The World-Struggle for Oil

Part Iii. the Struggle Between the Powers.

Chap. VII. The Europeanische Petroleum Union: a German Trust for the Control of European Oil which founders in the Great World Conflict 97

VIII. The War and Oil 101

IX. An Imperialism not without Greatness 110

X. The Struggle between Great Britain and the United States in Mexico 113

XI. A State-subsidised Company: the Anglo-Persian 129

XII. An American Balkanism: the British Controlled Oil-fields 143

XIII. Political Tendencies of the Royal-Dutch: the British Oil Empire 147

XIV. How the United States lost Supremacy over Oil 151

XV. The American Retort 178

XVI. From Washington to Genoa: the Struggle for the Oil-fields of Russia 184

Part Iv. France's Part in the Struggle Between

Great Britain and the United States.

Chap. XVII. The Cartel of Ten 201

XVIII. The Petroleum Consortium 207

XIX. How Great Britain Succeeded in Winning France over to Her Side in the Struggle with the United States 215

XX. Great Britain and the Oil-fields of the French Colonial Empire 234

XXI. The Standard and France 239

XXII. Conclusion: the World in 1923 244

PART I. The World's Oil

THE WORLD'S OIL

CHAPTER I

"WHO HAS OIL HAS EMPIRE!"

The question of oil has become one of the most vital in all countries. Its importance is such that even the most solid political alliances are subordinate to it. The Great Powers have all an "oil policy." The United States, where the most powerful trust is an oil trust--the Standard Oil Company--the United States, which control 70 per cent. of the oil production of the world, have decided not to leave the question to private initiative alone, but to start a vigorous oil policy both at home and abroad. The American Senate recently decided to create the "United States Oil Corporation to develop new petroleum fields," while Mr. Bedford, Chairman of the Board of Directors of the Standard Oil Company, asked the Government to lend its support to any Americans who were soliciting oil concessions throughout the world. This support, which even Wilson--hostile to trusts as he was--did not refuse, was granted very energetically by Mr. Harding: three European States have just had experience of it.

Britain, with her usual foresight, understood long ago the importance of oil, and took the necessary action. In the work of exploration alone she is at the present moment spending considerable sums, and she will soon have nearly all the remaining oil-fields of the world in her hands.

France alone remains behind, hesitates, changes her mind, and allows herself to be despoiled, not only of the region of Mosul, one of the richest oil-fields of the world, which was formally promised to her by the Agreements of 1916, but also of the few modest oil deposits which she possesses in her colonies. For these are almost all exploited by British firms; and by the Agreement of San Remo the French Government has, in addition, promised to reserve a large share for "British co-operation" in new companies which may be established there.

"Who has oil has Empire!" exclaimed Henry Bérenger, in a diplomatic note which he sent to Clemenceau on December 12, 1919, on the eve of the Franco-British conferences held in London to consider the future of Eastern Europe and Asia Minor. "Control of the ocean by heavy oils, control of the air by highly refined oils, and of the land by petrol and illuminating oils. Empire of the World through the financial power attaching to a substance more precious, more penetrating, more influential in the world than gold itself!" The nation which controls this precious fuel will see the wealth of the rest of the world flowing towards it. The ships of other nations will soon be unable to sail without recourse to its stores of oil. Should it create a powerful merchant fleet, it becomes at once mistress of ocean trade. Now, the nation which obtains the world's carrying trade takes toll from all those whose goods it carries, and so has abundant capital. New industries arise round its ports, its banks become clearing houses for international payments. At one stroke the controlling centre of the world's credit is displaced. This is what happened already in the eighteenth century when, with the development of British shipping, it passed from Amsterdam to London. And British statesmen have had, at one time, a moment of anxiety lest it should move to New York!

Thus began the terrible struggle between Britain and the United States for possession of the precious "rock-oil."

