The Daily Ardmoreite. [volume] (Ardmore, Okla.) 1893-current, 1916-02-28

] eAdS :! stems.
OF Standard Oil methods, the re.
port said:
The advantage which the Stand
ard Oil group derives from the ex.
elusive use Of the only trunk line
from the mid-continent field to the
east would be largely removed if this
pipe line system became a common
carrier in fact as well as in name.
It is explained that though con.
gress has declared pipe lines com
mon carriers, little use has been made
of them as such, as the small refiners
almost without exception buy. their
crude petroleum locally. The inter.
! state commerce commission has not
yet passed on tariffs and require
ments submitted by the pipe lines,
because 1t has not completed its own
investigation into pipe line conditions
while the Standard OIL interests
have in this field some lines which
show relative high costs" the report
adds, nevertheless their chief line
running northeast to Chicago excels
all others in capacity and in the ex-
tent to which that capacity is used
This line shows the lowest cost. This
favorable situation is partly due to
the fact that there is no other line
running 10 points east Of the Missis.
sippi. As all the connecting trunk
lines between this river and the Ap.
palach.an mountains are controlled by
the Standard Oil group, and independ-
ent refineries are small and scattered
other pipe line concerns in the mid.
continent field have not attempted to
run their lines TO the east, but have
built them to the gulf of Mexico. For
this reason the Standard refineries
are able to obtain mid-continent oil
at a great advantage over competing
refneries located in the principal con-
suming districts"
The report has this to say of pipe
line profits
THE net earnings, before deducting |
bond interest, of the companies which |
operate the five pipe line systems in |
the mid-continent field, have been |
1898 pr cent on the net investment |
for the three-year period, 1911 to 1913 |
These net earnings, however, do not |
show what they earned from pipe |
line operations, because in most cases
these companies are engaged in other
branches of the oil business, such as
producing, refining and marketing,
and their pipe lines are operated
merely as departments of this integ-
rated form of business. These CON,
Danies generally treat their earnings
as though they arose entirely from
OIL because they as
yet have not to any significant extent
performed the duty of common car
.iers.
"The significance of pipe line rates
$ best appreciated by showing the
ate of return on investment which
would be obtained if all the oil ship
'ed by the interests owning the pipe
ines were charged the tariff rates at ,
which the pipe line offers to take the ,
Ill of other shippers. Taking all -,
hese five pipe lines together, the ,
et investment aggregated in 1913 +
43,S57000; the cost of transportation
y pipe line, including depreciation q
n investment, $10624,OOO and the =
ross receipts which would have been =
btained if tariff rates had been
harged on all the oil carried, $685. -
$1,000. On this basis the earnings .
'ould have been 900 and the >,
ate of return on the net investment -
l.5 per cent "The variation in net g
arnings for the five different systems ;,
ould have been considerable, rang :,
,g from fourteen to GO per cent c
The report goes into minimum guam -
ty requirements of the pipe lines, ,,
hich, it charges, excludes smaller !,
lncerns. ;,
Conditions made regarding the 9
.inimum quantity of oil which will =,
e accepted for shipment" it says, :,
are such that the small oil producer 4
= refiner is virtually precluded from -,
sing this method of transportation. -.
he Prairie Pipe Line company y,
axes the minimum requirement lOO,- -,
10 barrels; certain others require at
asst 25.O00 1t is evident, therefore, -
at a minimum requirement of 1OO,-
% barrels is not necessary. But a
inimum requirement of 25,0O0 would
pear to be excessive. III
THE really difficult problem, for .
pc lines acting as common carriers ID