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About Morning Oregonian. (Portland, Or.) 1861-1937 | View Entire Issue (May 5, 1906)
THE MORNING OREGONIAN, SATURDAY, MAY 5. 1906. TALKS OF MERGER Frank L Brown Discusses Its Benefits. MEANS MUCH TO PORTLAND Iicclares That It Shows the Confi dence of Eastern Capitalists in the Prosperity and Growth of the City. That the Investment of $30,000,000 of Eastern capital In the merging of the electric power, traction and lighting plants of Portland and the Lower Willam ette Valley is one of the most important steps that has ever been taken for Port land's advantage and growth is the belief of Frank L. Brown, head of the firm of Brown, Wilson & Co.. of San Francisco and New York, financial agents, who were largely instrumental in interesting the capitalists n the Portland properties. Mr. Brown took an active part in swinging the deal, and he regards the fact that Baatern capital has overcome Its prejudice against Western securities as the strongest proof or a splendid future for Portland. It was only a few years ago that the men who invested in the Portland General Electric und the Portland Railway would not con sider properties west of the Mississippi River that were offered to them. New Owners of Properties. The Interests merged by the big transac tion in New York will probably be man aged practically as they have been here tofore, with the addition of an Eastern executive committee. The new owners" of blie property arc E. W. Clark & Co., -of Philadelphia; J. & W. Scligman, of New York: D. O. Mills, of New York and 8an Francisco, and Charles M. Pratt & Co.. of New York. The four interests hold about cunal shares of the allied properties. The fact that such strong and conser vative financial interests have been will ing to Invest over J25.OO0.O0O in street rail ways and electric power plants in Port land will give great confidence to investors throughout the United States to place their money In this city, said Mr. Brown, "The men who have financed this consoli dation are men of the highest character and standing in Eastern llnanefal circles. 13. W. Clnrk & Co. is the oldest banking house in Philadelphia, and the founder of the firm was the grandfather of the pres ent members of the firm. Will Assist Portland. The interests which have taken over ' Portland's street railways already suc cessfully operate over 14 traction prop erties In as many cities. Among them ore the street railway systems of St. Jo- soph, Mo.: Rochester, N. Y.; Scranton. Pa.: Bangor, Me.; lirana Kapias, mien. Oniuha. Neb., and others. The roads are all perfectly operated and give splendid service. The equipment and facilities Intended for Portland will undoubtedly assist largely in the rapid growth and development of the city. Tho v.rrtn.ri in enmhlned are In a do- ' sttlon to give better service and a more cconomffal administration, wnue witn such Interests back of the traction sys tem thev ate amply able to provide in croHsed facilities as the city grows and in fact thev will stimulate tne growtn i.f Portland because of the conveniences n fTorded." Mr. Brown is well known to Portland people, he having formerly been secre tary of the Portland Railway Company, ns well as a largo stockholder, lie Is also interested In the bonds of the Ore Bon Water Power Company. For the past few years he has been away from Portland, but his confidence in the city's future- has been unshaken. That he suc ceeded in Interesting capital 3000 miles away in Portland was largely due to his own Implicit confidence in the commun ity. REPLY OF JSTANDARD OIL (ContinuM From Pate 1.) fair competitive methods, but beyond this mere assertion does not go into a history or explanation of these alleged unfair methods af all. "Ho says the 'development of the pipe line spstem by the Standard Oil Company wbb the result of special agreement with the railroad companies.' What he can mean is past our comprehension. As a matter of fact, the development of the pipeline system by the Standard was in the face of violent hostilities on the part of the railroads, which naturally were opposed to the Introduction of such means of transportation. At enormous cost and in the face of steadfast railway opposition, at an early date the Standard Oil Company adopted the pipeline method for handling crude petroleum. The first line was extended from the Western Pennsylvania oil field to Bergen Point, on the Atlantic coast. This line diverted an enormous amount of freight from the railway companies, which fact they did not view with complacency. . Denies Railroad Favoritism. "Passing from this point. Commissioner Garfield takes up the question of favor itism, which he alleges has been shown by various railroad corporations to the Standard Oil Company. The first spe cific case of alleged discrimination to which he directs attention Is in the New Kngland territory- It Is charged that we enjoy a monopoly In certain parts of that section, because some of the railroads there refused to pro-rate. The man who could be deceived by such a statement must be pretty dense. First, if the New Kngland roads ought to pro-rate, but re fuse to do so, it must occur to someone somewhere that perhaps the New England roads and not the Standard Oil Company are blameable. Second, a very casual in quiry would show that the New England roads are eimply doing what they are forced to do by natural conditions and that Mr. Garfield's attack, to 'be effective, should be directed at Long Island Sound as a means of freight communication. Advantage of Pipe Lines. "Obviously