Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-04-04
POLICY IS DEFINED
IN OIL DECISION
Government win Demand Re-
spect for Antitrust and
Other Laws.
BY MARK SULLIVAN.

The administration has refused sane
ton TO proposal by the oil industry
that 1t should restrict production by
agreement among its members. That
refusal, directly and by implication.
clarifies and determines group Of
questions In the area Of the relation Of
Government to business.
The first and most important princi.
pie Is that the Sherman law against
trusts and combinations is In full effect
and will be respected. Since respect for
the antitrust law prevents the agree
ment that the oil producers want, 1t will
prevent any similar agreement by the
members Of other industries.
The case for indulgence made out BY
the OIL producers are stronger than any
analogous plea that can be made by
any other industry. The oil producers
were able to say with perfect truth that
their action would have the effect of
conserving the country's stores of oil,
conservation Is major policy Of the
administration, but that and every other
policy bows before the plain prohibition
OF combination as expressed BY Con.
greSs 10 years ago In the Sherman law.
=, Inc defect In the oil plan was that
the agreement would have the effect Of
giving the producers the opportunity
to raise prices or fix prices. That ds.
feet win be the more fatal In any agree
ment proposed by any other ordinary
INDUSTRY into which the element Of
conservation would not enter. In short
II the oil industry cannot make the
agreement 1t proposed. then no indus
Try can make any similar agreement.
Change In Not Expected.
This sustaining of the sanctity Of the
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the law enforcement branch OF the
Government, the policy Of the admins
istration in general and the policy of
Congress. Not only does the anti-trust
law stand, but there Is not anywhere
in the world OF politics and government
any movement to repeal the antitrust
law or reduce Its strength. Such move
ments are frequently suggested In the
world Of business. They are frequently
advocated by economists and other
theorists who say the antitrust law
Is antiquated and out Of step with eco
nomic and mechanical developments.
However that may be, 1t is plain the
anti-trust act Is going to remain what
1t is.
Along with this goes a collateral prin-
ctple. President Hoover, during the
campaign, stated his conviction that
VAC AVNCAAltAAGhk SuQQlA HUI G1ik6kG III
the operation Of businesses OF the sort
now commonly carried on by private
corporations. That declaration evoked
general applause, especially from busi-
ness ana conservative circles. A corol-
larry OF this principle now emerges from
the present attitude about the oil pro-
posal. II private business wants to en-
Joy its present immunity from the Gov
eminent entering such business, 1t must
pay the price OF always preserving COM
petitive conditions. II any industry be-
comes tired Of restricted competition
among persons engaged in 1t, as the oil
industry now is,, and II such industry
wants to end the Inconvenience OF un-
restricted competition, 1t must, as a
FIRST step, submit itself to Government
regulation.
To illustrate, there is a method by
which the oil industry can secure the
permission which IL now seeks for
restricting competitive production. That
method Is by first giving to the Federal
Government the right to regulate prices
charged for oil, gasoline and other
products. This means that there would
have to be action by Congress setting
up some regulatory body to control the
oil industry. The administration does
not recommend this method. On the
contrary the administration, speaking
generally, deplores further extension OF
Federal regulation. The administration
says, however, In effect, that submission
to Government regulation Of prices Is
the cost which any industry must pay,
and must pay In advance, before it can
be permitted to agree to restrict COM
petition among its members.
Partial Way Out II Seen.
All that Is here said applies, Of course,
to the Federal antitrust law. That
law covers only and forbids only such
agreements and combinations as cross
state lines. Consequently the oil in
dustry has partial way out, by which
owners Of oil fields wholly within indi-
vidual States may secure legislation or
other action by such individual States
regulating and restraining the boring
Of new wells. While restriction OF the
boring of new wells might be accom-
plished within separate States by this
method, apparently 1t would be difficult
In many States to restrict production
from existing wells. Most States, though
not all, have State antitrust laws
plainly discouraging to the oil industry
to be told to seek such partial remedy
ais they could In the separate States.