THE total amount of petroleum produced in the world down to the end of 1926 amounted to approximately fourteen and one-half billion barrels, about nine and one-fourth billion barrels of which had been produced by the United States. Since 1860 the United States has contributed more than any other country to the world's annual total, except for the period from 1898 to 1901 when Russia led by a narrow margin. In 1902 leadership was regained by the United States and the development of the California and Mid-continent fields increased its lead to such an extent that since 1908 its annual production has exceeded that of all the rest of the world put together.

Many factors have united to bring about this condition. The combination of wonderfully rich deposits of high grade petroleum in a well populated, progressive country of fairly high average wealth is found nowhere else in the world. All of the other major centers of large scale oil production, both present and prospective, are in more backward, less industrialized countries where important production must depend on exports -- a condition much less favorable to the development of an entirely new industry with diversified technical problems and the all important essential of building up a market for a long list of new commodities.

Although the oil industry in America dates back some seventy years its rapid expansion is the product of the present century. With its inseparable companion, the automotive industry, it records a story as dramatic as were the railway developments in the last quarter of the century just past. The world's production of crude petroleum in 1900 was less than 150,000,000 barrels; preliminary figures for 1926 are 1,100,000,000 barrels. In 1900 the United States produced forty-three percent of the total, in 1926 it produced seventy percent. The American production of 1902 was doubled in 1908, redoubled in 1918, and doubled once more in 1923, and this growth has been largely due to the growth of our domestic consumption, which in 1926 amounted to more than sixty percent of the world's production for that year.

So far as production is concerned, the situation in the United States, and in the world at large for that matter, is not dominated at any one time by the quantity of oil reserves underground, but by the current rate of production. At the present moment the situation in the United States is dominated by the production from a single field, whose reserves are small compared to the total for the country, but whose current rate of production is all out of proportion to its reserves. Flurries of this sort arise very largely through lack of control of the rate of production. Ownership in oil deposits is commonly divided, and each operator must get his oil out as rapidly as possible in order to avoid drainage by neighboring wells. Further, practically all leases require the drilling of wells to offset those on adjoining land in order that the lessor may receive his "royalty," and failure to comply with this provision voids the lease. As a result of this, competitive development and overproduction are almost sure to follow the discovery of a new highly prolific pool. Even drastic price reduction has little effect in most cases, and operations are continued in the hope of better prices and to prevent the forfeiture of leaseholds in which heavy investment may already have been made. Thus forced production may continue even though current operations show no margin of profit, and price reduction is more likely to result in curtailment of operations in other districts than in the immediate region of over-production.

This situation has arisen many times in recent years, as at Cushing, Oklahoma, in 1915-1916, in Oklahoma, Texas and California in 1923, and the present period of overproduction in the Seminole field of Oklahoma. Severe flurries of this sort rarely last more than a year, on account of the characteristically rapid decline in rate of production of new fields, and the situation is more or less equalized by absorbing large quantities of oil into storage to be drawn upon later (at substantially better prices) when the flurry shall have passed.

In the past four years production has ranged within about six percent of the level of 732,000,000 barrels reached in 1923, and during the period from 1924 to 1926 the industry was on fairly even keel. In any year the available supply consists of oil in storage, oil produced during the year, and oil imported. This supply is in part absorbed by domestic consumption, in part exported, and the remainder is carried forward in storage. The figure on the next page shows graphically the source and disposition of the available supply for the United States during the last five years.

The 1926 situation is shown in greater detail in the chart on page 94, in which crude oil and the various products of refining are shown separately. Two points worthy of particular notice are the comparatively small part played by imports and exports, and the relative small proportion of the available supply of each commodity that is represented by stocks.

WORLD PRODUCTION

The production of the rest of the world has not increased so rapidly as that of the United States but the increase has been conspicuous. In 1918 it amounted to something like 160,000,000 barrels, while in the past three years it has held fairly steadily at about 300,000,000 barrels. In these three years Mexico, Russia, Persia and the Dutch East Indies have contributed the major part of the production, but in 1926 the results of development in Venezuela and Colombia began to be important. For a long period Russia was the leading contributor and was not displaced until 1918 when Mexico came to the front with a marked increase, simultaneously with the almost complete breakdown of producing operations in Russia. Marked changes in the rate of production have been common in the past and will occur frequently in the future. The trend of these changes, both in the United States and in the other countries, is a matter of the utmost importance to the industry and to the world, because these rates will at any one time determine roughly the relative importance of each country to the industry and may shift its control from one nation to another, entailing a variety of economic, political and social readjustments. The following table shows the world production for the years 1924, 1925 and 1926:

