The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1906-05-05

not the profits arising from it are to be
given to any Indian tribe, and the lands
should be leased only on such terms and
for such periods as will enable the gov
eminent to keep entire control thereof.
THEODORE ROOSEVELT.
The White House, May 4, 1905,
Department of Commerce and Labor.
Bureau of Corporations,
Washington, May 2, 1902.
Sir-I have the honor to submit the
part of the report on the oil industry
which has to do with the subject of
transportation and freight rates.
House resolution No. 400, passed Feb
ruary Is, 1905, directed particular at
tention to the condition of the Kansas
oil field. The study of the oil industry
which had heretofore been made by the
bureau showed that a special report
upon the conditions in the Kansas field
would not be advisable. A report on
any special field would necessarily be
unfair to both the producers and re-
finers, for the reason that the purely
local conditions do not 10y any means
determine the price Of either crude oil
or its products or afford proper basis
for understanding the conditions of the
industry. Therefore, a general and very
extensive investigation has been con-
Quoted, covering the following subjects:
1. The crude oil production in the
United States and its relation to the
worlds supply; the prices and methods
Of purchase.
Q. The use, development and control
of pipe lines.
S.Refning Of oil; the control of re-
fineries; the cost Of refining and mar
keting; the prices Of petroleum prod
ucts.
4. The organization, ownership, and
relation of the companies engaged in
the production, manufacture, and dis
tribution of oil
5. The comparative methods used in
the production and sale of oil.
g. Transportation and freight rates.
Z. Foreign trade and conditions and
their relation to the domestic industry.
l have personally visited nearly ell
of the great fields, and have been in
communication, either personally or
through the agents of the bureau, with
many hundred producers and practic-
ally all the refiners and transportation
agencies engaged in the distribution Of
oil. a special agent of the bureau was
sent to Europe to study at first hand
the conditions in foreign producing
fields and distributing markets. The
facts obtained have in every feasible
way been verified by examination of
the original sources of information.
BY far the greater part of the materi-
al necessary for the completion of the
entire report has been collected. The
preliminary study of this material
showed that the most important sub
ject was transportation, because the
cost of transportation is a very large
percentage Of the total cost to the con-
sumner Of the finished product, and
hence a most important factor in COM
petition.
The control OF the Standard Oil COM
pany over the entire oil industry is so
great as to require a special study of
its relations to transportation compa-
MES.
therefore first submit the accompa-
nying report upon the subject of rail-
way transportation and freight rates.
AS it necessarily covers many details,
| beg to invite your attention to the
following summary of Its more promin-
ent features.
The manufacture of refined oil, COM
monty known as kerosene, is about 26,-
100000 barrels annually, of which the
Standard Oil company directly and in
directly controls about 2SO00,000. 1t al
SO controls approximately the same
proportion Of the other finished prod
ucts of petroleum.
The reflnerles owned or controlled by
the Standard Oil company are located
near New York, Philadelphia, Balti-
more, Chicago, Kansas City, in western
New York and Pennsylvania, in West
Virginia, Ohio, Kansas, Colorado, Cali
fornia and Texas. It's largest ,refneries
are located at the great centers Of dis
tribution, which are connected by pipe
lines with the crude oil fields. The re-
fined products are carried by rail and
water. The independent refineries-
that Is, those not owned or controlled
by the Standard Oil company-are 10
Gated, with a very few exceptions at
or near the crude oil fields This diff
ference of location, as will be seen lat
Ell, is of importance.
The Standard claims that the location
of it's reflneries and the use of pipe
lines are natural advantages to which
it is justly entitled by reason of the
energy and foresight of its managers.
While in measure that is true, it must
not be forgotten that these advantages
were in part obtained by means of I'M
fair competitive methods after years of
fierce Industrial strife.
The development of the pipeline sys-
tenn by the Standard Oil company was
the result of special agreements with
railroad companies. Furthermore, these
so-called natural advantages have been
and are being greatly increased by dis
ordinations in freight rates. both pub
iished and secret, interstate and state,
which give the Standard monopolistic
control in the greater portion of the
country, and which so limit COMPETE
tion as to practically prevent the ex-
tension of the business of any indie
pendent to point which even remote
ly endangers the supremacy of the
Standard.
An immediate result of this delimita-
ton of the competitive area is shown
by the prices of ordinary Illuminating
oil throughout the country. After de-