Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1907-08-12
OIL PRICES il Il, %
y
Standards Methods of Maintain is
Monopoly ExpOunded.
SECOND SECTION OF REPORT
Commissioner Knox Smith Makes
Startling Charges.
FOREIGNER IS MOST FAVORED
pennsylvania Gets Huge Advantage
Over Competitors.
PUBLIC IS BIGGEST LOSER
"Com bination Uses Power Unfairly
Gained 70 Cypress Through
wholly ExtOrtIOnate Prices"
Says Report.

y ASiINGTON, Aug. 1.-THE second part
OF the report OF Herbert Knox Smith, com
missioner of corporations Of the Depart
ment Of Commerce and Labor, made public
today. on the petroleum industry In the
United States, contains volume OF inform
alton directly interesting to the American
consumer The former portions Of the re-
port dealt with the margin between the
price OF crude OIL and the finished product,
showing the effect Of the Standard OIL COM
panys monopollzation OF the refined and
pipeline facilities Of the country. The re.
port now issued deals directly with the
methods of the Standard oil company in
hxing its prices to consumers, showing how
prices have f1uctuated in different cities and
states and in different sections OF the same
state, solely to meet local conditions, with
out reference to the original cost Of the OIL,
freight rates or other considerations except
The wishes of the monopoly. The report
also contains striking data showing how
The American consumers have been COM
PEELED to pay higher price for oil than is
charged by the Standard for the same
product delivered to its patrons in France,
England, Germany and other foreign coun-
tries. Another section OF the report reveals
the discrimination practiced BY the Stand
ard against certain railroads in the sale OF
lubricants. The summary OF the report.
furnished by Commissioner Smith, Is as fol-
lows:
In the business Of selling petroleum prod
ucts in foreign countries the price policy of
the Standard Oil company has apparently
been to sacrifice the interests Of the Amer
lean consumer for the purpose OF securing
the Standards foreign business, which is a
very important one. In 1904 over 50 per cent
of the illuminating oil produced in this
country was exported, of which the Stand
ard exported about 81 per cent.
The relative movement OF oil prices as dis
tinguished from their absolute level has
shown for the last eight years a startling
kNsparity between the United States and
lToreign markets, particularly from 1902 TO
1905 The American price steadily advanced
from 1897 TO 1903 The New York EXPORT
price advanced much less up to 1908. de-
elining in 1904. and the Hamburg dGermany)
price shows practically the same movement
as the New York export price. while the
London price shows a steady decline from
1901 to 1904 and very important drop dur
ing 1906. The course of American and for
eign prices in the last hve years covered
by this report has shown greatly In
creased divergence, in general the Ameri-
can prices going up and the foreign prices
showing a marked decline.
stiI more remarkable Is the comparison
of the absolute level of prices (as distin-
guished from their movement) of the United
States and foreign markets. Tho statistics
obtained for these computations were Sc
cured by a representative of the bureau.
who visited the more important European
oil-consuming countries and secured accur-
ate and representative data.
Meeting Foreign Competition
1t should. be noted In comparing absolute
prices of America with foreign markets
that a difference of about cent per gallon
must be allowed for on account of the diff
ference in the quality of oil sold in the
two markets, water white oil being the
basis of the American prices and standard
white the basis OF foreign prices. Water
white oil is worth about cent more than
standard white. Therefore, l cent per
gallon should be deducted from the diff
forences between American prices and for
eign prices. The following summary state
ment shows the average OF the monthly
prices for the periods specified after de-
ducting transport costs and duties:
Average United states price (June 1908,
AverSse German price ijunc 1908. to
August 1900 .....................'...'... 7.S
Excess Of United States price Qess
Average United states price tJanuary,
1903 TO August, i905) 5)......,............l0 10. 8
Average English price January, 1903, to
August 1900 OBSERVATION-DISCLOSURES. rs
Excess OF United States price Qess
Average United states price October,
1893, 10 August, 1905) ................1 "a
Average Danish price october, 1905, to
August 1900 .'..'.".''.''''''''''''''' ia
Excess of United States price Oess
Average United states price tseptem-
Average Belgian price (septemSer, 1908 81
Excess of United States price dess
Average United states price tsaptem-- ~
Average price in The Netherlands (sep-
tember, fsoS) ...,..,,..,...,.,..,...,.,,. 10
Excess Of United States price Cess
cent? ................,.........-. 10
Similarly for the leading oriental mar
kets;
Average net price in United States
(January, 1903, to May, 1so6) )....,....... SO
Average net price In orient January,
1903, TO May. 1909 so0).,.,....,..,........., 4S
Excess of United States price dess
I cent? ...........-................ rs
Again. It is to be remarked that the really
significant figures are the margins of the
respective prices above costs. The deduc-
ton OF the principal elements OF cost
throws into proper prominence these great
dlferenceh In prices From the prices
may, therefore. be deducted. FIRST, the price
OF crude oil Ousing Pennsylvania crude az
a basis) and second. the operating en-
penses OF piping. refining and marketing
the oil, which amount 10 about cents per
gallon. With these deductions, for the
respective periods above mentioned. the
average German margin was I.@ cents.
as compared with ASs In the United States;
the United Kingdom margin was LEA cents.
as against asa In the United States, and
the other countries mentioned-Bslgi GUM.
Holland Denmark and the orient-show
similar enormous disparitiss. Even after
further subtracting I cent from the Ameri-
can margins to allow for difference In
quality. they are stili from ~ to . times
as kigh as the foreign margins.