PETROLEUM. 89 



roots of the trouble. So long as economic conditions encourage waste 

 in petroleum exploitation, no amount of technical and scientific 

 knowledge will more than scratch the surface of the matter. The 

 advisory policy, therefore, is an incomplete policy — good so far as 

 it goes, but it doesn't go far enough.^ 



THE ADTOCEATIC POLICY. 



Secretary of the Interior Lane, in his annual report for 1915, says 

 in regard to petroleum: "An absolute government would prohibit a 

 barrel of it being used for fuel before every drop of kerosene, gaso- 

 line, and other invaluable constituents have been taken from it."^ 

 An autocratic government by fiat could probably eliminate waste 

 from petroleum exploitation by enforcing arbitrary laws to this end. 

 But we do not have an autocratic government and, moreover, the 

 type is in the course of passing into universal discredit. But even 

 democratic governments sometimes deal with such problems in a 

 harsh or rather arbitrary manner; in point of fact, it is a somewhat 

 widespread feeling that wastes and economic maladjustments can be 

 legislated out of existence by wisely drawn laws, even in a republic. 

 Fiat methods, however, apart from being inconsistent with our pro- 

 fessed principles of government so as not to merit wide approval, 

 may also be seen, both in the light of past experience and of common 

 sense, to offer a prospect only of harm. Thus, to give extreme sup- 

 positions, a law demanding increased recovery from wells would re- 

 sut in a lowered production, -with an industrial mix-up; a require- 

 ment that oil be no longer used for steam-raising would cause the 

 Southwest to starve to death ; a call for efficient drilling would throw 

 chaos into oil production. The legitimate and illegitimate strands 

 have become so closely interwoven that it is now impossible to im- 

 prove the pattern by plucking out the economically inartistic threads. 



THE CONSTKCCTIVE ECONOMIC POLICY. 



This country has applied the laissez-faire and advisory ^ policies 

 to petroleum without adequate betterment of the situation so far as 

 wastes are concerned. It has even tried certain forms of legalistic 

 or dictatorial force in the way of interjecting competition into phases 

 of the matter already integrated * or by nature noncompetitive,^ but 



1 An advisory policy is really a part of a constructive economic policy. 



^ An absolute government, indeed, would presumably go further and require the fuel 

 residuum to be used in the Diesel type of internal-combustion engine Instead of under 

 stfam boilers. 



3 No intent to belittle the advisory policy is in mind, but that policy is limited in the 

 good it can accomplish by circumstances over which it, per se, has no control. 



* The operation of the Sherman antitrust laws in disintegrating the Standard Oil 

 Co. into a number of subsidiary companies is an example. 



sniustrated in the case of the Walsh bill (S. 2812, 1918), opening public oil lands 

 to development in 160-acre tracts. The United States, through the Geological Survey, 

 has spent millions of dollars in learning and proving that oil does not occur in 160-acre 

 tracts, yet it tries to force oil to so occur by flat, or, at least, ignores legally the fact 

 that oil is migratory. 



