The sun., 1907-08-12
STANDARD UNFAIR TOAMERICA
mn LOW ABROAD, HIGH HERE
GAVE WHERE RIVALS SET PRICE.
Corporations Commissioner smith Reports
10 the President That the Trust Deceives
the Government -PcnnsyIvanl Read
,Dnr Of Its Particular Pets. re says.

One Of ns Particular Pets. re says.
WASHINGTON. Aug. 1t.-The Standard
on Company has sacrificed the interests OF
| the American consumer for the purpose OF
occurring foreign business. according to
| Verbert Knox Smith. Commissioner Of
| corporations. in a report just submitted
| 20 President Roosevelt The report deals
| with the Standards DETERMINATIONS in
prices'
Another charge made by Commissioner
Smith IL that the Standard has maintained
| high monopoly prices in non-competitive
| communities. thus making up losses In
| communities where IL had to meet or cut
the prices quoted by Independent concerns.
Further the Standard has practically forced
| American railroads TO pay exorbitant prices
| for Elbricating oils. fav oring some roads TO
| the prejudice of others The pet railroad
| Of the Standard the Commissioner OF Cor
| porations declares. is the Pennsylvania.
The Commissioner charges the Standard
| Oil Company with deceit and falsehood In
i,s dealings with the Government and with
| unfair unjust and unlawful methods in
| developing and extending its business
| Bogus" "brbing." -falsity." illegal" and
.extortona,e" are some of the terms used
| IN the report.
Commissioner Smith repeats an assertion
| be made In q previous report that combina-
| ton IN industry may as a rule reduce costs
and consequently prices, and therefore
| benefit tho public. He denies that this Is
| true in the case of the Standard. In his
letter transmitting the report to the Prcsi-
| deat the Commissioner says:
The obnoxious character Of the Stand
| ards price policy is made clear. The
| Standard has repeatedly asserted that COM
| bmation, as illustrated by it's own history.
is a great benefit to the public. IL may
| readily be that in some Industries combina-
| tion has had beneficial results IL is prob
| able that the Standard. by reason OF its
| undoubtedly great efficiency. could. had it
| been content with reasonable profits. have
| made prices to consumers lower than would
| have been possible tor srSaller concerns,
| and thus have maintained its great proper
| tion Of the business by wholly fair and legti-
| mnte means
The Standard il, however, a most con-
| tricuous example OF precisely the opposite
| of a combination which maintains a sub
stantial monopoly not by superiority Of
service and by charging reasonable prices
but by unfair methods Of destroying com
| retition: a combination which then uses
the power thus unfairly gained TO oppress
the public through wholly extortionate
prices 1t has raised prices instead Of
| lowering them. 1t has pock keted all the ad-
| yantages of its economies instead Of sharing
| them with the public. and has added still
| further monopoly profits by charging more
| than smaller and less economical concerns
could sell for if the Standard allowed them
l the chance.
by your direction continues Commits
soner Smith, -in view Of the proceedings OF
/ the Attorney General against the Standard
oil Company, some Of the more detailed
evidence regarding price discrimination
Is at present withheld from publication.
Discussing the disparity in prices Of oil
IN the United States and foreign markets.
Commissioner Smith says that the American
price steadily advanced from 1907 TO 1903.
The New York export price advanced
much less up to 1909 and declined in 1904.
The Hamburg German price shows prac-
| tically the same movement as the New York
export price, while the London price shows
q steady decline from 1901 to 1904 and a
very important drop during 1905.
The course Of American and foreign
prices in the last five years covered by this
report" Commissioner Smith says, has
shown a greatly increased divergence, in
general, the American prices going up and
the foreign prices showing a marked de-
cline
Commissioner Smith shows that the ex-
cess Of the price in the United States over
that received abroad varies from I cent
20 % cents. The really significant
figures" he says. ARE the margins Of the
respective prices above costs. The de-
duction of the principal elements OF cost
throws into proper prominence these great
differences in prices. From the prices may
therefore be deducted. first, the price of
crude oil and. secondly. the operating ex-
peuses of piping. refining and marketing the
oil. which amount TO about two cents per
gallon"
With these deductions for certain desig-
l mated periods the Commissioner shows
that the average German margin was SO
cents as compared with 4.d3 in the United
States; the United Kingdom margin was
lo4 cents, as against 4.S4 in the United
States. ard other countries-Belgium, II OIL
land, Denmark and the Orient-show
similar enormous disparities."
l Commissioner Smith continues.
These remarkable determinations in
favor Of foreign markets at the expense OF
/ the American consumer have naturally
called forth excuses from the apologists
Of the Standard. They have attempted to
create the impression that the recent de-
cline in lrices of American Illuminating
oil abroad was necessitated by an over
supply of that product. They have also
claimed hat there has been severe COM
| petition against the American product
from the oils of Russia and other foreign
/ countries and that the reductions IN ex-
| port and foreign prices were necessary To
rr'din the American export trade.
| Neither Of these arguments is well
| founded There was no oversupply OF
Illuminating oil during the years 1904 and
| 1905, az which time foreign prices were
being severely cut. This decline was not
hecessltdted by an oversupply OF oil. In
iact. the movement of prices was precisely
The opposite of that which would have
Teen expected from the changes in supply.
The falsity Of the Standards arguments
Is further demonstrated by the fact that
during 1904 and 1905, a period when the
standard claims that an oversupply existed,
that company actually took large quantities
OF Oh in Russia TO supply its trade in Europe
and the Orient Having a monopoly at
nome II has charged such prices as IL could
thereby extort, and the American consumer
mas had to pay these prices. Meeting COM