The Washington herald., 1921-07-18

today on whether the duty of
35 cents a barrel on crude oil and
25 cents on fuel is to remain in the
Fordney tariff bill. A second and
record vote probably will be de-
manded Thursday when the bill
comes up for final passage. regard
less of the result OF tomorrow's
vote.
The fight for tariff on oil has
been and still is one of the bitter
est controversies of any in the nu-
merous schedules of the Fordney
bill. Proponents and opponents are
exerting every effort and swinging
all possible influence to their aid.
II is the only schedule in the tar
iff bill which has been made the
subject of an executive communica-
tiOn. President Harding wrote
Chairman Fordney of the Ways and
Means Committee. urging the de-
feat of a tariff on oil.
After the publication of this let
ter, William N Davis, president of
the Mid-Continent Oil and Gas AS
sociation. wrote letter to the
President, in which he said he had
become convinced that the attitude
of the Chief Executive on the oil
tariff was based upon a misconcep-
tion of the facts"
Extension "Perhaps" Wise.
Davis. in his letter, agreed that
the policy of encouraging invest
ment of American capital in de-
velopment of petroleum in foreign
fields was perhaps" wise, but
deprecated the tendency to consider
seriously repeated statements that
only one-sixth of the worlds pc
troleum reserve was in the United
States.
He denied that there is a worthy
basis for an opinion, much less an
estimate, of the petroleum reserves
under undrilled lands, and declared
that predictions have been made for
thirty years that this country's oil
reserves were nearing exhaustion.
while we have today the largest
production in our history.
81 submit" he said, that a pol
icy based upon so unstable a foun-
datiOn should not be permitted to
crush the many thousands of indi-
viduals and small corporations pro-
ducing oil at home. and to throw
out of employment hundreds of
thousands of men, to the advantage
of ten or a dozen corporations of
great capital whose operations in
Mexico have created utter demoral-
ization in this country. to their
own great ultimate profit"
Fuel in Mexican Oil.
The argument that the United
States should conserve its own
petroleum reserves for use in time
of war or for the development of its
merchant marine was answered by
Davis with the contention that the
needs for these purposes is fuel oil.
in which Mexican petroleum is rich.
and in which the high grade oil of
this country is deficient.
Mexican petroleum contains
about 10 per cent gasoline and
practically all the residue is fuel"
Davis said. American capital now
owns and controls SIS per cent of the
known Mexican petroleum reserves
and 1 suggest that this would be the
logical point for the practice of con-
servation in order to have at hand
in the hour of our need the neces-
sary supply of fuel oil for our navy
chant marine"
Davis pointed out that the aver
age production of wells in the
United States is less than five bar
rels daily, while in Mexico it is
$500 barrels, indicating, he said,
the enormous disparity in cost of
production in the two countries.
The Standard Oil Company" he
said. with it's great financial re-
sources, is storing it's own domestic
production during the period of
demoralization which it has created.
but the independent oil men, who
now own more than wo-thirds of
the domestic production, in their A.
nancial distress must either aban-
don or sell their producing proper
ties at a fraction of their real
worth.
Predicts High Prices.
Thus will control of the supply
of crude oil again become central
lied: the Independent refneries
which have largely increased with
the number of Independent produc-
ers viii disappear and the thing
which always happens under such
circumstances will happen again.
Competition having been re-
moved. Mexican production will
doubtless decline. a natural eco
nomic reaction win set in and con-
sumers may look forward with con-
hdence to> a prolonged period of
excessively high prices"
Analysing the oil situation, in a !