The Waterbury Democrat., 1939-08-21
Oil We'll Shutdown Bolsters F.D.R.'s Move For U. 5. Control
Ickes Backs Presidents Control Bill
By WILLIS THORNTON
 NEA Service Staff Writer

ANASf1 JOAVhNG Gw9Ah VUAhsSA
 The spectacular shutdown of southwestern oil wells by order of state governments is being watched more closely by several pairs of ob- servant eyes than it is by the public generally.
 John o. Public knows that there are nearly six weeks supply of re- fined gasoline in storage and enough crude oil for almost another three months. He knows he could stagger along for four months or So even if not single barrel of oil were pro- duced.
 So he doesn't worry about a short- age as yet.
 But there are other eyes watch ing the southwestern situation more closely Some of them belong to Congressman w. P. Coles subcom- mittee of the House Interstate Com merce Committee. This is the prin- ary congressional committee on oil, and one of the last acts of the ex- piring Congress was to charge 1t with an investigation of the oil ulUuSIIy.
 It is to report to the new Con- gress in January, where its findings will be brought to bear on bill pro- posed by President Roosevelt just before the end of the last Congress for federal control of the entire oil industry in the interest of conser- vation.
 1CKEC RAcxc
 REGULATION MOVE
 The other pair of eyes, twinkling in this case, belong to Interior Sec rotary Harold Ickes, who attempted oil control under the NRA and has been an active proponent of 1t ever since.
 The southwestern shutdown is, in part at least, 8 contest between states like Texas and Oklahoma which have operation, and states like California and Illinois which do not.
 Proration is simply a system by which a state authority estimates the demand for the states oil, and then parcels out quota of that market to each producer, limiting his production to this fixed amount.
 The present controversy, though its roots go deep, began June IA, when Harry Sinclair attempted to lead all retail gasoline prices upward by announcing price rise.
 He told the public that at present gasoline prices there just isn't any money in it for refiners and distri- butors. Some of the larger compan- ies failed to follow the Sinclair prices upward, and he was compelled to take the other tack of reducing the rrice of crude oil to the producer.
 It was easier to get followers for tiis lead, and the mid-continent shut-down is an effort to focus at- tention on the low price of crude and try to force 1t upward again.
 Typical of the unrestricted com petitors which Texas faces in its new move is Illinois. Two years ago. Illinois oil production was' negli- gible 17,000 barrels a day. Today it has reached rate of nearly 300,0 ,000 barrels a day, and the first state regulations of drilling are just going into effect. Illinois oil is easily drilled and close to populous mar kets It has been for the past year a boom field, with all operators out to "get theirs" quickly.
 THOMPSON URGES
 PRODUCTION HALT
 Illinois is a member of the Inter state Oil Compact Commission on which Ernest O. Thompson of the Texas Railroad Commission urged a cessation of production in all mem- Der states. But Illinois has now no power to halt its own production even if Its observers on the compact wanted to do so.
 tween producing states, with some carefully husbanding and regulating their oil resources and others per- hitting them to be tapped almost without restaint, is expected to present to the Cole committee a powerful argument for federal regu- lation across state lines.
 It is already being suggested in the southwestern field that state pTOIdClOIl Hldy HUI US tilC nAAoWCA " the industry's problem, since oil from those closely-regulated fields is being forced off the market by cheaper oil from unregulated fields
 The test now being carried or will indicate whether or not inter- state action is able to stabilize prices
 If not, the Cole committee and the federal government proponents of federal regulation of the industry will be given powerful argument All forces in the oil industry are trying to avoid this, and there have been some efforts to settle the mat ter in industry wide conferences be- tween producers and distributors Failing this, the industry is look ing federal control squarely in the face