The herald., 1895-10-01
Will Soon Be Bidders for the
Los Angeles Product
AND THE LOCAL EXCHANGE,
Not to Be Caught Mapping, Is Elk.
tremeIy Active
ducers, but VIII Market the OIL In
Its Own Tank Cars

years has been the local agent for the
Standard Oil company. was seen yester-
day and asked to shed light upon the
rumor that his principals were about to
descend upon Los Angeles and gobble up
everything in the Gil line that was lying
around loose. Mr.. Harvey said substan-
TALLY as follows:
II have received word from headquar-
tiers to the effect that our people will
soon be in the field as purchasers of crude
oil, and that arrangements are now be.
ing made to provide facilities for moving
it to points of consumption. This does
not mean that the Standard Oil company
is about to buy up oil territory, or that
it will lease oil lands, or that 1t will be
in any sense a producer of oil. 1t means
simply that our people have become con-
WINGED of the suffi cient extent of the local
oil field and of its permanency, and that
they propose to engage in the shipping
of oil to the points of consumption.
The oil exchange is purchaser of oil.
We soon will be. We expect to pay a
price for the product, load our own tank
cars and sell it in outside markets. The
difference between what we will give for
the oil and what W. shall sell it for will
represent gross profit, out of which, of
course. will come transportation and
other charges. We can find the markets
for Lus Angeles crude oil, providing we
can obtain it at a figure that will admit
of our operation. 1t is business propo-
sition purely. II the oil exchange can
affcrd to pay more for the oil than we
can, why, they'll get the oil; that's all
mo, sir: the idea of refining this local
oil is out OF the question; its gravity is
~ IL. s1-1~ l. A<.f
We shall engage only in the shipping Of
OIL Nothing has been said in my ad
vices of pipe line to tidewater. That
would be expensive to operate. The oil
is so thick that 1t would nccessitate its
being pumped at one or more stations.
The Standard Oil company has some.
thing like 500 tank cars. A portion OF
these are now being detailed for use here,
and as soon as they arrive we will be in a
position to enter the field as bidders for
the product. l do not know definitely.
but should judge that in about thirty
days we will be ready to commence oper-
ations. One thing is sure: producers
does not pay them to do so; neither are
our people going to sink wells if an unre-
munerative price is offered for the pro-
duct OF wells.
"The general effect of the project when
in full swing will be to greatly widen the
will receive better price and MANY new
wells will be sent down. The Standard
Oil company will not control anything
here. 1t will be a bidder for crude oil,
and the latter will bring more nearly
what it is worth than It now does.
LOCAL OIL EXCHANGE CONTRACT
From the interview with James G..
Harvey, published in the foregoing, it
would seem that the Standard Oil COM
pany is busy arranging the preliminaries
for local business of large dimensions
IN crude oil. 1t would seem also as if
the local oil exchanges, keenly alive to
the issue, was preparing to monopo-
lie as far as possible the handling of all
well outputs. as witness its contract for
which signatures are being solicited and
OF which copy is here given:
This agreement made this = day of -,
l89-, between the Los Angeles Oil ex-
change, a corporation, duly organized
under the laws of California, and having
its principal Office in the city of Los
Angeles, California, the party of the first
part. and ----, the party of the second
part,
Witnesseth, That whereas the said
second party is the owner, lessee or pos
| sessing an interest in and TO the follow
| ing producing wells. described and To-
| Gated as fellows, to-wit:
And whereas said second party -, de-
sirouss that all of the oil now owned, or
| hereafter to be owned or produced from
| said above described oil wells, or from
| any other oil wells or sources whatsoever
| hereafter to be owned or controlled by
- within the Los Angeles oil belt,
shall be placed upon the market through
| the agency Of said party OF the first part;
Now, therefore, In consideration of the
| n n ha
| parties thereto, and hereinafter specified.
the said party of the second part hereby
| promises and agrees that - will deliver
to said party as - agent, broker and
| factor, for sale, all of the oil which
| shall be produced from the oil wells
aforesaid, or which shall be owned con :
| trolled c. produced by said party. from
| any source whatever, in Los Angeles oil
| belt, for period of three years from the
date of this agreement.
The SAID second party further agrees
that = will maze no sales. directly or
| indirectly, of - said oil product, or
any portion thereof, nor enter into any
| agreement for the sale thereof with any
| person whomsoever.
| 1t is. however, understood, and agreed,
| that the said second party shall have the
| right to fulfill any contracts fof the sale
| of - said oil which have been executed
| by--or in--behalf prior to the date
| of this agreement. These contracts to be
reported to and recorded by the secre-
| tary of the exchange.
| 1t is further agreed that said first party
| shall have the right to call for the de-
! livery of all of said oil, or any portion
| thereof, at such times and in such guam
titles as said first party shall indicate,
| and the said second party agrees to de-
liver the same in tanks ut the wells, or
in the public storage tank, at the times
indicated by said first party, free from
slusn. dirt and water. and in condition
satisfactory to the inspector OF said party
OF the first part.
And the said party of the first part
agrees that it Will receive all of said oil
election, place the same upon the market
without any delay, and sell the same for
the highest and best price that can he OBJ
tanned therefor.
Said party of the first part shall receive
for its services in selling said oil product,
all The nee essary expenses thereof. in
GLIDING storage and freight charges to the
point of delivery, and o commission, not
to exceed IL per cent on the gross amount
realized from said sale. The printed copy
from which this copy is made has the u
per cent crossed and written So
Said fist party shall deliver TO said Sec
ond party each month during the term of
this agreement a statement showing the
total amount of oil received and sold dur
ing the preceding moth and the average
price at which sold, including state
ment of receipts and disbursements on
accoun. of sales, and shall pay to said
second party on the 10Th Of each month
a pro rata OF the net amount received.
In case said party of the second part
aha1l violafo ~ Mt HE ~