 

WORLD OIL PRODUCTION
(in barrels)
  1924 1925 1926
United States 713,940,000 763,743,000 775,000,000
Mexico 139,497,000 115,515,000 90,551,000
Russia 45,312,000 52,448,000 62,000,000
Venezuela 9,006,525 20,912,600 37,226,019
Persia 32,373,000 35,038,000 35,400,000
Rumania 13,303,000 16,646,000 23,500,000
East Indies 20,473,000 21,422,000 21,700,000
Peru 7,924,700 9,138,042 10,750,676
India 8,150,000 8,000,000 8,000,000
Colombia 444,744 1,006,708 6,443,540
Argentina 5,669,900 5,949,000 6,200,000
Poland 5,657,000 5,960,000 5,600,000
Trinidad 4,050,612 4,386,507 4,971,000
Sarawak 4,163,000 4,257,000 4,500,000
Japan 1,959,000 2,000,000 1,850,000
Egypt 1,122,000 1,226,000 1,250,000
Ecuador 70,000 143,000 350,000
Other Countries 1,241,000 1,403,000 1,720,000
   Totals 1,024,356,481 1,069,193,857 1,097,012,235

Since world production, like the production of the United States, has not fluctuated much in these three years, the period affords an opportunity to study the trend in various countries outside the United States. From the point of view of probable changes in rate of production that may affect the world situation the most interesting countries for study are, in order of present importance, Mexico, Russia, Venezuela, Rumania and Colombia. The trend in these countries is indicated in the chart on page 99, with a forecast of probable production for the current year.[i] It seems probable that these trends will be continued through the next few years. But definite predictions in any case are more than hazardous, and the following discussion is merely an attempt to indicate some of the things that may happen.

MEXICO

From the nature of the fields in Mexico everything seems to point to a continued decline. This is likely to be accentuated by legal difficulties, which are pretty sure to restrict operations until the questions involved are finally decided. The effect over a period of years will depend on the results of the litigation and diplomacy. But in any case it appears that the importance of Mexico in world production will continue to decline. The discovery of new territory producing wells of enormous initial yield like those of the older fields would, of course, radically change the picture, but according to Small[ii] the prospect for such discoveries is less favorable than it has ever been in the history of Mexican operations.

Ordinarily the course of oil development runs through a number of phases. The period of exploration and discovery is followed by a large influx of labor, with an attendant swarm of camp followers who are more than likely to over-run such organized forces of law and order as were required before the influx. Vice and crime are rampant until adequate police forces can be developed. The feverish activity of early development gradually subsides, the camp followers migrate to new fields and a period of thriving, prosperous enterprise follows, gradually dwindling to orderly insignificance as the production declines and leaving a comparatively small number of sober, industrious workers to carry out the slow, unexciting task of extracting the remainder of the oil.

In Mexico the decline has already made itself felt in a number of ways. Tampico, which rose from comparative insignificance to a port of first importance as a result of the development of the nearby oil fields, has begun to wane. Unemployment was increasing seriously even before the restriction of drilling permits under the new petroleum regulations became effective, and with the almost complete cessation of new drilling operations on the part of a large number of operators conditions may become acute in the very near future. Even the normal decline of production would have brought increasing unemployment and a fall in property values and in standards of living. At present there is no other industry in the region to absorb the released surplus of labor on anything like the wage scale that has been paid in the oil fields, and serious labor disturbances should occasion no surprise. The oil field labor, always a turbulent element, has been to a considerable extent organized and dominated by extremists with whom the government of the State of Vera Cruz seems to be sympathetic. But direct action cannot increase the available oil supply, and ultimately a large part of the labor surplus must disperse to other fields or adjust itself to a reduced standard of living.

At the same time the Mexican Government is faced with a serious curtailment of revenues from oil production and export taxes, which have declined from about forty-two million dollars, or almost one-third of the total ordinary revenue in 1922, to a little over seventeen millions in 1926. On the basis of the production forecast it will probably not exceed thirteen and one-half millions in 1927.

