Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-08-12


of that product. They have also claimed
that there has been severe competition
against the American product from the oils
of Russia and other foreign countries, and
that the reductions in export and foreign
prices were necessary to retain the Ameri-
can export trade.
Neither Argument Well Founded.
Neither of these arguments is well
founded. There was no oversupply of il
Illuminating oil during the years 1904 and
1905, at which time foreign prices were
being severely cut. The exports from the
United States during 1904 were less than
in 1901 and 1902. The exports from the
five important oil-producing countries
combined show little more than normal
increase. The worlds production in 1909
was less than in 1904. The exports from
the five principal countries combined In
1905 were more than per cent less than
in 1904.
There was an actual decline In the
total imports into the United Kingdom
during 1904 as compared with the two
preceding years, and a still more con-
spicuous decline during 1905. Notwith-
standing this. the prices In England fell
enormously. The imports into Germany
during 1904 were almost exactly the same
as during 1903, and the imports during
1905 fell off considerably. But the Ger
man prices declined very materially in
both years
THE conditions of supply, therefore do
not excuse the extraordinary decline in
foreign prices in 1905 and the resulting
discrimination against the American con-
sumner. This decline was not neceSsitated
by any oversupply of oil. In fact the
movement Of prices was precisely the OPP
posite of that which would have been ex-
pected from the changes in supply.
Falsity Of Standards Argument.
"The falsity of the Standards argu-
ments is further demonstrated by the fact
that during 1904 and 1905. a period when
the Standard claims that an over supply
existed that company actually took large
quantities of oil in Russia to supply it's
trade in Europe and the Orient. During
1904 1t shipped from Russia over a mill
lion and a half barrels of Illuminating
oil for distribution In European and Ash
attic countries. 1t has secured largo crude
production in Roumania and has estab-
lished refineries there and in other coun-
tries for refining foreign crudes.
1T Is perfectly evident that the Stand
ard has not always been concerned with
maintaining the export trade in American
oil, but has been solely In
terested In maintaining its own domina-
ton in the markets of the world. fire.
quently at the expense of the United
States
1T Is true that during 1904 and 1905 the
markets, but Its new competitors were
largely a group of concerns which drew a
considerable part of their supply from the
United States itself
Having a monopoly at home. 1t has
charged such prices as 1t could thereby ex-
tort. and the American consumer has had
to pay these prices. Meeting competition
abroad. 1t has given the foreign consumer
lower prices. apd it has used
the profits made at home to maintain its
position abroad. so that the American con-
sumner has been severely Disseminated
against for the purpose of maintaining, not
dominance of
but the dominance of a particular cOmbina-
ton which has used its power frequently
and conspcuously to the disadvantage Of
the American public.
Determinations In Prices.
"a still more important and extraordinary
state of affairs appears in the conditions of
prices in the United States study of the
Standards price policy has brought to
light. as shown IN this report, a very re-
system of determinations tn
prices for the same products In different
localities throughout this country. 1t Is
evident that the Standard charges price
which is proportionate to the extent of its
In a given place. and reduces
prices in proportion to the degree of compe-
ton which 1t may meet.
1T Is to be emphasized that there is SUBJ
no general market price for pc
troleum products, especially illuminating
,i The Standard sells most of its Hum
mating oil and gasoline in the United
States directly to retail dealers at their
own towns, delivered mainly by tank
wagons. Consequently the prices are, as
rule. purely local prices. This system of
and price-making puts 1t In the
power of the Standard to vary its price
according to local conditions without dis
turbing prices in other localities.
The significance of the extraordinary DIFF
ferences in prices charged in many different
sections of the country or in different towns
can be appreciated only in the light of the
fact that very small amount per gallon
constitutes a fair margin of profit on the
Investment in refining and marketing of
7 mills per gallon in the price of illuminat-
ing oil may mean difference between a
profit of 10 per cent on investment in re-
filming and marketing and no profit at all.
But the actual differences in the Stand
ards prices among competitive and nom
towns and areas, after making
all allowances for differences in cost Of
production and distribution, often amount
to several cents per gallon. A combina-
ton which can command the profits that
these figures imply, over large areas has
obviously a tremendous weapon
when 1t enters on aggressive price-cutting
against independent concerns.
Accurate and Complete Data.
The most accurate and complete data
were obtained by the bureau on this sub
ject directly from the records of the Waters
Pierce OIL Company "a Standard concern)
L ne Oh tNdI company lnciuueS Ar
kansas, Oklahoma. Indian Territory, Texas
and part of Missouri and Louisiana sepa-
rated in these records into seven divisions
by the company. In 1900 the profits varied
from % cent in the st. Louis division to 4
cents per gallon in the north Texas di-
vision. The first six months OF 1904 the
profits were as follows: st. Louis division
O6 cent per gallon: east Texas and Louis
lana Is cents; Missouri. 1S cents; Arkan-
sas. % cents; south Texas, 3.3 cents; CEN
trail Texas, 3.5 cents: north Texas, A cents,
showing an extreme range of profits. and. of
course. a correspondingiy extreme range
OF net prices. Similar inequalities in local
prices appear in the gasoline business Of
this company.
The data from other sources. mainly
from prices reported In December. 1904, by
over 5000 retail dealers throughout the
show even more startling discrimi-
nations IN prices. wholly unexplainable on
any other theory than that Of the differ
ences In competitive conditions and the use
OF monopoly power. These dtscrimina-
lions are shown in several ways. TAX
ing the average prices for the several
states in December. 1904. the lowest price
appears In Delaware, II cents per gallon,
freight deducted, and the highest In Colo
rado. 49, cents per gallon. freight deducted
or more than twice high.
Part of the difference in this case Ia
due to higher cost of refining and market
Ing of the Colorado Oil The difference in
cost cannot exceed 3h cents per gallon
which explains less than one-half of the