Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-12-28
KANSAS OIL INDUSTRY
Representative BoWersock
Talks on the Subject.
NO NATIONAL CONTROL
WOULD DO ANY PARTICULAR
GOOD IN THE MATTER.
Not Sanguine of Power of Congress,
Through Legislation, to Give Pro-
ducers Higher Price.
NO NATIONAL CONTROL,

| Representative Bowersock of Kansas does
not look forward to national legislation to
| control the oil industry of his state as like
| ly to produce important results. He does
not look forward to the report of the In
| vestigation of the bureau of corporations
| as likely to throw much light on that SUBJ
| ject that can be utilized by Congress In
| framing legislation to benefit the producers
| of oil in his state
| For one" said Mr. Bowersock to a Star
| reporter today, II am not sanguine about
the power to Congress through legislation
| to give the producers of Kansas better
| price for their oil. So far as pipe lines are
| concerned / realize that they are in a large
measure analogous to railroads, and there
seems to be every reason why they should
be made common carriers and subjected to
| the interstate commerce law. But that is
about all that l can see can be done IN re-
spect to the industry through the machinery
Of the law.
THE fact is, I have already told some Of
my friends that, when 1t comes to reguat-
ing the industry by law so as to give the
producers of my state better prices for
their oil, 1t is simply dam nonsense I
built a dam across the Kansas river in con-
nection with some of my business enter
prises, and that is what 1 refer to when
I say it is dam Notwithstanding else, /
assure you.
AZ have no doubt that the Standard Oil
Company could afford to pay producers
more than they do for their oil and yet
Of that because they make a large dividend
for their stockholders so that they might
give the producer more and still do pretty
well. At the same time, [ know that is a
very common condition in the business
world and I do not look for philanthropy
on the part of the Standard Oil Company
In excess OF the business philanthropy that
is practiced by the very people who are
complaining about the prices they are get
ting for their oil when 1t comes to making
purchases in the open market.
Has Been a Producer.
81 have been producer Of oil in Kansas
and I think / understand just what has
been the trouble with the industry there.
We had an unusual development IN the
southeastern part of the state and with
mad rush the people went to drilling wells.
The supply was phenomenal. Sixty-five
compan MES, with capital of g. million each,
were formed to develop oil territory. There
were in all perhaps 100 companies. but there
were sixty-tive of them averaging million
of capital each The rush of oil caused fall
ing prices. We had with oil just what we
have with every other commodity when
there is an overproduction. Prices fell. The
oil could not be marketed The Standard
OIL Company bid for oil under those con-
dfttons, and as might be expected they got
II at low price. There is no law to prevent
some other aggregation of capital coming
q,
but there IS no other such company on
sufficiently extensive a scale to make itself
an important factor in the case. / would
like to know what kind Of LEGISLATION Com
gress can pass to meet that condition?
We can prevent railroad discrimination
and enforce the law to protect every shin
per. BUT IN spite OF whatever we do in that
respect am inclined to believe that the
shippr of 10000 carloads of oil year will
somehow fare better in the price the shin
ments cost him from beginning to end than
m a no chit
legislature appropriated 5000 to build a
government refinery to compete with the
standard in the refining of oil but the idea
that a SNpooo refinery could compete sue
cessluHy with their Immense establis hments
always seemed grotesque to me, The SUI
preme court of the state has since declared
the law that carried that appropriation nm
constitutional. 80
As to Competition.
L am a miller in Kansas and I can con-
duct my business in competition with the
great mills of the northwest because thav
are a thousand miles away. If thew were
near to me l do not believe I could COM
pete with them. For the same reason
never believed the little 100000 refinery
to be run by the state of Kansas co111d COM
pete with the great reffneries of the Stand
ard OIL Company that are not far distant.
IheSe matters must be viewed from q
standpoint of common sense and when we
do SO view them we will find that thew are
natural conditions growing out of the Or
binary laws of trade which, so far as l can
see, legislation cannot reach.
But 1t SO happens that the people who
invested in the stock of the sixty-five-mil-
lion-dollar companies, paying for it a few
cents on the dollar, are reaching out for
any hope that they may be able to realize
a profit their investment ANY one who
suggests g. legislative method to reach that
end is welcomed by them and is applauded
For one don't propose to introduce or to
advocate any fake legislative measures or
measures that believe will have no bene-
flcfar result.
Principal of Supply and Demand
1.-The same principle of supply and de-
mand in the determination of prices Is now
operating In pretty much the same way
IN the matter of the natural gas supply in
my town of Lawrence, where l am a large
consumer of gas in manufacturing estab-
lishments. A company with a great many
millions of dollars of capital was formed in
order to pipe gas, and when it came to sup
plying us they charged just enough less
than the cost of securing the same power
from coal to induce US to substitute gas.
I suppose they might have charged us less,
but at the same time | suppose 1t is natural
that they should fix the price by the meth
cd they have adopted. 1t is to our adj
vantage to use the gas at the prices at
which they have offered 1t to US. They in
vested a vast amount of money in the gas
fields and in the necessary piping. No one
else, saw fit to do 1t, and for one l do not
beerudge them the profit they are getting.
IT do not know what the report of the
bureau of corporations on TINS subject Will
be. but as l have said, l am not sanguine
that ii will contain anything that Will be of
aid to us in framing legislation to benefit
the producers of Kansas. Whatever better
price they are to get will be the result of
trade conditions and not the result of leg
islation, in my opinion.