Many millions of dollars during recent months have been poured into oil company flotations that in all likelihood will never yield any return whatever. Even well-organized companies, directed by men of experience, seldom prove bonanzas in a day when leases command very high prices; the exception arising where the company happens to be the first comer in the field that later develops important production. The oil business partakes of the nature of most other industries; it yields profits when fortunately located and economically operated. But there is no certainty that even the company which possesses leases in established fields will prove profitable. Under the circumstances it is ridiculous to assume that mushroom promotions, by men with no actual experience in the oil business, and whose talents lie rather in the direction of writing advertisements, can yield profits to those foolish enough to invest in them. The experience of one of the large producing companies, operating in the best fields of this country, financed exclusively by oil men and directed by some of the ablest men in the business, may be cited as an instance of the uncertainty of profits. This company produced about five million barrels of crude oil in 1919 and sold at the relatively high prices then being obtained. Nevertheless, the company’s profit and loss statement for the year showed a net loss of approximately $1,000,000. This does not mean, of course, that this company is a liability to its owners. It may have expended in work that could not properly be capitalized, large sums of money that will eventually be repaid out of production. It is easily conceivable that without any material increase in its investment its yield of oil might be so augmented by 1921 as to make its business show a very handsome profit. What this case does prove is that something more than good leases, experienced men and ample capital is needed to insure large returns from money put into oil promotions. People who clamour against the prices exacted by producers of crude oil overlook the fact that wells have an unfailing habit of playing out. This means that a producing company must never cease drilling and exploring. To do so would mean an early decline in its production and eventual failure even of its best wells. The monetary return from a big producer must not only offset the cost of that well but repay the owner the cost of drilling a large number of dry holes, abandoned after large expenditures. Production in the United States is only kept up by the work of the “wild-catter” in locating new pools and by more intensive drilling of the old fields. Both involve heavy costs. There were drilled in this country last year no fewer than twenty-nine thousand new wells, but the net increase in production over 1918 was but twenty-two million barrels of crude. The declining yield of wells necessitates amortization to cover the cost of new wells to take their place.