New-York tribune., 1910-06-19


A Complicated Problem.
Dabsters at statistics will find a neat
problem awaiting their attention II they
essay to estimate the losses sustained ny
the Mexican national treasury, and by the
country at large. through the thirty years
in which Mr.. Pierce pigeonholed the re-
por.s of experts averring that there was
plenty of oil to be had for the drilling
sat on his leased oil prospects, declined to
pioneer and miIked the consumers by
charging tham fully 100 per cent more for
refined products than the prices which
now prevail as the result of the develop
ments undertaken by Sir Weetnnan.
For some occult reason. which is not
readily fathomed by those who have at
heart the economic welfare of Mexico, the
literary experts of the monopoly, in all
of their effusions since the oil war start
ed, have laid stress and emphasis upon
reiterated statements that Mexico never
has been, is not now, and will not be IN
the future, a factor in the production of
crude oil Had the issue depended upon
the enterprise of the Waters Pierce on
COMPANY these assertions, so far as they
refer TO the present and future, would
most likely be well within the bounds of
veracity The pioneering work of the
Pearson interests. together with the ac-
cessions to their supply of Mexican crude
oil, sunmariiy consign them TO the limbo
of topics indexed under the general head
important, if true"
Upon retracing the sequential events
which form the history of the oil war 1t
may be recalled that very early in the
conflict, before the Pearson refinery in
Minatit1an was in operation, Mr.. Pierce
entertained no mean opinion of Sir Weet-
man as a contender for &, share of the
Mexican oil trade His interests being
purely local, the Waters Pierce Oil Com
pauy not being a. producer Of crude oil,
It was natural that he should be fndif-
ferent to whatever designs Sir Weetmdn
cherished of opening UP markets abroad
for Mexican refined oils or of preparing
to supply the Mexican demand for oil fue,.
But he did rot hesitate to display his IN
easiness at the then remote prospect that
Sir Weetman might eventually extend his
operations into the local market in re-
fined oils.
Knew the Situation.
Mr.. Pierce was we'll posted on what STR
Weetman was doing. His representatives,
by invitation of Pearson men, had inspect
ed the Minatitlan refinery and the San
Cristobal and Capoacan oil fields, adjacent
to the refinery, which were the first fields
brought in by Sir Weetrnan. He already
knew, of course. that there was plenty
of oil in Mexico to be had for the drilling.
and that these wells were not merely &C
cidents and without significance as con-
firming the positive declarations Of able
experts that Mexico's undeveloped oil re-
sources were vast and valuable. The re-
alization came quickly to him that 1t lay
in Sir Weetuans power, if he chose, to
claim his proportionate share OF the trade
in refined oils in Mexico
Mr. Pierce acted with characteristic
prornptness AS far back as the latter
part of 1907 he made overtures to Sir
Weetman suggesting consolidation of In
terests or the formation of a working
agreement by which there would be Sc
cured to the Waters Pierce Oil Company
assurances that its monopoly and profits
would be respected at the hands of Sir
Weetman.
In one Of the numerous letters and
cablegrams with which Mr.. Pierce bonn
barded Sir Weetman and the latter's rep
resentatives in his impetuous anxiety 10
secure himself against loss. he said, in
effect. that he assumed that before the
refinery is ready for regular operations
an entirely satisfactory arrangement will
be completed between Sir Weetman Pear
son and myself -
Sir Weetman did not find It possible,
nor did he consider it expedient, to traffic
with the monopoly or aid it in any man.
ner to secure a perpetuation of its power
in Mexico. Neither would he become a
party to combination that would de
prive the consumers of oil in Mexico CT
the benefit of reduced prices, which uni
versal1y result from legitimate con1peti-
ton.
Then the War Was On.
Therefore, no entirely satisfactory ar
Tangement' was consunmated, Mr..
Pierce had hoped, and the oil war was on.
The consequences have been highly profit
able TO the consumer, for oils are now
selling in Mexico at a, reduction of 90 per
cent below the monopoly'S former prices.
IN the rate cutting it is d. question who
has been hurt the most. The reader may
form his own deductions from the facts
Mr.. Pierce is not a producer of crude oil
in Mexico. He obtains small part of
his crude supply, about zoo barrels day.
from the Mexican Petroleum Company,
Limited, which, with the pearson and the
Furbero interests, are the only producers
of crude oil In Mexico. This is approx
mately one-seventh of the total that the
Waters Pierce OIL Company requires to
supply its trade. So. upon six-sevenths
of its crude oil, which 1t transports from
the United States to its ref1neries at
Tampico and Vera Cruz 1t is obliged to
pay a duty of S4.59 a. barrel
The Pearson interests have discontinued
importing crude oil from the United
States. As a matter of fact, practically
all OF the oil they formerly imported was
refined and exported to Europe. and henc5
was exempt from duties.
On the other hand, the Waters Pierce
people always have been, and still are, at
a. disadvantage equal to S4.59 a. barrel
notwithstanding this manifest handicap.
the Waters Pierce Oil Company has been
obliged to meet. and is now meeting, the
selling prices of the Aguila, Company, the
Pearson corporation in Mexico. The ad-
vantage that the Pearsons thus hold can
not be argued. nor explained away.
If the profit the Pearsons are realizing
is merely nominal, using Mexican crude
and as Mr.. Pierce's company is meeting
the Pearson prices. the economical prac
tees of the vaunted "rnatchless organiza-
ton" of the Waters Pierce Oil Company
with. TO quote from its literature "the
produced at its head" must be put to
severe strain to cope with the S4.59 handi-
cap that perches upon every barrel of i'm.