which, together with the neighboring district, comprises about 2,000 to 3,000 square versts, of which only about 12 square versts are worked. The principal field is at Balakhani, 91⁄2 miles north of east of Baku, covering a territory of, say 3% by 11⁄2 miles. Two miles south of Baku, is a small field at Bebeabát, on which there are some 25 wells. The cost of sinking wells ranges from $5,000 to $7,500. What can be obtained for such an expenditure may be illustrated by the result of boring the Droobja well, which cost $7,500-the total amount of oil poured forth by this well in six months of 1883 being, according to the lowest estimate, 55,000,000 gallons, and according to the highest, 125,000,000 gallons. Had the oil been in England, it would have realized a million sterling. At Baku the bulk of it was lost. Not only this, however, but this Droobja fountain, which was from 200 to 300 feet high, produced much more sand proportionately than the average Baku well, although all wells there produce immense quantities of sand with the oil. Some one-story buildings, about 15 feet high, within a hundred yards of the well, were completely buried out of sight in sand from the well, and an area of probably 10 acres around the well was covered from 1 to 15 feet with sand. The Mining Company, which owned the well, not only lost their oil, but were ruined by the damages they had to pay the surrounding wellowners for flooding them with sand and oil.

On

The great Markoff fountain, bored in 1887, spouted oil and sand 400 feet high-a veritable volcano. On windy days the oil spray was carried eight miles away. The Markoff fountain was situated not far off the Droobja, which pessimists had prognosticated erroneously would drain the whole area. this occasion, the Russian government, which had been angered by the waste of oil from the Tagioff fountain—which spouted 2,700,000 gallons a day the previous year, and endangered the town of Baku by raining oil upon it, although three miles away -gave permission to the other Baku firms to lynch the "gusher" at the owner's expense. Accordingly they sent their best engineers to the spot, and after several unsuccessful

attempts the well was finally capped over, and a stop made to the disgraceful waste of oil. All the same, no law exists to prevent any foreigner or Russian repeating the same destruction to-morrow. Large firms, like Noble Brothers, mostly manage to have good engineers and the best appliances on the spot to check a "gusher" at the outset, and allow the supply to flow as they want it. But the native firms bore heedlessly, and for want of "caps" at the right moment, all control is lost over the well, and it belches forth millions of gallons of oil, forming rivers that flow away to the Caspian Sea or sink into the earth again.

According to United States Consul James C. Chambers' report,' the production of crude petroleum in Russia, in 1887, was over 45,000 barrels, of 40 gallons, for every day in the year; i. e., the amount of crude used was over 45,000 barrels per day and no one knows how much was lost, but there is no doubt that the loss was at least 20 per cent., and that the actual amount of crude taken from the ground during the year was nearer 55,000 barrels per day than 45,000. Of course,

20 per cent. allowance of oil wasted will seem to an American very liberal; but if the manner in which oil is conducted to reservoirs from wells, the construction of reservoirs, and the great number of flowing wells are considered or understood, this estimate will not appear so liberal. In 1887, the amount of crude oil wasted was undoubtedly much greater than in any previous year, because of the number of flowing wells and the great productiveness of some of them.

In recent years no new territory has been discovered, and very little effort has been made to find any, notwithstanding the fact that the theory advanced by some of Baku's eminent scientists, that the complete exhaustion of the present developed territory is very near at hand, seems to be gaining supporters. One of these scientific gentlemen now says that the BalakhaniSabunchi territory will not last more than three years, in which opinion, it is said, he is backed by some of the people having

1 Reports from the Consuls of the United States. No. 92, April, 1888.

the heaviest financial interests in the trade. However, on the other hand, Professor Mendelejeff and Mining Engineer Torokin, assert that, according to their calculations, there is sufficient oil in this region to supply all refineries in Baku for 100 years to come.