To some slight extent the decline in the industry and the dwindling of the stakes may tend to lessen the international difficulties over the ownership of Mexican oil deposits. The political effect of diminishing revenues and increasing unemployment cannot be foretold. It may either exert pressure toward an early settlement in the hope of restoring revenues and employment, or it may lead to a definite effort on the part of the government to enter the field of oil development and production itself, which would seriously prolong the legal and diplomatic tangle.

RUSSIA

Until 1925 the Russian Oil Syndicate was forced to extend its exports in order to market not only gasoline, but fuel oil and kerosene as well. The recovery of the Russian home market since early 1925 has been rapid and now instead of over-production the demand exceeds the supply.[iii]

The possibility of further increases in Russian production appears to depend largely on the furnishing of increased transportation facilities, as for example the construction of the projected Grozny-Novorossisk pipe line. This, and the installation of additional facilities for refining, are delayed largely by lack of credits. When the more acute financial problems have been solved very substantial advances in Russian production are to be expected. It is probable that Russia will equal and may even outstrip Mexico in 1927, and within a few years after the problems of financing have been met it may well surpass its former peak production of eighty-five million barrels, reached in 1901. In the six months ended March 31, 1927 the reported production was almost thirty-five million barrels, which was more than the production for the corresponding period of 1913, and exports for the period were almost equal to the exports for the entire year of 1913.

It seems entirely possible that extensive exploration and intensive development might within a few years bring Russia's production to two or three times its former peak, assuming favorable financial and political stabilization. If the proceeds of present operations are reasonably conserved, the financial difficulties may be considered well on the way to solution. Then, too, the negotiation of concessions or monopolies with foreign operators and marketers may solve the financial difficulties at a stroke. That such action might also plunge the petroleum world into inter-company and even international strife is hardly likely to worry the Russian Oil Syndicate or the Soviet Union.

VENEZUELA

The rapid increase in Venezuelan production has resulted largely from the developments along the eastern shore of Lake Maracaibo in what is known as the La Rosa-Lagunillas field. Because of a diversity of ownership, development in the productive zone has been competitive and at the present moment there doubtless is a surplus of production. The limits of the productive area have not yet been defined and the production will doubtless continue to be large for a considerable period. During the first six months of 1927 Venezuela produced 27,697,716 barrels of oil and the expectation of 55,000,000 barrels for the year seems entirely reasonable.

Political and legal conditions in the country are perhaps somewhat more favorable to oil development in Venezuela than they are in most countries, and as geological conditions in large areas that have not as yet been tested by drilling are encouraging, the future prospects of the country are bright. It is within the range of possibility that in the next few years Venezuela may take the place being vacated by Mexico as the second largest producer in the world. It seems likely that second rank in the world's production will lie between Venezuela and Russia, and will depend largely on the rapidity with which Russia will be able to exploit her undeveloped reserves.

Some of the usual social adjustments are already making themselves felt about Maracaibo. Wages have increased about fivefold in the past five or six years, and commodity prices and rents have risen correspondingly. The increase in the standard of living is expressing itself chiefly, so far as the peon is concerned, in more and better clothes and in more numerous and prolonged fiestas. But the novelty of breaking away from the restraints formerly imposed by poverty will pass, and orderly progress will follow.

There is good ground for hope that many of the political difficulties that have been experienced by operators in Mexico will be avoided in Venezuela. In the first place, as the government early asserted its ownership in the sub-surface rights, all operations must be based on concessions granted by the government and usually the chain of title involves very few transfers. This will avoid the intricate questions which have been at the base of not a few controversies between companies in Mexico, and between companies and the Mexican Government. Further, the government has a balanced budget, enjoys excellent credit, and will not be forced to exact the maximum possible tribute from the oil industry. Its revenues will increase largely through its royalties, and through taxes on unexploited lands held under concession, but these are defined in the terms of the concessions, whereas the Mexican export and production taxes could not be foretold in advance with any degree of certainty. In addition, the country is at peace with itself and possesses a stable government which has worked out a policy for petroleum exploitation that is fundamentally sound and that gives the government a reasonable participation without imposing undue or uncertain burdens upon the holders of concessions.

Perhaps the greatest difficulties will arise over the question of concession boundaries, as a great part of the country is as yet unsurveyed and a conflict of surveys is inevitable. In this connection it is more than possible that efforts at corruption -- and perhaps competitive corruption -- may appear, but if the courts maintain their integrity no serious political difficulties are likely to result. As to possible future political difficulties, it should be noted that concessions have been granted by the government in such an orderly manner and on such a basis of fairness that no succeeding administration may abrogate them without inviting disastrous international complications, provided, of course, that the concession holders can appear with clean hands before their respective governments.

