The Omaha guide., 1934-11-24

Recently a group Of seven sober
faced men sat down at a table in
the little town Of Kilgore Texas
Three members Of the Federal
Tenders Board. Thre belonged to the
State Tenders Board. The seventh re-
presented the Texas Railroad Com.
mission which among other jobs, re-
gulates the states vast oil industry.
The seven men came together BE-
cause one of the country's most diff
ficult industrial problems had reach
ed q crucial point The problem was
that Of "hot ol"-and it was boil
ing more merrily than at any time
in the past.
The "hot OH problem Is. basieal-
ly. Of Dame Natures creation. West
Texas possesses some Of the greatest
oil field In the world. There gems
to be m ineexhAcstible supply Of
the stuff that grcases and propels the
machinery Of the country. That looks
Ike a very happy situation-but
there's a big fly in the oinment II
Texas and other states were permit
ted to produce Al the oil they can
tho national market would DO elut-
ted and surfeited with petroleum IN
no time-and the prizes would drop
to the vanishing point
States. the-Federaa government and
and responsible oh men. unwi1hzx.
to 9 . necessary industry kepA in
upheavAi-. have been
wrestling with tho problem for years
Crux Of their efforts game In pro-
ration laws. under which the output
Of every oil field is strictly regulat-
Cd. Each we'll is given q quota, which
1t isn't supposed to exceed. Thus mp
ply and demand are adjusted
So far 50 good-the PROBATION
schenas is simple workable and ef-
fcient-h everybody sbides by it..
But everybody doesn't And during
the last few montbhan and increas-
ing number Of operators have through
subterfdgee been evading oil regu-
lations There r the operators who
produce "fot oil'-oil in excess Of
the leal quota which is sneaked out
Of the state, sold at low prices to
anybody who wants It.
Upshot Of these operations vas one
Of the grandest gasoline price wars
ever staged. Hardly a motorist, east
the osky Mountains. was paying
the ordinary price for gas. Service
were dispensing It at prices
ranging down to one cent q gallon.
plus tax. Ind the oil industry. which
has plenty Of troubles on it's hands
at all times, could lock forward to
nothing save choas-and more choas.
Charges flew thick and fast-small
operators blamed big ~operators for
the war, and vice versa But dis
passionate observers place the fault
on neither-it's simply an example
Of the ancient truism that when an
Industry produces more of a product
than people can use, prices are going
to the basement.
The group which met in Kilgore
talked-then acted. The states share
of the wok will lie in determining
what oil is legal. what isn't Then
the Federal government will step in.
using its constitutional power over
all interstate commerce. Federal u
ents will stop shot oil" at the border,
refuse to let it be shipped into other
territories.
1t is said that the "hot oil" men
are really worried now-if this state
federal effort succeeds, it is obvious
that a very profitable racket will be
nipped in the bud. Whit, at this
"Ao-AS IN SdoOlllc war IS SLltl rag
ing, it looks as if it won't be long
before all is aain quiet on the petro-
leum front.
just about everybody who is able
to read knows something of the dras-
tie changes in NRA set-up and policy
that have been taking place for some
months. Pr~ice-fixing has been drop
peed in many codes; business is be-
ing given more power over its own
affairs; the era Of iron handed in
dustrial dictatorship is apparently
coming to an end.
Not so well known are changes that
have taken place or that will take
place, m the second most Important
OF the Administrators bureaus-the
Agricultural Adjustments Administra-
tion, generally spoken of as the AAA.