Great Undertaking

Attorney General Stone, in his first important act since taking office, instituted a suit of magnitude. He attacked a monster group--some 50 Standard Oil and other oil companies, charging restraint of trade under the Sherman Anti-Trust Act. He also asked for injunctions to stop alleged illegal procedure. The case was brought in regard to the "cracking" process for petroleum. In refining crude oil, gasoline is taken off by distillation. But on account of the great demand for gasoline, more of it is obtained by subjecting the residue of heavier oil to heat and pressure. Under this pressure, some of the heavier oil "cracks;" that is, breaks up into lighter, more volatile gasoline. The general idea of this process was invented more than 60 years ago. The patents on it have expired. The Government charges that the only patents still extant are trivial and relate only to details of the "cracking" process. Five companies, the Standard Oil of New Jersey, the Standard Oil of Indiana, the Standard Development Co., the Texas Co., the Gasoline Products Co., are accused of controlling these minor patents, pooling them, and licensing them to other companies under contracts which restrict trade and increase unnecessarily the cost of gasoline by heavy royalties. Forty-five companies are accused as "secondary defendants," as having entered the allegedly illegal combination by securing licenses to "crack" oil under these patents. The suits were hardly filed when the cry of "Politics" went up from the oil companies. Said they, in effect: "The case will come up in the Fall during the campaign and the Administration will try to gather votes by the claim that it is trying to lower the cost of gasoline to consumers." At the Capital it was said that the Department of Justice had been making investigations and preparing the case for over a year. Certain it is that the case has been in preparation for some time; early in June, as soon as the Tariff Commission made its report on gasoline, the President turned the report over to the Attorney General.

Quite contrary to the charge that the Administration was planning to use the suit for political purposes, was a suggestion of which The New York World (Democratic) made first page material: that the Pure Oil Co., of which Beman G. Dawes is President, is a secondary defendant. Beman G. is a brother of Charles G. Dawes,* the Republican candidate for Vice President, and the World added that the latter is "commonly believed to be a heavy stockholder." The World admitted, near the end of the article, that this supposition was "not of public record." At any rate, the Department of Justice is certain to have stirred up a real legal battle, in attacking a group of corporations, including the major companies of Standard Oil. As for politics, the suit should be first aid material for stump speakers, especially if Charles G. Dawes should prove to have any connection with the Pure Oil Co. The question will be extremely technical, so very few people can really know much about it, and politicians will be able to assert, very affirmatively and generally, almost anything they like.

* Charles G. Dawes has three brothers. They are: Beman Gates Dawes, ex-Congressman, Rufus Cutler Dawes, business man and Henry M. Dawes, U. S. Comptroller of the Currency.