Sinclair's Alternative

One day last June heavy-jowled Oilman Harry Ford Sinclair, sick & tired of the red ink on the ledgers of his sprawling Consolidated Oil Corp., fixed his steely blue eyes on the brawling petroleum industry and made a statement for all to hear. Said he: "The price of [finished] products must go up or the price of raw material must go down."

So saying, he upped the price of his principal finished product (gasoline) by a half-cent a gallon in 42 States where Consolidated's wholly-owned subsidiary, Sinclair Refining Co., has filling stations. This was an invitation for the rest of the business to follow suit and get some of the profits in a year when motor fuel sales were running nearly 5% over record 1938.

But few followed where Harry Sinclair led. Standard of New Jersey, Atlantic Refining Co., many another big operator stood pat. Within a few days Sinclair Refining had to drop its price to the old levels in the marketing areas of all the other big companies.

Last week Consolidated Oil made its semiannual report, and by that time Harry Sinclair was hopping mad. For the first half of 1938 Consolidated had turned in a neat net of $4,000,341. But for the first half of 1939, it had a deficit of $872,671. With the report Harry Sinclair made another bitter statement: "I think the industry has served the public extremely well, but it is serving itself very badly."

Next day, having failed to up the price of gasoline, Harry Sinclair turned to his May alternative: Sinclair-Prairie Oil Marketing Co., another Consolidated subsidiary, cut its posted buying price for crude oil 20-c- a barrel.

This time Harry Sinclair's leadership was followed. Standard of New Jersey's marketing subsidiary, Humble Oil & Refining Co., cut its posted prices 5-c- to 32-c-. Cities Service and Bell Oil & Gas cut 20-c-, like Sinclair. Standard of Indiana was expected to follow.

This week the No. 1 U. S. oil State made a bold answer: Texas shut down 87,600 wells for 15 days, cutting off production of some 1,300,000 barrels daily. Texas' objective: to force up posted prices--no easy job with gasoline stocks at the thumping total of 76,431,000 barrels and crude pouring into the refineries from other fields.

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