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37th Midyear Meeting, Independent Petroleum Association of America, Washington, DC, May 4, 1967
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37th Midyear Meeting, Independent Petroleum Association of America, Washington, DC, May 4, 1967
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The original documents are located in Box D22, folder "37th Midyear Meeting,
Independent Petroleum Association of America, Washington, DC, May 4, 1967" of the
Ford Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford
Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. The Council donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box D22 of The Ford Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford Presidential Library
For PM's of Thursday, May 4, 1967--
A Speech by Rep. Gerald R. Ford, R-Mich., at the 37th Midyear Meeting of the
Independent Petroleum Association of America, Washington Hilton Hotel.
It is a truism that we often fail to grasp the significance of important
events at the moment of their happening.
We recently witnessed just such an event--one in a series of similar
occurrences--and the true meaning of it apparently was lost on a great majority
of the American people.
I speak of actions taken by the present Administration in February of this
year when the White House exerted heavy pressure on the petroleum industry to
roll back a penny-a-gallon price increase posted by some--not all--refiners.
As you well know, the Administration in the name of "the national interest"
threatened to open the doors to more foreign gasoline if the refiners who had
raised their prices did not rescind the increases.
What was the real significance of this Administration action? Those of
us who are not naive know that it was a form of blackmail, a bit of price-fixing
unsanctioned by any law, an action destructive of the private enterprise system.
We pride ourselves on what we call "the free, private enterprise system."
There still is enterprise in this country--plenty of it. It's the fuel
that sparks American democracy, the marrow in the skeletal structure of a capital-
istic system of which we in this country can be most proud.
But what of the flesh of the capitalistic system? What about freedom?
I submit that under the present Administration the free, private enterprise
system in this country is neither free nor private.
The American businessman is not free to make pricing decisions that affect
the overall operations of his enterprise.
The "public interest?" I am as concerned about the public interest as
President Lyndon Johnson, Interior Secretary Stewart Udall and Undersecretary
Charles Luce.
Whatever happened to competition as a force for determining prices? Is a
counterfeit price-fixing office in the White House a substitute for competition
and the forces of the market place?
(more)
of GERALD LIBRARY FORD
-2-
I mentioned earlier that the oil industry's confrontation with the White
House was only one of a series.
The other cases are perhaps more celebrated. Certainly more attention was
focused on them by the news media. I refer, of course, to the White House-
industry price disputes in steel and aluminum.
Let me refresh your memory about some of the facts in the steel price case.
When U. S. Steel and seven other companies announced price increases of
$6 a ton, or about 3½ per cent, on April 10, 1962, President Kennedy denounced
the price increases the next day. As yet, there was no real coercion.
The President delivered his scathing remarks on April 11. On the 12th,
Attorney General Robert F. Kennedy announced he had ordered a Grand Jury
investigation of the price increases. The Federal Trade Commission also began
an inquiry to determine whether there had been collusive price fixing. Bobby
even sent the FBI to rout some news reporters out of bed in the middle of the
night to ask them if Bethlehem Steel President Edmund F. Martin had said he was
opposed to a price increase.
Defense Secretary Robert S. McNamara gave orders that Pentagon steel
purchases be shifted to companies which had not increased prices. The first
effect of this order was that Lukens Steel got an entire $5 million order for
high-grade steel. Ordinarily, U. S. Steel would have received half of that order.
You know the rest of the story. Inland Steel and Kaiser Steel held back on
the price increase. Then Bethlehem and U. S. Steel called off the price increase,
and others followed suit.
Since that time, there have been selective price increases in steel and the
White House has chosen to ignore them.
In fighting an aluminum price increase in the fall of 1965, the White House
used somewhat different tactics.
The White House simply let it be known that government stockpiles of
aluminum would be dumped onto the market if the aluminum producers did not roll
back their announced price increases. And of course they capitulated.
Price stability should be and must be a national goal. We saw how cruelly
millions of Americans were hurt in 1966 when the economy became badly overheated
and prices jumped under the pressures of demand-pull inflation.
But is White House coercion and blackmail the way to keep prices relatively
stable? Is there any real justification for bludgeoning businessmen over the
FORD
head to prevent a price rise business leaders feel is being forced by mounting
LIBRARY
(more)
-3-
costs of doing business?
I do not profess to know whether the price increases proposed by various
firms in the oil, steel and aluminum industries were justified.
