The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1899-05-20

WASHINGTON, May 1.-THE indus
trial commission today heard the first wit
ness TO be called in connection with its IN
quiry intc the operations of trusts The
witness was Hon. James W. Lee, of Pitts
burg, attorney for several pipe line aud oil
companies, and formerly state senator of
Pennsylvania Mr. Lee testimony was
directed especially against the Standard
OIL company.
Speaking Of the effect Of trusts upon the
consumer. Mr. Lee said the tendency was
to increase prices until they became ex-
tortionate Trusts were organized 10 secure
4 monopoly aud when this was secured by
closing up nval establishments they were in
a position to fix prices, which were accord
ing to his observation, generally increased in
order to permit dividends on watered stock
This had been eminently true of the
Standard Oil company is an illustration
he said tha, when the Pure Oil company
in which the witness i interested, went
into the field in New York in 90, they
found the Standard selling oil at 81 cents
a gallon The price was almost immedi-
ately reduced to 81 cents and had remain
Ell At that figure since, the object being to
drive out the rival The first price was
inordinately high, but the latter was sui
cidally low and while the independent com
pany had met the reduction it had done 81
AZ loss. He thought the competition had
resulted in saving Of fully s., 600, GOO to
the people of New York The same con
ditiou Of affairs existed at other competitive
points
Mr. Lee expressed the opinion tha; the
Standard company was still getting rebates
from the railroad companies despite the law,
and he thought this was accomplished By
paving exorbitant prices for lubrieating oil.
Tie estimated that the Standard com
pany had within the past twenty years
absorbed about one hundred independent
companies, but that the company with
which he was connected had refused to sell
at an advance of twelve per cent. in cost
when they were about To be closed out by
the sheriff This refusal had been dictated
largely by sentiment. Now, however, the
independent companies were doing profit
able business. lie knew Of several re-
hueries which had been purchased at high
prices by the Standard company aud then
had been shut down He had also heard
that men had received bonus to remain
idle but he had no personal information on
this subject
Mr. Lee testimony at the afternoon
session of the commission was devoted to
the effect OF trusts upon the producer and
upon labor, dealing almost exclusively with
the oil business lie said the aim of the
trust was TO get a complete monopoly OF
business, fixing the price as 1t may please
and leave little or no profit to the producer.
Iu illustration, he said the Standard Oil
company had maintained the price paid for
crude oil at ,ixty-iye cents per barrel toI
a year, aud that for the ten years prior to
1895 the price paid had averaged only
eighty cents per barrel whereas the aver
age cost of production was not less than 81
He further expressed the opinion that
the counties in Pennsylvania, which had
produced all the oil turned out in that state
amounting to about 500, 600, 600 barrels,
were worse off for its output. Still there We're
some wells which were largely remunera-
tive. due to their high degree of produc-
tiveness. As a matter of fact, however,
many Of the wells produce very little. OF
the 90, 600 wells in operation %, 600 pro
duced less than half barrel a day each.
He thought if there had been fifty re
finers instead of the Standard company the
market would have been just as extensive,
the consumer would have gotten his oil as
cheaply and the producer would have been
much better off.
Where has the balance gomez asked
Mr.. Livingston.
Il think, the witness replied, 'the
Standard Oil company could explain that.
The understanding is that it has realized
about $500, 600, 600.
Mr. Lee was quite confident that the
general effect of trusts was injurious tC
labor The effect was to deprive laborers
of competition of chance for employment
when thrown out of work and to make
them subservient and poorer citizens.
Speaking specifically of the Standard com
pany's treatment of its employees, he said
they were well paid and certain class OF
them received very high salaries. Still
the ultimate effect of any monopoly must
be injurious to labor.