The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1920-08-09
WAR ON PROFITEERS
Forms First Wedge In Probe of
Gasoline and Fuel Oil
Manufacture.
WILL HAVE BIG RESERVE
Naval Officers Competent to
Take Charge Government
Plant If Necessary.
Csy HARRY 8. HuNr3

Washington, Aug. s.-Uncle SANS
navy has declared war on oil profIteers
Through a contract recently closed
by the department with the cochrane-
Harper Co, OF Boston, the government.
for the first time, will be put in pos
session OF every detail in the cost az
producing oil and OF secret processes
followed In oil refining
With this information the navy ana
the government, viii possess indisput-
able data as to what should be a prom
er cost for both oil and gasoline and
VIII no longer be sat the mercy OF
greedy oil interests.
One year ago, special navy grade
fuel OIL cost the government delivered
at Port Arthur. Tex, SO cents per bar
rel
Today the same oil, delivered at the
same port. costs the navy-and there
fore the public-s2s5 per barrel
Gasoline for navy use. which was
put on the docks at Galveston in tanlg
wagons and drums at 2IH cents
gallon last year. costs 2s cents on the
same docks and in the same contain
ers today.
Secretary Daniels and Rear Admiral
Samuel MCGOWAN. chief OF the navy's
bureau OF supplies. like 20 know why
prices go up. They like 10 know how
things are made
II was this inquisitiveness that led
Daniels to establish a navy powder
plant which demonstrated the govern
ment was paying more than 100 per
cent profit on smokeless powder
bought from the powder trust. The
same inquisitiveness developed that
the navy was paying double a proper
cost for armor plate The resulting
savings on powder and armor plate
have amounted to hundreds Of millions.
So Daniels and MCGOWAN decided
to find out just the why and wherefore
of Increasing fuel oil and gasoline
costs.
On a request for bids on 5000. 900.
barrels of fuel oil made in March
only bids covering 71s.O00 barrels
were received and at prices ranging
from 1855 to $420. depending on points
OF delivery. All were rejected and new
proposals sought
This time the Cochrane- Harper Co.
of Boston, came through with an Of
fer OF 100000 barrels. the fun capa.
city of their plant 1t was proposed
that the company supply the fun
amount OF gasoline derived as a by
product in refining the fuel oil.
Negotiations led to a contract which
gives the department its first real
wedge into the oil industry.
This contract specifies that tho
company shall instruct specially de-
tailed naval officers in every detail OF
fuel oil and gasoline manufacture.
In this way. for the first time. exact
and accurate knowledge of the cost OF
fuel Oil and gasoline manufacture viii
be put in the hands of 1.-THE govern
ment.
In producing these 1000. 900 barrels
Of fuel oil, IL is estimated 1879. 900
gallons of gasoline will be obtained.
OF which 100000 gallons will be ord
mary motor gasoline. at 20 cents a
gallon, and 1885,. 900 gallons high-test
gas" at 22 cents. This as against %
cents now being paid the Standard Of
New Jersey.
But the navy needs less than 5000
600 gallons. So It will sell 10.0O0.CB
TO other government departments al
cost.
Having nailed down the major part
of its fuel OIL requirements, and hav-
ing secured an option on the products
OF an additional 100000 barrels OF
crude on similar terms. the navy was
in position to talk turkey to other
oil concerns which had maintained
prices sky-high.
Result: Standard Of New Jersey.
Standard of louisiana ard Texas CO.
accepted contracts 70 supply the 2.200--
900 additional barrels OF fuel oil neces-
sary o make up the navy's annual re-
quirements. at prices from 50 TO rs
cents under their previous bids
On gasoline alone, the Cochrane-
Harper deal nets saving Of 1880
900 under the low bids received. The
direct total saving, when the lower
costs of gas TO other departments Is
considered. probably win exceed 81
900 900.
But the big gan is in this The navy
has large oil reserves Of its own Un-
der its latest contract, It viii obtain
the full manufacturing secrets and cost
data necessary for opening up a naval
refinery Of its own should the greed
of private oil Interests make that de-
slrable. II will have, IN the officers
trained at the Boston plant. men quail
flied to take charge OF such govern
ment plant