The San Francisco call., 1906-12-16

unioaded movement. They got three
fourths of cent a mile for both loaded
and empty cars.
But California has been subjected to
more serious discrimination, and this
in the declination of the Southern Paci-
fie Company to haul private tank cars
for certain shippers, unless the railroad
was allowed to use them FOR its general
traffic, the owner surrendering all con-
troll The Southern Pacific endeavored
to enforce the same terms on the Union
Tank Line Company, the Standard con-
cern. but the latter insisted on being
allowed to operate a certain number of
its cars to be used exclusively in its
own business and under its own control.
MATTER is COMPROMISED
Just about this time the Union Tank
Line, which had for several years
leased about 500 of its cars to the
Southern Pacific to be used by oil ship
pers generally. demanded their with
drawaL The matter was compromised
by allowing the Southern Pacific to re-
tain these cars for six months. during
which time it might provide supply of
its own. at the same time allowing the
Union the exclusive control of certain
other cars. This withdrawal occurred
almost coincident with the purchase by
the Standard of a controlling interest
Il y,
was at this time that the Standard be-
gan TO purchase California crude oil on
an extensive scale.
At the time these cars were with
drawn the California railroads did not
have supply of tank cars sufficient to
meet the requirements of the oil busi-
ness and the production of oil was in
creasins very rapidly. The result OF
this withdrawal was to demoralize the
q nj mo ri 81 Of 49,, 4 -.
force many large independent producers
of crude oil. who had bees dependent
upon the Union Tank Line COMPANY
tank cars for transportation of their
product to abandon contracts with con-
sumers. Many of the contracts thus
lost were secured by the Standard Oil
Company.
DEPRESSEs PRICE Of OIL
The withdrawal Of these cars also
contributed to q serious depression in
the price of crude oil, since producers
being deprived of means of reaching
markets. had only the choice of seilin z
their production at prices which the
Standard or one or two other large
companies, having cars, would name,
or else close down their wells The
latter course was obviously impractic-
able. The shortage OF equipment also
operated to the advantage Of the rail-
ROADS themselves, by enabling them TO
buy oil for their own use at reduced
prices. The result of the Union Tank
Line Company's Withdrawal of its cars
and the failure of the railroads 20 pro-
vide sufficient number OF tank cars
was the infiiction OF serious and per-
rnanent injury upon the independent oil
producers of the State.
But the producer was to be subjected
to an aggravation of this injury. When
the railroads had purchased an add;-
tional supply of tank cars. they dis
erifrinated in the allotment OF then
among shippers This was especially
true of the Southern Pacific. The
Southern Pacific is a large stockholder
In the Associated Oil Company, one OF
the largest producers of crude oil on
the Pacific Coast. This fact was made
apparent to the independent producer
by the favoritism shown in the allot-
ment of cars The Associated got the
cars 1t needed; its competitors did not.