Smooth Oil

Sir Henri Wilhelm August Deterding, K. B. E., head of Royal Dutch Petroleum Co. and Shell Transport & Trading Co., Ltd., sat at a large mahogany table and ate an Edam cheese sandwich. Around the same table some 20 potent oilmen sat, discussed petroleum and how not to produce too much of it. To Sir Henri, munching his pungent delicacy, might have come memories of the days in which he and John Davison Rockefeller would have constituted an extremely effective quorum on world oil-questions. What battles he had had with the old Standard Oil! How well he remembered the time when, after Stand ard had given away kerosene lamps throughout China, in order that the heathen might learn the advantages of kerosene lighting, he had stepped in and irreverently undersold Standard, thus filing free U. S. lamps with cheap Royal Dutch kerosene. Well, the old Standard was broken up now -- its pieces, in fact, were all around him: Herbert L. Pratt, Standard Oil of New York; W. T. Holliday, Standard Oil of Ohio; Edward G. Seubert, Standard Oil of Indiana (an absentee was Col. Robert Wright Stewart) ; Walter Clark Teagle, Standard Oil of New Jersey (one good Standard friend of Sir Henri's) ; and, at the other end of a long distance telephone, Kenneth R. Kingsbury, Standard Oil of California. Present also were Harry F. Sinclair, of Sinclair Consolidated, Ralph Clinton Holmes, head of Texas Corp. and of the oil committee that would have to superintend the carrying out of whatever oil-restriction agreements were made, and many another. It was a notable company that American Petroleum Institute had assembled in the big director's room that is dominated by Artist Boynton's portrait of A. P. I. Founder, A. C. Bedford. Not for nothing, thought Sir Henri, sprinkling cheese-crumbs, bread crumbs on the grey carpet, had the Isle de France rushed him across the Atlantic and docked him the day before.

As to the meeting itself, its outstanding result was an agreement to restrict 1929 oil production in North and South America to approximate its 1928 output of 1,075,369,847 barrels. Output of various companies will be pro-rated by five regional committees; restriction is apparently on a voluntary "gentlemen's agreement" basis. Had the U. S. oilmen been European oilmen, they might have drawn up a very solemn legal compact involving fines for overproduction and compensation for underproduction. But despite the fact that President Coolidge in 1924 appointed a Federal Oil Conservation Board which consistently recommended co-operation within the oil industry as a cure for over production, the U. S. tycoon is still a little nervous concerning production agreements which might provoke anti-trust proceedings. So everyone simply shook hands all around and Edwin Benjamin Reeser, head. of A. P. I., also of Barnsdall Corp., Tulsa independent, said: "For the first time in the life of the Institute a child has been born."

Though the meeting closed on a note of good-fellowship, it was rumored that Sir Henri, watchful of Shell,* U. S., Mexican, Colombian and particularly Venezuelan interests, had at one point seemed quite unable to reconcile himself to the A. P. I. program. After the close of the conference he announced, however, that he would give the movement his "100% co-operation." He added that he was at the meeting in an unofficial capacity as observer and A.P.I. guest.

Oil men hope that the 1928 production figure will hold for 1930 and 1931 as well as for the present year. Head of the General Conservation Committee which worked out the A. P. I. program is Ralph Clinton Holmes, President of Texas Corp. (Texaco products). A potent and rapidly growing "independent" (i.e., not a fragment of the dismembered Standard), Texas Corp. in 1928 sold 26,744,806 barrels of gasoline. an increase of 36.5% over 1927 and during 1928 increased its land holdings from 2,728,000 acres to 5,475,000 acres. President Holmes went from school room to oil company (Standard of New York, 1895), has been identified chiefly with the refining end of the oil industry, is co-inventor of the Holmes-Manley process for "cracking" gasoline.

*The Shell Transport & Trading': Co., Ltd., is so called because its Founder Sir Marcus Samuels once conducted a seashell business.