CORNELL UNIVERSITY LIBRARY TmM fT».^i t^"?-' hfj! The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924092546401 In the Circuit Court of the United States for the Eastern Division of the Eastern Judicial District of Mis United States of America, petitioner, V. Standard Oil Company op New Jersey et al., defendants. BRIEF OF FACTS A]!a> ARGUMENT FOR PETITIONER. Volume 2. UNFAIR METHODS OF COMPETITION : LOCAL PRICE CUTTING. PATMBNT OF BEBATES ON OIL PUB- CHASES, OPEEATION OF BOGUS INDEPENDENT COMPANIES. BEPOBTS or COMPETITOES' SHIPMENTS. X 00E"TE1*^TS. BRIEF ON UNFAIR COMPETITION, Volume 2. LOCAL PRICE CUTTING: Page. Genkrax Statistics Compaking Local Prices 4r-21 Comparison of average profits per gallon and percentage of competitive sales, major marketing divisions, years 1899 and 1906 ' 6 Comparison, prices of Water White illuminating oil, margins of profit, and percentage of competition, at selected towns throughout the United States, on October 15, 1904 8 Comparison of margins and prices, based on prices of Water White oil on October 15, 1904, town having lowest margin and town having highest margin, in each marketing divi- sion of the Standard 14 Comparison of margins at main stations and substations, for Water White oil, on October 15, 1904 16 Diagrams comparing movement of prices and margins, January, 1902, to December, 1906 face 18 (a) Fall River, Worcester, Boston, and Springfield, Mass. (6) New York, Binghamton, and Albany, N. Y. (c) Savannah, Ga., Richmond, Va., Baltimore, Md., and Washington, D. C. (d) Columbus, Cleveland, and Cincinnati, Ohio. (e) South Bend, Evansville, and Indianapolis, Ind. (/) Rockford, Davenport, Peoria, and Chicago, 111. (g) Fargo, N. Dak., Mankato, Duluth, and Minne- apolis, Minn. {h) Birmingham, Ala., Nashville and Memphis, Tenn., and New Orleans, La. (i) Santa Pe, N. Mex., Butte, Mont, Las Cruces, N. Mex., and Denver, Colo. {j) Seattle, Wash., Portland, Oreg., San Franpisco and Los Angeles, Cal. Individual Instances op local Peice Cutting 21-114 Albany, N. Y , 24 Atlanta, Ga - 66,68 Atlanta territory, particularly South Carolina points 71 Augusta, Ga 60 (III) IV LOCAL PRICE CUTTING— Continued. P^se- Individual Instances of local Pbicb Cutting — Continued. Baltimore territory generally " Binghamton, N. Y ^ Birmingham, Ala ^^ Boston, Mass *^ Chardon, Ohio l'^2 Charlotte, N. C ^8 Cheshire, Mass 3® Cleveland, Ohio 100 Collins ville, Mass. , and Tarifiville, Conn 35 Danbury, Mass ^^ Denmark, S.C .' 66 Dexter, Mo 109 Greenville and Spartanburg, S. C 58 Hisgen Brothers, axle-grease business 21 Hyannis, Mass - 44 Jefferson City, Mo 107 Joplin (Mo.) territory -- 109 Kansas City, Kans 110 Lincoln, Nebr 103 Long Meadow, Mass 43 New Windsor, Md 55 Pierce City, Mo 108 Tittsfield, Mass 37 Portland, Mich 104 St. Joseph, Mo 107 St. Paul (Minn.) territory 105 Saranac, Mich 104 Sedalia, Mo 107 Spartanburg and Greenville, S. C 58 Springfield, Mass 32 Tariffville, Conn. , and Collinsville, Mass 35 Thompsonville, Mass 33 Troy,N. Y 49 Washington, Ga 67 Waters-Pierce territory generally 106 Wichita (Kans.) territory 110 Winchester, Va 57 Windsor, Mass 34 Windsor Hill, Mass 35 Windsor Locks, Conn 33 PAYMENT OF REBATES ON OIL PURCHASES 115-149 Aledo, 111 131 Birmingham (Ala.) territory ; 141 Canal Fulton, Ohio 122 Cleveland territory 115 Columbiana, Ohio 119 Crystal Springs, Ohio 12i PAYMENT OF REBATES ON OIL PURCHASES— Continued. Page. Cuyahoga Falls, Ohio 122 Dalton, Ohio 122 Damascus, Ohio 122 Decatur (111.) territory , 130 Farmington, 111 132 Gallatin, Tenn 138 Garfield, Ohio 122 Greenville, Ohio 122 Kansas City, Mo 143 Leetonia, Ohio 119 Leighton, Ala 141 Lorain, Ohio 122 Malvern, Ohio 119 Manitoa, 111 137 Massillon, Ohio 119 Minerva, Ohio 118 Navarre, Ohio 121 North Lawrence, Ohio 122 Paris, 111 130 PortHuron, Mich 137 Springfield, Mo 142 Urhana, 111 130 Vandalia, 111 ." 