Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-04-03
Attorney General Holds No
Government Agency Can
Approve Law Evasion.
WILBUR READS LETTER
ToPETRoLEUM INSTITUTE
Proposed Curtailment Under Exist
ing Law Would Require Author.
ity Which Is Non.Existant.
BY the Associated Press.

secretary Wilbur today informed ran
reSentatives Of the American PetroIe,,r,
institute that Attorney General M,tch.I,
nad ruled that the Federal OIL co.-
serVation Board had no power tn grant
approval OF the Institutes proposed nro-
duction curtailment.
secretary Wilbur read to the renre.
sentatves of the institute a letter from,
Attorney General Mitchell which an
swered the question whether the Eed-
eral OH Conservation Board couId an
prove the proposed curtailment but
Wnicn declared that the Attorney Gem
erai Is not authorized by law to give
an opinion on the actual legality of the
proposed program. The institute has
asked the conservation board for ap-
proval Of its proposal to curtail oil
production in 1929 to the 1928 level
Holds Authority Limited.
Mr.. Mitchell's letter declared that "it
is clear that Congress has not given the
board any power to grant to any per-
sons immunity from the operations of
the acts Of Congress prohibiting asree-
ments In restraint of interstate COM
merce, and that the botrd has no au-
thority to approve any action which is
contrary to an act Of Congress or to the
antitrust acts Of any State, and that
no action taken by the board would
have the effect of relieving such parties
to such an agreement from the opera.
tons Of antitrust laws"
The Attorney General in referring to
the actual legality of the proposed cur
tailment OF production said that "as the
powers OF the board are limited in this
way. the question whether the proposed
agreement would violate the antitrust
laws Of the United States is apparently
not question arising in one of the
executive department on which the At
torney General Is authorized by law to
give an opinion. Furthermore, it Is not
the practice of Attorney General to give
opinions as to whether proposed action
| by private persons would violate the
laws of the United States
Mr.. Mitchell said that the proceed
ings Of the Petroleum Institute make it
clear that its members already realize
That under existing laws such an agree
| ment could not safely be made without
the sanction Of some official of the
United States authorized to give it,
and. ,"as have pointed out, no such
authority exists"
Board Asked for o. X.
The Petroleum Institute asked the
Federal Oil Conservation Board today
for approval Of its proposal to curtail
! oil production in 1929 to the 1928
| level
E B. Reeser, president of the Petro-
leum Institute, who presented the re-
! quest, told the conservation board that
| ne represented at least 80 per cent of
all the petroleum industry In America
and about the same percentage of the
total production In the entire Western
Hemisphere.
Mr.. Reeser declared that the develop
ment OF petroleum engineering had en-
abled producing companies to bring oil
to the surface at pace undreamed of
few years ago. This scientific de-
velopment he said, coupled with a
keenly competitive practice between
many well organized companies had
brought about deplorable condition
in the industry"
Exhaustion Date Speeded.
"It should be remembered" Mr..
Reeser said. that nothing has been or
can be developed to create new sup
plies-petroleum Is an irreplaceable re-
source-and the use of modern meth
DDS in bringing it to the surface has
only the effect of hurrying the date of
exhaustion"
Mr. Reeser said that IN accordance
with a resolution adopted by the board
of directors of the Petroleum Institute
he had appointed committees to study
conditions and to recommend what
should be done to correct the situation.
The reports of these committees, he
said, had led the Petroleum Institute
to follow the advice which he said the
Federal Oil Conservation Board had
given, to draw up plans which they
submitted to the board today, which call
for the curtailment of this years pro-
duction to last years level.
Suggestion Held Shock.
G. B. Ames, general counsel of the
Texas Co., said that the ruling of the
Attorney General appeared to presup-
pose that the proposed program of the
| institute would be in violation Of the.
antitrust laws. He declared that 1t
| never occurred to any member of the
institute that the proposal was not well
within the law and that "The sugges-
ClOn OF the AL1oAney General comes %
distinct shock"
Secretary Good, member of the
board, asked Mr.. Ames If it did not
appear that legislation would be neces-
sary before there could be any general
oil conservation, Mr.. Ames replied that
he did not think so and that he saw
no reason why the present plan should
be classed as a violation of the anti
trust laws.
Mr.. Reeser said that in the face OF
the ruling of the Attorney General the
oil industry appeared to be "at the
end of the road so far as production
Is concerned. =
In answer to question, the insti-
tutes president said that it appeared
to be impossible to regulate production
through State authorities. He declared
that the jea1ousies which existed be-
tween States foreclose any possibility
Of any real and effective curtailment Of
production In that direction.