Rensselaer Semi-Weekly Republican, Volume 40, Number 42, Rensselaer, Jasper County, 31 January 1908 — Commissioner Smith vs. The Standard Oil Co. [ARTICLE]

Commissioner Smith vs. The Standard Oil Co.

From the Railway World, January j, igoß.

Mr. Herbert Knox Sriiith, whose zeal in the cause of economic reform has been in no wise abated by the panic which he and his kind did so much to bring on, is out with an answer to President Moffett, of the Standard Oil Company of Indiana. The publication of this answer, itis officially given out, was delayed several weeks, “for business reasons,” because it was not deemed advisable to further excite the public mind, which was profoundly disturbed by the crisis. Now that the storm clouds have rolled byj however, the Commissioner rushes again into the fray. Our readers remember that the chief points in the defence of the Standard Oil Company, as presented by President Moffett, were, (i) that the rate of six cents on oil from Whiting to East St. Louis has been issued to the Standard Oil Company, as the lawful rate by employes of the Alton, (2) that thejß-cent rate on file with the Interstate Commerce Commission was a class not a commodity rate, never being intended to apply to oil (3) that oil was shipped in large quantities between Whiting and East St. Louis over tbe Chicago and Eastern Illinois at six and one-fourth cents per hundred pounds, which has been filed with the Interstate Commerce Commission as the lawful rate, and (4) that the 18-cent rate on oil was entirely out of proportion to lawful rates on other commodities between of a similar character, and of greater value, such, for example, as linseed oil the lawful rate on which was eight cents. President Moffett also stated that thousands of tons of freight had been sent by other shippers between these points under substantially the same conditions as governed the shipments of the Standard Oil Company. This defence of the Standard Oil Company was widely quoted and has a powerful influence upon the public mind. Naturally the Administration, which has staked the success of its campaign against the “trusts” upon the result of its attack upon this company, endeavors to offset this influence, and hence the new deliverance of Commissioner Smith. We need hardly to point dut that his rebuttal argumerttSs extremely weak, although as strong, no doubt, as the circumstances would warrant. He answers the points made by President Moffett substantially as follows: (1) The Standard Oil Company had a traffic department, and should have known that the six-cent rate hid not been filed, (2) no answer, (3) the Chicago and Eastern Illinois rate was a secret rate because it read, not from Whiting, but from Dolton, which is described as “a village of about 1,500 population just outside of Chicago. Its only claim to note is that it has been for many years the point of origin for this and similar *<*fejrrates. M The Commissioner admits in describing this rate that there was a note attached stating that the rate could also be used from Whiting. The press has quite generally hailed this statement of the Commissioner of Corporations as a conclusive refutation of what is evidently recognized as the strongest rebuttal argument advanced by the Standard. In fact/tf is as weak and inconclusive as the remainder of his argument. The lines of the Chicago and KnXns Illinois do not run into

