92 BULLETIN 102, VOL. 1, UNITED STATES NATIONAL MUSEUM. 



to the point where each geological unit is occupied by a single pro- 

 ducing activity. Anything short of this leads to competitive racing 

 for extraction, the most potent single impetus toward wastefulness. 

 As integration is a natural tendency, perhaps no artificial stimulus 

 would be necessary to attain an appropriate result, other than a 

 policy advertising its desirability and perhaps obtaining the passage 

 of standardized leasing laws forbidding grants of inadequate hold- 

 ings. Petroleum mining can not be administered so as to give every 

 comer a chance; that is inconsistent with the public interest because 

 of the peculiar occurrence of petroleum ; so much of individual right 

 must succumb to the common good.^ 



Whether production should become integrated in further degree, 

 or come more fully under the ownership control of the handling 

 activities, transportation and refining, need not be settled here. Cer- 

 tainly, however, for good effect production must be controlled by 

 demand working through refineries; production, then, can not be 

 independent in fact. Hence integration in this respect is unavoidably 

 present, whether materialized in formal arrangements or not. 



The common objection that an integrative tendency must be com- 

 bated as leading to monopoly need not detain the argument. A con- 

 structive economic policy may be expected to find means whereby it 

 can protect the public from the undue exercise of the power inherent 

 in large integrated activities. Indeed, that safeguard has already of 

 late developed to considerable measure through the simple expedient 

 of publicity of operations. Neither constructive policy nor inte- 

 grated industrial operations will soon again underestimate the power 

 of enlightened public opinion.^ 



1 The bearing of this matter on the public lands, although it is equally applicable to 

 developments In general, is well expressed by Max W. Ball in testimony on the 

 public lands given before the House committee on Feb. 8, 1918, as follows : 



" It seems to me * * • that there are two fundamental theories as to the dis- 

 position of public lands • * ♦. The first of these Is to so dispose of the public 

 lands that the largest number of individuals will be able to make a living from them, 

 make a profit from them, or in some way enjoy individually the benefits of the public 

 domain * * ♦. Suppose we call that the ' individual-bounty ' theory, which, I think, 

 describes it fairly well ♦ • *. The other theory is to so dispose of the public lands 

 that their products will be available to the public with the minimum of waste and at 

 minimum cost. Suppose we call that the ' consuming-public ' theory, for want of a 

 better name. Possibly as good an example as we have of that theory is the mineral- 

 land laws, under which we have had such marvelous mineral development in this coun- 

 try in the last two or three generations. Those laws, you will remember, although they 

 provide a limited area for each claim, make no restrictions as to the number of claims 

 that may be operated together and therefore permit small unit operations or large unit 

 operations as may be necessary to get the mineral products to the public at the lowest 

 cost * • *." 



2 It may be presumed that the large units engaged in the handling of petroleum would^ 

 have gone more fully Into organized productions had not they faced a public opinion 

 suspicious of any such trend toward what would popularly be termed " monopoly." As 

 these activities could command, anyhow, all the oU they wished without directly con- 

 trolling production, there was no pressing Incentive to go Into any branch of the activity 

 that might invite further destructive attention from public opinion. Both the public 

 and the petroleum industry have been the losers in this period, now passing, of mutual 

 distrust. 



