Evening star., 1924-02-08
GAS-PR|CE INQUIRY
IS STARTED BY U. S.
Justice Department and Fed
eral Trade Commission Act
on CooIidge's Orders.

Acting on instructions from Pres
ident Coolidge, the Department Of
Justice today set in motion its ma
chinery to go to the bottom Of
charges by Gov. McMaster of South
Dakota, that "allied interests of the
Standard OiT' had cornered the cxude
oil supply and enhanced gasoline
prices. The executive yesterday re-
ccived a telegram from the South
Dakota governor setting forth his
charges and also "a similar message
from Gov. Bryan of Nebraska
Coy. McMasters said in his mes
sage that South Dakota had per
formed it's duty in preventing excess
profits in the distribution business
and called upon the federal govern
meht TO check excess profits in the
refining of gasoline.
Defends Price Chanxes.
Shortly after the announcement
that the President had ordered an in =
curry into the gasoline and crude oil
situation. former Representative
Campbell of Kansas, speaking for the
Prairie Oil and Gas Company. sub
mttted to the Executive statement
giving reasons for fiuctuation of
crude oil and gasoline prices in the
last year. Mr.. Campbell suggested
that the operations Of the economic
law of supply and demand alone were
responsible for the ffuctuating prices.
The Department OF Justice is pre-
pared TO study both excess profits in
the refining of gasoline and excess
profits in the distribution business
me federal trade commission. which
also was directed by the President to in
qulre into the situation, is consider
ing its course in the matter. The
commission already has much data
bearing on the questions involved and
a review of that will be made to de-
tcrmine its further course.
Mr.. Campbell's statement follows:
EARLY in 1898 new oil pools pro-
ducing unusually large quantities of
crude oil were discovered in Cali
fornia. Texas and Arkansas. This
beyond the normal capacity of those
engaged in the industry to handle
the production. This large produc-
tion in the crude product was soon
reflected in the downward price of
crude oil and of gasoline and was
seized upon at the psychological mo-
ment hy the Governor of South Da-
kota as a reason. for reducing the
price of gasoline in that state.
Based ON Big Production.
The action he took last summer
Tas based upon the constantly in
treasins production of crude oil and
at the same time, the reduction in its
price. The price Of gasoline was low
cred throughout the country during
that time because the production
end consumption conditions of the
Oil industry caused it. Within recent
months. the flush fields in California,
Texas and Arkansas have ceased to
produce the large quantities of oil
that oversupplied the market a few
months ago, and the fall off in the
quantity of production has caused,
and is now causing, the rapid rise in
the price of crude oil throughout the
country.
THE price of crude oil to the re-
hners is naturally reflected in the
price of gasoline to the consumers
The upward tendency now is as
natural as the downward tendency
last summer. The law that justified
Gov. McMaster in making his de-
mand for a lower price for gasoline
last summer would justify him now
In demanding higher price for the
san, same product The economic law
ing now"