Evening star., 1940-09-30
Antitrust Suit
Names u Biq
Defense Bourd Plea
Norrows Action in
District Court Here
Ey the Associated Press.

Ey the Associated Press.
The Government filed suit today
against the American Petroleum In
stitute and % major oil companies,
charging unlawful monopoly, price
fixing and conspiracy in violation Of
the Sherman Antitrust Act.
Contending the defendant firms
controlled virtually all of the crude
oil available for refining and put
independents at competitive dis
advantage" the Justice Department
asked District Court to restrain the
companies from acquiring oil re-
serves for monopolistic purposes.
The dissolution of the Petroleum
Institute, which has its headquarters
here, also was asked.
The Government contended the
institute was created by the de-
fendant firms TO promote illegal
practices in the industry.
Firms Named in Case.
The following oil firms are the
defendants:
Atlantic Refining Co, Barnsdall
Oil Co. Cities Service Co. Consoh-
/ dated Oil Corp, Continental Oil Co.,
Gulf Oil Corp, Mid-Continent Pc
troleum Corp. Ohio Oil Co. Phillips
Petroleum Co.. Pure Oil Co, Shell
Union Oil Corp, Skelly Oil Co.. the
/ Socony-Vacuum Oil Co. Standard
Oil Co. of California, Standard Oil
/ Co. Indiana Standard Oil Co.
| kentucky, Standard Oil Co. New
/ Jersey, Standard Oil Co. Ohio,
Sun Oil Co. Texas Corp. Tldewater
Associated Oil Co.. Union Oil Co. OF
California and approximately 300
subsidiaries Of all the defendant
firms
The maintenance Of fixed prices"
the complaint said. has restricted
or eliminated competition which
would force the integrated COM
panies to give to the consumer the
benefits of lower costs arising from
chronological improvement.
The operation of the present struc-
ture of the oil industry has fostered
and preserved an uneconomic du-
/ plicatlve and wasteful marketing
system"
, The Departments summary Of
the complaint which Attorney Cen
eral Jackson ordered the Antitrust
Division to file. listed charges rang
ing from conspiracy TO maintain
/ non competitive prices" for crude
oil 10 agreements on uniform and
exorbitant price differentials be-
tween various grades Of gasoline"
Scope of Action Narrowed.
The action is of narrower scope
than at first contemplated. as an
effort 10 force the companies to
rid themselves of distribution and
marketing facilities is being held
in abeyance on recommendation Of
the National Defense Commission.
The court, however, is being asked
for general relief with respect TO
the organization, funCtioning and
operation of the defendants as it
may deem proper
If successful in the suit, the De-
partment predicted lower prices to
consumer Of oil products and higher
prices for independent oil produc-
ers
Stressing the importance of lower
prices OF petroleum products to the
Government defense program, the
department observed that the pro-
duction of oil should be determined
not on the basis OF price mainte-
nance but on true conservation
principles"
The department said the suit
here would be supplemented by the
following three suits:
Against the Phillips Petroleum
Co. and the Phillips Pipe Line Co.
in the Delaware Federal Court.
Against the Great Lakes Pipe
Line Co. in the same court.
Against the Standard Oil Co. OF
Indiana in the Federal Court for
Northern Indiana, Hammond di.
vision.
Receiving Rebates Charged
These three suits, the department
said, will seek to clarity the law
with respect TO ownership Of pipe
lines by the major oil companies
and will charge the companies with
receiving illegal rebates from com.
mon carrier pipe lines.
In the principal suit here ths
Justice Department charged the
companies conspired:
To fix and maintain uniform
non-competitive prices TO be paid
for the crude oil purchased
from independent producers and to
be charged by them for crude oil
. sold to independent refiners"
To restrict the production Of
crude oil and the manufacture Of
petroleum products"
To compel independent producers.
who have no practical means of
transportation to competitive mar
kets. TO sell crude oil 70 the de-
fendant companies at the well
rather than permitting them to use
major companies oil pipelines.
Pipeline Rates Assailed.
To file tariffs for transportation
of crude oil, gasoline and petroleum
products which require shippers TO
ICIlOCI ldl
ties. to maintain uniform, non-
competitive, onerous and oppressive
rates"
To charge excessive rates for use
OF pipelines 'and to receive back as
funds and rebate on the rates
charged to themselves substantial
part of the revenue from pipeline
operations.
To cause railroads TO establish
rates favorable to them and un-
favorable to small independent re-
flnerS.
To distribute their products "only
through facilities operated by per-
sons or companies whose buying,
selling and operating policies de-
PENDANTS can control. ."
To distribute products only
through service stations whose poll
icies they can control"