Evening star., 1952-08-22
|0iImen Accused
Clipping us.
For $50 Million
MSA Charges 5 Firms
Use Two-Price System
At Toxpoyers' Expense

/
The Mutual Security Agency
charges five American oil COM
panies used a two-price system to
clip United States taxpayers for
an extra $50 million profit.
The oil companies deny it.
The Senate Small Business
Committee made the MSA charges
public last night. On Monday, the
committee will publish con-
troversial Federal Trade Commits
sion report on international oil
Operations.
The MSA report, covering only
a segment of the FTC material
accused Standard Oil of New Jer-
sey, Standard Oil of California
Socony-Vacuum. the Texas Co
and the Gulf Oil Co.
MSA said these firms selling
Middle Eastern oil charged West
ern Europe far more than they
charged American consumers fol
identical oil from the same wells
The price to Europeans. MSA said
was based on the cost of deliver
ing high-cost Venezuelan oil in
the United States.
Exorbitant Discrimination
This. MSA said, led to "exorbi-
tant price discrimination" Since
the United States, through the
delivered to Western Europe, the
American taxpayers got over
charged at least $50 million. COM
mittee sources said.
Because of this two-price sys-
tenn and the abnormally high price
charged in European markets, an
undue burden was placed on the
American taxpayer" the Senate
committee said.
MSA also attacked Aramco, the
giant Middle East oil firm owned
mostly by Standard of New Jersey;
Standard of California, Socony-
Vacuum and the Texas Co.
It said Aramco obtained steel
allocations to build a pipe line
across Saudi Arabia. The under
standing, MSA said, was that the
pipe line would lower transporta-
ton costs and allow some of the
savings to be passed on to Europe.
MSA said, however, that Aramco
kept the savings.
"The only defense offered by the
companies for this situation" the
Senate committee said, twas that
the large risks inherent in Middle
Eastern operations made it neces-
sary to amortize the new pipe line
as quickly as possible"
Standard Of Jersey and the
Texas Co. quickly renewed pre-
vious statements denying any
wrongdoing.
Competitive Angle Cited.
Standard said its export prices
always have been competitive. It
said the Marshall Plan directors
were attempting to interfere
with normal competitive prices" ."
This was the attitude it had
taken. Standard said, during
numerous conferences with Mar
shall Plan representatives. No
European country, the oil COM
pany said, had complained over
prices.
The Texas Co. renewed a sim
liar statement that was issued
previously.
In Pittsburgh, General Counsel
David Proctor of the Gulf OIL Co.
said only that. "as far as I know,
there has been no claim made
against Gulf by MSA."
Two Democratic Senators used
the committee report as the basis
OF public statements. Senator
Hennings. Democrat, of Missouri
said seven oil firms dominate
United States foreign policy in the
Middle East, Indonesia and
Venezuela.
Democratic Senator Moody,
running for election in Michigan,
said the committee report shows
the cartel has overcharged Eu-
ropean customers at the same
time it has dumped foreign oil on
the American market whenever it
wanted to drive independent oil
Nr0dI1carS fo tho xvo1IO