Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1908-01-03
COMMISSIONER HERBERT KNOX
SMITH ISSUES A RED HOT
STATEMENT.
SAYS TRUST EVADES THE LAW.
Cry of Persecution Declared Humbug
and Company Deliberately Seeks
to Deceive Public.
MOFFETTs ALLEGATIONS RIDDLED.

Commissioner Herbert Knox Smith OF
the bureau of corporations last night
made public a trenchant reply to the
statement of President James A. Moffett
of the Standard Oil company of Indiana,
in which that official sought to show that
the $29,OOO,OOO fine levied by Judge
Lands last August was unwarranted.
After replying in detail to the argu-
ments of Mr.. Moffett, Commissioner
Smith closes with this vigorous para
graph:
The Standard undersold competitors in the
great southwest by means Of this Scent
rate to the st. Louis gateway, and having
rndersold them and driven them out of that
territory, it then raised prices to monop-
oily figure, SO that its marketing concern
there was making over 900 per cent. on its
capital stock in 1904, and for a long series
of years had been making profits extorti on
on this secret discrimination which had
been in existence over fifteen years. The
enjoyment Of this discriminatory rate was
we'll worth many millions of dollars to the
Standard, and most emphatically justified
the imposition of a great fine when tnat
rate was finally discovered and conviction
was secured thereon.
Says Fact Is Evaded.
Taking up what he styles Mr.. Moi
fett's remarkable statement" that there
was mo question of rebate or discrimina-
tion," when the Standard paid only q
cents from Whiting, Ind, to East st.
Louis, when the published rate was Is
cents. Mr. Smith says:
Whether it was rebate" or not is a
mere question of words. Apparently thu
position of Mr.. Moffett is that if he had
per hundred pounds and received back l.
cents, so as to make a net rate of e
cents, this would have been rebate;
But that because the lawful rate was Is
the balance a. cents never physically
passed back and forth between his company
and the Alton railroad, although the re
suit was exactly the same, it was not 4
''rebate.' This statement is simply an
evasion.
The other proposition of Mr. Moffett is
that there was mo discrimination in this
case" Apparently his position is that, be
cause no one else is known to have paid the
st. Louis while his company was paying
cents, therefore there was no dscrimina
ton. On the contrary, this very situation
proves that not only was there discrimina
ton, but that this discrimination had
worked out its logical result, so that nc
one else could ship at IS cents i'll competi
ton with the Standards 6-cent rate
Shows Other Law Violation.
But the chief ground upon which the
Standard defends itself is the so-called Chi
cago & Eastern Illinois rate" The claim
is that while the shipments of oil were go
ing on at cents over the Alton railroad
Chicago 4 Eastern Illinois railroad a rate
of Ga cents from Whiting to East st. Louis
SO far from this Chicago & Eastern Hi
nos rate being a justification for the Alton
shipments, it was an additional wrong in
itself. The Chicago & Eastern Illinois rate
was quite as secret as the Alton rate and
genious and deliberate attempts of the
Standard to evade or violate with impunity
the whole spirit of the anti discrimination
law
The commissioner shows that this
rate, made in 1895, read from Bolton, an
obscure village near Chicago, not from
Whiting, and says there is no evidence
that the announcement of the 6A-cent
rate was ever made to any shipper other
than the Standard Oil company.
Furthermore" he adds, about four
years later in May, 1899, the Chicgao
and Eastern Illinois railroad still further
concealed the existence Of this already
obscure BOLTON rate by issuing and filing
the same conspicuous 1S-cent tariff, al
ready mentioned, to which the Alton
was the only oil rate on the Chicago
and Eastern Illinois which could ever
come to the notice of the ordinary ship
per-"
Not Virgin Offense."
Referring to Mr.. Moffett's claim that
the Standard Oil company was innocent
of any intention to violate the law and
enjoying a rate lower than that offered
to its competitors, Mr.. Smith points out
that his bureau had in 1906 exposed sew
eral similar cases of illegal rates granted
the Standard. He says:
Considerations like these become highly
material when the Standard Oil company
appeals, as it has, from a question of strict
legality to a question of equity and good
faith, and claims that in this specific case,
though it may have been technically guilty
nevertheless 1t was morally innocent. AS
Judge Lands remarked in imposing the
fine, this was by no means it's virgin Of
Tense.
This Alton rate, therefore, was substan
TALLY rebate; was the most effective kind
of discrimination, because 1t killed out all
competition; was secret and was concealed
by secret methods; Is sought to be JUST.
fed only by another like secret rate which
also was covered by secret methods; was
only of a great system of discrtmina.
tory rates practically covering the country
(Which the railroads dared not maintain In
the light Of publicity, and in its ingenuity
secrecy and complete effectiveness const1
tutes as extreme a violation of both the
letter and spirit of the anti-rebate laws as
could we'll be imagined
Mr.. Moffett also refers, by way of just1-
fication, to certain other rates on peas,
beans and popcorn, 8 cents; linseed Oil s
cents, and others, as she wing the reaSOna.
bleneSs of the Scent oil rate The "rea-
sonabeness' of this rate is not in question
The question is whether this rate constr
tuted a discrimination as against other
shippers of oil. Oil refiners in Chicago and
rates on popcorn.
JOHN LAMBERT, ARTIST, DEAD.