Briefly, the present position is that two new companies have been created, in which the Royal Dutch and the Shell Company hold all the shares. The Bataafsche Petroleum Maat schappij is a Dutch company with a capital of 80,000,000 florins, which carries on all the pumping and refining operations of the combine in the Far East, while a new English company, the Anglo-Saxon Petroleum Company, with a capital of £4,000,000, owns all the petroleum fields in which they operate, and also the very large fleet of tank steamers formerly owned by the Shell Company, in which their products are carried. They send into London alone 80,000 tons of petroleum spirit annually through the Asiatic Petroleum Company, their marketing agents. Last year the same com bination sent 10,000,000 gallons of this motor spirit into the United States, supplying firms who were competitors of the Standard Oil Trust.
In 1909 the Royal Dutch-Shell combine took over the business of many of their agents.
For this purpose the Shell Company provided additional capital amounting to £440,000, the Royal Dutch put up £660,000, and the Asiatic Petroleum Company £200,000, making an additional outlay of £1,300,000 for one branch of their business. A large Roumanian oil company, the Astra, has been secured, and the Shanghai-Langkat Company, which oper ates refineries in Borneo, has also been bought out since the amalgamation of 1907. That amalgamation has apparently been profitable to those engaged in it, for the Shell Company's dividend, which had been only 5 per cent. per annum between 1903 and 1906, rose to 15 per cent. in 1907, 20 per cent. in 1908, and 221 per cent. in 1909.
Now the awkward part of this chain of events so far as the Standard is concerned is that the whole petroleum world has been turned upside down by the motor engine. In 1897 Mr. Paul Babcock, director of the Standard, told the Select Committee on Petroleum that they had in New York tanks full of naphtha which they could not sell. Mr. Bergheim, a well-known Galician oil producer, told a City meeting the other day that he could recall the day when his firm gave the naphtha to any one who would take it away. Then the Standard with its control of the tank installations and the selling agencies for reaching the consumer of illuminating oil (or kerosene) was the master of the world. Now the consumption of kero sene is threatened by electricity among the rich and slot-gas meters among the poor, and it is the despised naphtha (or benzine) which is in demand. Motor-cars, motor-cycles, motor omnibuses, motor-lorries, aeroplanes, all these engines are demanding petrol, and it is the good fortune of the Shell combine that its crude oil provides a larger percentage of ben zine than the Standard's American. While
huge quantities of benzine, for which there is an increasing demand, are being sent to Europe by the Shell combine, the Standard is left with its monopoly of kerosene, for which the demand is decreasing. At the same time, the Sumatra and Borneo crude produces a very profitable percentage of petroleum wax, for which there is also an increasing demand, and there is a big market for the residue all over the Far East as fuel oil. This is the real secret of the recent " oil war," which has broken out chiefly because the Standard finds its supremacy challenged by wealthy and vigorous com petitors, and is trying to use its vast accumu lated profits in a " rate-cutting" war. The latest news in this connection was the intelli gence that the Standard is attempting to repair its initial failure of thirteen years ago by ob taining petroliferous areas in Java and Sumatra. It proposes to do this through the medium of the Holland-American Petroleum Company of Amsterdam, which being nominally a Dutch company can legally acquire this property. Whether the Dutch Government which took so strong a stand against the Standard's inva sion in 1897 will consent to be fooled by such an obvious device as this remains to be seen. But the fact that the scheme has been initiated indicates the desperate straits to which the Standard is reduced for benzine.
This is not the first time the Standard has come into collision with the Shell. In Sep tember, 1904, the New York Herald published an interview with Mr. W. H. Libby, the foreign marketing agent of the Standard in New York. This was a long " puff " of the Standard, and contained the allegations that in the " rate cutting " which had then been going on the Shell Company had been reduced to serious financial straits, and were selling oil falsely branded. As these allegations were entirely false, the Shell Company brought an action against the New York Herald in the English Courts for libel, which ended in 1905 in a complete victory for the victims of Standard Oil calumny. Mr. J. Eldon Bankes, K.C. (now Mr. Justice Bankes) stated on behalf of the defendants that they had made inquiries into the matter and found that the statements could not be substantiated, and 'therefore withdrew, apologised, and paid the plaintiff's costs as between solicitor and client. As we proceed we shall find other points at which the Standard and the Shell have collided, but the vital factor in the present oil situation is the Sumatran benzine, which the Rockefellers failed to secure in 1897.