The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1923-08-17
MONOPOLY
CAUS E OF
GAS PRICES
SideIightS Show Trust Needs
Profits for Inflated Stock
Dividends,
BY JOHN CARSON,
Times Staff Correspondent

ET7 ASHINGTON, Aug. 17.-Before
Wt this gasoline war broke loose
in the Middle West, consumers
had been paying from 20 cents to 20
cents a gallon for gasoline for almost
ten years. The one exception was
California where consumers supplied
from the local fields were favored by
some measure of competition existing
there in the oil industry.
Why these high gasoline prices.
when back in 1913 gasoline was sell
ing at cents a gallon generally
throughout the United States and
corporations were making wonderful
profits at that price?
Here are some side lights on the oil
industry which illuminate somewhat
the gasoline war and what is behind
1t.
Capital Stock Inflated
Congress Investigated gasoline
prices through the La Toilette com
mittee last session and found that
gasoline was selling at % cents a gal
lon instead of 10 cents solely because
the oil trust needed profits to pay
dividends upon inflated capital stock.
To get an idea of the meaning OF
the high gas profits, statistical ex-
perts, on the basis of information
gathered by the La Toilette commit
tee, on the basis of information
gathered by the La Toilette commit
tee, estimated the average motor car
owner is paying at least $50 year
tribute TO the oil trust
Company Is Dissolved
What is this oil trust?
Back in 1911, the United States Su-
preme Court held that the Standard
Oil Company of New Jersey was
trust and should be dissolved.
The Standard Oil of New Jersey
was the parent or holding company
that controlled all the other Rookie
Teller companies, and in court 1t was
proven the company manipulated the
oil industry to keep down competition
and to control prices.
AS the court ordered. the company
was dissolved
Subsidiaries Organized
What happened?
Immediately various subsidiary
Standard Oil Companies were organ
lied. There was the new Standard OF
New Jersey, the Standard OIL of New
York. the Standard Oil of California.
the Standard of Indiana and the
Prairie Oil Company. and now there
are almost a score Of lesser concerns
In the Rockefeller oil family.
These new oil companies divided up
the territory Of the United States and
then of the world. They divided IL
both as to buying oil and as to selling
gasoline and other oil products. Thus
they wiped out competition among
themselves.
The Supreme Courts order dissolv
ing the trust was carried out in the
letter. but 1t meant nothing in the
operation of the oil trust
Only $1,S79,125 In Cash
Standard Oil Company of New Jer.
sey-Common stock issued was 4e8,-
5S7125. OF this. only s1,379125 was
cash invested, seS 900 900 was issued
for property. and the remaining $685.
S69,70 was excess profits re-invested,
or stock dividends. In addition, the
company paid average cash dividends
over last ten years Of 26 per cent. Fiji
teen officers of this company took
S1,070,000 in salaries last year.
Indiana Company
Standard Oil Company of Indiana
Total common stock was 1920, 600, 900.
OF this, only S1,700.OO0 was cash in
vested and $S4 300 900 for property.
The remaining 1884, 900. 900 was from
excess profits reinvested. or stock div
idends. In addition. the company av-
eraged more than % per cent in cash
dividends over each of lastiten years.
Twenty-six officers took $500 900 in
salaries last year.
Is Per Cent Dividends
Standard Oil Company of Ohio
Common stock issued was s14, 900. 900.
OF this only $500 000 was from
cash invested and $10.500. 900 from
excess profits reinvested, or stock
dividends. Company, in addition.
paid average cash dividends over last
ten years of not less than IS per
cent. Five officers in this company
took $79,9S0 in salaries last year.
Gulf Oil Corporation, one of Sec
rotary Of the Treasury Melons finan-
cial babies. The total common stock
is 5000, 900. Only 100000 Of
this was from cash investment. The
remaining $4,000 came from ex-
cess profits.
The Texas Company Common
stock issued was $164 100000. OF
this only s22 100000 was from excess
profits reinvested, or stock dividends.
Cash invested was S136,S50,000 and
stock issued for property was $5,-
100000 Company averaged cash
dividends in addition Of about 10 per
cent over last ten years.