Roundabout

Oil conservation moved off in a new direction last week. The Federal board headed by Secretary of the Interior Wilbur to deal with this problem advised the American Petroleum Institute, in effect, that what was apparently illegal under the Sherman anti-trust law could be made legal through the little-used state-compact clause of the U. S. Constitution. What smart Secretary Wilbur proposed to the A. P. I. was: Disintegration of its hard-won national agreement to limit oil production to the 1928 figures, into state agreements; legalization of these agreements by each state; consolidation of these state authorizations into compacts or treaties between the States; final integration of the whole plan, beyond the reach of the anti-trust law, by the ratification in congress of the state treaties. The A. P. I., after four years' labor, had attempted to cover the U. S. oil industry with a broad agreement limiting production. Attorney General Mitchell advised Secretary Wilbur's board that it had no power to sanction such an agreement and thus immunize the industry against anti-trust prosecutions. Disgruntled, A. P. I. officers threatened to buck the anti-trust law anyway and, as President Ralph Clinton Holmes of the Texas Co. put it, "if by chance we are held to be acting in restraint of trade, leave it to the courts to determine whether such restraint is in the public interest or not." But the Hoover administration recalled this clause in the final section of Article 1 of the Constitution: "No state shall, without the consent of Congress . . . enter into any agreement or compact with another state. . . ." Interstate treaties were rare, though not new.* Secretary Wilbur prepared to send Dr. George Otis Smith, Chief of the Geological Survey, to see the governors of "three or four" of the largest oil producing states, with a view to starting cooperative action./- Meanwhile crude oil production, lacking any restrictions, jumped up 30,850 barrels last week over the week prior, to a total of 2,658,100 barrels.

* Recent example: New York-New Jersey covering the Port of New York's Development. /- Three largest oil states: Texas, California, Oklahoma.