Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1907-12-30
Herbert Knox Smith Officially
Answers Pamphlet Issued
by Oil Company.
BROUGHT OUT BY BIG FINE
History of Case Which Resulted in
$2s,240,0o0 Penalty Is Once
More Reviewed.

|
form of an answer to the pamphlet is
sued by James A. Moffett, president
of the Standard Oil company of Indi-
ana, soon after Judge Kenesaw M.
Landis imposed on that corporation
the famous $29, 100000 fine last August.
Every contention made by Mr.. Moi
felt is swept away, his allegations arel
called "evasions," and the acts which
he says were legal are denounced as
links in a chain of illegal practices
which the Oil trust has indulged in for
years.
Claimed Persecution.
Mr. Moffetts Statement" contended,
| in effect, that the Standard Oil COM
lpany was being prosecuted by the gov
ernment; that it never knowingly vio-
lated any laws, and that the things for
which it was sentenced were practices
common to numerous shippers"
Judge Landis directed the federal
grand jury to investigate the allega-
tions in Mr.. Moffett's statement. Ac-
cordingly the inquisitors hailed Mr..
Moffett before them, but when under
oath he failed to substantiate the dec
larations so boldly set forth in the
pamphlet which had been sent broad
cast over the country.
| AS the prosecution and conviction of
the company grew out of the exposure
of its practices made by the bureau of
corporations, Herbert Knox Smith,
commissioner of that bureau, was Or
ldered by Secretary of Commerce and
Labor Straus to report officially on
Mr.. Moffett's charges.
Answer of the Commissioner.
"On Aug. 3, 1907, at Chicago, the
Standard Oil company of Indiana was
fined $29,240,000 for the violation of
the Elkins anti-rebate law" the com
missioner says. This was the So
called Alton case
Various statements have since ap-
lpeared, one in particular signed by the
lpresident of that company, James A.
Moffett, others in the public press, and
|. also series of confidential circular
trade letters all endeavoring to throw
ldoubt ON the legality and equity of
that conviction.
Must Repeat Story.
"These statements have made it nee
essary to show once more that the
I transactions which form the basis OF
; this conviction at Chicago were such
as struck at the life and spirit of the
J Elkins anti-rebate law and of the pol
| licy of congress in forbidding unfair
mess as between shippers.
"The question in this case was one
of published Is cent rate to Eas
: st. Louis, as against secret 6 cent
rate. The oil shipments involved In
: this so-called Alton conviction start
ed from Whiting, Ind, the great re
. finery of the Standard, near Chicago
: and were delivered at ST. Louis, Mo.
/ Tor at East st. Louis, ILL.,, just across
1.-THE river from st. Louis, by the Chi
lcago & Alton railroad. They covered
a period from Sept. I, 1908, to Marcl
1, 1905.
One-Third of Published Rate.
During the time so stated, LAG.
! cars of oil were carried from Whiting
Ind, to East st. Louis over the AltoI
road for the Standard Oil company a
the rate of cents per 100 pounds
just one-third of the said published
rate.
This same secret 6 cent rate ha,
> been used by the Standard Oil com
pany, and by no one else, for man!
lyears prior to this period. 1t was no
filed with the interstate commerce com
mission, and was absolutely secret an,
: unknown to Independent oil refiner
. or to shippers generally.
Mofett's Statement Evasion.
o "The statement of James A. Moffet
I uses the following remarkable Ian
lguage:
, at must be borne in mind that ther
Is no question of rebate or discrimina
ton In this case.' saaNH2
Whether it was a rebate or not /
a mere question of words. Apparenti
the position of Mr. Moffett is that i
j. he had actually paid the Alton railroa
Is cents per hundred pounds and rt
lceived back IL cents, so as to make
e net rate of cents, this would hav
e been a rebate
r. But that, because the lawful rat
!, was Is cents and his company onl
Y, lpaid 6 and the balance az cents) ne,
Ter physically passed back and fort
Is between his company and the Alto
: railroad, although the result was exac
S. lily the same. it was not a rebate Thi
Z, statement is simply an evasion.
p-t Claimed No DETERMINATION.
Ell "The other proposition of Mr.. Mo
n fett is that there was no discrimin
n tion in this case Apparently his p
Of sition is that because no one else
ss known to have paid the published
IS icents rate from Whiting to East
tLouis while his company was payiI