The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1899-05-12
Some Information AS to the Stand
ard Oil Company.
FREEZES OUT OPPOSITION
THEN RAISES THE PRICE ON ITS
CUSTOMERS.
Member of Rival Concern Who Has
Withstood the Standards OPP
preston Gives Testimony Before
the Industrial Commission-Lit-
tie or No Profit Left to Producer.

washington, May 1.-THE industrial
commission today heard the first wit
ness to be called in connection with its
inquiry into the operation Of trusts.
The witness was Hon. James w Lee
of Pittsburg, attorney for several pipe
lines and oil companies, ana formerly
a state senator of Pennsylvania. Mr.
Lees testimony was directed especially
against the STANDARD Oil company.
Speaking IF the effect Of trusts upon
the customer, Mr.. Lee said the ten
dency was 20 increase prices until trey
became extortiOnata. Trusts were or
ganized TO secure a monopoly, and
when this was gecUre1 bv closing up
rival establishments, they were in Il
position to fix prices. which were. ac-
cording to his observation, generally
increased, in order - permit dividends
on watered stock. This had been emil
nently true of the Standard Oil COM
pany.
The Freezing-out Process
As an illustration. lie said that when
the Pure Oil company, in which the
witness is interested, went into the
field in new York in 30, they found the
Standard selling oil at ~ cents a gal
lon. The price Was almost Immediately
reduced TO 81 cents. ana nad remained
there since, the object being to drive
out the rival. The first price was in
ordinately high, but the latter was
ruinouSly low, and while the indepen1-
ent company had met the reduction, 1t
had done so at 4 loss. He thought the
competition had resulted in a saving of
fully $1,000, 600 10 the people Of Greater
New York. The same condition of al
fairs existed at competitive points.
He estimated that the Standard COM
pany had, within the past twenty years,
absorbed about 100 Independent cuni-
pahies, but that the companies with
which he was connected had refused
10 sell at an advance of 121A per cent
in cost when they were about to be
closed By the sheriff.
Business Profitable Now.
This refusal had been dictated largely
by sentiment; now, however, the indie
pendent companies were doing a profit
able business. He knew of several re-
tineries which had been purchased at
high prices by the Standard company
and then had been shut down. He lad
also heard that men had received a
bonus to remain idle, but he had no
personal information 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 companies
were able to compete abroad largely,
because in Great Britain and in Ger
many and in some other countries. COM
petition was preserved to a greater eX-
tent than in the United States. In Ger
many 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 unproht-
able.
Aim of the Trust.
Mir. Lee said the aim of the trust vas
TO get complete monopoly of business.
fixing the price as it may please, and
leaving little or no profit to the PFC
ducer. AS an illustra ton, he said the
Standard Oil company had maintained
The price paid for crude oil at O. cents
per barrel for a year. and that for the
ten years prior TO 1895 the price paid
had averaged only so cents per barrel,
whereas the average cost Of productloQ
was not less than 81.
He further expressed the opinion tEat
the counties in Pennsylvania which
had produced all the oil turned out in
that state, amounting to about 800 co.,
coo barrels, were worse off for the out
put. He thought that il there had been
fifty refTeries instead of the STANDARD
Oil company, the market would have
been Just as extensive the consumer
would have gotten his oil as cheaplv,
and tie producer would have been |
much better of.
Where has the balance gomez" asked !
Mr.. Livingston.
4 think" the witness replied. the !
Standard Oil company could explain |
that. The understanding is that il has |
realized about $500 0O0, Coo