Internally Venezuela faces a possible strategic difficulty on account of certain geographic factors. Maracaibo, which is at present the chief center of the oil industry, lies several days' journey from Caracas, and although the transportation facilities between these points are being rapidly improved they are still somewhat primitive. Even under present conditions, however, it is hardly possible that a situation comparable to the Palaez régime in the Mexican oil fields can develop. The present and prospective oil fields are scattered over a much wider area than they are in Mexico and communication by sea between Maracaibo and Caracas can be maintained, whereas rail traffic between Mexico City and Tampico could be interrupted without difficulty. Further, the present administration has for years pursued a policy of conciliation with disaffected elements and there is every reason to hope that any future change in administration will take place by orderly process without any interruption of the continuity of the government itself.

COLOMBIA

In many ways conditions in Colombia are comparable to those in Venezuela, and there is no doubt that this country will make important contributions to the world's oil production in the next decade. Progress has been somewhat slower than in Venezuela, partly because of the fact that the development of the important producing area has been confined to a single large concession, eliminating all competitive exploitation, partly because of legal and technical difficulties in certain other promising areas, and largely because of lack of transportation facilities for moving large quantities of oil to seaboard.

In Venezuela the bulk of the production has been in or near Lake Maracaibo and barge transportation has been feasible, at least as a temporary measure. In Colombia the present important producing area is in the Magdalena valley, some 275 miles inland, and river conditions do not permit year-round barge operations. A pipe line with a rated capacity of 30,000 barrels per day has been built to tidewater and for some time has been operating considerably above its rated capacity. A parallel line now under construction will relieve the situation and with its completion the country's production will be substantially increased.

One of the largest potential fields in Colombia lies east of the main cordillera, in the southern part of the Maracaibo Basin, and its exploitation seems to depend largely on arriving at a satisfactory basis for importing machinery and exporting oil through Venezuela. The only alternative route is across the Andean barrier, and while this may not be insuperable it furnishes anything but a natural gateway. Negotiations with the Venezuelan Government have not as yet resulted in any workable agreement, but they are still being carried on and now that a boundary dispute in this region has been settled an amicable adjustment of differences should ultimately result. With an outlet through Venezuela, this field could contribute substantial amounts to Colombia's production as soon as transportation facilities are developed.

Colombia's rate of increase is not likely to match that of Venezuela, but taken together these two countries seem to afford the best hope for additional production to compensate for the decline which must pretty surely come in the production of the United States. It may be too optimistic to hope that their increase will entirely offset this decline, unless our production rate is maintained for a number of years, but they may be looked upon as important sources of relief.

In the matter of titles, conditions in Colombia are more complex than in Venezuela as certain early grants carried the sub-surface rights. Since a few of these extend back to the 16th century the possibilities of conflicting claims and defective titles are not to be overlooked. In most cases, however, it appears that such difficulties are not insuperable and, of course, a large part of the country can be developed only under concession granted by the government.

The government of the Republic is in a very real sense a popular government and pursues its orderly course through changes of administration without difficulty. In the past the development of oil properties has been somewhat retarded through anxiety regarding adverse legislation, and, although such fears have not been entirely dissipated, rapid development under laws that provide a workable basis now seems to be assured.

RUMANIA

Rumania's recovery from the devastation of 1917 has been conspicuous and in 1925 and again in 1926 the production broke all previous records. How far this increase can go is problematical, but it hardly seems likely that the maximum yearly rate will exceed thirty or forty million barrels, and it is not anticipated that this country will ever be of major importance as a world factor in the oil industry. It must not be forgotten, however, that Rumania's oil deposits are of sufficient importance to be reckoned with in the international political strategy of the Balkans, and hence of the world.

OTHER COUNTRIES

In this discussion (illustrated by the chart on page 99), several important countries have been omitted, either on account of lack of explicit information or because there is comparatively small likelihood of any substantial change in their rates of production within the next few years. Persia, for example, is producing steadily about thirty-five million barrels per year. This could probably be doubled, possibly trebled if occasion required, but production is controlled and the future rate will, within certain limits, depend on the wishes of those in control. The Dutch East Indies are producing about twenty-one million barrels annually and there is no great probability of change in this rate in the near future. Peru has expanded rapidly in the past few years but is approaching a probable peak of some fifteen million barrels and will never be very important from the world standpoint unless prolific fields should be developed on the east side of the Andes -- and such fields, if discovered, cannot seriously enter the world market for a considerable number of years.