Attention has recently been drawn to the Sundhenski naphtha region in the Northern Caucasus. This territory has been known for a long time, and on account of its favorable situation (east from Wladikawkas, between the Sundscha river and the principal direction of the Caucasus) may be destined to replace the disappearing oil-wealth of Baku. No borings have thus far been made, and only four natural wells, not very deep, are worked at Grosenensk, Brahmsk and Benojewsk. In the year 1889, 170,000 poods of naphtha were obtained, while in 1890, after deepening the wells, the output amounted to 350,000 poods. In 1889 the average daily production of a well was 300 poods, and after deepening the well, 600 poods. These conditions are analogous to those found in the Baku industry.

With an apparently unlimited supply of crude oil, a great refining capacity and a profitable market for refined oil, it is clear that the limited transportation facilities of the railway are the chief obstructions to a rapid increase of export. Since December, 1886, railway transportation has entirely governed the price of oil at Batoum. Refined oil for Caspian Sea shipment, during 1886, brought an average price, free on board at Baku, of about 1 cents per gallon, while the same quality of oil, free on board cars for Batoum, averaged 2% cents per gallon. At the beginning of 1887 the railway company had 1250 tank cars in service, and there were no private tank cars on the road. The price for refined oil, free on board cars at Baku, then reached 3 cents per gallon, a premium of almost 2 cents per gallon on tank car capacity. This encouraged refiners to put cars of their own upon the railway, and permission was granted them by the department of the government controlling the railway to place over 4,000 private tank cars upon the road.

But even these measures were insufficient for the ever-increasing quantities of refined oil. In 1887 the Batoum tankage, aggregating about 23,000,000 gallons, was about full, and the monthly receipts were probably 3,000,000 to 4,000,000 gallons in excess of the shipments. A pipe-line for crude oil from the Caspian to the Black Sea has been proposed, but it will scarcely ever get any further than talk. The advantage of such a pipeline is evident, as it would increase not only the carrying capacity but also the production of oil.

There are a number of tank steamers in the Batoum trade with an annual carrying capacity to ports for which they are chartered of about 90,000,000 gallons. About 35,000,000 gallons of oil are shipped in cans and cases, while the railway cars deliver about 150,000,000 gallons, so that the tankage being full, the difference, or 25,000,000 gallons, will have to be exported in barrels to keep up with receipts.

The export of petroleum and petroleum products amounted, according to Engler:

In 1884..

In 1885.
In 1886..

In 1887.

In 1888.

In 1889..

From Baku.
Barrels.

From the United States.

Barrels.

From a recent report of the Executive Committee of the Petroleum Bourse at Baku, it appears that, though the Russian petroleum industry has succeeded in increasing the share of Russia in supplying the foreign market at the expense of American competition, this success has been more than set off by the lower prices obtained. In 1891, the share of the United States in supplying the markets of the world with petroleum amounted to 70 per cent., and that of Russia to 30 per cent., while at the present time, that of the former is 66 per cent., and that of the latter 34 per cent. This increase in the export trade, however, has not improved the condition of the Russian petroleum industry. The great decline in the price of

petroleum is shown by the following figures: In 1888, the proceeds of the Baku works for the 32 millions poods exported amounted to 10.2 millions rubles after the deduction of 6.4 millions rubles for freight from Baku to Batoum. In 1892, exportation rose to 51 millions poods, but the proceeds of the Baku works from this entire quantity amounted only to 3.3 millions rubles after the deduction of 121⁄2 millions rubles for freight to Batoum. Hence petroleum brought only about of the price paid in 1888. The Russian petroleum companies are now endeavoring to improve their condition, partially by an agreement with the Standard Oil Company, as well as by cheapening the freight by means of a proposed pipe-line from Baku to Batoum, and an understanding with the Trans-Caucasian Railroad Company.

A Belgian journal, the "Bulletin du Mussée Commercial," of January 20, 1894, gives the following statistics regarding the consumption of American and Russian petroleum in various countries:

Of the total consumption of petroleum there was used,

During the last ten years there has also been a considerable reduction in the price of American petroleum, as shown by the following figures from publications of the Bureau of Statistics at Washington. The average price per gallon of refined petroleum of 70° Abel in New York was: