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I. A. HOURWICH 



in view of this fact an increase of the output by about three 

 fifths, while the population of the United States increased by 

 one fourth, could not be termed overproduction. During 

 the next eight year period, however, the average annual pro- 

 duction increased only by 40 per cent, whereas the population 

 of the United States, according to the twelfth census returns, 

 increased by about one fifth; at the same time the average 

 stocks of oil were reduced to 33 per cent of the annual produc- 

 tion, which is equal to the output of four months; still this 

 contraction of the output had no effect on the price. There 

 is no evidence of either overproduction, or reduction of cost 

 of operating. But the price of crude oil was during these 

 years made by the trust, — this was admitted by its represen- 

 tatives who testified before the industrial commission. There 

 is no escape from the conclusion that the fall of nearly 80 

 per cent in the profits per well must have come from the 

 efforts of the trust to keep the price of crude oil down. 



The average profits per well, taken for an eight year 

 period, do not tell the whole story, however, since a well be- 

 comes dry, as a rule in about six months. To form a better 

 idea of the condition of the oil producer, we shall compare the 

 average cost of operating per barrel with the prices ruling for 

 shorter periods. Taking the average monthly prices up to 

 1894 and the daily prices since 1895, as given in the report of 

 the industrial commission, and converting gallons into barrels 

 (42 gallons — 1 bbl.), we obtain the following table: 



