Conservative * 11
ROCKEFKLLER ON TRUSTS.
Argument in Favor of Combinations
Reasons for SUCCCSH Disadvantages
to the Public.
Mr. Rockefeller , in his testimony
before the industrial commission , stated
that the leading object of the combina
tion of the oil interests was to unite
their skill and capital in order to carry
on a business of some magnitude and
importance in place of the small busi
ness that each separately had theretofore
carried on.
Reasons Tor Success.
"I ascribe the success of the Standard
to its consistent policy to make the vol
ume of its business large through the
merits and cheapness of its products. It
has spared no expense in finding , secur
ing and utilizing the best and cheapest
methods of manufacture. It has sought
for the best superintendents and work
men and paid the best wages. It has
not hesitated to sacrifice old machinery
and old plants for new and better ones.
It has placed its manufactories at the
points where they could supply markets
at the least 'expense. It has not only
sought markets for its principal
products , but for all possible by-products ,
sparing no expense in introducing them
to the public. It has not hesitated to
invest millions of dollars in methods of
cheapening the gathering and distri
bution of oils , by pipe lines , special cars ,
tank steamers and tank wagons. It has
erected tank stations at every important
railroad station to cheapen the storage
and delivery of its products. It has
spared no expense in forcing its products
into the markets of the world , among
people civilized and uncivilized.
Advantages of Combinations.
"Much that one man cannot do alone
two can do together , and once admit the
fact that cooperation , or what is the
same thing , combination , is necessary
on a small scale , the limit depends solely
upon the .necessities of business. Two
persons in partnership may be a suffi
ciently large combination for a small
business , but if the business grows , or
can be jQflde to grow , more persons and
more Capital must be taken in. The
business may grow so large that a
partnership ceases to be a proper instru
mentality for its purposes , and then a
corporation becomes a necessity.
"Our first combination was a partner
ship and afterward a corporation in
Ohio. That was sufficient for a local
refining business. But dependent solely
upon local business we would have failed
years ago. We were forced to extend
our markets and to seek for export trade.
This latter made the seaboard cities a
necessary place of business , and wevsoon
discovered that manufacturing for ex
port could be more economically carrie4
on at the seaboard , hence the location of
refineries there.
"We soon discovered as the business
grew that the primary method of trans
porting oil in barrels could not last.
The package often cost more than the
contents , and the forests of the country
were not sufficient to supply the neces
sary material for an extended length of
time. Hence we devoted attention to
other methods of transportation , adopted
the pipe line system , and found capital
for pipe line construction equal to the
necessities of the business.
"To operate pipe lines required fran
chises from the states in which they
were located , and consequently corpora
tions in those states , just as railroads
running through different states are
forced to operate under separate state
charters. To perfect the pipe line
system of transportation required in the
neighborhood of $50,000,000 of capital.
This could not be obtained or maintained
without industrial combination. The
entire oil business is dependent upon
this pipe line system. Without it every
well would shut down , every foreign
market would be closed to us.
"Every step taken was necessary in
the business if it was to be properly
developed , and only through such suc
cessive steps and by such an industrial
combination is America today enabled
to utilize the bounty which its land
pours forth and to furnish the world
with the best and cheapest light ever
known , receiving in return therefor
from foreign lands nearly $50,000,000
per year , most of which is distributed in
payment of American labor.
Dangers to the Public.
"The dangers are that the power con
ferred by combination may be abused ,
that combinations may be formed for
speculation , in stocks rather than for
conducting business , and that for this
purpose prices may ba temporarily raised
instead of being lowered. These abuses
are possible to a greater or less extent in
all combinations , large or small , but this
fact is no more of an argument against
combinations than the fact that steam
may fexplode is an argument against
steam. Steam is necessary and can be
made comparatively safe. Combination
is necessary and its abuses can be mini
mized , otherwise our legislators must
acknowledge their incapacity to deal
with the most important instrument of
industry. Hitherto most legislative at
tempts have been an effort not to con
trol but to destroy , hence their futility.
The Remedy.
"I would suggest as a remedy federal
legislation , under which corporations
may be created and regulated , if that be
possible , or in lieu thereof , state legis
lation as nearly uniform as possible ,
encouraging combinations of persons
and capital for the purpose of carrying
-on industries , b .c permitting state
supervision , not of a character to hamper
industries , but sufficient to prevent 1 *
frauds upon the public. " r S * j
WHAT OTHERS SAY.
Opinions of prominent people and the
press relative to the Puerto Rican bill :
Ex-President Harrison : "I regard the
bill as a most serious departure from
the right principles. "
Governor Mount ( rep. ) : "I am op
posed to the Puerto Rican bill in its
entirety , and I am uncompromisingly
opposed to the ship-subsidy bill. If
Puerto Rico is a part of the United
States , why should we frame a tariff
bill for that island any more than for
any other territory of the United States ?
If we must have a separate tariff bill for
Puerto Rico , why not for Hawaii , the
Philippines , and other of our territory ?
This would result in complications , and
is , I think , not in harmony with the
constitution of the United States. "
Ex-Attorney General Miller ( rep. ) :
"Puerto Rico is just as much a part of
the United States as is New Mexico or
the District of Columbia. There is no
more right , under the constitution , to
discriminate in the tariff against one
than against the other. Having taken
the people of Puerto Rico under our
flag under the pretense of philanthropic
interest in their welfare , the attempt to
discriminate against them is the worst
sort of politics and the worst sort of
morality. It will fully justify what
President Schurman has said that it
will make truthful the charge of im
perialism made against the republican
party by the democracy. "
Boston Transcript ( rep. ) : "As the
question underlying the bill is to be
carried up to the supreme court , there is
ground for hope that through the
agency of that tribunal this monstrous
piece of legislation , with all its contra
dictions , its protection against imaginary
competition , and its cant about relieving
humanity by a duty of only 15 per cent
will be consigned to the dust heap where
repose so many of the works of states
men who did not know their business. "
Chicago Inter-Ocean ( rep. ) : "Cuba
and Puerto Rico were not redeemed
from serfdom in the spirit of the cry ,
'Help the Trusts.1 Nor are they to bo
administered in such a spirit. "
Hartford Courant ( rep. ) : "What the
purblind and blundering leadership in
the house has done is grievously to dis
appoint the people of Puerto Rico , to
chill and alienate them , and to put a
new weapon in the hands of the repub
lican party's enemies. "
Pittsburg Dispatch ( rep. ) : "As a
compromise , this is the most absurd
concision that could have been reached.
The principle is wrong and no conces
sions in other directions should operate
to allow it to prevail. "
