The evening star and Newark advertiser. [volume] (Newark, N.J.) 1907-1908, 1907-09-27
juggling Methods Of Stand
ard Oil With Subsidiary
Concerns.
TRANSIT COMPANY A BANK
Comptroller Chesebro Tells Gov
ernment Inquisiter How Buck
eye Plant Costing Less Than
Ten Millions, Earned Mere
Than Seven in a Year.

NEW YORK, Sept. 27.--George
Chesebro, comptroller of many of the
subsidiary pipe line companies of the
Standard Oil Company. took the stand
today in the government suit against
the Standard Oil Company of New
Jersey to give testimony regarding the
operating costs and profits of the pipe
line companies. Mr.. Kellogg questioned
the witness regarding the Buckeye Pipe
Line Compsny.
''I notice the following loans made
by the Buckeye Pipe Line Company to
the National Transit Company, as
shown by the balance sheets Of the
Buckeye Company: In 1899, $3,S17,1 ,141;
in 1900, $5,251, ,2S7; in 1902. $5,63S,61S; in
1908. $8,115, 1853; in 1904, $6,515.4S8; in 1905,
$s, ,326, and in 1906, $4,616.514. What
were these loans?" asked Mr.. Kellogg.
"They represented funds on deposit
with the National Transit Company"
replied Mr.. Chesebro.
"You carried these loans as an as
set?'
Eyes, sir."
"Why did you deposit these funds
with the National Transit Company"
1--WE used the National Transit Com
pany as a bank, and we could call for
the funds whenever we wanted them"
replied Mr.. Chesebro.
'I notice that in 1906 the cost of the
Buckeye plant is carried at S9,995,967,
and the net earnings were $7,02S,bOs for
that year. Is that correct ~
Yes, sir.ss&a3sAz.Ss
1T notice that $2,231 ,901 is carried on
the books as an oil purchase contin-
gent fund Why is such fund as
that carried?"
ITO cover the loss by shrinkage in the
carrying Of oil,''' said Mr.. Chesebro.
Mr.. Chesebr6 said that such a con-
tingent sum was carried because the
shippers might call for the shrinkage
funds at any time. The gross earn
ings of the Southern Pipe Line Com
pany in 1899 were $4,376.618, the oper-
ating expenses $316,522, and the net
plant investment $2,125,666. He said
he did not know what the item OF
$2,607, 1856 charged to J. p. Trainor repre-
sented nor what an item of $4,599, 1888
to Mr.. Trainor in 1900 was for. He was
asked to find out from his books
Mr.. Kellogg said the Southern Pipe
Line Company showed loss of $662,512
III lJUU, presumably pCSouoO u ettS
Trainor item, but Mr.. Chesebro said his
predecessor in the company had never
explained the Trainor items.
The witness added that the Standard
Oil Company owns the pipe line which
runs under New York city, and, pre-
vious to 1905, leased 1t to the New
York Transit Company. The latter
sold the pipe lines from Unionville and
Centre Bridge to Bayonne to the Stand
ard OIL Company in 1905. He could not
recall the purchase price.
Mr.. Kellogg asked the witness about
loans shown by the balance sheet OF
the National Transit Company to have
been made to Messrs. Folger and
Payne, but he had only heard of them.
He was unable to identify G. M.
Barnsdale, to whom the company was
shown to have loaned $270,5S1, and did
not know whether he was connected
with the Barnsdale Oil Company of
Indian Territory.
Charles s. White assistant secretary OF
the Standard OIL Company of New Jersey
was the next witness. Mr.. White said he
held positions with various subsidiary COM
panies of the Standard. Mr.. Kellogg asked
the witness to produce list of the records
of the Standard oil Company of New
York, showing the numbers and names ol
all stockholders voting at all meetings
from 1892 to 1900, and a list Of those hold
ing trust certificates, not voting. He also
asked for the same information concerning
all the companies with which the witness
was connected.