THE CHINA MAIL, TUESDAY, JUNE 14, 1960.
OF OIL 'FIXED?
IS PRICE OF Public's frequent accusation answered
Why are oil companies so frequently targets for pccusations of cartelism and monopoly? The following answer is given by the Royal Dutch/Shell Group in their annual report:
A distinguished Américan economist who recently carried out an independent investigation of the Sil Busífiets if the United States concluded his report by remarking:
"The oil industry continues to economic be one of the most competitive businesses ever seen."
London
Wall Street
closes higher
London, June 13. Industrial stocks moved ir regularly Highër today but often failed, to hold their prices. Several blak chips shaded including Courtaulds, Fords and Im- Chemical Indus- trles:
Breweries, stores and textiles
after
Gilt-edged securities reversed late firmness on last week's scattered selling following talk of a bank rate increase.
in foreign bonds Germans were a weak spot in, the quiet market.
gains despite profit-taking
New York, June 13.
4312
+51
The stock market warded off some afternoon profit-taking and finished higher for the seventh session out of the last eight. Most Issues Anished below . C. Tel. Co.
Eri Terphone the day, many
Bridal Finance Boeing Airplane Burroughs Add Machine Eorden (The) Co.
Brush Cohumble Elec. British Amer. Gil
Cana. Bk. of Comm. Campbell Soup Co. Calf Packing Corp.
Canadian Pacific R. Cane (J. I.) Co. Cal. Tractor Celanese Corp.
The glamour stocks took over from the blue chips in spear heading toray's advance.. Texas Instruments jumped about seven in the electronics where. Tran- sitron added about four and IBM about three, Drugs featured Up John and Pilzer, they were up more than two cach.
LT. Financial Corp. Clucit Peabody Consolidated Paper Consumers Gas
Continental Chi Continental Oil of Del. Creole Pet
Delaware & Hudson Co. Distillers-Seegrams Dominion Stores
Douglas Aircraft
Lactors which also will be measured in biis of are pounds sterling and may be affect its competitors, who therefore likely to take simular paid from new capital or from Those who work in oil are action. If it has misjudged the the retention of past earnings;
perial of increase and others if the company is to survive, the only too familiar with the prac- amount
be recovered tical effects of this competition, do not increase by the same expense must which is not confined to selling amount, it will have to make quickly by sales in the world's markets. The eventual pur- but extends into every phase of a prompt readjustment.
In this way prices tend to a chasers of the bill will not pay met demand, with selected en- their highs for
ground. Brokers: operations.
all the more than the competitive price There are hundreds of separ-common level, while
strong start to show had looked for a period of ate companies, large and small, time the competitive pressure is at the point of sale. so in the ineerings, but steels reacted in lower.
rise, but the engaged internationally in some also being applied to service, end it is the relative cost at small losses on balance. Dividend quiet irregularity following last or all of the complex operations quality, technical development which any company can get its expectations, lifted many misweek's record
at an all-time high in the near of the oil business: exploration, and overall operating efficiency product to that point that deter-cellaneous issues into higher consensus is for another attempt
ground.
future. production, transportation, re- The competition ranges through mines the success or failure of fining and selling. The larger every phase from the service its operations.
