September 1, 1923
Entire Report
  1. The following investigation with regard to the sharp decline in retail prices of gasoline, particularly in the Middle West, brought out these facts:

    1. The decline was due to overproduction of crude oil and of gasoline and other refinery products.

    2. The over-production of crude oil in California was resulting in a tremendous waste, since there were not enough ships, tank cars or pipe lines to carry the oil from the fields and the storage tanks were filled. Open air reservoirs, dug out of the ground were used to store the crude oil.

    3. Producers in California met and agreed to restrict production for one month. This action was taken during the latter part of June.

  2. The Department of Justice is considering two questions in regard to this matter: Whether or not the letter of the Sherman antitrust act was violated by this agreement among California oil producers; and whether or not such violation, if such there was, was in the general public interest.

  3. The following is a digest of the more exhaustive articles appearing in the leading journals published in the interest of the petroleum industry:

    1. National Petroleum News: August 22–Ward K. Halbert, writing from Chicago, August 21–Standard Oil Co. of Indiana made reduction 6.6 cents in the tank wagon price on Aug. 14. In effect in 11 states whore the company markets excepting South Dakota. Cut of 8.6 cents still in force there.

      August 18, Governor W.H. McMaster met committee-representing jobbers and agreed with them that 6.6 cents was a proper cut. Accordingly prices in So Dak. were raised to 6.6 cents below the retail price which prevailed August 1.

      Mr. Halbert reviews events leading up to the cut, saying that the overproduction of gasoline would have brought a tumble in prices regardless of McMaster's move.

      “Overproduction chiefly in California narrowed the marketing territory of refiners who found themselves over-stocked with gasoline and obliged to curtail their operations,” says he “Obliged to remove their stocks, numerous refiners dumped what the trade calls ‘distress gasoline’ on the market and jobbers’ margins were thus made unusually wide …… Gov. McMaster, approving bills for the highway department, discovered that wide margins existed. He offered to retail gasoline at wholesale prices and cut the retail price to 16 cents. This cut was met all over the s

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