Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1907-08-05
TANDARD CONTROLS THE FIELD
Competition But Name in United
States at This Time.
SIDE LIGHTS ON BIG INDUSTRY
Report Disproves Claims Of Friends Of
Gigantic OIL Company.
UNFAIR PRACTICES ALLEGED
Commissioner smith says Independent
Companies Have Been Driven from
Field aud Consumer IL over
charged.

WASHINGTON, Aug 4--The report OK
the commissioner Of corporations the
oil industry, dealing with prices and prodts.
has been made public. In his letter of
trausmlttal. Commissioner Smith says that
the Standard on company Is respons bls
for the course of the prices OF petroleum
and its products during the last twenty
FIVE years, that the report shows tuGL
prices would have been lower during this
period under normal competitive condtioa
and IN the absence of any such oveS-
shadowing combination as has actually ex-
listed. he continues:
The Standard has repeatedly claimed
that it has reduced the price Of oil; thst
It has been benefit to the consumer and
that only a great combination like the
Standard could have furnished oil at the
prices that have prevailed.
Each one Of these claims is disproved
by this report.
The Standard has consistently used its
power to raise the price of oil during
the last ten years. not only absolutely,
but also relatively to the cost OF crude
OIL"
The letter continues:
The total dividends paid by the stan
dard from 1889 to 1895 were $55l ,922. 904.50.
averaging thus PALS per cent per year. The
dividends. however were much less than
the total earnings. Exact information as
to these earnings is available only for the
years 1852 to 1896 and for the years 1903
to 1895 inclusive, aggregate for these
years Of about S714OOo,oOO, but from these
figures the earnings for the other six
years may be estimated with some degree
of correctness. and it is substantially
tHa arrYfv of tha
Standard from 1889 to 1906 were at least
$3.50, ,0O0,CCO, and possibly much more.
Rate of Profit increases.
These enormous profits have been based
on an investment worth at the time of its
original acquisition not more than S75,-
OOOOOO
Furthermore, the rate of profit on the
capitalization has increased greatly. From
1882 TO 1894 the net earnings averaged about
10 per cent on the capital stock or trust
certificates outstanding, while the average
net earnings for the period from 9OS
to 1905 were about s. per cent yearly.
These rates Of profit and their great in
crease are strikingly confirmed by the
known profits Of one important Standard
concern, the Waters-Pierce oil company.
The lowest rate of profit on its investment
was in 1s96-23s per cent. 1t increased In
nearly every year thereafter until in the
first six months Of 1904 the profits were at
the rate Of AZ per cent per year. More
over the rate Of profit of this company has
increased not only in proportion to its In
vestment but also per unit OF products sold.
The average profit on Illuminating oil for
the years 1895 TO 1893 was s3 cents per bar
rel. while from 1900 to June, 1904, the aver
age profit was s1S2 per barrel with similar
increase of profits on the important by
products.
"A further verifcatlon Of the profits oe
the Standard was afforded by computation
OF the profits Of certain Of its individual
rehneries In 1904 the rate Of profit on
investment in these refineries and in the
marketing concerns distributing their prod
ucts was as follows; Refinery at Lima, o..
81 per cent; Whiting. Ind, 45 per cent;
Sugar Creek. Mo, S5 per cent; Neodesha.
! Kan. 35 per cent; Florence Colo. 81 per
cent; or a weighted average OF AZ per cent,
about 80 cents per gallon Of crude handled.
This excludes the profits on pipeline busi-
ness.
what - Proven.
The following facts proven: Ths
Standard has not reduced margins durtna
the period in which 1t has been responsible
for the prices OF oil. During the last eight
wears covered by this report Qs9s to lSOBl
II has raised both prices and margins. Iu
domination has not been acquired or main
tanned by it's superior efficiency, but rather
by unfair competition and by methods eco
nomically and morally uniustihable. Thi
Standard has superior efficiency in runninA
its own business; II has an equal efficiency
in destroying the business OF competitors.
II keeps for itself the profits OF the frst
and adds TO these the monopoly profits SCI
| cured by the second. Its profits far
Z f14a standard
reasonable commercial return, and have
been steadily increasing. Finally, the his
tory OF this great industry is a history Of
the persistent use Of the worst industria
methods. the exaction OF exorbitant prices
from the consummer and the securing q
excessive profits for the small group o
men who over a long series OF years have
thus dominated the business
The report then deals with the margin
OF profits between crude oil and its pro-
ducts and says:
crease in the margin between the price OF
crude oil and the prices or It's leading
finished products in the United states dur
inR the past ten years This increase In
margin Is only IN small part attributabls
to increase IN costs OF e3hdaS Us
the STANDARD OIL company first secured
large proportion OF the business about
is74 there has been a material decrease
OF and the price of Illuminating oil the
Standard on company can clalH no eteal' sn
for this decrease The margin In the do
rnesttc trade Is greater today than Il would
be under free competition.
2 The profits Of the Standard OIL conn
/ panv particularly on its domestic business.
are altogether excessive, and they havs
been higher during recent years than for
merly.
Relation of Prices.
The influence OF the Standard OIL com
pany on prices must be judsed' not by the
absolute prices OF the finished products OF
petroleum. but by comparison OF such
prices with the price OF crude oil The
Standard buys much the greater part Of
its crude and therefore the margin be-
tween crude and its finished products az
f0ris the proper criterion of us policy.
In consider.nE such margt1s the stand
ards Price policy may conveniently be
considered as though n affected principally
or only the consumer Of the finished pro-
ducts II is true that the Standard Is sub
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