United States. Industrial Commission.

Preliminary report on trusts and industrial combinations, together with testimony, review of evidence, charts showing effects on prices, and topical digest online

. (page 93 of 237)
Online LibraryUnited States. Industrial CommissionPreliminary report on trusts and industrial combinations, together with testimony, review of evidence, charts showing effects on prices, and topical digest → online text (page 93 of 237)
Font size
QR-code for this ebook


as against other shippers over the Pennsylvania Railroad prior to May 1,1878.
because said shippers had contracts extending to that date, which were excepted
in the contract with the Standard.

" rv. That the Pennsylvania Railroad was willing and offered to carry oil for
all shippers on the sanie terms with the Standard, excepting only 10 per cent
commission, for which it demanded like considerations.

"V. That it did continue to carry for all shippers who did all their business
over its line as low as for the Standard, commission included.

" VI. That shippers not using the Pennsylvania Railroad were able, after May
1, 1878, to get oil east by the Erie Canal lower than by rail, and shipped their oil
by that route, in consequence of which the Pennsylvania Railroad shippers were
paying greater freight rates than other shippers.

" VII. In consequence the Pennsylvania rate was reduced to those who contin-
ued to ship by that line 44^ cents on refined, making the net rate 81, said 44*
cents being paid as rebate.

"VIII. For the same reason, namely, to meet canal rates, in July. 1S7S. the
rate to those who shipped by rail was further reduced 30 cents, the 30 cents bemg
paid as a rebate, and refunded back to May 1, 1878.

"IX. That these rebates were paid to all shippers who shipped entirely by rail,
and were for the express purpose of putting them on an equality with those who
shipped by canal. , . ,

"X. The same is true of the rebate allowed on crude oil during the same period,
except 10 per cent paid to Standard and 22!!: cents paid to the American Transfer
Company, the latter being the pipe line's share of a throuRh rate. ., -,

"XI. That the rebates which were paid from May 1, 1878, to equahze rail and
canal shipments were discontinued December 8 of the same year, when the canal

was closed. , ,, , ,< , >-a ••

"XII. All payments of rebates entirely ceased March 31, 18v.:».
The result of the testimony is that while there was an agreement for a 10 per



516 HEARINGS BEFORE THE INDUSTRIAL COMMISSION.

cent commission between the dates referred to there was in fact no discrimina-
tion against shippers by the Pennsylvania Railroad: that the rebates paid were
paid to all shippers over that line, and that they were paid to ptit shippers by
that line on an equality with shippers by canal.

Q. (By Mr. Smyth.) Yon will make that a part of your testimony, will you?—
A. I will make that a part of my testimony, and I hope it will be in the record
of the proceedings of this commission as simple final answers to these lusty old
lies about the 810,000.000 rebates.

Q. (By Representative LiviNciSTOM.) You say now, in your place as a witness,
that there never have been any rebates in favor of the Standard Oil Company?—
A. I am proceeding with the statement.

Q. I understand" you deny everything that has been said here before about
rebates? — A. I will go right into that and be glad to answer questions about that.

AS TO FAVORITISM IN BUYING LUBRICATING OILS.

Mr. Lee makes the statement that the railroad companies are now systematically
robbed by their own officers through the making of discriminatory contracts with
the Standard Oil Company for lubricating oils.' I had never heard of this allega-
tion brought out here by Mr. Lee and some other witnesses until told before you.
I want to deny it absolutely and entirely as being utterly untrue, and I challenge
him to produce a scintilla of evidence in support of their allegations.

Q. (By Mr. Jenks.) Perhaps you will note that Mr. Lee says that he does not
state that to be absolutely truei but it is a matter of belief with him. — A. It is
the same old method — he does not know it to be true, and he can not say it is true,
and I challenge him to make any showing of any such thing at any place or any
time.

Q. You say it is not true? — A. I say it is not true.

NO DISC'BIMINATOEY- RATES.

In answer to questions as to whether the Standard Oil Company is now receiv-
ing discriminatory rates, he does not answer directly, but goes back to the 1889
case,' in which the Standard Oil Company was in no way involved; was not,
indeed, in the case referred to by Mr. Lee, and the same is true in a number of
other cases also. It was not shown that there was any discrimination in favor of
the Standard Oil Company, and as a matter of fact the Standard Oil Company were
not given any such discriminatory rates. I make that answer more specifically
with reference to the case of the period to which he referred, in answer to the
testimony at that time.

