But mere relinquishment of their own stations does not tell all the story of the retirement of the integrated companies from retailing and the consequent renascence of small business in the gasoline dispensing field. The "Iowa plan" in addition converted all dispensers of gasoline at the 226,00o service stations and at the 182,00o garages, wayside and other stands as well into retailers in fact, rather than dealer-commis sion men. The marginal contract which insured a fixed margin to the dealer, irrespective of the fluctuations in the retail price, was wiped out by the suppliers. While going in for a surgical remedy, integrated business amputated its entire retailing arm, including the "guaranteed" margin. The suppliers, instead of posting a retail price, posted a delivered tank wagon price—wholesale price—and left in the hands of the dealer the question of how much he charged the motorist and made out of the transaction himself.
Probably in the whole history of modern American industry there never has been a more dramatic shifting of function than that in volved by the large integrated companies giving the retail end of the gasoline business over to the dealer. The shift to the acceptance of responsibility for the retail price by retailers was not made easily. In many sections of the country a hectic period of readjustment began which had not run its course in 5939. Retailers rushed to form associ ations in many territories and establish prices which were to allow margins of 50, and even 60 per gallon. But the efforts of retail associations to maintain margins at extremely high levels were soon abandoned, and margins settled back to the 3 to 40 level. Local price wars were numerous and secret concessions pushed the margin level below 30 in many sections. Jobber groups attacked proration as the imputed source of their troubles. The distributing system of the petroleum industry became the focus of incessant dissension and the source of proposals for regulation and change. To some observers, the adjustment was attributed to the working of economic forces which might force large numbers engaged in gasoline retailing to withdraw over a long period of years thus contributing a solution to one of the major problems of the industry—over-building and duplication of service stations. The problem, however, also was a social one, inas much as a great army of people were involved and this introduced an element which tended to make it a potential weapon for far greater governmental control than had yet been exercised over the petroleum industry.
The number of service stations in the United States in 5938 was estimated as 226,000, compared with 525,553 in 5929. There were in 5938 a total of 182,000 secondary outlets such as garages.
Filling stations are not the only physical equipment required for the distribution of gasoline. There are terminals and bulk stations. The terminal is a large depot, usually at seaboard, for receiving the product unloaded from tankers. Other terminals, seldom as large as those along the coast, are located at inland points ; and these are usually serviced by pipe lines. The bulk plants are wayside storage stations, comprising a few tanks, a loading rack, and often a ware house building, located within trucking distance of the retail outlets. The number of terminals and bulk plants in the United States was estimated in 5938 as about 20,000, having a value of $348,000,000.
The average retail price of gasoline (excluding tax) in 5o representa tive cities of the United States declined from 25.060 per gallon in 5923 to 54.070 per gallon in 1938. During the same period and from the same cities the average gasoline tax, Federal and State, increased from 0.910 per gallon in 1923, to 5.440 per gallon in 5938. Expressed in dollars per annum per motor vehicle the gasoline tax cost to the motor vehicle user increased from $4.37 in 5923 to about $35.75 in 5938.
The American Petroleum Industries Committee estimated that the total amount of taxes collected from the petroleum industry, its prod ucts and customers in 5938 amounted to $5,278,000,000. Reduced to a per barrel basis the aggregate represents $5.05 per barrel of crude oil produced, against a weighted average price of $5.58 per barrel. About three-quarters of the total represented State and local levies, while one-quarter was paid into the Federal treasury. About 59% of the total, or $758,000,000, represented State gasoline taxes.
Besides supplying considerable capital for the development of the oil business abroad, the American petroleum industry imports and ex ports crude oil and products in substantial volume. In its foreign trade in oil the United States has long had a favourable balance of trade on a dollar basis.
transactions of Am. Inst. M. & M.E., Am. Assn. Pet. Geol., Am. Chem.
Soc., Am. Pet. Inst., Inst. of Pet. Tech. (L. M. F.)