The San Francisco call., 1906-12-16

product in San Francisco.
oil from Bakersfield TO San Diego. at
a time when the tariff rate was 92-1
cents. This secret rate was known
by the Standard Oil Company and
the Associated Oil Company and en-
ioyed by them for a considerable time
1t enabled them to capture number
Of important longtime contracts in
San Diego and gave them virtual
monopoly of the fuel oil markets in
that vicinity. This rate was for some
time deliberately withheld from the
Union OIL Company, which was an ac-
tive competitor of the Standard and
Associated, and which had previously
figured on some of the contracts In
question. II was also unknown TO all
other shippers.
PRICE LESS THAN RATE
This rate not only enabled the Stand
ard and Associated to underbid the
Union, but il also permitted them to
ship crude oil all the way from Bakers
field past the wells of Southern Call
fornia producers, into what was nat
ural market for the latter. A number
of the contracts entered into by tne
Associated Oil Company were for 20
cents a barrel, delivered. a price much
alone. But or the other hand. some
of the consignees paid the open rate OF
92.7 cents barrel, the Associated Com
pany refunded TO them 22.7 cents a
barrel out of ifs rebate of 1878 cents a
barrel retaining the balance as the
net price to it in the oil fields.
Against tariff rate OF 80 cents a
barrel on refined oil from Redondo to
Los Angeles, the Santa Fe system
fbo ri saara4 rata of
~ cents on barrels of forty-two gal
Ions. The same secret rate was al
lowed on fuel oil, the tariff rate being
10 cents. The Standard Oil Company
shipped great quantities of oil at this
rate to q large number of important
markets in Southern California and
Arizona. On shipments OF fuel oil TO
Arizona points the original waybills
at Redondo clearly showed their desti-
nation and the interstate character of
the business. On fuel oil the Santa
Fe applied the secret rate by way of
rebate, while on refined oil the rate
was used directly on the waybill in
most cases.
COMPETE WITH LOWEST PRICES
This secret rate. in connection with
the very low cost of water transporta-
ton by its own tank line vessels
from Richmond to Redondo, enabled
the Standard to overcome the disad-
vantage OF the location OF it's refinery
nearly 500 miles north of Los Angeles.
and to deliver it's product in Los An
geles and neighboring southern cities
in sharp competition with southern
producers and refiners. The prices of
refined oil in Los Angeles were the
lowest in the State The same oil
which the Standard sold in San Fran
cisco, just across the bay from it's re-
finery. for 12ia cents q gallon, was de-
livered and sold by it in Los Angeles
for Il cents.
An even greater advantage over the
Independent refiners at Los Angeles
was secured by the Standard OH Com
pany through q secret rate OF 81 cents
barrel on refined oil from Redondo
TO San Diego. The quoted tariff from
both Redondo and Los Angeles to San
Diego was so cents a barrel. And in
addition TO this. the oil shipped by the
Standard from Redondo had to go by
way Of Los Angeles. past the refineries
OF its competitors. On fuel oil the
Standard secured a secret rate of 20
cents from Redondo to San Diego.
During part of the time the tariff rate
on fuel oil was about 50 cents barrel.
and during the remainder about 33
cents. The excuse offered for this
rate was that il was made to meet
water competition.
SUGAR REFINERIES FAVORED
Several OF the large sugar refineries
obtained secret rates on crude oil from
the Southern Pacific The American
Beet Sugar Company at Oxnard was
given secret rate OF 37.S cents bar
rel. as against a tariff rate of SO
cents. The rebates to the American
Beet Sugar Company in ten months OF
asal - al rI-I-
Union Sugar Company Betteravia was
given a secret rate of 5o.4 cents a bar
rel, as against a tariff rate of 81 cents
The rebates in this case for 1904
amounted to about s3500
The foregoing instances are the most
important illustrations of secret rates
allowed on oil by the California roads.
In all, more than eighty distinct viola
tions of tariffs on oil were discovered
IN this State. The total concessions
made to shippers and consignees
through the secret rates aggregate.
according to Commissioner Garfield s
figures, $780, 900, of which amount
about 100000 went to the Standard.
Since the investigation by the bureau
was undertaken a large number OF
those secret rates have been published.
but in view of the fact that the fa-
vored shippers had been able to secure
many longtime contracts, the benefit
Of belated publication to their competi-
tors is greatly restricted.
KNOWS PECULIAR CONDITIONS
The investigation disclosed another
form Of secret rates under peculiar
conditions. Among these was a special
rate Of s2.30 a ton from Bakersfield to
the Murphy Water, Ice and Light Com
pany, at Needles. on the Arizona border
The tariff rate was IS a ton. The Santa
Fe claimed that this rate was involved
in contract with the consignee for the
supply Of water and ice 10 the railroad
This principle OF special rates 10 con-
sisnees having peculiar relations with
the railroads. while not necessarily in
volving any impropriety. the Commits
sioner says is, nevertheless. capable OF
being developed into widespread dis
crimiDation.
Ssill another discrimination is prac-
ticed In the treatment OF private tank
cars Throughout the country the I'm
ion Tank Line Company, Standard OH
concern, obtains three-fourths of cent
per car per mile as a mileage or rental
rr1,n hav-