Q. (By Mr. Smyth.) If there had been any such rates, you would have known
it? — A. I should have known it.

Q. It would have been impossible for any such rates to be in existence without
yoirr knowing it? — A. It would. Further, the cases referred to in Mr. Lee's testi-
mony '' as pending in the United States court to recover discriminations are really
cases to recover freight which the railroad charged refiners on barrels. The Inter-
state Commerce Commission decided that railroads carrying both in tank cars and
in barrels should carry barrels free; and the railroads, refusing to accept such a.
decision, are testing the (piestion in the United States court. It is fair to say that
the same charge for carrying barrels was made against the Standard Oil Com-
pany, and if the refiners are sui-cessful in recovering the Standard Oil Company
will have a claim for a very large amount.

Q. (By Mr. Jenks.) Against the railroads?— A. We shall be in the same posi-
tion as the other shippers if it is decided in the interest of the refiners.

Q. (By Mr. Smyth.) You will claim a rebate of the freight on the barrels of
the refined? — A. Yes; we are in the same position as they are on that question.
I may say, in my personal opinion, it is a most unjust decision for a)iy court to
make; but it is not for me to decide it.

In answer to inquiry as to whether the Standard Oil Company were paid rebates
on shipments of other people, Mr. Lee answers in an untruthful and disingenuous
way. and refers finally to the Rice Case as the only possible sirpport of his asser-
tion. ' The Rice Case will be fully answered in connection with the testimony of
anotlier witness. '

THE standard HAS STRICTLY OBEYED THE INTERSTATE-COMMERCE LAW.

It is fair to say here, however, and I will make this statement covering the
entire question of freight rates prior to the passage of the interstate-commerce

' Sre 11, aiS. Sec also Mr. 1 htvis, i>. IfiH: Mr. Riri>, pp. (i!)y, 71)0: Mr. Piitio, pp. T.W-TiVJ.

■-SiM.p,:w

■' S.N- p. r,r,i;.



STANDARD OIL COMBINATIONS: ARCHBOLD. 517

law, in 1887, that the shipment of oil or any considerable freight over the roads
was a question of special contract. While tariffs were nominally issued, every
shipper knew that a special contract could be had, and it was universally the rule
that special contracts were made for the Shipment of any considerable freight.
Since the passage of the interstate-commerce law we have strictly obeyed it. I
want to say further in this connection that during the period before the passage
of the interstate-commerce law every and any rate of freight was uniformly con-
sidered in the fixing of prices at which the oil was sold. I want an exhibit

Q. (Interrupting.) Are your books open to verify that statement? — A. To the

• very utmost. I have thought it worth while, in view of the hard downing of this

old ghost, to go into some considerable collateral proof to show the falsity of the

charges in reference to discriminatory rates. I now beg leave to submit to you,

and I of course will leave them with you

Q. (By Representative Livingston.) (Interrupting.) If you will pardon me
just now — is there a suit pending or anything of the kind on the part of the
Interstate Commerce Commission against the Standard Oil Company for rebates
now, or has there been since the passage of the act? — A. There have been various
actions instituted regarding some special features of the carrying law, but I do
not know that there are any now pending. I think they have all, so far as relates
to our interest directly, been adjudicated.

LETTERS FROM RAILROAD OFFICERS DENYING THAT THEIR ROADS GIVE PREFEREN-
TIAL HATES TO THE STANDARD.

I submit here, in answer to direct queries — and they are only a small part of the
entire number I might have had for the asking — letters from prominent railroad
officials representing the railroads in this country. North, South, East, and
West, answered on their own part and over their own signatures, with refer-
ence to the charge of discrimination in any way. These letters are of the most
"specific character on this subject. I thought it best not simply to rest on our own
denial on the charge of discrimination, but to leave these with you as collateral
evidence of the falsity of these statements which our enemies and competitors in
the business are continually making on this question. I will, with your permis-
sion, read a list of these letters, and I will siibmit a naap,' colored in lines, show-
ing the different sections of the country reached by the railroads which are rep-
resented in these letters, and which deny any preferential relations with the
Standard Oil Company:-

[Standard Oil Company, 26 Broadway, New York.]

Dear Sir: During May and June of this year the Industrial Commission (a body
appointed by CongTess) had a hearing in Washington. Before this body appeared
a number of oil producers and refiners who testified, generally, that it was their
behef that the railroads of the United States were giving the Standard Oil Com-
pany and its interests many advantages on its shipments of petroleum and its
products as compared with those, of other oil shippers.

