The Appeal., 1906-05-12
GRIMES
OF THE Oil TRUST
PRESIDENT GRILLs THE
IN SPECIAL MESSAGE TO
CONGRESS.
BRAztN VIOLATION OF Law
GROSS FAvoRITIsM OF RAIL.
ROADS ENRlcHEs POWERFUL
MONOPOLY.
BRAzfN VIOLATION OF Law

AS0oo%' SiI yCSLclOdy transmitted TO
congress the report of James r. Gar
field, commissioner of corporations,
giving the results of his investigation
OF transportation and freight rates in
connection with the Oil industry.
The president expresses the view
that the report is of capital Importance
because of the effort now being made
to secure such enlargement of the
scope of the interstate commerce com
mission as will confer upon it power to
meet the demonstrated needs of the
situation. The facts in the report, he
declares, are for the most part not dis:
puted.
Trust Profits Enormously.
That the Standard Oil company has
benefited enormously, up almost to the
present moment, by secret rates, many
of which were clearly unlawful, the
president says the report clearly
shows, the benefit thereby secured
amounting to at least three quarters Of
a million year On this subject he
says:
This three-quarters of a million an
nually represents the profit that the
Standard Oil company obtains at the
expense of the railroads; but, of
course, the ultimate result is that it
obtains much larger profit at the ex-
pense of the public.
Corrected When Caught.
"A very striking result of the in
vestigation has been that shortly after
the discovery of these secret rates by
the commissioner of corporations, the
major portion of them were promptly
corrected by the railroads, so that
most of them have now been done
away with This immediate correc-
tion, partial or complete, of the evil Of
the secret rates. is,sssof course. sonzthe
one hand an acknowledgment that
they were wrong and yet were perse-
vered in until exposed; and on the 9TH
er hand a proof of the efficiency Of the
work that has been done by the bureau
of corporations"
Prepares to Prosecute.
The. statement is added that the de-
partnlent of justice will take up the
question of instituting prosecutions i'll
at least certain of the cases, and the
hope is expressed that congress will
enact into law the bill of Senator Knox
to correct the Interpretation of the i'm
,munity provision rendered in Judge
Humphreys decision. Continuing, the
ptesident says:
But in addition to these secret rates
the Standard Oil profits immensely by
open rates, which are so arranged as
to give it an overwhelming advantage
over it's independent competitors"
Gross Favoritism Enriches.
It is not possible, he says, to put
into figures the exact amount by which
the Standard profits through the gross
favoritism shown it by the railroads in
connection with the open rates.
'The profit, of course, comes not
merely by the saving in the rate itself
as compared with it's competitors. but
by the higher prices it is able to
charge by the complete control Of the
market it secures, thereby getting the
profit on the whole consumption"
The president calls attention to that
feature of the report regarding the
manner in which the law is evaded by
treating as state commerce what in
reality is merely a part of interstate
commerce.
ThWarts the Law.
He says it is clearly shown "that
this device is employed on the New
York Central railroad, as well as on
many. other railroads, in such fashion
as to amount to thwarting the purpose
of the law, although the forms of the
law may be complied with
It is unfortunately not true, he says,
that the Standard Oil company is the
only corporation which has benefited
and is beneftting in wholly improper
fashion by an elaborate series of rate
determinations.
The sugar trust, he adds, according
to the investigation now in progress,
rarely if ever pays the lawful rate for
transportation.
He favors as an element of competi-
tion the passage of some such law as
that which has already passed the;
house, putting alcohol used in the arts
On the free list and of keeping the fee
to Oil and coal lands of the Indian
tribes or on the public domain in the
government, the lands to be leased
only on such terms and for such peri
DDS as will enable the government to
entirely control them