The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-01-16
KANSAS news.
The OIL Producers Are q Unit in
Seeking Relief.
Southeast Kansas Field Plan.
ming for Topeka Meeting.
CUTS NOT DEMANDED,
Action Of the Standard Has
Aroused q Sentiment
That the State Should Aid With
Proper Legislation.

Peru. Kan, Jan. 1e.-The last cut OF
five cents a barrel in the price of crude
oil. announced by the Standard Oil
company has brought the producers, ii
this part of the field at least. up with
a jerk For a year the producer has
seen q steady decline in price, but each
time he fed the waning hope that soon
prices would improve. One excuse and
another was offered. The producer has
taken it all hopefully. but when there
came along four cuts in price within q
month he began to see that unless he
did something quick he was going To
suffer loss. Hence the meeting We'd
nesday night and the determination to
organize all the oil men in the state at
the meeting called for January 19 at
Topeka.
There is one feature Of the situation
which has brought to the minds of the
producers the conviction that the re-
auctions in the price of crude oil have
not been necessary. There has been no
corresponding reduction in the prsee of
refined oils. While the price Of crude
oil has gone OF more than a per cent
in The last year the price Of refined oil
has been reduced less than 10 per cent.
The price for crude oil in the southern
part of the Kansas-Territory field =
year ago was $1.3S a barrel, against Y
cents a barrel at this time. The whole
sale price of refined a year ago was 1874
cents and now it is 141A cents a gallon.
But the argument is made by the
friends Of the Standard that the reason
Tor the recent reductions lies in the fact
that foreign stocks have enormously in
creased and that the price of export
oil has decreased out of all proportion,
and the only way to equalize things is
to reduce the price of crude oil.
The slaughter of prices of crude oil
has brought about some figuring as to
IL
oil The average barrel Of Kansas crude
oil Of q gallons contains 35 per cent
tlluminant, % per cent machine oils and
gas oils, Is per cent gasoline and naph-
tina and 25 per cent wakes, aSphaltunn,
coke, etc. That would give 1470 gallons
kerosene, $50 gallons Of gasoline and
naphtha, so gallons of machine and
gas oils and 1850 gallons wakes, coke,
asphaltum, etc. At the present whole
sale prices charged the retail merchant,
the returns to the ref1ner on the pro-
ducts OF a barrel Of crude oil are as
follows: Kerosene S2.15, gasoline 81. ID,
coke. etc. SO cents, making a total re-
turn to the refiner of S4.52.
The cost of refining oil is hard to
reach, as the Standard never gives fig
urges on any part of its business, but
q rsfiner of years of experience and
stin in the business asserted that, al
lowing for everything, including wear
and tear of machinery, interest on the
cost of the refinery at 8 per cent and
freight rates, the cost to the refiner per
barrel of crude oil was $1-5O. and he
the mark Add the present price of
crude oil in Kansas, y cents, and the
total cost to the refner per barrel of
crude oil converted into rehned oil is
81. p, leaving a net profit to the refiner
Ut $3.50 for every barrel of crude oil
used in the refineries- AS the Standard
IS now taking more than 5000 barrels
of crude oil a day at the rehneries in
y n
esha the daily net profit IS close to 49,,
900. or S12e,000 a week or $685., 600 a
year, assuming that the present capaci-
ty OF the refineries VIII be maintained.
A large producer recently made the as
sertion that had he the facilities enjoy
ed by the Standard he could afford to
pay $3.50 a barrel for Kansas oil and
still make more than so per cent net
profit This is what started the in
ouiry as to the refining products OF
Kansas oil and the prices obtained for
the refined products.
The operators here feel that they
have reached the point where some
protective legislation is absolutely de-
manded to prevent further price cut
ting and decentralization on the part of
the Standard They believe that if
the producers in the other districts
VIII stand together that their demands
viii be granted. They believe that the
present state administration realizes
the PROSTATE condition of the oil busi-
ness-appreciates the fact that the
Standard has a strangle hold on the in
dustry-and viii go any reasonable
length to secure protective legislation.
Governor HOch is himself the preSi-
dent Of an oil company with holdings
in Kansas and he has given the sub
5ect careful attention.
The operators here are addressing
letters to operators in every other dis
trict urging the Importance of a full
attendance at the Topeka meeting.
They expect to have a great crowd on
hand at that time. OF course, they
realize that there is a certain percent
age of the operators who will not join
the movement until its success is as
sured for fear of antagonizing the
themselves open to a system of re-
But the absence of this element has
been discounted. The producers in
northern end of the field, at Chanute
Humboldt and other places will be
asked to attend. The Chanute ope-
rators were the first in the state to
organize a protective association and
their active cooperation is depended
on this time
operators is to make the organization
strictly an oil association devoted to
the interests of oil and oil alone. The
gas people will be left to fight their
own battles in their own way AS to
the demands they may be modified
after discussion. The making of pipe
lines common carriers; the building