The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-05-05

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fspust hss hasn -rfieetsf fHs preliminary
sstiy N this mstertsi sto9ssi thai 80
most l'aportsH, at,ier' 49, transportation.
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n f~siHsp8risti1r rpmrHrIe
thsfefrfs frtt suhmf fHo accompany
me feroft ur,H to- sutifff n tfilWsY
transportation anil ffsifht rates " "
nereasafiiv euvsfs mani details ! tTa ~
invite yetf attention ~ NE ]i1ltpcinH suHn.
mary N .a mrfe prominent teatuf~s
Tho manufacture n fefrei ~, commonly
hnown ~ befr-sne. is shout 7sfnof'o teT.
rls annually ~ rhich The Standard u'
tont any directly anil Indirectly contr'ls
atsut 71Hooo q II alsu CONTROLS arf rnsis
mtiely tho snme proportion ~ the ether
nnlahsd rfudncta ~ ~ rrieum
The renreriss owned NJ controlled w The
STANDARD Ol Company arc locttei near
New York, philadelphia Haltimur" chicago,
Kansas City, In Western New Dorh and
PENNSYLVANIA. In West Virginia, Ohio,
kanAas. Colorado. California and Texas,
w. largest rehnsriss are located a. tho
great CENTRES ~ distribution. which ara
connected ny ripe lines viii tho Crude oil
fields. The refined products are carried
by rail and water Tho independent
reRncrles-that IL. those not owned or
controlled by the Standard M Company
are located. with q very few exceptions,
at or near the crude oil fields, This differ
ence of location. a. will he -ren later, il n
Importance.
Tho Standard lain that rho location OF
liz refineries and the use ~ pip" lires arc
natural advantages 60 which II IL Justly
entitled by reason n the energy and FORE
sight Of IL managers. While In n measure
that IL true, II must not be- forgotten that
these advantages were in part obtained by
means Of unfair competitive methods after
years Of fierce industrial strife.
pELIMITATIoN OF COMPETITIVE AREA.
The development Of the pipe line system
by the Standard Oil Company was the re-
suit OF special agreements with railroad
companies. Furthermore. those sn-callcd
natural advantages have been and are be-
ing greatly increased by determinations In
freight rates, both published and secret,
interstate and State, which give the stand
ard m~onopolistic control in the greater
portion Of the country, and which so limit
competition as to practically prevent tho
extension OF the business of any inde-
pendent 10 a point which even remotely
A. 90 tha standard
An immediate result OF this delimitation
OF the competitive area Is shown by the
prices Of ordinary Illuminating oil through
out the country. After deducting the freight
rate the price Of such oil is usually from ,
10 5 cents a gallon higher in the nom
competitive than in the competitive
fields. A reasonable profit upon refined oil
is about one-half a cent per gallon. 1t Is
clear that exorbitant profits are obtained
in the non-competitive fields, This monop-
olistic control extends from the well Of the
producer to the doorstep Of the consumer.
The facts. regarding freight rates have
been obtained by the examination OF thou
sands of entries upon railroad records.
With but a single important exception. rail-
road companies have, upon application OF
INC uItuu VI e'NSh "NNOP'
to records Of both State and interstate busi-
ness. The New York Central Company re-
fused for itself and it's affiliated lines to give
access to records OF State rates. Al the
beginning Of this investigation the officials
of the Standard Oil Company stated that
that company had not obtained in recent
years, and was not o obtaining, any re-
bate or other transportation discrimination
as against it's competitions. They invited
the most careful investigation of the SUBJ
jeot.
Upon the request Of its attorney. all the
essential facts discovered by this bureau
were presented to the company at the close
Of the Investigation, and an exhaustive
statement relating thereto was made by
its chief afic officer, There was no denial
OF the facts found, but explanations Of par
ticular situations were offered, and 1t was
urged that the facts did not show any
violation by the Standa I'd Of the letter or
spirit of the Interstate Commerce law
PROFITS ECREr RATES.
A most careful review OF the facts and
the explanations lead to the following con-
clusion:
The Standard Oil Company has habitually
received from the railroads, and il now
receiving, secret rates and other unjust and
illegal determinations.
During 1904 the Standard saved about
$780, 900 through the secret rates discovered
by the bureau. and Of course there may
be other secret rates which the bureau
has not discovered. This amount repre-
sents the difference between the open rates
and the rates actually paid, Many Of these
determinations were clearly in violation
OF the Interstate Commerce law, and others,
whether technically illegal or not, had the
same effect upon competitors, On some
State business secret rates were applied
by means OF rebates.
These determinations have been 80 long
continued, so secret, 40 ingeniously applied
TO new conditions Of trade, and 30 large in
amount as to make 1t certain that they
were due to concerted action by the Stand
ard and the railroads.
DETERMINATIONS IN OPEN RATES.
The Standard OH Company Is receiving
unjust determinations in open rates.
The published rates from the lending
Standard shipping points are relatively
much lower than rates from the shipping
points OF it's competitors, The advantage
TO the Standard over its competitors from
such open determinations lie enormous,
~.