130 Youngstown, Ohio 117 DISCREDITING COMPETITORS' OILS 147-149 Decatur (111.) territory 147 Birmingham, Ala 148 BOGUS INDEPENDENT CONCERNS 150-357 Alabama Oil Company, Birmingham, Ala 259 Argand Refining Company, Richmond, Va. 189 Banner Oil Company, Springfield, 111 290 Blaustein, companies managed by, introduction 175 Brooks Oil Company, Indianapolis Ind 310 Capital City Oil Company, Indianapolis, Ind 312 Cassetty Oil Company, Nashville, Tenn 264 Cleveland Oil Delivery, Cleveland, Ohio 330 CoUings's general reasons for establishing bogus concerns. . 316 Consumers Oil Company, Macon, Ga 296 Cordner (peddler ) , Springfield, Mass 167 Davidson, William G. , Baltimore, Md 214 Denlinger Brothers, Pittsburg, Pa 153 Dixie Oil Works, throughout the South 233 Domestic Oil Company, Indianapolis, Ind 312 Eagle Oil Works, Baltimore, Md 208 Eastern Oil and Gasoline Supply, Boston 153 Electric Light Oil Delivery, Philadelphia, Pa 153 Eureka Oil Company, Virginia, Maryland, and North Caro- lina 176 VI BOGUS INDEPENDENT CONCERNS— Continued. Pa^e- Excelsior Oil Company, Kansas 3^® "Fake" wagons, Philadelphia ^^ Farrell, Charles (peddler), Oneonta, N. Y 154 Farrell, Charles (peddler), Troy, N. Y 162 Funke Brothers, Brooklyn, N. Y -- l^^ Hamilton Oil Company, Terre Haute, Ind 270, 274 Haynes peddling wagons, Columbus, Ohio 266 Home Oil and Gasoline Delivery, northern Ohio towns 330 Home Safety Oil Company, Terre Haute, Ind 269 Home Safety Oil Delivery, Norfolk, Va 219 Home Safety Oil Delivery, Baltimore, Md 228 Home Safety Oil Delivery, Washington, D. C 230 Household Supply Company, Holyoke and Springfield, Mass 167 Hults and Day (peddlers), Terre Haute, Ind 281 International Oil Works, St. Louis, Mo 355 Jenny Manufacturing Company, Boston, Mass 166 John, D. M. (peddler), Joplin, Mo 355 Kercher, Charles, concerns operated by, introduction 273 Kercher Brothers, Springfield, 111 290 Kercher's peddler at Pekin, 111 305 Kercher's peddler at Vincennes, Ind 298 Kercher, Charles, at Mobile, Ala 303 Liberty Oil Company, Boston, Mass 153 Lines, C. M., 1-gallon can business in northern Ohio towns. 325 Mehlen's Family Oil Company, New York, N. Y 153 Mill & Stanley Works, Long Island City, N. Y 153 Moore (peddler). New London, Ohio 346 Morgan (peddler), Oberlin, Ohio 338 New American Oil Company, Mansfield and Canton, Ohio. 339 New Orleans, 1-gallon can concern at 153 Oakdale Oil Works, Philadelphia, Pa 153 One-gallon square can, explanation of 153 Paragon Oil Company, Troy, N. Y.. 166 Paragon Oil Company, Maryland and Delaware towns 171 Paragon Oil Company, Decatur, 111 287 Patent 1-gallon square can, explanation of 153 People's Oil Company, Atlanta, Ga 261 Protection Oil Company, Cincinnati, Ohio 153 Red Line Wagons, Cleveland, Ohio 329 Kepublic Oil Company 349 South Chicago, 1-gallon can concern at 153 Southern Oil Company, Virginia points 192 Special wagons, called "fake" wagons, Philadelphia, Pa.. 357 Springfield Oil Delivery, Springfield, 111 290 Square can, patent 1-gallon, explanation of 153 Sunlight Oil & Gasoline Delivery, Cincinnati, Ohio 153 Sutton Brothers, Kansas City, Mo 35g VII BOGUS INDEPENDENT C0NCEEN8— Continued. Page. Toledo Ciil Works, Toledo, Ohio 343 Troy Oil Works, Troy, N. Y 164 Vincennes Oil Company, Vincennes, Ind 298 Wagner Company, C. P 153 White's Golden Lubricator Company, Cincinnati, Ohio 153 REPORTS OF COMPETITORS' SHIPMENTS 358-428 General Statement 359 Individual Instances — Albany, N. Y 371 Alliance, Ohio 383 Atlanta, Ga 377 Baltimore territory 363 Birmingham, Ala 377 Cleveland territory 381 Cleveland territory (oil inspectors) 422 Columbus, Ind 389 Council Bluffs, Iowa , . 406 Decatur, 111 403 Decatur (111. ) territory, payments for information 395 Decatur (111. ) territory ( oil inspectors ) 425 East St. Louis, 111 1 402 Huron, Ohio 382 Indianapolis territory 423 Jacksonville, 111 405 Kansas City, Mo 408 Lansing, Mich 388 Lincoln, Nebr 407 Logansport, Ind 388 Massillon, Ohio 385 Norfolk ( Va. ) and territory 375 Omaha (Nebr.) territory (oil inspectors) 427 Peoria (111.) territory 391 Springfield, 111 403 Springfield, Mo... 413 Topeka, Kans 413 Troy, N. Y 373 Waters-Pierce Oil Company territory generally 407 Wichita, Kaiis 413 DEFENDANTS' TESTIMONY ON PRICE CUTTING BY INDE- PENDENT COMPANIES, AND ON EXHIBIT 635 429-528 General Statement 429 Phice-Making Methods op the Independent Companies 431 Specific Cases op Alleged Pkice-Cutting by Independent Concerns 432-528 Alexandria, Va •- 459 Anacostia, D. ". 