Los Angeles herald., 1907-12-31
RANK HYPOCRISY

= an article on Roosevelt VS.. Rookie.
feller" which should be read studlousl,
by every person in whose mind ha'
rested the faintest suspicion that the
Standard Oil magnate has been mis-
Judged by the courts of the land, the
president of the United States or an.
portion of the American people which
has freely criticised this absorbing per.
sonality on account of his fragrant VIC.
lations of human and divine law. II
any man on earth can ever be proven
to be a hypocrite, Miss Tarbell has
made it plain enough that this is the
| least of the sustainable indictments
against this czar Of the business world
1t is not practicable in a brief edi-
torial reference to this intensely In
teresting article to direct attention tc
anything more than some Of the most
vital points in Miss Tarbelrs arraign-
ment of Rockefeller In this instance
| we will content ourselves with pointing
to one feature of her cogent resume OF
the Standards attack upon competi-
tors. This deals with the alleged rea-
lsonableness CT the Standards pipe line
tariffs. On this subject Misss Tarbell
says:
"Mr. Herbert Knox Smith, Mr.. Gar
fields successor as commissioner OF cor
porations. has recently put out fun
and able report on the oil pipe lines Of
the country and he reports there tine
attitude of the Standard to the new
law. Their first duty was to file their
tariffs Mr.. Smith says that four of the
lcompanies in the Standards trunk sys-
tenn have failed to file tariffs. One of
these companies, the Prarie OIL ana
Gas company, operating between KAN
sas and whiting, Ind, has refused TO
take oil offered by outside shippers. IL
this refusal is persisted in 1t means
that no eastern independent concern
can get a supply of cheap Kansas OIL
until the government or the courts force
the shipment. Those Standard pipe
lines that do offer to accept oil unuer
the new law make one amazing regu-
llation: they will accept nothing less
| than $4,000 barrels in one field notnins
less than 100000 in another. There are
but few of the independent refineries
which use 5000 barrels Of oil IN year!
"The law requires that the rates shall
| he reasonable. Just what reasonable
means the writer does not KNOW puc
lot ms suppose, as the bureau OF cor
norations does. that it means an allow
ance of 5 per cent for depreciation ana
clean profit of 10 per cent "nlch
certainly is enough in handling neces-
s;tv of life-a necessity to the poor, II
should he remembered always in con-
siderine Mr.. Rockefeller's operations.
Now, what are the tariffs 1t fiies? pney
are few enough and they are to out-of-
the-way points as rule-tnat 49, "
no;nts where there are no Independent
concerns: and they follow in general
the rates which the Standard Oil COM
panv has kept up ever since lSS4-tnat
| is. railroad freight rates. Now now
reasonable is this?
"The tariff quoted from Lima, o., to
philadelphia, Pa, is 53.5 cents. MI
Knox Smith calculates that the service
costs 9.S cents, and that tariff OF IN
cents would allow Mr.. Rockefeller per
cent depreciation and 10 per cent IN
terest. He collects 3411s cents more than
this reasonable rate. Between West
Virginia and Philadelphia the tariff Is
90 cents-the cost of the service is about
AZ cents. Nine cents would give the
same profit as estimated above; that is,
the tariff is 30 cents over reasonable
rate. Between Griffith, Ind. (the pipe
line junction of the eastern and western
Ilines), and Buffalo, N. Y, the tariff is
521s cents. The operating cost, depre-
citation charges and interest at 10 per
cent amount to 1913 cents. That is,
there is a charge OF 32.6 cents more
than is reasonable"
Upon the advice Of John G. Milburn,
counsel for the company, Standard OIL
began to readjust the ownership of its
lines to the end that each company
should own no pipe lines outside of the
state in which it was Incorporated.
This was in November, 1905. Through
this trick in bringing about a technical
change in ownership the various Stand
ard companies sold portions of their
pipe lines to one another, leaving each
company in control of such lines as
had been built in the state in which
the company had been incorporated. In
the summer of 1906, when it became
certain that the pipe line section of the
Hepburn bill would pass, Mr. Milburn
advised the company that henceforth
it should pump no more oil across
state lines. And here is the way in
which the company evaded the law: II
erected receiving tank on the Penn
sylvania border at the point where the
oil had been pumped into New Jersey
On the other side of the line it erected
a pumping station. AS result, the
oil goes into a tank in Pennsylvania
owned by one company, and is pumped
| IaxT q nUnAf