The Washington herald., 1907-10-04

New York, oct. 3.-After a weeks re-
cess in the taking Of testimony before
Referee Ferris for use in the suit brought
in the Federal court at s.. Louis 20 dis
solve the Standard Oil Company OF New
Jersey. the inquiry was reOpened to-day
with Prosecutor KellOgg's effort 10 adduce
testimony showing that. through the two
subsidiaries, the Galena Signal Oil Com
pany and the Waters-Pierce Oil Company,
the Standard Company controlled q per
cent Of the railroad lubricating oil bUsi-
ness Of the country. The government at
t0rney also attempted 10 bring out the
fact that the two lubricating oil compa-
nies not only charge an eXhOrbitant price
for the commodity, but that they dis
criminate against some railways by a re-
funding scheme.
c. G. SteinbrenneT. auditor Of the Ca
lena Signal Oil Company, testified that
some railroads pay more for their engine,
valve, and car lUbricating oils than others.
On the item Of valve oil, he cited the
rates paid by the Pennsylvania 10 be q
cents a gallon; the Baltimore and Ohio
Railroad, IS cents the Toledo. Peoria, and
Western, q cents. the Southern Pacific
Railroad gets its valve oil for "A cents.
while the Union Pacific has TO pay ~. and
the Delaware and Hudson pays % cents
for the same commodity
system of Refunds.
This discriminating was accounted for
by system Of refund which the Galeua
manufacturing concern has had in 0per-
alton for fourteen years at least. The
GaIeua would make q contract with q
railroad To lUbricate all of its rolling
stock for 30 per cent Of the cost that the
road had experienced when doing that
function itself.
H. through economy and improved
methods, the amount Of oil Use5 20 ac-
complish the fabrication was not in excess
of that stipulated in the guarantee the
Gaiena Company would refund something
on the gross invoice. If the cost was IL
excess no refunding would be made
Taking the Galena's accounts for a
specific yeer, the governments prOsecU-
tor mad the witness admit that his COM
pany had refunded Al per cent on the
gross invoice % the Southern Pacific. and
3 per cent on the gross invoice of tie
Baltimore and Ohio. but that the South
ern Railroad paid the fuu invoice price
for its lubricants. as did the Delaware
ana Hudson, the New York Central. and
the New YUs,- New Haven and Hart
ford.
Mr.. kellogg sought 20 have the witness
say that the contracts mad, with the va
ri0us railroads depended largely upon the
amount of the Galena's oil that was ear
/ ried on these lines, but SteiHbreuuer de-
: MED that this was 50.
Liked the Advertising.
/ He added that the present contract the
|GaIena concern had with the PeuusyIva-
/ MIA Railroad represented a loss 10 the
manufacturing company. but the GaIena
/ company believed that this loss was com
/ |pensated for BY the advertisement repre-
/ sented by the Pennsylvania patronage.
! Steinbreune- said that his company had
/ contracts with about go railroads fin the
/ country, and that its business extended
/ % railroads in Europe. South America,
and India.
/ He said the company kept about fifty
I experts on its sraf. whose duty 3 was 20
/ instruct the operatives Of the coutractius
/ railroads in the most economical and eff
/ cient use Of the oils. The cOmpauy's con-
/ tracing system had remained the same
since il first began 20 go into business
/ The tid5watcr railroad of Mr. Rogers
. thirty miles Of which is fin operation. was
one Of the neSy railroads the witness
could remember that did not have con-
/ tracts for lubricating oil with the Galena
company. The Waters-Pierce oil Com
pany. which does business in lubricants
! buys its stock from the Galeua Signal
/ Company, according TO Steinbrenner. az
/ the same invoice price charged tie rail-
/ roads, but il receives a commission on al
I sales.