The Washington herald., 1906-11-16
The Case AGAINST standard Oil

The government has begun at St. Louis
q legal warfare against predatory wealth
fraught with nomentous consequences
20 national industry and commerce. and
Of epoch-making Importance 70 popular
welfare. For It is there 10 be determined
whether there be power In a government
by the people 70 bring before the bar OF
Justice and to convict Of wrong-doing the
most powerful combination Of organized
capital the world has ever known;
whether there be remedy by legal process
for the monopoly Of a natural product
OF universal use. and whether Il be pos
sible by court injunction 70 restrain cor
poration managers from using underhaud
and Illegal methods TO suppress competi-
ton. and to build up a vast Industrial
monopoly upon the wreck Of ruined
rivals. Not since Andrew Jackson forced
out OF existence the powerful Bank of
The United States has so important an
Issue been Joined between the people
and the power OF wealth.
The petition in equity fled by Attorney
General Moody in the United States Cir
cult Court Is an extraordinary indictment
Of Standard oil practices. These have
become sufficiently familiar through
public and private Investigations, but
never before have they been so effectively
presented, and with so strong q backing.
The impression which the Standard OIL
people have been sedulously seeking to
create, that their monopoly is a much
abused institution, will, we think. be
effectually dissipated by q reading Of the
government petition. The description there
given Of the growth and methods Of the
Standard OIL Company shows that by the
favoritism OF railroads, by extortion from
consumers, and by the deliberate wreck
ing Of Independent producers in order to
kill of competition, this great corpora
don was able IN fourteen years to pay
dividends amounting TO over S512,OOO.OOO on
"a capital Of s69.O00.O0O. and TO accumulate
surplus OF nearly 5000. 600, besides in
creaslng its actual capital to Sa0O,00OOOO
These figures are q startling Illustration
OF the power and value OF monopoly unre-
strained by law and operated by un-
scrupulOus men. Tint the enormous earn
ing capacity Of Standard OIL capital is
due largely to railway rebates and to
contracts and combinations in restraint
Of trade is the gravamen Of the charges
which the Standard Is now called upon
TO answer in court
The government seeks not only To dis
solve the parent corporation into its con-
stituent elements. but also to restrain the
subsidiary corporations from entering into
agreements with each other in contraven-
ton Of public policy. We have hereto
fore expressed some doubt as to the eff
cacy Of breaking up a large corporation
into small ones as a means Of preventing
the abuses Of monopoly. inasmuch as the
monopoly may easily resume some other
external form; but the government IS
going beyond that by asking for injune-
tions forbidding the various practices in
restraint Of trade complained of. In the
action begun at ST. Louis We shall have
a severe test Of both methods of attack
Ing corporate wrong-doing. If that test
shall fail in any particular, there is every
reason TO feel sure that adequate remedy
VIII be sought through drastic legislation. /
But there is evidence that the legal &c
tons taken by the government against
the Standard oil Company, especially the
prosecutions under the Elkins rebate .
law, have already produced excellent re-
suits, although pending in the courts. /
a competent authority, writing in the
New York Journal of Commerce. saws
that the system Of illegal rebates to the
Standard has been broken up in several
Instances, that an equitable adjustment
OF rates on oil has been made by num-
Der OF railroads. and that in consequence
both independent producers and refners
and the public were getting the benefit Of