Abilene weekly reflector. [volume] (Abilene, Kan.) 1888-1935, 1899-05-18
WORKING OF TRUSTS
Industrial Commission Inquiries into
the Effects Of Combinations.
The STANDARD OIL COMPANY CITED.
James W. Lee Testifes That the General
Effect of Trusts Is Injurious to Labor
destructive Competition De-
ed to BE u Crime.

Washington, May l2.-The industrial
commission Yesterday heard the first
witness to be called in connection with
its inquiry into the operation OF trusts
The witness was James W. Lee,
of Pittsburgh, attorney for several
pipe lines and oil companies and for
merlv state senator OF Pennsylvania.
Mr. Lees testimony was directed spe-
cially against the Standard Oil com
pany. Speaking Of the effect Of trusts
upon the customer, Mr. Lee said the
tendency was to increase prices until
they become extortionate. Trusts were
organized to secure monopoly and
when this was secured by closing
up rival establishments they were
in position to fix prices, which
were, according to his observation,
generally increased in order to permit
dividends on watered stock. This had
been eminently true Of the Standard
Oil company. As an illustration, he
said that when the Pure Oil company,
in which the witness was interested,
went into the field in New York in 1896
they found the Standard selling oil at
"a cents a gallon. The price was i'm
mediately reduced to IA cents and had
remained there since, the object being
to drive out the rival. The first price
was inordinately high, but the latter
was ruinously low, and while the indie
pendent company had met the reduc-
ton It had done so at loss.
Mr.. Lee estimated that the Standard
company had within the past 30 years
absorbed about 100 Independent COM
panies, but that the companies with
which he was connected had refused to
sell at an advance of II 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 a profitable business. lie
knew of several refineries which had
been purchased ut high prices by the
Standard company and then had been
shut down. He had also heard that
men had received bonus to remain
idle, but he had received no personal
information on this subject.
Mr.. Lees testimony at the afternoon
session of the commission was devoted
to the effect of the trusts upon the pro-
Queer and upon labor, dealing again
exclusively with the oil business. Mr..
Lee was quite confident that the gen
eral effect Of trusts was injurious to
labor, The effect was to deprive labor
ers of competition, of chance of EN-
ployment when thrown out of work,
and to make them subservient and
poorer citizens Speaking specifically
of the Standard company's treatment
of its employees, he said they were well
paid and a certain class of them re-
ceived very high salaries. Still, the
ultimate effect of any monopoly must
be injurious to labor.
As "A means Of preventing trusts, Mr..
Lee suggested a law making destruc-
tive competition criminal oifense. He
thought the fear of imprisonment
would intimidate some of,them Moth
ing had done so much as destructive
competition to prevent progress ant
fairness. The law could be passed by
the states, and in eases of prosecution
prices charged for years could be useC
as evidence, He would also suggest
that the capital of all corporations
except those of apublic or quasi-publi'
nature, should be limited to 1000, 900
He thought that something of THU
kind was necessary, and that if
remedy was not found the countr,
would be ruined by combinations o
capital detrimental to the public in
terests. Under the present condition
personal ambition was stifled an,
many men were being kept out o
business because Of the existence 0
these corporations.