BRITISH OR AMERICAN?

Dominion, Volume 14, Issue 122, 16 February 1921, Page 3

BRITISH OR AMERICAN?

OIL TRUSTS’ FIGHT FOR FRENCH MARKET v AN EXCITING CONTEST The Palace of Dufayel, in the Champs Elysees, which was reserved bv the French Government as a sumptuous club for the foreign Press during the Peace Conference, has been bought, says “Humanite,” by the Standard Oil Company. One of the most expensive and pretentious town houses in the world, it was built for the millionaire furniture merchant Dufayel, just before the war. ■ Even he felt that it was too gorgeous to bo lived in, and until his death, a few years ago, he lived with his wife in a modest dwelling at the back of his own court. Among the many marvels of this mansion are a resplendent marble staircase and a private theatre. To ribald Pressmen in the days when they used it as a club it was known as "The dreaan of a million gildings." Its acquisition by the Standard (wrote the Paris correspondent of the "Manchester Guardian" on December 9) is the latest step in the great fight being waged here between the American Company and British oil interests. Each of th“ home companies has founded a daughter company here with French directors, of which the principal are M. Paul Cambon, ex-Ambassador, for the Standard, and Sir Basil Saharoff for the Shell Royal Dutch. France as an oil-consuming country first became prominent immediately after the Commune. A group of astute financiers managed in the early days of the regime of M. Thiers to get the Government to vote a law handing over the ' monopoly of the sale of oil to them. There were nine companies interested. The motives brought forward by the supporters of this law, passed on July 8, 1871, were that mineral oil, then newly in use, was an extremely dangerous substance, and should be carefully controlled by the Government. Great use was made of the incendiarism of the famous "netroleuees” of the Commune, who were said to have tried to burn Paris by this means Prohibitive Duty. Under the monopoly law a duty of 20 francs per 100 kilos of raw paraffin was imposed on entry, this duty being raised no less than 32 francs per 100 kilos OU the refined variety. The consequence was practically to prohibit the entry of refined oil and to give to a group of nine a monopoly of oil refining in France. Oil at that time was only used for domestic lighting purposes, but with an average consumption of 300.000 tons per year this left the "cartel" of nine refiners a net profit of 36 million franca a year. yuite early in the game the “cartel" came to an agreement with Standard Oil by which 90 per cent, of the supply of raw oil was done by the American company. This continued for years. In the decade before the war, however, in the face of violent opposition in the Chamber, the 12 franc refinement protection tariff was' successively reduced, first to 7 francs, then to 3.50. Finally, before the war broke out. the Cartel, now consisting of ten firms, finding the protection was only 3 francs per 100 kilos- gave up the business of refinement and took on that of distribution. Still the monopoly rested in their hands, the same factory made tins and ten different sorts of labels, but the profits were, divided by private agreement as before. In 1917, in the midst of the war the Cartel had to confess that they could no longer guarantee suiitcient suppuos of petrol oil to the armies, and the French Government let the British into the business. In 1919 the British trusts arrangement expired, and they made an offer to the French to continue. At the same time the shares of the principal components of the British combine the Iloyal Dutch, Shell, and Mexican Eagle, were put on the market in Faris in considerable quantities to get investors interested. The business was paying well at the moment, and coming n'J the same time as the boom in foreign securities that followed the fall in the value of the franc, there resulted the greatest rush boom that the French bourse has ever experienced since Panama Canal days. A Raqe of Speculation. The whole of France seemed to be engaged in speculation on Mexican Eagle ’ and .Royal Dutch. The first crowd in made huge sums. - Iloyal Dutch rose from 21,000 francs to near 70,000 per share in the wild days of 1919 and the beginning of 1920. Everyone seemed to be a buyer. Shopkeepers, demi-mondaines, duchesses, maiden ladies, rentiers, priests, country . gentlemen, and mothers of families found their greatest interest in life in watching the fluctuations of the Royal Dutch, the fame of which was spread and applauded in everj' music-hall and chic dancing resort. What happened to that boom is another story. Five hundred millions worth of Royal Dutch are held to-day in France. The culminating point in the fortunes of the British Trust was at San Remo, where in return for the major part of Mosul oil Mr. Lloyd George gave M. Millerand a free hand in Syria. A by-pro-duct of the San Rv.no agreements was the entry of the British into part exploitation of the French colonies. Standard oil all this while seems to have been rather slow to take in what was happening. Then they sent over Mr. Bedford to try to pick up the pieces of their loft monopoly sale and development. Mr. Bedford followed closely in the wake of the British. The latter had engaged French Ixinks to look after their interests. Mr. Bedford allied himself with the Banque de. Paris et Pays Bas and started the standard I'ranco-Americaine Company. The British bought the two Gabriel buildings ort the Place de Concorde tor ©dices, the standard tn turn took over DufayeFs white elephant. No outsider can claim to pierce tne secrets or tne two great trusts, out it is ueiu in sound quarters tnat so tar the real honours of the battle have gone with the British. Bow should it be otherwise when they had all the French i agreements in their pocket before Mr. Bedford arrived on the scene? But no doubt the war will go on by Press campaigns and by bourse nnd banking encounters for a long rime to come.