Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1890-12-08
The Standard Profits in Producing,
Transporting and Refining.
A MEETING OF INDEPENDENTS
To Take Strong Action for the Protection
of Their Interests.
LATEST DEVELOPMENTS IN THE FIELD

Inorn Kun pool, on the Meeks ldrHl, ABOUT
one mile ahead of developments. They
drilled the well Sc feet and were rewarded
with a good gasser, which will let them out
in good shape. The same company also
completed we'll Saturday on the McClin-
ton farm, a half mile northeast from
their duster, which will probably make
producer when shot. johnson &
Story, too, brought in a dry hole
above St. Mary's while the Vancluse
we'll Just below ST. Mary's is in ami is
duster Wildwood has not brought in any
more gushers for the past few days, al
though several wells on the southwest line
have been drilled deeper and found a
second pay, which has materially increased
their production. The we'll at Mcdonald
station, Panhandle road, on the Mcdonald
farm, was drilled Friday and Saturday with
out any improvement. The well has ceased
spraying and an experienced scout said to
THE DISPATCH tonight that the venture
did not look TO him TO be good for more
than a tour or five-barrel well. The further
decline in the market has augmented the
feeling OF depression among the independent
producers. and is acting as stimulus and
incentive TO Independent organization. This
spontaneous outburst of independent spirits
is but the result of oppression and is not
general all along the line.
Production Regardless of Cost
In a recently published interview with a
Standard Oil Company official, it was said
that company would continue to produce oil
regard SIS of the price for petroleum. This
is as much as to say that if the field price of
oil was not sufficient to pay the expenses it
made no difference to a company which,
taking that oil IRON the wells, could trans
port, refine and market ii. The price of the
manufactu ed article could be maintained
owing 10 the manufacture being exclusive.
and so long as the manufacturer was also the
producer the profits would remain the
same. The only losers would be the pro-
ducers who were not interested in the manu-
facture of it. Allow such a monopoly TO
become a producer of the bulk of the oil, as
ii Is row the manufacturer of il, and the
producing minority, or the manufacturing
minority, could be squeezed alternately,
while the profits of the squeezer would
remain at a fixed figure. Under such
circumstances petroleum at 3 cents a barrel
or 50 barrel would make no difference to
the monopoly. Its income would not be
affected BY 1t, while on the other hand the
one price would kill the minority producer,
and the other price dismantle the refnerles
Of the minority manu- acturer.
The Standard has had control of the man.
Utacture of petroleum for years. It's policy
in the past was to purchase rivals, or drive
them from the market by lowering the price
OF refined. is was a costly policy and |
not wise one. 1t was the policy of capital |
and force and not OF brain and shrewdness. |
But 1t vas the only course to pursue so long
only two of the three branches of the |
industry were in the hands of the Standard. |
They were the transporters and manufac- |
turers, but they had no production. Ii they
used capital and force to overcome their
rivals in these two branches, it resulted in
benefit to the producer in higher prices
either from increased consumption or
speculative advance in prices. Ii
they tried to check the producer
their manufacturing rivals reaped a benefit.
In neither case were the advantages to the
minority re6ner nor the producer equal to
those Of the Standard, but they were suffi-
cient TO keep the two parties in tine field.
Gets Al of the Profit.
Within four years the Standard has be-
come a producer of oil, and now whatever
profit there is in producing, transporting,
rehnI e or marketing, ii gets IL all; for it is
In each branch OF the business. But its pro-
ducing portion is yet only small part
OF the .Lole. For what it has large sums
were paid, and expensive management has
Increased the cost. To become the owner of
the hulk of production the easiest way for
The Standard was through low prices, and
the latter has been attained without in any
way affecting the profits OF the monopoly.
lnsIead, at the difference between refined
and crude, their profits have increased owing
10 the fact that the bulk of the production is
still iu the hands of outsiders
The shortest route to low prices is through
over production, and to this the Standard
has contributed share as disproportionate
as its portion OF the pronts. An analysis
OF the last monthly oil report will prove
this, as it shows that OF 1000 barrels new
production, the Standard was interested in
4 800 barrels, or more than one-third of the
total while of the $40 new rigs and drilling
wells, the Standard was interested in 102,
or nearly one-eighth of the total. This is
in the Pennsylvania and West Virginia oil
regions only. In the Ohio field the Stand
ard was interested in 7,45O barrels OF the
1879 barrels of new production, or more
than one-half; and in Ill of the 297 new
rigs and drilling wells. 1t looks, indeed,
as if the Standard intended to drill and
produce oil, regardless of the price of the
product!
Under these circumstances some few pro-
ducers are pursuing a conservative business
plan which promises to make them inde-
pendent Of any combination. They propose
TO transport and market their own oil. This
is not being done by any large combinations
or associations of producers, such as in the
past have met, "resolooled" and adjourned,
but by the few individual producers of dis
tlnct pools One of the companies of the
CHARTERS district is caring for its own pro-
duction; several producers of Elk county
are constructing line for the same purpose,
and at Clarendon some of the producers
transport, refine and market their own oil.
The Producers Interested.
These enterprises will be watched with
Interest by producers, and if successful will
be hint of the future policy of the pro-
ducer. From the evidence of a prominent
and successful business man before the
Inter State Commerce Commission at WASH
ington the Standard gained hint which
may have shaped its course in regard to
buying production. The witness said, in
substance, there are but three branches of
business, producing, transporting and man.
ufacturing. He who is engaged in but one
branch has two competitors; but he who is
engaged in all has no rival. Let the pro-
ducer take hint from the same sage re-
mark.
The independent producers of the Emlen-
ton district held large and enthusiastic
meeting Saturday in the Opera House with
q view to building a refinery and piping
their own oil. The meeting was ably ad-
dressed by a number of the most prominent
citizens and producers in that section of
Venango county. The situation was thor
oughly discussed in all its phases, and the
consensus of the meeting unquestionably
indicated that the new project will be con-
summated at no distant day. The plan as