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article number 615
article date 12-01-2016
copyright 2016 by Author else SaltOfAmerica
Join the Protest Against "Big Oil" . . . the Rising Price of Gasoline, 1916
by Hoosier Motorist magazine staff

From the Volume 4, 1915-1916, Hoosier Motorist magazine.



The price of gasoline has advanced so rapidly and already reached so high a point as to warrant a determined effort on the part of all organizations of motorists to act concertedly against the big oil interests in the effort to secure a recognition of their strength in battling for lower prices on the prime necessity of motoring.

The present high prices with hints as to further advances, affects not only motorists, but all users of internal combustion engines, including manufacturers, merchants, farmers, transportation men and others.

It is a very serious situation for all, and appears to be largely an artificial situation brought about by the oil interests for the purpose of swelling their already large profits.

The fight started when the Automobile Club of Springfield, Massachusetts, offered the following resolution:


"WHEREAS the matter of the continued and rapid advance in the price of Gasoline is giving the members of this club great concern, and

"WHEREAS it has been represented to this club that said prices are unreasonable, and that the Standard Oil Companies are influencing crude oil production, and manipulating crude prices, over which they have control, and

"WHEREAS said prices have reached such a point as to unreasonably restrict or make prohibitive the use of Automobiles in which large sums of money have been invested, and

"WHEREAS it is greatly feared that with the market cornered, at this season of the year when consumption is only equal to about one-third of the normal summer demand, that still greater extortion is contemplated by said Standard Oil Companies.

"THEREFORE be it resolved, that Automobile Club of Springfield through co-operation with the affiliated clubs of the American Automobile Association take such action as will secure legal or legislative relief."

Since then other clubs have joined the ranks until the motor clubs affiliated with the American Automobile Association now present a solid front against the gasoline trust.

There is no question but that the manufacturers of motor cars are regarding the matter in a serious light also. They have united in a fight against the advance in price of gasoline and have organized a company to produce and refine petroleum.

The National Automobile Chamber of Commerce, which is aiding in the organization of the company, report they will incorporate with a capitalization of five to ten million dollars. They claim they have options on large tracts of fertile oil fields.

Automobile Engineers have set upon themselves the task of increasing the efficiency of the automobile engine, and there will probably be some interesting developments along that line in the near future.

C. E. Sargent, chief engineer Lyons-Atlas Company, gave a lecture at the regular monthly meeting of the Indiana Section Society of Automobile Engineers, held in the assembly room of the Claypool Hotel, March 31st, on “Increasing the Thermal Efficiency of the Automobile Engine.” He asked the members present: “Is it up to Rockefeller, or is it up to us?”

Safety First. Keep your clothes clean. Equip your car with Seat Covers made by the Central Auto Top Co. 421-23-25 North Capitol Ave., Indianapolis.

In response to a resolution passed in the Senate January 5, 1916, an Investigation was authorized concerning the continued advance in price of gasoline. The result of that investigation is contained in Senate document No. 310, a brief of which is as follows:

• Production and Consumption.

The production of gasoline in the United States for the year 1914 was 34.9 million barrels, and for 1915 was 41.6 million barrels, an increase of 6.7 million barrels.

The consumption of gasoline is estimated by deducting amount exported from amount produced.

There was exported in 1914, 5 million barrels, and in 1915 6.5 million barrels; that would leave for domestic consumption 29.9 million barrels in 1914, and 35 million in 1915. As there are no exact figures obtainable on consumption, it is not known whether all of this gasoline was used or whether some of It went into storage.

• Rise In Price of Gasoline.

The price of gasoline has risen 71 per cent. from September 1 to March 1, to 24 cents per gallon. The price of crude has risen 41 per cent. from September 1 to March 1, $1.70 to $2.40 per barrel.

Considering the prices month by month, for the year 1915:
- during the month of January the price of gasoline dropped, while the price of crude was rising;
- during March and April gasoline remained stationary, while crude was falling.
- during July gasoline remained stationary, while crude was rising rapidly, and
- since August 1 gasoline has gone up relatively faster than crude; its rapid rise being uninterrupted by the stationary price of crude during November.

• Financial Influence.

The recent rapid increases in the prices of crude oil and gasoline have been accompanied by rapid increases in the market quotations of oil company shares. The market values of the capital stock of thirty-eight corporations, of which thirty-five are in the Standard Oil group and three are typical large independent companies, have increased remarkably in the last six months. The stock of other oil companies probably show a similar rise.

The thirty-eight companies selected are believed to represent all phases of the oil industry. These rapid increases might be ascribed to the rapid increase of prosperity and to the general trend of the stock market, but for the fact that during the last quarter of 1915, the oil company stock did not rise and fall with the market.

During November, when the stock market was falling, the oil stocks were rising rapidly, and during December the rise of oil stocks was many times more rapid than that of the general market.

Other indications that the rise of oil stocks may be ascribed in part at least to increased profits are found in the following quotations from “The Commercial and Financial Chronicle” of New York for January 22, 1916, and from the Petroleum Age of New York for December, 1915.