We are now and have been, as you know, large shippers of petroleum and its
products over your rails, and we would be glad if you would write me a letter
stating as fully as you can whether or not, since the passage of the interstate-
commerce law, you have in any way given to the Standard Oil Company or any
of its representatives any lower rates of freight, either by direct tariff, rebate,
underbilling, or in any way given to it or its representatives any advantages in
the carriage of its shipments over your rails as against any other oil shipper. In
other words, have not the Standard Oil Company and its interests paid the same
rate per 100 pounds on its shipments, whether in tank cars, carloads, or less than
carloads, as you have charged other shippers between the same points, and has
there been since the passage of the interstate-commerce law, or is there now,
any arrangement or device by which the Standard Oil Company have m any way
received any advantage in the transportation of its oil, per 100 pounds, as com-
pared with any other shipper over your road between the same points?

If you yourself, hat^e not full knowledge of the matter referred to, we would be
glad if you would confer with your traffic department before answering. It may
be that we will show this letter and your reply to the Industrial Commission, and
would like for your reply to be as full and explicit as possible. Kindly reply at
your earliest convenience and oblige.

Yours, truly, Howard Page.

1 Omitted. ^ See Mr. Emery, pp. 642, 643.

83A 34:



618 HEARINGS BEFORE THE INDUSTRIAL COMMISSION.

I will not weary you, unless it is your desu'e, by reading all these letters, but I
will read two or three of them. I will first read the list: Atchison, Topeka and
Santa Fe Railway, Paul Morton, second vice-president, Chicago, 111.; Baltimore
and Ohio Railroad, Oscar G. Murray, first vice-president, Baltimore, Md.; Boston
and Maine Railroad, W. F. Berry, second vice-president and general manager,
Boston, Mass.; Chicago and Alton Railroad, C. A. Chappell, vice-president and
general manager, Chicago, 111.; Chicago, Milwaukee and St. Paul Railway, A. J.
Earling, second vice-president, Chicago, 111.; Chicago, Burlington and Quincy
Railroad, Thomas Miller, general freight agent, Chicago, 111.; Cleveland, Cin-
cinnati, Chicago and St. Louis Railway, E. E. Cost, freight traffic manager, Cin-'
cinnati, Ohio; Delaware, Lackawanna and Western Railway, W. H. Truesdale,
president. New York City, N. Y.; Erie Railroad, G. Q. Cochran, fourth vice-
president. New York City, N. Y.; Great Northern Railway, D. Miller, second
vice-president, St. Paul, Minn.; Lake Shore and Michigan Southern Railway,
W. H. Newman, president, Cleveland, Ohio; Louisville and Nashville Railroad,
S. R. Knott, first vice-president, Louisville, Ky.; New York Central and Hudson
River Railroad, S. R. Callaway, president. New York City, N. Y.; Northern
Pacific Railway, C. S. Mellen, president, St. Paul, Minn.; Pennsylvania Rail-
road, W. H. Joyce, freight traffic manager, Philadelphia, Pa.; St. Louis and San
Francisco Railroad, D. B. Robinson, president, St. Louis, Mo.; Southern Pacific
Company, J. C. Stubbs, third vice-president, San Francisco, Cal.; Southern Rail-
way, J. M. Culp, traffic manager, Washington, D. C; Union Pacific Railroad,
H. G. Burt, president, Omaha, Nebr.; Wabash Railroad, S. B. Knight, general
freight agent, St. Louis, Mo.; Western New York and Pennsylvania Railroad,
E. T. Johnson, general freight agent, Buffalo, N. Y.

I will read, if you please, first, as representing the different sections of the
country, a letter from the New England States, Boston and Maine Railroad:

[Boston and Maine Eailroacl, traffic department.]

Boston, Mass., August 18, 1899.
Dear Sir: Replying to your esteemed favor of the 15th instant, you ask me
to state whether or not since the passage of the interstate commerce law the
Boston and Maine Railroad have in any way given to the Standard Oil Company,
or any of its representatives, any lower rate of freight either by direct tariff,
rebate, or underbilling than has been openly quoted to all other shippers of oil,
and I am pleased to be able to state that we have not.
Yours, .truly,

W. F. Berry,
Second Vice-President nnd General Traffic Manager.
Mr. Howard Page,

S6 Broachray , New York, N. Y.



{Chicago and Alton Railroad Company, C. A. Ctiappell, vice-president and general manager.]

CHiCAao, III., August 17, 1899.

