The times. [volume] (Washington [D.C.]) 1897-1901, 1900-01-11
Mr.. ROCKGFELLBR' REPLY
He Answers Questions Propounded
hy the Industrial Commission.
The Great Monopoly Due Ia ~ Desire
to Carr. on ~ Husiuess of MnIni-
fudc-Hc Declares That C"mbinn-
ton L. M More Than Co-opcrHii"n.

/ \ statement was received by the Indus
/ trial Commission yesterday morning from
/ John ID. Rockefeller. in answer to twelve
| questions propounded by the Commission.
/ He admits that the organization OF the
/ Standard oil Company was due to the de
sire to unite our skin and capital in order
10 carry on business of some magnitude
and Importance. in place of the small busi-
ness that each separately had heretofore
carried on" and that the Standard did
receive rebates from the railroads prior to
1880 He ascribes "the success of the
Standard to its consistent policy to make
the volume of its business large through
the merits and cheaphess of its product"
He suggests the enactment of Federal
legislation under which corporations may
be created and regulated il that be pos
sible. and, in lieu thereof. State legislation
as nearly uniform as possible"
"The first combination of different es-
adjustments in the oil industry in which
was interested reads the statement.
was the union OF William Rockefeller &
Co., Rockefeller & Andrews. Rockefeller &
Co, s. V. Hardness. and II. VI. Flagler,
about the year 1861 The causes leading TO
its formation was the desire TO unite our
skill and capital in order to carry on a
business of some magnitude and impor-
tance in place of the small business that
each separately had heretofore carried on.
As time elapsed and the possibilities Of
the business became apparent. we found
further capital to be necessary. obtained
ha irc1 al r
ganized the Standard oil Company with a
capital of 81 900 eco. Later we found more
capital could be utilized. and found per-
sons with capital to interest themselves
with us, and increased our capital TO So
jG0. 900. AS the business grew and mar
kets were obtained at home and abroad
more persons and capital were added TO the
business and new CORPORATE agencies we're
obtained and organized. the object being
always the same-to extend our business
by furnishing the best and cheapest prod
ucts.
THE Standard Oil Company of Ohio. Of
which / WAS president, did receive rebates
from railroads prior to 1880. but received
no special advantages for which 1t did not
give full compensation. The reason for re-
bates WAS that such was the railroads
method of business. public rate was
made and collected by the railroad COM
psnies. but. so far as my knowledge ex-
tends. was never retained in full. 4 por-
tion of 1t was repaid TO the shippers as a
rebate. Much depended upon whether the
shipper had the advantage OF competition
of carriers The Standard being situated
at Cleveland had the advantage of different
carrying lines. rs we'll as of water trans
portstion iu the summer. and. taking ad-
vantage OF those facilities. made the best
bargains possible for its freight For va
rious reasons sufficient to the railroads. II
obtained contracts for special allowances
on freights These never exceeded. to the
best of my present recollection, 10 per cent.
But In almost every instance it was dts
covered subsequently that our competitors
had been obtaining as good and. in some
instances, better rates Of freight than our
selves.
NO percentage OF the profits OF the
Standard came from advantages given by
railroads at any time. Whatever advan-
tages 1t received in its constant efforts 10
reduce rates OF freight was deducted from
the price of oil. The advantages to the
Standard from low freight rates consisted
solely in the increased volume OF its busi-
ness. arising from the low price OF Is
product. / know of no instance in whiaL
the Standard ever received from any rail-
tracks by any OF the Standards cOmpeti-
tors. II seems that some such arrangement
was entered into 10y one of our agents in
Ohio. when notice OF this agreement was
brought to the Office of the company fer
which it was made IL was promptly repu-
dated and the money received-some small
amount, think under sS00-was refunded
And this was done not because OF any ac-
tion in court or judicial opinion, but
promptly as soon as reported.
II ascribe the success OF the Standard 10
its consistent policy to make the volume OF
its business large through the merits and
cheapness OF its products. 1t has spared
no expense in finding, securing, and utIliz-
ilg the best and cheapest methods Of man
ufscture. Ii has sought for the best super
lntendents and workmen. and paid the best
wages. II has not hesitated to sacrifice old
machinery and old plants for new and bet
ter ones. IL has placed its manufactures
at the points where they could supply mar
lets at the least expense. 1t has not only
sought markets for its principal products,
but for all possible by-products, sparing no
expense In introducing them TO the public
II has had faith in American oil. and has
brought together millions of money for the
purpose OF making II what 1t is and holding
its markets against the competition of Rus
STA and all the many countries which are
producers of oil and competitors against
American oil.
IN my Judgment the advantages for
Industrial combinations are the advantages
which can be derived from cooperation
OF persons and aggregation OF capital !
Much that one man cannot do alone two
can do together. and once admit the fact
that corporation or what Is the same
thing g-comblnation-is necessary on
small scale, the limit depends solely on
the necessities OF business. II IS TOO late I
to argue about advantages of Industrial /
They are a necessity, and /
IL Americans are TO have the privilege OF
extending their business in all the States I
of the Union and into foreign countries I
as well. they are a necessity on a large 1
scale. and require the agency of more than |
one corporation Their chief advantages are:
Command OF necessary capital. extension |
of limits OF business. increase of number of |
persons interested in the business. economy
in the business. Improvements and econo- !
mics which are derived from knowledge OF /
many interested persons of wide expert /
ence. power 10 give the public improved |
product at less prices and still make a /
profit for stockholders. permanent work I
and good wages for laborers. speak from
my experience in the business with which
] have been Intimately connected for about
forty years"
or the advantages and dangers to the |
public from combinations, Mr.. Rockefeller |
said: THE dangers arc that the power
conferred by combination may be abused |
that combinations may be formed for spec
ulation Ia stock rather than for conduct
ing business, and that for this purpose
prices may be temporarily raised instead
OF being lowered. Combination Is neces-
sary and Its abuses can be minimized.
otherwise our legislators must aeknoWl-
edge their incapacity TO deal with the most
important instruments of industry.
Hitherto most legislative attempts have