we have an advantage by the use of our own pipelines from the Western oil fields to the coast and by use of water transportation to New Eng land over any one who uses all-rail trans portation from Western points. But this advantage Is one which if is not possible to correct by any rate legislation, unless It is proposed to bankrupt the railroads In order to meet water competition. Yet we are not alone In this method of trans portation. Some of our competitors do the same thing and deliver oil at the points in New England that we do by the same process. "Mr. Garfield claims that the refusal to pro-rate on the part of the New Eng land railroads has given the Standard Oil Company practical control of New England ter ritory and enabled it to main tain exorbitant prices for kerosene. Yet, while it is admitted that the New Haven road has recently begun to pro-rate, this alleged condition of control has not changed in any way, nor have the prices of kerosene been affected. The New England roads believe they can make more noney by a refusal to pro-rate and, if In so doing they are violating the pro prieties, clearly they, and not the Stand ard Oil Company, should be made the ob ject of atttack. ' Innocent of Rebating. "The Commissioner is pecularly unfor- ,,naA tn ouhtot nf 'rehfltps.' The public may well take his word that he made an exhaustive examination, ana yei withal he says that 'with one or two exceptions, the Investigations of the bu reau have as yet discovered no rebates In the technical sense in interstate busi ness.' These exceptions were on business wtthtn tha fftnta of California. ' over which, of course, neither Mr. Gar field s bureau nor tne interstate bum meree Commission have any Jurisdiction. But in those cases the alleged rebates were fully explained to Mr. Garfield and Involved no turpitude whatever. It was a new business on the Pacific Coast, and before it had been systematized there were overcharges, not to the Standard Oil Company alone, but to every one engaged In the enterprise, which overcharges were subsequently adjusted. "He says the Standard Oil Company has habitually received from the railroads and is now receiving 'secret' rebates and other unjust and illegal discriminations. T i l,Bnilv rati, nr mnnlv for him to add the sentence, 'of course, there may be other secret rates wnicn tn.e ouieau not discovered.' Not Garfield's Business. - "In dealing with the discriminations which are alleged to be violations of the interstate commerce law the plain an swer is that, if Mr. Garfield's statement is correct, it was the duty of the Inter state Commerce Commission to have taken action and brought not alone the Standard Oil Company, but the railroad companies involved, to book, and this they have never done. Violations of the law in this respect do not fall within the jurisdiction of the Bureau of Corpora tions and any statement on the part of Mr. Garfield respecting this subject is gratuitous and valueless. "Again, he has no control whatever over state rates, which by the law are put un der the Jurisdiction of the state author ities, and over which neither the Bureau of Commerce nor the Interstate Commerce Commission have any control. No Rebates or Secret Rates. 'But all of this aside, there have been no secret rates or unlawful discrimina tions In the interest of the Standard Oil Company, Take the case of the rate from Whiting to East St. Louis, upon which he laj's so much stress. While discussing it at great length as an Important 'find,' he qualifies and explains It all by the state ment that Whiting was a suburb of Chi cago, within the -switching district' of that city.' and all freight rates from Whit ing had for many years been the same as those from Chicago. This practice had obtained for 20 years, and had applied to all kinds of merchandise, and to say that a rate that had been used thus freely and openly for that period by every one was a 'secret' rate is manifestly unfair. Moreover, our oil refinery Is the only one at Whiting or within 100 miles of it. so that the so-called discrimination clearly could not have worked any harm to any competitor shipping oil from Whiting or its vicinity. Argument" on Pipe Lines. "Mr. Garfield's claim that by the use of low interstate rates the Standard Oil Com pany gained an unfair advantage Is equal ly unfortunate. At great expense we con structed pipe-lines from the Pennsylvania and Ohio oil fields and from the Kansas and Indian Territory fields to Whiting. If our competitors did not do the same thing shall it be said that any one is unfair who does not give .them the advantage of this enterprise of ours? It is quite true that, having our oil at Whiting and desiring to transport It to points in the in terior of Illinois, we used the state rates. To say that a man in Ohio who had never expended a dollar for a pipe-line to Whiting should be able to transport, his oil to an inland town In Illinois over an all-rail line at the same rate that we en Joyed by reason of our pipe-lines must ap pear absurd to any one. Are we to have no advantage because we constructed these pipe-lines? Is the amount invested and the interest on that investment to count for nothing? Take two men going to Boston; one uses an $8000 automobile to go to New London, and there takes the train. Is he to have no advantage on the rates from the man who leaves New York and travels all the way by rail? The case of a shipment from New York to Vermont, of which mention is made, is susceptible of like explanation. Answers in Own Words. "Respecting the use of private