Standard Oil of California O Per Cent. Stock Dividend:
A stock dividend of 50 per cent. has been declared on the $49,686,655 stock, payable April 15, to the holders of record March 4, along with the regular quarterly 2 1-2 per cent. cash distribution payable March 15, to holders of record February 9.

Imperial Oil Co. (Ltd.) Canada Stock Dividend:
This company, which on November 15, 1915 filed with the Secretary of State of Canada a certificate of increase of authorized capital stock from $15,000,000 ($11,000,000 outstanding) to 50,000,000 (par $100) has this week distributed a stock dividend of 100 per cent. thus increasing the outstanding stock to $22,000,000. The Standard Oil Co. of New Jersey is said to own 80 per cent. interest.

• Oil and Gas Securities

Convincing proof of the amazing recovery within the oil industry in the last half of 1915 is furnished by the dividend declarations of the Standard Oil group for the last quarter, which reached the astonishing total of $21,788,636, which is the record for any quarter since the dissolution, with the exception of the first quarter of 1913, when Standard Oil Co. of New Jersey made its famous 40 per cent. cash distribution.

True it is that this sum, $4,890,000, representing the 15 per cent. dividend of Illinois Pipe Line, 5 per cent. by Prairie Pipe Line, and 3 per cent. by Prairie Oil & Gas Co., will not be payable until January 15, but all of them are payable to December shareholders and represent distributions from 1915 profits.

Including these sums, the total of regular and extra cash dividends since the dissolution in December, 1911, reaches the impressive total of $290.6 million, to which must be added stock dividends at. par, totaling $169.1 million. Taking into account the present market value of the distributed stock, the cash value of all distributions in the last four years by this group is in excess of half a billion dollars.

The market effect of this enormous earning capacity is strikingly reflected in the steady appreciation in value of the old Standard Oil Co. of New Jersey stock “all on” which has risen from less than 650 at the time of the dissolution in December, 1911, to a new high record of 1770 during the current month.

Elcar 1917 Sensation. 5-Passenger Touring $795. Delco Ignition—35 H. P., Electric Starter and lights, Four Cylinder, Powerful, Speedy, Stream Lines, Immediate Deliveries. Elcar Motor Sales Co., 541 N. Capitol Ave. Indianapolis. Phone, Main 5346.

• Shortage of Crude Only Prospective.

That a cause for the increased price of gasoline and crude oil other than any present shortage of crude must be sought, is shown by the reports of pipe-line company storage in the Appalachian, Lima-Indiana, Illinois, and Mid-Continent fields.

During the months of August, September and October, while the price of gasoline was rising rapidly, the amount of oil in pipe line storage was also increasing.

The production of crude oil in 1915 was greater than in any previous year, and at the end of the year the total stocks for the United States, both pipe line and field storage, are estimated at more than 200 million barrels.

Thus, it is believed that the net increase in visible reserves of crude oil for the year was at least 45 million barrels; that is to say, more than 15 per cent. of the total production for 1915 went into storage. With the owners of these stocks, a shortage of crude must be considered only prospective.

• Resume.

The extent to which the rapid and extraordinary rise in the price of gasoline can be traced to causes related to supply and demand has been indicated above. A conclusion justified by a review of the year’s record in the oil industry is that the selling price of gasoline is fairly responsive to the supply and demand for gasoline, but is less directly related to the actual supply of crude oil.

Attention has also been directed to the possibility of other contributing factors, with the result that the evidence at least suggests that increasing profits to the larger refining corporations have accompanied the upward trend of gasoline prices.

The obvious fact is that the refining and transporting companies that are strongest in business foresight and financial backing take advantage of both the falling and the rising markets in crude oil to strengthen an already strong position by purchasing both stocks of crude and producing properties.

Under these conditions a market shortage of crude may develop which is not wholly warranted by facts of actual production, yet it no less surely leads to higher prices in both crude and refined products. This furnishes the opportunity for the well supplied refiners to sell at the higher price, gasoline which is derived from crude oil purchased in a lower market.

The net result of this clearly indicated business policy is that the consumer of gasoline pays a price, which in the case of the companies controlling the larger stocks of crude oil is not necessarily determined by the price paid to the producer for the oil from which the gasoline is obtained.

The smaller refiners on the contrary, less favored with transportation and storage facilities and ready capital, may be so dependent for crude upon the current market that their cost of gasoline production is directly related to the current price of crude if indeed they do not have to pay a premium whenever a shortage is threatened.

Red Crown Gasoline and Polarine Friction Reducing Motor Oil, May Now Be Had at Our Service Station, Meridian Street at Tenth. Standard Oil Company (Indiana).


Write Your Congressman Today to Support This Bill—Do it Now

A bill calling for an export duty of 50 cents per gallon on all gasoline shipped out of this country was introduced March 6th by Representative Fred A. Britten, of Chicago. If it is adopted and if the entente allies continue to take as much gasoline from the United States as they used in 1915, the resulting revenue will be almost enough to pay the annual cost of maintaining the navy.

