The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-01-28
A Distinctive Part of Standard
Oil Company's Methods.
So Declares the Interstate Com.
MERGE Commission.
REPORTS TO CONGRESS
The Result of Its Investigation
of the Subject.
The Railroads Are Generally
Exonerated From Blame.


Washington. Jan 2S.-The interstate
commerce commission has sent to con-
gress a report of the Investigations
hade by it under the Tillman-Gillespie
resolution concerning the relations of
common carriers by rail to the produc-
ton and distribution of oil. The report
covers the distribution of petroleum
and it's products east of the Mississippi
river and, incidentally. the Kansas and
Texas fields. The report points out gen.
orally the methods by which the Stand
ard Oil company has built up and per-
petuated it's monopoly" 1t is asserted
that the ruin of its competitors has
been a distinct part of the policy of the
Standard Oil company in the past, sys-
tematically and persistently pursued"
mo instance" the report says. lis
found where any railway company has
been interested in oil lands or in petrol
cum production, and only one instance
is shown where officials of a railway
company were interested in the produc-
ton and sale of oil. This relates to GER
tain officials of the Baltimore & Ohio
Southwestern railroad having owned
stock of the Argand Refining company.
which was on their recommendation
afterwards sold to the Standard Oil
company, and the Lubricating contract
which the road transferred to the Ga
Ns.c1
The Standard Oil company largely
monopolizes the hapdling of petroleum
from the mouth of the well until 1T is
sold to the retailer, and sometimes to
the consumer. and under ordinary cir
cumstances its margin of profit is very
large Estimates made in the report
show profit on refined oil from the
Sugar Creek refinery at Kansas City of
from 5 to 8 cents per gallon A much
higher profit is indicated for gasoline
The sale of refined oil from the large
Standard refinery at Whiting, is CORE
epondingly profitable.
THE evidence shows little basis for
the contention that the enormous divi-
dends of the Standard Oil company are
the legitimate result of it's economics.
Except for its pipe lines, the Standard
has but little legitimate advantage over
the independent refiner.
THE Standard buys advertising
space in many newspapers which it
fills. not with advertisements. but with
reading matter prepared by agents
kept for that purpose, and paid for at
advertising rates, as ordinary news
The assumption is that this literature
furnishes many OF the ideas touching
the great benefits conferred upon the
public by the Standard Oil company.
Possession of the pipe lines enables
the Standard absolutely to control the
price of crude petroleum and the price
ity shall pay. It can raise the price in
one locality and obtain it's own oil from
another and reverse the process when
it desires to do so. Whoever controls
the avenues of transportation of the
raw material or of the refined product
can speedily drive his competitors out
of existence and the production and
distribution of petroleum is excep-
ton to the rule
The pipe line system of the Standard,
the report contends, is not natural,
but rather an artificial advantage. 1t
is argued that the reason why long
pipe lines competing with those of the
Standard have not been provided is
found in obstacles in the way of such
undertakings. having been opposed by
the railroads. whose right of way has
generally stood Chinese wall
against all attempts to extend pipe
lines. Ordinarily. it is said, the Stand
ard has not received reba ties in recent
years. so far as has been discovered,
but ii has nevertheless enjoyed secret
rates possessing all of the elements of
tanned over Independent shippers have
been of very great value to that COM
ma ton in favor of the Standard result
ing from the published railway rates
were found. says the report. In this con-
nection the following is an instance
given:
"A low rate of 10 cents per 100 pounds
upon petroleum and its products exist
ed for many years from Neodesha,
Kan. where the Standard operated a re-
f1nery, to Kansas City. This was for
the interest of the Standard; but when
the Standard constructed its refinery at
Sugar Creek, Kansas City, and connect
ed II by pipe line with the Kansas oil
wells, the rail rate was advanced from
10 TO Il cents per 100 pounds. While the
railway insists that this was not dc he
at the instance of the Standard, the
significant fact remains il, this and
many other cases called to the COM
missions attention, that the rate was
not changed until it came to be for the
interest of the Standard that it should
be changed and it was changed as that
company naturally would DESIRE
In discussing the assertion contained
in the report that the ruin of its COM
petitors has been a distinct part of the
policy of the Standard Oil company"
the commission says one method has
been the organization of a perfect sys-
tenn of espionage over the shipments of
Its competitors. resulting in knowledge
as to the destination of every car of oil
leaving the refinery of an independent
The Standard agent at the destination.
says the report. is held responsible if
the Independent oil is sold.
1T does not appear" says the re-