The Birmingham age-herald., 1907-08-05
MONOPOL|ST|C, AGGRESSIVE
 AND UNFAIR TO PEOPLE
Commissioners Report Shows the Enormous Profits That Have Been Built Up Through the Meth
 ods Used by the Company.

Washington August 4.-Signifcant reve- 1ations are made public today in a report submitted 10 President Roosevelt by Her- bert Knox smith, commissioner of cor porations, concerning the operations of the Standard Oil company.
 In a previous report the means and methods of the Standard company were explained. The present report sets forth the results of these methods and the ef- feet they have had on the consumer of oil, and on the profits of the Standard Oil company. It deals with profits and prices. showing just how the manipula- tion of the oil industry by the Standard has affected the pocket books of the American people.
 Commissioner Smith says:
 The Standard Oil company is respon- sibe for the course of prices of petrol cum and it's products during the ll.t twenty-five years. The Standard has con- sistently used it's power to raise the price of oil during the last ten years, not only absolutely but also relatively of cost of the user.
 "The Standard has claimed that it has reduced the price of oil; that it has been q great combination like the Standard could have furnished oil at the prices that have prevailed.
 Each Of these claims" says the coni- missioner. "is disproved by this report
 Enormous Dividends.
 The increase in the annual profits of the Standard from 1896 to 1904 was over s2T, GOO 000 the report says. The total divi dends paid by the Standard from 1882 to 1906 were S55l .904, averaging thus 24,15 per cent per year. The dividends, how ever, were much less than the total earn ings II is substantially certain that the entire net earnings of the Standard from 1882 to 1906 were at least $790 0OO, coo, and possibly much more.
 "These enormous profits have been based on investment worth at the time of its original acquisition not more than $75 000. .000."
 In his letter to President Roosevelt transmitting the report, Commissioner Smith says:
 "The following facts are proven:
 "The Standard has not reduced margins during the period in which 1t has been J. sponsible for the prices of oil. During the last eight years covered by this report. 1898 to 1905. 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 competi- ton and by methods economically and morally unjustfhable.
 "The Standard nas super-efficiency in running it's own business: 1t has equally efficiency in destroying the business ot competitors: it keeps for itself the profits of the first and adds to those the monop- oily profits secured by this second. Its profits are far above the highest possible standard of a reasonable commercial re- turn, and have been steadily increasing. Finally, the history of this great industry Is history of the persistent use of the worst industrial methods the exact on or exorbitant prices from the consumer and the securing of excessive profits Tor the small group of men who over a long series of yes IFS have thus dominated busi- ness"
 Monopolistic Power.
 Commissioner Smith concludes his re- port by summing up the monopolist - power and unfair practices of the com pany as follows:
 The proof is therefore clear that the enormous profits of the Standard oil com- pany are due not merely to superior eff cency, but also to monopoly power. ln- dependent concerns could if they had the opportunity, afford to sell oil at prices less than the Standard charges on the average in the country a whole. Tho Standard Oil company gives the public none of the benefit of its superior eff cency, but, on the contrary, charges prices higher than those which would exist in the absence of such a combination.
 This comparison of Standard and inde- pendent costs also confirms the conclusion previously req ached that the Standard can claim no credit for such reduction In prices as has taken place since the early history of the industry. If independent concerns can today sell oil prohtably for Fl.. 1g,1,1 fA11A that independent concerns. In the absence of any great combination. could have re- duced prices more than they actually have been reduced. This conclusion is the stronger when it is borne in mind that, had the Standard never secured any such domination in the industry. there would almost certainly have arisen number of independent competing con- cerns in the oil industry, each consider ably more efficient than even the most efficient of the present independent con- cerns. It would be absurd to argue that the Independents today are more efficient by reason of the existence of the Stan dard. Doubtless they have borrowed some improvements which the Standard has initiated, just as, the other hand, the Standard has borrowed some which Independents have initiated. But In view of all the restraints which the Standard by it's unfair competive methods has placed upon the development of the bus mess of the independent concerns, there can be not the slightest question that under a regime of free competition the Independent concerns would have become more efficient and economical than they are today.
 Unfair Practices.
 It has been shown that the chief ad- vantage tsshich the Standard has over inde- pendent concerns in respect to costs is in the pipe line business. Transportation of petroleum by pipe is a quas-public serv- ice. corresponding to transportation by railroad. It Is the duty of transporting concerns to charge reasonable rates It is the duty of the Standard pipe lines under the laws of several states and un- der the fedreal law, to act as common carriers transporting oil for others at reasonable rates. If the Standard did