Because there was sufficient coal to supply household consumers with a reduced percentage of their normal requirements, it fell upon Solid Fuels Administration for War to see that they received their full share in tons of the available supply, and that the limited supply was not adversely affected by deliveries of coals containing excessive ash. It was necessary to suspend the operation of some 20 anthracite mines for various periods because fuel containing excessive ash was shipped from them. Violations of all types averaged about 100 per month.1

1 The war had ended by the time this report was written. The solid fuels outlook for the 1945-46 fuel year was still clouded, however, by the delayed return of manpower to the mines from the armed services and from employment in war industries in time to make possible the production of adequate coal for all purposes.

In general, the supply of the lower grades of coal appeared adequate, but the Nation was still confronted with a serious shortage of the higher grade bituminous coals produced in the east and of anthracite. It unquestionably will be necessary to continue exercising certain controls over the distribution of solid fuels throughout the 1945-46 fuel year, and for the public to accept alternative fuels wherever preferred types or sizes are not available.

E. B. SWANSON, Acting Director

茶

THE Connally "Hot Oil" Act, approved February 22, 1935, delegates to the President prescribed powers "to regulate interstate and foreign commerce in petroleum and its products by prohibiting the shipment in such commerce of petroleum or products moved in excess of amounts allowed by State law and for other purposes."

Acting through the Secretary of the Interior as the designated agent of the President, the Petroleum Conservation Division was established to assist in the prescribed administration of the act, to cooperate with oil and gas producing states in the prevention of waste and the adoption of uniform oil and gas conservation laws, and to keep informed as to the movement in interstate commerce of petroleum and its products with respect to its parity between supply and consumptive demand.

FEDERAL PETROLEUM BOARD

The Federal Petroleum Board with its head office in Kilgore, Tex., and field offices at Lafayette, La.; Corpus Christi, Houston, and Midland, Tex., administers the regulations prescribed under the Connally Act. While the act is applicable to any State having an oil proration law, the supervisory operations of the Federal Petroleum Board are now confined to 106 counties in Texas, two producing counties of New Mexico, and the entire State of Louisiana. Within this area, monthly production reports are not required for "stripper" fields. Eliminating these, the designated area includes 476 oil fields, 59,323 wells, 78 refineries, and 129 gasoline plants. Daily production averages 2,110,604 barrels of oil and 132,599 barrels of casinghead gasoline and other liquids. This is 75.37 percent of the total output for New Mexico, Texas, and Louisiana or 41.96 percent of national output. The refineries process a daily average of 1,679,189 barrels of products. The daily average increase in production, within the designated area, over the fiscal year 1944, is as follows: Barrels of crude oil, 10.2 percent; barrels of petroleum products, 16.1 percent; barrels of casinghead gasoline, 25.6 percent.

Although the Board's area for supervision does not include all territory in which State proration laws are applicable, action can be and is instigated by the Federal Petroleum Board when Connally Act violations occur outside of the supervised area but within a State proration area.

The enforcement of the act and administration of the regulations is essentially a specialized field operation requiring, among other things, routine and special inspections. This function is necessary to maintain effective control over the interstate movement of petroleum and its products. As a result of this control, illegal practices are reduced and a maximum compliance with conservation laws is maintained in oil operations.

Activities of the Federal Petroleum Board have been curtailed by reduction in experienced personnel and by other wartime handicaps. Yet the volume of criminal investigative operations has been maintained at an effective level. Changing economic conditions have reduced the incentive for Connally Act violation and continued supervisory operations have acted as a deterrent. The Board's personnel has been for several months in a position to report on technical and economic conditions within the Board's area.

During the fiscal year J. W. Steele retired as chairman, and member Ray O. Armstrong was appointed chairman.

As of July 1, 1944, there were seven Connally Act cases which had been referred to the Attorney General pending action by the Department of Justice and six major investigations in progress. Evidence had been developed in the six investigations to such an extent as to allow for allegations of Connally Act violation. Of these 13 cases, 4 were prosecuted successfully, and $12,100 in fines collected. Indictments have been secured in two other cases and they are now ready for trial. The two indictments name two corporations and 21 persons. Civil action involved in three cases has been conducted effectively in the Government's interest and criminal action against respondents has been started. One of the cases in investigative status at the beginning of the fiscal year has been compiled and presented to the Department of Justice, another will be offered shortly. Two of the cases in an investigative status have been closed by administrative action because it was found that prosecution would not be advisable or justified. The thirteenth case remains pending in the Department where it has been for several years awaiting apprehension of the indicted.

On December 1, 1944, by Order No. 2012, the Secretary established a Departmental Petroleum Committee, which consists of the Director of the Geological Survey, Director of the Bureau of Mines, Assistant Commissioner of the General Land Office, Assistant Solicitor and the Director of the Petroleum Conservation Division, as Chairman.

The Committee reviews and coordinates the petroleum work of the several agencies of the Department and makes recommendations to the Secretary as to changes which may be necessary or desirable to increase the effectiveness of the work.