The Portland daily press., 1899-05-12
Trusts Injure Labor and
Raise Prices.
Witness Suggests a Remedy For
The Evil.

COmm1SslOn touhy nearu bne ursU WitHeSs
to be called in connection with its inquiry
into the operations of trusts. The witness
was Hon. James w. Lee of Pittsburg,
attorney for several pipe line and oil COM
panies and formerly state senator Of
Pennsylvania. Mr.. Lees testimony was
directed especially against the Standard
OIL company.
Speaking Of the effect Of trusts upon the
consumer, Mr.. Lse said the tendency WAS
to increase prices until they be"ame ex-
tortionate. Trusts were organized to
SECURE q monopoly and when this was
secured by closing up rival establish
ments 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 suid that
when the pure oil company in which the
witness is Interested went into the field
in New York In '96, they found the
Standard selling oil at 0 1-2 cents gal
Ion, The price was almost Immediately
reduced to B l-2 cents and had remained
there since, the object being to drive out
the rival
Inc uISb prICo WdS luOruiuutclf uiBu
but the latter was ruinousIy low and
while the independent company had met
the reduction it had done SO at loss.
He thought the cou. petition had resulted
In a saving of fully 5000, 600 to the
people Of Greater New York. The same
condition of affairs existed at other COM
petitiye points; Mr; Lee expressed Exp sssnds the
was still getting rebates from the railroad
companies, despite the law and he thought
this was accom- plished by paying ex-
horbirant prices for lubricating oil. He
estimated that the Standard company had
within the past twenty years absorbed
that the companies with which he was
connected had refused to sell at an ad-
vance of 12 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 independ-
ent companies were doing profitable
business. He knew of several renneries
which had been purchased at nigh 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 no personal information on
this subject. MIR. Lee said the Standard
Oil company had made an effort to pre-.
vent the extension of the business of the
independent companies to for sign markets
by buying up the tankage at given points
and by selling at lower prices than pre-
vailed even in the United States. Still
the independent companies were able to
compete abroad largely because in Great
Britain and Germany and In some other
countries, competition was preserved to u
greater extent than in the United States.
In Germany no one was allowed to do
business at q loss. The profits made
abroad were what enabled the independ
ent companies to continue in existence as
the business in this country alone was
Improbable.
He further expressed the opinion that
the counties in Pennsylvania which had
producsd all the Oil turned out in that
state amounted to about 100000 barrels,
were worse OF for its output. stu there
were some wells which were largely re-
munerative, due to their high degree OF
productiveness. Many of the wells, how
ever. produced very little OF the 6J,0O0
wells in operation, 10000 produced less
than half barrel day each. He
thought that II there had been 80 refiners
instead of the Standard company the
market would have been just as exten-
sive, the consumer would have gotten his
oil as cheaply ard the producer would
have been much better of.
"Where has the balance gOne?" asked
Mr.. Livingstone.
sI think," the witness replied, "the
Standard Oil company could explain 1t.
The understanding is that it has realized
tout $500. 600, ,000."
Mr.. Lee was quite confident that the
general effect of trusts was injurious to
labor. The effect was to deprive labor
of competition. of chance for employment
when thrown out of work, aud to make
them subservient and poorer citizens.
Speaking specifically of the Stan lard
conpany's treatment of its employees, he
said they were we'll paid and certain
class of them received high salaries. Still
the ultimate effect Of any monopoly must
be injurious to labor.
AS means of prevention OF trusts
MIR. Lee suggested law making destruc-
tive CompetitiOn a criminal offenSe.