460 Arlington, Va 458 Ballston,Va 459 VIII DEFENDANTS' TESTIMQNY ON PRICE CUTTING BY INDE- Page. PENDEl^T COMPANIES, ETC.— Continued. Specific Cases op Alleged Pkicb-Cotting by Independent CoNCEBNS — Continued. Baltimore, Md 432,465 Bassetts, Va 489 , Bennettsville, S. C • ^^l Bethesda, Md , 458 Bethune, S. C 508 Blackstone, Va 484 Broadway, Va 488 Brookneal, Va 490 Cambridge, Md 475 Camden, S.C 509 Castlewood, Va 492 Catskill Station, N. Y 445 Charleston, W. Via 494 Charlotte, N. C 499 Cherrydale, Va 459 Chesapeake and Western R. R. , Baltimore 469 . Chester, S. C 507 Christiansburg, Va 490 Clarendon, Va 459 Colfax, Va 491 Colora, Md 475 Copake Iron Works, Columbia County, N. Y 446 Craigsville, Va 486 Denver, Colo 517 Duluth, Minn 513 Easthampton, Mass 432 Easton, Md 474 Elkin, N. C 503 Elkins, W. Va 496 Falls Church, Va 459,460 Falls Hill, Va 459 Federalsburg, Md 47O Forest Glen, Md 458 FortMill, S. C ! 508 Gaffney, S.> C 507 Galena, Md 474 Germantown, Md 478 Goldsboro, N. 432 Harrisonburg, Va 487 Hartford, Conn 436 Henderson, N. C 501 Hickory, N. 498 Hiltons, Va 492 HotSprings, N. C 5O5 IX DEFENDANTS' TESTIMONY ON PRICE CUTTING BY INDE- Page. PENDENT COMPANIES, ETC.— Continued. Specific Cases of Alleged PBica-CnTTiNO by Independent Concerns — Continued. Jakin, Ga 513 Jefferson, S. C 508 Kensington, Md : 477 Lake City, S. C 510 Lenoir, N. C 499 Lebanon,Va. 491 Lexington, Va , 486 Lincolnton, N. C 496 Linden, Md 458 Los Angeles, Cal 519 Lowndesville, S. C 511 Lubricating oils, price-cutting on 527 Luray, Va 489 Lynchburg, Va 493 Madison, N. C 502 Marion, S. C 510 Middleburg, N. C. , , 501 Millboro, Va 486 Minneapolis, Minn <. 513 Monroe, N. C 499 Mooresville, N. C 497 MountSavage, Md 478 Murphy, N. C 505 National Oil Co. of Washington, D. C 464 Newburgh, N. Y 439 Newton, N. G 499 New York, N. Y 432 Norfolk (Va.) district 481 NorthEast, Md 475 North Wilkesboro, N. C 504 Perryville, Md 473 Philadelphia, Pa 447 Pikesville, Md 477 Pinetta, Va.^ 480 Preacher, Va 492 Bandleman, N. C 502 Easpburg, Md 476 Eavena, N. Y 443 Eeidsville, N. C 504 Eed "C" Oil Company's relative prices for red and white oils 523 Eed " C" Oil Company's representations that its red oil is a ' "natural product" 525 Eichmond, Va 484 DEFENDANTS' TESTIMONY ON PRICE CUTTING BY INDE- Page. PENDENT COMPANIES, ETC.— Continued. Specific Cases op Alleged Peicb-Cutting by Independent Concerns — Continued. Rising Sun, Md ^'^^ Rockville, Md ^^'^ St. Michaels, Md ^"^^ Seaford, Del ^^^ Secretary, Md ^^^ Silver Spring, Md *^1 SUgo, Md ^^ Solley, Md 476 Somerset, Va '^^^ Staunton, Va 485 Stissing, N. Y •-- 444 Sylvatua, Va 491 Thomasville, Ga 513 Thomasville, N. C - 503 Triangle, Md 458 Washington, D. C 452 Washington suburban towns 456-464 Alexandria, Va 459 Anacostia,D. C 460 Arlington, Va 458 Ballston, Va 459 Bethesda, Md 458 Cherrydale, Va 459 Clarendon, Va 459 Falls Church, Va 459,460 FallsHill, Va 459 ForestGlen, Md 458 Linden, Md 458 Rockville, Md 457 Silver Spring, Md 461 Sligo, Md 464 Triangle, Md 458 Westminster, S. C 512 Wheaton, Md 479 Whitman, Ga 513 Whitmire, S. C 507 Wilson, S.C 432 Worcester, Mass 439 Yorkville, S. C 506 ALLEGED OVER-GAUGING OF BARRELS BY INDEPEND- ENT COMPANIES: Birmingham, Ala 535 Charlotte, N. C 530,533 Coles Ferry, Va 529 XI ALLEGED OVER-GAUGING OF BARRELS BY INDEPEND- Page. ENT COMPANIES— Continued. Deals Island, Md 530,533 Grifton, Md 529,533 Hastings-on-the-Hudson, N. Y 537 Keysville, Va 529 Pittsfield, Mass 538 Rockville, Md 529,532 Spray, N. C 529 Yorkville, S. C 529,531 UNFAIR METHODS OF COMPETITION. It is alleged in the petition (pp. 173-184) that as another means and in furtherance of the conspiracy to control, re- strain, and monopolize the commerce in petroleum and its products among the several States and Territories of the United States, the defendants have from time to time pur- sued unfair methods of competition against their competi- tors in various places throughout the