AMERICAN OIL PRICES.

Digger (Invercargill RSA), Issue 3, 1 April 1920, Page 13

AMERICAN OIL PRICES.

PROFITEERING ALLEGED. An investigation of the Standard, Union, Shell and other large oil companies, against which complaints of profiteering have been made, has been started here' by ihe Federal Government. The Government is represented by Mr C. C. Richards, special assistant to the Attorney-General, Mr Palmer, and he came to the Pacific Coast to look into the oil situation, and to see if there were any combinations in restraint of trade punishable under tlie Sherman law. Special agents of the Department of Justice will conduct the inquiry, and will endeavour to ascertain why the companies advanced prices from 2s lld a barrel in some places to 7s 8d. A barrel contains 42g gallons. Mr Richards said: "Thefe has been a withdrawal of 11 of the 22 steamers carrying passengers in the vicinity of Seattle, They have been compelled to jease operations on account of the increas in the price cf oil. Passenger fares have been advanced, and tlie people are eomplaining. When the secretary of the navy advertised for 14,000,000 barrels of crude oil for tl^e use of warships there was a number of bids, but the figures were all the same. ' ' It is argued on behalf of the Seattle Chamber of Commerce that the prevailing price sliould be cut in two. A price of 3s 4d a barrel at Los Angeles would save the Pacific (government anti private) more than £10,000,000 a year. True, it would take nearly £4,000,000 off the annual profits of the Standard Oil Company, but it wrnuld still have £5,000,000 left. There is a strong feeling among oil men that the inquiry is likely to have been instituted by men with a bias against the oil industry. .Tlie most striking thing is the positive staternent made by Mr

Richards that the existing shortage of oil in California is no excuzs whatever for rahing the price. It must mean, declared operators, that the Department is attempiing by its own fiat to abolish the law of supply and demand , October statistics show tliat the State was short of market calls by 936,930 barrels. Although the price has remained stationary for 18 months, the cost of production lias been greatly enhanced. Labour unionism has invaded the fields and refmeries ; hours of labour have been cut from twelve to eight, thus necessitaiing three shifts instead of two, and wages have been raised until now drillers get a mmimum of £l 19s for eight hours, while the lowest semi-skilled labourer receives a minimum of £1. The price of field and refinery supplies have gone up to an abnormal extent.