Iowa state bystander. [volume] (Des Moines, Iowa) 1894-1916, 1906-05-11
TRANSPORTATION GREAT
FACTOR IN COMPETITION.

In summarizing his report Commits
sioner Garfield speaks of his personal
visit to the oil fields and of the great
mass of data obtained by him either
personally or through agents Of the
bureau of corporations. The prelimi-
nary study of this material, he says.
showed that the most important sub
ject was transportation. which enters
so largely into the cos. of furnished
product and hence most important
factor In competition.
"The Standard claims that tho To-
cation of its refineries and the use
of pipe lines are natural advantages
to which 1t Is justly entitled by reason
Of the energy and foresight of its man
ayers. While in a measure that is
true, 1t may not be forgotten that
these advantages were In part obtained
by means of unfair competitive meth
DDS after years Of Industrial strife.
''The development of the pipe line
system by the Standard Oil company
was the result of special agreements
with railroad companies. Further
more, those so-called natural advan-
tages have been and are being greatly
increased by determinations In freight
rates, both published and secret, inter-
state and state, which give the Stand
ard monopolistic control in the great
er portion of the country.
Oil Price Is Gauge
IAN immediate result OF this delim-
ttation of the competitive area Is
shown by the prices of ordinary H.
Illuminating oil. After deducting the
freight rate the price Of such oil is
usually from two cents to five cents a
gallon higher in the non-competitive
than in the competitive fields. A rea-
sonable profit upon refined oil Is
about one-half cent per gallon. It is
clear that exorbitant profits are OBJ
tanned in the non-competitive fields"
In 1904 these secret rates saved the
standard Oil company three-quarters
OF a million collars, representing the
difference between the open rates and
the rates actually paid. "These dis
examinations" he says, have been so
long continued, and SO secret, so in
geniously applied to new conditions
of trade, and so large in amount as to
make 1t certain that they we're due to
concerted action by the Standard and
the railroads" He says further that
the Standard on company Is receiving
unjust determinations in the matter
Of open rates, the published rates from
the leading Standard shipping points
being relatively much lower than rates
from the shipping points of its COM
petitors.
Roads Abolish Secret Tariffs.
Mr.. Garfield then refers to seven
instances of important determinations
in favor of the Standard Oil COM
pany in various parts OF the country,
and says that most Of the secret rates
and some Of the open Determinations
discovered by the bureau were abol-
ished by the railroads shortly after
such discovery. After calling atten-
ton TO the good which already has re-
suited from the investigation, Mr.. Gar
field says that the changes effected
have put the independents upon fair
er footing and make competition pos
sible in territories heretofore inacces-
sible. The report concludes as fol-
lows:
Tariffs may be maze and rates may
be combined in such a manner as to
make it practically impossible for the
ordinary slipper to find them"