Dear Sir: I take pleasure in stating to you, as I have frequently stated to
others, and am willing to state before the Interstate Commerce Commission, or
any other authority, that, in my judgment, the Standard Oil Company has obeyed
the interstate law better than any other large shipper in the country.

So far as the Chicago and Alton is concerned, the Standard Oil Company has
not only declined to accept concessions of any name or nature, but has used its
influence with the railroads to maintain agreed and tariff rates, and there haS
been no arrangement, device, or any other plan by which the Standard Oil Com-
pany received less rates than other shippers. The rates granted the Standard Oil
Company have been the same that all other oil shippers have had, whether in
tank cars, carloads, or less than carloads.

I have frequently stated to the Interstate Commerce Comhiission, and to others,
that if all the large shippers of the country would cooperate in the enforcement
of the interstate law, as the Standard Oil Company has done, we would have an
ideal condition.

Yours, very truly, C. A. Chappell,

Vice-President and General Manager.

Mr. Howard Page,

Standard Oil Company, Neio York.



• STANDARD OIL COMBINATIONS: ARCHBOLD. 519

[Louisville and Nashville Railroad Company, office of the first vice-president.]

Louisville, Ky., August 10, 1899.

Dear Sir: Please refer to your favor of the loth instant.

Having been since January, lySS, in one position or another, charged with the
direct supervision of the traffic affairs of the Lonisville and Naslrville Company,
and having been for several years prior to that time directly connected with that
department of the company's business, I feel I am in position to speak most
authoritatively upon the subject mentioned in your letter.

I beg to say that the Louisville and Nashville Railroad Company has not in any
way given the Standard Oil Company, or any of its representatives or allied inter-
ests, any lower rates of freight, either by direct tariff, rebate, refund, underbill-
ing, or any other subterfuge or device, than it was at the same time extending to
any and all other shippers handling the same or similar traffic and subject to the
same rules, regulations, and conditions. In other words, the Standard Oil Com-
pany has been required to pay and has paid to the Louisville and Nashville Rail-
road Company the same charges for the same transportation rendered as any other
shipper, and there is no arrangement between it or any of its agents and the
Louisville and Nashville Railroad Company by which any advantage accrues to it
over any other shipper handling similar traffic between the same points over this
company's rails.

Yours, truly, S. R. Knott,

First Vice-President.

Mr. Howard Page,

Standard Oil Company. Neiu York.



[The Atchison, Topeiia and Santa Fe Railway System, Great Northern Building, 77 Jackson
street, Chicago, second vice-president's office.]



August 17, :

Gentlemen: It is with a great deal of pleasure and satisfaction that I write you
in regard to the general belief that the railroads of the United States are giving
the Standard Oil Company and its interests many advantages on its shipments of
petroleum and its products as compared with shipments of other oil producers.

For nearly four years I have had charge of the freight business of this company,
and never in all that time 'has the Standard Oil Company's representatives asked
for, or received, better fates than other shippers of oil secure. From my own
experience I know that the Standard Oil Company does not ask for rebates, and
I know further that the chief aim of the freight representatives of your company
has been to have the railroads of the West absolutely maintain the tariff. I wish
that other large shippers would take the same position in regard to this matter
that your company does. If the terrible pressure from gigantic shippers for
inside rates could be relieved the transportation problem of the country would be
a very easy one to solve.

The position of your company in not asking for special rates, and in declining
to receive rebates, and its effort to keep the rates on oil and its products up, has
been a common topic of discussion among western traffic men ever since the
interstate commerce law became enacted.

I take this occasion to thank you, on behalf of the railroad I represent, for the
broad-gauged position that you have taken in this matter.

"Yours, truly,

Paul Morton,
Second Vice-President .

Standard Oil Company,

Kvw York City.



[Great Northern Railway Company, office of second vice-president.]

St. Paul, Minn., August :?3, 1899.
Dear Sir- Replying to your favor of the 15th instant, I herewith hand you a
letter from our general traffic manager, Mr. F. B. Clarke, under date of the 21st
instant, which, I think, covers your inquiry fully so far as this company is con-
cerned.



520 HEARINGS BEFORE THE INDUSTRIAL COMMISSION. *

I have no hesitancy in stating that since my connection with this company, in
November last, the Standard Oil Company have paid the full legal tariff on all
shipments made by it over this line, and there have been no arrangements by
vs^hich any less rates were secured.

