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July 14, 1973 - Image 4

Resource type:
Michigan Daily, 1973-07-14

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Summer Daily
111r111 Edito/ of
Edited and managed by students at the
University of Michigan
Soturday, Juiy 14, 1973 News Phone: 764-0552
Senate committee
vote commendable
THE REJECTION OF G. McMurtie Godley by the Senate
Foreign Relations Committee is commendable be-
cause the nominee was undesireable for the recommend-
ed position and also because the action was a reassertion
of the Senate's constitutional powers.
Godley was nominated by President Nixon for as-
sitant secretary for far eastern affairs. The rejection
apparently is the first decision of this kind by the For-
eign Relations Committee nn a key'nomination by any
According to the committee chairman, Sen. William
Fulbright (D-Ark.), Godley showed too much enthusiasm
for U. S. military involvement in Southeast Asia.
THE WHITE HOUSE, as was to be expected, was aghast
at the committee's action. They believe Godley was
rejected not'on his qualifications as a Foreign Service of-
ficer, but rather because he was executing a policy un-
popular with the committee.,
Godley was deeply involved in the secret fighting in
Laos. He headed an American operation that involved
the use of Central Intelligence Agency commanders with
a clandestine army. In addition, Godley was instrumental
in the determination of bombing targets in Laos, a posi-
tion he spparently relished.
But, as University Prof. Allan Whiting said, Godley
was in some degree responsible for a secret war and the
creation of 700,000 refugees.
"IT IS INCONCEIVABLE that Godley's activities in Laos
could be irrelevant to this appointment," Whiting
said. He stated that the consideration of politics in For-
eign Service appointments is "long overdue."
This, in itself. is sufficient to reject Godley, Military
strategists, disguised as Foreign Service officials, are
not needed to develop our far eastern policy.
But, equally imnortant, the rejection of Godley dem-
onstrates that the Foreign Relations committee is reas-
serting its responsibilities in foreign affairs.
While the President is allowed to develop foreign
relations, only Congress has the power to declare war,
But the evidence shows conclusively that the Presiden
has decided to pre-empt this power of Congress. His
bombing of North and South Vietnam and in Cambodia
without permission of Congress are evidence of this fact.
Indeed, there is no better example of this unconstitution-
al activity than the ''scret war" in Laos, in which God-
ley was so deeoly tn olved.
Since the President ignored the votes in Congress to
directly end the bombing. Congress has had to respond
indirectly. First, the President was forced to set a cut-off
date for the bombing of Cambodia. And now to make the
message even more clear, a Presidential appointment
has been blocked.
The committee's rejection of Godley now shows that
the actions of a diplomat will be considered in further
appointments. And it further demonstrated that the Con-
gress is serious in its efforts to restore its constitutional
war-making powers.

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Major oil companies make most of
the controversial gasoline shortage

A FEDERAL Trade Commission
(FTC) report made public last
week charges that the major pe-
troleum companies have used the
well-publicized but yet-to-be-proven
gasoline shortage "as an occasion
to debilitate, if not eradicate, the
independent marketing sector."
The report stated that 1,200 in-
dependent gasoline stations have
closed in the first five months of
this year.
In the midst of the alleged gaso-
line shortage, the major petroleum
companies have called for t a x
breaks, higher prices for gasoline

IN THE oligopolistic oil industry,
it is much more profitable for the
big companies to cooperate w : t h
each other than to compete. 13y
concerted shifts in pricing and
supply arrangements, they try to
cut smaller companies out of busi-
ness. -
The infamous oil depletion allow-
ance, intended to encourage es
ploration for new sources of oil,
has long rebounded to the benefit
of the majors. The law, in effect,
encourages integrated companies
to declare their profits on the
crude oil phase of their operations

In the oligopolistic oil industry, it is much
more profitable for the big companies to co-
operate with each other than to compete. By
concerted shifts in pricing and supply arrange-
ments, they try to cut smaller companies out of

tailers, ostensibly because of t h e
gas shortage. Yet several majors
are proceeding with plans to set
tip their own new discount brands.
The war of the majors against
the independents, combined with
their self-serving solutions to the
alleged gasoline crisis, raises the
question of whether a shortage
exists at all.
FOR EXAMPLE, while the maj-
ors point to a lack of national re-
fining capacity as one of the rea-
sons for the shortage, independent
refineries say they are operating
at only 50 to 60 per cent capacity.
And the revelation by the FTC
of serious under-reporting of na-
tural gas reserves by petroleum
companies casts further doubt on
their petroleum reserves reports.
What is certain is that the major
oil companies are reaping benefits
from the "crisis."
Oil industry spokespersons have
noted with satisfaction that prices
have "stabilized" in recent months,
usually at prices higher than be-
fore. Gas prices in the Detroit area
are reported to be about 6c per gal-
ton higher than at the same time
last year.
THE PROFITS of Standard Oil
Co. of Indiana in its Michigan
marketing area have doubled, from
two to four percent, in the last
year. Majors' profits, it should
be remembered, traditionaly come
from crude oil operations.
Because of such facts, and
prompted by the FTC study, the
Cost of Living Council announced

and natural gas, "more realistic"
environmental legislation, and con-
struction of the ecologically con-
troversial Alaskan pipeline.
The major petroleum companies
claim that these moves - which
would divert billions more of the
national income into their pockets
- are required due to increasing
demand for their products.
Although the United States may
soon face an energy crisis of mon-
umental proportions, there is little
doubt that the big petroleum cor-
porations are managing to parlay
the present "crisis" into a more
profitable future for themselves.
SPECIFICALLY, the majors --
the large integrated producers who
control their own oil from the
fields to the refineries . and fin-
ally to the gas pumps - are using
the occasion to declare war on the
smaller independents.
Together the eight largest com-
panies hold 64 per cent of the na-
tion's proved crude oil reserves, 58
percent of its crude refining capaz-
ity and sell 55 percent of its
Independent refineries and retail-r
ers depend on such majors for a
large share of their crude oil and
Independents, however, engage in
competitive, price-cutting practi; es
inimical to the interest of the larg-
er, integrated companies.

where they will be taxed at the
most advantageous rate.
The majors operate their refin-
tog and retailing operations, onethe
other hand, at a minimal rate of
profit or even a loss. Thus inde-
pendent refiners are charged an
artificially high price for the crude
oil they need in order to survive,
which, as the FTC report cogently
observed, renders their existence
. INDEPENDENT refineries al-
ways used to get by, however, by
trading their government allotied

The war of the majors against the inde-
pendents, combined with their self-serving
solutions to the alleged gasoline crisis, raises
the question of whether a shortage exists at all.
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rights to import foreign oil, whizh
they have no means to transport,
to the majors in exchange for the
majors' domestic oil. Now that
foreign oil has become as expensive
as domestic oil and the impitv
quota system has been abandoned
however, the independents are
left without a lever.
And, at the same time that the
major suppliers are squeezing the
independent refineries,- they are
also cutting off the independent re-

earlier this week that it was
launching a major investigation of
the petroleum industry and its well-
publicized gasoline shortage. In
the nation-wide audit the Council
plans to investigate supply prac-
tices to independent retailers and
refineries, and whether, in fact,
a gasoline shortage exists.
David Stoll is an assistant
sight editor of The Daily.

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