The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1895-09-30
OIL MEN ON THE QU| WYE
Rumor That the Standard Oil
Company Is Negotiating
TO CONTROL THE OUTPUT
Causes Of Dlscord Among Some Mem.
bers Of the Exchange
The Commissions to Be Charged on Sales
Made the Most Prolific Source
Of Trouble

The Standard Oil company is credited
with having designs on the oil industry
of Los Angeles, and from what can be
gathered, there appears to be strong
suspicion among certain of the oil pro-
ducers that there is good ground for the
rumor.
city yesterday in consequence of the heat,
30 that full particulars regarding the
negotiations said to be going on were
difficult to obtain. Sufficient information
was cleaned, however, to illustrate the
fact that the possibilities are good for
outside influences to dominate the oil in
dustry.
When the idea of applying the exchange
syatem Of marketing the oil product was
first worked it proved acceptable to every
one interested in the oil industry. The
same system had been tried by the fruit
men of Southern California and with sue
cess, and, it was thought, and is indeed
still the opinion that the cooperation or,
Is 1t is better known here, the exchange
system, will result advantageously to the
oil men. But it appears as if there was
something wrong somewhere. The ex-
change is divided into 1000 shares of the
par value of 500 each. Every oil pro-
Queer is eligible as a purchaser of one
share only. This rule was adopted so
that large and small producers might
meet on absolutely the same footings.
The owners Of non-producing wells are
not eligible to the exchange. This latter
10 considered by some hardship and
particularly as President Heron, Secre-
tary Cochrane and j. M. G. Marble, one
of the directors of the exchange, all fall
under this classification, they having no
direct interest in oil. AS there are only
from seven ty to eighty owners of produce
ing wells that represents the mem bership
of the exchange, roughly speaking. As
4 consequences there must be over 9G0
shares either in the treasury of the ex
change or in some outsiders HANDS. Some
of the members Of the exchange, and
others who are in favor OF the exchange
system and desire to join in, are inquisf-
tive enough to profess an interest in the
whereabouts OF these shares and what it
is proposed to do with them.
It was broadly intlmated yesterday by
one of the oil men that right here seemed
Q good opportunity for the Standard o il
company to gain control of the oil ex-
change.
A little over week ago the exchange
held secret meeting at which, if report
be true. quite lively discussion took
place with regard to the commission
charged by the exchange on all sales
made. 1t was figured out that at the
present rate of increase the daily output
of oil within the next year Will be about
5000 barrels. If sold at net rate of 81 per
barrel, excepting the commission, the
rate of 1917 per cent charged by the ex-
change would mean abous $500 per day,
or about $1S7, 600 per annum. A promi-
nent oil producer on Temple street want
ed some information regarding this vast
sum. If it was to be returned to the
members of the exchange in the shape OF
dividends. less the working expenses of
the exchange, what could be the use of
charging such an excessive commission,
which would OILY result IN emporarily
depriving mem bers of money that they
might utilize in other ways? If, on the
other hand, dividends were not to be- de-
clared, who was to have the benefit OF the
accumulated funds? The discussion
waxed warm. and it is said. the question
of commission is not yet settled.
THESE and other questions were alluded
to by the several oil men seen, and while
protesting to know nothing regarding the
negotiations said to be in progress by. the
Standard Oil company, gave 1T as their
opinion that such a scheme seemed prob
able enough.
Nj. James c. Harvey, special agent in
Los Angeles OF the Standard OIL COM
pany, is supposed to be representing the
giant corporation in the deal on hand.
Unfortunately he was away from home
yesterday and was not expected to return
until an advanced hour, so his version of
the affair could not be obtained.
II is too early to attempt any prognosti-
cation as to what would be tho result in
the event of the Standard Oil company
controlling the local industry. In any
case it could scarcely be to the advantage
of tho Y,rnducars or the citu Of Iaro.