Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1916-04-18
The Rise of Gasoline
BY FREDERIC j. HASKIN

The price of gasoline has suddenly
leaped into prominence as a national
problem. Motorists are paying twice
as much for gallon as they did year
ago. The federal trade commission
may be called upon to investigate, or
else congressional committee will
probe the situation. Experts Of the oil
companies say they would not be sur.
prised if the price went to thirty-fve
cents in the near future. The reason
for the rise is apparently shrouded In
mystery. A dozen theories are ad-
vanced, and meantime the man with
the auto or gas engine continues to pay
the bill.
The cost of gasoline affects the
whole country to an extent that few
people realize. The day when the auto
was a rich mans toy is long past The
motors of the United States have pass
ed the two million mark by several
hundred thousand-in other words,
about ten million people make daily
use of them in some form or other. The
grocer delivers cabbages in the auto
truck. the farmer plows with an auto
tractor. Besides the motor cars, there
are almost million gasoline engines
in the country, driving the belts or
thousand industries, pumping water IN
the barren plains of the west saving
wood, baling hay, threshing grain. ANY
change in the price of gas engine luel
is ref,ected in every one of hundred
different quarters.
Why is the price of gasoline rislhs'
despite enormous production! IS IL pe-
cause the administration has proposed
a revenue tax of one cent gallon on
gasoline and the oil men want 10 sho"
the country that the industry cannot
carry it? Or is it due to the storage
of millions of barrels of crude OIL ny
the interests that control its distrlou-
ton? Both of these explanations nave
been advanced but close scrutiny OF
the facts hardly bears them out.
The situation may be summed up p|
saving that conditions justify nlsher
nriced gasoline, but the rise came
sooner and pushed the price higher
than was absolutely necessary Inc
producers saw the increase coming
and apparently forestalled 1t a NUE.
Tho fact that they stored their crude
Of, in anticipation of better prices was
in itself factor that brought those
nrices up., Thus in Oklahoma there are
today about eighty million barrels OF
oil in surface or pipe line storage
Much Of this cannot be bought from
the holders at any price, speaking III
reason They are confident that the
market will go up and they VIII not
soil The withdrawal of great STOCKS
of crnde oil such as these necessarily
forces the price up.
The Appalachian oil fields, where the
hest grades of petroleum flow, have al
so probably an immense reserve STOCK
though the holders are not giving out
anv figures, It is no more than natural
that these companies should hold up
their oil. when the price goes up as II
has from $1.35 for pennsylvania crude
in August to s2.15 for the same grade
in December. The point worth noting
is that in any industry, the raw mater
ia, Of which comes from a relatively
small number of sources, any general
advance in price is always greater thaf
conditions seem to warrant, because
tho tendency of producers to hold their
stock for further rise quickly brings
on a shortage.
Far sighted oil men anticipated the
present increase by an observation OF
three main factors. The first and most
striking of these is the immense IN
crease in foreign demand for gasoline.
The European war might be described
as a. battle of motors. Countless motor
trucks, converted omnibuses, touring
cars, racing cars, and a host of speci-
ally built vehicles form the vital means
of transportation and communication
on both sides. The fleets of aeroplanes
and Zeppelins consume immense guam
titles of gasoline, though the allied
blockade has forced Germany to de-
velop several substitutes. AS the
worlds leading gasoline producer, the
United States feels the effect Of this
state of things in greatly increased
export business. The exports have
jumped from an annual hundred mil
lion gallons before the war, to figure
between three and four hundred mil
lion gallons year today. These lat
ter figures represent from 30 to 40 per
cent of our total production, and alone
explain quite rise in price.
The normal domestic demand for
Gasoline also increases at a surprising