New-York tribune., 1907-12-30
REPLY TO STANDARDOTL
CHICAGO CASE RETIEWED
Com missioner Smith Defends Result
of Court Procedure

porations. has issued statement the allega-
tions contained in a pamphlet entitled From the
Directors OF the STANDARD Oil Company Its
Employees and Stockholders This statement is
made in reply 10 a request from Oscar S. Straus,
Secretary Of Commerce and Labor 1t follows:
On August :. 1907, at Chicago the Standard Oil
Company of Indiana was fined 20. for the
violation OF the Elkins ant-rebate law This was
the so-called 'Alton case" Various statements
have since appeared. one in particular signed by
the president of that company, James A. Moffett;
others in the public press, and also series of
confidential circular trade letters all endeavor-
ing 10 throw doubt the legality and equity Of
that conviction.
The report Of the Commissioner of Corporations
the transportation Of petroleum. published IN
May, 1906, on which this and all other pending
rebate indictments of the Standard texcept onel
based set forth in detail the deliberate long
continued conduct the part of the Standard in
violating the anti-rebate laws. But these recent
statements have made it necessary to show once
more that the transactions which form the basis
Of this conviction at Chicago were such struck
AZ the very life and spirit OF the Elkns anti
rebate law and Of the policy of Congress in for
bidding unfairnesS as between shippers.
The question in this case was one of q published
ls-cent rate TO East 81. Louis against secret
scent rate The oil shipments involved in this
called Alton conviction started from Whiting.
Ind, the great refinery OF the Standard Chi
cago. and delivered at ST Louis, Mo, or at
East ST Louis. H.. just the river from St
Louis, by the Chicago & Alton Railroad They
covered a period from September l. 1905. 10 March
i 1905.
The law requires that all interstate railway rates
be fled with the Interstate Commerce Commission.
During this entire time there file with the
Interstate Commerce Commission joint tariff
rate sheet TO which the Alton road
party. showing that the rate fifth class freight
from Whiting and Chicago TO East st. Louis was
Is cents hundred pounds Fifth class freight in
cludes petroleum oil This joint tariff was large
printed document distributed to many shippers of
all sorts of freight.
During the time so stated 1,46o cars Of oil werc
carried from Whiting, Ind, East ST. Louis over
the Alton road for the Standard Oil Company. at
the rate OF six cents a hundred pounds-just one
third OF the said published rate This same secret
Scent rate had been used by the Standard OH
Company. and by one else. for many years prior
10 period II not filed with the Interstate
Commerce Commission. and was absolutely secret
snd unknown 10 independent oil refneTs, or to
shippers generally.
MoFFETT ACCUSED OF EVASION
The said statement of James A Moffett uses the
following remarkable language
1t must be borne in mind that there is no ques-
ton of rebate discrimination in this case
Whether it a rebate or not is a mere oues-
Of words. Apparently the position OF MI
Mofett is that if he had actually paid the Alton
Railroad is cents a hundred pounds and received
back u cents to make a net rate OF cents
this would been rebate But, that be-
pany paid only 6. and the balance Q2 centsp never
physicaily passed back and forth between his COM
pany and the Alton Railroad, although the result
exactly the same, it was not rebate. Ifils
statement is simply an evasion
The other proposition Of Mr. Mofett1s that there
was mo discrimination in this case. Apparently
his position is that. because no one else is known
- have paid the published 1S-cent rate from WHIT
ing to East St Louis. while his company was pay
ing six cents, therefore there was no discr1rlna-
ton. On the contrary, this very situation proves
that not only there discrimination, but tfal
this discrimination had worked out its logical re-
suit so that else could ship at is cents IN
cornpetition with the Standards Scent rate Pre-
cisey this and other secret determinations In SNIP
nlents from Whiting, produced that complete state
of monopoly in the vicinity of Chicago which the
STANDARD calmly designates as absence Oh
Discrimination
This scent Alton rate rebate IN es-
sence If not in form. and both in essence and In
form il was discrimination of the most severe
and successful type
CoMPANY'S EXCUSES REFUTED-
The Standard OIL Company of Indiana has tried
to excuse of the Scent rate on two grounds.
II admits that the Scent the Alton Rail-
road was never filed with the Interstate Commerce
Commission as the law required But the stand
ard tries remedy this fatal defect py reIerrhs
10 a certain application sheet which was on hie
with the commission. This sheet merely stated
that the rates from Chicago should apply also from
Whiting enumerated the tariffs referred TO ny IL
and manned snecifcav the tariff containing the u
cent oil rate; it made no mention OF the unIlied
Special Billing Order containing the o-ceht rat.
nor did it give any information to any scent
rate on oil. OF course. this sort of thins was ao-
soluteiy no notice TO one of the unrunhsheo O.
ccnt rate nor was il intended TO be
But the chief ground upon which the STANDARD
defends itself lis the so-called Chicago & Eastern
Illinois rate The claim is that while the SNIP
r77ents of oil were going at cents over 'he
Alton Railroad there existed at the same time over
the Chicago e. Eastern Illinois Railroad a rate OF
81, cents from Whiting TO East St Louis. Inc
Standard claims that this ehcent rate was legal
rate and that therefore. inasmuch as the stanoaro
oouId have shipped all oil at this alleged iegai
rate over the Chicago & Eastern ILLINOIS, IL "as
justified in accepting like rate over the altol anu
TINS that even if these shipments over the Alton
were technically Illegal there was no moral wrong
them
rate, being justification the Alton shipments.
n Was additional wrong in itself The Chlcs4so
T. Eastern Illinois rate quite as secret as Tue
Alton rate and was merely one more instance oL
IN, ingenious and deliberate attempts of the Stand
ard 20 evade or violate with impunity, the Whoe
spirit OF the anti-discriminstion law
The facts as to this 'iustifying rate are as fol-
,cr-s- In October 1895 the Chicago q Eastern
Illinois Railroad filed with the Interstate com
raarce Commission d single mimeoSraph sheet stat
ing that the rate on oil from Dolton Ill. TO East
{. rouis Was 81 cents a hundred pounds. There is
no evidence that this sheet was ever dlsfipueo ~
zry sbsuper except the Standard Oil Company
This rate read from Doiton. not from " ni'iiis
~ chicago A note however. indicated that 1t
;h. .rso he used from Whiting. But no indepen-
s.r, s,,nyer who wanted 10 ship oil from Chicago
= yr-,,,.ir- "a East St Louis ST Louis would
o- ,y,;nl. of looking for rate from Dolton Doiton
- village of about fifteen hundred population just