The Washington times., 1916-02-28

crude oil, which. under conditions Of free
competition. would he determined by
supply and demand. Competition, how.
II would naturally be expected that
prices would be made more even ana
equitable not only as respects the crude
OIL prices In the mld-continent and APP
palaehian fields, but also as respects the
prices OF the refined products In dt-
The report declares. however. that
the advantage which the stand
ard OIL group derives from the ex-
elusive use OF the only trunk line from
would be largely removed II the pipe
ilne system became common carrier
IN fact as well as In name"
No Action In Schedule.
The Interstate Commerce Commission
hos never passed on the tariffs ana
shipping requirements OF the pipe lines
OF the country, action being deferred
pending an Investigation by II.
such an Investigation was ordered by
congress-, and the Interstate Commerce
commission and the Federal Trade
commission divided the work. the latter
taxing rates and charges for the trans
portstion OF oil and petroleum in the
East, and the Federal Trade Commits
sion the mld-continent field.
Tho Interstate Commerce Commission
hns not yet made It's report.
In view of the report OF tie Federal
Trades Commission. however, Il Is prob
able that the Interstate Commerce
commission will give early consldera-
ments.
1t would seem from the report that
the big oil companies which own or
control the pipe line companies ara
| lAFnOlV at
TO their own uses.
Would Show Huge Profit.
The trade commission finds that II
the five systems In the midcontinent
field charged their own refineries the
rates that are charged others, that they
should show a net profit of I15 per
cent on the total investment. As Il is,
they are declared to earn more than 10
per cent.
The report says the cost Of pipe line
transportation from the Cushing field.
the great gasolene field in Oklahoma,
to the Chicago district Ia IL cents n
barrel. The published tariff for this
Transportation is " cents a barrel.
The Prairie Company has a minimum
requirement OF 10000 barrels. The other
companies will not take from indepen-
dents shipments less than 5000 barrels.
They do take, however, as little as 80
barrels from their own producers.
The report states that independent
shippers cannot compete with the oil
companies owning pipe lines by ship
ping BY rail. because the railroad rates
are even higher than the pipe line
rates. and that this situation shuts of
the small producer from any measure
OF independence, with the result that
retail prices are not entirely free from
the influence of the controlling con-
Germs in the petroleum producing and
transporting business
Conclusion of Report.
The report concludes;
THE conclusion is evident that lower
rates and equitable shipping require
ments by pipe line are necessary IN
order to make pipe lines common car
riers in fact as we'll as in law. and
that the property and perhaps even
the existence OF many small concerns
are dependent upon reasonable ana
equitable shipping conditions.
Lower pipe-line rates and reasonable
pipeline shipping requirements would
enable many small producers ana re-
hners to transport crude oil from the
midcontinent field by pipe line VINO are
now unable to do so. and would. there
fore. tend to equaslze competition IN
the sale of crude oil by increasing IL
in some markets where II is slight or
non-existent and by reducing II in
others where 1t is extraordinarily keen.
While the natural disadvantage OF To-
cation of the midcontinent field with
respect to the largest consuming mar
kets cannot be removed, the artificial
disadvantage due to high pipeline rates
and shipping requirements can be elm
mated.
''The removal OF these artificial dis
advantages would tend to a greater
equality in the prices of midcontinent
| and Appalachian crude OIL and conse-
quently the prices of the refined products
which are made from them woud tenG
/ to he more equal In different markets
of the United States. Whether the gem
oral level of prices OF refined products
would he thereby reduced or kept at a
| lower level would depend chiefly upon
| the movement of the price OF crude
oil. Such prices, under conditions OF
| free competition in purchase and safe,
would be determined by supply and Ge-
| mand. Competition would be promoted
however, and more equitable conditions
| established by the removal of these
artificial disadvantages imposed on the
| mIdcontinent field"