The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1906-05-08
BY Open and Secret
Rates, Says Garfield.
REPORT TO CONGRESS
He Eliminates Trust Methods for the
Public. In Letter of TransmittaI to
Congress Roosevelt Urges That
Greater Powers be Given Inter
State Commerce Commission.
CBy the Associated Press

Washington, j.. G., May 4.-The
following message from the President
concerning the oil industry in tn"
United states was communicated 10
the Senate and House Of Represent
ativos today:
The Senate and House Of Representa-
tircs:
transmit herewith It report by
the Commissioners 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 csults OF part
of which are summarized in this re
port, was undertaken in accordance
with House Resolution 499. passed
February IS, 1905, but for the reason
6iven in the report it has been more
general and extensive than was called
Tor in the resolution itself.
call your special attention to the
lcttca of tr~anslnittal accompanying
and summarizing the report, for the
report is of capital Importance III
view OF the effort now being made to
secure such enlargement of the pow
erS Of the Interstate Commerce Com
mission as Will confer upon the Com
mission power i'll some measure add
~cquatcly to meet the clearly demon
stratcd needs Of the situation. The
facts set forth in this report are for
the most part not disputed. 1t is
only the differences from them that
are disputed, n even in this respect
the dispute is practically limited TO
the question as to whether the trans
actions are or are not technically
legal. The report shows that TIA"
Standard oil Company has benefited
enormously up almost to The present
II by secret rates many of
these secret rates being clearly I'M
lawful. This benefit amounts to ut
least three-quarters of a million a
year. This three-quarters of a mil
lion represents the profit that the
Standard Oil Company obtains at
the expense of the railroads; but of
course the ultimate result is that it
obtains Il much larger profit at the
expense of the public. \ very strik-
ing result of the investigation has
been that shortly after the discovery
of these secret rates by the Commits
sioner of Corporations, the major
portion of them were promptly cor
rccted by The railroads, SO that most
OF them have now been done away
with. This immediate correction. par
ti3l or complete, OF the evil of the
secret rates is of course on the one
hand an acknowledgement that they
were wrong, and yet We're persevered
in until exposed: ana on the other
hand q proof of the efficiency of the
work that has been done by the Blu
reau of Corporations. The Depart
ment of Justice Will take up the ques-
ton of instituting prosecutions in at
least certain of the cases, but it is
most desirable to enact into law the
bill introduced by Senator knoX to
correct the Interpretation of the i'm
munity provision rendered in Hum
phrey's decision. The hands of the
government have been greatly
strengthened in securing an effective
remedy by the recent decision of the
Supreme Court in the ease instituted
by the government against the To-
bacco Trust. which decision permits
the government to amin the books
and records Of any corporation en-
gagged iii Interstate commerce.: and
by the secret conviction and punish
mcnt of the Chicago. Burlington and
Quincy Railroad and certain of its
officers.
But in addition to these secret rates
the standard oil profits immensely by
open rates, which are so arranged rs
to give 1t an Overwhelming adVant-
age over its independent competitors.
TIE refusal of the railroads in Ger
tain cases To prorate produces anal
ogouS effects. Thus in New England
II refusal of certain railway sys-
toms to proratc has resulted in keep
ing the Standard Oil in absolute
monopoli&tic control of the field en-
abling it to charge from three to four
hundred Thousand dollars Il year more
to consumers of oil in New England
than they would have had to pay had
the price paid been that obtaining in
competitive field. This is q charac-
~teristic example Of the numerous evils
which are inevitable under Il system
in which the big shipper ana the rail
road are left fee to crush out all in
dividual initiative II all power of
independent action because of the alb
sencc of adequate and Thoroughbred
ing the government control. Exactly
similar conditions exist in a large pOr-
ton Of the West and Southwest. This
particular instance cXemplifeS tho
fact that the granting to the govern
ment of the power to substitute n
proper for an improper rate is in
very many instances the only effect
i've way in which to prevent improper
discrimination in rates.
Gross EayoritiSIn shown the Trust.
1t is not possible to put into figures
the exact amout by which the Stand
ard profits through the gross favor
itiem shown it by the railroads in
connection with the open rates. The
profit of course, comes not merely by
saving in the rate itself as compared
with its competitors. but by the high
er price it is able to charge. and
r"ven Withnut reference to these high
err prices) by the complete control of
the market which it secures, thereby
getting the profit on the whole con
sumption. Here again the only way
bv which the discrimination can be
cured is by comforting upon the In
terstate Commerce Commission the
power TO take quick ana effective ac-
ton in regulating the rates.
one feature of the report which
is especially worthy of attention. is the
showing made as to the way in which
the law is evaded by treating as state
commerce what is in reality merely a
part of interstate Ommerce. 1t is
cleo flv shawn for instance tina THIS