Show dion an fn FM F M M 1 I in I 1 I 1 AA I 1 VM WA 9 I 1 1 iviry I 1 nih H I 1 ff M A I 1 L 13 oili I 1 i I 1 ya il L 9 0 0 I 1 I 1 t 1 raft 10 I 1 I 1 u mi N 2 I 1 N I 1 rm A I 1 1 R a GE U V lae I 1 ka a M R A A I 1 OAD S all I 1 I 1 lm loosevelt KOO SeVelt sends a messa 9 e to congress Con oress ff 0 ing fh F discriminations h 0 0 a P practiced i n favor t I 1 of the oil monopoly 1 1 1 I 1 I 1 washington D C slay 4 ri president cs Roo evolt lt today tran transmitted 0 a congress the report of 0 jaich 11 garfield commissioner of corporations giving the results or of liis his investigation of the subject of transports ion and freight rates in connection with the oil industry in ili his message the president ex dressed the view that the report is ai of capital importance because of the of fortnot fort nou noi being made to secure such enlargement lar tar of the powers polders of the interstate commerce commission as will confer upon the power in some mpa siire adequate to to meet the clearly demonstrated needs of the situation the facts set forth in the report he declares are for the most part not noi disputed that the standard oil company has benefited enormously up almost alma st to the present moment by seret rates many of which were clearly 1 unlawful the Pre prescient Adent says the he aport pert clearly shows lie he benefit there uv bv secured amounting amoun tini to lo at least threz thres quarters of a million a year on oil this subject he be says this three quarters of a million represents op ep resents the profit that the standa d oil company obtains at the expense ef cf the railroads but of course the ul ill uli i inmate reut result is thir that it obtains a much iftner profit at the olt public A very result of the in has been that shortly after he be dac discovery very of these secret rates by 1 1 40 f I 1 I 1 eq m I 1 ive e IA promptly r colv coric tAd be aie e rall railroads i I 1 so that ILI oe t m have now nonn h veen cen done away alth this corree ion partial or complete of the evil of the secret ecret rates is of course on the one hand an acknowledgment that they w wre were re wrong and yet were persevered in until exposed and on the other hand a proof of the efficiency of the work that has been done by the bureau of corporations the statement is added that the department part ment of justi justice cewIll will iko ike up the question of instituting prosecutions in at least certain of the cases and the hope is expressed presed ex that congress will into law tile the bill of senator knox to correct the interpretation of the immunity provision rendered in judge humphreys decision continuing the PreEl president dent says dut but in addition to these secret rams rats the standard oil profits immensely by open rates which are so arranged as to give it an overwhelming advantage over its independent competitors competitor this is a characteristic example of the numerous evils ellich are inevitable under a system in which the big shipper and the railroad are left free to crush out all individual initiative anti and all power of independent action because of the absence of adequate and thoroughgoing thorough going governmental control exactly similar conditions condl tiona obtain in ili a large part of the west and southwest itris not possible he says to put into figures the exact amount by which the standard profits through the gross favoritism shown it by the railroads in connection with the open rates the profit of course comes not merely by the saving in the rate itself as compared with its competitors but by the higher prices it is able to charge and by the complete control of the market which it secures thereby getting the profit on the whole consumption the president calls it attention to that feature of the report regarding the manner in which the law is evaded by treating as state commerce what in reality Is merely a part of interstate commerce he says gaya it is clearly shown that this device is employed on the now new york central railroad as well as on many other railroads in such fashion as to amount to thwarting the purpose of the law although the forms of the law may be complied with it Is unfortunately not true lie he says that the standard oil company is the only corporation which has benefited and Is benefiting in wholly improper fashion by an elaborate series of rate discriminations the sugar trust lie he adds according to tie the results of the investigation now in pro progress ress rarely it if ever pays the lawful rate for transportation por tation lie he declares that in the effort to prevent the railroads from uniting for improper purposes we have i very unwisely prohibited them from uniting tor for proper purposes that Is for purposes of protecting themselves them solves and the general public as against the power of the great corpora corporations tiong lie he favors as an an element of competition putting alcohol used in the arts on the free list hat and of keeping the feo fee on oil an and 1 I celal lands of the indian territory tribes or on the