Chicago. They terminate at Dolton, from which point entrance is made over the Belt Line. Whiting; -where the oil freight originates, is not on the lines- of the Chicago and Eastern Illinois, which receives its Whiting freight from the Belt Line at Dolton. The former practice, now discontinued, in filing tariffs was to make them read from a point on the line of the filing road, and it was also general to state on the same sheet, that the tariff would apply to other points, e. g., Whiting. The Chicago and Eastern Illinois followed this practice in filing its rate from Dolton, and making a note on the sheet that is applied to Whiting. This was in 1895 when this method of filing tariffs was in common use. Now let us see in what way the intending shipper of oil could be misled and deceived by the fact that the Chicago and Eastern Illinois had not filed a rate reading from Whiting. Commissioner Smith contends that “concealment is the only motive for such a circuitous arrangement,” i. e., that this method of filing the rate was intended to mislead intending competitors of the Standard Oil Company. Suppose such a prospective oil refiner had applied to the Interstate Commerce Commission for the rate from Chicago to East St. Louis over the Chicago and Eastern Illinois, he would have been informed that the only rate filed with the commission by this company was 6% cents from Dolton, and he would have been further informed, if indeed he did not know this already, that this rate applied throughout Chicago territory. So that whether he wished to locate his plant at Whiting, or anywhere else about Chicago, under an arrangement of long standing, and which applies to all the industrial towns in the-neighborhood of Chicago, he could have his freight delivered over the Belt Line to the Chicago and Eastern Illinois at Dolton and transported to East St Louis at a rate of 6% cents. Where then is the concealment which the Commissioner of Corporations makes so much of? Any rate—from Dolton on the Eastern Illinois or Chappell on the Alton, or Harvey on the Illinois Central, or Blue Island on the Rock Island,applies throughout Chicago territory to shipments from Whiting, as to shipments from any other point in the district. So far from the Eastern Illinois filing its rate from Dolton in order to deceive the shipper, it is the Commissioner of Corporations who either betrays his gross ignorance of transportation customs in Chicago territory or relies on the public ignorance of these customs to deceive the public too apt to accept unquestioningly every statement made by a Government official as necessarily true, although, as in the present instance, a careful examination shows these statements to be false. The final point made by President Moffett that other commodities of a character similar to oil were carried at much lower rates than 18 cents, the Commissioner of Corporations discusses only with the remark that “the ‘reasonableness' of this rate is not in question. The question it whether this rate constituted a discrimination at against other shippers of oil” and he also makes much of the failure of President Moffett to produce before the grand jury evidence of the alleged illegal acts of which the Standard Oil official said that other large shippers is the ter-

ritory had been guilty. Considering the fact that these shippers included the packers and elevator men of Chicago the action of the grand jury in calling upon President Moffett to fur* nish evidence of their wrong-doing may be interpreted as a demand for an elaboration of tha obvious; but the fact that a rate-book containing these freight rates for other shippers was offered in evidence during the trial and ruled out by Judge Landis, was kept out of sight President Moffett would not, of course, accept the invitation of the grand jury although he might have been pardoned if he had referred them to, vartons official investigations by the Interstate Commerce Commission and other departments of the Government We come back, therefore, to the conclusion of the whole matter, which is that the Standard Oil Company of Indiana was fined an amount equal to seven or eight times the value of its entire property, because its traffic department did not verify the statement of the Alton rata clerk, that the six-cent commodity rate on oil had been property filed with tha Interstate Commerce Commission. There is no evidence, and none was introduced at the trial, that any shipment of oil from Chicago territory Jiad been interfered with by the eighteen-cent rate nor that the failure of the Alton to file its six-cent rata had resulted in any discrimination against any independent shipper,—we must take this on tha word of the Commissioner of Corporations and of Judge Landis. Neither is it denied even by Mr. Smith that the “independent” shipper of oil whom he pictures as being driven out of business by this discrimination of the Alton, could hara shipped all the oil he desired to ship from Whiting via Dolton over the lines of the Chicago and Eastern Illinois to East St. Louis. In short*— President Moffett’s defence is still good, and wa predict will be so declared by the higher court The Standard Oil Company has been charged with all manner of crimes and misdemeanors. Beginning with the famous Rice of Marietta, passing down to that apostle of popular liberties, Henry Demarest Lloyd, with his Wealth Against the Commonwealth, descending by easy stages to Miss Tarbell’s offensive personalities, we finally reach the nether depths of unfair and baseless misrepresentation in tb« report of the Commissioner of Corporations. Tbe Standard has been charged with every form of commercial piracy and with most of the crimes on the corporation calendar. After long years of strenuous attack, under the leadership of the Presi- . dent of the United States, the corporation is at last dragged to the bar of justice to answer for its misdoings. The whole strength of the Government is directed against it, and at last, wa are told, the Standard Oil Company is to pay the penalty of its crimes, end it is finally convicted of having failed to verify the statement of a rate clerk and is forthwith fined a prodigious sum, measured by the car. Under the old criminal law, the theft of property worth more than a shilling was.punishable by death. Under the interpretation of the Interstate Commerce law by Theodore Roosevelt and Judge Kenesaw Landis, a technical error of a traffic official b made the excuse for the confiscation of •' vast aooMt of property.