New-York tribune., 1907-08-05
to increase prices enormously during the last few
years.

rnnreover the profts during recent years have been
much higher in relation TO investment thah 5
earlier wears. As might be expected from L'e du
vance in the margin between the prices OF Hii'S''
petroleum products and prices OF crude OIL
The total amount Of dividends pad ny ule S"t'''
ard from 1852 1876 S5 92-.% .% go OF an '.h'udt
average Of %22077.0pa The average auaoIiit Oh
ce, ttcates stock outstanding during - 1ir >, -
81. 434.57t The dividends thus dNe'dSe' -fi'
PEI cent a Ill.,. .-,.
The dividends, however. were much less 'ilI' - I-e
tota! earnings The company has 1hFeS'td Ia -.
proportion of its profits in the extension o. "l ~
business and in other ways. For the years Ne -
1876 the profits in of dividends amounted 20
Sg aS n25 Il or about is per of the amount OF
dividends Information for later years II 'N"'ld'ie
on, for 1902 1904 and 1906. During the5" years me
Dir fs Of the Standard Oil Company were IN rou"
numbers Sl99 Sg0000 and the dividends were siioif
62A The profits thus exceeded the o,ViottS oet ~
Excess of dividends for the years for which definite
Information is available only. t. the ai!iot", %
dividends for the whole period gives totai oI
about S14.10o0, How much the earnlitS earh Hu' @ 80.
the seven ether years exceeded the DIVIDENDS can
only he guessed \ Standard representauSe e st1tsp
iii 1Se9 that from 1896 TO 1899 the excess "l IN
over dividends less than before IT seems SUI"
santally certain. from the general sttuaIdou a. 20,
prices that the excess of profits from 'Sst 10 nv
and for le{; was not less than s75Gpl"o Clo HiEi-
dels being about S21o0@pM- In tH4' CAS- ,cn. ,ae
ferrarate profits OF the Standard 1852 to 1906
would about S7So.Go1@o They may nave pee'
! considerably
| These enormous profits have heen based on an
investment worth. at the fine Of its Original acq.-
! stion. not more than s75.eDero n 1872 when me
Standard oil Trust organized me appsalSN"
/
| issued (s70N0NN OF the additional trust certi1-
Gates and stock issued by the trust and successor
! corporation down to the end OF iN" "'i'N a"ot'
SS5fe.lt0 were issued in exchange for casa or prop
srty- Some Of tn stock thus issued coni.i'. 4l
premium. that the value Of the property thuS
| secured may have been nearly SGo0CaNn which.
ADDED to the original value Of the property ac-
| quired in lsS2 gives about s750ne"
INCREASE OF INVESTMENT.
II is evident from tho table that the rate Of
profit Of Standard its capitalization has IN
creased very greatly. From 1852 to 1854 the prom
| met earnings. diydends) the capital STOCK
trust certificates outstanding averaged ABOUT -
per cent: in 1903 the profit amounted to about -
Ier cen, on tho canitai stock and the average
! the period about Is per cent yearly
The investment Of the Standard. however mas
| increased greatly and during recent years mas
much exceeded its capitalization. This fact Is IN
| cicated by the excess of pTohtS above 'e ~. "
dends Ry the end of 1896 when tho capitalization
was s97 250OoO the value of the assets Of the
Standard had reached EiI.22o3S9" =" HOW mu'h @ 'I'
! net value Of the assets has increased since 1880
must he a matter of conjectLrN. consideration
OF the known figures for available wears. stated
above. shows that the profits in excess of diVdTHS
added to the investment by the Standard from 1897
to 1906 could not possibly have exceeded s225tGo1
| In that case however. the above estimate OF In"
total profits since 1852 would have 10 be increased
from s790 nna0D 1S5hp-o.so 1t seems scarce
| y conceivable. however. that the Standard sh"uid
/ nave been abic 10 invest Such an eoliI''L7 80
in the extension OF the oil business proper Indeed
even II the excess Of profits from 1877 TO %' Were
/ the smaller amount above estimated. namely. ABOUT
sl57. .0.0Gpl doubtful whether the entire amount
! has been invested by tn" Standard in the oil in
IuStry. It more likely that part OF in" sur
/ plus earnings. particularly during the last few
! years. must have been invested In securities Ho'
/ connected with the oil business or loaned de
! posted I'm banks. has h~"n the case. It
may safely bc assumed that The outside Investments
/ thus made cannot r"turn-that is directly to tn"
Standard oil Company as corporation anything
/ Ike the rate OF profit which the STANDARD has Oh
} tanned from the oil business proper. SO that the
greater part Of the profits above mentioned almost
beyond question connected with IL" oil business
Even If the most liberal possibl" assumption pe
made Of the increase since 1881 IN Il" investment
Of tie Standard in tn" oii business Itself its prohS
during recent years have stil necn altogether oN-
ccss.Ee as compared with ITS Investment Thus, II
II he assumed that the profits from 1891 i9o.