cars, of which Mr. Garfield makes much, it is only necessary to make answer In his own words. He says that, owinp to the rela tively slow movement of tank cars in the petroleum oil trade, the mileage allowance of rental does not appear to result in an excessive profit to the private tank-car owner. "It is asserted over and over again in the report that the Standard Oil Company preflted by 'secret' and 'unlawful' freight rates. Yet in the same connection It Is admitted in the report that all of these rates are covered by tariffs filed with the Interstate Commerce Commission, precise ly as the law provides, and therefore can not be either 'secret' or 'unlawful.' "The Commissioner uses the curious phrase at one point in his report that 'al though a tariff or rate has been filed with the (Interstate) Commission in compli ance with the terms of the law, none but the favored shipper may know of Its ex istence." As the interstate law explicitly provides that every tariff of rates must be posted at every freight station and be open to the inspection of the shipper, it is hard to conceive of the pommlssioncr's temerity in making such an. utterance. Says Methods Were Held Lawful. "The President's message complains of 'the way the law is evaded by treating as state commerce what is, in reality, mere ly a part of interstate commerce, . . . although the forms of law may be com piled with'; yet this very method of mak ing a through rate by a combination of two separate state rates has been held by the Interstate Commerce Commission to be lawful and proper. "The statement that the 'Standard Oil Company has, largely by unfair and un lawful methods, crushed out home com petition," is fully answered by the fact that home competition has always existed. Is steadily growing, and that there are now at least 125 competitive refineries in the United States. "As to the claim that changes in rates have been made since the Commissioner's efficient work began, all the Standard Oil Company has to say is that any such changes have been made without its sug gestion or efforts. Calls Garfield Man With Muckrake. "The grief which the President ex presses in his message over the inability of the railroads to combine and protect themselves from the shippers will proba bly arouse amusement. The President says respecting this in vestigation that the facts are not in dis pute, only the inferences are disputed. The Standard Oil Company furnished the facta, and a man with a muckrake dug out such as under his manipulation he felt would prove damaging. "In Honorable Business." "The Standard Oil Company has been Investigated over and over again at the Instigation of its rivals, and it always wel comes such investigation, when conducted in good faith and fairly. We are engaged in a large and honorable business. We are conducting It honorably, and. we sin cerely believe. In conformity with the llaw." 15 OF STANDARD (Continued From Pace l. continued; so secret, so ingeniously ap plied to new conditions of trade and so large In amount as to make it certain that they were due to concerted action by the Standard Oil and the railroads." He says further that the Standard Oil Company is receiving unjust discrimina tions in the matter of open rates, the published rates from the leading Standard Oil shipping points being relatively much more than rates from the shipping points of its competitors. Railroads Reform When Found Out, Mr. Garfield then refers to seven In stances of important discriminations in favor of the Standard OH Company in various parts of the country, and says that most o'f the secret rates and some of the open discriminations discovered by the bureau were abolished by the rail roads shortly after such discovery. After calling attention to the good which already has resulted from the investiga tion, Mr. Garfield says changes effected have put the independents upon a fairer footing and make competition possible in territories heretofore inaccessible. The re port concludes as follows: "Nevertheless the widespread discrimi nations in open rates still in force leave the independents at serious disadvantage. The Investigation only incidentally touched state shipments from distributing centers, particularly in less than carloads. "Tha few Instances examined suggest probability of discriminations on such shipments which, taken in connection with through traffic, may result in discrimina tions on interstate business. "I have cited these particular Instances to show the various methods by which discriminations are obtained and to call particular attention to methods which, if legal, are mere -devices to obtain exactly the same result as would be obtained by rebates paid on interstate business. "Any freight discrimination, whether it be state or Interstate, tends to give con trol of .markets to the .preferred shipper, and makes monopoly possible. Law Shields Lawbreakers. "If existing law merely prohibits a spe cial rate device for obtaining discrimina tion, and permits the same result to bo accomplished in a different way, then the legislation is to that effect a sham. "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 rate has been filed with the Commission in compliance with the terms of the law, none but the favored shipper may know of its exist ence. "Tariffs may be made and rates may be combined in such manner as to make it practically impossible for the ordinary shipper to find them. . a a lnnor as the state rates are not re quired to be made public, and shippers use such rates in commnation witn inter state rates, all manner of devices to evade the purpose of the law are possible. 