The Roswell daily record. [volume] (Roswell, N.M.) 1903-current, 1907-08-07

try as well as from various other
the utmost care, verified wherever
necessary, and in the final results ap-
portioned or weighted" according to
the amount of business or quantity
of the article involved. Very careful
computations of the cost of refining,
transporting, and marketing have
been made, by-products have been in
cluded with carefully weighted"
prices, and, as will appear by the bo-
dy of the report itself, these conclu-
sions, while briefly stated in this let
ter of submittal, are the final results
from most elaborate and indisputable
calculations.
These results are given chiefly in
the shape of margins" that is, the
difference ia cents per gallon between
dard buys and the prices of the prod
ucts thereof which it sells. These
margins" of course are the really
significant facts, representing that
part of the price for which the Stan
dard is responsible.
Prices of oil products may rise OF
fall slightly without affecting the pro-
fits of the Standard because of a
change in the price of the crude oil,
although the Standard also fixes within
certain limits even the price of crude.
But the margin the difference be-
tween the price Of crude and the
price of the finished products, is al
ways a true indication of price policy
and profits.
There are two varieties of raw ma
terial of essential importance-Penn-
sylvania crude oil and Lima crude oil.
The crude oils of the other fields,
both by reason of their very recent
development and by reason of mark
ed difference in quality, do not affect
in any significant way the prices
herein considered.
The average margin between Penn
sylvania crude oil and the illuminat-
ing oil sold by the Standard through
out the country, after deducting freight
costs, from September, 1897, to the
end of 1899, was 5.3 cents per gallon;
from 1900 to 1902 inclusive, cts. per
gallon; and from 1903 to June, 1905,
sc cents, or an increase of 1.3 cents
during these eight years. When It is
remembered that from OF cent to 1
cent per gallon constitutes good pro-
fit on the business, the meaning of an
increase Of 1.3 cents in the last eight
years covered by this report is evi-
dent, even as applied to Illuminating
oil alone
But it must be emphasized that
has taken place in the case of the by
products than in Illuminating oil, the
most important of which are Gin the
case of the Pennsylvania crude) gaso-
line, lubricating oil, and paraffin wax.
Including the margins for these by
products with the margins for the com
bined four products, weighted accord
ing to the prospective quantities pro
duced, the increase in margins for
this recent period is still more conspic
uous. Thus, the relative average mar
gin for the four products combined for
the years 1898 and 1899 was 6.6 cents:
for 1900 to 1902 TT cents, and from
June 1903 to June, 1905, s.4 cents, or
an increase of 1.S cents.
Substantially the same conclusions
as to the increase OF prices appear in
the margins for Lima crude. The in
orooco in itr ,,,aroipS ic fuJlu nc oon-
spicuous as for Pennsylvania crude.
The relative average margin for the
combined products of Lima crude for
the years 1898 and 1899 was 81 cents;
for 1900 to 1902, IL cents; from 1903
to June 1905, 7.S cents, or an increase
of 1T cents for the eight years
The tremendous importance of the
increase in margins can be fully ap-
preciated only by consideration of the
enormous output of the Standard. The
average increase in the margin for the
products of both Pennsylvania and Lii
years and not, as above, groups of
years. from 1898 to 1904 was over 2
cents per gallon, and, allowing a very
liberal estimate of one-half cent per
gallon (25 per cent? for increase in
the costs of production and marketing
during this period, the net average
increase in profit during these seven
years would thus be at least 1.5 cents
per gallon. II the same increase in
profit be applied to the Standards en-
tire sales of all kinds, the petroleum
products in the United States in 1904.
the profits for that year would be
about s21.O00.00 more than they
would have been on the basis of the
prices and costs in 1898. AS matter
| of fact, the known increase of profits
on its whole business as stated herein
after, was more than this
Similarly. for the year. 1908. when
the prices of oil reached their maxi
mum. these prices would represent an
increase in the Standards profits on
sales in the United States that year
of nearly s25 1000. 600 over the prices
and costs in 1898.
These figures show conclusfvefT the