The major development in stabilization of the oil industry during 1933 wasthe transition in the United States from state control to federal control inmany of the functions that government is presumed to exercise. A brief reviewof the influences leading to that transition is given here to suggest itssignificance and to assist in forecasting its further development. Bitumens were known to the ancients and have been applied to minor uses sinceearliest historic times, but it was not until after the discovery of oil inconsiderable quantities near Titusville, Pennsylvania, in 1859 that it was madethe basis of extensive commercial undertakings. In 1859 little was known about the origin of oil and gas, the nature of thesedeposits, and the physical laws that controlled their accumulation. Scientistssoon began to study them, but 50 years or more of active oil-field developmenthad elapsed before sufficient geological information had been accumulated topoint the way toward efficient recovery of these products. In fact, only withinthe past five years has the function of reservoir energy become widelyunderstood, yet it is a primary factor in oil recovery. In the meantime, during the 75 years that have elapsed since the discovery nearTitusville, this infant industry has developed into an industrial giant. Incomplete ignorance of their destructive effect, wasteful development methodswere initiated in Oil Creek and these became industrial habits. These habits inturn became oil and gas law. Under that law vast sums of money have beenexpended, rights have become vested and development methods fastened on a greatindustry that not only bring upon it periodic demoralization but cause ruthlessdestruction of the nation's reserves of these important natural resources. Thisis occurring in the midst of a petroleum era when oil is essential to thenation's security, its industrial supremacy, and the personal convenience ofevery citizen. Its conservation, therefore, has become a question of gravenational concern.