Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-04-05
ACCUSED AS LAWBREAKER
Standard of New Jersey "Gross Vio-
:. lator" of Sherman Act.
KELLOGG BEGINS ARGUMENT
Defense Represented by an Array OF
Lawyers Before Full Circuit Court
Bench at st. Louis.

to the United. States Attorney General
Frank B. Kellogg filed his brief of ], 400
printed pages with the clerk of the United
States circuit court Of this city today and
commenced his argument. after two
years of evidence, taking in: the govern
ment's suit to dissolve the gigantic Stand
ard Oil Corporation of New Jersey. for
alleged violations of the Sherman act.
The argument was heard by the full
circuit court bench. Judges Sanborn, VAN
devanter, Hook and Adams. With Mr..
Kellogg for the government was As
sistant Attorney General C. B. Morrison
Of Chicago. who will argue certain phases
Of the government case. The defense
had half a score of lawyers, including it's
principal attorneys. Messrs. Milburn Of
New York, Rosenthal OF Chicago, John
son OF Philadelphia and Watson, of Pitts
burg The Importance of the case to
lawyers and laymen~ alike resulted in a
crowded courtroom when the arguments
commenced.
With but little by way of preliminaries
or generalties. Mr.. Kellogg plunged into
his subject. He commenced with a rather
full review of the evidence taken by the
government before discussing the law ap-
plicable to his case. He told of the COM
William Rockefeller and Henry NJ. Flag
Ter in 1879. conceived, he declared, to
effect monopoly of the petroleum trade.
bo,h domestic and export. 1t was at that
moment, according to the federal lawyer,
that the alleged illegal conspiracy to
monopolize the oil trade of the country
was conceived. Later. said Mr.. Kellogg,
Henry H. Rogers, John d. Archbold,
Oliver III. Payne and Charles VI. Pratt
were taken into the conspiracy by the
other defendants
Points in the Brief.
In this brief the history of the COM
pany from its inception to the present
time is reviewed, and the declaration is
made that the testimony shows that the
various defendants have from the first
pursued system of unfair competition
against their competitors whereby the
Independent companies selling and mar
keting petroleum have either been driven
out of business or their business so re-
stricted that the Standard Oil Company
has practically controlled the prices and
the commerce in the products
of petroleum in the United States. This
system, il is contended. has taken the
form of price-cutting in various locai-
ties, while keeping up high prices or
raising them still higher in other locali-
ties where competition exists; OF pay
Ing rebates 10 cuStoHlGIS dS pant III
their system of cutting; of obtaining Sc
cret information as to competitive bust
ness. largely through bribing railway en-
ployes, and using their secret informa-
ton 10 procure the countermanding OF
orders of Independent producers, and to
facilitate the price-cuttinS policy; or the
use of so-called independent companies,
that is. companies held out by the stand
ard Oil Company as independent which
are engaged i'll price-cutting, while the
Oil ('pnD3ny maintains the
price through it's well known companies,
and other abusive competitive methods
against the competitors.
The Standard Oil Company. the brief
alleges, is particularly able to carry on
this predatory competition for the reason
that it does not sell its product at CEN
trail markets or through ordinary chan
nels, as most other ordinary manufac-
turers 1t markets its products to the
retailer in every village and community
in the United States and ii sells directly
10 the consumers.
A Practical Monopoly.
1t does from So to 80 per cent Of the
business of the United States, leaving
about 10 10 y per cent for all its COM
petitors. 1t is also held that the testi-
mony taken in the Standard Oil prose-
cution shows that that company, through
a company in which it owns a majority
of the stock 1.-THE Galena Signal Oil
Company, also controls about 97l3 per
cent of the fabrication of railroads
throughout the United States. and that
1t sells to most railroads at enormous
profits This is evidenced by the net
earnings of the company, which in 1906
were about III per cent on the capital
stock actually paid in and about 40
per cent on a liberal valuation of the
capital used.
1t is also shown by the further fact
that the prices to these railroads are
substantially double the prices charged
to a few favored lines, notably the
sayss the New York Central railroad
for ten years has paid about 100 per
cent per gallon more than the Pennsyl-
vania. It is also stated that wherever
the Standard can do 80 1t has made
contracts whereby it has either marketed
a part or all of the product of the in
dependent refineries, or has limited the
output of the same.
One of the evidences of the monopoly
of the defendants. it is charged, is its
summarized as follows: The Standard
Oil Trust and the Standard Oil Company.
with an investment of $69024, 4sO had
earned up to the end of 1906 1888, 1873. 7S3.
1908. we have substantially. the brief
state, a billion dollars earned by this
company in twenty-seven years with
an original investment Of about $69, 100000.
Has Increased Prices.
Further on the brief says:
TT has usually been claimed for large
corporations in this country that they
have increased business and decreased the
cost to the consumer, but in the case
of the Standard Oil Company it has dur
ing ten or fifteen years actually increased
the price to the retailer, and this a good
deal more than the price Of other products
throughout the country, although the
price of its raw material and cost of
manufacture and sale during these years
has increased very little, If any"
1t is stated that during the years from
1874 to 1882 the Standard obtained con-
troll Of practically all of the pipe lines
then existing and brought them together
under the control of the National Transit
to prevent or destroy competition in pipe
line business. 1t first sought to control
the Underwater Pipe Company. then the
only pipe line to the seaboard, and sue
ceeded In getting an agreement with that
company for division of the business.
Through this and other agreements with
other companies and purchases the
time control of about 95 per cent-of the
transportation of crude Oil to the At.
lantic seabOard, which by reason of the
large percentage of oil exported gives it
a tremendous advantage.
Recognizing the Importance to the
Standard of railway transportation, it's
officials and their associates during the
rectors In many of the leading railroad
systems of the United States For in
stance, the Standard interests have in
the Chicago. Milwaukee and st. Paul four