The News-Herald. [volume] (Hillsboro, Highland Co., Ohio) 1886-1973, 1904-08-25
The Price OF OIL.

1
These are the questions answered by
Miss Ida M. Tarbell in an extraordi-
nary paper on "The Price of Oil" in
McClure's for September.
From the time John d. Rockefeller
went into the business-IS85-unti
1872, the margin. or difference be.
tween the price of crude and refined,
fell steadily. There was decline in
expenses and profits coming from a
natural develop ment of the business
from the multiplication of pipelines,
reduction in freight charges, simplif-
cation of the business, and free COM
petition in the markets.
Then came Rockefellers first com.
binati on--in 1S72-and sudden rise
in the price of oil. The result of this
consolidation for the consumer is
admirably demonstrated by the dia-
gram that goes with Miss Tarbell's
article This scheme failed, but four
years later another one was launched.
Here again was sudden and tremen-
dous rise in the price Of oil. The
profits from this raid of 1877 we're
staggering. One of the leaders in the
affair sold cargo of oil lat 30 cents
gallon-oil that .cost him ten cents a
gallon. To-day a aquarter of a cent
gallon is big profit on export oil :.
That year the Standard paid divi-
dend of 1929, ,950.0l, on a capitaliza-
tion of S3,5O0,0O0. After this came
successful efforts on the part of in
dependents to restore competition
and fall in prices. = Then in 1880 the
Standard throttled competition again,
and up went prices.
But the Standard Ilearned that it
didn't pay to hold up the public for
too high profits. 1t learneds to keep
prices as high as possible without in
juring the market or inviting too
strong competition. This is beauti-
fully illustrated by the period from
1879 to 1882 During this time the
margin never fell below the point
reached by competitive influences in
1879, though frequently 1t went above.
Yet in this period the Standard did
all its great work in extending
markets, developing by-products, in
Producing small and various economies
on which it rests its claim to be a
great public benefactor. Bnt, in
spite of all this enormous develop
ment, and these enormous economies,
the margin, never went down frac-
tion of a cent. The profits grew
enormously: the public gained moth
ing
So tar the price under discussion
has been the export price. What of
the home market? Here the fluctua-
tions have been even more violent.
Refined has been pushed up two or
three points to every one for crude.
High domestic prices have often been
held to effect low export prices caused
by competition. Right now, for ex-
ample, we are paying high prices for
oil at home to help pay for the
Standards fight with Russia, Rou-
manian and Asiatic oils.
Again, there is no settled price for
oil in this country. The Grange is
tremendous. Where there is COM
petition the prices are down. Where
there is no competition the Standard
shoyes the price up as high as possi-
BILE. The touch of the competitor
always brings the price down.
Miss Tarbell's series of articles has
been but a rehearsal of the opera
tions practised by the Standard OIL
Company to get rid of competition.
1t was to get rid of competition that
the South Improvement Company was
formed. II was to get rid of competi-
tion that the oil-carrying railroads
we're bullied or persuaded or bribed
into unjust determinations. 1t was
to get rid of competition that the
Empire Transportation Company was
wrested from the hands of the men
who had developed it. 1t was to get
rid of competition that war was made
on the Tidewater Pipe Line, the
Crescent Pipe Line, the United States
Pipe Line. 1t was to get rid Of COM
| petition that the Standards SPY sys-
TEN was built up, its oil wars institut-
ed, all its perfect methods for maxi
ing it hard for rivals to do business
developed.
The most curious feature perhaps
of this question of the Standard Oil
Company sand the price of oil is that
there are still people who believe
that the Standard has made oil cheap.
Men recall that back in the late
sixties and seventies they paid 30 and
60 cents a gallon for oil, which now
they pay IL and Is cents for. This,
then, they say, is the result of the
combination. They do not know the
meaning of the variation of the price,
that it was forced down from 1866 to
1872, when Mr.. Rockefeller's first ef-
fective combination was secured by
competition, and driven up in 1876
and 1877 by the stopping"of competi-
tion; that it was driven down from
1877 to 1879 by the union of all sorts
of competitive forces-producers, in
Idapendept refiners the deyeloninU Of