Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-02-23
$3.50, 900, 900 Deal Expected
to Give Rise to Further
Arguments.
CUT IN OUTPUT DOUBTED
BY OBSERVERS IN TRADE
Greater Competition in World Mar
kets Seen During Coming
Weeks.
BY JOHN A. CRONE.

Special Dispatch to The Star.
NEW YORK, February 22-Forma-
ton of the $3.50, 100000 General Pc
troleum Corporation, second biggest oil
concern in this country and third
largest in the world, through a merger
of Standard Oil of New York with
Vacuum Oil Co., clinaxes a. week
marked by falling crude oil and gaso-
line prices and declining oil security
quotations.
The consolidation from an oil trade
point of view, is interesting not only
because Of its effects on world petroleum
markets, but because 1t Is the first
marriage of two Standard Oil units of
the trust dissolved by Supreme Court
decree in 1911 and because it further
breaks down the marketing territories
OF the former trust.
Within the last week average prices
Of crude oil and gasoline reached their
lowest levels in more than year. Dur
ing the same period Standard Oil of
New York and Vacuum Oil shares, as
well as their two chief rivals, Standard
Oil OF New Jersey and Royal Dutch,
respectively, declined to record low quo
tations for the year.
Hope for Better Market.
This merger, which joins the worlds
greatest distributor Of lubricants. Vac
uum, to the second largest American
oil marketer, Standard Oil of New
York, has created hopes in the hearts
OF spectators for a better oil share
market. The combination may hasten
dozen or more pending consultations
The oil trade, however, does not look
for any decline in petroleum produc-
ton or any lessening of competition as
result OF this merger. The combine.
since both Of these firms are outranked
by more than a half dozen producers
in the United States, does not promise
to bring about solution to the present
glut Of OIL
1t is likely to bring about greater
competition in both domestic and world
markets. Royal Dutch Shell, which, 1t
VIII be recalled, battled with Standard
OH OF New York several years ago in
buying Russian crude and distributing
1t in foreign markets, may meet greater
competition. Only recently Vacuum,
which supported New York Standard in
/ It's Royal Dutch fight. made some agree
mentS with the Russian oil syndicate.
Although Standard Oil of New JERSEY
recently acquired Anglo-American Oil
Limited, former foreign subsidiary of
the original Standard OIL trust, through
formation of the Standard Oil Export
Corporation, the Standard Vacuum deal
VIII be the FIRST welding of two former
domestic units Of the trust.
AS TO the permiSsibility of a union
OF two former subsidiaries of the Stand
ard on Co. New jersey" writes Her
bert L. Pratt, chairman of Standard Oil
OF New York, in a letter mailed today
TO shareholders, counsel have advised
that this question was raised before the
Supreme Court of the United States in
the dissolution case and that that court
held that after the subsidiaries had been
freed from the control of the Standard
Oh Co. New Jersey, they would be en-
Titled to pursue any course of conduct
lawful for any one else"
Invasion Moves.
Several years ago the various one-tine
units OF the Standard Oil trust began to
invade each others marketing territory.
standard OF New Jersey bought the
Beacon Oil Co., thereby invading the
marketing area of Standard oil Of New
York. Standard Oil of Indiana. through
Pan American Petroleum, invaded many
Standard Oil territories. Vacuum Oil
which had under the trust been solely q
distributor OF lubricants, became a pro-
ducer Of oil In Texas and q marketer In
this State. Standard Oil of New York
through purchase of General Petroleum
Corporation, California producing
company, invaded Standard Oil of Cali
fornia'S territory. These invasion moves
are now expected to move at a fast pace
as a result Of this merger.
! Copyright, 1907