Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-05-04

The President today sent 10 OOll-
gress a message transmitting the re-
port of Commissioner of Corpora
tions Garfield of the result OF his
Investigations into the transactions
of the Standard Oil Company in so
far as it refers to the subject OF
transportation and freight rates.
The message is as follows:
The Senate and House of Representatives:
transmit herewith report by the COM
missioner of the bureau of corporations In
the Department of Commerce and Labor on
the subject of transportation and freight
rates in connection with the oil industry
The investigation, the results of part of
which are summarized in this report was
undertaken in accordance with House reso-
luton 400, passed February 15, 1908, but for
the reasons given in the report 1t has been
more general and extensive than was called
for in the r. solution itself
call your especial attention to the letter
of transmittal accompanying and summar-
izinE the report; for the report is OF capital
Importance In view of the effort now being
made to secure such enlargement of the
powers of the interstate commerce commits
sion as will confer upon the commission
power In some measure adequately to meet
the clearly demonstrated needs of the sltu-
alton The facts set forth in this report are
for the most part not disputed. 1t is only
the differences from them that are disputed,
and even in this respect the dispute is prac-
tically limited TO the question as to whether
the transactions are or are not technically
legal. The report shows that the Standard
OH Company has benefited enormously up
almost to the present moment by secret
rates. many OF these secret rates being
clearly unlawful. This benefit amounts to
at least three-quaTters Of a million year.
This three-quarters of n million represents
the profit that the Standard OIL Company
obtains at the expense of the railroads; out,
of course. the ultimate result is that 1t OBJ
tains a much larger profit at the expense OF
the public. very striking result of the In
vestlgatlon has been that shortly after the
discovery Of these secret rates by the com
missioner 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 cor
rectlon. partial or complete, of the evil of
the secret rates Is Of course, on the one
hand an ack lowledgment that they were
wrong. and yet were perseyered In until ex-
posed: and on the other hand a proof of the
efficiency of the work that has been done
by the bureau of corporations. The De-
partment of Justice VIII take up the question
Of institutng prosecutions in at least GER
tain Of the cases. But IT is most desirable
TO enact into law the bill introduced by Sem
Rtor Knox TO correct the Interpretation of
the immunity provision rendered in Judge
Humphreys decision. The hands of the
government have been greatly strengthened
i'm securing an effective rcr.edy by the re-
cent decision OF the Supreme Court In the
case instituted by the government against
the tobacco trust. which decision permits
the government 10 examine the books and
records Of any corporation engaged In in
terstate commerce; and by the recent con-
Vlction and punishment Of the Chicago,
Burlington and quincy railroad and certain
OF its officers.
Profits of Open Rates.
But I'm addition to these secret rates the
Standard OIL profits Immensely by open
rates which are so arranged as TO give 1t
overwhelming advantage over its tnde-
pendent competitors. The refusal of the
railroads in certain cases to prorate pro
duces analogous effects. Tnus in New Eng
liuu the TNIusdl or certain railway SyStSii5
10 prorate has resulted in keeping the
Standard Oil IN absolute monopolstic con-
troll Of the field. enabling it to charge from
three 90 four hundred thousand dollars a
year more TO the consumers of oil in New
England than they would have had to pay
had the price paid been that obtaining in
the competitive fields. This is character
tstc example of the numerous evils which
are Inevitable under a system in which the
big shipper and the railroad are left free to
crush out all Individual initiative and all
power OF independent action because OF the
absence OF adequate and thorough going
governmental control. Exactly similar con-
ditions obtain in large part of the west
and southwest. This particular instance ex-
emplihes the fact that the granting to the
gov eminent of the power to substitute a
proper FOR Improper rate is in very many
instances the only effective way In which
TO prevent improper determinations In
rates.
1t is not possible to put into figures the ex-