The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-08-05
PROFITS OF STANDARD OIL
NET EARNINGS IN "a YEARS AT
LEAST $3.50, 900, 600.

rree OF OIL and Hus Heem 0t Wefeft tn
the Consumer 10 Disputed in n Report
Of tho commissioner Of Corporations.
WARRINGTON, Aug. A.-That the Standard
OIL Company has made enermous profits.
far above a reasonable commercial return.
that il is steadily increasing prices and that
it's claim that it has benefited the consumer
Is a baid Misrepresentation Of facts are
among the charges embraced in a report
showing tho Prices and Profits Of tbs
Petroleum Industry just forwarded 70
President Roosevelt by COMMISSIONS Of
Corporations Herbert Knox Smith. In his
letter Of transmittal to the President the
Commissioner OF Corporations arraigns
the Standard severely. Among other things
he says:
The Standard has repeatedly claimedtha,
it has reduced the price Of oil; that il has
been a 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 It's power TO raise the
price OF oil during the last ten years, not only
absolutely, but also relatively to the cost OF
crude oil.
1T appears conciusively that the result
Of this (the Standard's) domination has been
to increase the prices Of oil paid by the oon-
sumner and correspondngly to increase tho
profits received by the Standard. 1t is not
true TO say that only such a great combina-
ton can furnish oil at the prices which have
been charged.
The total dividends paid by the Standard
from 1882 to 1905 we're sS5I,s22, eO4. SO. The
dividends, however, were much less than
the total earnings. Exact information as
to these earnings is available only for the
years 1882 to 1895 and for the years 1903
to 1905, inclusive. an aggregate for these
years of about S7i4. 600, 600; but from these
figures the earnings for the six other
years may be estimated with some degree
Of correctness. and il is substantially GER
tain that the net earnings Of the Standard
from 1882 to 1905 were at least $3.50. 900, 900.
and possibly much more. These enormous
PAo-Abc tnNO bVOh cocOe oh MI
worth at the time Of it's original acquisition
not more than SIS, 0Oo. 900.
Furthermore, the rate Of profit on the
capitalization has increased greatly. From
1882 ; 1894 the net earnings averaged
about Is per cent. on the capital stock
or trust certificates outstanding, while
the average net earnings for the period
from 1908 to 1905 were about os per cent.
yearly
This report is the third on Standard Oil
prepared by the Commissioner Of Corpora
tons. Tn investigation into the operations
Of the Standard il the most comprehensive
Of she kind ever undertaken by the Govern
ment. II was started as q result OF ths
passage Of a resolution by the House Of
Representatives, but its scope was broad
ened from the outset. Previous reports
on this subject-on the transportation of
Petroleum and the Position of the Stand
ard Oil Company in the Petroleum Industry"
have dealt chiefly with the methods Of
tho Standard in building up its great
industry. The present report, on the
other hand, sets forth the results Of such
methods and their effect on the consumer
and on the profits OF the Standard Oil
Company. These results largely take Tho
shape OF prices. They are stated in the
form Of tables and computations.
Commissioner Smith declares that the
Standard 10 responsible for the course Of
the prices OF petroleum and its products
during the last twenty-five years. He! says:
in short, il nay be said that the great
decrease in prices which took place n the
period from 1895 to 1874 was due to odu
petitive conditions, while the much smaller
decrease that took place from 1874 to the
present, under the domination Of the Stand
ard, has been due to conditions over which
the Standard had no control. has been more
than Offset by increase in the value Of the
by products and cannot be placed In any
way to the credit Of the Standard Oil Com
pany.'
In concluding his letter to the Preeidsnt
concerning the Standard the Commissioner
Of Corporations says:
Its domination has not been acquired
or maintained by it's superior eficiency.
but rather by unfair competition and by
methods economically and morally u~njusti-
fable. The Standard has superior efi-
cheney in running it's own business; 1t has
an equal efficiency in destroying the bust
ness OF competitors. IL keeps for itself the
profits Of the first and adds to these the
monopoly profits secured by the second.
The history OF this great industry Is q his
tory Of the persistent Use Of the worst
industrial methods, the exaction OF ex-
orbitant prices from the consumer and the
securing Of excessive profits for the small
group Of men who over q long series Of
years have thus dominated the business"
The investigation OF prices OF petroleum
In the United States, according TO the no
port OF Commissioner Smith, shows two
conspicuous facts:
First-There has been a very marked
increase In the margin between the price
of crude oil and the prices Of It's leading
finished products In the United states, dur
ing the last ten years. This increase In
margin is only In small part attributable
TO increase In costs OF conducting the bust
ness. Although since the time when tho
Standard Oil Company first secured a large
proportion Of the business. about 1874,
there has been q material decrease In the
margin between the price OF crude oil and
the price Of Illuminating oil, tho Standard
Oil Company can claim no credit for thin