The morning news. [volume] (Savannah, Ga.) 1887-1900, 1888-04-08
OIL SHUT IN THE EARTH
HOW THE PRODUCERS WALKED
INTO MONOPOLY'S NAV.

Labor's Benefit.
WASHINGTON, April David Kirk, an
oil producer, engaged in the oil business in
the vicinity Of Bradford, Pa, for the last
twenty seven years, was examined by the
House Committee on Manufactures this
morning. The Producers Association, he
testified, was voluntary association and
was not incorpora ted. He was member Of
the Executive Board of the General As
sembly of the association. There were be-
tween 800 and 1000 men in the association,
divided into thirty-six local assemblies
He was under oath not to reveal the bust
ness TRANSACTIONS of the association, nor the
names of its officers, though the witness
knew of no special reason why anything
should be withheld. Producers of petrole-
um, dealers in oil well supplies. refiners
and persons engaged in business whose
interests ware supposed to be the same as
those of the producers we're eligible TO mem-
bership in the association.
CONSTITUTION OF THE ASSOCIATION
The constitution of the association was
put in evidence. Its preamble states the
object of the organization to be, to include
IN the organization all producers of petro-
leum, and those who are engaged in indus
tries incidental thereto, and known to be
friendly to the producers interests, in order
Niltb lutJ may, ny ullbttl httlOD anu All
honorable means, protect and defend their
industry against the aggressions of monopo
listic transporters, refiners, and buyers and
sellers of their product, in order that the
producers may reap the just reward Of
their capital and labor and to this end en-
courage and assist, as far as possible,
the refining and marketing of their
product and sales direct to the
consumer by the producer The
acgpeiafiAp ~ haA t.yitb he
Standard Oil Company or trust, and no
member Of the trust was admitted into the
association, being barred by the consttu-
tion and rules. The primary object of the
organization was to protect the members
against the Standard Oil Company.
THE PROTECTION THEY NEEDED
Chairman Bacon--In what way did the
producers need protection against the
Standard Oil Company'
Mr.. Kirk-The Standard Oil Company
had secured virtually a monopoly Of the
transportation, refining, purchase and sale
of this article.
Chairman Bacon-How did you expect to
overcome or alleviate that condition Of
things by forming this association
Mr.. Kirk-We proposed to refine and mar
ket our own product at that time; that is,
that was the purpose of the organizers.
The Standard Oil Company threw every
possible obstacle in the way of oil reaching
railroads or getting where an Independent
concern could secure it. The producers
were defeated in their attempts TO secure
legislation at the hands of the Pennsyl-
vania Legislature and then formed this or
ganization.
NEGOTIATIONS WITH THE MONOPOLY.
Chairman Bacon-After the organization
was formed was any negotiation entered
into with the Standard OIL Company
Mr.. Kirk-Yes, sir; after a great many
plans and schemes had been produced it was
deemed best to meet the Standard Company
and see what they would do before we went
into a fight. A committee was appointed,
and negotiations were conducted at Sara
toga and Niagara, which resulted in an
agreemeet being signed between the AS
sociation and Standard Company in Sep
tember last At the conference the Stan
dard attributed all the troubles of the
producers to over supply and existing
stocks, which were deteriorating Ia value
and were being carried at vast expense
These stocks were competing with the new
product, and the Standard Company said
that until the old stocks of oil could be got
rid of producers could not hope to get fair
price for their oil"
The witness said the contract was finally
entered into by the negotiators. There were
about 81, 900, 900 barrels of crude oil on hand
flJ DudU LltIlb. ne hdlQ
that they must be got rid of.
SQUEEZING THE STANDARD.
The producers desired in case they reduced
the production to get the benefit of an ad-
vance on existing stock, and asked that il
be given them at the market price. After
some time the Standard people said they
only had 10, 900, 900 barrels Of this oil and
agreed TO give on half OF it &c, the market
price The producers then agreed TO reduce
the production. In case they carried
out this agreement for one year the oil
which WIS held on their account, was TO be
sold and the profits given 10 the Producers
Association to be distributed TO each indi.
vidual producer in proportion to the amount
Of oil he had ''shut in." that is his
reduced production. or that 5,000.-
600 barrels 100000 was immedi-
ately set aside for the benefit of the
labor thrown out Of employment. After
ward another million barrels was secured
from the Standard company for the benefit
of labor. 1--WE thought" continued the
witness, I'VE could ring another million OUT
Of the Standard for that purpose and we
went to work and did it,"
HOW THE CUT WAS SECURED.
The witness said that the reduction In
production was secured by means of volun-
tary signing of individual contracts.
About / 900 men agreed to limit the pro-
duction, or shut IN" Others signed con-
tracts not to increase the production, and
still others agreed not to start new wells
or clean out old ones. Some of the con-
tracts were signed by persons not members
of the association. or the 81, ,000,0 900 bar
rels of oil on hand at the time Of the agree
ment, over %. .O00, 900 was controlled by the
Standard oil trust. The amount of oil on
hand had been reduced to 26,OO0,OOe
barrels April 1. The average daily redue'
ton of production since the contract went
into effect in November last had been about
25. 900 barrels day, Of which lS,5OO barrels
was the result of "shut in" contracts. The
reduction of the production was chiefly due
10 contracts, but there had also boen nat
ural shrinkage
Representative Smith asked II the witness
had really thought he could by legislative
enactment of Pennsylvania compel ths
Standard Oil Company to carry oil to every
| body.
suckers enough to think it. certainly
! thought they should regulate the monstei
they had created" The Standard company
placed the cost of the pipe lines al S30,OO
| 900 The understanding OF the producer
is that IL never cost them cent; that tn
whole system came frcrn the earnings. Tbs
first pipe was bought on tick and paid 10
itself before more was bought.
In conclusion the witness made state
ment TO the effect that they understood tha
tba,y ,op1d NOT he comDOlled to testify, bu