In addition to the countries which are at present productive, important new regions may in the future begin to make contributions. Important among these are Asia Minor, Mesopotamia, the Orinoco basin, and a long belt extending from Colombia into Argentina along the east side of the Andes, an area the exploitation of which on a large scale cannot be expected for a period of years.

THE WORLD SUPPLY

For convenience, the world's great oil reserves have been grouped in three broad regions, though these are not really defined geologic or geographic provinces.[iv] In this arrangement the United States is taken as one unit, another is the group of countries about the Caribbean Sea and the Gulf of Mexico (south of the United States) including Mexico, Central America, Colombia, Venezuela and the West Indies, and the third is the Caspian-Black Sea-Eastern Mediterranean area, including Rumania, Southern Russia, Mesopotamia, Persia and Asia Minor. It is from these regions, with the possible addition of the comparatively little known belt lying east of the Andes, that the major part of the world's future oil supply must apparently be drawn.

Repeated attempts have been made to state quantitatively, in terms of barrels, the world's available supply of oil, but the results have not been wholly satisfactory. The most recent attempt to estimate the supply of the United States is much more painstaking than any previous effort and was based on more adequate data than have been available for earlier studies, but the figures cannot be compared with previous estimates for other countries without some danger. This estimate, prepared by the Committee of Eleven of the American Petroleum Institute, assumes improvements in the technology of oil recovery and includes oil "producible at some price", neither of which is presumed to have been taken into consideration in the earlier world estimates.[v] David White's provisional estimate of 1920 was as follows:

 

THE PETROLEUM RESERVES OF THE WORLD
Country or district Relative Million
  number barrels
United States and Alaska 1.00 7,000*
Canada 0.14 995
Mexico 0.65 4,525
Northern South America including Peru 0.82 5,730
Southern South America including Bolivia 0.51 3,550
Algeria and Egypt 0.13 925
Persia and Mesopotamia 0.83 5,820
South-eastern Russia, South-western Siberia and the    
  region of the Caucasus 0.83 5,830†
Rumania, Galicia and Western Europe 0.16 1,135
Northern Russia and Sakhalin 0.13 925
Japan and Formosa 0.18 1,235
China 0.20 1,375
British India 0.14 995
East Indies 0.43 3,015
  ---- ------
   Total 6.15 43,055
* Later estimates give far larger quantities. David White of the U. S. Geological Survey in 1921 estimates the reserves at 9,150 million barrels, and the American Petroleum Institute arrives at considerably higher figures (cf. text).
Also here more recent estimates are much higher: 20 to 30 milliard barrels.

 

Total Eastern Hemisphere 3.03 21,255
" Western Hemisphere 3.12 21,800
" North of Equator 5.20 36,400
" South of Equator 0.95 6,655

These figures serve to show the great discrepancy between the reserve position of the various countries and their current status in the world industry, as indicated by their rates of production.

In the light of present day conditions, material changes would have to be made in the reserve estimates and at best the figures are useful only in a general way. Their use is attended with especial danger if they are made to form a basis for estimating the date when the supply of a given country is to be exhausted, which is often done by dividing its reserve by its current rate of production. Thus the American Petroleum Institute's estimate for the United States in March, 1925 placed the figure for proven and developed fields at 5,321,427,000 barrels. From that date to the end of 1926 we produced something like 1,360,000,000 barrels with comparatively few new discoveries. The balance of 3,960,000,000 barrels amounts to a little more than five years supply at our current rate of production. If this truly represents the quantity of oil remaining to be produced we must face a drastic reduction in the rate of production, for it will be physically impossible to extract all of the remaining oil in five years, or even ten years; or we must continue to add to our proven fields by discovery of new, enormously productive deposits. In my opinion none of these estimates of world reserves should be taken as quantitative but merely as a broadly general indication of the relative order of magnitude of the prospective reserves. Perhaps they may serve to spur the industry to improved technology in conservation all along the line. In addition, they enable us to anticipate to some extent the probable direction of the shift in dominance of the situation, but conditions and our knowledge of them change so rapidly that an estimate made today would be of quite different complexion from that of 1920, and further changes of major importance are to be expected from time to time. In a word, I believe these figures have nothing like the validity and permanent value that obtains in the case of our world estimates of coal, iron, copper, tin, and a wide range of other mineral resources, and that they should be used only with the greatest caution.

