Gold Hill daily news. [volume] (Gold Hill, N.T. [Nev.]) 1863-1882, 1866-03-07
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|REroRrEp pI 7. o'BRiEN, STOCK pRokEA, GOLD HILL'I
SAN Francisco, March II ?. Y.
Up. and Down. OF Peiroleum. m

Upb ana Oo"ub ol -
There has been q report presented to
the British Government which clearly es-
tablishes the superiority of petroleum over
all other known fuel for generating heat.
Its advantages are chiefly these: It will
enable q steam engine to do at least forty!
per cent. more work to the horse power.
It will require so much less room for fire,
as to save expense in construction and
afford more stowage room. And 1t can
be stored away with perfect safety in so
much less space. that steamships OF war
must adopt it at almost any price to which
i. may rise, and the government irst
adopting it will have o decided superiority
of those who do not.
To all these must be added several other
benefits, such as the saving Of labor in
handling, though oil being a fluid and
therefore easily pumped up by steam or
made to convey itself to the required point
by gravitation. Then add the Immediate
ness with which it can be made to pro-
duce its effects, without the constant waste
of banking up" as with coal. One
mans hand, by the turning of a stop.cocE,
can FIRE up q huge steamer in q minute.
Powers, such as these, must bring petro-
leum into use among the nayics OF the
earth rapidly.
And yet the cost Of production is so
considerably increased, and increasing
every day, that apart from the Govern.
ment tax Of one dollar per barrel, far less
can and will be brought into market. But
for those giant wells about Pithole, the
falling off would be far more marked than
it is, and as these die out there is every
reason to believe that the supply will be
much less than the demand, that instead
of four and Ave dollars per barrel, it must
rise again to q price that will make the
poorer wells pay.
A year ago six thousand dollars was the
outside price of sinking a well, and from
three to four thousand about the average.
Now we are credibly informed that 1t is
ten thousand. A year ago the working
expense of a well was about ten dollars
per day-now 1t 10 twenty. Then oil
brought ten dollars at the well-now five.
| with one dollar off for taxes. The result
was, that every we'll producing two barrels
and more per day was worth working.
Now we see that unless it produces ten
barrels it hardly pays to keep it going, but
Il leased on half shares it is hardly worth
anything at less than twenty barrels. Nor
will one in fifty Of those sunk produce
twenty barrels /; hardly that proportion
produce ten even. About Pithole not one
in twenty pays at all.
There are, Of course. prizes in the lottery,
and this keeps up the excitement. Each
hopes to be the lucky man, and he ven
lures what he can spare, and sometimes
money that he cannot and ought not to
spare, in the bold venture, and company
makers step in and abstract nearly the
whole. This forms the basis OF specula-
| tive companies, and these raise the price
| of wages beyond all reason, and the prices
of oil lands, and cause a waste OF capital
on the whole so great that it may be
| doubted whether, on the whole, more
wealth has been gained from the bowels
Of the earth or sunk in them.
To say that nine out of ten who buy
stocks lose their money, and might about
as we'll throw it into the river, is nothing.
For the real development Of oil, 1t were far
better they should do so, for that would
not raise prices so as to put it beyond tho
reach Of substantial and established asso-
Citations to do q profitable business. A
few companies, with good wells leased out
on shares, must of course do well. II 1t
ceases to pay the lcssees to work these
wells on shares, the companies can try 1t
il will not still pay to work them when
the whole profits belong to them; Where
they are free from debt and conducted by
honest men. they con stop sales when the
market is low and sell when it is high.
But when there is q constant pressure for
high dividends, often paid out OF capital,
or BY forced sales Of oil at q ruinous sac
rifce, i. is easy to perceive what must be-
come of such poor, ill.managed COM
panies as these. When they are cleaned
out and the public have opened their eyes
to the folly Of gambling such as this, with
every odds against them, the real business
Of producing oil will be placed on a better
and firmer basis than ever. There will
then be a demand for every gallon of oil
that can ba delivered at q fuir profit for
the capital invested and the average
amount of labor required. At present the
real value of the oil is no appreciated.
compared with other fuel, or with the real
cost Of production, because at times the
marke. 10 glutted by a process Of stimula-
ton, at enormous cost. In which all but .
few of the wealthiest and bes%t-conducted
must absolutely sink.-PhiFa LEDGER.