New-York tribune., 1907-01-29
ARRAIGN STANDARD OIL
CHARGES TO CONGRESS.
Corporations Methods Denounced by
Interstate Commerce Commission.

! last concerning the relations Of common carriers
by rail to the production and distribution Of oil.
! The report covers the distribution of petroleum
and its products east OK the Mississippi River,
and, incidentally, the Kansas and Texas fields
/ The report points out generally the methods
/ by which the Standard Oil Company has
| built up and perpetuated It's monopoly, and the
relations of transportation agencies to that
/ monopoly" 1t is asserted that "'the ruin of its
/ competitors has been a distinct part Of the
policy of the Standard Oil Company in the past,
! Systematically and persistently pursued" Con-
siderable of the ground covered has been gone
into fully in the report on oil and it's distribu-
ton made public by the Bureau of Corporations.
/ The report says:
No instance is found where any railway COM
pany has been interested in oil lands or III petro-
leum production, and only one instance is shown
where officials of a railway company were IN
terested in the production and sale OF oil This
relates to certain officials of the Baltimore &
Ohio Southwestern Railroad having owned stock
of the Argsnd Refining Company, which was. on
their recommendation. afterward sold to the
STANDARD oil Company. and the lubricating con-
| tract which the road transferred to the Galena
Oil Company, Standard company
The Standard Oil Company largely monopo-
llzes the handling Of petroleum from the mouth
of the well until il Is sold to the retailer. and
sometimes to the consumer. and under ordi-
nary circumstances it's margin OF profit is very
large. Estimates made in the report show a
profit on refined oil from the Sugar Creek re-
gallon much higher profit is indicated for
gasolene. The sale Of refined oil from the large
Standard refinery at Whiting is correspondngly
profitable
The evidence shows little basis for the oonten-
ton that the enormous dividends OF the Standard
on Company are the legitimate result OF its
economies Except for its pipe lines the Stand
ard has only little legitimate advantage over the
/ Independent refner.
The Standard buys advertising space in many
/ newspapers, which II fills. not with advertise
ments. but with reading matter prepared by
I kAV for fhaf md Nl1H fnV Mt
advertising rates, ordinary news. The as
sumption is that this literature furnishes many
OF the ideas touching the great benefits con-
ferred upon the public by the Standard OIL
Company.
Possession Of the pipe lines enables the Stand
ara to absolutely control the price of crude petro-
leum and the price which its competitors in a
given locality shall pay II can raise the price
In one locality and obtain Its own oil from an
other, and reverse the process when II desires 10
do so. Whoever controls the avenues of trans
portatlOn Of the raw material or OF the refined
product can speedily drive his competitors out of
existence and the production and distribution of
petroleum is no exception TO the rule.
RATES HELP THE STANDARD.
The pipe line system Of the standard the re-
port contends. IS not natural. but rather an
artificial advantage. 1t is argued that the rea-
why long pipe lines competing with those OF
the Standard have not been provided is found in
obstacles in the way Of such undertakings, which
have been opposed by the railroads. whose right
of way has generally stood Chinese wall
against ali attempts to extend pipe lines. Ordi-
narily. II is said the Standard has not received
rebates in recent years. far as has been dis
covered, but II has nevertheless enjoyed secret
rates possessing all OF the elements OF illegal
rates and the advantages obtained over in
dependent shippers have been OF great value TO
that company. Numerous instances OF discrimi-
nation in favor OF the Standard. resulting from
the published railway rates were found. says the
80
the commission.
A low rate OF 10 per 100 pounds upon
petroleum and its products existed for many
years from Neodosha Kan, where the Standard
operated refinery, TO Kansas city. This was
for the interest OF the Standard. but when the
Standard constructed its refinery at Sugar
Creek, Kansas City, and connected II BY pipe
line with the Kansas oil wells, the rail rate was
advanced from 10 to II cents per 100 pounds
While the railways insist that this was not done
at the instance of the Standard. the significant
fact remains in this and many other cases
called to the commissions attention that the
rate was not changed until it came 70 be- for
the interest of the Standard that II should be
changed. and II was also changed as that COM
pany would naturally desire
SYSTEM OF ESPIONAGE
In discussing the assertion contained in the
report that the ruin OF its competitors has
been distinct part OF the policy OF the Stand
ard Oil Company the commission says that one
method employed has been the organization OF a
perfect system Of espionage over the ship
rnents Of It's competitors. resulting in knowledge
as TO the destination OF every car OF OIL leaving
the refinery Of an independent The Standard
agent AZ the destination, says the report is held
responsible if the independent oil is sold The
report continues:
IT does not appear that the railroad companies
have directed the furnishing Of this inforIna-
ton or tina. the practice has been sanctioned by
superior officials Of the roads. but II does appear
that such information is systematically obtained
from railroad employees The testimony shows
thar the Standard at one time. II il does not
now devoted a fund to the purpose OF obtaining
this information. II has frequently happened
when the supply OF Independent oil I'm a particu-
lar territory was low and shipment was pc
cularly necessary. that the shipment has uhdc-
countably gone astray. Information also appears
TO have been given the Union Tank Line
creature OF the Standard. concerning the where
Abouts of its cars. while such Information was
not furnished 10 other owners or tank cars. ana
some discrimination in tank car mileage In favor
of the tank line Is shown for one railroad
Tho assertion is made that It is the practice OF
the Standard whenever competitor erects
storage tank 10 which the oil is transferred
from the tank car. 20 reduce the price of oil In
mat locality TO such a point to make the
busiDess unproftable to such competitor,
while nrices are maintained in other localities.
There was much complaint that the railroads
allowed the Standard to erect its tanks at con-
yenient points on the railroad right Of way and
declined to accord this privilege to independent
renners The commission says It is satisfied
that such discrimination has been generally
practised in the past.
The report shows that ''at present every con-
siderable railroad I'm the United States is buy
ing Of the Galena oil Company, one Of the
Standard companies. most of its lubricating and
signal oils, the prices paid for lubrcating oil,