Los Angeles herald., 1906-03-15
OIL RATE PROBE
QUITS DRILLING
KANSAS RAILROAD INQUIRY TO
MEET AGAIN
Effect Of Investigation VIII Probably
Make Lower Rate for Fuel Oil.
Santa Fe Official Is
Questioned
By Associated Press.

BY Associated Press
KANSAS CITY, Mo-, March 14.-The
interstate commerce commission today
completed it's Investigations here into
the methods of the Standard Oil COM
pany and the railroads in dealing with
the independent oil producers in Kan
sas. The commission adjourned, to
meet again at a time and place to be
designated by 1t. 1t will probably re-
sumo the investigation in Washington
and may summon before 1t the presi-
companies. These men may be ordered
to show their companies records and
to show their stock and bond owner
ship of affiliated companies and manu-
featuring interests and the methods by
which the transportation departments
of different railroad companies pre-
vent other coal companies from ope-
rating in Kansas.
Many who heard the testimony and
watched the investigation here con-
cluded that the commission probably
would grant lower freight rate upon
fuel oil. In the hearing Mr.. Prouty.
questions of railroad traffic men about
what would be the principal effect of
a lower freight upon fuel oil.
Former Senator Cockrell of the COM
mission said tonight:
This is Just a start. We will go to
Washington and investigate the oil and
coal business. We must get great
deal of information from the railroads.
The question of ownership of the rail-
roads must be settled. The trouble will
come when we undertake to learn the
ownership of all these concerns. We
must try to give everyone a fair
chance"
Santa Fe official Testifies
]. r. Koontz, general freight agent
of the Atchison, Topeka & Santa Fe
by Mr. Marchand, attorney for the COM
mission: Are the pipe lines of the
Standard Oil company upon the right of
way of the Santa Fe railway"
Yes, sir; they are for distance
east of Sugar creek (Kansas City to
point somewhere in Illinois, where
they branch off. West of Sugar creek
the pipe line is upon the right of way
of the southern Kansas division of the
Santa Fe for considerable distance"
"How did the Standard Oil company
get this right of way?"
"I do not know. That is a matter
with which 1 do not come in contact" "
Mr. Koontz was questioned about the
meeting of traffic managers of diff
ferent railways in st. Louis in June,
1904, at which the oil rate east from
Kansas points was raised from 10 cents
to II cents 100 pounds. He said that he
was at that meeting. He did not krow
who called it.
"I was notified by Mr.. German, our
freight traffic manager" continued Mr..
Koontz, "to represent the Santa Fe at
that meeting"
"Did he give you any instructions?"
"None at all.
Mr.. Koontz said that Mr.. Bogardus,
traffic manager of the Standard Oil
company, was at the meeting.
"Who invited Mr.. Bogardus?" was
asked.
"I do not know"
"Was any record kept of the pro-
ceedings of that meeting?
mo, sir"
Mr. Koontz, cross-eXamined by
Thomas r. Morrow, attorney for the
plaintiff, was asked:
Are the oil freight rates established
by the Kansas legislature compen-
satory?"
II do not so consider them"
Railroads Considerate
GLOW do the railroads look upon
them?"
LAS arbitrarily established without
the railroads having been given
chance to be heard. 1t was an effort on
the part of the legislature to meet the
scale in force in Texas with this diff
ference that while the Kansas rate IS
the Texas rate upon crude and fuel Oil
1t is much lower than the Texas rate
upon all the products of petroleum,
such as kerosene and gasoline"
"Why has there been no assault by
the railroads upon the Kansas pro-
ducers?" Mr.. Koontz was asked.
Largely in Difference to public SEN
timent," replied the witness. THE
officials of the Santa Fe-and think Of
other Kansas roads-think that the
Kansas rates would have been con-
tested long before this, but in view of
the agitation and infiamed condition of
the public mind the policy of the rail-
roads has been to submit quietly to the
unreasonable rates forced upon them
by the legislature of Kansas"
There has been a great deal of agi-
tation both by the press, at political
meetings. and in one way and another"
Eyes, and because of this the rail-
roads decided to submit for the pres
ent."
In the course of his examination Com
missioner Prouty asked of Mr..
Koontz:
"Why should you charge more for
moving oil than coal?"
Because the oil tanks go back
empty" replied Mr.. Koontz.
Don't the coal cars go back empty?"
mo, SIR
"What do they carry?"
"All full of sand" said Mr. Koontz.
Mr.. Koontz said that the risk In
volved in drawing fuel oil was an i'm
portant factor.
"What does that risk amount to?"
asked Commissioner Prouty.
''I could not answer that question"
"And yet you carry great quantities
of crude oil in California, risk that
is important enough to increase rates.
There must be some data available as
a calculation somewhere. Can you
produce these figures for us, too?"
Mr.. Koontz said that he could and
would produce the figurts.
A. II. Coffin of Longton, Kas.,
pumper and refiner of oil, testified that
the freight rate outside of Kansas pre-
vented him from shipping out of the
state.