The Atlantic Report on the World Today: Washington

ON THE WORLD TODAY

THE oil pipeline projected in Arabia is the result of American suspicion of British imperialism. Under cover of war the British have been improving their standing with the independent King ibn-Saud of Saudi Arabia. It seemed to the American companies in Saudi Arabia that their own concession was endangered by British activity. They appealed for aid to the State Department.

Since the last war we have always insisted upon the open door in the Middle East with respect to oil. Some months ago there was a prospect that, to get a foot in the door of Arabia, we might buy into the American properties as a government. But the countervailing arguments appeared decisive. There is no government elite in this country which could sit on management boards; we should probably be pressed to pay attention to labor and health standards in Arabia; Congress would be a constant inquisitor. Then the Navy proposed the pipeline. Theoretically, the government would have no responsibility beyond being a carrier for the oil. The notion of government partnership with the oil companies was then dropped.

Congress will hold a special investigation of the pipeline project at the same time that the AngloAmerican oil conference meets in Washington. This leads us to scrutinize our own resources. In defense of the Arabian undertaking, Secretary Ickes speaks of our reserves as dangerously low. Wallace Pratt, of the Standard Oil Company of New Jersey, puts them at a hundred years. Others say they stretch into the dim future, with the prospect of oil from sources yet untried. But all agree that our supply must be conserved.

It will be the function of our Arabian concession, which is fabulously rich, to aid the British in Iraq and Iran to supply the European market, now dependent on supplies from this continent. This is the economics of the Arabian concession.

But the Navy’s interest is strategic. Strategy would be served not only by the conservation of our own resources, but also by the building up, in accordance with the Arabian agreement, of a billion-barrel reserve of the Arabian oil for storage in the Middle East. Certainly this argument will count in Congress. So will the views of the State Department, which, again by the new agreement, would keep a supervisory eye on the outlets of the American companies’ sales, lest supplies be sent to any future enemy.

Oil and our allies

The British will come into the oil parley with divided minds. Clearly they view the pipeline as making our American oil in Arabia a competitor with their own oil in Iraq and Iran. They have a pipeline ending at the Mediterranean port of Haifa, and their plan is to quadruple its capacity, to meet peacetime needs. The Arabian pipeline, which also is planned to end at Haifa, would have about the same capacity as the enlarged British line.

If there were no pipeline, American oil in Arabia would have to go to Europe by tanker all the way around the Arabian peninsula. Counting Suez Canal tolls, that would make it cost twice as much as oil borne by pipeline. So the British are uneasy about the new competition. But on the political side they are relieved to see diplomatic America with a foothold in Middle Eastern politics. Diplomatically it makes their position much more secure — in Russian no less than in Moslem eyes.

The absence of Russia from the proposed conference is not promising. Some think Russia should have been consulted prior to the announcement that the United States intended to be an oil power in the Middle East. Secretary Knox calls the pipeline the beginning of a genuine oil policy for the United States. Surely that depends upon the nature of the forthcoming agreement. An oil policy worthy of the Atlantic Charter would cover marketing and price and conservation over the entire planet, and it can hardly be arrived at by an exclusive bilateral agreement.

Cartels and foreign trade

The cartel is as much of a bugaboo as the trust. Indeed, a cartel is a trust across national frontiers. The Department of Justice, in spite of Thurman Arnold’s translation to the Bench, is already taking vigorous action against American participation in existing international combines. No policy has yet been applied to foreign trade as a whole by the government. Yet there is a tendency in several branches of government, apart from the Justice Department, to press for an anti-cartel declaration as the governing principle of post-war foreign trade.

Business circles are perturbed by this possibility. They feel that no general policy should be crystallized. They believe that unforeseen situations are likely to arise — situations which cannot be controlled by a rigid policy. It might be necessary, so it is argued, to have cartels not only for oil, but for shipping, air transport, and the like, while maintaining competition in other foreign enterprises.

What is needed in foreign trade is neither rugged individualism nor cartelism, but a judicious combination of the two, with any cartel arrangements that may be necessary rigidly supervised by the government. The whole subject will be ventilated when the joint inquiry of Executive and Congress, which has been voted in Congress, begins on foreign trade policy.

