TRUSTS AND PRICES 



149 



Thus, relying upon the figures furnished by the editor of 

 the Oil City Derrick, we arrive at the conclusion that within 

 nine years out of seventeen since the organization of the trust, 

 the average monthly price of crude oil fell at times below the 

 average cost of operating; such a condition continued in 1886 

 for five months, in 1887 for eight months, and in 1891-93 for 

 two years and seven months in succession. Even amidst the 

 prosperity of 1897 and 1898 the price of crude oil was for more 

 than half a year below the cost of operating. 



In the preceding table the rental is figured at one fourth 

 of the gross product, as estimated by Mr. Boyle ; the result is 

 not materially changed, however, if Mr. Archbold's estimate 

 is accepted, as shown by the following table, where the rental 

 is figured at one eighth : 



September to December, 1891: 



Highest 



Lowest 



February, 1892, to February, 1893: 



Highest 



Lowest 



May to August, 1893: 



Highest 



Lowest 



Averages per barrel. 



Price. 



$0.60 

 .58 



.60 

 .51 



.59 



.58 



Rental 

 (= Vt). 



i.07 

 .07 



.07 

 .06 



.07 

 .07 



Realized. 



.53 

 .51 



.53 

 .45 



.52 

 .51 



Net loss 



(cost = 54 



cents). 



$0.01 

 .03 



.01 



.09 



.02 

 .03 



Thus, according to the showing made by a vice president 

 of the Standard Oil company, there were within the space of 

 two years, from September, 1891, to August, 1893 (both in- 

 clusive), just three months when the average price of crude 

 oil repaid the cost of operating, viz., January, 1892, and 

 March and April, 1893; during the rest of the time the price 

 was from 1 to 9 cents per barrel below the cost of operating. 

 The question naturally arises, why did the producer supply 

 the market for two years in succession at prices which did not 

 cover the cost of production? The answer is given by Mr. 

 James W. Lee, of Pittsburg, Pa., president of three independ- 

 ent oil companies, and attorney for the fourth. The follow- 

 ing is taken from his testimony before the industrial com- 

 mission : 



