The evening star and Newark advertiser. [volume] (Newark, N.J.) 1907-1908, 1907-08-12

FOR OIL USED
IN EUROPE
Standard Puts Up Prices at
Home to Get the Monopoly
Abroad.

WASHINGTON, Aug. 12.-rhe report Of
Commissioner Of Corporations Herbert
Knox Smith on the petroleum industry
just made public says in part:
In the business of selling petroleum pro-
ducts In foreign countries the price policy
of the Standard Oil Company has ap-
parently been 10 sacrifice TIA interests CT
the American consumer for the purpose
of securing the Standards foreign BUSH
ness, which Is a very important one. in
1904 over 90 per cent. OF the Illuminating
oil produced in this country was exported,
of which the Standard exported about 81
per cent.
The relative movement of oil prices as
distinguished from their absolute level has
shown for the last eight years a startling
disparity between the United states and
foreign markets, particularly from 1902 to
1905. The American price steadily advanced
from 1897 to 1903. The New York export
price advanced much less up to l503, de-
clining in 1904, and the Hamburg tGerman)
price shows practically the same movement
as the New York export price, while the
London price shows a steady decline from
1901 to 1904 and a very important drop
during 1906. The course of American and
foreign prices in the last five years covered
by this report has shown a greatly IN
creased divergence, In general the American
prices going up and the foreign prices
showing n marked decline.
Still more remarkable Is the comparison
of the absolute level OF prices Gas. dis
tinguishpd from their movement Of the
United States and foreign market The
statistics obtained for these computations
were secured by a representative of the
bureau, who visited the more important
European oil-oonsuming countries and Sc
cured accurate and representative data.
1t should be noted In comparing absolute
prices of American with foreign markets
that a difference of about l cent per gai-
Ion must be allowed for on account Of the
diqerence in the quality OF the oil sold in
the two markets, water-white oil being the
basis of the American prices and standard
white the basis of foreign prices. Water
white oil is worth about ] cent more than
tandard white. Therefore, 1 cent per
gallon should be deducted from the differ
ence between American prices and foreign
prices. The following summary statement
shows the averages Of the monthly prices
for the periods specified after deducting
transport costs and duties:
Average United States price (Septem-
Average Belgian price (~September,
1900 OIL
Excess of United States price Qess l
cent? l9
Average United States price (Septem-
Der, 1905) 80
Average price in the Netherlands 0sep-
TENDER, 1909 10
Excess of United States price Qess l
CENT? 10
Similarly for the leading Oriental mar
kets.
Average net price in United States
Uanuary, 1903, to May, 1900 .......... Sc
Average net price in Orient (January,
1903, to May, 1906 AS
Excess of United States price Oess 1
cent? 2S
With these deductions, for the respective
periods above mentioned, the average Ger
man margin was 1.66 cents, as compared
with 4e3 In the United States; the United
Kingdom margin was l.64 cents, as against
4S4 in the United States; and the other
! .ntw ..aANf1aA1 DAl0sV. IInItnA1
Denmark and the Orient-show similar
enormous disparities. Even after further
subtracting l cent from the American mar
gins to allow for difference in quality, they
are still from IA TO 3 times as high as the
foreign margins.
These remarkable determinations in ia
vor of foreign markets at the expense OF
called forth excuses from the apologists OF
the Standard. They have attempted to
create the impression that the recent de-
cline in prices OF American Illuminating oil
abroad was necessitated by an oversupply
of that product. They have also claimed
that there has been severe competition
against the American product from the oils
of Russia and other foreign countries, and
that the reductions in export and foreign
prices were necessary to retain the Amer
lean export trade.
founded. There was no o~ver-supply Of IL
Eliminating oil during the years 1901 and
1905, at which time foreign prices were
DeinE severely cut. 1ne exports from the
United States during 1904 were less than
In 1901 and 1902. The Exports from the
five important oil-producing countries COM
bined show little more than a normal in
crease. The worlds production in 1905
was less than in 1904. The exports from
the five principal countries combined in
1905 were more than s per cent. less than
in 1904. There was an actual decline In the
total imports into the United Kingdom
during 1904 as compared with the two pre-
ceding years, and a still more conspicuous
decline during 1905. notwithstanding this,
the prices in England fell enormously.
The imports into Germany during 1904
were almost exactly the same as during
1903, and the imports during 1906 fell off
considerably. But the German prices de-
clined very materially in both years.
The conditions of supply. therefore, do
not excuse the extraordinary decline in
foreign prices in 1905 and the resulting dis
elimination against the American consumer.
This decline was not necessitated by any
oversupply Of oil. In fact, the movement
of prices was precisely the opposite of that
which would have been expected from the
changes In supply.
The falsity Of the Standards argument
is further demonstrated by the fact that
during 1904 and 1905. a period when the
Standard claims that an oversupply existed.
that company actually took large quantities
of oil in Russia 10 supply its trade In Eu-
rope and the Orient. During 1904 II shipped
from Russia over n million and n half bar
rels of Illuminating oil for distribution in
] european anu ASldLlt COUNTRIES. III mas
secured large crude production In Rouma-
mia and has established refineries there and
In other countries for refining foreign
crudes. It is perfectly evident that the
STANDARD has not always been concerned
with maintaining the export trade in
American Illuminating oil. but has been
solely interested in maintaining Its own
domination in the markets of the world.
frequently at the expense of the United
States.
Having q monopoly Mt home, It has
charged such prices ms II could thereby eX-
tort. and the American consumer has had
TO pay these prices. Meeting competition
abroad, it has given the foreign consumer
enormously lower prices. and 1t has used
the profits made ut home to maintain its
position abroad, so that the American con-
sumner has been severely Disseminated
| against for the purpose of maintaining.
not the dominance of American export
trade, but the dominance of a particular
combination which has used its power
frequently and conspicuously to the dis
advantage of the American public.
The evidence is absolutely conclusive that
1t is the policy OF the Standard oil Com
pany TO take full advantage of all nom
competitive conditions to impose the high
est prices possible and TO extend such nom
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 In those localities
where price cutting is demanded by this
policy.
These discrimination in prices were
largely made possible by the widespread
49, 80 IN-gwtpafunffa IL Enf1pnnn rafpaH