Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1906-05-05
'oRK FOR DEPARTMENT OF JUSTICE
Attorney General Will Present Matter to
Federal Grand Juries.
INTERSTATE COMMERCE LAW THwARTtO
Biz shippers Favored by Device
which Subjects Through shipments
20 state RRtes-other irregu-
laritIes Uncovered.

hloher OF corporations giving the re-
suits OF his investigation OF the sub
ject Of transportation and freight rates
in connection with the oil industry
In his message the president expresses
the view that the report is OF capital i'm
portance because of the effort now being
made to secure such enlargement OF the
| powers OF the Interstate Commerce com
mission as will confer upon the commits
I sion power I'm some measure adequate to
/ meet the clearly demonstrated needs OF
/ the situation. The facts set forth In
the report, he declares are for the most
part not disputed. That the Standard on
! company has benefited enormously up al
most to the present moment by secret
rates, many of which were clearly un-
lawful. the president says the report clearly
shows, the benefit thereby secured amount.
ing to at least $4,000 year. On this sub
| ject he says:
This $500 represents the profit that
] the standard OH company obtains at the
expense Of the railroads, but of course the
! ultimate result is that II obtains q much
larger profit at the expense Of the public
| A 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
them were promptly corrected by the rail-
roads, SO that most Of them have now been
done away with. This immediate correc-
tion partial or complete, OF the evil OF
hand an acknowledgment that they were
wrong and yet were persevered in until ex-
the efficiency OF the work that has been
done by the bureau Of corporations.
Department of Justice TO Act.
The statement Is added that the Depart
ment OF Justice will take up the ques-
ton Of instituting prosecution in at least
certain of the cases. and the hope is ex-
pressed that congress will enact into law
the bill OF Senator Knox to correct the
Interpretation of the immunity provision
rendered in Judge Humphreys decision
Continuing, the president says:
But in addition to these secret rates the
Standard OF profits immensely by open
rates, which are so arranged as to give
dependent competitors. This is a char
acteristic example OF the numerous evils
which are inevitable under a system in
| which the big shipper and the railroad ara
left free to crush out all individual initla-
tive and all power OF independent action
because OF the absence of adequate and
thorough-going governmental control. Ex-
actly similar conditions obtain in a large
part OF the west and southwest.
1t is not possible. he says. to put into
figures the exact amount by which the
Standard proits through the grross favor
itism shown It by the railroads in connec-
ton with the open rates. 'The profit OF
course comes not merely by the saving in
the rate Itself as compared with its COM
petitors, but by the higher prices Il is able
to charge by the complete control of the
: : market which IL secures, thereby getting
: the profit on the whole consumption"
Purpose of Law Thvvarted.
The president calls attention to that fea-
l ture Of the report regarding the manner in
which the law is evRded by treating as
: state commerce what in reality is merely
: a part of interstate commerce. He says
it is clearly shown that THE device is
employed on the New York Central rail-
: road well as on many other railroad. In
= such fashion as to amount to thwarting
the purpose Of the law, although the forms
of the law may be compiled with"
\ 1t is unfortunately not true. he says. tina,
} the Standard Oil company is the only cor
poration which has benefited and Is bene-
hting in wholly improper fashion by an
| elaborate series OF rate determinations
The Sugar trust. he adds. according to the
results OF the investigation now in prog.
- ress. rarely II ever. pays the lawful rate
q for transportation. He declares that in the
- effort to prevent the railroads from unitinS
!, for improper purposes I'VE have very un
Ii wisely prohibited them from uniting foi
n proper purposes-that is. for purpose Of
4 protecting themselves and the general pub
= lie as against the power OF the great cor
a porations'
= He favors. as an element Of competition
!, the passage of some such law as tina
a. which has already passed the hous
putting alcohol used in the arts on tn
-, free list and OF keeping the fee to oil ans
a. coal lands of the Indian tribes or on thu
ID public domain IN the government. the land
,s to be leased only on such terms and 70
~ such periods as will enable the govern
Is ment to entirely control them.
no Report OF COmmissiOner.
In summarizing his report Commissions
Garfield speaks Of his personal visit to III
G oil fields and of the great mass OF data oh
tained by him either personally or throug
lr agents OF the bureau OF corporations. Tn
preliminary study of this was transports
tion. which enters 30 largely into the COS
OF the finished product, and hence a mos
important factor in competition.
to Taking up the subject OF the output {
er refined oil, Mr.. Garfield finds that
on amounts TO about 100000 barrels annl
m ally, OF which the Standard OIL compan
as directly and indirectly controls about .
4 10000 barrels and approximately the SAN
proportion Of the other finished products {
he petroleum. Continuing, the report says:
by The Standard claims that the location
at It's rehneries and the use Of pipe lines al
,er natural advantages 70 which It Is Justly eI
~ titled BY reason OF the energy and for
60 sight OF its managers. While In a measul
by that Is true II must not be forgotten ths
d. these advantages were In part obtained /
- ! means OF unfair competitive methods aft
ne years OF fierce industrial strife
ed The development Of the pipe line Eyste
,al by the Standard OIL company was the r.
suit OF special agreements with railTOe
companies. Furthermore, those so calls
natural advantages have been and are b
ing greatly increased by determinations
NJ freight rates, both published and secre
= Interstate and state, Which give the STAN
ne ard monopoiistic control IN the greater 20
on, tion OF tie country. and which 50 limit con
,as petftion as 20 practically prevent the e
- tension OF the business OF any tndependel
Hs 10 a point which even remotely endange
Of the supremacy OF the Standard.
he An immediate result Of this delimitatis
:. | OF the competitive area is shown by a
c. | prices OF ordinary illuminating OIL throug
out the country, After deduetin8 The freig