The Topeka state journal., 1906-05-04


importance, involved in the local dis
tribution of oil. especially in less than
carload lots. The Standard Oil COM
pany ships enormous quantities Of oil
in less than carload lots and although
the distances involved in such cases
are usually comparatively short the
amount of freight charges under the
high rates Which prevail on Sucn busl-
ness under regular tariffs would be
very great and the possibilities Of de-
parture from these charges extensive.
ut is perfectly clear that the distinc-
tion between the rebate and the secret
rate is merely one OF accounting
Visit to Oil Fields.
Commissioner Garfield speaks of his
personal visit to the oil fields and of
the great mass of data obtained by him
either personally or through agents OF
the bureau of corporations. The pre-
lirninary study of this was transporta-
ton, which enters SO largely into the
cost of the finished product and hence
a most important factor in compeu-
ton.
Taking up the subject Of the output
Of refined oil. Mr.. Garfield finds that it
amounts to about 26.00O,000 barrels
annually, of which the Standard Oil
company directly and indirectly con-
trolls about 2S,o00s0oo and approx
mately the same proportion Of the
other finished products of petroleum
Continuing the report says:
THE Standard claims that the loca-
ton of its refineries and the use or pipe
lines are natural advantages to which
it is Justly entitled by reason of the
energy and foresight OF its managers
While in a measure that Is true, II
must not be forgotten that these ad-
vantages were in part obtained py
means of unfair competitive methods
after years of fierce Industrial strife.
The development of the pipe Hne
system by the Standard OIL company
was the result of special agreements
with railroad companies fuFtheI-
more those sO-called natural adVanI-
ages have been, and are being greatly
Increased by determinations IN freight
rates both published and secret, inter-
state and state, which give the stand
ard unOnOpOlistic control in the greater
portion Of the country, and which so
limit competition as to practically pre-
vent the extension of the business of
any Independent to a point which even
remotely endangers the supremacy OF
the Standard.
Erect ON Prices.
IAN immediate result of this de-
limitation of the competitive area Is
shown by the prices Of ordinary
Illuminating oil throughout the coun-
try After deducting the freight rate,
the price of such oil is usually from
two cents to five cents a gallon higher
in the noncompetitive than in the
competitive fields. A reasonable profit
upon refined oil is about one-half
cent per gallon. II IS ClEdI tt4aL CA-
orbita11t profits are obtained in the
noncompetitive fields. This monopo-
listic control extends from the we'll of
the producer to the doorstep OF the
consumer"
Mr.. Garfield cites the fact that the
New York Central Railroad company
was the only one which refused for
itself and affiliated lines to give access
to records of state rates.
At the beginning of the investiga-
l1e,,-
pany denied that it had obtained in re-
cent years or was now obtaining any
rebate or other transportation dis
elimination as against its competitors
and yet he says that a most careful re-
view of the facts and the explanations
leads TO the conclusion that the Stand
ard Oil company has habitually re-
cefved from the railroads, and is now
I receiving secret rates and other unjust
and Illegal Determinations.
In 1904 these secret rates saved to
/ the Standard Oil company three-quar-
/ ters of a million dollars. representing
! ing the difference between the open
rates and the rates actually paid.
These Determinations, he says.
have been so long continued. so Sc
cret. so ingeniously applied to new
I conditions of trade and so large in
amount as to make it certain that they
We're due to concerted action by the
/ Standard OIL company and the rail-
/ roads" He says further that the
4 Standard OIL com pany IS receiving un-
/ just Determinations in the matter of
open rates, the published rates from
/ the leading Standard shipping points
/ being relatively much more than rates
! from the shipping points of its COM
/ petitors
Mr.. Garfield then refers to seven in
/ stances of important determinations
( in favor of the Standard Oil company
In various parts of the country, and
says that most of the secret rates
and some Of the open determinations
/ discovered by the bureau were abol-
ished by the railroads shortly after
such discovery. After calling atten-
ton to the good which already has
resulted from the investigation, Mr.
Garfield says that the changes effected
have put the Independents upon a
fairer footing and make competition
/ possible in territories heretofore in
accessible. The report concludes as
follows:
Discrimination in Open Rates.
Nevertheless. the widespread dis
! criminations in open rates still in force
+ leave the independents at serious dis
advantage. The investigation has only
/ incidentally touched state shipments
from distributing eenters, particularly
in less than carloads. The few in
stances examined suggest the proha-
bility of Determinations on such ship
ments which, taken in connection
with through traffic, may result in
determinations on interstate business.
''T have cited these particular in
stances 10 show the various methods
by which discrimina tions are OBJ
tained and to call particular attention
to methods which. if legal. are mere
/ devices to obtain exactly the same re-
suit as would be obtained by rebates
/ paid on interstate business Any
freight discrimination. whether it be
state or interstate. tends to give con-
troll of markets to the preferred ship
per, and makes monopoly possible. If
existing law merely prohibits q spe-
cial device for obtaining discrimina-
ton, and permits the same result to
be accomplished in a different way,
then the legislation is to that extent
a sham.
This investigation has shown very
clearly one glaring defect in the in