The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-08-12

/ tainty as to the relative cost of manufac-
/ turing the oil sold in different states. This
difficulty, however, may be avoided by
/ comparing only those states which are
supplied from a single refinery or from a
group of refineries using the same crude
/ oil and having substantial similarity of
| conditions.
Thus the range of state averages in the
states on or near the Atlantic seaboard
1 is very wide. In December, 1904, the aver
age price in Delaware, less freight, as al
ready stated, was TT cents per gallon. In
PeF stSta 10 i was 81 sePt s,o tR Ng nS
| New Hampshire io.s cents, part OF, South
l Carolina ia cents, Florida i2.s cents, and
! part OF Georgia supplied from the same
| source IS cents, all with freight deducted.
The figure for Georgia is 53 cents Higher
| than that for Delaware.
In the area supplied from Lima, Cleve-
| land and Whiting, three refineries operat-
! ing Under similar conditions the prices,
/ freight deducted, range from S.5 cents for
| Ohio to 1871 cents for a part of Arkansas
Samples Of Injustice.
One of the most striking instances is in
California, where the Standard carries oil
from its great refinery near San Fran
cisco, several hundred miles by water and
rail- and sells it in southern California
for several cents less than is charged for
the same oil in San Francisco. The aver
age price, freight deducted, for southern
California in December. 1904, was ~ cents,
and the average for the northern part OF
the state was 1874 cents. Oregon, supplied
from the same source, paid the price OF
1873 cents, freight deducted, and the state
of Washington 1874 cents.
That these differences in prices are nOt
due to differences in cost of marketing
arising from the density of population, is
shown by taking the prices for large cities
in different parts of the country. In the
North Atlantic division, prices, freight
deducted, ranged in 1904 from 40 cents at
3 w, To 2 Il
City, n. j. (at the very door of the great
Bayonne refinery of the Standard); in the
South Atlantic division, the range Is from
rs cents at Richmond, Va. to 125 cents
at Jacksonville. Fla; North Central d.
vision, from ga cents in Cincinnati, o., TO
l0.4 cents in st. Joseph. Mo-; South Cen
trail division, from cents in New Or
leans La, to 145 cents in Little ROCK,
Ark: Western division, 81 cents at Los
Angeles Cal, TO 16.6 cents at Butte, Mont,
all with freight deducted. very little OF
the difference in price among cities IN any
one of the divisions is due 10 differences
in cost of refining.
In fact even as between cities or states
most widely separated, only small frac-
ton of the difference in price after De
Quoting freight, can be explained by dill
ferences in cost either of marketing or
of refining. The rest is due to a consist
ent and wholly unjustifiable policy OF
price discrimination against non-compeu-
tive localities.
Even i'm towns in the same state or same
vicinity these wide discrepancies occur.
In the East Texas and Louisiana DIVISION
of the Waters Pierce Oil company In Au,
gust. 1903 the profit between delivered
cost and selling price on Brilliant oil IN
tank wagon and bulk ranged from 1s2 to
$50 cents, and in August, 1904, 1t ranged
from O69 cent to 500 cents. In the South
Texas division of that company, on the
same kind of oil, delivered in iron bar
rels, nine towns had profit margins De
low cents and twenty-one towns had
z In, Arr a M
similarly striking disparities occur within
other individual divisions.
Another interesting comparison is that
showing the lowest and highest prices
within given states. IN Arkansas the diff
ference between the lowest and highest
prices in December, 1904, freight deducted,
was 76 cents; Colorado, 81; Idaho, %;
Louisiana, So; Missouri, "a; Montana, ~
as; Minnesota, AS; Ohio, AS; Tennessee,
AZ cents.
Conclusive Evidence.
The evidence is absolutely conclusive
that il is the policy of the Standard Oil
company TO take full advantage of all
non-competitive conditions to impose the
highest prices possible and TO extend such
nOn-competitive conditions by aggressive
price cutting calculated to drive ont
rivals. The enormous profits secured over
most of the country enable the Standard
to carry out this plan very effectively
Is demanded by this policy.
These discrimina tons in prices were
largely made possible by the widespread
system of discrimination in railroad rates,
mainly secret, which was long enjoyed
by the Standard Oil company until re-
Gently exposed by this bureau in its
report on the transportation of petroleum,
published in Nav. 1906. The elaborate
system of railroad discrimination, eX-
tending, as it did, over very large areas
of the country, allowed the Standard to
place its oils in any given section where
it happened to encounter competition at
cost much below the cost to its COM
petitors. 1t was shown in the bureaus !
report on this subject that in several |
instances the unfair advantage enjoyed |
alone much more than living profit on |
its oil business. The Standard vas thus |
able virtually TO suppress competition in |
such areas, and this at a minimum of |
loss, or perhaps even without actual loss, |
to itself. In this way il was able TO |
tive territory. Having done this, the |
company promptly raised it's prices, got |
merely to a reasonable level. but far |
above il. Competitors, while theoreti- |
cally able, in view of these high prices, |
to re-enter such markets, were practical
~ prevented from doing so, owing to the /
fact that the Standard by reason of its !
advantage in rail rates, could. and would, |
at any time when necessary, again /
depress prices to point where such com /
petitOrs would again be forced to con- /
duct their business at a loss 1t is thus
apparent that discrimination IN railroad |
rates is intimately identified with 6s-
in prices.
Railroad Lubricants.
A special and important branch of the
oil industry is in the selling of railroad /