Middlebury register. (Middlebury, Vt.) 1886-1937, 1907-05-24

ton of the rival lines. Its competitors
consist of about seventy-five small re-
fineries, the total consumption of crude
oil by which is less than that of the
Bayonne refinery, and less than one
fifth of the Standards total consump-
ton.
1t is Mr.. Smiths aim to break up this
monopoly by compelling the Standard
to fix reasonable rates of pipeline trans
portation, to file its schedules with the
Interstate Commerce Commission, to
do away with all rebates and practices
of unfair discrimination, and, in short,
it is proposed that, like the railroads,
it shall submit itself to the rule of law.
1t is interesting to observe that in at
tempting to bring the Standard to its
knees, Commissioner Smith bases his
hopes upon establishing rates determined
by the cost of service. He discovers
that the operating cost of transporting
crude oil from the Appalachian field
through trunk line pipes to tidewater
averages about 81 cents per barrel of AZ
gallons. Adding depreciation charge,
the transportation cost rises to little
less than cents per barrel. A 10 per
cent. return on the estimated cost of re-
producing the pipe lines would add
cents per barrel more, giving IL cents a
barrel as the reasonable rate But the
pipeline rate over these routes is 35 cents
barrel, plus local collection charges of
20 cents per barrel additional. So that
1.-THE Standards pipeline charge repre-
sents profit of at least 80 per cent. on
the cost of reproducing the trunk line"
Mr.. Smith estimates that 90 cents per
barrel from the Lima field to the sea-
board would cover transportation cost
and yield a return of 10 per cent. on the
investment. The pipeline rate is 539
cents. This is not the whole story, for
the pipelines having been made common
carriers by the Hepburn act, it is within
the power of the Government to force
them to treat all shippers alike, and to
refuse their service to none, In that way
the independent refineries will, Mr..
Smith expects, be put upon q basis of
equality with the controlling company.
For the establishment of reasonable
rates and fair treatment the Federal
battle against the Standard monopoly
will be fought 1t will be of world wide
interest, for it is to be observed that cost
of service is not, and never has been, the
determining factor in fixing carrying
charges. The rule with carrying corpor-
ations has been to establish 1.-The rate
that will move the .traffic"-that is to say,
a rate based upon the market worth of
the service, not upon its cost. That is
the law of trade the world over. 1t has
been applied in the sale of transportation
as uniformly and habitually as in the
sale of commodities. A new principle
now swims into the ken of the economist
and of the traffic manager, the principle
of first ascertaining the cost of the plant
and to reasonable return thereon,
which Mr.. Smith appears to estimate
at 10 per cent, adding the operating
COSl Inc SuIu Vi Tie TWO Will De LDe
rate. 1t is evident that if this principle
is successfully applied and by the en-
forcement of Federal law made compul-
sorry, there must be, and at once, re-
examination of the basis of investment
and the complete change in the habits
and the calculations of investors. There
is no logical reason why the principle
, should not be extended to private trade,
!, to traffic in farm commodities, cotton,
wheat, groceries, and all articles that
men produce or buy and sell. 1t is true,
of course, that as private trade is not
affected with public interest,"" the ap.
/ plication of the principle favored by Mr..
, Roosevelt and recommended by Com.
!. missioner Smith will be for the present
confined to public service corporations
The questions raised by this new Federal
: policy are quite the most considerable
, and momentous of all those now engag
ing public attention.-N. Y. Times.
4
3 Certain Cure for Achjno Feet