The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1907-08-05

had the Standard never secured any
such domination in the industry, there
would almost certainly have arisen a
number Of independent competing con-
Germs in the oil industry, each consider
ably moro efficient than even the most
efficient of the present independent con-
Germs. 1t would be absurd to argue
that the independents to-day are more
deficient by reason If the improvements
which the Standard has initiated. just
as, on the other hand. the Standard
has borrowed some which Independents
have initiated But. in view Of al the
restraints which the Standard by its I'M
fair competitive methods has placed up.
on the development of the business of
the independent concerns, there can not
be the slightest question that under
regime of free competition the inde-
pendent concerns would have become
more efficient and economical than they
are to-day.
1t has been shown that the chief adj
vantage which the Standard has over
independent concerns in respect to costs
is in the pipe Line business Transpor-
tation Of petroleum by pipe line is Il
quasi-public service, corresponding to
transportation by railroad. 1t is the
duty Of transporting concerns to charge
reasonable rates. 1t is the duty of the
Standard pipe lines, under the laws Of
several states and under the federal
law, to act as common carriers. trans
porting oil for others at reasonable
rates. If the Standard did this, its adj
vantage over its present competitors
would be enormously reduced. AS has
been shown in Part l. OF this report,
tho Standard pipe lines have very gen
orally failed and refused to transport
oil for others. and in the rare cases
where they do so have charged alto
gether extortionate rates One of the
principal advantages, therefore, which
the Standard possesses over competitors
in respect to costs is an improper and
even an Illegal advantage,
Even by the aid of this advantage
in respect to pipe lines, however, the
Standard, as has already been demon
strated, does not, as matter Of fact,
sell oil for less than its competitors
can afford to charge 1t EFFORTS a
profit over and above all the profits
due to it's economies. The question
arises how the Standard is able to
maintain it's substantial monopoly
while still charging such prices. What,
1t may be asked, is to prevent indie
pendent concerns from either taking
away part Of the Standards trade or
forcing 1t to reduce prices? The an
swer to this question Is found in the
unfair practices Of the Standard
The most important of these, the
corner stone on which the Standards
power was first built UP, was railroad
discrimination. The Standard was able
TO maintain In position this primary
sunport OF its domination down nearly
To the present time-that Is, until It's
system of preferential freight rates,
secret or open, was exposed by the re-
merit of this Bureau on the Transporta-
ton Of PETROLEUM In May, 1906. The
difference between the rates charged to
the Standard by the railroads and the
rates charged to independent concerns
70, similar service has, in many cases
and for enormous areas, been alone
greater than fair profit.
Almost equally effective in maintain
ing the Standards position have been
it, unfair methods Of competition in
the selling of products. The immense
Importance of the practice of price
discrimination in restraining the busi-
, ness Of competitors and augmentina
,, the aggregate profits Of the Standard
will be set forth later. The Bureau
has also secured great mass OF evil
! dence regarding other unfair practices
OF the Standard, most Of which, how
ever are simply auxiliary means o.
rendering price determinations effect
i've. Thus, the Standard maintains bo
gus independent companies and there
BY is able to cut prices to the particu
H. customers of competitors withou
mourning the further loss Of cutting
/ prices to the entire trade in the local
ity. Again, the Standard maintains az
elaborate system of espionage on thu
: business of Independent concerns, II
: particuler securing almost complete re
: p{rts Of their receipts and shipments
. o. oil by bribing railroad employees
t This practice enables the Standard t
r direct It's policy of local price cutting
e in the most effective manner othe
less important methods of unfair com
l. petition pursued by the Standard arr
G the giving of short measure and deep
t ton regarding the quality of the Of
n sold
!, without railroad determinations ant
{ unfair methods of competitor the Stan
= dard could never have maintained 1T
: great proportion Of the oil business II
: the United States while at the sam
time extorting such immense profit
$ from the American consumer, TIL
claim OF the Standard that its eontro
I Of the business is due to its ability t
il maintain low prices because of supe
r rior efficiency is complete misrepre
I. sentation of the facts.
It ENORMOUS FINE.