The Connecticut labor news., 1922-12-08

which is ,'exceptionally favorable to the Government is the one authoriz- ing Sinclair to furnish the materials and build immense storage at 27 cos tai points. All the materials are to be bought at private arrangements, and the cost of construction fixed in the same manner. Sinclair becomes a purchasing agent for the United States Navy; his purchases and con- tracts will not be accepted from the lowest responsible bidders, as is usual in purchasing supplies or letting con tracts for the Government.
 Furthermore. it will not be neces- sary to ask Congress for appropria- tions.
 Congress has been eliminated from any jurisdiction over millions of dol lars of the Governments property. The lease also provides that the les see shall furnish the Navy its gaso- line, kerosene, lubricants, etc. Cat the reasonable market price, we assume), which gives the Standard a monop- oly on furnishing these articles to the Navy. Independents will not have a chance even to submit bid. These provisions are almost as fav- orable" to the Government as the one which enables the lessee to trade 63c worth of fuel oil for a barrel of crude oil worth $2. so. Apparently every eff fort was made in the lease to pro vide way for the lessee to get all the Governments royalty, oil without paying for 1t.
 Something has been said about the price provisions of the lease. The Secretary announces that the Gov ernment oil experts figured what they thought the leasing company could pay" and that he Jumped their estimates from o5c per barrel to $I, at the risk of wrecking negotiations. We cannot account for this absurd statement. Five cents a barrel on crude oil never wrecked the negotia- tions of any operator of Sinclair's caliber for a bonanza like Naval Re serve Mo- B. Moreover oil at that time was selling in the Salt Greek field at $40 per barrel, and in the Mid Continent fields at $2 per barrel, plus premium.
 We understand there is some pro vision in this lease for the payment of cash for the royalty oil. That the price, if payment is in cash, is to be determined by the highest posted market price offered or paid in the Salt Creek field b ythe Midwest Re lining Company, or in the Mid-Con tinent fields by the Sinclair Crude Oil Purchasing Company, or the Prairie Oil & Gas Company. Note that this does not mean that the highest posted open field price to the Mid Continent fields shall be paid, but instead the price offered or paid by the three companies above men, tioned-all Standard Oil companies. These companies may discontinue business, or have all the production themselves that they may need, and may not in the future offer or pay anything for crude oil, or they may post and offer price far below the market value of oil ,and in addition to their posted price agree, in order to enable them to secure oil, 10 pay a large premium per barrel.
 Why were these three Standard Oil Companies designated to fix the price of the Government oil? The Midwest Refining Company has a complete monopoly in the Salt Creek field and pays exactly what it pleases for the oil It has never paid more than about half the reasonable mar ket value of the product. The lease might as well specify that the price be fixed by the lessee.