The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1921-05-27
FINANCE ID
- AND
BUSINESS
~ b. C. FORBES.

DO0
Il By b. c. FORBES.
Is Mexico running dry OF oil?
Il Are securities OF Mexican oil COM
panies doomed? Are thousands upon
thousands of investors who have put
hundreds OF millions of dollars into
Mexican oil properties facing ruin7
/ The one man in all the world best
qualihed to answer these questions,
now exercising SO much concern In
Wall street, throughout the country,
and all over the world. says NO." and
says 1t very emphatically.
FIRST TO LOCATE MEXICAN OIL.
This man was the very first to To-
cate and develop oil in Mexico on a
large scale. He journeyed to Mexico
years ago (more than twenty on a
prospecting expedition. saw things
with his own eyes, became convinced
that there was oil there in abundance.
and backed his. convictions first with
his own ample means and later with
additional capital by scores Of mil
liens.
His Judgment proved sound, Oil
was found in abundance-in greater
abundance than anywhere else In the
world. After huge expenditures his
company began shipping oil from
Mexico in enormous quantity, and II
has been shipping 1t in enormous
quantity ever since. r..
More: He declares that II will 60
on shipping oil from Mexico in enor-
nous quantity for many years.
Is e. l.. DOHENY.
This man is Edward l.. Doheny.
founder and builder or Mexican Pc
troleum. Pan-American Petroleum and
other important oil companies, the
largest producer OF oil in the whole
world-last year his Mexican COM
panies alone produced nearly thirty,
million barrels.
His fleet OF ships carries the oil in
vast quantity from Mexico TO this
country and across the Atlantic.
Having known Mr.. Doheny for many
years, Isasked him to tell very frank
ly the fun facts concerning the salt
water scare" which has figured 30
prominently OF late in the newspa-
pers, and which has caused Mexican
oil shares to fluctuate widely on the
stock exchanges.
| Here is Mr.. Doheny's reply:
| Every property or enterprise has
| three values: it's earning value, its
intrinsic value, it's market value. the
| last measured by the price ruling for
it's securities.
THE first two do not govern the
third in times of financial stress, be-
cause the market value of securities
10 then dependent largely upon the
| ~ n Ia 10 inn ~
ment purposes. when people are
pressed for funds they often sell their
securities, and IT Is their asking price
that hxes the quotations.
| las to the first two forms OF
value behind our companies stocks
there has been an increase right
along until this year.
There Is stin an increase in the
earning value because some old.
lcw-priced contracts have expired
and our contracts this year average
higher than during any previous
year.
But 'the market price and the
consumption both today have the
| same effect upon our companies
that they have on every other cor
porations assets. The value of any
company's assets is determined by
the market price thereof This is
true OF goods on the shelves, stand
ing trees in the forest. coal. OIL
copper or other mineral under
ground.
Figured on this basis every COM
panys assets have deprecated, ex-
cept so far as they have been i'm
creased in quantity to offset the
price depreciation. Some oil com
panies have acquired proven or
nearly proven oil territory in such
additional quantities that total as
sets may be greater than they were
when the unit or calcuIs;!cr chat
is, the market price, was higher.
We believe this is true Of our
companies.
1T is only through the decline
In the marke price which they must
take IL they have to sell. that our
security holders are suffering from
the present conditions.
Our recent acquisitions have more
than counterbalanced depreciation
through exhaustion and through de-
crease in market prices.
II believe that the market price OF
oil and other staples will recover
rapidly. ] feel particularly confident
that oil will ultimately regain its
former value.
"SALT WATER SCARE"
you asked me about the salt wa
ter scare There is no salt water
scare in Mexico. but one seems to
have been very energetically promul-
gated in the press OF New York and
elsewhere.
There Is and has been for many
years in Mexico. as in all oil fields.
constantly recurring evidences of the
ultimate exhaustion OF oil wells and
fields. Exhaustion in the American
oil fields often evidences itself by
decreasing production owing to the