Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-05-20
LEGALLY HONEST EVASION
Tariffs Regularly Published, but In
dependents Still Suffer.
COMMODITY AND CLASS RATES
Company obeys the Letter, but It
Entirely Disregards the Spirit
Of the Law.

One feature OF the oil transportation con-
troyersy that does not seem to have
been particularly emphasized in the news
reports OF the commissioner of corporations
investigation is the way in which the rail-
roads have succeeded In discriminating In
favor OF the Standard Oil Company through
open tariffs properly posted w.sh the inter-
state commerce commission. The method
or publishing rate and then pigeon
hoiing 1t with the station agent SO that
the Standard OIL Company was the only
one who had access to 1t has been dis
eussed. but that partakes more or less of
secret rating. There is another and even
more important system on which the Stand
ard works. however. that IL quite within
the letter OF the law. but vitality opposed
70 the spirit It Is making commodity rates
as opposed to class rates. and then allotting
tne commodity rate so that the Standard
was able to reach territory from which its
competitors were entirely shut out.
= The general public does not know the Diff
ference between a class and commodity
rate. A class rate covers a lot of goods
an OF about the same transportation value,
and Is based on the distance goods are car
ried Oil would came in class If it were
carried under class rate, but the COM
modify rate Is made for a great many sorts
OF goods, principally farm products, and is
arranged so that the commodity carried
pays the same rate from no matter what
point It Is shipped to a central market
place. This Is for the avowed object Of
evening up geographical positions and CIV
ing all shippers of certain commodities with.
in certain areas an equal chance at the
common market. This Is a good arrange
ment in way, but. when desired, II can
be made to work enormous injustice and yet
remain strictly within the letter of the law.
Discrimination General,
The railroads which were bent on favor
ing the Standard, or which the Standard
had forced favors from, took oil out of the
class rates and put a commodity rate on
1t. This was all right so far as 1t went,
but the injustice came in when the rail-
roads so arranged it that the Standard
could ship oil from one of its refineries into
a market center, while the commodity rate
from the refneries Of the Independents
were made to pay such a rate that they
could not possibly compete. Now the tar
his On Oil in common with other interstate
tariffs had been duly filed with the inter-
state commerce commission for years
There was the tariff and there was the
discrimination, but the matter was not
shown up in its true light till the bureau
Of corporations got to poking around in
its investigation. Then it was discovered
that the commodity rates on oil In large
region of Pennsylvania were so arranged
that they always favored the Standard
and either put serious handicap on the
independent shippers or kept them out of
the most desirable markets altogether.
AS this remarkable state of affairs de-
veloped in the Pittsburg investigation, it
looked as though possibly 1t might have
been simply coincidence: but when the
other tariffs were examined it was found
that this state of affairs existed all over
the country In some cases. to be sure,
the commodity rate was more in favor of
the Independents than it was of the Stand
ard, but it was found that in all of such
cases the low tariff for the independents
was made for localities where neither they
nor the Standard wanted to ship.
Some Examples.
Perhaps it would be an injustice to say
that this state Of affairs was found to ex-
fst all over the country. The investiga-
ton was not carried to conclusion in Cal
ifornia as it would have delayed the report
too long, but 1t can safely be said that this
result was shown wherever the tariffs were
thoroughly Investigated. and this was In all
Of the country except California.
The report of the commissioner of cor
porations was embellished with lot OF
maps showing how far the Standard was
able to ship from its rehneries on, say. an
Scent rate, a 13-cent rate. an 1S-cent rate
and a 24-cent rate. 1t was found that In
almost every case the rates favored the
Standard by from a hundred to two hun
dred miles. Take the case of the commod-
fty rate out of Toledo, where there was an
independent refinery, and the rate out OF
Whiting, where there was a standard re-
finery. Whereas the 13-cent commodity
rate from these points carried the Stand
ards product nearly 400 miles, the same
rate reached 275 miles at the farthest for
the independent product. In the same way
the Standard could ship from Whiting to
New Orleans. distance of considerably
over 800 miles, on the 23-cent commodity
rate. but $50 miles was the farthest that
the independents could get from Toledo on
the same rate.
No Punishment Possible.
Now this discrimination was perfectly
open. perfectly legal, though palpably I'M
just. Any Of the roads detected in giving
rebates could be punished, but for this
sort of discrimination made through an open
tariff, there Is apparently no legal punish
uent. This Is what is meant In part by
the open determinations alluded to In the
commissioners report. Some of the tariffs
have been amended since the light of pub
icfty was thrown upon them, but 1t was
shown by the records of Oil shipments that
In the last twenty years since the tariffs
had been filed with the interstate COM
nerce commission that the discrimination
in freight over one short stretch of road
had Melted the Standard about a million
dollars
The roads can be punished wherever they
can be shown to have violated the law
either by rebates secret rates, but
when 1t comes to the open rate discrimina-
ton, which has Melted them millions of saw
fngs IN freight charges beside giving them
the control of the market and enabling
them to extort millions more from the
consumer, they can calmly inquire What
are you going to do about it?''
Ocean Steamship Movements.