But I feel certain that the Administrations which have held sway in the
White House since January 1961 have been treating the symptoms and not the cause
of inflation.
Price stability results from sound economics and sound fiscal policies, not
from coercion and blackmail and not from playing both sides against the middle.
I submit that the present Administration has mismanaged the economy and
has tipped the economy into imbalance by failing to deal adequately with
inflationary pressures.
It's really a shabby kind of performance for this Administration to mani-
pulate imports to control the prices of various commodities--or to threaten to
do so--and then to take a Big Daddy bow before the American people for fighting
price increases. That's playing it cute. That's employing an improper means
to achieve a desirable end and then saying, "Look at me I'm a hero."
Does the end justify the means? Should the American farmer be the victim
of surplus-commodity dumping and a flood of imports that force down farm prices?
Should American industry be forced to look fearfully over its shoulder at Big
Brother whenever it makes a pricing decision?
If competition is lacking in any particular industry, there are laws on
the books to handle that situation. Other administrations have not hesitated to
use this Nation's antitrust laws where such action was clearly indicated.
Assuming the presence of competition, the reasons for price increases are
rooted in basic economics--the supply and demand situation and the cost of doing
business.
Today--more than ever before--the federal government heavily affects the
supply and demand picture in various industries and sets policies which greatly
influence costs.
I submit that the inflation which drove up prices in this country last
year was due primarily to excessive federal spending in the domestic sector at
a time when the economy was overheated and needed cooling. Interest rates rose
to the highest level in 40 years because the Federal Reserve Board moved to
fight inflation when the White House failed to do so.
What we need for sound economic growth in this country--accompanied by
relative price stability--is the proper mix of fiscal and monetary policy and
(more)
LIBRARY
-4-
the courage to take the actions that are needed at the time they are needed.
Finally, lasting assurances of price stability can only come from the
discipline of a free market and from responsible actions by business and labor
leaders. I might add that it helps business and labor leaders to act responsibly
if they operate in the kind of atmosphere which is generated by sound and
impartial government.
This, then, is the key ingredient in any formula aimed at achieving price
stability--a sound government, an impartial government,
The American people can have that kind of government if they use their
right to choose their elective leaders carefully and intelligently.
Thank you.
###
For PM's of Thursday, May 4, 1967--
Excerpts from a Speech by Rep. Gerald R. Ford, R-Mich., at the 37th Midyear Meeting
of the Independent Petroleum Association of America, Washington Hilton Hotel.
It is a truism that we often fail to grasp the significance of important
events at the moment of their happening.
We recently witnessed just such an event-one in a series of similar
occurremes--and the true meaning of it apparently was lost on a great majority
of the American people.
I speak of actions taken by the present Administration in February of
this year when the White House exerted heavy pressure on the petroleum industry
to roll back a penny-a-gallon price increase posted by some refiners.
As you well know, theAAdministration in the name of "the national
interest" threatened to open the doors to more foreign gasoline if the refiners
who had raised their prices did not rescind the increases.
What was the real significance of this Administration action? Those of
us who are not naive know that it was a form of blackmail, a Wit of price-fixing
unsanctioned by any 1m, an action destructive of the private enterprise system.
We pride outselves on what we call "the free, private enterprise system."
There still is unterprise in this country--plenty of it. It's the fuel
that sparks American democracy, the marrow in the skeletal structure of a
capitalistic system of which we in this country can be proud.
But what of the flesh of the capitalistie system? What about freedom?
I submit that under the present Administration the free, private enterprise
system in this country is neither free nor private.
The American businessman and industrialist is not free to malleemajor
decisions that affect the overall operations of his enterprise. This is
ridhoulous and tragic.
The "public interest?" I sm as concerned about the public interest as
President Lyndon Johnson, Interior Secretary Stewart Udall and Undersecretary
Charles Luce.
But whatever happened to competition as a force for determining prices?
RALD LIBRARY
1 am as concerned about price stability as anyone else in the United
States?
But is coercion by the federal government the proper way to promote
price stability? Is there any real justification for bludgeoning the leaders
of an industry over the head to prevent a price rise?
I do not profes to know whether the penny-a-gallon gasoline price increase
proposed by some oil refiners last February 1 and thereafter was "justified." But
I submit that we should allow the competitive forces in our American system of
enterprise determine that.