several States and Territories where independent shippers, refiners, and sellers of petroleum and its products were or had been competing with the defendants ; that by such unfair methods of compe- tition they have injured and destroyed the business of said independent shippers, refiners, and sellers of petroleum and its products, and have restrained and monopolized the com- merce therein. This general allegation is denied (1, Ans. 56). LOCAL PEICE CUTTING. One of such methods of unfair competition alleged in the petition (pp. 174-176) is that the defendants have cut the price of petroleum products below the cost to such inde- pendent dealer, at the competitive point, in many cases below the cost to the defendants. This allegation is denied in the answer (1, Ans. 56) , except when it is done to meet the prices made by the independents. It is further alleged under this subdivision that by said means the defendants have in many cases throughout the United States either limited the business of said independ- ents to a small territory and a comparatively small amount, or entirely driven them out and destroyed their business, and as soon as the competition was removed immediately raised the prices in the community where such competition had existed. That this system of unfair competition has been practiced in substantially every State and Territory where independ- ent refiners and dealers have operated and undertaken to do business in competition with the defendants, and that by these means the competition of such independent refiners (3) and dealers has been substantially destroyed and limited to a small percentage of the refining and sale thereof in the United States. That generally throughout the United States the prices of petroleum products charged by the defendants in the various places where there has been effective and active competition have been very much lower than in places where there was no competition or where the competition was inactive and ineffective; that in such places where there was no competi- tion the prices have been exorbitant and unreasonably high. That by reason of the differences among the several States with respect to the proportion of the number of towns in each State in which competition has existed, and in respect to the degree of activity of such competition, there have been and are wide differences as among such States in the prices charged by the Standard Oil Company and its affiliated compahies for petroleum products. The foregoing allegations of this subdivision are denied by the Answers (1, Ans. 58-58). GENERAL STATISTICS COMPARING LOCAL PRICES. That the Standard Oil Company makes extraordinary differences in the prices which it charges for oil in different towns and different parts of the country, and that these differ- ences are largely due to differences in the degree of competi- tion is clearly shown by the statistics taken from the records of the Standard itself and introduced in evidence by the Government. It appears that the Standard Oil Company maintains an extensive statistical department, which, among other things, keeps records of the prices charged in indi- vidual towns for oil, naphtha, and other products, and the margin of profit of the marketing companies upon such prices in each town. Records are also kept showing the average profit in the laige marketing territories into which the Standard has divided the United States; and also the average prices and profits in the smaller divisions into which its individual marketing stations are grouped. Furthermore in this same statistical department are kept records show- ing the shipments of the competitors of the Standard Oil Company and the approximate percentage of the total business done by such competitors in each large territory and also in the various smaller marketing divisions and in many individual cities. We shall later present the evidence showing how this information regarding the business of competitors is obtained and the illegitimate uses which are made of it. Extracts and copies of these Standard records were introduced