There is ufus a great, incentive exploration 10 groups of companies, relatively station back few in number, conduct the methods in the field and to the to find and develop better and greatest proportion of the busi-negotiation of contractual rights more reliable techniques of ex- ness, but the vigorous competi- to explore for and develop new ploration and production. Here the competitive race extends, by tion between these groups and oilfields. between each of them and other Throughout their history, öll way of research, into the fields of companies engaged in different companies have had to meet an science and technology; it has led phases provides the stimulus ever-increasing demand for oil progressively from the first use
Dollar stocks showed little without which the oil industry which is likely to continue in of geologists at the turn of the to such technical in-
Gains of more than three in could never have attained such the future. An expanding world century
Du Pont and around two in fractions higher. à high level of efficiency. economy and bigher living stan-novations as the use of selamic change but Canadians ended
Owens-lipots ana Proctor and
Firestone Tyre & Rubber Why then are oil companies so dards for fast-growing popula- one gravimetric surveys, photo-
micropalaeontology, Gold mining issues resumed Gamble helped keep the tri-
First Nat. City Bank frequently targets for accusations tions largely depend on the geology,
slow downdrift when distrial verige, at the Ford Motor Co. of Cona. of cottelism and monopoly? reeting of this rising demand, electric and radioactive well-their
limited demand for leading free side. Allied Chemical added Gatineau Power Gasoline prices
and to this end new sources of logging, etc.,
counters lacked follow- to two but Eastman Kodak Georgia Pacific all must constantly be sought.
through. Coppels stayed dull dropped back more than a There is little doubt that these Before existing oilfields When the crude oil has been and tilts were mixed. accusations often spring from used up, the individual com-fourd, it has to be transported the aspect of the oil industry panics must seek and develop
to the refineries and the Bnished which meets the public eye most new ones if they are to supply products must then be moved t prominently and frequently their markets and maintain their the price of gasoline at the business or indeed if they are the markets This may volve
expenditure on piplines of any service station. There is sel
from thing
£20,000, 10 dom, and indeed there cannel
£100,000 per mile, on tanker be, much difference in price for brands of cumparable quality at Competition thus begins in the feels costing £3 million for any given moment. This, how initial search for new sources of each shilp of 45,000 to 50,000 ever, is not evidence of collusive oil and in obtaining exploration tons, and finally expenditure of price-fixing. Similarily of price and production leases in unex- journeys by rad ear and roed All these effect in a market for, any commodity ploted territories. The compet- tank wagon. can equally be the natural con- tiveness of this aspect of the the cost of delivering sequence of strong competition. business is self-evident since gallon of Bulshed product to the in the gasoline market, where, the owner of the oil rights, point of sale and every one of many companies compete, each whether government or private the numerous companies
its volume individual, naturally willward volved is inten: on keeping its striving to increase
is costs down to or below those of 01 sales, the laws of supply and leases to those whose ter demand apply
all most attractive, taking into acts competitors: pressure on
Royal proven ability In companies to hold prices down count their
to a level related
to stay in business at all.
Competition
ore
Casts
Dutch/Shell
tó
Group the costs of exploring for, and developing companies are among the largest the more efficient operators. No oilfields in the interests of both tanker operators in the world. company can persist in selling parties. Ability to sell the oil yet they own only about 40 per of the ships, which all above the general price level re- in the world's markets will be cent
and included in this, for the lessor is under their house nage, charter- sulting from this process expect to hold its trade for long. well aware that royalties and ing the remainder in the open If a company feels justified in taxes can only be paid out of market. The Group's owned, and chartered pa must be fully decreasing its price and does so, income generated from sales. 15 Competitors must quickly The oil company, however, competitive with other ships, or follow or they will lose trade. It must pay out the costs of ex- the total cost of delivering pro- ducts wit be her than the rods of other operators wi obcius effects on the viability of Use business as a whole.
One messure of competition within any industry is the rate at which It develops new methods and processes, and by
a company increases its price, it pleration, drilling and production does so under the compulsion of as it goes along. These
costs
CHANCE OF TELEPHONE NUMBERS
Messrs. Deacons' General Office telephone numbers 22577 and 27149 will as from the 15th June 1960 be changed to numbers 35028 and 35029.
DEACONS,
Solicitors,
Shell led Minar losses in oils. Rubbers,
where Improved changed and teas were subdued.
-UPI.
Closing Prices
Outented Bonds
Brita Coral 215%-45-9/16. Coneal 4%-26). Conversion Loan 3% 1- 281-1/16..
Transport 3, 1970/88-
20
206.
568 64..
Finding Ložn * 1958/03
1900/90 Funding Funding Stock 1%, 1999/200......