It should be noted that the pipeline agreement was made by the Petroleum Reserve Corporation. This is an eight-months-old child of the Reconstruction Finance Corporation. The RFC is now so big that it ought to be called USA, Inc. There are fifty-seven other government corporations similar to the PRC. Some are necessary to the war effort. But most of them are not. They have just spawned from Congressional bodies or Executive agencies. They are free to borrow from either government or private sources, free to make use of receipts from business operations. For instance, the Nelson Rockefeller office no sooner got established than it set up a Delaware corporation to work on the health and sanitation of South American republics. It got its first money from the President’s emergency fund, then from a direct appropriation by Congress.

A student calls these corporations the fifth arm of government. Truly they are a novelty in our system that needs to be watched — a novelty that already is spending 10 billions a year and holds a borrowing power of 33 billions. It is only when one of them makes a spectacular deal like the pipeline agreement that the public sits up and takes notice. Then there is some soul-searching. Is this, it is asked, going to develop into government by corporation? Ask some of those who have taken to government corporate life in a big way, and you get the response that these corporations are necessary as a method of bargaining with economic Russia. Must we transform our institutions in order to live in the same world as Soviet Russia? Congress itself is taking alarm because the innovation is threatening to destroy its control of the government’s pursestrings.

Congress and the President

One Senator remarked the other day that Congress really doesn’t know what powers it has delegated to the President, because of the vagueness of much of the legislation that was passed during the excitement after Pearl Harbor. Now it is searching for ways and means of recapturing its lost powers. One suggestion is that every statute granting extraordinary powers to the President should include a provision enabling Congress to set aside the Executive’s regulations under the act by means of concurrent resolution. In other words, there should be a legislative veto.

But this cure would be worse than the disease. If Congress should attempt to set aside specific regulations of Executive agencies, the administration of the law might be seriously hampered. The proposal would probably be unconstitutional, anyway. A better use of the concurrent resolution (which, of course, does not invite a Presidential veto) is to terminate a grant of power to the President on a finding by both houses that the exercise of that power is no longer necessary to effectuate the purposes of the original act.

The proposal for a legislative veto is an example of the way Congress is striking back at the Executive. Generally the moves take the form of blind kicks or of riders attached to appropriation bills. For instance, the Senate has agreed to a ban on the use of Federal funds for agencies created by executive order and in existence more than a year, unless Congress has specifically appropriated money for them or specifically authorized expenditure of funds by them. That is a wholly salutary reform.

But, on the same day, the Senate sought to hamstring the TV A. It likewise called for Senatorial confirmation of employees earning $4500 or more. The present reaction against “government by corporation” should not impede great government enterprises which have already proved their value, as TVA has. Nor should it invite patronage grabs like the $4500 amendment. Both “reforms” show anger over Exutive encroachment.

Political censorship

Our foreign policy, or lack of it, looms as a big issue in the Presidential campaign. One aspect of this issue is the suppression of news. Governor Dewey has taken it up. There can be no doubt that New York’s governor has found a vulnerable spot. Complaints persist on this vital subject of public information.

Military security is urged as the justification for both censorship and secrecy. But the excuse has been worked almost to death. Robert Sherrod in Tarawa comments that a whole generation may lose faith in the American press — the generation, that is, which is now making news in battle and then seeing how the newspapers handle it.

In the name of military censorship even political news is censorable. As Mr. Dewey said, the State Department has sought to restrain the British in their relations with the American correspondents on political news. War correspondents returning home say not only that our military censorship is the world’s tightest, but that the blue pencil is put to work on political matter submitted to the War Department.

Here in Washington, where news used to be fairly accessible, an army of public relations men is now at work shielding the sources. The Administration barricaded the food conference at Hot Springs against contact with the journalistic world. Even Mr. Byron Price, the Chief Censor, has protested against a tendency on the part of officials to get stories submitted to them prior to publication. It is up to the American people, if they are jealous of their liberties, to see that the present habits don’t get ingrained in their government.

THE MOOD OF THE CAPITAL

The mood of the Capital is cautious about the end of the war with Germany, though more optimistic about the end of the war with Japan. About the peace there is more than a little gloom. The tendency in the Capital is to think in terms of power politics in which America must bestir herself in getting plenty of chips for the next game. There is a lack of sense of direction about the peace which is covered up by idle genuflections to ideals.

Moreover, the exigencies of campaign politics, which are more and more bemusing the Capital, take up time which would otherwise be spent on reconstruction planning. The feeling is strong that the fight will be between Dewey and the President, for Mr. Roosevelt is reputed to be keener to take up the cudgels against Dewey than against any other candidate, except perhaps Bricker.