Oil or No Oil

If the railroads can really find the 20,000 idle tank cars they have been talking about since June, and if the railroads agree with the oil companies on lowering the tank car rates from Texas. ... In case there may be no oil shortage in the East. That is, there will be no shortage unless 20 more tankers are given to the British over and above the 80 they have already received.

Civilian Defense Director LaGuardia went home from Washington this week so confident of no shortage that he said even the nightly curfew on gasoline stations might soon be withdrawn. President John Jeremiah Pelley of the Association of American Railroads told a Senate Committee he could have the 20,000 cars rolling in a week or two, said 200,000 barrels a day was a conservative estimate of what could haul from Texas to the East. Since the highest estimate of the shortage is 174,000 barrels a day, that would mean the oil drought was over.

Rear Admiral Emory Land further volunteered that 26 idle Axis tankers in Latin American ports were available and could also beat the shortage. All this cheery talk just befuddled the public, long warned of gasless Sundays, and threatened with arrest for smoky exhausts or jackrabbit starts. But it did not befuddle Petroleum Coordinator Harold Ickes or his deputy, Ralph K. Davies, vice president of Standard Oil of California. It just infuriated them, the more so because Pelley is a super-optimist from way back. From the Maritime Commission's own report, Davies promised to show that only 17 -- not 26 -- tankers were in Latin American ports, that seven of the 17 were already in use, and that only three of the remainder were undamaged and usable.

As for the 20,000 railroad cars -- that talk made Coordinator Davies twice as mad. Since June he had been needling the defense Transportation Division to find them. New Dealers believed Pelley's surplus was strictly a product of the slide rule; i.e., that he was figuring a surplus of 20,000 if all round trips were speeded up to 20 days. No, said the A.A.R. stubbornly, we mean idle tank cars sitting at sidings for weeks at a time. A questionnaire had revealed them a year ago, a May survey had substantiated the number, and so had a "random" survey of Aug. 7. To show he meant real cars, Pelley produced a photograph (see cut).

This week railroad men and oil men sat down to make a deal on freight rates. The roads offered roughly a 50% cut in their present tariffs, which are currently about six times the tanker rates. The oil companies, hoping for a bigger rate cut, dickered with each other on ways to prorate among themselves the higher cost of rail shipment. Once the price deal is made the carriers will get their chance to prove what they can do -- and the whole East will cheer for it nervously.

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