Los Angeles herald., 1906-05-05

q DETERMINATIONS in the open ar
raneement Of rates
S-Discriminativns In classification
and rules Of shipment
"4-Discrin,inations IN treatment OF
private tank cars.
Use Peculiar Methods
Many Of the secret rates discovered
by the bureau Of corporations have ap-
piled only on shipments Of oil wholly
within single states The Standard Oil
company, which controls refineries in
twenty states, is obviously in a posi-
ton to make extensive use OF such in
terstate rates, or as they are originally
designated, state rates.
For the purpose Of more effectively
cohcealing the secret rates given to the
Standard Oil company, railroads in sew
eral important cases have used pecul-
lar methods Of billing and accounting.
I'm some cases oil has been blind
billed, that is to say the waybills have
been made out showing the kind Of
product transported and its weight, but
without showing, as is the usual Gus
tom, any freight rate or the amount of
the freight charges. In such instances
the collection of freight is ordinarily
made, not by the local agent Of tho
railroad, but through the central office
by the presentation to the STANDARD of
summary bill showing the amount of
freight charges at the secret rate.
Local agents often do not know what
the actual rates used on blind bills are.
Many Violations In California
''An especially large number of secret
rates and rebates in the transportation
of oil was found in California In all
more than eighty distinct violations of
tariffs on oil were discovered in that
state.
"The total concessions to shippers and
consignees under these rates as COM
pared with the published tariffs may be
safely estimated at about $780, 900 per
year, OF which amount about 100000
went to the Standard"
The commissioner, under the head Of
possibility of further determinations,
said:
at seems wholly possible that there
may exist a multitude of other dis
examinations, effected by secret rates
or even by rebates, Of great aggregate
Importance involved in the local distri-
button of oil, especially in less than car
load lots.
''The Standard Oil company ships
enormous quantities of oil in less than
carload lots, and although the distances
involved i'm such cases are usually COM
paratively short, the amount of freight
charges under the high rates which
prevail on such business under regular
tariffs would be very great and the
possibilities of departure from these
charges extensive. 1t is perfectly clear
that the distinction between the rebate
and the secret rate is merely one of ac-
counting"
Gives Unreasonable Advantage
Regarding discrimination in the open
arrangement of rates, Commissioner
Garfield declared:
Different methods are used in diff
ferent places and under different condi-
tons. but the net result is that from
Maine to California the general ar
rangement of open rates on petroleum
oil is such as to give the Standard an
unreasonable advantage over its COM
petitors.
The conclusion is unavoidable that
the Standard Oil company has had an
important voice in the construction of
such rates and this conclusion is sup
ported by specific evidence developed
by the investigation"
In many cases, he says, there are un-
differences between rates on
oil in carloads and less than carloads.
He charges that discrimination is prac-
ticed in some instances in the treatment
of private tank cards. On this point he
says:
Exceptions on Long HauIs
I'm most sections of the country all
refineries operating tankScars of their
own receive equal treatment in respect
to the mileage allowances. On the Pa
cific coast, however, most independent
refineries receive six-tenths of a cent
per mile. and this on loaded movements
only. An exception is made where the
haul exceeds 800 miles, in which case
three-fourths of a cent per mile is al
lowed on the excess mileage over that
distance, but again on the loaded move
ment only.
"The Union Tank line and the
Waters-Pierce Oil company-also
Standard concern-are the only oil cor-
panies operating tank cars on the lines
of the Southern Pacific company AMI
the Santa Fe on the Pacific coast,
which receive three-fourths of a cont
per mile on both loaded and empty
cars.
similar determinations are practiced
by some of the transcontinental sys-
TENS traversing the northwestern
states.
THE advantages of the Standard Oil
would alone give it highly
favorable position in the oil industry.
To a certain extent the policy of rail-
by giving favorable dates
to the smaller refineries.
Competition Of Railroads
1.-The STANDARD Oil company, through
its pipe lines and it's fleets of oil-carry-
ing vessels, is an active and powerful
of railroads.
Except in the Texas and California
fields 1t has already taken the trans
portation of crude oil almost wholly
away from the railroads.
1.-The general policy of the railroads
with regard to other freight traffic has
been to equalize conditions of competi-
ton in given markets by the use of
commodity rates relatively more favor
able to distant producing points than
to the nearer producing points.
but it appears that in the case of
the oil industry the policy has been gem
orally reversed and natural disad-