Los Angeles herald., 1910-03-16
KELLOGG FLAYS
OIL MONOPOLY
FEDERAL PROSECUTOR SEES
MENACE IN TRUST
DECLARES ONLY ONE STEP FROM
COMBINATION TO ANARCHY
Supreme Court Justices Evlnce Much
Interest In Suit for Dissolution
and Plies Government At
torney with Questions
Continued from Page One,

Continued from Page Onel
cd with the case since it's beginning as
l have" said Mr.. Kellogg.
''He is not informed on this point.
In 1908, Mr.. Rogers testified, they had
dismantled ifty refineries. [ may say
without exaggeration that Pennsylva-
mia was strewn with dismantled re-
fneries."
In answer to the argument that the
corporations which went Into the com
bination in 1899 were n-competitive,
Mr.. Kellogg declared If they were not
competitive it was because they were
in a trust that was void. But this
trust, he added. Mr. Rockefeller had
testified had been dissolved pursuant
to n decree of the supreme court of
Ohio, and it did not lie in the mouth
of the Standard Oil to deny that now.
Mr. Milburn said that he did not
deny it; that he merely asserted the
property had common owners.
Mr. Kellogg touched upon the meth
DDS of competition and management of
corporations. He told the court that
to meet the purposes of the Standard
oil two balance sheets were kept on
one pipe line company. On one of
these an employe was credited with
receipt of $22, ,000.00 He said the en-
ploye never got 1t and that the stand
ard declined to tell who did
Did they distribute it?' inquired
Justice Lurton.
1--WE do not know When I asked
Mr. Milburn he said he would not gra-
tify my almost feminine curiosity"
Profit of 500 Per Cent
Mr.. Kellogg next took up the ques-
tion of profits. He recited long list
of subsidiary corporations and the
profits he said they had earned. The
Colonial oil company, he said. in 1906,
earned a profit of 502.7 per cent on
its capital stock.
"What?" Interrupted Justice White
"-502.7 per cent on its capital stock
and 4l.2 per cent on its net assets. "
Mr.. Kellogg next discussed prices of
oil as compared with other articles
and then turned to the pipe line bust
ness.
Mr.. Kellogg charged that Standard
oil, since its pipe lines had been made
common carriers, had established de-
livery stations at "outlandish places,
where nobody ever had a refinery"
Their rates were prohlbitive, coun-
sci said. and that was the reason ap-
pliCation to use the pipe lines had not
been made by Independents.
Railroad rates as a means OF un-
fair competition were next considered.
He spoke of the number of Standard
Oil officials in many railroads
From the railroad question he re-
turned to what he called the unfair
methods of competition. AS an ex-
ample, he told of the Standard sell
Ing oil at n loss In Los Angeles, where
there was competition, and at a profit
In Portland, Ore, and Seattle, where
there was no competition.
"They may say that is only COM
petition, but we say Ii is competi-
tion that is dangerous in the hands of
a corporation spreading all over this
country" declared Mr.. Kellogg.
Alleged bogus Independent COM
panies. organized by the Standard
were likewise classed as dangerous TO
competition. I'D.
Like Northern Securities
Mr.. Kellogg turned to a discussion
of the legal phases of the controversy.
He argued that the Northern Securi-
ties decision applied squarely to the
case. In touching on the claim of
common ownership, he said at times
when il was convenient the defendants
dwelt upon corporation entity but in
the present instance they were anx-
ious to go beyond the corporation to
the individual He argued that the
action of the corporation was before
the court.
Justice White and Justice Lurton
questioned him on how he interpreted
the two sections of the Sherman anti
trust law i'm question. He answered
that much depended on the degree of
control possessed i'm each case by the
corporations.
The twenty minutes occupied by D.
T. Watson for the company were de-
voted to the argument that the only
thing the circuit court below held to
be in violation of the sherman anti
trust law was the combination of
1899 He maintained no other point
was before the supreme court and,
as he expressed il. "the things Mr..
Kellogg has spent three-fourts of his
time talking about. have nothing
to do with the issue"
The plan tonight is for Mr.. Watson
to continue his address when court
meets at noon tomorrow. He is to be
followed by Mr.. Wckersham for the
government. while John G. Johnson
is to close at the end Of the day for
the CORPORATION.