I can also make the same statement with regard to the shipments of the Stand-
ard Oil Company over the Missouri, Kansas and Texas Railroad during my con-
nection with that road, from May, 1893, to November, 1898.

If there is any further information desired, kindly advise and I will take pleas-
ure in furnishing same.
Yours, truly,

D. Miller,
Second Vice-President.
Mr. Howard Page,

Standard Oil Company, Neiv York City.



[Great Korthern Railway, traffic department.]

St. Paul, Minn., August 21, 1899.
Dear Sir: Referring to the inclosed inquiry from the Standard Oil Company
with respect to the rates charged on shipments forwarded over the Great Northern
Railway since the passage of the interstate commerce law.

My connection with this company dates from December, 1896, since which time
I know personally that the Standard Oil Company has paid our company full
tariff rates on all shipments we have carried for them. I have made inquiry of
those connected with the general freight department who were in the service prior
to my connection with the company and who have had opportunities to know what
rates were being charged on the shipments of the Standard Oil Company, and
have received assurances that the Standard Oil Company has always paid our
company the full published tariff rates on. their shipments, and that we have yet
to receive the first intimation that the Standard Oil Company desired less than
the published tariff rates charged other shippers of the same class of goods.
Yours, truly,

F. B. Clarke,
Gencrtd Traffic Manager.
Mr. D. Miller,

Second Vice-President.



[Brie Railroad Company, 31 Cortlandt street. New York.]

AUC4UST 29, 1899.
Dear Sir: In answer to your letter of the 15th instant to President Thomas, 1
desire to say, in his absence, that the Standard Oil Company has evinced the
strongest disisosition to cooperate with the railroad companies to the extent of
paying fair and reasonable rates for transportation of all of its products based
upon and in conformity with the interstate commerce act, and based on my own
knowledge and information obtained from other officers of this company that said
Standard Oil Company has not been afforded lower rates of freight upon such
traflic than the tariff's open to and offered for the carriage of like products between
the same points to any other shippers of oil over this company's lines.
Yours, truly,

Geo. G. Cochran,

Fourth Vice-President.
Mr. Howard Page,
S6 Bruddioay, City.



[Delaware, Lackawanna and Western Railroad Company, office of president.]

August 33, 1899.
Dear Sir: I noted with some interest that during a hearing before the Indus-
trial Commission in Washington during May and June of this year certain par-
ties appeared before that body who testified in a general way that they believed
that the railroad companies of the United States" were giving the Standard Oil



STAND AKD OIL COMBINATIONS: AECHBOLD. 621

Company, or its interests, many advantages on its shipments of petrolenm oil and
its products over those accorded other shippers of similar commodities.

These statements or this testimony, if it may be so considered, is so much at
variance with the facts and the truth as I know them to be that I feel compelled
to write yon and state the facts as I know them to exist, and to say that I am
willing yoti should make such use of this letter as you may desire in refuting the
false statements referred to.

This company has not since the passage of the interstate commerce act, so
called, given the Standard Oil Company or any of its interests or anyone for it
any reduced rates or advantages of any character whatever on its shipments Of
petroleum oil and its products different or in any way more favorable than was
at the same time accorded other shippers of similar commodities. As I am advised
by our people, no one for the Standard Oil Company has since the passage of said
act ever solicited any concession in any way, shape, or form from the regular,
established rates, rules, and regulations governing the transportation of petroleum
oil and its products.

Furthermore, I take pleasure in certifj-ing that at the time of the passage of
the interstate commerce act and until 1894 I was in charge of the Minneapolis and
St. Louis Railway, and from 1894 until 1899 was vice-president and general man-
ager of the Chicago, Rock Island and Pacific Railway Company in charge of its
freight traffic; that during my connection -with the Minneapolis and St. Louis
and the Chicago. Rock Island and Pacific railways, as aforesaid, neither of those
companies ever granted to the Standard Oil Company or anyone in its interests
or for it any concessions from the regtilar, established rates on its shipments of
petroleum oil and its products, nor did any official of the Standard Oil Company,
or anyone else in its interests, ever ask special rates or advantages on its ship-
ments, as against those accorded other shippers of the same commodities.

Should it be found necessary or desirable to have the foregoing statement of
facts put in the shape of an affidavit or deposition I shall be very much pleased
indeed to put my knowledge of this matter in that shape and place it at your dis-



Online LibraryUnited States. Industrial CommissionPreliminary report on trusts and industrial combinations, together with testimony, review of evidence, charts showing effects on prices, and topical digest → online text (page 93 of 237)