'A.11 state rates used in connection with interstate shipments should be filed with ihs interstate Commerce Commission and a radical change should be made in the direction of simplifying tariffs ana in methods of posting and filing them." METHODS OF DISCRIMINATION Garfield Shows Many Devices of Railroads to Favor Standard. WASHINGTON, May 4. The following is a summary of the report made to President Roosevelt by Commissioner Garfield upon his investigation of the Standard Oil Company and its relations with the railroad systems of the country in rebates and discriminations. After describing when, how and where his investigations were made, Mr. Gar field says: "The general result of the investigation has been to disclose the existence of nu merous and flagrant discriminations by the railroads in behalf of the Standard Oil Company, and Its affiliated corporations. "With comparatively few exceptions. mainly of other large concerns In Califor nia, the Standard Oil has been the sole beneficiary of such discriminations. In almost every section of the country that company has been found to enjoy some unfair advantages over its competitors. and some of these discriminations affect enormous areas. Forms of Discrimination. Discriminations in the transportation of oil embrace a variety of forms, the more Important of which may be classed under the following heads: "Secret and semi-secret rates. "Discriminations in the open arrange ment of rates. "Discriminations in classification and rules of shipment. ' "Discriminations in treatment of pri vate tank cars. "Many of the secret rates discovered by the Bureau of Corporations nave ap plied onlv on shipments of oil wholly within single States. The Standard Oil Company, which controls refineries in 20 ' States, is obviously in a position to make extensive use of such intra-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 sev eral important cases have used peculiar methods of billing and accounting. "In some cases oil has been 'blind hilled,' that is to say, the waybills have been made out showing the kind of prod uct transported, and its weight, but with out showing as is the usual custom, any freight rate or the amount of the freight charges. "In such Instances the collection of freight is ordinarily made, not by the local agent of the railroad, but through the central office, by the presentation to the Standard Oil of a summary bill show ing the amount of freight charges at the secret rate. "Local agents often do not know what the actual rates used on blind bills are. Worst Cases in California. "An especially large number of secret rates and rebates in the transportation of oil was found In California. "In all, more than 80 distinct violations of tariffs on oil were discovered in this State. "The total' concessions to shippers and consignees under these rates as compared with the published tariffs may be safely estimated at about $200,000 per year, of which amount about 1100,000 went to the Standard." Many Secrets Not Discovered. The Commissioner, under the head of possibility of further discriminations, said: "It seems wholly possible that there may exist a multitude of other discrimi nations, effected by secret rates or even by rebates, of great aggregate impor tance Involved in the local distribution of oil. especially in less than carload lots. "The Standard Oil Company ships enor mous quantities of oil in less than car loads, and although the distances In volved in such capes are usually com paratively short, the amount of freight charges under the high rates which pre vail on such business under regular tariffs would be very great, and the possibilities of departure from these charges extensive. 'It is perfectly clear that the distinc tion between the rebate and the secret rate is merely one of accounting." Open Rates Favor Standard. Regarding discrimination in the open arrangement of rates, Mr. Garfield declares: -" "Different methods are used in different places and under different conditions, but the net result is that from Maine to Cali fornia the general arrangement of open rates on petroleum oil is such as to give the Standard an unreasonable advantage over Its competitors. "The conclusion is unavoidable that the Standard Oil Company has had an im portant voice in the construction of such rates, and this conclusion is supported by specific evidence developed by the inves tigation." "In many cases," he says, "there are unreasonable differences between rates on oil in car loads and less than car loads." Higher Mileage on. Tank Cars. He charges that discrimination is prac ticed In some instances in the treatment of private tank cars. On -this point he says: "In most sections of the country all re fineries operating tank cars of their own receive equal treatment In respect to the mileage allowances. "On the Pacific Coast, however, most independent refineries receive S-10 cents per mile, and this on loaded movements only. The exception is made where- the haul exceeds 800 miles, in which ease three-fourths cents per mile Is allowed on the excess mileage over that distance, but again on the loaded movement only. "The Union Tank Line and the Waters Pierce Company also a Standard concern are the only oil companies operating tank cars on the lines of the Southern Pacific Company and the Santa Fe on the Pacific Coast, which receive three fourths cents per mile on both loaded and empty cars. "Similar discriminations are practiced by some of the transcontinental systems traversing the Northwestern