Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-04-03
OIL FIRMS ASK ]. I.
AID IN OU7PUTCU
Seek Cooperation for Cur
taiIment of Domestic
Production.
BY DAVID LAWRENCE.

Worldwide restriction of oil output
having been agreed upon by the oil
industry of the principal producing
countries, the American companies to-
day are seeking Government co-oper.
alton In a program Of curtailment Of
domestic production.
This cannot be accomplished under
the Sherman antitrust law in the opir.
ion of the Attorney General, but 1t re.
mains TO be. seen II the same object
cannot be accomplished In another way
The Federal Government already has
granted permission to American indus
try 10 AK prices and to regulate the
quantity of export. This comes under
the Webb roMerene law.
The pooling Of American producers
OF copper In the export held has beer
going on for q long time now under
that law. And the copper industry
does not suffer from overproduction oil
home largely because the intimacy re-
CURED to regulate export makes possible
. full realization BY the producers OF
what overproduction will mean to price
maintenance.
Always the Wildcattcr.
But the oil industry cannot as YET
control itself. There are elements
within its ranks that will not be
afienable to restriction and there Is
always the wildcatter who brings int
production wells that force the adj
jacent owners to drill lest there be a
subterranean drainage Of ones property
The Federal Government is unwilling
10 bring about compulsory cooperation
and restriction of output lest the con-
sumner some day rise up wrathfully and
turn an administration out of power
because Of the rise in the price OF
gasoline for his motor. And the Fed
eral Government does not want to take
the responsibility for price regulation
any more than the industry is ready
as yet to ask It. though the principle
of price-fixing as applied In the trans
by some oil men a. ultimately appli-
cable to them II the industry II seri-
ously damaged BY failure to curtail
production.
Since the Interstate Commerce Com.
mission fixes the rates Of Transports
ton, II also by law permits certain
fair return on the investment. The oil
companies that have failed TO make
"fair return" would not be averse to
Government regulation II 1t insured
them fair return. The theory Of reg
ulation would have to come under the
conservation powers Of Congress plus
the interstate commerce features OF
pipeline carriage Of fuel
Aim Not Quite Clear.
Just what the oil executives hoped to
accomplish by their conference with the
Federal Oil Conservation Board Is not
altogether clear on the surface, though
1t is known they did not expect Federal
permission or acquiescence In their plan
to restrict production.
They can: however; 60 TO the otl-
as they have from the regulatory
bodies In Texas, Oklahoma and Cali
fornia to curtail production. The pub
Lefty they will get by the expression
Of sympathy from the Federal Govern
ment with the general purpose OF con-
servation may help crystalline opinion
In the States, and also may focus the
attention Of dissenting elements In the
oil world on the necessity Of restrict-
ing production. Also II Ia an tndica-
tion OF good faith 10 the foreign pro-
ducers ii the American oil man show
they are exhausting every opportunity
to bring about restriction OF oil pro-
duckion In the United States itself.
other problems are involved. too, IS, for
instance, the possibility OF tarin being
erected against foreign oil, II the I'M
ports are not kept down.
This, 1t II expected, however, VAL ne
taken care OF by the Worldwide agree
ment on voluntary restriction OF produc-
ton. Just how far the Webb Pome-
rene laws provisions can Be utilised 70
keep down American production % 2
part OF an export or import arrange.
ment Is dificult TO desermine and VIII
not be known until. the American Gov
eminent has rendered legal opinion
on the subject, something that may be
forthcoming when the conferences thii
week have been concluded.
tCopyYieht, 1927