Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1907-05-23


tory to tie Atlantic Ocean.
1.-THE cornerstone of the Standard
Oil Company's power today" as Com
missioner Smith describes it, was the
favoritism of the railroads in the early
years of its career, when enormous re-
bates were deliberately given in the
transportation of its oil, which armed
it with irresistible might 10 destroy
competitors. And when the open re-
bate became too dangerous to use GER
tain railroads would reduce their rates
for short periods. giving notice to the
| Standard so that it could grasp the
chance, aud tl"an the rates would be
as suddenly advanced on the face of
the uninitiated independent companies.
This makes it easy to understand now
the Standard Oil Company of Ohio,
| organized in 1870 by the Rockefellers,
with modest capitalization of $1,000
900, could increase its share of the oil
refining business of America from 10
per cent to 80 per cent within 10 years
| In 1873 the Standard controlled al
most every important pipe line in the
oil fields. In 1882 it felt strong enough
| Trust, with Il capitalization of $4,000
000 and actual property appraised at
S55,100,000 The legality of this trust
was attacked in the Ohio courts, and
it promised in 1892 to dissolve. But
there was a mere juggling of securities
which changed the face but not the
real form, Of the giant monopoly. And
| When the State Of Ohio in 1897 started
contempt proceedings against the Ohio
company because il had not left the
| trust, the present holding company,
the Standard Oil of New Jersey, was
| organized giving its own stock in ex-
| change or the stock of constituent
companies, and leaving the actual
| monopoly undisturl ed.
Commissioner Smith charges the
STANDARD with deliberate efforts to
evlde and nullfy the interstate COM
| merce act of June, 1906. This was
rnade applicable to pipe lines, which
the legislation of several states had
already cla>sed as common carriers.
Several of the Standards pipe lines,
says Mr.. Smith, have filed no tariffs,
and have refused to transport oil for
others, or nave published rates only to
points where no oil is shipped, or to
points where there are only Standard
refineries. Another method of evad-
ing the law is to require an excessive
and impossible amount of oil to be
shipped at Il single time-75,000 or even
600, 900 barrels.
The almost absolute power of the
STANDARD TO control the pipe line stu
alton can be conjeCtured from the fact
that its largest Independent competitor
has only about $50 miles ot pipe, and
that there is but one independent line
to the Atlantic seaboard. The indie
pendent company was defeated in
every effort to reach New York, chiefly
by the insistence of the railroads that
the pipe line should not cross their
routes, and was forced to go TO Phil
adelphia.
In PORT Of cheapness, Of course. rail-
road transportation Of oil cannot COM
pete With the pipe lines. Even if the
railroad managers made equitable rates
the Standard with its pipe line system
tapping the best sources of supply and
reaching the refncries and shipping
ports, would be in position well-nigh |
impregnaDle. The use of it's pipe lines |
as common carriers on fair terms is es-
sential to the breaking of monopoly |
and to real and honest competition
compel, though Commissioner Smith |
insists that the Standard has thus far
successfully cvaded or defied its provi-
SionS
The output of crude oil in the United |
States has more than doubled between !
l9N and 1865. especially through the |
development of new fields in Kansas |
Indian Territory. Texas and California |
A great rart Of the California and |
Texas oil is Of a low grade and is used |
for fuel ard not refined. But in the
transportation ard refining of oil the
Standard holds its supremacy UNI
shaken. 1t refined in 1904 no less than
eighty four per cent of all the crude oil
put through reGnorieS in this country.
There are - Independent relincries.
but the whole - do not handle 50
much crude oil as the Standards
great refinery at Bayonne in New York
harpor. The Standard produces more
than Sc per cent of our total output of
oil. and controls a like
proportion of our export trade. 1t
transports through its pipe lines nearly
% per cent of the crude oil of the East