Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-12-30
DISCUSSES ALTON REBATE
Says Company Is Neither Innocent
Nor Ignorant.
AND RATES SECRET
Discrimination Worth Many Nil.
lions, Says Commissioner, and
Amply justified Penalty.

a belated reply to James A. Moffett,
president of the Standard Oil Company
of Indiana, who declared at the time the
fine of s29,240.OOO was imposed against
his company by Judge Lands that it was
not justified, as there was no discrimina
.tion involved in the rate paid on the ship
ment of oil from Chicago to East st.
Louis, and that the action Of the court
was based on a mere technical violation
of law.
Commissioner Herbert Knox Smith pre-
sents a statement Of facts in opposition to
this view, not only to show that discrimi-
nation was practiced, but that 1t was
practiced with the knowledge of the
Standard Oil Company and Of the Chi
cago and Alton railroad. Referring to Mr..
Moffett's statement, the commissioner
says:
Commissioner Smiths Reply.
On August 3. 1907, at Chicago, the
Standard Oil Company OF Indiana was
fined $40, 24O, 600 for the violation CT the
Elkins anti-rebate law. This was the So
called ALTON case Various statements
have since appeared, one in particular
signed by the president OF that company.
James A. Moffett, others in the public
press, and also series Of confidential cir
cular trade letters all endeavoring to
throw doubt on the legality and equity Of
that conviction.
The report Of the commissioner of cor
fra n q ~
leum. published in May. 1906. on which
this and all other pending rebate indict
ments of the Standard Except one) were
based set forth in detail the deliberate.
long continued conduct on the part of the
Standard in violating the anti-rebate laws.
But these recent statements have made 1t
necessary to show once more that the
transactions which form the basis Of this
conviction at Chicago were such as struck
at the very life and spirit Of the Elkins
anti-rebate law and of the policy Of Con-
gress in forbidding unfairness as between
shippers.
The question in this case was one of
published eighteen-cent rate to East st.
Louis, as against a secret six-cent rate.
The oil shipments involved in this So
called Alton conviction started from
Whiting. Ind, the great refinery Of the
Standard near Chicago, and were deliv-
cred at ST. Louis. Mo-. or at East st.
Louis, ILL.,, just across the river from ST.
Louis, by the Chicago and Alton ranroad.
They covered period from September /,
1908, to March 1. 1905.
The law requires that all interstate rail-
way rates be filed with the interstate COM
merce commission. During this entire
time there was on file with the interstate
commerce commission joint tariff or
rate sheet to which the Alton road was
party, showing that the rate on f1fth-class
freight from Whiting and Chicago to East
st. Louis was IS cents per hundred
pounds. Fifth-class freight includes Pc
troleum oil. This joint tariff was a large
printed document distributed to many
shippers of all sorts Of freight.
Says Rate Was Secret.
During the time so stated 1.462 cars of
oil were carried from Whiting. Ind, to
East st. Louis over the Alton road for
the Standard Oil Company at the rate Of
G cents per hundred pounds, just one
third of the said published rate. 4 lis
same secret six-cent rate had been used
by the Standard OIL Company, and by no
one else, for many years prior to this
period. 1t was not filed with the inter-
state commerce commission, and was alb
solutely secret and unknown to independ-
ent oil refiners. or to shippers generally
The said statement Of James A. Moi
felt uses the following remarkable Ian
guage:
ct must be borne in mind that there
is no question Of rebate or discrimination
in this case
Whether it was a rebate or not is
mere question of words. Apparently
the position of Mr. Moffett Is that IL he
had actually paid the Alton railroad 10
cents per hundred pounds and received
back IL cents, 50 as to make a net rate
Of 8 cents. this would have been re
bate But that because the lawful
paid 6, and the balance az cents) never
physically passed back and forth between
his company and the Alton railroad. al
though the result was exactly the same,
it was not rebate" This statement Is
simply an evasion.
The other proposition of Mr.. Moffett is
that there was mo discrimination in this
case" Apparently his position is that,
because no one else is known to have
paid the published eighteen-cent rate from
Whiting to East St. Louis while his COM
pany was paying cents. therefore there
was no discrimination. On the contrary,
this very situation proves that not only
was there discrimination. but that this
result. so that no one else could ship at
IS cents in competition with the Stand
ards six-cent rate. Precisely this and
other secret Determinations In shipments
from whiting. produced that complete
state Of monopoly In the vicinity of Chi
cago which the Standard now calmly
designates as absence Of discrimina-
ton
Rebate in Essence.
This x-cent Alton rate was a rebate
in essence, IL not in form. and both in es-
sence and in form it was a discrimination
II the most severe and successful type.
The Standard OIL Company Of Indiana
has tried to excuse its use Of the six-cent
rate on two grounds. 1t admits that the
six-cent rate over the Alton railroad was
never filed with the interstate commerce
commission. as the law required. But the
Standard tries to remedy this fatal defect
by referring to a certain application
aheet," which was on file with the COM
mission. This sheet merely stated that
rom Whiting enumerated the tariffs re-
ierred to by 1t, and named specifically the
tariff containing lie eighteen-cent oil
rate; but 1t made no mention Of the un-
filed special billing order" containing the
six-cent rate. nor did 1t give any informa-
ton as to any six-cent rate on OIL OF
course this sort Of thing was absolutely
no notice to any one Of the unpublished
six cent rate, nor was 1t intended to be-.
But the chief ground upon which the
Standard defends itself Is the so-called
Chicago and Eastern Illinois rate" The
claim is that while the shipments of oil
i've a n nyA la