Evening star., 1933-08-27
oil Code Critics Assailed &s>
For Leak In 'sBlunder" Story
Sachs, POgue Under Fire
for Memorandum on
Price FIXING. "
Former Says Statement
Vas Neuer Intended
for Publication.
BY the Associated Press

BY the Associated Press.
The long disputed question Of price,
fixing In the National Recovery Admin
istration code for the oil industry fiared
up again yesterday with the Recovery
Administration chief economist under
attack for permitting publicity on his
statement to Hugh s. johnson that the
price control provisions constituted 20
serious blunder."
The memorandum. which again re-
called the differences over price-fi
between Johnson. the N. r. A. chief,
and Secretary Ickes Of the Interior De-
partment was signed by DR.. Alexander
Sachs, chief of the administrations re-
search board. and Joseph E. Pogue,
economic adviser to the administrator
for oil.
Coming to the fore just as johnson
was pushing his effort to bring three
more industries-bituminOus coal. auto
mobiles and retailers-under the recov-
cry program, the controversy clad
memorandum was expected generally 10
have wide reperclssions In the Roose-
welt administration.
Franklin Issues Statement.
A few hours after it became public
Writ Franklin, president OF the lnde-
pendent Petroleum Association, and
supporter of price-fixing, said In
statement 1T would be interesting to
know what was behind a seemingly IN
spired statement made by an ofncial IN
the N. r. A. Office whereby he chargeo
the whole administration with biunoer
ing at the same time that ne served
well the companies who have 50 long
enioyed the perogative Of price f1xing.
The statement to johnson. VINO op-
posed price fixing throughout the nego,
fiation of the code which was signed
August l9 by President Roosevelt SAID
price fixing would endanger the exist
ence OF small reflners and distributors.
The memorandum ended with the
statement, 1.-The conclusion Is inescap-
able that a serious blunder has peeh
made"
The signing Of the code followed sew
eral days OF discussion with Johnson
and Ickes, who favors price control.
Squeezing Out Forecast.
The Sachs -Pogue memorandum main
tanned that small refiners and dlstrlbu-
tors would be squeezed out by the price
section. which provides a barrel OF
crude oil of set quality shall cost 1873
times the price of gallon OF gasoline
at wholesale at the refinery.
1t further said overproduction OF OIL
would be aggravated by the price con-
troll and that it would be particularly
difficult" to bring about balance be-
tween supply and demand.
The price control section stipulates
In its opening line that it Is to apply
during such periods as the production
of crude petroleum in any State is
within the ALLEGATION Of production to
be made to that State by a Federal
agency to work with the industry's
committee under the code.
Franklin. in his statement said:
1T would be interesting to know what
was behind a seemingly inspired state
ment made by an official in the N. r. A.
office whereby he charged the whole
administration with blundering at the
same time that he served well the COM
panies who have SO long enjoyed the
prerogative Of price fixing TO the I'M
poverishment of thousands OF petroleum
producers and millions Of farmers and
royalty owners, but without any conse-
quent benefits to the consumer.
1T is extremely unfortunate that DR..
Sachs should characterize as serious
blunder this portion Of code arrived
at only after exhaustive hearings, espe-
cially since the President Of the United
States, in submitting to the industry
this code. made statement announcing
that he was not engaged in efforts to
select a committee and submit further
amendments that would finally affect
the code. enabling the oil industry as
a whole TO compose their differences
and Work together in one unit for the
rebuilding of great industry"
Ickes to See President.
President Roosevelt. in accordance
with a reservation made by the faction
demanding full price regulation when
accepting the modified price control
section Of the code. will decide this
week the extent to which the Govern
ment should 60 in this direction.
The Chief Executive. expected to an
nounce tomorrow or Tuesday the Is
members of the Planning and o-ordina
tion Committee of the industry, to
supervise the carrying out of the oil
trade plan, will discuss with this group
the price fixing question. Secretary
IckeS will confer today with Mr.. Roose-
welt at Hyde Park on the committee
makeup.
Several oil men in Washington. de-
clining to permit use Of their names, said
the SachS-Pogue memorandum and its
publication just In advance OF this dis
cussion, appeared significant in view of
pending final action on price control.
Just how the memorandum became
public was the subject Of another con-
troversy. Sachs told newspaper men 1t
was written some weeks ago, while the
Oil code was under consideration. add
ing that its publication was not in
tended, but that he had shown 1t to
reporter for information, and not pub
lication.
Reclamation Denied.
He denied he had been asked to re-
sign or had submitted his resignation
as chief of the Research and Planning
Division. PoSue was at his home in
New York
Franklin said the oil men had "felt
it the part Of discretion not to embar-
rass the administration by untimely
public statements" that might hamper
the Governments recovery work
Reports circulated about the N r. A.
that advocates Of price fixing waged
their battle so they could move at high
prices crude oil held in storage were
answered by Franklin and others in
this faction by pointing to the codes
limitation on oil that may be taken out
Of storage.
The code limits Withdrawals to a to-
tai Of 100000 barrels daily for the
! An Eff