The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-08-12

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cants from oils bought in the omen roar-
ket' as well as statements made bv in
dependent oil companies show that tbo
prices paid by the Pennsylvania can he
used as a standard of reasonable nrice
by which to judge the excessive ,,rioos
PAID Dy nearly all other railroads in the
country. O' III tiiF
No Explanation Given.
Absolutely no satisfactory explanation
has been given for the excessive nrices
paid by nearly all railroads. They ,,,st
e. &c aItrl9uted solely to the fact that the
standard, which controls The Caiena is
powerful enough, either by reason Of its
enormous Shipments of petroleum. nrod1
uets or BY its influence in financial e.
t tbes' 70 induce most of the railroads of
the country to pay excessive prices fo-
their lubricants Two typical instances
Oi TINS character may be cited
Inc Norfolk & Western Railway cor,-
Pd1y mas been under contract with tbe
Galena since 1897, and during thar tili',
mas paid abOu. 50 per cent of The i,t IN
prices as against the PennsyIvaniais naSlo
Inent or about 40 per cent. In 1q05 ~ a
H 10 q western made a careful and
elaborate service test of the ole ns ~
Galena and two of its connetitors r,h me
Iests resulted in favor of the ITnfon
petroleum company, an indenendent n.,
Germ OF undoubted financial stan5ina,
ana business reputation NevortbnIs
the contract was finally closed LII -
TaIena-Slgnal OIL cOmpanv in tha e
or the fact that the net prices U.i,drS.-
aSoo9nt oI mileage guaranties) Offered b9
the Union Petroleum command 49, -
per cent lower than those Of IT, o.
tract made with the Galena ard tEn.
II me Did or the former had heep 90
cepteq the Norfolk & Western Womb baV-o
saved ABOUT $4,000 year. M
A similar instance was tb.t 90 A.
Louisville q Nashville Railroad conn.,ii,
MnIcn was under contract with the 90
lena from 1897 to 1902 During 1902 tbis
ROAD paid 20 per cent of the invoico -,: sIIo
as against the 40 per cent nil prices !I
pennsylvania, and yet the oil con,no,,'.
proposed TO increase The GUARANTEES ~. IS
that the iull invoice prices would no naid
s,eIt Ir.tslIio which the purchasing
asgIt submitted to the president of The
fallfoad company along with This nro
pOSdI lhrOWS considerable light on Pr
methods of the Galena: oh the
AtIached TO the papers is a memorap-
uuIh IeIt by Mr.. - Ga REPRESENTATIVE tF
the Galena). which he Was snxioi'e on
nave you see, which ii is cIain,ad 80 20
the business his company gave oI,r o'r 1--WE
IN the way or freight during the firSt
nine and one-half months of feo5 - iiisl
The railroad made contract Co. A..
years, from March 1, 1903. with anothNy
competitor, the New York Ti,br ailo otiL
t I'll company a at prices SO much lower
the railroad company paid S3s oo0 III it t1
II would nave paid had it made the 90
tract Offered by the GaIena W., vi. III
contract with the New York compapv t ax9
favorable terms, but in the face of ~
otfer the railroad COMPANY in 1o6S 80
back 10 the Galena and made a cont VII
Win Win II az It's former excessive prices The
purchasing agent of the railroad test;
Iled that the oils furnished nv tha NJ,
York company were entirely satisfacto,,r
Inc business was taken from fbe NJ.
~ n G1IIa ing Oll company and given
much higher prices for reasons e,eti neIy
apart from the matter of fabrication
Independent Concerns Shut Out.
These illustrations are typical of tho
experience of Independent concerns in at
tempting to sell lubricating oils to rail
roads in competition with the Standsrd
Except in rare instances, thew are not
lnvlted TO bid on contracts nor are their
offers to submit bids given anv consid-
Grafton, although the bids submitted and
the contracts made by some of them IN
recent years show that thew were readv
and offered to sell oils of the same anal
lty at one-half the invoice prices of the
Galena, and even less.
As stated above, il is fair to use the
prices paid by the Pennsylvania in i1Ide-
ing the prices paid by the other railroads
of the country. The total amount maid
py the nlnety-four roads for which the
bureau has returns, for lubricating oils
used on rolling stock, in one year was "a.
06l ,974. Had this oil been bought at the
prices paid by the Pennsylvania, the nav
ments would have been s.. 3S9. 219. or 81
6iS, 100 less than they actually paid These
figures cover railroads operating about
BIO per cent of the locomotive and car
mileage of the country. 1t is probable
mat taking into consideration the to-
tai purchases of lubricating oils lin addi-
lon to the oils used on rolling stock large
quantities of the same oils are bought
for other purposes) by all railroad com
panles in the country under contract with
the Galena, the payments actually made
are something over 100000 per year
more than the fair market value of the
lubricants. In all the evidence gathered
on this subject there is nothing to show
any reason why the railroads of the
country should pay the Standard this ex-
eess OF I,VO,OOJ per year, except the sug-
5ested connection between these contracts
and the distribution of freight traffic by
the Standard Oil company or the pos
sible weight of financfai influence
The obnoxious character of the Stand
ards price policy and its methods Is thus
made Gear from the present report The
Standard has repeatedly asserted that
e mbination, as illustrated by its cwn
history, is A great benefit to the pub
lie. in reducing costs and consequently
prices. 1t may readily be that in some
Industries combination has had these
beneficial results. 1t is probable that the
Standard. by reason of its undoubted
great efficiency, could, had it been con-
ent with reasonable profits. have made |
prices to consumers lower than would |
have been possible for smaller concerns. |
md thus have maintained its great pro- |