Loan 4 Savings 35, 1986/63-210-1-1/16. Bavings 25, 1960/20-2593. Saving 5%, 93/13-213-3/18.
Barclay's Bank Ltd Chartered Bank- 3 d. Hongkonga.. Lloyd's Bank A-62 4.
Dow Chemies
Family Finance Corp.
0014
275 244
Faireys are still flying high with future plans
By Alexander Thomson
THE country house atmosphere is everywhere. Sloping lawns. Neat flower beds. And a long, winding, rhododendron-edged
drive. SECOND, there is Canada, where Fairey has an active business. Again, it is servicing and repairing airplanes.
This
is
the
temporary headquarters at Iver, Bucks, of the Fairey Co. after the sale of his aircraft business in Britain under the recent big mergers in the air.
the
Sir Richard Fairey, Airplane pioneer, who died in 5114 1956, once Hyed here. The Duchess of Kent's Coppins is the
53
12
39
111 property next door.
30
23
291%
2912
92
I drove out to Woodlands Park to dsk Mt Geoffrey Hall, the Falrey "King" about the Arm's future in its new form.
We talked in what had one been the library, an elegantly- 2534
and bow-windowed 384 panelled 781% room,
Said Mr Hall: "Things are going very well for us in Canada. Business is on the up and up.”
Another listy baby is in
ENGINEERING. Its jobs in clikle making hydraulic Bying- control gear for aircraft,
It supplies the whole of the The British aircraft industry. know-how gained on hydraulles in the air is now being applied to developments on the ground, "A good potential is there," said Mr Hall.
Other side-lines are making
Sand Mr Häll: "Ši Richárd tools for the PLASTICS
371 was always a bit of a buccaneer. INDUSTRY. and in АТОМІС
He loved to face up to a chal-ENGINEERING.
the
170
284
General Dynamnles
43
Gen. Tel. & Elec.
31
lerige, and then get
Goodrich (B. F.) Co...
68
eased
Great Northern Railway Grumman Alrerit Gulf Oil Hammond Organ Hiram Walker Homesake Mining Co. Hussman Refrig.
4722
beter of 25,
201
292% boday.
We are determined to
3746 373
go forward."
point
Major stoel issues dospite an improvement in pro- Motors also duetke figures, favoured the downside with the exception of a grain of about one
Ford.
Ralls shored, actional gains in Cherpeuke and Ohio, New York Central and Pennsylvania Rallroad.
Closing Prices
Abitibi Pwf. & Paper.
Alded Mills Inc.
Alma Steel Corp.
Am,Brake Bon ****
American Cable & Radio Corp. American Cyanamad Co.
Am. Gas & Mortic
Am. Hopie Rrod ord-Am. Mach, & dry
Am. Nature. Gen Am. Super Ret. Ampex
Union Inirance Centon-25-27/32.
Aircraft & Motori British Motor Corp, Ord--18s 150. Ford Motor Co-Bids 7igd. Hawker Siddeley Group Ord-30%
Footer
Lid
Standard Triumph international
11s 15.
Breweries Distillers Co 388 d.
South African Breweries 23 d. Building and Materials. Associated Portland Cement-7168
Goodlass Wall Lead Tid.
is standard the oil business 4 x has few equals. New techniques in each of the principal branches
are continually being introduced
from exploration to ultimate distribution, and these techn!- ques are the applied results of research. This is why the the Group companies, among leaders in this field, are cur- rently spending some £20 mil lion a year on research und
No. 1 Des Voeux Road, Central employ around 5,500 people in
Hồng Kong.
Marine & Industrial
COVENTRY
Engines
VICTOR
Cerierating sets
G.P.O. Box 899 RENECO Tel, 24491
ORIENT & PACIFIC LINES
R.M.S. "CHUSAN”
EMBARKATION NOTICE
Passengers are advised that the Chusan Will now be berthed at Kowloon Wharf & North.
..
Embarkation will take place between 1 p.m. and 3 p.m. on 14th June.
