Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-08
RISE IN OIL PRICES
IS LAID TO HOOVER
Murray and Sterling Adopt
Idea Wilbur Advanced to
Curb Market.
BY FREDERIC WILLIAM VILE.

| BY FREDERIC WILLIAM VILE.
| Oil, which smeared the Harding adj
ministration with indelible stains, is
now accounted the field in which the
| Hoover administration has accom-
plished one of its major constructive
achievements. The circumstance that
| oil is selling today around IS cents a
! barrel instead Of the Is cents 1t was
fetching not so many months ago Is
| acclaimed as the direct result of the
| policy OF conservation and opposition
| to overproduction initiated in March,
| 1929, as the very first public policy
announced by President Hoover.
! The oil industry Is not walloWing
in prosperity with Ascent prices Not
| until barrel is selling for 81, the IN
duStry claims, will conditions approach
point at which real profits can be
realized. But a 200 per cent increase
| in middepression times is q develop
ment which has put producers in Cali
| fornta, Oklahoma, Texas and Kansas
in a better humor than they have reg
lstered for two years. They contem-
| plate with confidence the gradual re-
turn OF the good, old days"
Credit Given to Wilbur.
DR.. Ray Lyman Wilbur, elongated
college president and medical man who
was pitchforked into the Secretaryship
OF the Interior straight from his sane
tum at Stanford University, in 1929,
! took office blissfully ignorant of the
| oil problem. Yet today the industry
is inclined to accord DR.. Wilbur chief
| credit for pulling it out of the distress
into which it had fallen as the result
OF wholesale and senseless overproduc-
| ton. When the Hoover administration
took hold two and one-half years ago,
oil was selling at SIPS a barrel, but
! overprcduction was bearing down
heavily on prices. Ten times as much
oil as the country needed was being
produced. The whole world was del.
| uged with oil.
Nine days after DR.. Wilbur became
| Secretary of the Interior-on March
IS, l929-he issued an order through
the General Land ONCE to accept no
further applications for permits to
| prospect for oil and gas on the public
| domain. The rejection Of all pending
| applications also was ordered These
instructions were in accordance with
President Hooyer's opening official
statement that there would be COM
| plete, conservation of Government oil
in this administration" The prociama-
ton of this policy caused CONSERVATION
and protests, but the new policy was
resolutely adhered to.
hCttAeIn6u f1IIS EIeI0 CuEDe0.
Three months later the Hoover
Wilbur conservation policy bore fruit
in significant agreement covering the
Middle Dome of Kettleman Hills in
California. The Kettleman Hills field,
| which was discovered in 1923 by
Harris Hammond, son OF John Hays
Hammond, is described as the richest
oil field ever found in the history of
the world-richer even than the South
African mines Of gold whence John
Hays Hammond derived fame and
fortune.
Half of the Kettleman Hills field is
Government land. Secretary Wilbur
determined to make it a model of how
| an oil field should be developed so as
to avoid wastage of output through
| overproduction. To that end, Wilbur
concluded an agreement with group
or private companies whereby a pro-
gram of deferred development" was
adopted, looking to orderly and ra-
tional production in strict accordance
with consumption needs. They entered
into an understanding to delay tapping
the great reservoir until both gas and
Gil could be taken out without Cutting
the market. The Kettleman Hills field
Is the East Texas" of the West. Last
September the Interior Department
off1cially announced that the field had
finally been "harnessed." 1t is now
scaling its production down to a total
yield OF $4,000 barrels a day, where
1t might produce many times that
amount.
Murray Tries "Wilbur" idea.
Just about the time Secretary Wilbur
was moving to prevent these gigantic
southern California deposits from be-
| ing Squandered and contributing to fur
ther depression Of oil prices, the Amer
lean Petroleum Institute Gin June, 1920,
appealed to the Interior Department
Tor the right to let its members, the
great oil-producing corporations, grap-
| pie with oVerproduction in their own
way. The result was an opinion from
| Attorney General Mitchell saying that
the proposed plan would be in violation
OF the Sherman antitrust law. There
upon the oil people came to Washington
| again and in fearful accents told Sec
retary Wilbur that they were at the
end of the road" that the jig was up
and that ruin stared the Oil industry
| in the fare.
Secretary Wilbur didn't see things
through these gloomy spectacles. In
Vlted to participate in a meeting Of the
| Oil producers at Colorado Springs dur
Ing the ensuing Summer two years ago.
| the Secretary of the Interior succeeded
|
| the idea that what the Federal Govern
ment couldn't do or permit private pro-
oucerS to do, in the direction of arbi-
/ trary curtailment of production might
! be done by the sovereign States under
their practically unlimited local police
| powers.
The Wilbur idea caught on gradually,
II not at once. 1t did not ripen into full
fruition until this year, when, under
the vigorous leadership of Gov. Alfalfa
Bill" Murray, Oklahoma, that oil-gush-
ing State, proceeded to show just what
could be achieved in the way of keep
ing unrequired oil underground. al
falfa Bill had to call out the Okla
homa State Militia and scatter it
among the oil fields to prevent the I'M
necessary working of wells, but even
tually his Strong-arm methods obtained
the desired result. Murray's one-time
idea was that production should be
| choked off until oil was selling at 81 a
| barrel, but he did not stick to that
program.
Output Now Below Demand.
Soon after Oklahoma demonstrated
what could be accomplished, Gov. Ster-
ling of Texas followed Oklahoma's ex-
ample, and chaotic conditions in the
great Lone Star State oil fields soon
REVEALED signs of improvement. Prices
now were steadily mounting, until at
present they are three times as high as
they were earlier in 1881. Meantime
the oil industry in the great mid-con-
tirent oil belt, including the fields of
Oklahoma. Texas and Kansas, reached
an ALLEGATION agreement for the regula-
ton Of production in accordance with
market needs.
Production today is authoritatively