The Washington herald., 1907-01-29

THAI the Standard Oil Company is the
most perfect monopoly ever developed in
the United States; that IL has been fos-
tered and built up by determinations in
its favor on the part of certain railroads,
and that under these conditions it may
become necessary to the uprooting Of es-
tablished wrongs and the prevention Of
others that the government shall fix in
the first instance the rates and Tegula-
tioDs for the transportation OF this traf-
ne, are conclusions reached by the Inter
state Commerce Commission in a report
forwarded by it TO Congress yesterday.
The report is the result of the investiga-
ton made by the commission under the
joint resolution OF Congress approved
March Z, 1866. being known as the TiIlman-
Gillespie resolution concerning the rela-
lions OF common carriers by rail TO the
production and distribution of oil. The
report covers the distribution Of petro-
leum and its products east Of the Missis-
sippi River, and incidentally the Kansas
and Texas fields.
In the report the Standard is subjected
10 the most severe arraignment it has re-
ceived at the hands Of government au-
thorities 1t is practically charged with
having corrupted the railroads, the press
and everything with which il has come in
contact
Few Roads own Oil Lands.
The commission refers to the report
upon oil and its production and distribu-
ton issued rs the Commissioner Of Cor
porations. and says that such report
leaves little to be added to an under
standing Of the subject
No instance is found where any rail
way company has been interested in oil
land or ia petroleum production. and only
one instance is shown where officers Of a
railway company were interested in the
production and sale OF oil. This relates 20
certain officers Of the Baltimore and Ohio
Southwestern Railroad having owned
stock of the Argand Refining Company,
which was on their recommendation
afterward sold TO the Standard oil Com
pany and the lUbricaung contract which
the road transferred TO the Galena OH
Company, q Standard company
II is shown that the Standard oil Com
pany largely mOnOPoliZes the handling of
petroleum from the mouth of the well
until II is sold 90 the retailer and some
times Ia. the consumer. and under ordi-
nary circumstances its margin of profit Is
very large. Estimates made In the report
show prOnt on refined oil from the
Sugar Creek refinery AT Kansas City. of
from 10 S cents Per gallon. 4 much
higher profit is indicated for gasoline.
The sale of refined oil from the large
STANDARD .f WHITING l..
respondinginy profitable.
Dividends Not Honest Profit.
The evidence shows little basis for the
contention that the enormous dividends
of the Standard Oil Company are the
legitimate results Of its economies. FIX
cept for its pipe lines. the Standard has
but little legitimate advantage over the
independent refner.
II is charged that the Standard buys
advertising space IN many newspapers. /
which II fills not with advertisements. /
but with reading matter prepared by /
agents kept for that purpose and paid (
for at advertising rates as ordinary news. I
The assumption is that this literature /
furnishes many Of the ideas touching the /
great beneats conferred upon the publ. 1
boy the Standard oil Company
Pipe Line Basis of Monopoly.
The report points out generally the
methods by which the Standard has burt
up and perpetuated its monopoly and the I.
relation of transportation agencies. to that
monopoly. AT the basis of the monopoly 4
rests the pipe line. With rehneries-on the \
Atlantic Seaboard, in Pennsylvania, Ohio.
Chicago. Kansas City, and at various (
other points, which are all connected with
the principal oil fields. and with each
other by network OF pipe lines. the /
Standard may to-day pump oil from a 4
well in Indian Territory 70 Is refinery at /
Jersey City. The cost of piping a barrel .
of oil from the Kansas fields to the At /
lantic Seaboard would not bee much. if |
any above 81 cents
The independent refner is located usual
ly near the source of the crude supply.
but the Standard locates its refnerias
near the great centers OF distribution. The
independent retner in interior Kansas /
finds it dfticult TO dispose of his residuum.
such as fuel oil. because the railroad rate
is almost as much as its value. bur the
standard has at the doors of its refinery
in Kansas City "a market at a favorable
price for "a large part of this by-product.
and this is of itself an enormous advant-
age.
Pick Refining CenterS
The refined product can be distributed
cheaper and with better facilities from q
distributing center like Kansas CITY than
from a noncompetitive point Possession
or the pipe lines enables the Standard alb
soIuteIy to control the price Of crude De
troleum ana the price which its competi-
tors in a given locality shall pay. It can
raise the price in one locality and obtain
its own oil from another. and reverse the
process when IL desires 20 do SO.
Whoever controls the avenues Of trans
poTtation of the raw material or Of the
refined product can speedily drive his
competitors out of existence. and the pro-
duction and distribution of petroleum is
no exception 20 the rule The Standard
maintains "a system OF Geographic lines in
connection with its pipe lines. putting
every part of its producing and refining
operation into most intimate relations
Railways in League with Trust.
The pipeline system of the Standard is
not q neutral, but rather an artificial add
vantage. Any person with sufficient cap
itai. and the expense is not great. can
construct and operate a pipe line The
reason why long pipe lines competing with
those of the Standard have not been pro-
vided is found in obstacles thrown in tho
way Of such undertakings. having been
opposed by the railways. whose right of
way has generally stood as q Chinese wall
against all attempts 20 extend pipe lines
From the railway standpoint the pine
line takes the traffic which the railway
should otherwise obtain; but in cases
hrguWhf I'd the arr4r7f fg4, af m. y..v,-r,i-