Senator PASTORE. Thank you very much, Mr. Congressman. Senator MONRONEY. I have no questions. Senator PASTORE. Senator Schoeppel? Senator SCHOEPPEL. I have no questions. Senator COTTON. No questions, thank you. Senator PASTORE. Thank you very much, Mr. Congressman. Our next witness is Mr. William Berg, Jr., administrative assistant to Senator Wayne Morse. STATEMENT OF HON. WAYNE MORSE, U.S. SENATOR FROM THE STATE OF OREGON, PRESENTED BY WILLIAM BERG, ADMINIS TRATIVE ASSISTANT TO SENATOR MORSE Mr. BERG. Mr. Chairman and members of the committee, Mr. More regrets very much it was impossible for him to be here this morning. He had a commitment of long standing to be present in Oregon. The Senator's statement is as follows: It is a special privilege and a pleasure for me to inform the members of the committee of my very high esteem for Mr. Howard Morgan, an outstanding citizen of Oregon who has been nominated for the position of Federal Power Commissioner. For many years I have been of the opinion that Howard Morgan would be ideally suited to serve in one of the Federal regulatory agencies in a position requiring a high degree of intelligence, discretion, and integrity. This is what prompted me to write to President Kennedy on January 9, 1961, urging the President to give consideration to the appointment of Mr. Morgan to a Federa: post. In my letter to the President I said: "Another man I wish to mention is Mr. Howard Morgan, former State chair man of the Democratic Party in Oregon and chairman of the Oregon State Public Utilities Commission under Governor Holmes' administration. “Morgan is one of the most able men serving in the Democratic Party, not only in Oregon but along the Pacife coast. When Mr. Joseph Eastman was Chairman of the Interstate Commerce Commission, Howard Morgan was one of his top executive assistants. Morgan received his training under Eastman For nany years in Oregon, we have considered Morgan to be the best informed man In the Democratic Party on interstate commerce, pubile utilities, and other regu latory agency matters. "You would do yourself a great favor if you advised Dean Landis to look Into Morgan's record at once, with the thought in mind of appointing him to a very high position in connection with one of our administrative agencies. I cannot think of a better qualined person for an appointment to the Interstate Commerce Commission or for that matter, to any one of the other regulatory agencies,” It was with special satisfaction, therefore, that I received the news that Mr Morgan had been nominated for the position now under consideration by the committee By background and experience, Morgan is ideally suited for the position of Federal Power Commissioner. In college and in graduate school he placed emphasis on courses that would prepare him for work in the area of interstate commerce. For example, his senior thesis at Reed College was entitled “Economie Background of the Interstate Commerce Act of 1935 ** Mr Morgan completed his work at Reed College, Portland, Oreg., in 1940 and entered graduate school at the University of California in 1941. He was a candidate for the master's degree and was engaged in research on a thesis dealir g with proposed extensions of the Interstate Commerce Act. His studies in grad uate school were interrupted by the request he received to serve in Washington, DC, in the Office of Defense Transportation. The experience he obtained in serving under such an illustrious public servant as Joseph B. Eastman, Director of Defense Transportation, is in itself an excellent recommendation for the post now under consideration. From 1943 to 1946 the nominee served with distinction in the Naval Air Transport Service of the U.S. Navy. He retired with the rank of lieutenant. At the close of the war, Mr. Morgan engaged in the construction machinery business and served as transportation consultant to the Oregon State Grange. In 1948 to the present time he has also engaged in livestock ranching, first at his sheep ranch near Monmouth and more recently at his cattle ranch near Sisters, Oreg. From 1949 to 1951 Mr. Morgan served as a member of the house of representatives in the Oregon State Legislature. From 1957 to 1959 he served with distinction as public utilities commissioner of the State of Oregon. I regard him-and many people in Oregon share my view-as one of the finest and most able public utilities commissioners ever to have served in the State of Oregon. The selection of Mr. Morgan for membership on the Federal Power Commission would be most fortunate for the United States. He would bring to the Commission his very fine experience as a businessman and as a public servant. In particular, he would bring to the Commission a point of view that I regard as of utmost importance, namely, that an Administrator's job is to carry out the law as Congress drafted the law and not to superimpose his own ideas of what the law should be. It is with utmost sincerity that I urge the committee's prompt and favorable action on this nomination because, in my opinion, it relates to a man of tremendous ability and integrity who is a public servant of the highest type. To the committee I express my appreciation for having been given this oppor