The San Francisco call., 1906-05-05

I
vantages were in part obtained by
means of unfair competitive methods
after years of fierce Industrial strife
The DEVELOPMENT of the pipeline
/ system by the Standard Oil Company
was the result of special agreements
with railroad companies. Furthermore,
/ those so-called natura' advantages
have been and are being greatly in
creased by Determinations in freight
rates.
An immediate result OF this delimi-
tation Of the competitive area is shown
by the prices of ordinary Illuminating
oil throughout the country. After de-
ducting the freight rate the price of oil
is usually from cents TO cents q
gallon higher IN the non-competitive
than in the competitive fields. A rea-
sonable profit upon refined OIL is about
lOne-half a cent per gallon. 1t is clear
that exorbitant profits are obtained in
( the non-competitive fields This mo-
of the producer TO the doorstep of the
! consumer
4 SECRET RATES
I At the beginning of the investigation,
/ he says. the Standard oil Company de-
MED that it had obtained in recent
years or was now obtaining any rebate
or other transportation discriminatory
jas against its competitors. and yet i.
was found that the Standard Oil Com
pany had habitually received from the
/ railroads and is now receiving secret
rates and other unjust and illegal dis
examinations In 1904 these rates saved
TO the Standard Oil Company three
quarters OF a million dollars, represent
/ ing the difference between the open
rates and the rates actually paid. He
says that the Standard Oil Company is
receiving unjust determinations in the
matter of open rates. the published
rates from the leading Standard ship
ping points being relatively much more
than rates from the shipping points of
its competitors.
'-fhe Widespread Determinations in
open rates still In force leave the inde-
pendents at serious disadvantage The
Investigation has only incidentally
touched State shipments from distrib-
uting centers, particularly in less than
carloads.
TARIFFS KEPT SECRET.
This investigation has shown very
I clearly one glaring defect in the Inter
state Commerce laws. viz: the method
of fling and publishing tariffs. Al
though a tariff or a ra e has been fled
with the commission Ia compliance
with the terms of the law. none but the
favored shipper may know of its exist
ence
/ The general result OF the investi-
cation has been to disclose the exist
enee OF numerous and fiagrant discrim-
inations by the railroads in hehaff of
the Standard Oil Company anh its af-
hliated corporations. With compara-
lively few exceptions. mainly of other
large concerns in California the Stand
| ard has been the sole beneficiary of
such Determinations. In almost every
section Of the country that company
has been found to enjoy some unfair
advantages over its competitors. and
some OF these Determinations affect
enormous areas.
MANY of the secret rates discovered
| by the Bureau of Corporations have ap-
piled only on shipments OF oil wholly
within single States. The Standard
! Oil Company. which controls refneries
in twenty States, is obviously in a po-
sition to make extensive use of such
interstate rates, or as they are orig
inally designated. State rates. For the
purpose Of more effectively concealing
the secret rates given TO the Standard
oil Company railroads in several i'm
portant cases have used peculiar
methods OF billing and accounting.
FREQUENT VIOLATIONS.
An especially large number OF Sc
cret rates and rebates IT, the transpor-
tation of oil was found in California.
In all more than eighty distinct viola
tions of tariffs on oil were discovered
Vim this State. The total concessions
TO shippers and consignees under these
rates as compared with the published
tariffs, may be safely estimated at
about 100000 per year. of which
amount about 100000 went to the
Standard
The commission finds that the gen
eral policy of the railroads with regard
TO other freight traffic has been to
equalize conditions of competition In
! given markets by the use of commodity
rates relatively more favorable to dis
tant producing points thar to the
nearer producing points. But it ap-
pears that in the case OF the oil in
dustry the policy has been generally
reversed and natural disadvantages of
the Independents have been enormous
~ increased.