The Bon Homme County independent. [volume] (Tabor, S.D.) 1904-1913, 1907-08-08

for the later period, and conclusions here
must be based largely on the course OF ex-
have never represented exactly the course
OF prices in this country, but which prob
ably correspond to domestic prices much
more closely in the earlier periods than In
the later ones. Making due allowance for
these considerations, however, these long
er series Of prices are interesting because
they cover both the earlier competitive
monopolistic period. and allow q compari-
son between the two. They demonstrate
the falsity OF the historic claim Of the
OH that Sg Sf
prices to a point lower than would have
been reached had business remained under
normal competitive conditions and In the
Normally Competitive.
The industry may be said to have been
normally competitive from 1896 to 1874, and
ss1 time sSs DSss there of a IN
rels and the price OF Pennsylvania crude
OF from 2s.75 cents In 1896 to 902 cents In
1874 This decline was much greater than
that which has taken place since. 1t is
conclusive evidence that further reduction
would have been made In the absence or
any general combination. Moreover, a part
OF the reduction which took place from
1874 to 1879 under the Standard regime was
due to decrease In transportation costs and
In railway rates, the rates on illuminating
oil from Pennsyivania fields to New York
in 1874 being 4 cents per gallon. while dur.
ing part Of the year 1879 It was not over
cent per gallon. The construction OF the
seaboard pipe line during this later period
further. and it must be remembered that
the Standard was not the originator OF the
idea OF a seaboard pipe line, but that this
Tide Water & Pipe 'It company D then 1 wholly In
Furthermore, the reductions In margins
since 1879 have been much less than the
Standard has often claimed. and such as
have occurred have been more than offset
by the increased value OF the by-products.
In general, even the export prices, which
probably show the situation most favor
ably for the Standard, show margain
during recent years not very much lower
than twenty-five years ago. In 1873 that
margin was 66 cents; In 1908 the margin
was 4.a cents; and, as indicated above. In
risen much more than the export prices.
Offset by increase.
In short, IT may be said that the great
decrease in prices which took place In the
period from 1856 to 1874 was due to COM
petitive conditions while the much smaller
decrease that took place from 1874 to the
present under the domination or the
Standard has been due to conditions over
which the Standard had no control, has
been more than offset by increase In the
value Of by-products, and can not be
placed in any way to the credit or the
Standard OIL company.
Inc TaCL tnaL the SIanQdTO uOeb HooLy
nine-tenths Of the petroleum business has
been demonstrated in a previous part OF
this report. II now appears conclus1vely
that the result Of this domination has been
to increase the price of oil paid by the
consumer and correspondingly to increase
the profits received by the Standard. II Is
not true to say that only such great
combination can furnish oil at the prices
which have been charged. independent
competitors, though small and weak, do
survive and do business at prices which
are deliberately reduced by the STANDARD
within the small competitive areas reached
by these independents, and which are
much lower than the average prices re-
ceived by the Standard throughout the
country.
More Efficient Machine.
It is true that, taken as a whole, the
Standard Oil company Is a more efficient
Industrial machine than any one Of Its
competitors. Nevertheless, careful Hesh-
mates based upon data submitted by
number of independent concerns as to the
cost OF pipe line transportation, refining
and distributing Of OIL, as compared with
the Standards cost for these operations,
indicate that the total difference in efri-
cheney between the Standard and the in
dependent concerns is not very great. In
all three branches OF the business the su-
perior efficiency of the Standard would
not represent difference In cost OF more
than ~ cents per gallon on the average
for all petroleum products. The excess OF
the profits of the Standard on Its Ameri-
can business ABOVE Ine average COLupOI-
tive profit is much more than this. A
profit at least as large as the average
business return could be secured by the
Standard from not over Y cent profit per
refining and marketing business alone at
five of its plants-Lima, whiting, Sugar
Greek, Neodesha and Florence-have been
lon, and II to this be added the profit on
pipe line transportation the total proflts
would be at least cents per gallon. The
excess, therefore, of the Standards proht
over such average business return Is az
least 2M cents per gallon, or much moro
than the difference in efficiency estimated
above between the Standard and the inde-
pendents, to-wtt, 1h cents per gallon. In
other words, the Standard, though more
efficient than Its competitors, gives to the
public none of the advantage due to this
superior efficiency but, on the other hand,
demands an additional excess above such
Can Claim No Credit.
This confirms the conclusion already
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 independ-
ent concerns that now exist, harassed and
restricted as they are by the aggressive
fair competitive methods, and until re-
Gently by widespread system Of railroad
discrimination heavily handicapping all Of
its competitors, nevertheless can and do
ard charges, 1t inevitably follows that had
the industry followed the normal course
Of development and had no great combina-
tion arisen to exercise substantial control
therein, prices to 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 1t has been respon-
sible for the prices of oil. During the last
eight years covered by this report (1896 to
1905) It has raised both prices and margins.
It's domination has not been acquired or
maintained by its superior efficiency, but
rather by unfair competition and by meth
DDS economically and morally unjustifable.
The Standard has superior efficiency in
running It's own business; II has an equal
efficiency in destroying the business of
competitors. It keeps for itself the profits
OF the first and add to these the monopoly
profits secured by the second It's profits
are far above the highest possible standard
of reasonable commercial return, and
have been steadily increasing. Finally,
the history Of this great industry Is a his
tory Of the persistent use of the worst in
dustrial methods, the exaction Of exorbi-
tant prices from the consumer, and the Sc
curing of excessive profits for the small
group of men who over a long series Of
years have thus dominated the business.
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