(SECTION OF THE "SHELL" TRANSPORT AND TRADING CO. (LTD). COMPANY MEETING REPORT REPLYING TO COMMENTS MADE IN THE HOUSE OF COMMONS BY WINSTON CHURCHILL, ALLEGING SHELL HAD ENGAGED IN OIL PRICE FIXING)

ARTICLE

THE TIMES: COMPANY MEETINGS: "SHELL" TRANSPORT AND TRADING CO. (LTD).

SIR MARCUS SAMUEL REPLIES TO MR CHURCHILL: 23 JUNE 1914

THE TIMES: COMPANY MEETINGS. "SHELL" TRANSPORT AND TRADING CO. (LTD.).

SIR MARCUS SAMUEL REPLIES TO MR CHURCHILL.

The ANNUAL GENERAL MEETING of the members of the "Shell" Transport and Trading Company (Limited) was held yesterday at Winchester House, Old Broad-street, under the presidency of SIR MARCUS SAMUEL, Bt., the chairman of the company.

The SECRETARY (Mr. F. A. Smith-Rewse) having read the notice convening the meeting and the auditors' certificate.

The CHAIRMAN, who was cordially greeted, said:- Ladies and Gentlemen,-Before presenting the balance-sheet to you, a duty devolves upon your directors to rebut the statements of Mr Winston Churchill (hear, hear), made in the House of Commons about this company and its directors. The first and most serious is that we have exploited the necessities of the Admiralty, that we are a trust next to the Standard Oil Company-a trust of such magnitude that Mr. Winston Churchill has assigned to us a very important position in the oil trade. He has stated that there was a combination among various companies so close and binding that there was no free market, and he has implied that the oil trade was controlled by the Standard Oil Company and the Shell Company. If this be so, what is the reason that for the years from 1907 to 1911 not a single ton of liquid fuel was purchased by the Admiralty from the Shell Company? In 1912 this company supplied no more than one-seventh of the oil fuel imported by the Admiralty in that year, and that quantity we supplied at a price which left the company a heavy loss. It was largely in consequence of the very low prices ruling then that production was discouraged and an inevitable reaction occurred 12 months later. In 1913 of the total quantity of oil imported by the Admiralty our company supplied less than one-eighth. The remaining seven-eighths were derived from nine separate vendors, not one having the most remote connection nor alliance nor agreement with the Shell Company, nor among themselves. I assume that when the First Lord realizes these facts he will at once agree that he was completely misinformed when he stated in the House of Commons that there was a "ring" against the Admiralty and that we were concerned in it and that there was no "free market." (Hear, bear.) The argument, of Mr. Winston Churchill that because there was not an "open market" it was necessary for the Government to develop oil fields themselves goes by the board when it is remembered that in addition to the nine companies from whom supplies were drawn in that year the Admiralty have notoriously obtained for 1914 and following years large supplies from Mexico, from the Scottish Shale Oil Producers, and from the Shell Company, whilst they know, too, that supplies are increasing in Trinidad. Sarawak. and Egypt, and that the opening of the Panama Canal will place vast quantities of oil at their disposal.

CAUSE OF THE RISE IN PRICE.

The great rise in the price of which Mr. Winston Churchill complains was, amongst other natural causes, due to the prospective demands of the Admiralty being concealed instead of being announced as early as possible. (Hear, hear.) The imports of oil by the Admiralty in 1913 were no less than 150 per cent, in excess of those in 1912. With such a large and sudden increase in demand the wonder is that the Admiralty had not to pay still higher prices, and that they did not proves the elasticity of the oil market. The Admiralty, if they wished to secure supplies, made the grave mistake of supporting one company only (hear, hear), and of keeping at arm's length this company, whom the First Lord has honoured by describing as a power in the oil world. The specification prepared for liquid fuel for the Admiralty was of a character which excluded many sources of oil from supplying it. With the growth of the requirements of the Admiralty for liquid fuel it became necessary to obtain larger supplies, and then, and then only, was this company approached. We, cannot betray Admiralty secrets, and, unless Mr. Winston Churchill releases us, we may not disclose the actual figures at which we have sold to the Admiralty, even for refuting the accusation, which we deeply regret, that we are only courteous "at a price."

AN INVITATION TO THE ADMIRALTY : MR CHURCHILL'S SNEER.

