Evening star., 1936-08-09
Ickes' Reply to Landon Speech
Brings Oil Issue to Forefront
Kansas Governor Has Been Leader
in Fight to Stabilize Industry,
Long in Chaotic Condition.

In 1881. Landon. as an oil operator
and chairman of the Kansas delega-
tion to the Governors oil relief con-
ference, signed a petition to Con-
gress urging imposition of IAN adequate
tariff" on oil imports. or as an alterna-
tive, passage of a law to limit i'm
portations to 20 per cent Of the 1923
total N6,000,000 barrels) and to ex-
clude refined products entirely. State
efforts to control production. the petit
ton stated, had been frustrated by a
flood Of foreign oil.
Landon subsequently supported leg
islation in both chambers which
would have entirely excluded importa-
tions, or limited them as the Gov
ernors' relief conference asked. He
submitted statements at committee
hearings in which he pointed out the
plight of the owners Of small or
'stripper" we'll owners.
This legislation failed, as had similar
proposals by the Independents to re-
strict importations by imposing duty
Of 81 a barrel on crude oil in the
Fordney-McCumber tariff of 1921. and
the Hawley- -Smoot tariff of 1880.
Likewise the Capper Marland bills,
which would have given the Secretary
of the Interior broad discretionary
power over the oil industry. were re-
jected by the House Ways and Means
Committee in June, 1888.
Conditions Were Choice.
Meantime, conditions in the oil In
dustry were chaotic. Production was
running wild, particularly in new flush
fields, and the price of oil in the East
Texas field had gone as low as 10
cents a barrel. The independents
undiscouraged by earlier failures.
turned to the revenue act Of 1882 and
demanded an excise tax on all oil
imported.
The House voted a tax Of / cent
a gallon or AZ cents barrel. and the
Senate cut this in half. This 81
cents barrel tax is now in force. The
proposal was one of the most bitterly
contested in the bill. Arrayed against
it were Eastern interests who wanted
low-priced oil, users of asphalt, i'm
porters, seaboard refiners and others
A Tariff Commission investigation
in 1881 had shown that the average
cost of transporting barrel Of crude
Oil from the mid-continental fields to
New York was from IS to At cents,
whereas it could be brought by
tanker from Venezuela for from 25
to 28 cents. Theoretically, at least,
the impost OF one-half cent gallon
on crude, and commensurate taxes
on its derivatives, wiped out the
advantage of about 20 cents barrel
enjoyed by the importers and put
them on an equal footing with the
domestic producers.
Ickes Made Administrator.
When the national industrial recov-
cry act was enacted, President Roose-
welt signed a code of fair competition
for the oil industry, and named Sec
retary of the Interior Ickes as admin
1strator. The code became effective
on September 1s, 1888, and sought
to limit the supply of oil to the de-
mand.
The allowed production of the
United States, plus imports and with
drawals from storage. shall, as nearly
as may be, equal the current domestic
consumption plus the demand for ex-
port" said the code. The amount
of crude petroleum necessary to meet
such requirements shall be equitably
allocated between current production,
Withdrawals from storage, and i'm
ports, and there shall be equitably
allotted a maximum production to
the various producing areas, proper
ties, and wells located thereon, all as
determined or approved by the Pres
ident."
The code authority soon encounter
ed difficulty from "hot OIL" that Is.