The Washington herald., 1907-05-20
CONTINUED FROM PAGE ONE.

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means of domination have been found ir
local price discrimination and other an
fair competitive methods In the sale OF
products. as we'll as in the elimination OF
the jobber but throughout its entire his
tory the factor of transportation has beer
the keystone OF its success.
The scandalous railway discrimination
obtained by the Standard in its earlier
years as against its competitors, did more
than all other causes together to establish
II in its controlling position. Later, when
the rebate, per sc (that Is. the actual
physical repayment Of part Of the freight
rate. was substantially abandoned, the
Standard was able, by compelling the CO.
operation of the railroads. to establish
I n place thereof a system Of secret OF
open determinations in rates in its owr
| favor. covering almost the entire country
and Of such a nature that throughout
large sections it could sell and make a
profit on oil at prices which left no profl
for competitors. The existence Of many
such important railway determinations
was set forth in full In the report Of the
commissioner on the transportation Of
petroleum, in May, 1906; and as result
Of that report all the secret rates which
had been discovered were discontinued
and the Determinations in open rates have
largely been abandoned
Controls Connecting Link.
This system OF railway discrimination
allowed the Standard 70 control sub
stantially that link in the business that
lies between the refinery and the con-
sumner. BY means OF its great pipeline
system it also controls the gap between
the producer Of oil and the refinery. I,
has now a pipeline system Of more than
1890 miles, covering completely the Ap.
palachian. Lima-Indiana, Illinois. and Mid
continent fields, with great trunk lines
running TO the seaboard and 10 the great
markets and distributing centers where
its largest rehneries are located. All at
tempts on the part oflothers 10 construct
competing pipe lines have been bitterly
opposed by the Standard. and usually
with success. By means OF veXatious llti-
CATION and pre-empting or rights Of way
by the aid Of railroads which refused
rights Of way across their lines and ad-
Justed their rates so as to iniure COM
peting pipe lines. by paying local discrimi-
mating premiums for crude oil i'm the
limited areas reached by rival lines. the
Standard has been able TO practically pre-
vent the rise Of any efficient competitor
IN the pipeline business from the older
fields 70 the Atlantic seaboard. or has
DESTROYED or absorbed rivals already es-
tahlished.
Having thus established and main
H..Ir H.F q
ness, u has IN substance refused 20 act
as a common carrier or 20 transport and
deliver oil for independent producers or 70
independent rehneries. and, where making
any rates at all for such transportation.
mas made them al least as high as the
railroad rate between the same points.
although the cost Of pipeline transpor-
tation Is very much less
The economy Of pipeline transporta-
ton as compared with that bv rail is q,
VITAL consideration. A re7ner wholly de-
pendent on railroads for his crude SUNNY
cannot hope 20 become a factor Of much
Importance in the industry. This iuuara
i've condition Of rail transportation costs
has hNed the location of most Independent
reineries near the oil fields, and has re-
sir'cted most of their sales Of the refined
products % the comparatively small adj
Joining sections. on the other hand. the
standard comprehensive pipe-pine sys-
TEN has given II the choice of strategic
positions for It's rehneries near 20 the
largest distributing and exporting centers
of the country
Gains by Marketing Methods
Another important element Iu the con-
troll over the industry is secured by the
Standard through its marketing methods
Il uses very generally the bulk system
Of delivery 20 retail dealers by tank
wagons cheaper. safer. and far more
convenient method Of delivery than by
barrels. This not only reduces the cost
o' marketing greatly, but also has elimi-
mated largely the jobber from the bust
ness. Dealing thus directly with the re-
taller. the Standard is enabled to arrange
such local price differences as it may de-
sire for the purpose Of destroying local
competition, without disturbing its prices
over any large section Of its trade.
I desire 10 call particular attention to
the facts as TO the cost Of pipeline
transportation and TO the striking com
parison made between the estimated cost
Of the Standard pipeline transportation
and the rates actually named therefor by
that company. These rates are from
three 90 six times as great as they should
be, taking into consideration all the costs
Of operation. maintenance. depreciation.
and proht on investment.
! desire further 10 call attention 20 the
substantial failure of the Standard pipe
lines 20 comply with the common-carrier
requirements Of the act of June %. 1906
the so-called rate law While most Of
the Standards trunk lines do an inter
state business. and should therefore.
under that law. file tariffs of rates. four
of these interstate lines-the Prairie Oil
Snd Gas Company. which furnishes the
only outlet from the midcontineut field.
the Ohio oil Company, which furnishes
the only outlet from the Illinois field: the
New York Transit Company. and the
Tidewater Pipe Company-haye not filed
any such tariffs at all. refusing entirely
20 accept or deliver oil owned by others.
Other Standard lines. while filing certain
rates, have done so in such a manner as
% reduce their apparent compliance 70 an
filing rates only 10 perfectly
10 ship oil or to points where the stand
ard oil Company only has refineries (for
example, naming no rates to New York
Harbor), by placing impossible restrictions
upon the acceptance Of shipments (reuuir-
ing single shipments to be at least 5000
or even 30eeo0 barrels in amounU. and by
fixing even the rates so filed at a point
wholly excessive and unreasonable I'm
amount. when compared with the cost Of
the service.
NullifyinE Rate Law.
The Standard. having prevented the
rise Of independent pipe lines. having de-
stroytd or absorbed the few that were
successfully constructed against its oppo-
sitioa, having then refused the use Of its
own lines to producers and renners who
had no other outlet, now plainly intends
to nullify, so far as its own lines are con-
pnrnpd the commemorative raor1iror,,sr+.