The evening star and Newark advertiser. [volume] (Newark, N.J.) 1907-1908, 1907-08-05

shows, has taken place in the case of the
Standards by-products, such as gasolene,
lubricating oil and paraffin a sAverag-
ing them up into Illuminating oil, the net
increase in the profit per gallon from 1897
to June. 1905, was l $40 cents.
The tremendous Importance Of these in
creases in the margins is appreciated only
after considering the enormous output Of
the Standard. For instance, IN increase
in margin of two cents a gallon, such as
took place from 1898 to 1904 meant, even
after allowing an increase of half a cent
a gallon in cost of production and market
ing, an increase In total profits of about
S21 100000.
While the dividends from 1882 to 1906
were $685., 600, 900, the net earnings, the COM
missioner says, were much more; at least
$4,000 900. These enormous profits were
based on an investment worth at the time
of Its original acquisition not over SIC, Co.,
900. and not over S147, 600, 900 in 1896 From
1903 to 1905 the average net yearly earn
ings were about IS per cent.
These figures, says Commissioner Smith,
demonstrate the falsity of the historic
claim of the Standard Oh Company that,
by reason of its extraordinary efficiency.
it has brought prices to a point lower
than would have been reached had business
remained under normal competitive condi-
tions and in the hands of a number of
comparatively small concerns.
The industry may be said to have been
normally competitive from 1866 to 1874.
and during that time there was a fall in
margin between the price of export oil
in barrels and the price of Pennsylvania
crude of from 2S;75 cents in 1896 to 9.o2
greater than that which has taken place
since. 1t Is conclusive evidence that
further reduction would lave been made
IN the absence OF any general combination.
took place from 1874 to 1879 under the
Standard regime was due to decrease In
the rate on illuminating oil from Pennsyl-
vania fields to New York In 1874 being 4
cents per gallon, while during part of the
year 1879 It was not over l cent per gall
Ion. The construction of the seaboard pipe
line during this latter period reduced the
cost of transportation still further, and
1t must be. remembered that the Standard
was not the originator or the Idea OF a
seaboard pipe line, bu that the Tide
Water Pipe Company, then wholly indie
pendent, first built such n line.
Furthermore, the reductions In margins
since 1879 have been much less han the
Standard has often claimed. and such as
have occurred have been more than offset
by the increased value of by-products. In
general, even the export prices, which
| probably show the situation most favorar
bly, for the Standard, show a margin dur
Ing recent years not very much lower than
twenty-five years ago. In 1879 that margin
was SOS cents: In 1903 the margin was 491
cents, and In the last few years domestic
prices have risen much more than the ex-
port prices.
In short, 1t may be said that the great
decrease in prices which took place in the
period from 1866 10 1874 was due to COM
| petitive conditions. while the much smaller
decrease that took place from 1874 to the
present under the dc mir alton of the Stand
a.A -. A-AA IAA - -..-- -~AQA
the Standard had no control, has been
more than offset by increase In the value
of by-products. and cannot be placed In
any way to the credit of the Standard oil
Company.
The fact that the Standard does nearly
nine-tenths Of the petroleum business has
been demonstrated. It now appears con-
clusively that the result of this domination
has been to increase the prices of oil paid
by the consumer. and correspondingly e
increase the profits received by the Stand
ard. II Is not true to say that only such d
great combination can furnish oil at the
prices which have been charged. indie.
pendent competitors. though small and
weak, do survive and do business at prices
which are deliberately reduced by ths
Standard within the small competitive
areas reached by these independents, and
which are much lower than the average
prices received by the STANDARD throughout
the country.
Summing up the results OF the govern
uhtil . liltluti " int COIlAtniil1StOitt Buys
The following facts are proven: Tn
Standard has not reduced margins during
the period in which 1t has been responsible
for the prices of oil. During the last eigh'
years covefed by the report dS9S-19o5) 4
has raised both prices aud margins. It's
domination has not been acquired or main
tanned by Its superior efficiency. but
rather, by unfair competition and by
methods economically and morally u%niusti,
fable. The Standard has superior efficiency
in running its own business; 1t has al
equal efficiency in destroying the business
of competitors. It keeps for itself tn,
profits OF the first and adds TO these tn,
monopoly profits secured by the second
Its profits are far above the highest pos
sible standard OF a reasonable commercia
return, and have been steadily increasing
Finally. the history of this great industr,
is a history of the methods, the exactioI
of exorbitnnt prices from the consumer
and the securing of excessive profits fr
the small group of men who over a Ions
series of years have thus dominated th'
business.
Later. the bureau. it announces viii
make public the unfair methods of com
petition OF the Standard in the selling O.
its products, covering, among other things
its espionage of rivals and bribery Of rail
road employees TO obtain facts as TO I'll