The Topeka state journal., 1905-02-27
ROCKEFELLER
POINTS WAY.
Head of the Standard Oil Some
Time. Ago
Indicated the Vital Spot in the
"System.
1T is THE PIPE LINES.
Whole Business He Declares De-
pends on These.
There Is Where the Govern
ment Must Strike as Last.
I is THE PIPE LINES.

Washington, Feb. 27.-'The entire
business is dependent upon the pipe line
system. Without it every well would
shut down and every foreign market
would be closed to u.s.
The 'us' in this significant statement
was the Standard Oil company, and the
speaker was John D. Rockefeller, head
of that great trust, who was testifying
before ehe industrial commission. Mr.
Rockefeller must have known what he
was talking about, as he has been in
the business all his life, and has built
up the Standard Oil company 10 its
present startling proportions from lit
tie business combination in 1867.
Now attention is being drawn to this
statement, and the sentiment-is growing
in congress that the way to Strike at
the Standard Oil canpanySand tosbreak
up its crushing lpuaopoly is 10 put the
pipe lines under tns control Of the in
terstate commerce commission. and then
give that body lower to regulate the
rates of the railroads for carrying gen
eral merchandise.
Just at the present time the pipe line
is piratca1 concern which apparently
in itself is wholly beyond the control of
the United States and yet which escapes
state supervision to a large extent be-
cause it is engaged in interstate com
merce. 1t uses this fact to defy the
state courts, and yet there is nothing at
all on the federal statute books which
covers the pipe lines except insofar as
they have become amendable to the
antitrust law.
Mr.. Rockefeller himself has given
the best and briefest description of
the oil pipe lines as they have .devel-
oped into the controlling factor in dis
n of ton % ,.4r-
leum in every section of the country,
whether the field in Pennsylvania,
Ohio, Kansas, Texas, or California.
The power of the Standard Oil COM
pany comes wholly from its export
and interstate business, and Mr.. Rock
efeller clearly recognized the fact in
his testimony when he said:
Our first combination was a part
nership and afterward a corporation
in Ohio. That was sufficient for the
local refining business. But depend
ent solely upon local business we
should have fallen years ago. We
and seek for export trade. This latter
made the seaboard cities the neces-
Safy place of business ard -yve--s0oAs
discovered that manufacturing for ex-
port trade could be economically car
ried on at the seaboard, hence the re-
fneries at Brooklyn, Bayonne, at
Philadelphia, and the necessary cor
porations in New York, New Jersey,
Mr. Rockefeller was under oath
when he made these statements. and
in his revised testimony he explained
the pipe line business and the neces-
sary part it plays in the mechanism
of the Standard Oil company when he
said:
I'VE soon discovered as the bust
ness grew that the primary methods
of transporting in barrels could not
last. The package often cost more
than the contents, and the forests of
the country were not sufficient to sup
ply the necessary material for an ex-
tended length of time. Hence we de-
voted our attention to other methods
of transportation, adopted the pipe
line system, and found the capital for
pipe line construction equal to the
necessity of the business. To operate
the pipe lines required franchises from
the states in which they were located
and consequently corporations in those
states, just as the railroads running
through different states are forced to
operate under separate state charters
ITO perfect a pipe line the system of
transportation required in the neighbor-
hood of 600 capital. This could
not be obtained or maintained without
an industrial combination. The entire
oil business is dependent upon this pipe
line system Without it every well
would shut down and every foreign
market would be closed to US. The pipe
line system required other improve
mentS, such as tank cars upon railways
and finally tank steamers. Capital had
to be furnished for them and corpora
tions created to own and operate them"
This testimony that the pipe line is
the keystone of the Standard Oil COM
pany seems to indicate that at the next
session of congress it would be. neces-
sary to put the pipe lines directly un-
der the control of the federal govern
ment. AT present the interstate COM
merce law relates exclusively to rail-
roads, the opening sentence being:
fe-4o ,f -,
apply to any common carrier or car
riers engaged in the transportation of
passengers or property wholly by rail-
road or partly by railroad and partly
by water. when both are used under
common control, management or ar
rangement for the carriage or shipment
from one state or territory of the Uni
ted States or the District of Columbia
to an adjacent foreign country, or from
any place in the United States through
a foreign country to any other place in
the United States, etc"
1t is easy to see from this that a
pipe line system does not come under
the control of the interstate commerce
act When a railroad hauls tank car
of oil it is required by law to make
public rates which cannot be varied
from without penalty When the oil
goes by pipe line il is absolutely free
from federal supervision. Pipe lines re-
celve oil throughout an entire district, !
but they run only to the refinery con-
trolled by the trust. They may even
be outside the jurisdiction of the anti
trust law because there necessarily is !
no competition with the pipe lines, and
as they carry only oil belonging to the
trust and cannot be used for any other
purpose they may be assumed to be
merely part of the corporation.
One of the first things to be develop !
ed by the investigation of the Standard |
Oil company, through the bureau of
corporations. will be the necessity for /
the enactment of a law. not only max /
ing the pipe lines common carriers be- |
cause that would do but little good. |