Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-08-05
Total Dividends of Standard.
Nearly Fifty Per Cent Profit.

Nearly f11ty Ser cent FRONT.
The lowest rate of profit on its investment
was in 1895, when it 1913 per cent. 1t
increased in nearly every year after that,
until in the first six months OF 1904 the
profits We're at the rate of 47.2 per cent per
year.
The ate of profit has increased not only
In proportion to its investment. but also
per unit of profits sold The average profit
on Illuminating oil for the years 1895 to
1899 was So cents per barrel. while from
1900 to June. 1901, the average profit
1872 per barrel, with similar Increase of
profit on the important by-products
These prices Commissioner Smith de-
Clares. demonstrate the falsity of the his
torc claim of the Standard Oil Company
that by reason of it's extraordinary eff
cheney it has brought prices to a point
lower than would have been reached had
business remained under normal COMPETE
tive conditions and in the hands Of a num-
Der of comparatively smaller concerns.
Period of Competition.
THE industry may be said to lave been
normally competitive from 1866 to 1874 and
during that time there was a fall in margin
between the price OF export oil in barrels
and the price of Pennsylvania crude of
from 2375 cents in 1866 to 900 cents in
1874. This decline was much greater than
that which has taken place since. 1t is
conclusive evidence that further reduction
would have been made in the absence of
any general combination.
THE fact that the Standard does nearly
nine-tenths of the petroleum business has
been demonstrated in a previous part Of
this report 1t now appears conclusively
that the result of this domination has been
to increase the prices of oil paid By the
consumer, and correspondingly TO increase
the profits received by the Standard. 1t Is
not true to say that only such great COM
'. ton tc1, ~
have been charged.
Independent Competitors Survive.
Independent competitors though small
and weak, do survive and do business at
prices which are deliberately reduced by
the Standard within the small competitive
areas reached by these independents, and
which are much lower than the average
prices received by the Standard throughout
the country
ut is true" the commissioner says. that,
taken as whole. the Standard OIL Com
pany is more efficient industrial machine
than any one of its competitors But that
difference in efficiency Is not very great.
Three-fourths of q cent profit per gallon
would give the Standard as large a profit
as the average business concern. but the
marketing business alone at FIVE Of its
plants shows profit Of % cents per gallon,
and If the profit of the pipeline transpor-
tation is added to this 1t would be at least
cents per gallon.
In other words" Mr.. Smith SAYS "the
Standard. though more efficient than its
competitors, gives to the public none of
the advantages due to this superior eff
cheney, but. on the other hand, demands an
additional excess above such advantage"
Facts That Are Proven.
In conclusion the commissioner says:
The following facts arc proven: The
Standard has not reduced margins during
the period In which il has been responsible
for the prices of oil. During the last eight
years covered by this report Ge9S to 1909
it has raised both prices and margins. Its
domination has not been acquired OF main
tanned by its superior efficiency, but rather
by unfair competition and by methods eco
nomically and morally uniustitiabe
The Standard has superior efficiency in
running its own business: it has an equal
efficiency in destroying the business OF COM
petitors. 1t keeps for itself the profits Of
the first and adds to these the monopoly
profits secured by the second. Its profits
are far above the highest possible standard
of reasonable commercial return, and
have been steadily increasing.
The Worst Industrial Methods.
Finally, the history of this great indus
try is history of the persistent use of the
worst industrial methods the exaction of
exorbitant prices from the consumer, and
small group Of men who over a long Sc
ries or years have thus dominated the busi-
ness"
Inc summary of the report presents
ai Vi ueI"is TO substantiate the conclu-
slonS OF the commissioner 'I,he ,.orcl,,
SION the report states that tbe Stan5ar5
mas increased the margin between the nrice
OF crude and the price of its pro1ucts IN
the domestic trade during recent Years i
indisputable. 1t is true that the STANDARD
ts able to fix the price OF crude oil In ,nost
of the great oil fields. But it is Impossible
to determine precisely how far the nro-
Queer and the consumer are affected II
is shown that the anthracite coal strike
OF 1902 caused a shortage of fuel which
led to an increased consumption of ilu-
minating oil The price of oil rose greatly
at that time. Profits made at various
Standard reineries are given according to
the estimates made during the investiga-
ton of the bureau of corporations
1t Is said that II the Standard operated
Its pipelines common carriers Its advan-
| tage over its competitors would be enor-
mously reduced.
Short Measure and Deception.
| The Standard" the report asserts, main
tains an elaborate system of espionage on
| the business of independent concerns, In
| particular securing almost complete reports
of their receipts and shipments of oil by
| bribing railroad employees This uractice
enables the Standard to direct its policv of
| local price cutting in the most eHective
| manner. Other less important methods of
unfair competition pursued by the STANDARD
! are the giving of short measure and do
| CeptOn regarding the quality of the oil
| sold.
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