Why ? You go into this agreement, and can give me no reasons for it. Is it in writing 2—In print.
So that a great number of people enter into the same kind of agreement, apparently 2—No, I think not. Of course, I have no personal knowledge (Report and Evidence, 1897, Q. 3,475 et seq.).
We have only to read the evidence of Mr. Leonard and Mr. Rigby, and the American evidence already given, to understand why these " tied houses" exist.
In one portion of the United Kingdom the Standard has never been able to obtain com plete control. Scotland is the earliest home of the mineral oil industry, and patriotism and caution alike induced the Scottish users of burning oils to prefer the high-flash oil which the Scottish oil companies refine to the danger ous low-flash petroleum imported by the Stan dard. Although the cheapness of the latter's product has made considerable inroads -on the former's trade in kerosene the Standard has never been able to kill it, and it has of late made various proposals to the Scottish companies to take over their whole output of kerosene and to distribute it by the tank system. The Scottish oil com panies (who do a barrel-oil trade) are unwilling to supply the Standard with all their output, for they know that the Standard would by the tank distribution system kill the middlemen. Then when it had made itself the sole channel by which kerosene could reach the scattered Scotch consumers, it might decline to buy any more Scotch oil and simply force its own oil on the purchaser. The Standard people are now attempting to push their own oils by the tank distribution system on Scotland, but are meeting with strong opposition.
But the strength of the Scottish companies is not patriotic so much as economic. They refine
their oil from the shale, a soft, greasy, slate-like stone. Now so long as kerosene was the only thing the refiner troubled about, the Americans had the advantage because Nature had done half the work of distillation for them in her own laboratory, and instead of mining a stone, they got petroleum as a liquid. But the bottom is falling out of the kerosene trade, as I have already explained, and the Scottish companies are recouping themselves on their by-products. At the time of writing burning oils (kerosene) and lubricants are lower than they have ever been, and it is certain that no profit is being made out of them in Scotland. But the Scotch shale in distillation yields sulphate of ammonia, which is in good demand as a fertiliser, and is not obtainable from either American or Russian crude. Naphtha is also selling at a fairly good price owing to the development of the motor industry—in fact, the Standard has been buying large quantities of it from certain Scotch com panies. In the past the Scotch refiners have been greatly assisted by the considerable per centage of paraffin wax which their crude yields, but in the last three or four years they have lost some of this advantage owing to the increased output of paraffin wax in Galicia. The Boryslav and Tustanovitch fields in that country produce an oil which yields from 1 to 7 per cent. of paraffin wax, and the production of paraffin wax has shot up very suddenly— which is no doubt one reason why the Standard has been fighting so hard in Galicia. The net result is that the Scotch companies have a hard struggle to maintain themselves against the Standard monopolist tactics, but that on the whole they hold their own.