The record-union., 1899-05-12
In Connection With the Inquiry Into Opera
tlon Of Trusts.
James w. Lee of Pittsburg, an At
torney for Several Pipe Lines,
and Oil Companies, the First
Witness Called, His Testimony
Being Directed Mainly Against
the Standard Oil Company.

witness to be called in connection with
it's inquiry into the operation of trusts
The witness was Hon James W. Lee
of Pittsburg attorney for several pipe
lines and Gil companies, and formerly
a State Senator of Pennsylvania. Mr..
Lees testimony was directed mainly
against the Standard Oil Company.
Speaking of the effect of trusts upon
the customer, Mr. Lee said the ten
dency was to increase prices until they
became eXtortionate. Trusts were. or
ganized to secure monopoly, and
when this was secured, by closing up
rival establishments, they were in po-
sition to fix prices, which were, accord
ing to his observation, generally i'll
creased in order to permit dividends ON
watered stock. This had been emf
nently true of the Standard Oil Com
pany. AS an illustration, he said that
when the Pure Oil Company, in which
the witness is interested, went into the
field in New York in 1896, they found
the Standard selling oil at 91a cents a
gallon. The price was almost immedi-
ately reduced to 51a cents, and had re-
manned there since, the object being to
drive out the rival. The first price was
ruinously low, and while the independ-
ent company has met the reduction, it
had done so at a loss He thought the
| competition had resulted in a saving Of
fully $1,000 600 to the people of Greater
New York. The same condition of af-
| fairs existed at competitive points.
Mr.. Lee expressed the opinion that
the Standard Company was still get
ting rebates from the railroad COM
panies. despite the law, and he thought
this was accomplished by paying exor-
bitant prices for lubricating oil. He
estimated that the Standard Company
had within the past twenty years alb
sorbed about leo Independent compa-
MES, but that the companies with which
he was connected had refused to sell
at an advance of 1912 per cent. in cost,
when they were about to be closed by
the Sheriff This refusal had been die
tated largely by sentiment; now, how
ever, the independent companies were
doing profitable business.
He knew of several refineries which
had been purchased at high prices by
the Standard Company and then had
been shut down. He had also heard
that men had received a bonus to re-
main idle but he had no personal IN
formation on this subject.
Mr.. Lee said the Standard Oil Com
pany had made an effort to prevent
the extension of the business of the in
dependent companies to foreign mar
kets by buying up the tankage at given
points, and by selling at lower prices
than prevailed even in the United
States. Still the independent COM
panies were able to compete abroad,
largely because in Great Britain and in
Germany and some other countries COM
petition was preserved to a greater
extent than in the United States In
Germany no one was allowed to do bust
ness at a loss. The profit made abroad
was what enabled the independent
companies to continue in existence, as
the business in this country alone was
Improbable.
Mr.. Lees testimony at the after
noon session was devoted to the effect
Of trusts upon the producer and upon
labor, dealing most exclusively with
the oil business. He said the aim of
the trust was to get a complete mo-
nopoly Of business, fixing the price as
it may please, and leaving little or no
profit to the producer. AS an Illus
tration, he said the Standard Oil Com
pany had maintained the price paid
for crude oil at 65 cents per barrel for
year, and that for the ten years prior
to 1885 the price paid had averaged
only 30 cents per barrel, whereas the
average cost of production was not less
than 81.
He further expressed the opinion that
hSa ti,@r-.
produced all the oil turned out in that
State, amounting to about 1O,000O00
barrels, We're worse off for its output.
Still there were some wells which were
| largely remunerative, due to their high
degree of productiveness. AS a mat
ter OF fact, however, many of the wells
produced very little OF the $1,000
wells in operation, 25,0OO produced less
than half a barrel a day each. He
| thought that if there had been fifty re-
hnerles instead of the Standard Com
pany, the market would have been just
as extensive, the consumer would have
gotten his oil as cheaply, and the pro-
Queer would have been much better
off.
Where has the balance gomez" asked
Mr.. Livingston.
I think" the witness replied, "the
Standard Oil Company could explain
that The understanding is that it has
realized about S5OO,O0O,OO0"
Mr.. Lee was quite confident that the
general effect of trusts was injurious to
labor. The effect was to deprive la
borers OF competition, of chance for
employment when thrown out of work,
and TO make them subservient and
poorer citizens.
speaking specifically of the Stand
ard Company's treatment of it's en-
ployes, he said they were we'll paid,
ana a certain class of them received
very nigh salary. Still, the ultimate
erect OF any monopoly must be injuri-
Gus to labor
AS means of prevention of trusts,
Mr.. Lee suggested a law making de-
strucuVe competition a criminal Of
tense. He thought the fear of impris-
onment would intimidate some of them.
Nothing had done so much as destruc-
tive competition to prevent progress
and FAIRNESS. The law could be passed
by the States, and in case of prosecu-
ton, prices charged for years could be
used as evidence, He would also sug-
gest that the capital of all corpora
tons, except these of public or quasi
public nature should be limited to ST.
OC0,CCO. He thought that something of
| the kind was necessary, and that il a
| remedy was not found. the ca,,nt,.v