Entrance to the wharf should be made through No. 6 gate, Navy Street, off Canth Road.
Baggage will be received. th No. 8 Godown between g ́a.m. and 6 pm, on 18th June and bette 8 a.m. and 1 p.in. on 14th June.
between
Chusan will call at 4 p.in. on 14th Juhế.
their international laboratories. Thus, competition is ever pre- sent throughout the oil, industry und the consumer benefits ac- cordingly-in service, in quality, And in value for money,
The real price of gasoline to- the day--taking into account fall in the value of money-is considerably lower than it was before the war. In some coun tries indeed the net retail price of gasoline in current money terms is little different from what it was some 30 years ago. This of course is the price ex- clusive of tax and duties, which | nowadays are often greater than the price which the oll com- panies, receive for this product, most By contrast, the prices other commodities have risen substantially,
Ord-4
Coal, Steel and Engineering Babcock & Wilcox Ltd 40s,
United Sleel-80s 3d
Vickers L4d3494.
Food and Tobacco ...British American Tob. Co. Ltd--als 3d.
Imperial Tobacco Co., Ltd-675 1d.
Miscellaneous Boardman Marden Ltd 4: 70. British Oxygen Lid Ord-95 6d. Canadian Paciße Rly-16.
De La Rue Co. Ltd. Ord-71a. Dunlop Rubber Co--276 7:40. Gilan Holding Lid-28 45d. Hongkong & China Gas-15; 6d n. Imperial Chemical-01, 0. Lvons & Co-80s 6 d. Unilever Ltd-109% 41%d.
Paper Bowater Paper Corp 14.
Baldwin-ma-tam. Bank of Brocreal Bank of Nova Scotia Beech Life Savers
HONGKONG
STOCK
EXCHANGE
by
Our Own Correspondent
Idaho Power Imperial Oll
Imperial Tobacco Interchemical Corp. International Faper Johns Manville Ca. Kaiser Industries Kimberly Clark
do
Liggett & Myers Tob. Co. Lay Tulip
Lorillard P
Lowenstein & Sons,
McDermoti J. Ray
* McDonnell Aircraft
Monsanto Chemical Co. Motorola Inc.
Philip Morris
Then there is the AERO- That is still the Fairey spirit PLASTICS offshort. New pro- duets here are drainage pipes,
Hall is 54. He trained as an
101 engineer. He has also held a plot's licence since 1928. still fles regularly,
521
He
106
di
so
38%
ard inner containers trigerators.
for re-
Declared Mr Hall D$ we
sipped coffee: "So you see, we have quite a nucleus on which
As a young man working for to expand and build up.
the
Je tested Rolls-Royce,
"Just now, we are going engines that powered the ar-through a transition stage, On blaties with which Britain woh my reckoning, it will take about the Schneider Trophy in 1929 two years to complete." and 1931.
What about that subject, su He told me: "We are still dear to all investors' hearts, the prospects, very much in the aircraft bust-dividend
though not in this
meantime?
Hess,
country."!
2424
B
First, there is the company's offshoot in Belgium, "I really
is
coming into its own."
34% Hall declared.
But it has others which are still fapping vigorously.
Along with a Belgian com
build for the pany, it is to Belgian government some of Is the American Starfighters with 09 which Nato's air forces are, to
14 be equipped
Merck
4411⁄2
Mesabi Iran Corp.
917 Molsons Brewery
2815
53
1671k | National Bicult Co. National Dairy Prod. National Steel Carg. 2914 Noranda Mines Líð, 4% Norfolk & Western Ry,
North Amer. Aviation Northwest Airlines (Com.) (914 | Oklahama.Net, Gas
13
30
D99,
19
384 | Owen-Illinois Glass
112
Penny J. C. Co.
Pliney Bowes
Portland Gen. Elec.
Publicker Industries
Pullman
722%
Raytheon
4214
big job."
Royal Bank of Canada.
