Evening star., 1927-05-13
GIL INDUSTRY ASKS
GOVERNMENT AID
{ observation Board Urged to
Solve Problem of
0verproduCtion.

The influence of the Federal Gov
>inment in aiding industry to put its
humse in order is exemplified in the
p neal Of the leading oil producers
;at some practicable plan be worked
r,t bv the Federal Oil Conservation
oard to prevent the overproduction
hich today is causing anxiety in the
I world.
The farmers Of the West have ap-
called for aid to take care OF their
portable surplus. The cotton pro-
1cers obtained Government help in
a overproduction which attended
lem in recent months. And now
% oil industry, faced with declining
tices and a continuance OF over
nnduction, asks help at Washington.
Secretary Work of the Department
the Interior as chairman of the
'aderal Oil Conservation Board re-
,ived the appeal and promptly asked
alter G. Teagle. president OF the
andard Oil Co. of New Jersey,
I'd w. S. Parish. former president
the American Petroleum Institute,
no had addressed their letter 10
N, to convene as many of the lead
: of the oil industry as possible IN
Wv York at once and formulate
. an Tor the GONetDificilL W S-ANtA1AAAH~'
Reduced Drilling Urged.
one of the proposals made by
assrs. Teagle and Parish was that
crested producers instead Of pur-
,asing full interests in definite sub
visions of so-called wildcatters'
rcks of acreage should buy undi-
ed fractional interests in such
'ocks. In this way it is hoped that
e forced competition in drilling un-
n the present system will be rem
red unnecessary and much more
{ the oil kept in the ground until
production is necessary and deslr-
hle.
Secretary Work calls attention to
'ederal and State laws relating to
greements to control production, but
'essrs. Teagle and Parish have an
;cipated this difficulty by pointing out
nat such a relatively small part of
ae total production would be with
I'D by concerted action of various
-oups that no mOnopolistic control
1Ild really be charged. In other
ords, the oil men call it voluntary
p.operation. drawing an analogy
)mewhat to the way in which a
:~oup of farmers might group them
md agree among themselves not to
n,ant more than certain acreage
aach year.
Unless all the co-operatives enter
into agreements with each other as
% prices, the Federal Government
',as held that the concerted action
# the co-operatives in regulating
their own production is not vio-
sation of the antitrust laws.
Conflict Hinges ON Wording.
This very thought that monopolis-
&c control need not be feared was
expressed by the Federal Oil Conser-
Fation Board in its last report, which
i a5Ced that cooperative regulation of
either the development or the opera
tlon of a single pool could control only
3 small percentage of the country's
total production"
In other words, the possible con-
1ict with Federal statutes viii de.
aend on the exact way in which
greeinents are worded to refrain
from purchasing wildcat" blocks ex-
1apt under certain conditions and to
refrain from drilling. When the oil
producers have drafted a plan, the
secretary of the Interior viii submit
It to the Department OF Justice for
an opinion.
Then it viii become necessary for
The oil industry to persuade its own
members to adopt the scheme of their
,wn volition and the Government
nay be factor in urging the adop-
ton of such a plan if all viewpoints
,an be reconciled as to legality.
fCopyright 1927