The arrangement was discussed (June 17), on the resolution in Committee of Ways and Means required as the basis of the necessary legislation. The First Lord of the Admiralty said that oil was necessary for the Navy, and the question was solely the policy and soundness of the proposed arrangement. The Government would not depend on oil supply from any one quarter; coal would for many years continue to be the main motive power of the Fleet; oil would be purchased from companies in all parts of the world, British or foreign; the home supply of shale oil would be further developed, and experiments made for the production of liquid fuel from shale and coal, and support would be given to the search for new oilfields in the Empire. An unlimited amount of oil was obtainable if the Government was willing to pay for it and had command of the seas. The oil reserve obviated any fear of an oil famine in the first days of war. During war, oil from this field could easily be brought by the Suez Canal or the Cape. The problem was really the price during peace. There were two dominant oil corporations, the Standard Oil, and the Shell and Royal Dutch. The only notable independent company was the Burmah Oil Company and its offshoot, the Anglo-Persian. In the past few years the price paid for oil by the Admiralty had more than doubled; and the Anglo-Persian field had been kept in view since the previous Unionist Administration, when Lord Strathcona came forward, at the instance of the hon. member for Chelmsford (Mr. Pretyman), to keep the company commercially independent and British, A Special Commission had reported; the northern field, near Shustar, would suffice for Admiralty requirements, but besides that the Government got control of an oil region of 500,000 square miles, some of the indicated sources being near the sea or the Indian border. A great military Power could only cut off the supply as an incident in a world-wide war, and the only effect on the Navy would be that the price of its oil would be higher. Local disturbances could do even less, and the development of the district would tame the wild tribes and strengthen the Persian Government. The Admiralty must have power to control an oilfield somewhere, and neither Trinidad nor Egypt offered a practical alternative, nor would Scottish shale oil be adequate for years. The Government took 200,000_l._ in debentures and 2,000,000_l._ in shares. This latter sum would be used in developing the company. The Government would obtain control and would also be the company's principal customer. The company would supply less than half the total amount needed for the Navy, and the prices would be on a sliding scale according to the profits. The money would come from the Consolidated Fund--l,500,000_l._ diverted from the New Sinking Fund by the Finance Act of 1912, and 750,000_l._ representing the Old Sinking Fund for 1913-14. The oil was necessary for the Navy, and the criticisms came from representatives of the Shell Company. The only difficulty of the Admiralty with this company was price. It was easier to pay what it asked and let the matter alone; but Parliament must decide between taking a fair commercial risk and the certainty of overcharge following monopoly.