TRUSTS AND PRICES 



147 



As totals do not lend themselves to comparison, the 

 figures must be reduced to averages. We first take the tables 

 furnished by Mr. Boyle and calculate from them the averages 

 per well drilled and per barrel of crude oil. 



In this calculation the bonus, or rental paid for holding 

 the ground, is not considered at all. Mr. Boyle concedes that 

 "it operates against the profits;" he concedes also that it is 

 necessary to pay this bonus in order to pursue the business, 

 but he thinks that "the lease is speculative" and should 

 therefore not enter into the cost of operating. 



Granting, for the sake of the argument, the contention to 

 be correct, it appears nevertheless that within the last two 

 decades, i. e., since the organization of the oil combination, 

 the average profits of the producer have been reduced from 

 $3,439 to $715 per well, or from 63 cents to 11 cents per barrel. 

 The average price has for the last two decades remained con- 

 stant, as well as the average cost of operating; that is to say, 

 in the long run, the fluctuations within each decade, extreme 

 as they were, affected neither the average price, nor the 

 average cost. This stability points to an equalization of 

 supply and demand, when taken for periods of sufficient 

 length. The inference is sustained by a comparison of the 

 average annual production with the total stocks on hand 

 before and after the organization of the trust. In the follow- 

 ing table the year 1882, in which the trust was organized, is 

 excluded and the averages are taken by eight year periods. 



During the first period following the organization of the 

 trust the production of crude oil increased by 64 per cent as 

 compared with the period next preceding, which resulted in an 

 increase of the stocks slightly above the amount of the annual 

 output. The oil combination justly claims the credit for 

 having brought American oil into every nook of the world; 