States. "The advantages of the Standard Oil Company would alone give it a highly favorable position in the oil industry. Natural Policy Reversed. "To a certain extent the policy of rail road rates would be, to neutralize these advantages by giving favorable rates to the smaller refiner. The Standard OH Company, through its pipe lines and its fleets of oil-carrying vessels, is an active and powerful competitor of railroads. "Except in the Texas and California fields, it has already taken the transpor tation of crude oil almost wholly away from railroads. "The general policy of the railroads with regard to other freight traffic has been to equalize conditions of competition in competitive markets by the use of commodity rates relatively more favor able to diBtant producing points than to the nearer producing points. But It ap pears that In the case" of the oil industry the policy has been generally reversed, and natural disadvantages of the inde pendents have been enormously increased." ANOTHER INQUIRY TO BEGIN Interstate Commission AVill Probe Standard Oil Crimes. CHICAGO, May 4. One of the most thorough inquiries into the relationship between the railroads and the Standard Oil Company that has ever been conduct ed by the Government will commence In this city on May 10, before the Interstate Commerce Commission. Special Counsel J. T. Marchand. of the Commission, arrived here today to make preliminary arrangements for the inquiry. Mr. Marchand authorized the . Issuance of four subpenas for local railroad of ficials for their attendance before the commission. The names of those summoned are kept secret. Hundreds of subpenaed have been Issued, it is said, for independent oil refiners in Ohio, Kansas and Pennsyl vania. Railroad officials from those states will also be summoned before the Commission. NONE OF GARFIELD'S BUSINESS New York Central's Attitude on State Rates No Rebates Given. NEW YORK. May 4. Replying to the statement by Commissioner Garfield that the New York Central Railroad refused to disclose its rates within New York State. President Newman of that company said today : We refused to furnish our state rate to the Bureau of Corporations of the Depart ment of Commerce and Labor because the department has jurisdiction only over inter state commerce. We cheerfully save the department access to our interstate com merce books, just as we would give the proper state authorities information as jo our state rate, if It was called for. As to the New York Central being the only company which refused to supply Com- miesloner Garfield with the state rate, at tention should be called to the fact that the New York Central is the only large state railroad in the country. - I do not think that the Standard Oil Com pany received rebates from any railroad. Naturally, it Is always on the lookout for the most favorable rates and by reason of Its compact organization Is instantly ready to take advantage of changes In the tariff. Any other shipper could do the same thing, only the Standard Oil Company, by being alert, has been enabled to get the best possible rates by unceasing scrutiny of the tariffs. If It had failed to take advantage of any rate changes favorable to itself the standard Oil Company would have been foolish. No Effect on Standard Stock. NEW YORK, May 4. The President's message regarding freight rates in connection with the country's oil in dustry, which was transmitted to Congress today, had no noticeable ef fect on the price of oil stock in the stock market: Soon after the publica tion of the message. Standard was sold at 605, an advance of 7 points over last night's close. CUTS HIS 0WN THROAT Captain Webster, of Vancouver Reg iment, Attempts Suicide. SAN FRANCISCO, May 4. Captain F. B. Webster, of the Twentieth Infantry, attempted to end his life here today by cutting his throat. He entered a room in the appraisers' building and, taking a bayonet from a rifle, succeeded in half severing his windpipe. The attention of the guards surrounding the building was attracted by the man's groans, and he was placed in an ambulance and taken to the Presidio General Hospital. The physicians in attendance say the officer may recover, but that he has not as yet regained consciousness. Captain Webster, who originally came from Missouri, is 39 years old and has seen 20 years of service. The physicians say his attempt at suicide was the result of an unbalanced mind. Captain Web ster's command - was rushed to this city from Vancouver Barracks, Wash., imme diately after the catastrophe overtook this city. He had been on duty In the fire-swept district. v IF YOU WANT TO KNOW WHAT SMARTLY-DRESSED MEN WILL WEAR THIS SEASON ASK BEN SELLING Serious Fire at Knoxrille. KNOXVILLE, Tenn.. Mar 6. Fire broke out at midnight in the Commerce building on Gay street, just north of Vine avenue, and caused loss estimated at $350,000. Flames were firstdiscovered in the basement of the Llttleflcld Steere Company store and soon gutted lhat building and the wholesale shoe store of the McMillan Hazen Company adjoining WA s!iil y"Ji lit; i - f i i -f o .. m ; , lu i " "f 1 f-stv S V I. ' 1 H' $ ' ' s ill U J I? I - ' f $l C I III JiWlwJr f fS'fiff i "S 3 -'Coerinht MM . y " C. BOTH WHETHER FOR BUSINESS OR FOR OUTING Our stock at all times includes the choicest fabrics from foreign and domestic looms designed by Artist-Tailors built by New York's . Foremost Wholesale Manufacturers specially to our order and carrying our fullest guarantee -everything equal to the custom tailor except price ours is about one-half his LEADING CLOTHIER