Reporter and farmer. [volume] (Webster, Day County, Dakota [S.D.]) 188?-1946, 1906-05-10
FLAYS STANDARD OIL
PRESIDENT TRANSMITS COMMITS.
sIoNER oARFiElp's REPORT
TO CONGRESS.

Results Of Investigation Of Transpor-
tation and Freight Rates Show the
Octopus Has Benefited Enormously
by Secret Rates-Department Of
Justice Will Institute Prosecutions
In Certain Cases.
Washington, May 5. - President
Roosevelt has transmitted to congress
the report of James r. Garfield, COM
missioner of corporations, giving the
results of his investigation of trans
portation and freight rates In conpec-
ton with the oil industry.
The president expresses the view
that the report is of capital impor-
lance because Of the effort now being
made to secure such enlargement of
the scope of the interstate commerce
commission as will confer upon II
power to meet the demonstrated needs
of the situation. The facts In the re-
port, he declares, are for the most
part not disputed. That the Standard
Oil company has benefited enormous
! ly up almost to the present moment
| by secret rates, many of which were
clearly unlawful, the president says
the report clearly shows. the benefit
! thereby secured amounting to at least
! $750,000 year. On this subject he
says:
This $750,000 represents the profit
! that the Standard Oil company OBJ
tains at the expense of the railroads:
but of course the ultimate result is
that it obtains much larger profit at
the expense of the public. A very
striking result of the investigation has
been that shortly after the discovery
of these secret rates by the commits
sionsr of corporations the major pOr
ton Of them were promptly corrected
by the railroads, SO that most of them
have now been done away with. This
immediate correction, partial or COM
plete, of the evil Of the secret rates, Is
Of course an acknowledgment that
they were wrong and yet were perse-
vered in until exposed" 81
VIII Institute Prosecutions. '"+s'
The statement Is added that the de-
partment of justice will take up the
question Of instituting prosecutions in
at least certain Of the cases and the
hope is expressed that congress will
enact into law the bill of Senator Knox
to correct the construction of the i'm
munity provision rendered In Judge
Humphreys decision. Continuing, the
president says:
| But In addition to these secret
rates the Standard Oil profits i'm
mensely by open rates, which are so
arranged as to give II an overwhelm-
ing advantage over its independent
competitors. This is characteristic
example of the numerous evils which
are inevitable under system In which
the big shippers and the railroads are
left free to crush out all individual
initiative and all power of independent
action because of the absence of ade-
Quate and thorough going govern
mental control. Exactly similar condi.
lions obtain In a large part Of the
West and Southwest"
T. 1t is not possible, he says, to put
into figures the exact amount by
which the Standard profits through the
gross favoritism shown 1t by the rail-
pads in connection with the open
rates. 1.-The profit of course comes
not merely by the saving in the rate
itself as compared with it's com
petitors, but by the higher prices it is
able to charge and by complete con.
troll Of the market which 1t secures,
thereby getting the profit on the
whole consumption"
Purpose of the Law Thwarted.
The president calls attention to that
feature of the report regarding the
manner in which the law is evaded by
treating as state commerce what in
reality is merely a part of interstate
commerce. He says it is clearly
shown that this device is employed
on the New York Central railroad, as
well as on many other railroads, In
such fashion as to amount to thwart-
Ing the purpose Of the law, although
the forms Of the law may be complied
with"
1t is unfortunately not true, he
says, that the Standard Oil company is
the only corporation which has bene.
fitted and is beneftting In wholly i'm
proper fashion by an elaborate series
Of rate Determinations. The sugar
trust, he adds, according to the inves-
tigation now in progress, rarely II ever
pays the lawful rate for transporta-
ton. He declares that In the effort
to prevent the railroads from uniting
tor improper purposes I'VE have very
unwisely prohibited them from uniting
for proper purposes; that is. for pur-
poses Of protecting themselves and
he general public as against the power
Of the great corporations"
He favors as an element of COM
petition the passage of some such law
rs that which has already passed the