public domain in tile the government the lands to be leased only on such terms and for such periods As an will enable the bov government wilment ril ment to entirely control them gar fields report in summarizing his report commas stoner bloner garfield speaks of his personal visit to the oil fields and of the great mrss mass of data obtained by him either c person personally allt or through agents of tho the bureau of f corporations the preliminary study of tills mar tran transportation daloli ta loli which enters so largely into the cost of the finished product and hence a most important factor in competition taking up the subject of the output of refined oil mr garfield tilds finds that it amounts to about barrels annually of which the standard oil 1011 company directly ani and indirectly control about and approximately the same proportion of the other finished products of petro petroleum leuin continuing the report says the standard claims that the location of its refineries and the use ine of pipe lines are natural advantages to which it is justly entitled by reason of the energy and foresight of its managers while in a measure that is true it must not be forgotten that these advantages were in part obtained by means of unfair competitive methods after years of fierce industrial strife the development of the pipe line system by the standard oil company was the result of special agreements with railroad companies furthermore those so called natural advantages have been find and are being greatly increased by discriminations in freight rates both published and secret interstate and state aich give the stand ard monopolistic control in the greater portion of the country and which so limit competition as to practically prevent the extension of the business of any independent to a point w which even endangers ei jlii the supremacy of th heStan eil dardr ia 4 c I 1 1 ari Imm immediate fate result this delimitation or of ha i competitive area IF la shown n by the prices of ordinary 11 II ruminating lumina ting oil throughout the country after deducting the freight rite the price of such ruih oil is usually from two i cents to five cents a gall gallon on higher in the noncompetitive competitive non than jn in the competitive peti tive fields A roa reasonable profit upon refined oil is about one halt half a cent per gallon it is clear that exorbitant profits ire are obtained in the non compe titine fields this monopolistic control extends from tile the well of if the producer to the doorstep of the consumer mr fr garfield cites the fact that the new york central railroad company refused for itself and affiliated lines to give access to records of state rates at the beginning of the investigation he says the standard oil company denic d thac that it had bad obtained in recent years or was nov DOX obtaining sany any rebate or othel transportation discrimination as against again 4 its competitors and yet he says that hat a most careful review of the facts and the explanations pla nations leads to the conclusion cooc lusion that the standard oil company has habitually received rec eivid from the railroads railroad and is now receiving secret rates and othor other unjust and illegal discriminations discrimination in 1904 these rates saved to the standard oil company three quarters of a million dollars representing the difference between the open rates and the rates actually paid these discriminations he says says I 1 have been so long continued so secret t so ingeniously in gen applied to new conditions of trade and so large in amount as to make it certain that they were duo due to concerted action by the tha standard and the rall railroads roads ile he says further that the standard oil company is receiving rf unjust discriminations in the matter of open rates the published rates from the leading standard shipping points being relatively much more than rates from the shipping point of its competitors mr garfield then refers to seven instances of important discriminations in favor of the standard oil company in various parts part of the country and says that moat of the secret rates and so some me of the open ns discovered by the bureau were abolished by the railroad shortly after such discovery after calling attention to tile the good which already has resulted from the investigation mr ir garfield says the changer chang efe effected have put the independents pen dents upon a fairer footing and make comiti comte tion possible in boril toril ten I 1 heretofore inaccessible sable the report concludes as follows nevertheless the widespread discriminations crimi nations in open rates still in force leave the independents at serious disadvantage tag investigation ins bs only incidentally touched state shipments from distributing centers particularly ticul arly in less than carloads the few instances examined suggest the probability of discrimination on such shipments which taken in connection with through traffic may result in dis on interstate inter jilter state business 1 I have cited the those these