The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-08-07
AN on WAR FEARED.
why the Melons Withdrew From the
Gulf Pipe Line Deal.

Chanute, Kan, Aug. THE real
reason why A. w. Mellon backed out
of the gulf pipe line deal at the last
minute was not due to any discovery
that oil production in Kansas and the
ter ritories did not come up to expec-
tations. The backdown was made in
order to avert a war in the petroleum
industry throughout the world which
would have made all the other pc
troluem wars look like counterfeit
money
For years there has been truce be-
tween the Mellon interests and the
Standard Oil company. There has
been working agreement on prices
of refined and crude oil. Neither of
the parties has disturbed the market.
The agreement even went so far as to
territory, the Standard Oil company
letting certain districts alone and the
MELONS keeping their products out of
certain sections.
When the Melons first became in
terested in the gulf pipe line scheme
not a word of protest came from the
Standard Oil company. The plan was
worked out, every detail was agreed
upon and the money was ready to be
paid into the National Bank of Com
merce at Kansas City tomorrow morn
ing. Then everything went into the
fire, at least so far as the MELONS are
concerned. The excuse is made for
them that the production of the Kan
sas wells did not come up to the esti-
mates made by the producers and that
the price was not satisfactory to the
Pittsburg people.
The Melons knew the production of
every well included in the combination
more than month ago. The first
work of the experts sent to the field
was to test the production of the wells,
and this was the first section of the re-
port. In fact, the Star printed the
production of the various properties
more than two weeks ago, and these
| figures came from the Mellon experts.
who furnished them to the producers.
AS to the price to be paid the pro-
Queer per barrel for his oil the Mel
| Ions fixed that themselves. The pro-
ducers simply accepted the figures
made in PittSburg.
Were Afraid of the Trust.
Neither of the reasons given for the
| failure of the MELONS to take up the
options hold good with the producers
who are familiar with the situation.
Reliable information received here
| within the past twelve hours is to the
effect that the Melons were given to
understand that if they financed the
gulf pipe line and disturbed the mon
opoly of the Standard Oil company in
the southwestern field all agreements
as to prices and territory and every
thing else would be declared off and
the war would begin. The MELONS,
afraid to go up against the trust in its
wrath, backed down and out of the
deal.
1t may be parenthetically stated
here that here is another interesting
bit of evidence, according to the lights
of the producers, which may be pre-
scented to the government in its in
vestigation of the methods of the
Standard Oil company and the extent
to which the Standard controls the oil
| business of this country.
1t is not the intention of the pro-
motors of the gulf pipe line or the
producers who signed the agreement
to give up the scheme. There is a well
grounded report that the Cudahy's
whose properties were all included in
the agreement. are going to float the
bonds of the pipe line company and
thus step into the shoes of the Mel
Ions the Cudahys had a brush with
the Standard once and they came out
of the deal some three million or four
| million dollars to the good.