Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-11-20
GOES ON WITH STORY
Rockefeller Questioned by
"Trust Buster" Kellogg.
OIL HISTORY AFTER 1882
Cross-Examination Not Confined to
Early Days, as Expected.
JOHN D. AFRAID OF FIRE
OIL HISTORY AFTER 1882
JOHN D. AFRAID OF FIRE
One Reason He Considered the Com
pany's Business Hazardous-Im-
mense Profits Admitted.

NEW YORK, November aO-It was sup
posed when the Standard OIL hearing was
resumed this morning. with John d. Rock
efeller witness. the last quarter of a
century of the history of the great cor
poration would not be touched upon at
all But Special Assistant District Attor-
ney Frank D. Kellogg, who conducted the
cross-eXamination of Mr.. Rockefeller.
early gave notice that the examination
would not be confined to the period be-
tween 1862 and 1882 where Mr.. Rockefel
ler's counsel had him leave off abruptly
on his direct examination yesterday
you have been prosperous since the be-
ginning?" asked Mr.. Kellogg. in opening
his examination this morning.
Yes" answered Mr.. Rockefeller.
do you consider business hazardous
that, on an original investment of $61, ,OO0,-
600 paid dividends amounting to s591,-
coO.000 and had left surplus of $780,
0UO, ,0O0?'
Not a Question of Amount
Il do not consider the amount of money
made determines whether the business is
hazardous or not" said Mr.. Rockefeller.
He was then asked about the trust
agreement of 1852 and whether the trust
100000, and that the stocks held under
the agreement an actual value of 500
710,69S. Mr.. Rockefeller said he believed
those figures to be correct. Mr.. kellogg
then asked whether the stock certificates
issued thereafter were for stock dividends
or for additional properties acquired. but
John G.. Millburn of Mr.. Rockefellers
counsel objected on the ground that this
was not within the scope of Mr.. Rookie
feller's direct testimony. Mr.. Rockefeller
MI jaH
burn had again objected Mr.. Rockefeller
said that a stock dividend of s15,OO0,O0O
was paid in 1856 and that the stock of the
company was then $9S,32S.OOO.
Then up to the present time there has
been issued s13,31O.OOO for cash or prop
erty?' asked Mr.. kellogg.
Il cannot tell
well. that would make the total value
of cash and property turned in exclu-
sive of money earned and turned back
into the property
Mr.. Rockefeller said he did not quite
comprehend the increase of s13, 100000 and
Mr.. Kellogg discontinued this line of In
quiry.
Brought Down to Date.
Mr.. Kellogg said that the cross-exami-
nation would not be confined to the period
between 1862 and 1852. concerning which
Mr.. Rockefeller gave evidence on his d.
rect examination. but would cover also
subsequent developments which were con-
nected directly with those of the period
described by Mr. Rockefeller.
In response to questions about the haZ-
ardous nature of the oil business owing to
the possibility of failure of supply, Mr..
Rockefeller said that the production of
crude oil in the Pennsylvania field had
steadily increased from 1862 to 1900. Mr..
Kellogg read figures from an official re-
port showing that the Pennsylvania field
reached its highest point of production in
1900. Mr.. Rockefeller denied that the
supply of crude oil had always been am
pie and asserted that it had fiuctuated.
but that the supply is larger than when
he was actively engaged in business. He
was asked about the development OF oil
fields in Ohio and Oklahoma, but said
that he knew little about them as they
had been actively worked since he re-
tired from business. He described the
drilling and production of oil of the
character Of a mining business. He said
it was the policy of his company to pay
for its oil at the wells and that the larger
part of the oil refined was purchased
from the producer
Earnings Half Billion
He was then asked:
THE record shows that up to 1905 the
net earnings of the company were SOL
922. .9O4. What was the dividend in 19O7?''
II should say about 10 per cent
THAT was about $4,000. .OOO?"
THAT would be a million in favor OF
the poor ola Standard" said Mr.. Rookie
feller. He added that the net earnings
for 1907 were approximately $S0,OO0.OO0.
Mr. Kellogg again asked If he consid-
cred the business risky on such show
ing, and Mr.. Rockefeller again retorted
that the profits did not determine the risk.
1t was evident that the business was
prosperous. He assented to Mr.. kellogg's
figures showing that the company earned
$3.50, 100000 from 1899 to 1906. Adding
the earnings of 1907 would give a total
earnings of $o7OOOO,OOO.
Then where does the hazard of the
business come IMP asked Mr. Kellogg.
I'm the first place, since the first re-
finery was built more than fifty years ago
we have been prepared at any moment.
day or night, to hear the fire alarm. We
are dealing with a very explosive product.
Fires are constantly occurring
But your profits were above your fire
losses. which have been charged to profit
and loss account"
Yes. sir
Mr. Rockefeller said another risk was
the peculiar construction of refining ma
chnery which could be used for no other
purpose. One could never tell when he
would awake and find the crude oil sup
ply exhausted.
Railroad Rebate Agreement.
Mr. Kellogg then asked Mr.. Rockefeller
about the Standard Oil agreement with
the Pennsylvania railroad in 1877, in
which the Pennsylvania agreed to pay
back 10 per cent of the freight rates
which the Standard paid. The witness
said this agreement followed the rate
war between the northern and the south
ern lines and that there was an agree
ment whereby he was to equaliZe the
amount of freight distributed between
the different railroads.
Mr. Kellogg read the agreement, which
showed that ii provided that the Stand
ard Oil Company was to ship 100000
barrels of oil a year. When the govern
ment counsel asked if the other rail-
roads besides the Pennsylvania made q
like agreement for 10 per cent rebate
Mr.. Rockefeller referred him to the men
who conducted the negotiations.
Replying to Mr.. Kellogg's question
whether the Standard Oil Company was
the only one to get the rebate the
witness said that the greater volume or
business given by the Standard was given
in part for the rebate, and In those days
ii was the custom for large shippers TO
receive consideration. I'VE sought to Sc
cure what all shippers then and now
seek" said Mr.. Rockefeller. He did not
recall what Daniel O'Day's connection