In discussing reserves a further consideration must not be overlooked. There is what may be designated a "technological reserve," which may supply products for more urgent uses by converting fuel oil, for example, into more volatile hydrocarbons suitable for motor fuel. With facilities already available our present supply of crude oil can be made to furnish a very largely increased volume of motor fuel at the expense of fuel oil, which is in many instances on a competitive basis with coal.

Further reserves in the form of shale oil and low temperature coal distillates will be available when price conditions warrant their production to supplement petroleum products. The recent acquisition of the Bergius patents by one of the large American companies appears to indicate a new recognition of these possibilities by one of the powerful factors in the oil world.

THE FUTURE

It may be worth while to draw a picture (again not a prediction) of what may possibly occur within the next decade. In this picture we see the United States producing at an annual rate of five or six hundred million barrels, Venezuela and Colombia contributing one hundred and fifty or two hundred million, Russia one hundred to one hundred and fifty million, and Persia with Mesopotamia contributing some hundred million, with the remainder of the world's supply coming from a large number of lesser sources. In each case the increase in production will tend to elevate the standard of living and to increase government revenues for a time at least, but the restrictions imposed by decline of production and curtailment of revenues have great potentialities for trouble.

Referring again to the three broad areas in which the world's reserves appear to be concentrated, it is of interest to note that the first is, of course, under control of the United States; in the second (Gulf-Caribbean) the ownership of concessions is divided between British and American interests; while the third (Black Sea-Caspian) is largely within the British sphere of influence. Thus, it seems that even though the rates of production in the various countries change substantially it is likely that the world situation will be dominated by America or Great Britain, especially as Britain and America are the dominant financial powers of the world and the oil industry is firmly intrenched in each.

As a result Britain or America, or both together, will have to do with oil development in one country after another, as the focus of operations shifts from time to time; one or both will be involved in legal and diplomatic tangles that may arise, and the extent of their coöperation and the fairness they show will determine to a large extent whether the control of the world's oil supply shall be in the interests of peace or of war. If England and America should support opposing factions in some weaker country, each working to give the control of the local oil supply to its own nationals, the possibilities for trouble would be very real. Each country may count on receiving support from its nationals on the plea that oil is necessary for national defense, even though the controversy may be fundamentally one of commercial competition rather than a matter of national defense.

No doubt America will feel no small irritation when she is no longer able to supply her own demands from domestic production, and when this moment comes the control of foreign sources of supply may become a popular issue in American politics. On the other hand, British opinion will, no doubt, follow Deterding in his protests against the Russian efforts of Standard Oil Company of New York, which may appear as a challenge to Britain in the regions she dominates, a challenge that will seem in extremely bad taste after the " generosity" shown by Great Britain in allowing American operators to participate in the development of Irak under a sort of British hegemony. And, doubtless too, many Americans, knowing no more than their British cousins about the real situation, will lend what support they may to the New York company because it is an American company.

We may look with more or less equanimity upon a trade war between two American companies, but a trade war in the oil industry between a powerful British group and a powerful American group holds within it the possibility of a struggle for dominance of control over the supply by the nations themselves and that is, unfortunately, more serious. There is, of course, the alternative possibility of a combination, or some sort of cooperative arrangement between the great competitors in the field of petroleum; if this can be effected under proper control the danger of serious tension will be materially lessened.

It seems almost as inevitable as the operation of a biological law that the world's oil resources must be developed to supply the world's demands without much reference to political boundaries and ownership of the deposits. The possibilities of accomplishing this without serious international difficulties rest largely upon the shoulders of Great Britain and America. If they accept their dominance as a quasi-trust under which they shall deal justly and reasonably both with the producing nations and the consuming nations, whether they be large or small, strong or weak, trouble can be avoided, but deviation from the course of fairness and justice will be attended with grave danger.

[i] Based for the most part on papers presented at the February, 1927, meetings of the American Institute of Mining and Metallurgical Engineers.

[ii] February Meeting, Amer. Instit. Min. & Met. Eng.

[iii] Zavoico, February, 1927, meeting, Amer. Instit. Min. & Met. Eng.

[iv] Pogue, "Economics of Petroleum," Wiley & Sons, 1921.

[v] "American Petroleum Supply and Demand," McGraw-Hill, 1925.

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