The citizen-Republican. (Scotland, Bon Homme County, S.D.) 1???-19??, 1907-08-08

Industry. Available prices for the period
preceding 1897 are much less complete than
must s be Base BASED pg larreiy a nn t iunc comrss - n ere
port prices, which. as q matter OF fact,
have never represented exactly the course
Of prices in this country, but which prob
ably correspond to domestic prices much
more closely in the earlier periods than in
the later ones. Making due allowance for.
er series of prices are Interesting because
they cover both the earlier competitive
period and. the later non-con1petitive or
monopolistic period, and allow a COMPARE
the falsity of the historic claim OF the
Standard OIL company that by reason OF
prices to a point lower than would have
been reached had business remained under
normal competitive conditions and in the
hands of a number Of comparatively small
er concerns.
Normally Competitive.
The industry may be said to nave been
normally competitive from 1856 to 1874, and
during that time there was a fall in mar
gin between the price of export oil in bar
rels and the price of PENNSYLVANIA crude
of from 23.15 cents in 1856 to 800 cents In
1874. This decline was much greater than
conclusive evidence that further reduction,
would have been made in the absence OF
any general combination. Moreover, a part
of the reduction, which took place from
1874 to 1879 under The Standard regime was
due to decrease In transportation costs and
IN railway rates, me rates on 1~luIn1nAtiDE
oil from Pennsylvania fields to New Yors
in 1874 being 4 cents per gallon, while dur-
ing part of the year 1879 1t was not over !
cent per gallon. The construction Of the
seaboard pipe line during this later period
reduced the cost of transportation still
further, and it must be remembered that
the Standard was not the originator Of tho
idea of a seaboard pipe line, but that the
Tide Water Pipe company, then wholly in-
dependent, first built such a line.
Furthermore, the reductions in margins
SjnNa 1874 have hapn m1lrhE JaSSE fho n the
Standard has often claimed, and such as
have occurred have been more than offset
by the increased value of the by-products.
In general, even the export prices, which
probably show the situation most favor
ably for the Standard, show a margain
during recent years not very much lower
than twenty-five years ago. In 1879 hat
margin was 65 cents; in 1903 the margin
was 4,9l cents, and, as indicated above, in
the last few years domestic prices have
risen much more than the export prices.
Onset by Increase.
In short, it may be said that the great
decrease in prices which took place in the
period from 1856 to 1874 was due to com
petitive conditions, while the much smaller
decrease that took place from 1874 to the
present under the domination Of the
Standard has been due to conditions over
which the Standard had no control, has
been more than offset by increase in the
value Of by-products, and can not be
placed in any way to the credit of the
Standard OIL company.
The fact that the Standard does nearly
nine-tenths of the petroleum business has
been demonstrated in a previous part of
that the result of this domination has been
to increase the price 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 a great
combination can furnish oil at the prices
which have been charged. 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
l by these 1aeve ~ind lspn len and which nrschs are are
ceived by the Standard throughout the
country.
More Efficient Machine.
1t is true that, taken as a whole, the
Industrial machine than any one of it's
competitors. Nevertheless, careful estt-
mates based upon data submitted by a
number of independent concerns as to the
cost of pipe line transportation, refining.
and distributing of oil, as compared with
the Standards cost for these operations,
cheney between the Standard and the in
dependent concerns is not very great. In
all three branches of the business the SUI
perior efficiency of the Standard would
not represent a difference in cost of more
than ~ cents per gallon on the average
for all petroleum products. The excess of
the profits of the Standard on its Ameri-
can business above the average competi-
tive profit is much more than this. A
profit at least as large as the average
business return could be secured by the
Standard from not over y cent profit per
gallon. The profits of the Standard on tie
refining and marketing business alone at
five Of its plants-Lima, Whiting, Sugar
Creek, Neodesha and Florence-have been
shown to average about 2.3 cents per gal
Ion, and # to this be added the profit on
pipe line transportation the total profits
would be at least 3 cents per gallon. The
excess, therefore, of the Standards profit
over such average business return is at
least - Gents per gallon, or much more
above between the Standard and the inde-
pendents. to-wtt, 112 cents per gallon. In
other words. the Standard. though more
eff1cient than Its competitors, gives to the
public none of the advantage due to this
superior efficiency, but, on the other hand.
demands an additional excess above such
advantage.
Can Claim Mo Credit.
This confirms the conclusion already
stated, that the Standard can claim no
credit for such reduction in prices as has
taken place since the early history Of the
industry. If the few and small independ-
ent concerns that now exist, harassed and
restricted as they are by the aggressive
price cutting of the Standard, by its I'M
far competitive methods, and until re-
Gently by a widespread system OF railroad
discrimination heavily handicapping all of
its competitors. nevertheless can and do
sell oil prottably for less than the Stand
ard charges, it inevitably follows that had
the industry followed the normal course
- aiio a ilO SIedl cDIIlDild-
ton arisen to exercise substantial control
therein, prices to the consumer would have
been much less than they actually are or
nave been.
The following facts are proven: The
Standard has not reduced margins during
the period in which it has been respon-
sible for the prices of oil. During the last
eight years covered by this report QS9S to
1909 It has raised both prices and margins.
It's domination has not been acquired or
maintained by It's superior efficiency, but
rather by unfair competition and by meth
DDS economicallyand morally unjustifab bile.
The Standard has superior efficiency in
running its own business; it has an equal
efficiency in destroying the business CT
competitors. 1t keeps for itself the profits
OF the first and add to these the MONOPOLY
profits secured by the second. Its profits
are far above the highest possible standard
OF a reasonable commercial return, and
nave been steadily increasing. Finally,
the history of this great industry is a his
tory of the persistent use of the worst in
dustrlal methods, the exaction of exorh-
tant prices from the consumer, and the Sc
curing of excessive profits for the small
group OF men who over a long series Of
years nave thus dominated the business.
STANDARD OIL FINE
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