MEDFOHD MAIL TRIBUNE, MEDFORD, ORE.
THURSDAY. AUGUST 25, I960
Oil Industry Faces Major Challenge: Demand for Its Products to Double by 1975
By HENRY J. BECHTOLD
UPI Financial Editor
New York OIPD The oil in
dustry has a tremendous chal
lenge ahead - to satisfy a de
mand for its products that is and is expected to reach more
expected to double by 1975. than 6-billion barrels in the
The nation's annual petro- next I5 years-
leum consumption now is a But the success of the oil
whopping 3.25 billion barrels, industry in meeting this chal-
Mary Martin Grief-Stricken
Over Hammerstein's Death,
But Broadway Show Goes On
New York -tUPD- Mary Mar
tin Tuesday night choked
down her grief over the death
of Oscar Hammerstein II, and
in the best show-must-go-on
tradition gave her 262nd per
formance in the famed lyri
cist's last play.
Then, after the curtain had
fallen on "The Sound of Mu
sic," Miss Martin could aban
don the role of show business
trooper and become once more
a woman who has suffered a
great personal loss.
She threw herself in actor
Theodore Bikcl's a r.m I and
wept.
"Please excuse me," she
said tearfully. "Oscar has al
ways said the words, Tonight
I have none of my own." Then
she fled to her dressing room.
Wept for Hammaritein
Miss Martin wept for the
man who gave her her first
audition for Broadway when
the was just 17 and a self-described
"hick" fresh out of
Weathcrford, Tex.
Many years later Hammer
stein was destined to be the
writer-lyricist who created for
her the role that pushed her
permanently into the hall of
theatre greats - that of Nellie
Forbush in "South Pacific."
Hammerstein died Tuesday
of stomach cancer at the age
of 65. His body was cremated
and private funeral services
will be held bv his family to- and dancers stood
day at Hartsdalc, N. Y. His, hushed gloom.
the longest and most demand
ing performance of her career.
Bikel and fellow cast mem
bers Marion Marlowe, Patricia
Neway and Kurt K a s z n a r
trickled in later, each looking
more glum-faced than the one
before.
Backstage, actors, singers
about in
friends in the theatre will pay
tribute to him at a memorial
service in about two weeks.
Hundreds of persons called
the Lunt - Fontanne Theatre
boxoffice Tuesday to ask
whether Tuesday night's per
formance had been cancelled.
They v:re told that Hammer
stein's family and his partner,
composer Richard Rodgers,
were convinced he would
want the show to go on.
Demanding Performance
Miss Martin's car pulled up
to the stage door an hour be
fore the scheduled 8:30 p.m.
curtain. She hid her face from
a curious crowd and dashed
into the empty theatre to pre
pare for what must have been
Several of Miss Martin's
friends had expressed fear
thai she might choke up on
the lyrics Hammerstein wrote
for the first number she sings
in the musical, the title song,
which is her favorite:
My day in the hills
Has come to an end I know.
A star has come out
To tell me its time to go,
But deep in the dark green
shadows
Are voices that urge me to
stay ...
And stay Miss Martin did,
through two hours of smiling
laughing, dancing and sing
ing Hammerstein's songs as
though her heart really
weren t broken.
lenge depends heavily upon
the percentage depletion pro
vision of our federal tax struc
ture remaining unchanged, ac
cording to oil experts.
This taxing method has
been under fire since Congress
set it up 35 years ago. It has
been examined by many ses
sions of Congress during this
period but has remained in
tact. And now the industry is fac
ed with a 50-50 possibility that
percentage depletion will be
taken up by the next Con
gress. The Democratic party
platform lists a reduction in
percentage depletion as one
way to recapture revenues for
its increased spending pro
gram. - -
The oil industry says that
while a temporary jump in in
come taxes from oil produc
ers might result, the govern
ment would lose income over
a period of time.
Percentage depletion mere
ly recognizes that oil in the
ground is the producer's capi
tal, and that this capital is
depleted by the operation of
an oil well.
To prevent an oil producer's
capital from being taxed as
income, he is permitted to de
duct from his gross income
for tax purposes- up to 27.5
per cent of the value of the
oil and gas he produces dur
ing the year. It is limited, how
ever, to 50 per cent of the net
income of each lease or prop
erty. Because of this limitation,
one oil expert notes, the 27.5
per cent is cut to about 23 per
cent.
