The Birmingham age-herald., 1907-08-05


 this, Its advantage over it's present com petitors would be enormously reducer, As mas been shown in part l of this report the standard pipe lines have very gen. erally failed and refused to transport oil for others, and in the rare cases where they do so have charged altogether ex- tortionate rates. One of the principal advantages, therefore, which the Standard possesses over competitors in respect to costs Is an improper and even an illegal advantage
 Even by the aid of this advantage in respect to pipe lines, however the Standard, s has already been demon strated, does not, a matter of fact sell oil for less than its competitors can afford to charge. It extorts q profit over and above all the profits due to it's economies. The question arises how the Standard is able to maintain it's substantial monopoly while still charging such prices. What 1t may be asked, is to prevent inde- pendent concerns from either taking away part of tue Standards trade or forcing 1t to reduce prices? The 8an- swer to this question is found in the unfair practices of the Standard
 The most important of tn ese, the cor ner stone on which the Standards DOW CT was first built up, was railroad dis crimination. The Standard was able to maintain in position this primary support of its domination down nearly to the present time-that is, until It's system of preferential freight rates. se- cret or open, was exposed by the re- port of this bureau on the transporta- tlon of petroleum in May, 1906 The difference between the rates charged to the Standard by the railroads and the rates charged to independent con- cerns for similar service has, in many cases and for enormous areas, been alone greater thansa fair profit.
 Bogus Companies.
 Almost equally effective in maintain ing the Standards position have been its unfair methods of competition fin the selling of products. The immense importance of the practice of price dis 'crimination in restraining the business of competitors and augmenting the az gregate profits of the Standard will be set forth later. The bureau has also secured great mass of evidence re- garding other unfair practices of the Standard, most of which, however. are simply auxiliary means of rendering price discrimination effective. Thus, the Standard maintains bogus independ- ent companies and thereby is able to escape the disadvantage due to anti
 
 to the particular customers of eompeti- tors without mourning the further loss of cutting prices to the entire trade in the locality Again, the Standard main- tains an elaborate system of espionage on the business of independent con cerns, in particular securing almost complete reports of their receipts and shipments of oil by bribing railroad em- ployes. This practice enables the Stand ard to direct it's policy of local price cutting in the most effective manner. Other less important methods of un- fair competition pursued by the Stand ard are the giving of short measure and deception regarding the quality of the oil sold.
 Without railroad discriminations and unfair methods of competition the Standard could never have maintained It's great proportion of the oil business in the United States while at the same time extorting such immense profits from the American consumer. The claim of the Standard that its control of the business Is due to it's ability to maintain low prices because of superior efficiency is a complete misrepresenta- tion of the facts.
 In few days another section of the report will be made public setting forth the importance of price discrimination in restraining the business of compeff- tors and augmenting the profits of the Standard.