If competition is lacking in any American industry, there are laws on the
books for dealing with that situation. Teddy Roosevelt did not hesitate to use
this nation's antitrust laws when such action was indicated.
I submit that the present Administration is playing it cosy with the
American people.
misuling
This Administration is unting its import policies to control the prices of
various commodities and then taking a Big Daddy bow before the American people
for holding the price line.
Does the end justify the means? Should the American farmer be the victim
If a flood of
of surplus-commodity dumping and imports
that force down farm prices?
Should American industry be forced to look fearfully zt over its
shoulder at Big Brother whenever it makes mura pricing decision? *********** Most
emphatically not.
The American enterprise system is sick, and it is the Federal government
which has pum poisoned it. We must restore freedom to the enterprise system
and bring the force of true competition into play in the economy.
# # *
I am truly alarmed by what I see happening in this country today, this
great Nation that was molded out of wildmerness by the
fieree, proud spirit of the American pioneer.
We are being infected by what I call the "disincentive sickness." It is
the sickness that afflicts an American when he
struggles under a $x federmal tax burden 80 heavy he does not begin working for
himself until the fifth month of the year. This year Freedom Day==that's what I
call it--is tomorrow, May 5.
I have always found that the driving force behind every * individual worth
his salt is desire. That's the added ingredient that often means the difference
between - wintory and # defeat on the plaving field and on the battlefield.
We suffered last year in this country through a damaging period of
inflation--inflation that in my view was primarily due to mismanagement of the
economy by the present Administration.
Now we are faced with sprint spiraling war eosts-war costs that were
underestimated by the present Administration by $10 million while domestic
spending was being greatly expanded and all calls for a system of priorities
were ignored.
The inflationary wave of ******** last year has deluged individual Americans
with higher living costs that continue to plague them. The inflation of last year
has pushed up the cost of doing business for the oil industry
and others.
For this situation the Administration answer is continued heavy deficit
spending in the domestic sector as well as in defense and a demand for an increase
in E income taxes under threat of a federal deficit that could run as high as
$20 billiomsx in fiscal 1968.
Our goal in this country should be to lower federal income taxes, not raise
them. We can achieve that goal if we pursue policies that produce a
balance or surpluses in the Federal Treasury during times of E
growth in a balanced economy, = a sound dollar respected
at home and abroad, citizen programs to lick poverty and to
truly equal
bring about educational and job opportunities.
This is the kind of American I want for all our citizens--a free Americanxx
where every man can stand straight and tall, and is fear does not east a shadow.
####
Distribution: House Galleries and full mailing--150 copies to Petroleum Association
10:00 a.m., May 4, 1967
For PM's of Thursday, May 4, 1967--
A Speech by Rep. Gerald R. Ford, R-Mich., at the 37th Midyear Meeting of the
Independent Petroleum Association of America, Washington Hilton Hotel.
It is a truism that we often fail to grasp the significance of important
events at the moment of their happening.
We recently witnessed just such an event--one in a series of similar
occurrences--and the true meaning of it apparently was lost on a great majority
of the American people.
I speak of actions taken by the present Administration in February of this
year when the White House exerted heavy pressure on the petroleum industry to
roll back a penny-a-gallon price increase posted by some--not all--refiners.
As you well know, the Administration in the name of "the national interest"
threatened to open the doors to more foreign gasoline if the refiners who had
raised their prices did not rescind the increases.
What was the real significance of this Administration action? Those of
us who are not naive know that it was a form of blackmail, a bit of price-fixing
unsanctioned by any law, an action destructive of the private enterprise system.
We pride ourselves on what we call "the free, private enterprise system."
There still is enterprise in this country--plenty of it. It's the fuel
that sparks American democracy, the marrow in the skeletal structure of a capital-
istic system of which we in this country can be most proud.
But what of the flesh of the capitalistic system? What about freedom?
I submit that under the present Administration the free, private enterprise
system in this country is neither free nor private.
The American businessman is not free to make pricing decisions that affect
the overall operations of his enterprise.
The "public interest?" I am as concerned about the public interest as
President Lyndon Johnson, Interior Secretary Stewart Udall and Undersecretary
Charles Luce.
Whatever happened to competition as a force for determining prices? Is a
counterfeit price-fixing office in the White House a substitute for competition
and the forces of the market place?
(more)
-2-
I mentioned earlier that the oil industry's confrontation with the White
House was only one of a series.