by the Government and constitute peti- tioner's Exhibits 379 to 396, inclusive. From these detailed exhibits Mr. Durand, a witness for the Government, prepared condensed statements constituting petitioner's Exhibits 628 to 635, inclusive. These are merely transcripts of the figures contained in the exhibits furnished by the Standard Oil Company, no new material being intro- duced. These condensed statements show clearly the ex- traordinary differences in prices maintained by the Standard Oil Company in different towns and different parts of the country, and the relation between those differences and the degree of competition which is encountered. We first call attention to petitioner's Exhibit 630, which shows the average profits per barrel of the several Standard marketing companies or departments for each year from 1899 to 1906 and the percentage of competitive sales in each territory. It should be explained that the testimony of Mr. Dredger and other witnesses from the Standard Oil Com- pany shows that the designations of these territories appear- ing at the left of the exhibit do not represent the several States and cities there named, but cover large areas which for convenience are thus designated. Thus the heading " Kentucky " stands for Standard Oil Company of Ken- tucky, the marketing area of which comprises the larger part of the territory south of the Ohio Eiver and east of the Mississippi Eiver. We have described the territory covered by these various marketing companies or marketing divisions more fully elsewhere. To illustrate the wide differences in the profits of the several marketing companies or depart- ments on refined illuminating oil and the corresponding differences in the percentage of competitive business, we present below the figures for the years 1899 and 1906, taken from petitioner's Exhibit 630, omitting for brevity the inter- vening years. We have also designated, approximately, the area covered by each of the marketing territories. We have reduced the profits, which are stated in the exhibit in terms of so much per barrel, to the basis of cents per gallon. 72064— VOL. 2—09 la Profits of marketing companies on refined oil. Territories. Kentucky (Standard Oil Co. of Ken- tucky, south of Ohio River, east of Mississippi) Indiana (Standard Oil Co. of Indiana; northern Central States) Waters-Pierce Oil Co. (Southwestern States and Mexico) ■ San Francisco (Standard Oil Co. of Iowa; Pacilic Coast States) Denver (Continental Oil Co.; Rocky Mountain States) Ohio (Standard Oil Co. of Ohio; State of Ohio) • Winnipeg and Vancouver (western Can- Nebraska (Standard Oil Co. of Nebraska; State of Nebraska) Pittsburg (western Pennsylvania) New York stations (New York State, outside New York City and Long Is- land) Baltimore ( Baltimore Division Standard Oil Co. of New Jersey; South Atlantic States) - — Newark (Standard Oil Co. of New Jer- sey; State of New Jersey) Philadelphia (eastern Pennsylvania) . . . New York City (includes Long Island) Boston (Massachusetts and neighboring territory) Providence (Rhode Island and neigh- boring territory) Portland (Maine and vicinity) Montreal (territory in Canada) Maritime provinces (Canada) 1899. Average profit m cents per gallon. 1.06 1.22 3.02 2.86 4.36 .94 2.54 .66 6.54 1.14 1.00 .52 .90 1.06 1.52 L26 1.30 .82 Percent- age of competi- tive sales. 8.9 13.6 8.9 5.7 .2 14.2 4.8 15.8 10.8 1906. Average profit in cents per gallon. Percent- age of competi- tive sales. 1.26 12.1 1.60 12.8 1.80 6.5 3.06 1.1 1.40 13.3 1.18 2L0 1.98 (a) 1.60 15.6 1.30 5.9 6.8 1.54 5.8 1.48 18.7 .84 4.2 1.82 6.8 1.36 1.6 1.68 («) («) .3.9 .40 4.9 2.68 o Not reported. 