Evening star., 1940-04-21
Oil Assumes Great Importance
In Politics Here and Abroad
Federal Regulation, Latin American Situation,
World Afame With War Thrust
Petroleum Into Limeeht
By Marquis ". Childs

It has been said that the story of con-
temporary politics can be told in terms
OF oil. If that is an exaggeration, it is
certainly true that oil has figured vitality
In almost every important political con-
test in recent decades. This is as true
of the coming campaign as of past ones.
Occasionally the political maneuvers
centering around this vital commodity
are apparent More often they take
place behind the political stage on which
less realistic issues are debated But
almost invariably the private interests
controlling oil are factor. Their power
Is over product almost as essential to
modern life as food-in a mechanical
world all depends in great measure on
oil.
In 1910 oil will be an important issue
IN an, election which may we'll be
turning point in American life. In three
ways it comes into the politics of this
election year.
First, there is the comparatively sim
pie question of Federal regulation of the
industry. Secretary of Interior Ickes has
come out for Federal regulation in the
interest OF conservation. He would police
the INDUSTRY to prevent waste, in an eff
tort to conserve Americas rapidly shrink
Ing reserves. This move has been op-
posed by virtually the entire industry, the
so-called independents along with the
big companies
Latin American Question,
Second, there is the more complicated
question of oil in Latin America, a ques-
ton tied up with the right of Latin
American countries to appropriate for
eigners' property and the whole position
Of the United States south of the bor-
der" The oil companies are very likely
to promote the issue of Mexican expro-
priation, perhaps condemning the pres
ent administration for not taking
stronger" stand. And this will be point
ed not SO much at recovery of Mexican
properties as at retention of the vast
oil stake in Venezuela and elsewhere.
Last, and by no means least, comes the
whole matter of world oil politics as it
relates to the war in Europe and the
American attitude toward the war. The
late Sir Henri Deterding, head of the
Royal Dutch Shell Co., had thrown in
his lot with the Nazis, seeing in them a
last hope for recovery from the Soviet
for the "West," for civilization" for
Shell perhaps-of the great oil fields of
Baku, Before his death a year ago he
was disillusioned in that hope In fact,
a ItY9~ - hi
sionment contributed to his death.
In any event, the oil of Baku, the oil of
Persia and the Far East is one of the
great prizes for which the war is being
waged. Even so conservative thinker
as Calvin Coolidge once remarked, ut is
even probable that the supremacy of
nations may be determined by the pos
session of available petroleum and its
products" Both sides in the present
conflict know that all too well.
Before 1888 there was no effort in the
United States to regulate the oil indus
try. just few years before the New
Deal the great East Texas field came
roaring in and the domestic market was
flooded with oil. The price went down to
Az SCAAVo q OdIlCl 1Ol VHlU-NOllGlIlGuG
crude, less than the cost of production.
Under the royalty leasing system wild
caters were making quick kills, leaving
priceless and irreplaceable deposits of oil
In the earth in such way that they
could never be recovered.
N. r. A. Checked Some Abuses.
Confronted with this chaos, even the
oil operators were prepared to accept
some kind of regulation. They came
under the Blue Eagle of the N. R. A. and
this far-reaching instrument served at
least to keep up the price and prevent
some of the worst abuses What it did
not do according to Mr.. Ickes and other
conservationiSts, was to check the vast
wastage that has gone on almost from
the time when the first we'll in Pennsyl-
vania was drilled.
When the Supreme Court threw out
the Blue Eagle, the major oil interests
then sponsored the State compact idea
for the control of production. Senator
Tom Connally of Texas introduced and
had passed the "Hot Oil' Act, permitting
the Federal Government to halt the in
terstate flow of oil in excess Of the pro-
duction agreed upon by States entering
the compact Under the act, Of course,
the Government has no right to inter-
fere with production within the State.
Whatever the compact system may
have accomplished in the way of regula-
ton, a serious flaw has been the fact
that two producing States-Californi