The West Virginian. [volume] (Fairmont, W. Va.) 1914-1974, 1916-03-01
RIPE LINE cos
. DISCRIMINATE
That is View of Dill Situation
Taken BY the Trade
Commission.

81" ..aa|. |a.4 - FHH"
WASHINGTON. D. c., Feb. 2s.-A
charge that petroleum pipe line COM
panies OF the midscontinent field,
through high tariffs and unreasonable
shipping requirements, have excluded
independent shippers from their lines
was made today by the Federal Trade
Commission in it's report to the Sem
ate on a special investigation OF the
business.
i. the five systems that control the
mid-continent pipe lines charged their
own refinerfes for carrying oil at tbs
rate they offer to carry it for the in
dependents, the report declares, their
annual net earnings should show q
41.5 per cent. profit on their. pipe line
Investments. AS 1t Is they are de-
clared to arm more than 10 per cent
The investigation was ordered by
the last Congress, which later directed
an Interstate Commerce Commission
inquiry. To avoid duplication the
Trade Commission confined it's work
to the mid-continent field, while the
Commerce Commission, turned its at
tention to systems operating in the
East.
" - no @
findings in this language:
1.-THE dominant position OF the mid
continent field makes the facts de-
veloped in this report of vital import
ance to the entire country.
1.-THE fixed investment In pipe lines
is extensive and corresponds closely
with the actual cost Of such property.
"aThe pipe line companies require
nAnk{n nnk Ra1d hos FnIInr,e5 tSnatnnS NJ
preceded, crude oil production, and
such investment is comparatively Sc.
cure. &.5s
There Is a large difference between
the cost OF pipe line transportation,
which Is very low, and pipe line tariff
rates, while the independent shippers
cannot use railroads because their
rates are still higher.
1.-THE pipe line companies require
large minimum shipments, which
makes it irnpracticable for small pro.
ducers or refiners to ship crude oil
by pipe line.
"The price Of crude oil delivered at
the refinerias Is to a large extent made
up Of the transportation charge.
1.-THE cost OF pipe line construction
is SO great that small concerns can
not buildslines from the rmtd-contiuent
field to the large consuming and dis.
tributing markets.
Lower pipe lines rates and smaller
minimum shipments r necessary to
enable small concerns to compete
with large retineries affiliated with
pipe line companies.
Reasonable and equitable condf
tions OF shipment by pipe line would
tend to a greater equality in the prices
of mid-continent and Appalachian
crude oil and in the prices OF refined
products in different markets"
OF the ave large systems operating
In the field the commission found
that two belong to the Standard on
Company and that q third ts con-
itrolled by Standard Oil capitalists.
The Standard Oil lines are gtyen$ as
the PrarfesSrunning northeast oE1llt.
.nois and Indiana; the 0klahomaLous
.isiana, running southeast to Baton
Rogue, and the Magnolia, running
south The others are
.thet Gulf andSTexas SYSTEMS.
OF Standard OIL methods stheSFeport
said:4
4.The advantage which.the Standard
oh group derives fromSthes exclusive
use Of the only trunk line from the
mtd,conttnents feldetoktheE East would
.be&largely removed &c thisApipe line
system became aScommuna carrier In
NEUTRALITY-SUSPICIOUS.
II! 10 explRinedith that though Ccngregg
has declaredS pipe lines ScommunEcaEs
riers, little nae9hasl been midlothian
asEsuch,f as the Gmallsrehnafslalnost
without excepttppybuy their crndeypes