The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1923-08-18
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PRICE GUT
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Independent Concerns,
BY JOHN CARSON
Times Staff Correspondent


WASHINGTON, Aug. 1S.-What
happens when the oil trust goes to
war? And why does it go to war;
\ To take up the latter question first,
these price-cutting wars are the oc-
casions when the oil trust is able to
embarrass and often to- gobble up the
Independent oil companies. Visualize
what happens to oil before it finally
reaches the gasoline tank in your ma
chine.
First, someone has to prospect for
oil, sink test wells, and get the crude
oil out of the ground. The oil trust
does not do that generany-it is too
expensive. 1t may buy oil wells after
they are already producing and it
may sink wells near others that are
producing, but it does prospecting
only on a very limited scale.
Most of it's oil the trust buys from
independent producers who have to
sell at the price fixed by the trust
because the latter owns the pipe lines
through which the Gil must be carried
to refineries and to markets.
Next Step Is Refining
The next step in the trusts uctiv-
tiles is refining From the crude oil
It gets gasoline, kerosene, fuel oil, and
numerous other products. some of
which are sold to independent market
ing agencies.
The big product today is gasoline,
and the trust has established gasoline
distributing stations all over the
United States They fix the price OF
gasoline to the service station. To
make sure that the service station
viii be good" and sell gas at the
fixed price. the trust maintains its
own service stations all over,the coun-
try
These trust service stations are the
Instruments OF price war. When the
trust declares war on the independent
companies, it Immediately reduces
gasoline prices AT its own service sta
lions. The independents must follow
suit BY reason Of its fine profits
elsewhere the trust can sell gasoline
at Z loss long enough to drive the in
dependents in any locality TO the wall.
Come to Trust Terms
Just AN illustration Of how this is
done. AS this is written. gasoline is
selling for % cents in the city Of
Washington. In Chicago the price
has been reduced TO 16 cents A few
days ago gasoline was selling for the
same price in both cities The trust,
by reason Of it's widespread activities.
can sell I6.cent gas. or sven 10-cent
gas. I'm Chicago until the independents
in that city come TO trust terms.
The reason for this temporary price
in the Middle West is that some Of the
Independent companies are undersell
ing the trust. Any time the indie
pendents do not follow the trust
within a Gay or two in the price adjust
ments. either up or down, the trust
Is in a position to declare war"
Often along State border lines auto
mobile travellers notice there Will be
from / TO 3 .cents difference in gasoline
prices at the service stations only a
mile or two apart on the different sides
OF the State lines. The reason for this
is that the State line is often the Dor
der line between the territories divided
up between the trusts.
Try to Beat Game
Independent owners Of gasoline sta
tons have tried to beat this game by
hauling their own gasoline across the
line The trust beat them by charg
ing them the wholesale prices pre-
vailing in their own territories even
when a lower price prevailed at the
distributing station for dealers in that
stations territory.
During the recent congressional in
vestigation by the La Toilette com
mittee. an attempt was made to find
out Just who got the % cents a gal
lon paid by the consumer for gaso-
line. About as far as the committee
could get was that the gas station
man who sells you your gasoline gets
but two cents a gallon and ofttimes
less than that, while the Independent
refiner rarely gets more than cents
per gallon The other II cents in be.
tween is distributed in such a round
about way that even the oil trust
books would not show who got how
much, and Standard OH officials re-
fused to reveal that particular piece
Of information
The only conclusion that the Senate
committee could reach was that the
consumer paid % cents for his gallon
Of gas simply because the oil trust
wanted him to pay that much.