Vernon County censor. [volume] (Viroqua, Wis.) 1865-1955, 1906-05-16
SPECIAL MESSAGE TO CONGRESS
oNITs ABUSES.
UNLAWFUL PROFITS LARGE
Statement to Case on Basis of Dis
closures to Commissi,1
Argument for Rate Regulation
REBATES not Uenied-Unfair
Advantage Over Competitors.


field, commissioner OF corporations,
giving the results of his investigation
of the subject OF transportation ana
freight rates in connection Wda III
oil industry. In his message he ex
presses the view Ihat the report is of
capital Importance because of the eff
fort now being made to secure och
enlargement of the powers of the in,
terstate commerce commission as will
confer upon the commission power
in 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 tie Standard
oil company has benefited enormous
ly up almost to the present moment
by secret rates, many of which were
unlawful the president says the report
clearly shows. the benefit thereby Sc
cured amounting to at least three
quarters of a million a year.
The president also transmits a re-
port by Commissioner Garfield on the
subject of rates in connection with the
oil industry. The investigation, the re-
suits of part of which are summarized
in his report, was undertaken in &C,
cordance with house resolution passed
February 10, 1905. The facts set forth
In this report, says the president, are
for themost part not disputed. 1t is
only the differences from them that
are disputed, and 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 the Standard
oil company has benefited enormously
by secret rates, many of these rates
being clearly unlawful. This benefit
amounts TO at least three-qaurters OF
million year, and represents the
profit that the company obtains at the
expense of the railroads; but, adds
the president, of course the ultimate
result is that 1t obtains a much larger
profit at the expense of the public.
A striking result of the investigation
has been that, shortly after the dis
covery of these secret rates by the
commissioner. the major portion OF
them were promptly corrected BY the
/ railroads, so that most of them have
now been done away with. This i'm
mediate correction, partial or com.
plete, Of the evil of the secret rates
is Of course an acknowledgement that
they were wrong, and yet were persa
| yered in until exposed. The depart
meat of justice will take up the ques-
tIon If instituung prosecutions in al
least certain of the cases. But it Is
most desirable, declares the president,
to enact into law the bill introduced
by Senator Knox to correct the inter
probation of the immunity provision
rendered in Judge Humphreys decl-
sion. The hands of the government
have been greatly strengthened in Sc
curing an effective remedy by the re
cent decision Of the supreme court in
the case instituted by the government
against the tobacco strust, which de
cision permits the government to ex-
anime the books and records of any
corporation engaged in interstate
commerce; and by the recent conyie.
ton and punishment of tie Chicago.
Burlington & Quincy railroad and Ger.
tain of it's officers.
But in addition to these secret
rates the Standard oil profits i'm
mensely by open rates. which are so
arranged as to give It an overwhelm-
iDs advantage over it's Independent
competitors. The refusal of the rail
roads in certain cases to prorate
produces analogous effects. Thus in
New England the refusal of certain
railway systems, to prorate has re-
suited in keeping the Standard On. n
absolute monopolistic control of the
field enabling it to charge from $780,
coo to $500 600 year or more to the
consumers of oil in New England
than they would have had to pay had
the price paid been that obtaining in
/ the competitive fields This saws
! the president, is a characteristic ex.
( ample of the numerous evils wbIch
are inevitable under a system In
which the big shipper and the railroad
are left free to crush out all indiyjd
ral initiative and all power OF indie.
pendent action because of the absence
OF adequate and thorough. going GOV.
ernn entail control The president
confesses that 1T Is not possible In
put into figures the exact amount bv
which the Standard profits through
the gross favoritism shown it by the
railroads in connection with the omen
rates. Here again the only way by
which the determinations can be
cured is by comforting upon the inter.
/ state commerce commission the power
TO take quicH and effective action in
regulating The rates"
1 One feature Of the Garfield report
which the president declares is as.
reeially worthy Of attention is the
showing made as to the wav in which
the law is evaded by treating as state
commerce what is in reality merely a
/ part Of interstate commerce. that this
clearly shown, for instance. that this
device is employed on the New York
I Central railroad rs we'll as on many
( other railroads, In such fashion as TO
/ amount 10 thwarung the purpose OF
the law, although the forms of the
law may be compiled with.