The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-05-12
Inds cent Companies Only Able 20
e st in This Country by Their
Profitable Trade Abroad
BIG STEEL TRUST PERFECTED
OFFICERS AND DIRECTORS OF THE
REPUBLIC COMPANY ELECTED.
Yarn Mil Combination I'm Process OF
observation-disclosures i'm New
Jersey and Delawarc.

WASHINGTON, May 1.-THE Industrial
Commission to-day heard the first witness
to be called In connection with Its inquiry
into the operations of trusts. The witness
was Hon. James w. Lee. OF Pittsburg. at
torney for several pipeline and oil compa-
MES and formerly state senator OF Penn
sylvania. Mr.. Lees testimony was directed
especially against the Standard Oil Com
pany. Speaking of the effect Of trusts on
the consumer, Mr. Lee said the tendency was
to increase prices until they became ex.
tortionate. Trusts were organized TO secure
a monopoly, and when this was secured by
closing up rival establishments they were
in position to fix prices. which were, accord
ing to his observations. generally increased
in order 20 permit dividends on watered
stock. This had been eminently true OF the
Standard Oil Company. AS an illustration.
he said when the Pure Oil Company. In
which the witness Is interested, went into
| the field in New York in 1926 they found
tie Standard selling oil at 9l2 cents a gallon.
The price was almost Immediately reduced
| TO 5ia 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 in
| dependent company had met the reduction. IL
had done so at a loss. He thought the COM
petition had resulted in a saving OF fully
| 100000 to the people of New York. The
| same condition of affairs existed at other
| competitive points.
| Mr. Lee expressed the opinion that the
| Standard Oil Company was still getting re-
bates from the railroad companies. despite
| the law, and he thought this was accom-
| plished by paying exorbitant prices for iu-
| bricating OIL He estimated that the Stand
| ard had within the past twenty years ABB
| sorbed about one hundred independent COM
panies, but that the companies with which
| he was connected had refused 10 sell at an
| advance OF u per cent I'm cost when they
| were about to be closed out by the sherin.
This refusal had been dictated largely by
sentiment. Now. however, the independent
| companies were doing profitable business.
| He knew of several refneries which had
been purchased at high prices by the Stand
ard and then shut down. lie had also heard
| that men had received bonus to remain
| idle, but he had nc personal information on
| this subject. Mr.. Lee said the Standard
| Oil Company had made an effort TO prevent
the extension of the business Of the jnde-
| pendent companies 10 foreign markets by
buying up the tankage at given points ana
| by selling at lower prices than the one prev
vailing in the United States. Still the in
dependent companies were able to compete
| abroad largely because in Great Britain and
/ Germany and in some other countries COM
petition was preserved to a greater extent
than in the United States. In Germany
no one was allowed TO do business at loss.
| The profits made abroad were what en-
| abled the independent companies to continus
| business, the business In this country
| alone was Improbable.
| EFFECT OF TRUSTS.
| Mr. Lees testimony at the afternoon ses-
| sion OF the commission was devoted to the
+, effect OF trusts the producer and on la
| Dor. dealing again exclusively with the oil
| business. He said the aim of the trust was
| to get complete monopoly OF business, FIX
| ing the price as it may please and leaving
| little or no profit TO the producer In illus
tration he said the Standard OIL Company
had maintained the price paid for crude oil
| at s. cents per barrel for a year, and that
| for the ten years prior to 1896 the price
| paid had averaged 80 cents per barrel
| whereas the average 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 S00,00o0O
! barrels. were worse of for its output Still.
| there were some wells which were largely
| remunerative. due to their high degree OF
prcductiveness. AS matter OF fact. how
ever. many of the wells produced very little.
| OF the 60oo0 wells in operation 25.0C5 pro-
| duced less than half barrel a day each.
| He thought l. there had been fifty refiners
instead of the Standard Company the mar
| ket would have been just as extensive the
| consumer would have got his oil as cheaply
and the producer would have been much
! better off.
| Where has the balance gomez" asked Mr..
| Livingston.
II think" the witness replied. the
Standard OIL Company could explain that.
The understanding is II has realized about
| five hundred Millions
Mr.. Lee quite confident the general
effect OF trusts was injurious to labor Ths
effect was to deprive laborers OF competi-
tion. of chance for employment when
thrown out OF work. and 10 make them SUBJ
seryient 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 ulti-
mate effect OF any monopoly must be in-
| furious TO labor.
AS means OF prevention OF trusts Mr..
Lee suggested law making destructive
competition a criminal offense. He thought
the fear OF Imprisonment would intimidafo
some of them. Nothing had done so much
as destructive competition 10 prevent
progress and fairness The law could be
passed by the States. and IN OF prose-
cution prices charged for years could b
used evidence. He would also suggest
| that the capital Of all corporations except
those Of public or Quasi-puhlic nature