"The country which dominates by means of oil," said Elliot Alves, head of the British Controlled Oil-fields, a semi-official, semi-private organization, which the British Government has specially commissioned to fight the Standard Oil Company, "will command at the same time the commerce of the world. Armies, navies, money, even entire populations, will count as nothing against the lack of oil."

The War proved it.

* * * * *

Whence does oil derive this formidable power, before which the whole world bows down? From the fact that the fundamental basis upon which the industrial life of modern nations rests is fuel. Before the War, Germany, Britain, and the United States owed the whole of their power and their wealth to coal. It would have been true to say that the British Empire rested upon a foundation of coal.

It is essential to have control over fuel in time of peace for economic prosperity, and in time of war to supply the navy and maintain control of the seas.

Now oil has considerable advantages over coal. Its extraction is remarkably easy compared with that of coal. What is the boring of a well and the installation of some simple machinery on the surface compared with the expensive subterranean workings which are involved in the exploitation of a coal-mine? An oil-boring before the War cost a few hundred thousand francs, while the simplest workings for a colliery always necessitated an expenditure of several millions. The installations once made, oil flows by itself into the reservoirs, whence it is conducted by pipe-lines to the sea-ports and there pumped into the ships. It may be refined before exportation or only on arrival in the country where it is to be consumed. The expenditure upon labour in these various operations is extremely small, especially in undeveloped countries where native labour is employed. Thus, even at the present time, in the Dutch Indies the coolies are paid a florin a day. Now at the end of the War the employés of the Royal Dutch in the Dutch Indies numbered only 1,000 Europeans and 2,906 natives and Chinese for a production of 1,706,675 tons. A native earned only 300 gold francs a year for 80 tons of oil extracted, refined and transported to the coast.

After the Bolshevik revolution wages at Grosny were still only seven roubles a day, which, considering the depreciation of Russian money, represented very little. Generally the expenses of production in Russia did not exceed a few kopecks a pood (50 kopecks for one of the best-known firms, that of Akverdoff).

Thus oil is bound to become in future more and more important as a fuel, because of its peculiarity in necessitating so insignificant a charge for labour--which protects it from the inconveniences resulting from the social crises in the midst of which we live--and because its net cost is so small. For half a century it was used only for lighting purposes, and then it had to compete with gas and electricity. At one time there was talk of limiting production!

Between 1900 and 1910 the invention of the internal-combustion engine and the enormous development of motoring gave it new impetus. Fine oils only had been used up to then. Under pressure of the demand, it became customary to raise and refine poorer and poorer oils, giving from 60 to 75 per cent. of waste products.

There remained the mazut or fuel-oil, which required very high temperatures for combustion and which was very dirty in use.

Then the German, Diesel, invented the internal-combustion engine for heavy oil. The mazut, subjected to high pressure in a cylinder, produces an explosive mixture which, without sparking-plug or magneto, drives the pistons in the manner of a petrol engine. The installation is rather heavy, but no boiler is required, and it takes up much less space than a steam engine of the same power. A vessel fitted with a Diesel engine can sail for fifty-seven days without re-fuelling, while with a steam engine it could only sail for a fortnight. A ship fitted with a Diesel engine and having a speed of 20 knots could sail from France to Suez, India, Australia, New Zealand, and return by Cape Horn without re-fuelling. But, better than any words, the following little table, made out for two boats of the same power, will give an idea of the great advantages of the Diesel engine:--

--------------------------+--------------+--------------- | Diesel. | Steam. --------------------------+--------------+--------------- H.P. | 21,000 | 21,000 Weight of engine and | | accessories | 1,000 tons | 3,400 tons Space required | 5,300 cu. m. | 10,000 cu. m. Daily consumption | 100 tons | 360 tons | (heavy oil) | (coal) Consumption for a voyage | | of 15 days | 1,500 tons | 5,400 tons Bunker space for a voyage | | of 15 days | 1,700 cu. m. | 7,000 cu. m. Total space required for | | engine and fuel | 7,000 cu. m. | 17,000 cu. m. --------------------------+--------------+---------------

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