Los Angeles herald., 1910-02-27

nas been instructed to tell the truth
/ he sees it.
BAKERSFIELD, Feb. 26.-New-
comers in the oil business, of whom
there are now so many, frequently
bring with them erroneous ideas con-
cerning the structure and purpose OF
the Independent agencies, and for the
sake of a clearer understanding upon
their part it should be made clear that
the organizations referred to are purely
cooperative in their nature and are
estopped by provision of their char
ters from earning profits or to engage
in business with the usual object In
view. namely the creation of dividends.
The agencies are to be classed with
fraternal organizations rather than
with corporations as they are generally
known. Each company of the agency
membership is a stockholder. Each
stockholder is a director. Affairs are
conducted through an executive com
mittee, whose acts are not legal unless
ratified by the managing board OF
directors; that is to say, the companies
themselves. Thus the conduct of the
business comes back finally to all those
who are interested, and each company
is far safer and has far more to say
regarding what should be done with its
property than has the ordinary holder
of corporation stocks. Other men al
ways handle his money.
The agency Idea was born Of the
last stage of despair. 1t was squeezed
out from between the millstones of the
Standard Oil company and the Assocl-
ated Oil company. whose actions tended
to crush and grind out of the producers
oil all the values that could be re-
moved The price was artifcially re-
duced to about 10 cents barrel ana
there seemed little hope that II would
ever be any greater. An agency was
formed in Kern River.
Grouped Into One
A few scattering small productions
were grouped into a comparatively
large one. AS barrel was added to
barrel the agency's Importance grew,
and with growing Importance came
slowly increasing power. The price
gradually went up until it became u
cents. In the meantime the Coallnga
agency was organized and the two
bodies worked in harmony. A little
over two years ago, by reason of the
advantage of the two agencies gained
by making common cause, the prices
leaped during a night from 27 to 611s
cents. From that time on the price
of all oil not previously contracted at
a low figure, held at 60 cents or over.
Millions upon millions of dollars were
thus saved to the producer, money
which would otherwise have gone else
where.
During the past year a great advan-
tage was gained by absorption Of the
Union Oil company, through which
process the agencies have become mar
keters, possessing their own pipe lines,
steamers and selling organizations.
This accomplishment is noteworthy as
being the one occasion in the history
OF oil development work where the
producer gained for himself a voice in
the disposal of his oil. Considered as
a mere business achievement the
event was colossal, and considered in
the light of a victory gained it con-
stituted one of the most remarkable
occurrences transpiring since Colonel
Drake drilled the first we'll
Achieve Success
AS a business organization purely the
agencies are a tremendous and over
whelming success, not only for them
selves, but for others. Each and every
member participates equally in the
nrofits derived, each and every mem
her bears his share of the burden, each
and every member has voice in the
proceedings There is, and can be,
neither treachery nor false dealing
The freezing out" process IS not one
of the possibilities. Looked It from
whatever point, the agencies and their
members are in no danger from such
scores as these.
AS to the "closed door" a subject now
uppermost, there is division of opinion
among the members of the organiza-
tions. Those who oppose this project
mostly base their opposition upon the
ground that there is moral RESPONSE
bility attaching to the organization,
which, If needed as 1t should be, Will
dictate the open door, and they point
to the unexampled fulfllment of the
original purpose to justify their con-
tention that the open door policy is the
wiser one TO follow.
Admit Good Qualities
Those who favor the closed door ad-
nit the agencies success, but outline
a more abundant success still. They
admit, also, a moral responsibility, but
they claim this would be provided for
by a thirty-day term in which all pro-
ducers would be at liberty to make
application and be received into MEM
bership, together with opportunity, al
WAYS to be allowed, for new producers
to become associated. They also say
that with the open door there are a
number OF large ana powerful con-
Germs which make use of the agencies
without assisting but, rather, retarding
the progress of the agencies. Further
more, the proponents of the closed door
declare that the Independents have
borne the heat and burden of the day,
have fought the fight, have kept the
faith The way has been rough, the
work has been hard, the risk has been
great and the expense has been very
considerable. LET ALL" say these, "who
profit through our endeavors share with
us equally the cost in labor, time, trou-
BILE and money"
This question win be debated at a
meeting to be held in Bakersfield on
March 1. Every producer in the state,
in or out of the organizations, has been
invited to be present and to express
his views.
FISH FOR THEM