Los Angeles herald., 1907-08-05

submitted by a number of indepen-
dent concerns as to the cost OF pipe
line transportation, refining and dis
triDutfng of oil, as compared with the
Standards cost for these operations,
indicate that the total difference in ef-
hciency between the Standard and the
independent concerns is not very
great In all three branches of the
business the superior efficiency of the
Standard would not represent a differ
ence in cost of more than IL cents
per gallon on the average for all pet
roleum products. The excess of the
profits of the Standard on it's Ameri-
can business above the average COM
petitive profit is much more than this.
A profit at least as large as the
average business return could be Sc
cured by the Standard from not over
q cents per gallon. The profits of
the Standard on the refining and
marketing business alone at five of it's
plants-Lima, Whiting, Sugar Greek,
Neodesha and Florence-have been
shown to average about 2.3 cents per
gallon, and if to this be added the
profit on pipe line transportation the
total profits would be at least cents
per gallon. The excess, therefore, of
age business return is at least "a
cents per gallon, or much more than
the difference In efficiency estimated
above between the Standard and the
independents, to-wit IL cents per gal
lon. In other words, the Standard,
though more efficient than it's com
petitors, gives to the public none of
the advantage due to this superior
efficiency, but, on the other hand, de-
mands an additional excess above
such advantage.
This confirms the conclusion al
ready stated. that the Standard can
claim no credit for such reduction in
prices as has taken place since the
early history of the industry. If the
few and small indepDdent concerns
that now exist, harassed and restrict
ed as they are by the aggressive
price cutting of the Standard, by it's
unfair competitive methods, and until
recently by a widespread system of
railroad discrimination heavily handi-
Gaping all of its competitors, never
theless can and do sell oil protitably
for less than the Standard charges,
it inevitably follows that had the in
dustry followed the normal course of
development and had no great COM
DlQaIlOn arisen 10 e&eTClSe SubSldhlldA
control therein. prices OF the consumer
would have been much less than they
actually are or have been.
The following facts are proven: The
Standard has not reduced margins
during the period in which it has been
responsible for the prices of oil. Dur
ing the last eight years covered by
this report QS9S) to 1900 it has raised
both r,ricas and margins
Its domination has not been acquired
or maintained by it's superior efficien-
cy, but rather by unfair competition
and by methods economically and
unjustifiable. The Standard
has superior efficiency in running its
own business; is has an equal eff
cheney in destroying the business of its
1t keeps for itself the
profits Of the first and adds to these
the monopoly profits secured by the
second. Its profits are far above the
highest possible standard of a reason
able commercial return, and have been
DRY of this great industry is a his
DRY of this great industry is a hist
DRY of the persistent use of the worst
Industrial methods. the exaction of ex-
prices from the consumer,
Ind the securing of excessive profits
or the small group Of men who over
long series of years have thus dom
mated the business.