Evening star., 1927-05-18
OIL MEN PRESENT
vEX|NG PROBLEM
Administration Confronted by
Program Held Doubtful Un-
der Anti Trust Laws.
BY DAVID LAWRENCE.

The Coolidge administration finds it.
self embarrassed by the problem which
the oil producers have left on its door
step. The oil men would like to have
the Presidents Conservation Board ap-
prove steps which may permit them
to regulate production. To do this
would mean acquiescence in some
thing the antitrust laws might pos
sibly be construed to cover. especially
if the resultant effect is not liked by
the consumer.
And yet the oil industry is in the
throes of an economic situation which
is not unlike that of agriculture
namely, oVerproduction and a declin-
ing market. The administration has
refused to approve the measure. which
had for its purpose a stabiliZation of
farm prices by means of an equaliza-
ton fee, and the indications are that
it will similarly decline to sanction any
move by the oil producers which might
have the effect of increasing prices to
the consumers.
Auto Owners Held as Factor.
Millions upon millions of auto own
ers, lit is recognized. are able by their
voting power to frown considerably on
any effort on the part of the Govern
ment to boost oil prices. The opposi-
tion members of Congress are warn.
ing the administration that any sane
ton which leads to rise in oil prices
will be fought in Congress.
So what can be done? The oil men
find themselves in a serious plight
because more oil is being taken out of
the ground than Is necessary. Also,
the prices being paid for gasoline are
too low in the sense that they do not
cover the transportation charges. Most
people who pay the retail gasoline
price do not realize that the biggest
factor in the price of oil is carrying it
from the we'll to the consumer, and
that there is little opportunity for cut
ting costs in that direction.
0verprOduction Reduces Price.
The overproduction in oil has led to
the reduction of the price TO a point of
danger to the oil industry. That is
the reason why the producers are anx-
ious to prevent an excess of drilling.
The administration would like to see
them succeed and probably will not
scrutiniZe too closely the arrange.
ments they may have among them
selve to refrain from oyerproduction.
But as for Government sanction OF
any plan, the politics of the situation
would appear to make that not only
impossible, but somewhat perilous
just now.
There may be way out in the han
ding of the question as intrastate in
stead of interstate.
In Hands Of Owners.
If the agreements among the own
ers OF wells govern situations within a
State and are so Worded that they
cannot be connected with interstate
commerce. the chances are that the
few States which have laws relating
to the subject would themselves find ii
ineXpedient to prosecute, because these
very States would be interestd in "a
higher return from the oil that is
sold. In other words, the producer
States, where the agreements are
made, are likely to be in sympathy
with curtailed production. whereas the
the consumer States would have re-
course only through Federal statutes,
with which Ii is supposed the oil pro-
duce. will carefully avoid conflict.
tCopyright. 1927