Waterbury evening Democrat., 1907-12-30
REPLIES ID 0|L TRUST.
Herbert Knox Smith Riddles Plea
 of Standard Octopus.
JUsTIFIEs S29,240,o0o FINE

commissioner of Corporations at Re-
 quest of Department of Commerce
 Answers Statement of j. A. Moffetts
 Proof of Guilt Fully Shown.
 Washington, Dec 3O-Answering a letter from the secretary of the de. partment of commerce and labor, Her.
 bert Knox Smith, commissioner of the
 bureau of corporations. reviewed the testimony in the suit which brought on
 the Standard Oil company fine of $29, 240,000.
 The head of the department of com. merce and labor wrote Knox that he had seen q circular from the directors of the Standard Oil company to it's employees and stockholders in which doubt was thrown upon the merits of the conviction found against the oil monopoly, and in this circular was 8 statement by James A. Moffett of coun. sel who made 1t appear that if any technical Offense had been committed the corporation was wholly innocent of any attempt at wrongdoinS.
 Mir. Knox takes up the entire case. beginning with Moffett's statement that lit must be borne in mind that there Is no question of rebate or dis crimination in this case' and says:
 There were the secret and illegal rates to large part of the south via Grand Junction, Tenn: similar secret illegal rates from Whiting to Evans vile, Ind, on which large shipments to the south were made: a secret rate combination from St. Louis into Lou isiana, upon all of which rates indict- ments are now pending against the Standard: secret rates from the Stand ards refinery at Clean, N. Y.. into Yer mont, upon which the New York Cen. tral and Hudson River railroad has al- ready been convicted and the Standard indicted, and various secret rates else where
 "These rates were all exposed by this bureau in May. 1906. Within three months after that date every such rate criticised by the bureau as illegal had been cancelled by the railroads making the said rates. This volun- tary action of the railroads themselves more than justified the conclusion of the bureau that there had been in ex- istence for long time a system of railway discriminations in favor of tho Standard Oil company in almost every section of the country.
 Considerations like these become highly material when the Standard Oil company appeals. as it has, from a question of strict legality to a question of equity and good faith, and claima that in this specific case. though it may have been technically guilty, neverthe- less It was morally innocent. As Judge Landis remarked in imposing the fine. this was by no means its virgin of fense'
 This Alton rate therefore was sub- stantially a rebate: was the most ef- fective kind of discrimination. because 1t killed out all competitions: was secret and was concealed by secret methods: is sought to be justified only by an other like secret rate which also was covered by secret methods; was only one of great system of discrimina- tory rates practically covering the country (which the railroads dared not maintain in the light of publicity. and in it's ingenuity. secrecy and complete constitutes as extreme a of both the letter and spirit of the antirebate laws as could we'll be imagined.
 '"'The Standard ,undersOld competitors in the great southwest by means of this six cent rate to the St. Louis gateway. and, having undersOld them and driven them out of that territory. 1t then raised prices to a monopoly fig ure, so that it's marketing concern there was making over 600 per cent on Its capital stock in 1G04. and for a long series of years had been making prof. l It's extortiOnately high.
 These profits were thus based on this secret discrimination which had | been in existence over fifteen years. | The enjoyment of this discriminatory l rate was well worth many millions of l dollars to the Standard and most en- 1hatically justified the imposition of d yreat fine when that rate was finally | discovered and conviction was secured | hereon.''