Consumers Commanding Oil
'I f we cannot secure the access to this island of oil ships, we cannot secure the access to this island of the whole of the great volume of our trade on which we shall depend in war as in peace, if we are to maintain ourselves effectively,' said Mr. Winston Churchill in the House of Commons on 7th June, 1914. 'The proposition that the Navy should be able to keep our ports open and to keep our trade routes safe in time of war for all the vast merchant fleets which traffic with this island, and yet should lack the power to bring in the comparatively few but, from our point of view, specially interesting oil cargoes, is a proposition which is naturally, inherently and, if need be, demonstrably absurd.'
These are perhaps not the obvious terms for a First Lord of the Admiralty to use in justifying the purchase, originally for £2,200,000, of a controlling interest in the Anglo-Persian Oil Company. But Mr. Churchill was emphasizing the commercial, as against the strategic, significance of the government's purchase of a stake in oil. 'Nobody cares in war time,' he went on to say, 'how much they pay for a vital commodity, but in peace -- that is the period to which I wish to direct the attention of the Committee -- price is rather an important matter, and as we hope that there will be many years of peace to every week of war, I cannot feel that we are not fully justified in taking up the time of the Committee in considering how, in years of peace and in a long period of peace, we may acquire proper bargaining power and facilities with regard to the purchase of oil. The price of oil does not depend wholly or even mainly on the ordinary workings of supply and demand.' Mr. Churchill was concerned with the question of supplies for the Royal Navy, which was becoming, in the interests of efficiency, more dependent on oil; a long-term contract for naval supplies was, indeed, one of the corollaries of the share purchase. But he was setting out in this debate nearly fifty years ago exactly the mixture of motives, not entirely