70%
Rheem_Mig.
200%
Shell Oil Co.
Saint Reg. Paper
4214
15
9024
34
Southern Railway (Com.) Stone & Webster
51%
Studebaker-Packard Corp.
10
Sunshine Mining
Thlakal Chem.
Schenley Inc.
Scott Paper
South Puerto Rico Bugar
Southern Natural Gaa
Southern Pacific Co.
Textron Inc.
Tide Water Oil
Traders Fançe
Bufnics done at the Hong-Tri-Cont. Warrants
į kong
Stock Exchange this Twentieth Century Fox Film
United Fruit morning amounted to approxius. Line. Co. mately $2,012,000. Noon quola-Westinghouse Air Brake tions, and the morning's trans-Western Union Tel. Co. West Va. Pulp & Paper actions:
(Zenith Radio
Shares Buyers Sellers HK Bank.. 1185 1200 In B2 $316 Valon
Wharf Ord=824 | Waterboat
Wheelock
Radio, and. Electrical Associaled. Electrical-63x, Electrical & Musical-la, English Electric Co-41s General Electro-30 d.
shipping Indo-China Steam Nav. Co. def ord-235 34,
P&O Steam Navigation def ord- als 6d.
£d
Stores
HK. & 8.
Hotel .... Great Universal Blores "A-804 HK Land.. 52.
Debenhams, Ord. 1-475 .
Marks & Spencer Lad-751 d. Woolworth FW. & Co-is 4%.
Con Goldfields of South Africa-
LI
For this year, the Fairey
promised Company ha final payment of 1234 D.c. te make 20 p.c. in all.
Mr Hall told me: "We would not have forecast 20 pc. if we had not felt fairly certain about, continue paying being able to it."
What earnings will Fairey lose by the transfer of its helicopter and UK airplane business Westland Aircraft?
10
Mr Hail. called it a very I estimate that, in
Hall paused for a little think. cash terms, it must be worth Then, he said: "It is impossible
more than £15 milión.
This Continental subsidiary to say,, Urill quite recently, sa already has a good business much of our engineering business
repairing and servicing aircraft, For the Starfighters, its plant 20% is to be enlarged.
18
302%
As Belgium is so promising a gateway to the Common Market other in Europe, Hall secs 22% opportunities there.
We have in mind new pro- ducts for which we know the 25 Belgian government would give is their support," he said.
"American and Canadian firms are interested in coming in with us on some of them. But is loo early to talk about that'
232/
31
60
12012 UPI.
was tied up with the UK aircraft side,"
Finally, will Fairey in its new form buy up other concerns?
Yes," said Mr Hall. "We are acurely looking around for the right opportunities..
Our aim is to broaden the feld for our engineering skills, and continue the diversification which, thank goodness, wie started years ago."
CONCLUSION.
The Fatrey Ca may have had a wings clipped by the big air mergers
here at hom
London Exprem Service).
Yesterday's Closing
COMMODITY PRICES
Jan./Mar.
Apr/May
General markets, af, bázis,
July
NEW YORK
thick June
AMSTERDAM
Closing prices all in guilders
Closing prices all in cents per kilogram, c.f.f. June,
Sater
700 da
HK Dock
150 924 Co. 216 220 500 220 9.70 6.00 1000 6.00 2950 6.70 100 102 200 9615
1300
500 + 100
200 . 101
China
Provident 10.30 18.70 200 19.30 2000 1914 1000 1915
4026
54
200
3200
SUGAR
Junk
2300
Aug.
521
Erlate crepe thin June
Textiles, Conte & P. Lid-60 Courtaulds 1
d.
521
535
Bax 115deg
20054
per Jb....
Cons, Zine Corp, Ord--791 6d.
No. 1 rubber
Yaumati
185
De Beers def-143 94.
HK Tram
Hongkong. This 74.
Petaline Tip-to
Ch. Light
30% 30% 2140 21%
Contract No. (world).
