Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-07-31

1t is difficult at the outset to understand
what bearing this move may have on the oil
situation al home. But in his statement last
week Sir Henri made the connection very clear.
He pointed out that in selling Russian oil in
foreign markets (which can be done cheaper
than by shipping American oil to the same
markets. the New York company and the
Vacuum company are shutting off the mar
kets for American oil products. He uses the
term red herring in referring to the conten.
ton OF the Vacuum and New York companies
that Russian Oil sold In the Mediterranean and
Black Sea areas will displace Ruma nian, and
not American, oil. He bases his complaint, from
the trade point Of view, the fact that In sell.
ing Russian oil the two companies are displac-
ing American products at time when there
Is great surplus production in this country
and foreign markets are needed to get rid OF it,
But there Is another point of view concerned
here which is pointed out by those who are
watching this international game of tockeying
for oil and oil markets. Is it economically
feasible TO drain American Oil resources at such
rate that it must be sold in foreign markets
and at such price that 1t will kill competi.
ton in oil brought from much closer sources
OF production? The question is whether 1t
would not be more advisable to let some of this
surplus oil stay underground by controlling
production, instead Of rushing forward at such
a mad pace to dispose Of it abroad. For this
reason Sir Henri might himself be accused Of
resorting to the redherring method of obfus.
eating the real issues involved. He dwells on
patriotism, but his critics inclined to lay
stress on the patriotic duty of keeping down
American production and conserving Ameri.
can resources. as opposed to maintaining for.
eign markets for getting rid of American over.
production.
X X *
Sir Henri. 1t is pointed out by students of
the oil situation, knows that at the coming SEES.
sion OF Congress much light probably will be
a-t-L
snow that along with enormous overproduction
which is rapidly exhausting domestic resources
America is supplying some II per cent of the
worlds supply Of oil. OF this amount from
to 8 per cent Of the American production is
owned or controlled by foreign interests In
the case OF the company of which Sir Henri is
the managing director, the Royal Dutch group
obtains 81 per cent of it's total production of
oil from America. On the other hand onIv
per cent OF the American companies produc.
ton comes from outside of America in British
or Dutch territory The vital interest OF the
Dutch'Shell group in a market for American.
produced oil is not hard to understand
And as far as the patriotic angle of the
question Is concerned, an angle empha sized
by Sir Henri in his attack on the Vacuum and
New York companies, the situation today finds
an American company, the Standard Oil of New
Jersey which is the most powerful oil company
IN America, allied with foreign company
against two other American companies There
Is an interesting point in patriotism concerned
here.
In the meantime, Walter C.. Teasle pre.i.
dent Of the Standard Oil Co. of New Jersey
mas gone to Europe with the reported object
In view or asking Sir Henri to abandon anv
plan that ne may have for retaliation against
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