Editorial: Behind the Fall of the Coalition. (1922)

Editorial from the November 1922 issue of the Socialist Standard

The bulk of the world’s-oil supply comes from America. According to the Daily News (May 31st, 1921), “82 percent, of oil comes either from the United States or from American mines in Mexico.” The same paper states that within 13 years the wells of the United States, unless conserved, will give out. The Standard Oil Co. practically controls the American supply and, consequently, they have been looking abroad lately for fresh fields. In this they have come into conflict with the Dutch and British group of oil companies. The capital of the respective oil companies is tremendous, and they use their resources to shape the policies of the different world powers.

The fight for oilfields and control of oil distribution has played a large part in recent foreign policy. Behind the Russian negotiations and the Mesopotamian squabble lurked the power of oil.

On Thursday, October 26th, 1922, the Financial Times reports an interview with Mr. J. Koster, the managing director of several oil enterprises. Mr. Koster, after giving detailed evidence to prove that America would be facing a shortage of oil in the near future, wound up as follows :—

  “My study of the world’s oil position teaches me these significant facts. The conclusion I have arrived at is that in the United States within the next two years there will be a crude oil shortage, and the prices of crude oil and oil-products, and the value of yet unmined petroleum, must necessarily feel the effects of such unavoidable shortage, and the one result can only be higher prices and a large premium for oil reserves.

   So the British and Dutch oil enterprises that have succeeded in securing control of a large part of the world’s petroleum reserves can face the future with every confidence. In order to account for this, one has but to consider the effect which a stopping of all export from the United States, combined with a decreasing export from Mexico, would have on the markets outside of America. Besides the profits already obtained under the present circumstances by undertakings working in countries like the Argentine Republic, Venezuela, Persia, the Far East and Roumania, the future of such undertakings, thanks to the state of affairs in the United States, seems to offer almost unlimited possibilities.”

The prize is large, the future bright— what seeds for future turmoils ! The Anglo-Persian (in which the British Government has a large interest) and Shell Groups have angled themselves into a good position in the East to threaten the position of the Standard Oil Co., and the fight between these groups to corner the world’s supply is now going ahead fast and furious.

Another factor at the root of the late Government’s fall has been suggested by two recent happenings.

Mr. Leslie Urquhart, the Chairman of the Russo-Asiatic Corporation, negotiated an agreement with a representative of the Russian Government under which his corporation gained certain concessions in Russia. Arising out of the British Government’s muddling of the recent near Eastern problems, the Russian Government refused to endorse the Urquhart concession. In his speech to the shareholders of the Russo-Asiatic Corporation on October 23rd, 1922 (see Evening Standard for that date), Urquhart blames the British Government’s policy for his failure, and urges that Russia should be treated as any other world power. He also deprecates the suggestion that his corporation would endeavour in any way to influence Government policy. The next day Mr. McKenna, the Chairman of the London Joint City & Midland Bank, and formerly a Liberal Chancellor of the Exchequer, threw overboard his former associates, and appeared on a Tory platform, advising his audience of business men to support Bonar Law, the new Tory Prime Minister. On the surface, this might appear as an ordinary case of a political turncoat. It is a curious fact, however, that the London Joint City & Midland Bank owns thousands of shares in the Russo-Asiatic Corporation. Would it be too bold to suggest, in spite of Mr. Urquhart, that the above corporation have succeeded in influencing Government policy?