-THE SHELL TRANSPORT IN THE UNITED STATES.
It is a strange fact that, while the Americans were watching the activities of the Pearson group with evident hostility, they displayed not the least mistrust of the Shell Transport, which, by a veritable master-stroke, had estab lished itself in the heart of the United States. American law, unlike French, does not distinguish between ownership of land and ownership of the minerals. Both alike belong to the owner of the surface. If, then, a private individual discovers at any depth a deposit of oil or of ore within the boundaries of his property, he is at liberty to work it, lease it or sell it however he desires, without the intervention of the State.
It was thus quite easy for the Shell Transport to buy land, sink wells and work oil as it liked. The source of its capital did it no harm, for before the War nearly all American large-scale industry had had to make calls upon European savings. And then the Democrats, fearful of the political and commercial power of the great trusts, were not sorry to set against them foreign companies which, while usefully stimulating competition, could have no influence upon domestic politics.
Hence the British company was allowed to set up its pipe lines and its storage tanks side by side with those of the Standard Oil. Very cleverly, too, it contrived to issue
shares to the American public in order to give the latter an interest in its prosperity ; and the operation was facilitated by the fact that the dividends it paid were very high. In 1919, the Shell Transport placed 750,000 shares upon the New York market ; by so doing, it realised a premium of L4,390,623, out of which 4 millions sterling were appro priated to reserve and to amortisation. A delightful stroke, indeed, to make use of the capital of a competitor in order to develop a concern which is to deprive him of his supremacy But then what reason had the Americans to distrust a company which operated in their own country and with their own money ? The Royal Dutch, the great Dutch trust, followed a similar policy. It bought oil-bearing estates in Texas and Okla homa, issued a portion of its share-capital in New York, and exerted itself to acquire concessions in Central America.
The competition which to all outward seeming existed between the three companies—Shell Transport, Mexican Eagle, and Royal Dutch—quieted public opinion and re assured the authorities. They came to be looked upon as international undertakings without any political ends.