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I. A. HOURWICH 



of the product, the number of wells drilled by decennial peri- 

 ods and the estimated cost per well, from all of which the 

 sum of $263,968,413.75 is obtained "as the profits of the pro- 

 ducing business for the last thirty nine years, or an average 

 of $6,768,420.86 per year." The result appears to be quite 

 satisfactory, compared with the annual valuation of the prod- 

 uct, which averaged, for the period from 1870 to 1890, in 

 round numbers $20,000,000, and from 1890 to 1898, about 

 $28,000,000. 



These results are obtained, however, by combining the 

 early period of oil production, when prices were generally 

 high, with the later years, following the organization of the 

 oil combination, which were marked by low prices of crude 

 oil. Whether this was a mere coincidence, or there was a 

 casual connection between the combination and low prices, 

 can be ascertained only by treating each period separately. 

 An element of uncertainty in estimates of this sort is the 

 landed interest, which has varied, since the beginning of oil 

 production, from one half to one eighth of the output. Mr. 

 Boyle's calculation is made upon the basis of an average rental 

 of one fourth for the whole period 1860-1898; Mr. Archbold 



adopts the present rental of one eighth throughout the period. 

 The tendency of this assumption is to give the total an appear- 

 ance more favorable to the oil producer. 



