The Providence news. (Providence [R.I.]) 1891-1906, 1906-05-04


The Senate and House OF Representa-
tives:
/ transmit herewith a 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 i'm accordance
with hosse resolution 499. passed Feb. 10,
1906, but for the reasons given in the re-
port IL has been more general and exten-
sive than was called for in the resolution
itself.
1 call your special attention to the letter
| of transmittal accompanying and sum
marking the report; for the report Is OF
capital importance In view OF the effort
now being made 10 secure such enlarge
ment OF the powers OF the interstate com
merce commission as will confer upon the
| commission power I'm some measure ade-
austely 10 meet the clearly demonstrated
needs OF the situation.
| The facts set forth In this report are
| for the most part not disputed. IL Is
only-the inferences from them that are
! disputed, and even In this respect the dis
/ pute Is practically limited 10 the question
| as TO whether the transactions are or are
not technically legal The report shows
| that the Standard Oil company has bene-
| fitted enormously up almost 10 the present
| moment by secret rates, many OF these
| secret rates being clearly unlawful. This
benefit amounts TO at least three-quarters
OF million a year.
| Three-Quarters of n Million Profit.
| This three-auariers OF a million repre-
sents the profit that the Standard OH
! company obtains at the expense or the
| railroads; but, Of course the ultimate re-
suit is that II obtains a much larger profit
| at the expense OF the public. very
striking result OF the investigation 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 correction, partial or
| complete OF the evil OF the secret rates
! is of course on the one hand an acknowl-
| edgement that they were wrong, ana YET
| were persevered in until exposed; ana on
! the other hand proof OF the eniclency or
| the work that has been done py the bureau eau
| OF corporate The department or JUS
! tice will take up the question or institut-
| ing prosecutions In at least certain OF lhe
| cases But IL is most desirable 10 enact
into law the bill introduced by senator
Knox 10 correct the Interpretation OF tne
| immunity provision rendered IN Juuse
| Humphreys decision The hands OF lne
| government have been greatly strength
/ ened in securing an effective remedy py
| the recent decision OF the supreme court I
in the case instituted by the government
| against the tobacco trust. which decision
| permits ths government TO examine the
books and records OF any corporation en-
gagged In interstate commerce ana Dy
the recent conviction and punishment ot
Chicago. Burlington and quincy railroad
| and certain OF its officers.
standard OIL Favored.
But In addition TO these secret rates the
rates. which are so arranged as to give II
| an overwhelming advantage over lts In.
| dependent competitors. The retusel OF
| PRODUCES analogous errgrts- ffts- Aeu
| England the refusal OF certain railway
| systems to prorate has resulted IN keeping
| the Standard Oil In absolute monopollstic
control OF the field, enabling IL 10 charge
from three to four hundred thousand DOL.
lars a year more 20 the consumers OF OIL
! in New England than they would have
had 10 pay had the price paid been that
obtaining In the competitive fields.
This Is a Characteristic example OF the
| numerous evils which are inevitable under
| a system in which the big shipper and
! the railroad are left free 10 crush out all
| individual Initiative and all power OF In
! dependent action because of the absence
| Of adequate and thorough going govern
! mental control. Exactly similar condi-
tions obtain in large part OF the west
|
exempliies the fact that the granting to
| the government OF the power. to substitute
| n proper for an improper rate Is In very
many instances the only effective way in
| which to prevent improper determinations
1t is not possible to put into figures the
| exact amount by which the Standard
profits through the gross favortism
! shown IL by the railroads in connection
with the open rates. The profit OF course
comes not merely by the saving I'm the
| rate itself as compared with its competl-
| tors, but by the higher prices II is able TO
! charge. and (even without reference TO
! these higher prices by the complete con-
troll OF the market which # secures, there
! by getting the proht on the whole con-
sumption Here again the only way by
which the Determinations can be cured is
| NV conferrinR upon the Interstate com
] merce commission the power TO take
quick and effective action in regulating
| the rates.
one feature Of the report which is es-
pecially worthy OF attention Is the showing
| made as 20 the way In which the law is
! evaded by treating as state commerce
what is IN reality merely a part OF inter
state commerce. II Is clearly shown, for
| instance, that this device IL employed on
the New York Central railroad. as well "a
on many other railroads. I'm such fashion
as to amount TO thwartlng the purpose
] OF the law. although the forms Of the
| law may be complied with
| IL Is unfortunately not true that the
Standard on company Is the only great
| corporation which in the immediate past
| has benefited. and IL at this moment bene-
/ hting. in wholly improper fashion by an
elaborate series OF rate determinations,
which permit it 10 profit both at the ex-
pense ~ its rivals and OF the general pub
| lie The attorney general reports % me
\ ,ha, the investigation now going on as
10 the shipments by the sugar truet over
tho trunk lines running out Of New York
| city~ends 90 show that the sugar trust
rs-ely n ever pays the lawful rate for