ccedsd the dividends BY - per cent. and That all ot
| the excess In profits was added 70 the investment
in the oil business the investment At III" close Of
| 1902 would have been about S26a"0r, The profits
n 1893 were $4,000" or ~ n" rat" 'of over % p"r
cent even on this high estimate Of investment. and
the average profits OF tic three years 1a.-ieo rep
! resent D per cent on an Investment "i $-"t"'e"
| When it rcnleInbe-ed tnat, particularly during
lan and laG. much the larger part Of -" profits ~
! the Standard must have been derived from It's de-
! nestle business which constitutes not much more
than half Of IL total business IT = Cl@"r tnat the
| cxp;bItaut tribute to the oil monopoly
PROFIT OF T. PER CENT
| The report then takes up the profits Of the
Waters Pierce OIL Company. a subsidiary con-
| Germ. for which fun figures are available show
| ing from them that the estimates given are
| probably approximately correct 1t goes into
| tn" amount OF rTont Tor n lnlt ~ prpiu'I- ana
| after explaining how the figures are reached.
| SAYS.
| This computation shows a range Of profit from
! - cents "A barrel at the Neodrsha and Sugar Creek
| plants s. s. a barrel at IL" Flor"nC" plant or
! from Is cents to . cents a gallon Of crude The
! average profit for the fix" plants combined Is @1&
cents barrel. - a gallon Since there is
4 slight loss Of crud" in the process Of refining the
average profit g1llun Of finished product would hc
somewhat higher. about - cents.
| il should hr repeated that this eStlmat" repre-
| tho on he nd g
| kctinc Of tho oil. The profit however. already
portation the crude oil used by tho rednerics.
except perhaps that small part Of the profit for
| the Whiting plant represents pip" lire profit
! This estimated profit on refining and marketing
may b compared with the Investment in these two
! branches Of the business Til" investment a barrel
| ranges from g. Sl.3 cents. the weighted
7 probable that The investment At the Lima. Whiting
aud Florence rcdncrles does not exceed 70 cents
! barrel
TO this Investment in plant proper must be added
the investment Of refining concerns in current
sets From the hest available information Il ap-
pears that to add . per rent to such
basis tile total investment Of the Standard
rcGueiies under consideration would - about 81 %
/ barrel.
Tb. Investment pf marketing concerns must also
! be taken into account. According to these
estimates. therefore. the rate Of profit the in
veetneut I'm tho refining marketing business for
the several standard plants under consideration
ranged 1904 . per cont 10 s. per cent and
The average for the Gy" plants combined weighted
according to tine quantity Of oil handled by each
! was y per cent
The evidence thus far presented shows clearly
| thar the Standard OH Company has greatly
creased the margin between The price Of crude OH
/ and prices of it's finished products during the
last few years. These facts alone q sufficient
/ condemnation of the Standards policy and provo
! that its profits are eXorbitant Nevertheless, the
argument will doubtless be put forward that. TAX
, history OF the oil nduStry>5ts Il whole. 10