The Bon Homme County independent. [volume] (Tabor, S.D.) 1904-1913, 1907-08-15
OIL OCTOPUS ROBS
AMERICANS TO KEEP
EUROPEAN VICTIMS

ousiy. The imports into Germany during
| 1904 were almost exactly the same as dur
ing 1908. and the imports during 1906 fell
declined very materially in both yearD.
The conditions Of supply therefore do
not excuse the extraordinary decline In
foreign prices IN lsOe ana the resulting ois-
sumner. This decline was not necessitated
by any oyersupply OF OIL In fact the
movement Of prices was precisely the OPP
posite ,of that which would have been Sx-
pected from the changes In supply.
The falsity Of the Standards arguments
Is further demonstrated by the fact that
during 1904 and 1905. a period when the
Standard claims that an oversupply ex-
listed, that company actually took large
quantities Of oil in Russia TO supply It's
trade In Europe and the Orient During
1904 IL shipped from Russia over million
and a half barrels of illuminating oil for
distribution in European and Asiatic coun-
tries. It has secured large crude produc-
ton in Roumania and has established re-
fineries there and In other countries for
refining foreign crudes. II ", PERFECTLY
evident that the Standard has not always
been concerned with maintaining the ex-
port trade In American Illuminating oil,
but has been solely interested In main
tanning its own domination in the markets
OF the world, frequently at the expense OF
the United States #G ."
Supply From the United States.
IL IL true that during 1904 and 1905 the
markets, but it's new competitors were
largely a group OF concerns which drew q
considerable part of their supply from the
United States itself.
charged such prices as IL could thereby
extort, and the American consumer has
had to pay these prices. Meeting compe-
tition abroad, u has given me tne toreign
has used the profits made at home to
maintain its position abroad, so that the
American consumer has been severely dis
crirninated against for the purpose or
maintaining, NOT the dominance Of Ameri-
can export trade, but the dominance OF
a particular combination which has used
its power frequently and conspicuously to
the disadvantage Of the American pub
A stin more important and extraordi-
nary state Of affairs appears In the con-
ditions OF prices in the United States. A
study of the Standards price policy has
brought to light, as shown In this report,
a very remarkable system of diserimina-
tions in prices for the same products in
different localities throughout this coun-
try. 1t is evident that the Standard
charges a price which Is proportionate to
the extent OF Its monopoly In given
place. sna re9uces prSes IN y aS 10
meet. .,- ....
1t is to be emphasized that there is sub
stantially no general market price for
ing OIL The Standard sells most OF its
Illuminating oil and gasoline In the United
States directly to retail dealers at their
own towns. delivered malaly by tank
wagons Consequently the prices are, as
a rule, purely local prices. This system
of distribution and price making puts II
In the power Of the Standard to vary its
out disturbing prices in other localities.
Fair Profit Margin.
The significance OF the extraordinary diff
Ena rAWaw ~
ent sections OF the country or in different
towns can be appreciated only in the light
OF the fact that very small amount per
gallon constitutes far margin of profit
on the Investment IN refining and mar
keting OF petroleum products. A differ
ence of about mills per gallon In the
price Of Illuminating oil may mean a diff
investment in reininS and a maPketiHe PS i9G aSd %
no profit at all But the actual differences
In the Standards prices among competi-
tive and noncompetitlve towns and areas,
after making all allowances for differ
ences In cost of production and distribut-
ing, often amount to several cents per
gallon. combination which can com
over large areas. has therefore obviously
q tremendous weapon when II enters on
aggressive price cutting against independ-
ent concerns. %EI ~
were obtained by the bureau on this sub
tect directly from the records of the
Waters Pierce Oil company "a Standard
concern). The territory of that company
includes Arkansas, Oklahoma, Indian Ter
rttory, Texas and part of Missouri and
Louis!ana, separated In these records into
seven divisions by. the company. In 1900
the profits varied from 90 cent In the ST
Louis division to cents per gallon in the
north Texas division. The first six months
OF 1904 the profits were as follows: St
Louis division, 0.6 cent per gallon; east
Texas and Louisiana, Is cents: Missouri,
18 cents; Arkansas, 28 cents: south Texas,
33 cents: central Texas, 3.5 cents; north
Texas, AZ cents, showing an extreme
range Of profts and, Of course a CORES
pondingiy extreme range OF net prices.
Similar Inequalities in local prices appear
In the gasoline business Of this company.
Startling Determinations.
The data from other sources, mainly
from prices reported in December 1904, by
over 5000 retail dealers throughout the
country, show even more startling dis
able on any other theory than that OF the
differences In competitive conditions and
the use OF monopoly power. These dis
examinations are shown In several ways:
Taking the average prices for the several
states In December, 1904, the lowest price
appears in Delaware, TT cents per gallon
freight deducted, and the highest In Colo
Quoted. or more more than twice as hish hisnt PART art
Of the difference in this case Is due to
higher cost OF refining and marketing OF
tne SolorhuO OH. Inc Qlner0nce In cost
can not exceed 81 cents per gallon, which
explains less than one-half OF the total
difference Of 8h cents difference In the
price; In several other Rocky mountain
and Pacific coast states the average price
Of Illuminating OIL, less freight, for De-
cember, 1904, was over L. cents, as COM
pared with TT In Delaware, freight de-
Quoted.
There is some difficulty In comparing
average state prices, even after deduct
ing freight rates, arising from the uncer-
tainty as to the relative cost Of manufac-
turing the OIL sold in different states This
difficulty, however, may be avoided by
comparing only those states which are
supplied from a single refinery or from a
group of refineries using the same crude
oil and having a substantial similarity OF
conditions
Thus the range Of state averages In the
states on or near the Atlantic seaboard
Is very wide. In December, 1904, the aver
age price in Delaware, less freight, as al
ready stated. was IL cents per gallon. In
Pennsylvania 1t was 81 cents, In New
York state 10 cents, in North Carolina
and New Hampshire 1913 cents, part Of
South Carolina ia cents, Florida 128
cents, and part OF Georgia supplied from
the same source 13 cents, all With freight
deducted. The figure for Georgia Is SIS
cents higher than that for Delaware.