Douglas daily dispatch., 1928-01-11

not based On fact, at least in a
great many cases. 1t was found that
prices set Tor gasoline in many cities
of the United States, including Ariz-
ona, were apparently arbitrary.
"It was learned that in many in
stances, retail and wholesale prices
of gasoline in critics hundreds OF
miles from the source OF supply We're
as low or lower than in cities near
to refineries or within production
fields. The volume OF this evidence
indicates conclusiveIy that in large
percentage OF cases freight rates are
not the controlling factor in estab-
fishing gasoline prices
Investigations also revealed that
many sections of the United States,
equally distant with Arizona from
producing Oil fields and in, some in
stances at greater distances from
refineries, were favored with lower
prices for gasoline than were con-
sumers in this state.
1.-THE various wholesale oil COM
panies supplying Arizona were invited
to submit data and information COW
ering the factors OF cost in supplying
gasoline to Arizona consumers. The
response of the companies was general
and the information which they kind
ly furnished the governors office was
carefully considered.
Producers Use Coast Retail
"One glaring inconsistency stood
forth in the computations OF costs
supplied by the wholesale companies.
1t was the fact that all the wholesale
companies, in computing the price to
be charged for gasoline in Arizona,
took the Los Angeles retail price as
the basis, and by adding to that price
the freight rate charged to Arizona
plus the Arizona state tax on gaso-
line, arrived at the Arizona price.
"It should be readily apparent that
the only logical and reasonable basis
for their computations should lie in
the Los Angeles wholesale price, plus
the freight to Arizona and the Ariz-,
ona state tax. =
ut is the first instance OF which
the governors office mas had in
formation OF the producers in another
state, rather than upon the wholesale
prices charged In the state where the
commodity is produced.
''This procedure of computing costs
of gasoline in Arizona is fundament-
ally and economically wrong. It
would be as reasonable to compute
the charge OF clothing or flour OF
any other necessity OF life to the
people of Arizona upon the retail
price in Los Angeles, plus the freight
to this state.
''This practice of the Oil companies
results in the consumers OF Arizona,
in effect, paying two retail profits
that of Los Angeles and that OF the
Arizona retailers.
Crude Oil Price Effect
"The Investigations revealed little
between market prices
Of crude oil and prices charged for
gasoline. In fact there was curious
divergence from the usual relation
ship between prices OF the raw and
the finished products.
I'm tracing the history over the
past few years OF market prices .for
crude Oil and for gasoline, an ailo-
malouS situation was found 1t was
learned that frequently when crude
Oil was highest, gasoline was lowest,
and when crude Oil was lowest, gaso-
line was highest, especially and par
ticularly in Arizona.
"The Investigations by the COVER
nors office showed that in practically
all instances, retailers OF gasoline in
Arizona were operating upon d four
cent per gallon margin. This margin,
while rendering satisfactory profit
to the retailers, cannot be classed
as excessive where a first class
product and good service are rend-
cred. 1t was found that in some
cities in other states, retailers were
handling gasoline on two cent
But it was also learned
that in a majority OF such cases, the
product furnished the consumer was
of doubtful quality.
Conclusions
"The conclusions reached in the
governors office, after an exhaustive
and thorough investigation OF the
subject are:
"(1) That the consumers of Arizona
are arbitrarily and unfavcrabIy dis
Grim mated against in prices charged
AO1 SooOAA41C,7 W oil CAtGt1b Vi 'USGWCCA
thr .e and four cents per gallon.
~ "It is indicated that the re-
s'jonsibility for such apparent over
rharge lies with the wholesale dis,
tributors.
"(3) Freight costs apparently do
not determine or greatly influence
gasoline prices.
go Market prices OF crude OIL
have little apparent relationship to
prices fixed for gaso ine.
"(5)' The aggrega'e e OF overcharge-
to Arizona consum ers OF gasoline
amounts to a great sum OF money
each year and is a matter OF serious
concern to the peor le OF this state.
The Re medy
"a large percent .ge OF the letters
of protest over case ine prices received
in the governors office suggested
that the legislatU re be called into
special session to cal with the siLua-