New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1872-12-17
BUSINESS COMBINATIONS.

A very remarkable experiment IN mercan-
tile affairs is now in progress. we reier 10
the operations of the Petroleum PRODUCERS
Agency. This combination, it will be recol-
lected. originally contemplated merely the lx-
ing of n minimum price ut which oil should
be sold TO the refiners, and was supposed to
be solely in the interest Of producers. 1t was
cravcly set forth in the publications of the
founders of this movement that the rehners
would bo the only losers by fixing the lowest
price at which sales could be made to them
that indeed the refners could well afford such
loss as their profits were excessive; that
the public would not be the sufferers, since
the price of the refined oil would not be raised.
We pointed out at the time the probable fal-
lacy of such view, since the burden OF hlgh
prices thrown upon the reiiners must inevlta-
bly, be shifted, so that sooner or laterit would
fall on the consumers. This result has been
arrived at with great drectness. Quite re-
Gently the combination was extended so as to
embrace the refners in an agreement to take
fixed quantity of oil per day. at the agreed
price per barrel. Of course, hereafter SO long
as this monopoly exercises full sway over the
market, the consumers must pay the pilce IL
may determine.
1t is too soon yet to predict the fall OF this
association, but it seems scarcely in the nature
of things that il should be of long duration.
! "Comers" and rings" in stocks and grain
occupy prominent figure IN our business
records. but they rarely serve more than
temporary purpose, raising the price for II
few DAYS or weeks at furthest. These are,
however, merely strikes of middlemen; not
of producers. The nearest available COMPARE
son Of the day is in the combinations OF mlne-
owners in Great Britain during the present
year. by which the prices of coal were quad
rupled and iron doubled. These had some
pretcxt in the strikes of miners; but the IN
crease of pay that crossed the grimy hands
which actually bewed ont the coal and iron,
WAS scarcely n 1.-THE of that which consumers
had TO pay. But the success OF the cOmblna-
ton was fairly initiated by the stOppage OF
production when the miners struck. Similarly
a stoppage of production preceded our Oh
combination, and really made its sue
cess possible. Tho chief differences between
the two cases seem TO be- that the oil
combination is bound by certain lnelastlc
rules taking the shape of a pledge OF Its
members; and that il limits its prices by an
undertaking standard. We do not understand
that sucb was the ease in the British combi-
nations; their regulations or pledges were at
all events unpublished. 1t may be that these
rules will coerce for a while the poorer mem
beers of the oil association, and reduce pro-
duction when it exceeds requirements at the
fixed price; but the irksomeness OF the regula-
lions must sooner or later lead to their over
throw. No doubt the lOng-continued success
of the English combinations has been prinoi-
pally due TO the fact that the mine-owners
are few in number and individually wealthy.
As such combinations, by. destroying cOmpe-
tition, are always an injury to the healthy de-
velopment of trade, the usual breyity of their
existence is not t0 be regretted.