tunity to speak on behalf of an outstanding citizen of Oregon. Senator PASTORE. Thank you very much, Mr. Berg. Mr. BERG. Thank you. Senator PASTORE. Senator Monroney? Senator MONRONEY. I have no questions. Senator PASTORE. Senator Schoeppel? Senator SCHOEPPEL. I have no questions, thank you. Senator BARTLETT. No questions. Senator PASTORE. Senator Cotton? Senator COTTON. No questions. Senator PASTORE. Thank you very much. Mr. BERG. Thank you. Senator PASTORE. Senator Scott? Senator SCOTT. No questions. STATEMENT OF HOWARD MORGAN, OF OREGON, NOMINEE TO BE A MEMBER OF THE FEDERAL POWER COMMISSION Senator PASTORE. Mr. Morgan, I have before me a biographical sketch of your background, your experience. Are you familiar with it? Mr. MORGAN. Yes. Senator PASTORE. Do you want to add anything to it? Mr. MORGAN. No, sir. (The biographical sketch follows:) BIOGRAPHICAL Sketch, Howard Morgan, NOMINATED MARCH 21, 1961, To Be a MEMBER OF THE FEDERAL POWER COMMISSION FOR THE REMAINDER OF THE TERM EXPIRING JUNE 22, 1963 Mr. Howard Morgan, former public utility commissioner of the State of Oregon and presently owner and operator of a livestock ranch at Sisters, Oreg., is 47 years old and a Democrat. 69326-61-2 Mr. Morgan graduated from the public schools of Portland, Oreg., and from Reed College (1940) where he majored in economics and wrote a graduating thesis in public utility regulation. He also served as student body president in his senior year. After graduate work in economics and the administrative law of utility regulation at the University of California (Berkeley), he served under the direction of the late Joseph B. Eastman in the Office of Defense Transportation during 1941-42. From 1943 to 1946, Mr. Morgan served in various war theaters as operations officer with the Naval Air Transport Service. After the war, he engaged in practice as transportation consultant, and in 1948 purchased a large livestock ranch. He has remained in this occupation since that time. In 1949-51, Mr. Morgan served as a member of the Oregon Legislature, and from 1952 through 1956 as chairman of the Democratic Party of Oregon. In 1957, he was appointed public utility commissioner (the only one-man commission in the United States having full regulatory powers over all utilities and forms of transportation), serving in that capacity until 1959. Mr. Morgan is married to the former Rosina Corbett, of Portland. They have two sons, 8 and 18, and two daughters, 11 and 14 years of age. Senator PASTORE. Mr. Morgan, I am going to leave the questioning about your attitudes and your philosophy with regard to the development of hydroelectric power and so forth to my colleagues here. I am going to confine myself to your point of view on the question of natural gas. Are you a believer in the consumer's interest? Mr. MORGAN. If you mean do I believe that it is the function of a regulatory agency to protect the public interest; yes, sir. Senator PASTORE. Do you conceive that the public interest includes the consumer interest? Mr. MORGAN. I believe it mainly focuses on consumer interest. Senator PASTORE. Are you familiar with the so-called Phillips Petroleum case that was decided by the Supreme Court in 1954? Mr. MORGAN. In a very general way; yes, sir. Senator PASTORE. In that case, whether you agree with the decision of the Court or not, the Court decreed it was the function of the Federal Power Commission to regulate natural gas from the point of production. Are you familiar with that? Mr. MORGAN. Yes, sir. Senator PASTORE. And until that is either changed by a further opinion of the Supreme Court or by legislative fiat, do you think it is the responsibility, duty, and function of the Federal Power Commission to see that law is enforced in every way? Mr. MORGAN. There is no question about it, sir. Senator MONRONEY. Do you have any prejudice, however, that would lead you to prejudge any case dealing with natural gas? My State happens to be fortunate enough to be about the second largest producer of gas; it is a major part of our economy. Would you have any prejudice, knowing what the evidence is, would you prejudge any case for or against producers or consumers? Mr. MORGAN. No, sir. I am entirely familiar with the responsibilities of a regulatory official to protect the general public in its dealings with the large monopolies which provide utility service to the public and, at the same time, to deal fairly with the property interests represented by the utility and its stockholders. I am also aware of the difficulties of making this balance and being fair to all elements of the public. Almost the first obligation of a regulatory official— Senator COTTON. Pardon me. Would you speak just a little louder? Mr. MORGAN. I would say the first responsibility of a regulatory official is not to prejudge a case or to let his formative thinking, such as he may have before the case is heard, interfere with his freedom to follow the facts and the law wherever they lead him. Senator MONRONEY. You are undoubtedly aware, are you not, that in determining the price that the consumer interest is involved with, which is the burner-type price of the gas, there are three principal parts of the gas industry: one, the producer who finds