The other cases are perhaps more celebrated. Certainly more attention was
focused on them by the news media. I refer, of course, to the White House-
industry price disputes in steel and aluminum.
Let me refresh your memory about some of the facts in the steel price case.
When U. S. Steel and seven other companies announced price increases of
$6 a ton, or about 3½ per cent, on April 10, 1962, President Kennedy denounced
the price increases the next day. As yet, there was no real coercion.
The President delivered his scathing remarks on April 11. On the 12th,
Attorney General Robert F. Kennedy announced he had ordered a Grand Jury
investigation of the price increases. The Federal Trade Commission also began
an inquiry to determine whether there had been collusive price fixing. Bobby
even sent the FBI to rout some news reporters out of bed in the middle of the
night to ask them if Bethlehem Steel President Edmund F. Martin had said he was
opposed to a price increase.
Defense Secretary Robert S. McNamara gave orders that Pentagon steel
purchases be shifted to companies which had not increased prices. The first
effect of this order was that Lukens Steel got an entire $5 million order for
high-grade steel. Ordinarily, U. S. Steel would have received half of that order.
You know the rest of the story. Inland Steel and Kaiser Steel held back on
the price increase. Then Bethlehem and U. S. Steel called off the price increase,
and others followed suit.
Since that time, there have been selective price increases in steel and the
White House has chosen to ignore them.
In fighting an aluminum price increase in the fall of 1965, the White House
used somewhat different tactics.
The White House simply let it be known that government stockpiles of
aluminum would be dumped onto the market if the aluminum producers did not roll
back their announced price increases. And of course they capitulated.
Price stability should be and must be a national goal. We saw how cruelly
millions of Americans were hurt in 1966 when the economy became badly overheated
and prices jumped under the pressures of demand-pull inflation.
But is White House coercion and blackmail the way to keep prices relatively
stable? Is there any real justification for bludgeoning businessmen over the
head to prevent a price rise business leaders feel is being forced by mounting
(more)
-3-
costs of doing business?
I do not profess to know whether the price increases proposed by various
firms in the oil, steel and aluminum industries were justified.
But I feel certain that the Administrations which have held sway in the
White House since January 1961 have been treating the symptoms and not the cause
of inflation.
Price stability results from sound economics and sound fiscal policies, not
from coercion and blackmail and not from playing both sides against the middle.
I submit that the present Administration has mismanaged the economy and
has tipped the economy into imbalance by failing to deal adequately with
inflationary pressures.
It's really a shabby kind of performance for this Administration to mani-
pulate imports to control the prices of various commodities- or to threaten to
do so--and then to take a Big Daddy bow before the American people for fighting
price increases. That's playing it cute. That's employing an improper means
to achieve a desirable end and then saying, "Look at me I'm a hero."
Does the end justify the means? Should the American farmer be the victim
of surplus-commodity dumping and a flood of imports that force down farm prices?
Should American industry be forced to look fearfully over its shoulder at Big
Brother whenever it makes a pricing decision?
If competition is lacking in any particular industry, there are laws on
the books to handle that situation. Other administrations have not hesitated to
use this Nation's antitrust laws where such action was clearly indicated.
Assuming the presence of competition, the reasons for price increases are
rooted in basic economics--the supply and demand situation and the cost of doing
business.
Today--more than ever before--the federal government heavily affects the
supply and demand picture in various industries and sets policies which greatly
influence costs.
I submit that the inflation which drove up prices in this country last
year was due primarily to excessive federal spending in the domestic sector at
a time when the economy was overheated and needed cooling. Interest rates rose
to the highest level in 40 years because the Federal Reserve Board moved to
fight inflation when the White House failed to do SO.
What we need for sound economic growth in this country--accompanied by
relative price stability--is the proper mix of fiscal and monetary policy and
(more)
-4-
the courage to take the actions that are needed at the time they are needed.
Finally, lasting assurances of price stability can only come from the
discipline of a free market and from responsible actions by business and labor
leaders. I might add that it helps business and labor leaders to act responsibly
if they operate in the kind of atmosphere which is generated by sound and
impartial government.
This, then, is the key ingredient in any formula aimed at achieving price
stability--a sound government, an impartial government.
The American people can have that kind of government if they use their
right to choose their elective leaders carefully and intelligently.
Thank you.
###