CHAPTER VII 
COMPETITION IN MARKETING GASOLINE 
Section 1. Basis and scope of the study. 
Basis of the study.—The Senate resolution directing this inquiry 
specifically directed the commission to ascertain whether any agree- 
ments or understandings existed among the different companies in the 
petroleum industry whereby prices of gasoline and other petroleum 
products were either artificially increased or artificially depressed. 
The price advances in gasoline which were made in the spring of 1926 
were specifically mentioned as a subject of inquiry. State governors 
in all parts of the country wrote letters to the President, which were 
referred to the Federal Trade Commission, urging that an inquiry be 
made into the gasoline price situation. 
Scope of the study.—The information covering competitive con- 
ditions in the petroleum industry, with special reference to gasoline, 
was secured largely through interviews, conferences with sales 
managers and executives of a large number of marketing companies, 
and the examination of records of petroleum marketing companies 
and associations. The cooperation of the petroleum industry was 
generally excellent throughout the entire inquiry. A considerable 
number of companies and associations refused to permit their cor- 
respondence records to be examined, such refusal being within their 
legal rights under present decisions of the courts, but the companies 
refusing the examination of such records cooperated with respect to 
other phases of the inquiry. 
All of the so-called Standard Oil Cos., except the Standard Oil Co. 
(Kentucky), permitted an examination of all records called for, in- 
cluding their correspondence records. Data secured by the Depart- 
ment of Justice covering earlier years were also examined. 
Most of the information on competitive conditions relates to the 
year 1926 and the early part of 1927. 
Conditions of competition are discussed chiefly in the refinery or 
tank-car market and in the tank-wagon (wholesale) sales of gasoline, 
which are the most important markets, but sales of gasoline in tank 
steamers, and retail sales from service or filling stations are also 
discussed. 
Tank-car sales—As already pointed out, independent wholesalers 
usually have no difficulty in securing adequate supplies of gasoline. 
A number of the large Standard marketing companies sell gasoline in 
tank-car quantities to independent wholesalers at margins under the 
tank-wagon price (wholesale price to retailers) which are generally 
considered ample to cover marketing expenses and a remunerative 
margin of profit. The Standard companies not selling to independents 
are large purchasers themselves. The large independent companies 
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