Not Guilty

After five years of waiting, the U.S. oil industry finally got a lower court verdict on suits brought against three of its big gest companies by the Government. The defendants: Jersey Standard, Socony-Mobil, Caltex (owned jointly by the Texas Co. and Standard of California) and six subsidiaries. The charge: price-gouging to the tune of $111.5 million on Middle East oil supplied to Europe under Marshall Plan financing. Between 1949 and 1952, the Government charged, the companies sold oil to the Economic Cooperation Administration at $1.75 per bbl.

overseas, while billing their own sales to the U.S. at $1.43, thus breaking the ECA regulation that ECA oil had to match the "lowest competitive market prices." Last week, in a Manhattan courtroom.

U.S. District Judge Thomas F. Murphy ruled that Caltex, the only one of the three so far brought to trial, was not guilty. At exactly the same $1.75 price, said Caltex, it sold twice as much oil on the free market to willing European customers as it sold through ECA. Ruled Murphy, throwing out the Government's claim to $65.7 million in damages: "The defendants' proof showed beyond contradiction that the prices financed by ECA were in fact the lowest competitive market prices. Throughout the entire period ECA continued to finance at such prices, which perhaps more than anything else indicates ECA's acknowledgment that the prices charged were in fact the lowest competitive market prices." The Justice Department would not say whether it will appeal the case, or even whether it will bring Jersey Standard and Socony to trial. But it may well be that Judge Murphy's strong opinion knocked the bottom out of the barrel.

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