The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-08-05
MONOPOLY BEYOND DOUBT.
Summing Up at the End of Commits
sioner's Report.

dsHtllStoh, Aug 4-Ihe report of the
commissioner of corporations on the pc
troleum industry. after dealing with prices
ana profits, concludes as follows:
Inc representatives and defenders of the
standard OH company, as a cOrrelative OF
tnelr unWarra nted claim that il has been
the cause of the reduction in prices make
the further claim that the Standard
domination of the industry today is due
10 the fact that il furnishes products at
reasonable prices and that the less eff
Gent independent concerns are unable to
extend their business because they can
. not afford to sell so cheaply.
One sufficient proof that this argument
is not well founded is found in the sta
tistics regarding price discrimination
which viii be presented later. 1t will be
shown that the prices are very much low
er in places where Independent concerns
sell oil than in other places 1t follows
that if the Independent concerns are able
10 live on the basis of the prices which
they secure in their particular markets.
they could make large profits if they could
market their oil throughout the country
and obtain average prices as high as the
average obtained by the Standard on its
own business.
\ further proof that on the average,
the Standards prices are not lower than
those which independent concerns can at
ford to make is found in a comparison of
the costs of independent concerns with the
ent independent concerns in the oil in
dustry plus a normal rate of profit are
less than the costs of the Standard plus
Its eXtOrtiOnate profits. This fact, which
IS clearly demonstrated in this report,
shows that If the country were supplied
with petroleum products wholly by small
er competing concerns prices would be
lower than those the Standard charges on
the average. II means that the Standard
has pocketed the profits arising from its
economics and large additional monopoly
profits besides.
Standards Pipe Line.
The Standards advantage over present
competitors is greater with respect to the
pipeline business than with respect TO
any other branch of the petroleum indus
try There is no doubt that concern
controlling an enormous pipeline system
and handling an enormous volume of oil
can do business more cheaply than a
smaller concern. comparison of the
estimated costs of pipeline transportation
by the Standard with the costs of the
Pure Oil company, the most important in
dependent pipeline concern in the older
oil fields, shows a very considerable dl1-
ference. In the local gathering of crude
oil by pipelines the Standards operating
costs are estimated at not to exceed )
cents per barrel. while those of the Pure
Oil company producers and Reflners Oh
company a subsidiary CONCERN are nearly
S cents per barrel. The independent con-
Germ moreover. requires a larger invest
ment per unit of product handled than the
Standard. 1t requires return OF about
Is cents per barrel to provide deprecia-
tion allowance of 3 per cent and a profit
of 10 per cent on the investment of the
Pure Oil company in local pipelines;
while less than cents per barrel would
make similar provision on the estimated
investment of the Standard local pipe
lines The operating expenses plus these
allowances for depreciation and profit
amount in the case OF the local business
of the Pure Oil company TO about . cents
per barrel as compared with about 10
cents for the Standard concerns.
similar situation holds true with re-
spect to trunk pipeline transportation.
The trunk pipeline of the Pure Oil COM
pany Omitted States Pipe Line) from west
Continued on Page 2.