Biggest Cut

In the biggest oil-production cut in Texas history, the Texas Railroad Commission last week slashed allowable output for July to 13 days, a drop of 384,631 bbl. a day. The state's independent producers seized on the record cut as an opportunity to dramatize the plight of the domestic oil industry, hard pressed by record imports from abroad and steadily mounting crude oil stocks. Four associations of independents fired off telegrams to Washington blaming the production cut on imports, warning that foreign oil is replacing domestic oil.

With that, Senate Majority Leader Lyndon Johnson and Texas' Junior Senator Ralph Yarborough swung into action on Capitol Hill, asked Congress to help in curbing "uncontrolled" oil imports. Said Texan Yarborough: "The situation for our independent producers has become a one-way street leading to oblivion." Johnson announced that he had word that President Eisenhower himself would intervene in the case to curb oil imports "threatening national security."

With oil already in oversupply, Sinclair, Gulf and Conoco broke the rules of supply and demand last week and raised their wholesale prices; other major firms were expected to follow their lead. Experts claimed that the U.S. oil industry is creating a pattern of passing on increases in labor and other costs ultimately to the consumer.

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