se particular instances to show the various methods by which d nations are obtained and to call particular attention to in methods which it if legal are arc mere devices device dein 5 to obtain exactly the same ra result as would he be obtained by 14 paid on interstate inter state business bu sins and freight discrimination whether hether it be state or interstate inter state tends to give control of markets to the preferred shipper and makes monopoly possible if ext ting law merely prohibits a special rato rate device for obtaining disc rimini tion and permits tho the sanie same result to bo be I 1 accomplished tn in a different way then i the 1 legislation is to that effect a sham I 1 this investigation has shown very clearly one glaring defect in the interstate commerce law viz the method of filing and publishing tariffs although a tariff or a r rate abe has been filed with the commission in compliance with the terms ot of tile the law none but the I 1 favored shipper may know of its existence tariffs may be made and rates may be combined in such manner as to make it practically impossible for the ord ordinary luary shipper to find them As long as the state rates are not required to be made public and shippers use such rates in combi combination with interstate rates au all manner of devices to evade the purpose of the law are possible all state rates used in connection with interstate shipments should be filed with the interstate commerce commission and a radical change should be made in the direction of simplifying tariffs and in methods of posting and filing them explaining more in detail the results of his commissioner gar field says the general result of the investigation has been to disclose the existence of numerous and flagrant discriminations by the ralli oads on behalf of the standard oil company and its affiliated corporations with comparatively few exceptions inal mainly rily of other large concerns jn in california the Standard has sole beneficiary of uch 1 disa discriminations in almost ever evera see section gioi of the country i thai tha company has been found to enjoy I 1 some unfair advantages over its I 1 competitors aej some of these 1 inactions affect enormous areas discriminations A in the transports j tion of oil cro embrace brace a variety of forms the more important of which may be classed under the following heads 1 I 1 secret and semi seini bechet rates rate TI 2 discriminations in tho the open arrangement ran gement of rates I 1 3 in classification t and rules of shipment I 1 i 4 discriminations in treatment 0 of f private tank cars i many of the secret rates discovered by the tha boireau of corporations have applied only on shipments of oil wholly within single states the standard oil company compan which cont controls rolt refineries in twenty states is obviously in ili a position to mako extensive use of sach in ter state rates or as they are ordinarily designated state rates for the purpose of more effectively concealing the secret rates given to the standard oil company railroads in several fin cases have used peculiar me methods tit of hitting hilling and accounting jn in sonic som cape cases oil has s been blind billed thatis that is to say gay tile the way bills have ben been made out showing the kind of product transported and its weight but without sh otting as is the usual custom any freight rate or the amount of the freight charges jn such instances the collection of freight Is ordinarily dina rily made not by the local agent of the railroad but through the central office by alik presentation to the standard of a summary bill showing the amount of freight charges at the secret rate local agents often do not know what the actual rates used on blind bills are an especially large number of secret rates and in the trans por tation of bf ou oil was wa found in california in all more than eighty distinct violations of tariffs on oil oil were discovered in this state the total concessions ces to shippers and consignees consig nees under these rates as compared with the published tariffs may be safely sa fely estimated at about per year of which amount about nent ent to the standard tho the commissioner under the head of possibility of further discriminations says I 1 A jt jeems wholly holly possible that there may exist a multitude of other disc rj inactions effected by secret rates or even by rebates of great importance involved in the local distribution trib ution of oil especially in less than carload lots the Stati standard dard oil company ships onor enormous quantities of oil in less than carloads carload ii and although the distances involved in such cases cages are usually comparatively short 1 the amount of freight charges und under er the high rates which brevall pr evall on such bustness business under regp regular lir tariff would be very great and tho the possibilities of departure from these cli charges ages extensive it Is perfectly clear that the distinction between the rebate and the secret rate Is merely oly one of accounting vf 1 |