Morris tribune., 1907-08-17

1o'efhoI Soier. from a state cOurt
to federal court. Recently a civil
suit brought by citizens of Talladega
county against the Southern for per
sonal injuries was removed from the
county court to the federal court al
Birmingham. This act was taken to
Justify the revoking Of the license by
Secretary of State Julian, but action
to enforce the revocation was deferred
Subsequently officials of the Southern
railway conferred with Governor Com,
mise.
On Aug. 8, after three days of
numerous conferences, the state adj
minfstration reached an agreement
with the Southern railway by which
the latter will put the reduced passen-
ger and freight rates into effect pend
Ing test of the constitutionality Of the
laws in the United States supreme
court, in return for which the state
will surrender to the railroad it's IL
cense. Federal injunctions are to be
modified to fit this adjustment. A test
case oA tAc Halluily VI lAS Id " WIZ NC
made at once and the line of procedure
in future cases will be determined.
Smiths Oil Trust Report.
Commissioner Of Corporations Her
bert Knox Smith in the second part of
his report to the president on the petro-
leum industry deals with prices and
profits. He declares that the familiar
assertion of Oil trust officials that the
com bination has reduced the price of
oil is untrue. On the contrary, he as
serts that the Standard Oil company
during the last ten years has used it's
power to raise the price Of oil absolute
ly and relatively to the cost Of produc-
ton, and this statement is based upon
a large number of prices directly COL
lected by the bureau from thousands of
retail dealers throughout the country.
The report also emphasizes that much
greater increase of the. trusts margin
has taken place In the case Of byprod-
ucts than in Illuminating oil-namely,
In gasoline, lubricating oil and paraf-
fin wax. Considering these three prod
ucts along with Illuminating oil, it IS
found that the relative average margin
increased from sc cents in 1898 to
81 cents in 1905, or an advance Of
1.8 cents. The Importance Of this
is appreciated only when we consider
the output of the Standard. According
to this estimate the profits for 1904 on
all products Of the trust were $21 ,OOO,-
900 more than in 1898
Taking up the question Of dividends,
the report shows that the Standard
paid a total Of $551, 922,9O4 to stock
holders from 1882 to 1906, or an aver
age Of 24-15 per cent a year, but it
should be borne in mind that the divi-
dends were much less than the total
earnings. 1t is estimated that the total
earnings from 1882 to 1906 amounted
to s79ooOo,oo0 and possibly more, prof
its which accrued from an original in
vestment Of not more than S75, 100000
at the time of the trusts formation.
The oil INDUSTRY is founded upon nor
NAL competition from 1866 to 1874, dur
ing which period there was a fall in
SIN DCtNCCA III ISC VI CApoIL oll anu
the product at the WELL and it is in
ferred that further reduction would
have been made In the absence Of
combination. A part of the reduction
which did take place from 1874 to 1879
under the Standard regime is credited
to decrease in transportation cost by
rail and through the construction of
the seaboard pipe line, which idea orig
mated not with the Standard, but with
the Tide Water Pipe company, then
wholly independent, which built the
first pipe line. Proof is said to be clear
that the enormous profits of the trust
are due not only to superior efficiency.
but also to monopoly power Mr.. Smith
says that the Standard gives the pub
lie none of the benefit of its superior
efficiency, but on the contrary charges
higher prices than those which would
have existed, and he declares that
under free competition greater economy
and efficiency would have been de-
veloped.
In answer to the question WIZ in