The deduction which ap
proximates the capital value business,
of the oil in the ground, pro- Depletion is not a special
vides the producer with part benefit for oil and gas pro
of the funds needed to stay in ducers only. It is an across-the-
Malaria Exists
Organization Says
Havana, Cuba, (Science
Service)-Malaria still exists
in about 30 per cent of the
Americas, the Pan American
Health Organization - World
Health Organization has re
ported here at the twelfth an
nual meeting of the direct
ing council of PAHO.
To date, WHO'S efforts to
blot out malaria in every
corner of the world have
freed nearly 53 million peo
ple from the threat of the
disease in the Americas alone.
Another 9 million are in
areas under surveillance to
see if eradication methods
have stamped out all the
tough spots.
Malaria is completely
stamped out in Chile, the U.S.,
Barbados, Martinique and
Puerto Rico. Other countries
have stopped the disease in
isolated areas or large sections.
In Canada, Uruguay, the
Bahamas, the Virgin islands
and several other islands, the
disease never existed or has
disappeared without eradica
tion measures.
In more than 22 per cent
of the Americas area, erad
ication measures are in full
swing. Houses are being
sprayed with dieldrin and
DDT to kill 20 species of
Anopheles mosquitoes that
carry malaria. In areas such
as the Amazon Basin where
houses have no walls, the
natives are using salt with
an antimalarial drug added.
National budget appropria
tions in 1960 for eradication
programs have almost dou
bled in Colombia and Jamaica
since 1958. Mexico, which is
still spraying houses period
ically, has the largest single
antimalaria budget for 1960,
$6,720,000.
The 8 per cent of the
Americas area not presently
engaged in eradication pro
grams lies largely in Brazil,
a vast country with more than
its share of malaria prob
lems because of the remote
Amazon Basin and the coun
try's sheer size. Cuba has riot
started active spraying, but
is making a preliminary sur
vey, and Haiti's campaign
was- temporarily interrupted
by economic difficulties.
Various species of mosqui
toes in several locations have
developed resistance to the
sprays. Although the num
ber of physicians associated
with eradication programs
has been reduced, more spray
men are now at work
board provision applying to all
but a few minerals. The rates
for different minerals vary to
take into account different
economic factors.
Percentage depletion was
devised by Congress not only
to avoid taxing the producer's
capital, but to encourage the
search for critical minerals.
Congress realized that looking
for oil hidden far below the
surface of the earth was an
extremely risky business.
Men are drilling wells deep
er all the time. And, the deep
er a well is drilled, the deeper
a prospector has to go into his
pocket.
One oil spokesman points
out that since only one ex
ploratory well in nine uncov
ers any petroleum - and only
about one in 50 makes a com
mercially successful strike -the
prospector must be prepar
ed to invest large sums of cap
ital without any guarantee of
success. It now can cost well
over $100,000 and sometimes
over $1 million to drill a wild
cat well.
What would happen if per
centage depletions were cut
back? Most oil firms say the
first and most serious result
would be a falling off in ex
ploration and drilling.
"You can't look for oil and
you can't bring it up out of the
ground unless you have a lot
of investment capital at rea
sonable rates," they state.
The supply of investment
capital for oil production is
closely linked to the depletion
provision, according to the oil
men. This is true not only of
reinvested earnings, but also
I of loans, stock issues and other
sources of operating funds,
Cutting percentage deple
tions would dry up many of
these sources, and this would
mean less drilling, fewer dis
coveries and eventually less
oil for homes and industry, the
oil firms assert. All this, they
claim would lead straight to
higher product prices.
They also say a substantial
increase in producers' costs in
the form of higher income
taxes would cut income and
dividends throughout the oil
industry, and this in turn
would reduce government rev
enue from income taxes on
dividends.
Oldster Receives
Youngster's Appeal
Truro, Mass. - Full of ro
mance, 13-year-old Jane Briar
wrote a nojte appealing for a
pen pal, sealed it in a bottle
and tossed the bottle in the
sea.
Her message washed ashore
only 200 miles away. A fellow
named Harley George picked
it up. George, a retired car
penter, is 69.
EVER TASTED
1
Mrs. Budge's
Fudge?
Scads of Exhibils!
DOUGLAS COUNTY
f FA I It
I AUGUST 2S-28
Some critics of the deple.
tion principle claim it is a
golden gimmick to enrich the
oil industry. The oil firms, are
quick to point out, however,
that their after-tax earnings
in all the years percentage de
pletion has been in effect have
averaged 9.6 per cent of in
vested capital, against a 10.4
per cent average for all manu
facturing companies.
The oil industry says the
depletion principle has been
incomparably effective for a
generation.
"Who can doubt that it will
prove as effective for the gen
eration that lies ahead," it
adds.
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