you give us the same figures for the Atlantic coast area that you have given for New England?

Mr. FRANKLIN. I have seen them, but I frankly do not remember them now.

Mr. TREADWAY. Can you secure that for us and insert it as part of your remarks? Is it available information?

Mr. FRANKLIN. I think so.

Mr. TREADWAY. Can it be secured through your chamber of commerce?

Mr. FRANKLIN. I think so.

Mr. McCORMACK. I think it is in the tariff report.

Mr. TREADWAY. I think right in connection with your remarks, Mr. Franklin, since the subject is pertinently before us, that if that could be secured and made part of your extension it would be of assistance to the committee, because, as I said to start with, we can not regard

this as a New England proposition. I think for the sake of your argument you should extend it to the Atlantic coast area that will be directly affected by this tax.

Mr. FRANKLIN. I will undertake to get those figures.

Mr. SANDERS. Mr. Franklin, do you know it is a fact that the retail coal dealers of Massachusetts have gone on record favoring a tax on oil?

Mr. FRANKLIN. I beg your pardon?

Mr. SANDERS. Do you know it is a fact that the retail coal dealers of Massachusetts have gone on record as favoring a tax on oil? Mr. FRANKLIN. I don't know of it; no, sir.

Mr. SANDERS. You have not heard of that?
Mr. FRANKLIN. No.

Mr. SANDERS. You say this will cost your company $40,000. Can you conceive of any revenue bill that we might frame here but what will cost somebody something?

Mr. FRANKLIN. I wish you might, but I do not see how you will. Mr. SANDERS. All right. The only suggestion you have made to raise all of this money, about a billion dollars or more, is that we put a 1-cent tax on gasoline. Have you any other suggestions?

Mr. FRANKLIN. I am frank to say that I have not given it a great deal of thought. I have trusted to Congress to do it equitably.

Mr. SANDERS. You are listed here as representing industrial groups. Will you please state the names of all the group you represent?

Mr. FRANKLIN. I thought I did. The Associated Industries of Massachusetts, of which I have recently been president, and the Writing Paper Manufacturers of the country, of which I am at the present time the president.

Mr. SANDERS. You are president of two companies so far.
Mr. FRANKLIN. They are associations.

Mr. SANDERS. Any others?

Mr. FRANKLIN. No other association; no, sir.

Mr. SANDERS. Do you represent anybody else?
Mr. FRANKLIN. I represent my own company.
Mr. SANDERS. Other than what you have named?
Mr. FRANKLIN. No.

Mr. RAGON. As I understood it, you suggested awhile ago that this tax should not be placed on an already overburdened industry. The oil industry is the third largest in the United States. I can not think of any industry that has higher taxes to pay than the oil industry. You suggest an additional tax on the oil industry of 1 cent per gallon on gasoline.

Mr. FRANKLIN. I do not conceive that the oil industry will pay it. I think the people who buy will pay it.

Mr. RAGON. It is on the industry, is it not?

Mr. FRANKLIN. I beg your pardon?

Mr. RAGON. It is on the industry just the same.

Mr. FRANKLIN. Well, that is a point of view, but it is just like a State tax. I don't assume that the oil companies worry about the different State taxes. It is 7 cents a gallon in Florida, and 3 cents in Massachusetts

Mr. RAGON. Your theory is it is passed on. That is true. But it is still a tax on the industry, isn't it; that the industry carries?

Mr. FRANKLIN. You can specify it in any way you want. matter of fact, the consumer directly pays it.

As a

Mr. RAGON. But it is still a tax that is carried by that industry. It is a load that that industry carries?

Mr. FRANKLIN. It is not a load in the sense that the income tax is a load.

Mr. RAGON. You are here in the attitude of opposing a tax being imposed on one industry that does not bear any tax at all. Have you stopped to think about that?

Mr. FRANKLIN. What industry is that? Mr. RAGON. The importers of oil. Will you name any tax they pay except perhaps an income tax? Well, no

Mr. FRANKLIN. Well, I assume they bear the same burdens as other industries bear. I assume that whatever they pay in dividends is paid to the Government proportionately in income tax. I assume that their gasoline that is sold in this country, or whatever it may be, bears the same burden as any other gasoline.

Mr. RAGON. All right. What about the taxes on the physical plant, what about taxes on the oil in the ground, and your severance taxes, as it comes to the top?

Mr. FRANKLIN. They do pay a tax. They don't pay it to the United States Government, but they pay it.

Mr. RAGON. What about the Dutch Shell people? What do they pay the United States Government?

Mr. FRANKLIN. I can't tell you that.

Mr. RAGON. If your theory in raising this tax is not to overburden the industries already overburdened, aren't you sort of inconsist

ent

Mr. FRANKLIN. I assume if the Standard Oil of Indiana owns the majority of the Pan-American, for example, in that case the Standard Oil of Indiana would get the majority of their own income there, and they would have to pay the Government a portion of that in income taxes.

Mr. RAGON. But your attitude here, as you have stated it, is not to put a tax on those already overburdened. We find the domestic oil industry as much loaded with burdens of taxation as any other industry, and yet you oppose levying a tax on these imported oils that come here that have no tax at all save and except an indirect tax. Mr. FRANKLIN. I oppose it because the tax that is put on them will be on us and not on them.

Mr. RAGON. Then, that is your theory of raising this revenue?

Mr. FRANKLIN. In other words, if you tax the fuel oil that comes in, it is not the importing companies that will pay the tax; it is the Strathmore Paper Co. and other similar companies.