No. 2 rubber
Jub
No. 3 rubber
1.19
Но, в стере
Rand-718 34.
Southern Kints Cons Ltd-28 d. Union Corp-43
90.
West Driefontein Goldmining-TES
HK ziet.
27 21.30
2116 3002135
600 27
May
July
100 21.10
Spot44.A.3.- Cuba)
37 300 # 3571.
120638
Contract No. 8 (domestic)
300 35
July.
6680 & 9615
Sept
6.69 6.09
Nov.
2000 25%
Spot-CA... NY. ex-duty) | 3.05
900 € 471
1100 475
2:00 48
Total Sales; 200 contracía - Open interest: 1,850 contracts.-UPL
TLÁ
Spot
3-month
Copper
3-month
Sept.
zine 1st half June
Sept.
Id, addition, the quality of gasoline
ald has improved engine designers have been, able to take advantage of these ira- provements to such an extent that only 2 gallons of gasoline of present-day quality are need-hd. ed to do the work that required 3 gallons then. Thus the net retail price of gasoline has effectively been reduced bý | 26.
about one-third
British Borneo Petroleum Synd!- Hk Tel... cate-464 30.
Similar examples could be given for other oil products: 9. They lustrate the mutual bene. fits that come to consumers and producers ällke from the opera- ilon of well-organised and pro- Eressive companies in a com- petitive business.
British Burmah. Petroleuth-99.
British Petroleum Co., Ltd--329
Burmah-43 M.
Royal Dutch Petroleum~14-), G.I. Cement 401 4032 Shell Transport & Traflig-147
-Reuter.
Exchange rates
Datry Tam 26.00 26.80 2700 28.50
175 26.80
Watson .....
202
Allied Invest.
6,20
Textile ...
0.80
1000 80
500 G
5049.80
235.00
Nanyang Mill Buthow was done in the local | Rubber -
exchange unofficial
market this Rubber Trust
Taikoo Dock 131G
NOTICE TO CONSIGNEES at the following rates:
'ALCİXOUS"
Á
Damaged cargo ex this vessel
will be surveyed by Messis, Wood & Browne TV HDÍTS.... Tharf, from “19 ̧káz, od Jota 15 año 15, 1968, and oponere requieled to have
8.74 US dollars (per, #1). maak. Sterling notes (per #1)_
18.01 Australian notes iper. 21)... 12.01 Indonesian rupiah (per 100) F301- Sun. Licals (per 100)
Singapore (Straits)
ཡ།། མཎྜན་
Total Sales: 4 contracts
RUBBER
BINGAPORE
Closing prices in Straits carlts per lb. Lob. Malayafi ports:
No. 1'June
25.03 Realty
1.80
1.328 100 10000 - 12. 3000 1.70
July
No, z June
No.
thes representatives presesit curing Agreed merchant Ga
- tium durvey,
KUTTEKPILLÄ & ÄRIRË,
rates
Wen geenen Bélischemarks,
122014
No 2000 170
Spot rubber linbaled Blanket, prepe
LONDON.
Closing prices all in pence per
Settlement hớilah tergh?
1b.:
No. 1 Ha look
LIVERPOOL
per, 1b.:
Closing prices all in peče
American Contract
July/Aug Det/Nov, Dec/Ja
May/Jame
Silkell Contractk
3.50 buyeri
3.44 buyers
$33 buyers 3.12 buyers -UPI.
July/Aug. Hehov.
Mar/Apr
May/June
Buyers Sellers.
787
2473
KANNA STARET
23,00
➡UPI.
METALS
LONDON
Closing prices, all in sterling per long ton...............
FOREIGN EXCHANGE
NEW YORK
Closing rates:te Canada
England office
Austella
30-days
Nele. Zaklotid Boudi Aèrics
Other unchanged. -
* LONDON Closing rates: New York
COTTON
all in Cents
Zárt
Loty
2.2010
247630
2.7000
2.8050
10.55 -16.55%%
139.87-120.72)|