But since the accusation has been made, we invite the Admiralty to disclose the f.o.b. price at which we sold to them, and at the same time to state the price paid to others, for supplies bought at the same moment. My colleague, Mr. Deterding, resents as deeply as I do the insinuations made against this company that we have been courteous to the Admiralty only " at a price." Mr. Winston Churchill himself, in his speech in the House, acknowledged how much he was indebted to Mr. Deterding, and consequently to the company, for what had been done for the Admiralty. It is to be regretted that in the report of the debate Mr. Deterding's name, which was mentioned by Mr. Churchill, was accidentally omitted. We next come to a sneer by Mr. Winston Churchill which is unworthy of him. He stated that if the government did not conclude the purchase of the Persian Oil Fields, the Shell Company would have bought them, and under some high-sounding patriotic name would have registered another company. His sneer applied, no doubt, to the fact that the Company in which the Shell Company and the Royal Dutch Company are the solo shareholders is called the " Anglo-Saxon Petroleum Company." There is no other foreign element in the Anglo-Saxon Petroleum Company, whilst it is agreed that in those of our companies which operate in British territories the majority of the directors shall be British subjects. The Dutch sources of supply now produce 1,500,000 tons of petroleum annually. We have never done a greater service in securing a supply (if liquid fuel for the Navy than when we realized the potentialities of the Dutch East Indies. (Hear, hear.)

THE COMPANY AND THE ROYAL DUTCH COMPANY.

The reproach that we might. suffer from a foreign alliance would possibly have held good if it were with a country having conflicting interests with Great Britain and having a fleet requiring large supplies of liquid fuel. Neither of these conditions applies to Holland, and it has not been the least of the difficulties of your directors that the censures directed against this company have been based upon the fact that they were in alliance with the Royal Dutch Company. We have not only never denied, but we are proud of the association. (Hear, hear.) It has promoted good feeling between the two nations, and this will progress unless it is disturbed by unwise, ungenerous. and misleading misrepresentations. Most fortunately, Mr. Deterding and his Dutch colleagues are broadminded men, and they have not resented the attitude which has been taken. But on the contrary, they have given. and I am quite sure will continue to give, every help that they possibly can to the British Admiralty if they will frankly state what it is they require and give us time and opportunity for providing it. I am only too glad to chronicle that since the Admiralty realized their needs, since equal opportunity was given to this company with their competitors, a totally different, spirit has prevailed, and it was therefore astonishing to us to hear that, under the pretext that there was a " ring " against the Admiralty, and that we were parties to the " ring," it was thought necessary to take a step new to government practice and to involve public funds in a commercial adventure. In the tale that I shall presently have to unfold to you in connection with your own business, you will see our total production for 1913 amounted to 4.000.000 tons. The small quantity which the Admiralty took from us is a bagatelle compared with this, and your interests are therefore financially independent of prejudices and attacks even by a Government Department. But we would express the hope that, with the elucidation of the facts -which we have placed before you, the prejudice which has existed against this company may be dispelled. Under no circumstances whatever will your directors and managers-British or Dutch- resent to the injury of the British Empire the grievances which we have had against individuals. In spite of what has occurred, such service, advice, or assistance as we can possibly render to tho Admiralty will be freely, willingly, disinterestedly, and always at their disposal if they choose to avail themselves of it. (Cheers.)

A "FORTUNATE" AND "MOST INTERESTING" YEAR
The year under review has been not only a fortunate but a most. interesting one. Upon the declaration of the British Admiralty that they had decided to use liquid fuel on a large scale in view of its overwhelming advantages (so constantly demonstrated to them by this company taking their engineers on Shell boats and imparting them with al1 the knowledge we had obtained), hopes were raised high that the policy of " a fair field and no favour " would at length prevail. (Hear, hear.) Under this stimulating influence, a determined effort, was made by all the producers to furnish the Admiralty with such a supply of liquid fuel as would warrant them in continuing their enlightened policy of increasing the units in the fleet to burn oil for we are convinced that a coal-fired fleet cannot. survive against one oil driven. Great success has attended our efforts, which were devoted (in so far as prospects of success existed) to the development of fields all over the world, especially including British territory or places under British jurisdiction.

The First Lord of the Admiralty has misconstrued this action, and, has assumed that our purpose was to raise prices. The motive that prompts us is to obtain large, constant, and widespread supplies from as many sources as possible. This obviates dependence upon any one field, and enables us to undertake business and to give contracts of supply practically without a force majeure clause. A fleet once on liquid fuel, cannot afford to contract and be subject to a force majeure clause which quite suddenly becomes operative.It is in the best interests of consumers that certainty of supply should be established.