One-fifth of all the gasoline produced in this country last year was exported to the entente allies, according to statistics compiled by the Bureau of Mines, and amounted to almost 300 million gallons. The annual cost of maintaining the navy is approximately $150 million.

The need of gasoline by all the belligerents and the fact that the United States produces 60 per cent. of the world’s supply alike make it certain that the foreign demand will continue.

Gasoline is needed, not only for engine purposes, but forms the basis of all high explosives, its derivatives, toluol and benzol, constituting fundamental parts of ammunition.

Representative Britten’s great interest in the enactment of legislation looking to the decrease in the present price of gasoline is inspired by a two-fold motive, which he explained this afternoon. He said:

“The trouble is that gasoline consumers (and it must be understood that gasoline and crude oil are properly interchangeable terms inasmuch as gasoline is a product of crude oil) are unorganized and correspondingly ineffective. On the other hand, the chief gasoline producer, the Standard Oil Company, typifies the maximum of organization.

“If my bill Is to become a law every automobile owner, every farmer who has a gasoline engine in any form, must sit down and write their Representative in Congress, urging the passage of the Britten bill. If that is done the bill will pass.

"If it is not done, the chances are all in favor of the great corporation which controls the supply and price of gasoline.

“If only the people of the country, the bill-payers, understood what it is that forces the passage of legislation favoring them, they would know how to act at all times.

“In the controversy over the right of an American to travel on armed ships, Congressmen are receiving thousands of letters and telegrams urging them to stand firm for a resolution of warning.

“When Congress receives that kind of evidence of the sentiment of the country, it acts.

“Now as to this bill which I have introduced. In my district in Chicago alone there are 1,708 individual licenses for users of automobiles. Some of these licensees operate and own as many as 200 automobiles, the express companies and taxi cab companies, for instance. They are the individuals who are paying the 100 per cent. increase in the price of gasoline in the last year.

“Let them and all the other gasoline users in the country tell Congress what they think about it and the Britten bill will become a law.”

The Britten resolution recites that there were exported during the calendar year 1915 282 million gallons of gasoline, naptha and lighter products of distillation valued at $33 million (an average of 12 cents a gallon) and asserts that an inquiry by the government should firmly establish the existence of a monopoly in corporate control of the gasoline and oil products, in which direction the truth Is highly necessary.

Strauss Service System, Indianapolis.



Bernie Lehman, an Indianapolis man well known in the motor world, has formed a company for the distribution of the Deitz Auxiliary Carbureter, in the state of Indiana. Their headquarters and service station is located at 425 N. Capitol avenue.

The Deitz Auxiliary Carbureter is manufactured by The American Device Co., of Denver, Colorado, whose general sales offices are located at Chicago under the direction of Murray C. Shandal.

On account of the continued increases in the price of gasoline, mechanical experts all over the country have been working out methods and devices for reducing the consumption of this precious fluid.

The Deitz Auxiliary Carbureter is one of the successful results of this field of endeavor, as it has shown a saving of twenty-five per cent. to fifty per cent. in gasoline consumption on every car upon which it has been attached. The increased mileage obtained per gallon of gasoline by the use of this device reduces the cost per gallon to about twelve to fourteen cents.

Bernie Lehman, local manager says:

“We have installed this device on a number of cars for local people who are more than pleased. They find that it not only saves gas but it ends carbon troubles and cleans the spark plugs.

"The use of the Deitz Auxiliary Carbureter insures perfect combustion, increases power and eliminates foul odors. We are so sure that this device will more than please our customers that we guarantee to refund the price to any purchaser who is dissatisfied with the results obtained within five days after purchase.”

The Marvelous Deitz Vapor System. Less Gas and More Power. Not less Carbon but No Carbon. Complete System in Brass with Steel Tubing . . . $6.50 put on. Distributors: Non-Deflating Tube Sales Co. 401 North Capitol Avenue, Indianapolis, Indiana. Phone: Main 7116.


. . . Sacramento, Calif., July 6, 1916.

Practically no elevation today. Passed through San Jonquin Valley. Car cooling fine through this bad valley. Gasoline mileage 11.3. Sierra Nevada Mountains climb will be observed tomorrow by Sacramento Board of Commerce. Car attracts large crowds on display at Lobby Hotel tonight. A. A. A. seal intact. Riverside Hotel, Reno, tomorrow. W. A. WEIDLEY.

Reno, Nev., July 7, 1916.

From Sacramento to Reno today climbed Sierra Nevada Mountain range, steepest parts 21 per cent grade, most of the climbing ten to fifteen per cent. Other drivers very courteous in giving up clear road. Sacramento Chamber of Commerce pilot cars observed us entire climb made on high gear this according to report establishes record. A. A. A. seal still intact. Car cools and carburetor exceptionally good on high gear. W. A. WEIDLEY.

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