Mr. RAGON. Isn't that the result of any sort of tariff levy you make? Wouldn't somebody be saying "We have to pay it"? Mr. FRANKLIN. Sure.

Mr. RAGON. All right. Is there any State in the Union, and you have a great Commonwealth up there, more favored by tariff benefits than your own State?

Mr. FRANKLIN. That I couldn't say. I assume they all have their protection, whatever it may be.

Mr. RAGON. Now, if your industries in Massachusetts are entitled to a tariff, that the people of Kansas and Oklahoma and Arkansas

and these other midcontinent oil States have to pay in the increased price of the articles that they buy from your States, then how can you object to them getting a little increase in oil and you people up there paying it?

Mr. FRANKLIN. I would like to say this, that I think the financial history that is written of this past decade in the future will show a great many excesses, including an excess of protection.

Mr. RAGON. Of what?

Mr. FRANKLIN. Protection. So that I think protection, while it is a good thing, intelligently operated, may be pushed to just as much excess as we have pushed a great many other things to excess. Mr. RAGON. I agree with you, sir.

Mr. FRANKLIN. And a tax put on this fuel oil will not be paid by the importing companies. It will be paid by the manufacturers that use it, which merely means to increase their taxes.

Mr. RAGON. Increase what?

Mr. FRANKLIN. The taxes of the people who use the fuel oil.

Mr. RAGON. Isn't that the theory of any tariff bill that is put on? Mr. FRANKLIN. Yes.

Mr. RAGON. All right. Here is the situation of a certain group of oil industrialists in this country that are absolutely bankrupt. There is no disputing that. Here are the people importing this oil, every one of whom are receiving good dividends every year. Don't you want to come over here and help these little bankrupt fellows with this same tariff that has been benefiting the Massachusetts industries all these years? We mean an honest protection now, not an inflated one.

Mr. FRANKLIN. It seems to me in reading dividends paid that I have observed that a great many of the oil companies that control the major part of the oil of this country have been paying dividends. Our company cut them off a year ago. I don't know about the small independents. I assume that a certain percentage of every business in the country always records failure to make money.

Mr. RAGON. I assume so, but when there is one group of oil men in this country making money every year and another group over here that are absolutely prostrate, economically speaking, that looks to me as if you people up there who have been such great beneficiaries of the tariff would like to have some similar benefits extended to these people.

Mr. FRANKLIN. I think I could point out to you some paper companies that would like some such help as the oil companies.

Mr. RAGON. You are not in favor of us putting a tax on paper companies, are you?

Mr. FRANKLIN. I wouldn't object if you take it all off, so far as our companies are concerned. We do a considerable business in Europe and England at the same prices that we sell American paper. Mr. TREADWAY. Mr. Franklin, since interrogating you as to the amount of fuel oil used in various sections of the Atlantic coast, I have been handed a pamphlet entitled "National Survey of Fuel Oil Distribution." It is published by the chief economist of the Bureau of Mines, so I assume it is more or less official. You may be interested, and the committee may be interested, to know the quantities about which I was asking you. They appear in a table on page 9. The Middle Atlantic States in 1929 consumed 88,721,000 barrels. The

South Atlantic States consumed 9,953,000 barrels. New England consumed 21,829,000 barrels; making the total of the Atlantic coast consumption 120,505,000 barrels.

Mr. SANDERS. Mr. Franklin, just one more question. There was a dispatch in the papers of yesterday to this effect:

Special train of manufacturers from Maine are in Topeka, Kans., to-day and are going to Oklahoma City and Texas, boosting their products and seeking to improve outlets for their goods.

They will be in Oklahoma City, Fort Worth, Houston, and San Antonio. They were in Kansas City yesterday. If those folks down there who depend on oil can not derive any profit from oil, then how do you expect your folks up there in New England to sell their products down there?

Mr. FRANKLIN. We will take an equal chance with them.

Mr. SANDERS. Have you always had an equal chance with them? Mr. FRANKLIN. I can't tell you.

Mr. SANDERS. Don't you know you have had a better chance than they have had?

Mr. FRANKLIN. I have not been aware of it.

Mr. SANDERS. And you have been living in Massachusetts how long?

Mr. FRANKLIN. About 25 years.

Mr. SANDERS. That is all.

Mr. FRANKLIN. But I have been through Texas and when I went through it it seemed to be very prosperous.

Mr. SANDERS. How long ago?

Mr. FRANKLIN. Well, that has been 10 years ago. But if you will come up into New England now I do not believe you will observe any prosperity.

Mr. SANDERS. You wouldn't say that Texas is prosperous now, would you?

Mr. FRANKLIN. That I can't say, but I would imagine it is as prosperous as Massachusetts is now under present conditions. Mr. SANDERS. Well, that isn't bragging very much.

RESOLUTIONS OF FARM ORGANIZATIONS

Mr. CRISP. The next witness is Mr. Brenckman, representing the National Grange.

Mr. WALKER. Mr. Brenckman is not here. He intended simply to present resolutions of the National Grange against a tariff on oil. Mr. CRISP. When he presents them they can be put in the record. Mr. RAGON. Before Mr. Gray's or Mr. Brenckman's resolutions are to be put in the record, I want them here. What I mean is that if these witnesses are going to put in these resolutions of the farm organizations, so far as I am concerned, I have some testimony that I would like to ask them about, as to how come those organizations' make that kind of recommendation, and I can't get it unless they are here.

Mr. CRISP. Of course, if they come here and appear as witnesses, you will have that opportunity.

Mr. RAGON. They are on your list?

Mr. CRISP. I know, but I don't think the committee can go out and bring any witnesses in if they are not here.