Deterding on Oil

Pennsylvania's President William Wallace Atterbury, General Electric's Owen D. Young and many another U. S. tycoon felt something like a slap in the face last week when one of Europe's biggest industrialists quietly dubbed railway electrification obsolete. Arriving in Manhattan for a week's visit, Managing Director Sir Henri W. A. Deterding of Royal Dutch-Shell said: "Electrification, except in a suburban way, is a thing of the past. Diesel power is far cheaper than electricity. With electricity, if the power plant breaks down, nothing moves, but with Diesel power the railways are absolutely independent. Why, Diesel trains are so light that we could start new railroads at less investment than would be necessary to convert old ones."

Same day Sir Henri arrived, President Atterbury proudly announced that electrification of Pennsylvania's tracks to Washington would be finished for passenger trains in six months. Undisturbed by Sir Henri's skepticism, he and many an-other railroadman well knew that oil experts themselves are fearful that there may be an oil shortage within 20 years.

Sir Henri had left the famed semicircular desk in St. Helen's Court, London, from which he rules the world's biggest producer of crude petroleum, to see with his own sharp eyes what the U. S. had done about oil. Said he darkly: "It is nothing short of amazing that you have regulatory laws to meet a situation and yet do nothing about it. As we are well aware some people do not like law and order but we must nevertheless have it. What a wicked waste it is to tap resources today that will be sorely needed and that will bring top prices tomorrow! 'Hot oil' . . . has brought about a world oil situation which amounts to paralysis of the industry."

"Hot oil" means chiefly a 100,000-acre patch of sandy land in East Texas where geologists, oil promoters, wild-cat speculators rushed by the thousands in October 1930 to plant a forest of derricks almost overnight. Despite everything the Federal Government could do to curb its lawless elements, East Texas has persistently produced more than its Federal quota. In that hottest spot on the oil map, "hot oil" has been a fighting word for years. Last week, the Texas Railroad Commission was still impotent to stop "hot oil." This week the State of Texas, led by Governor Miriam ("Ma") Ferguson, will get busy with a special session of its Legislature to see what can be done.

One of the first acts of the New Deal was to put the problem in the hands of Oil Administrator Ickes. But last week, none too certain of his legal rights, the best Mr. Ickes could do was to start a test case against Eason Oil Co. of Enid. Okla. He charged the Oklahomans with having drilled three wells in Crescent Pool in direct contradiction to the plan approved by his Petroleum Administration.

Sir Henri announced last week that the prime purpose of his visit was to confer with his old friend Walter C. Teagle of Standard Oil. "There is always," said he, "enough to talk about when oil men get together." But to a newshawk who asked him if a world oil conference was likely this year, he shot back: "What can be done until you put your house in order?"

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