the gas and produces it out of the depths of the ground, delivering it to a pipeline, which then transports it in interstate commerce to the edge of a city or edge of a consuming area, and then turns it over to the local gas distribution company, and that all three of these elements are a part of the rate that the consumer must bear in this whole picture. Is that not the fact? Mr. MORGAN. Yes, sir. Senator MONRONEY. And in considering all of these things, you would not be blinded to each element of the cost that necessarily goes into the production and distribution of this very vital and natural resource? Mr. MORGAN. That is correct. Senator MONRONEY. You would be able to judge all three of them independently and without any predetermination or preconceived decision based on the evidence and on the findings as it is adduced in the hearings? Mr. MORGAN. Well, I can't guarantee that I will judge correctly, sir; but I can guarantee that I will judge free of prejudice. Senator MONRONEY. And be fair to all? Mr. MORGAN. Yes, sir. Senator MONRONEY. That is all I have. Senator PASTORE. You, Mr. Morgan, at any rate, will assume the responsibility to judge? Mr. MORGAN. Yes, sir. Senator PASTORE. In other words, you will not take the position, as some other Commissioners have taken, that just because they didn't think it was a wise law that they turn their backs upon the enforcement of that law? Mr. MORGAN. Sir, I believe it was Mr. Berg who read the comment of Senator Morse on this point, and I would like to associate myself with those remarks. I am a former member of a legislative body and I have a very strong feeling that the law should be carried out by administrative officials exactly as it was written and intended to be enforced by those who wrote it. I do not Senator PASTORE. And as interpreted by the courts of this land? Mr. MORGAN. Yes, sir. I do not think that an administrative official is entitled to change the law by distorting it or by failing to enforce it. Senator PASTORE. Senator Schoeppel? Senator SCHOEPPEL. Mr. Morgan, I want to ask you some questions with reference to this gas picture, since we are discussing it at the present time. I hope that you will understand that the reason for my asking these questions is because you are here for confirmation, and obviously we would like to have your views, or your judgment factors on some of these questions if you are sufficiently familiar with them to give us an answer at this time. I assure you that as far as I am personally concerned, there is nothing personal in these questions. What I want to know is what your views are and what your attitude is toward this law and this industry that you are hoping to become a member of through this great regulatory agency. Now, how much experience, Mr. Morgan, have you actually hal in the regulation of natural gas with reference to your commission, when you served as the commissioner in your State of Oregon? Mr. MORGAN. Very little, sir. The pipeline which serves the Pacifie Northwest from the Permian basin on the south and from British Columbian fields on the north was completed and service established in Oregon in 1956. I assumed the position of utility commissioner-and, incidentally, that is a one-man commission in Oregon; the only one in the country-in 1957. There were very few rate cases involving natural gas. There were several immediately after I left office i 1959. I had some dealings with the pipeline which serves the State and helped persuade its officials to extend that pipeline to serve severa! additional communities in the State. Senator SCHOEPPEL. Were those interstate pipelines as well? Did you have a separate intrastate pipeline within your State? Mr. MORGAN. Not a separate company. I was able to persunde the company to make intrastate extensions to their own interstate line. Senator SCHOEPPEL. I am sure, Mr. Morgan, that you know that there are different and serious hazards in the production of oil ani gas, and we have what is known as combination wells. Mr. MORGAN. Yes, sir: I am familiar with that. Senator SCHOEPPEL. You are familiar that the cost factors of con:bination wells may be entirely different than where you have just strictly a gas field, as such, with sufficient high pressures to put the gas into the line at the least possible expense, assuming that it 1suitable and practical gas for consumer use. Mr. MORGAN. Yes, sir; I am familiar with the difficulties in this field. Senator SCHOFPPEL. Are you familiar with the pricing policy of the Commission as set forth in paragraph 61 1, and some of the amend ments thereto? Have you had time to familiarize yourself with that' Mr. MORGAN. I have read them, sir. Senator SCHOEPPEL. If so, can you give me your opinion as to the wisdom of this approach as to the pricing factor of gas? Mr. MORGAN. I don't believe I have reached a conclusion on this matter, sir. Senator SchoFPPEL. In other words, you have no definite opinion with reference to that at the present time! Mr. MORGAN. No. 1 recognize this area pricing approach is an attempt to solve an extremely difficult problem. I know that it has not been passed on by the courts as yet, and I have withheld judg ment as to the wisdom or lack of wisdom of the policy. |