6 For 1899 this figure is given for New York stations and PennBylvania stations combined. "Division discontinued. From this table it will be seen that there is an enormous range in the rate of profit of the Standard marketing com- panies and that these differences correspond largely to differ- ences in the amount of competitive business. It should be noted that the profits of the marketing companies are over and above any profits in the refining business or in pipe-line transportation. In 1899 the rate of profit averaged from barely half a cent per gallon (0.52 cent) in the eastern part of Pennsylvania, where the Standard encountered 18.7 per cent of competition, to 4.36 cents per gallon in the territory of the Continental Oil Company in the Rocky Mountain States, where there was only two-tenths of 1 per cent of competition. Again, in the Pittsburg territory, the western part of Pennsylvania, the average profit was 0.66 cent per gallon and the amount of competition 15.8 per cent, while in the Pacific Coast States the average profit was 2.86 cents per gallon and the competition only 5.7 per cent. In 1906 the differences are not quite so marked. Nevertheless, the profits range from 0.84 cent in the eastern part of Pennsyl- vania, to 3.06 cents in the Rocky Mountain States. It should be noted that such averages for large areas by no means show the full degree of discrimination in the prices and the full measure of the difference in profit in different particular localities. The average for any given large mar- keting division includes many towns and sections where the profits are high, and other towns and sections where, the profits are low or where there may be loss, thereby tending to make the differences between the several large territories much less conspicuous than the differences which would appear if smaller areas were taken. To what extent this is true appears forcibly from peti- tioner's Exhibit 631, which compares prices of illuminating oil charged by the Standard Oil Company at a selected date (October 15, 1904) in the larger towns in each State through- out the country, and which shows also the so-called "mar- gin " in such towns. This margin is substantially the profit of the marketing companies. While the differences in gross prices are in part due to differences in freight rates and in the cost of marketing, the margin represents the net result after the deduction of such freight rates and cost of marketing, and is therefore the true measure of the differ- ences in the prices. This entire table is worthy of the cap- ful attention of the court, and we reproduce it here. We have also inserted, from petitioner's Exhibit 390, the per- centage of competition for such of the towns as the figures are available, and in a few cases we have indicated the per- centage of competition in the entire district of which the town named is a part, indicating these cases, however, by a note, to distinguish them from the cases where the percentage of competition covers the particular city in question. It appears that the Standard Oil Company has the country divided up into about a hundred divisions, in each of which there is a main station and usually a considerable number of substations, sometimes many substations. The percentage of competition is in a large proportion of cases reported for the main station separately, and an average for all the sub- stations is given, but in some instances the percentage in- cludes both the main and the substations, so that we can not show precisely the competition in the individual cities. It is for that reason, also, that for some of the towns we have not stated the percentage of competition. It may be noted that the towns covered by this table are generally the larger towns of the country and that the percentage of competition in many of them is decidedly greater than in the smaller towns in the same district, as appears likewise from peti- tioner's Exhibit 390. Petitionee's Exhibit 631. Price of water-white illvminating oil and margins, on October IS, 190k, iv specified towns throughout the United States. [Red Ink Indicates loss.] [Cents per gallon.] NORTH ATLANTIC STATES. Price. Margin. Per cent of competi- tion. Maine: Portland . ... 11.50 11.00 11.00 10.00 10.00 10.00 2.34 2.08 2.14 1.54 1.14 .69 14 New Hampshire: Concord Nashua .. 4 7 Vermont: BurUngton 1. / 1.0 Bellows Falls Barre Price of water-white illuminating oil and margins, on October 15, 190^, J}y speciflo towns throughout the United Siotes— Continued. NORTH ATLANTIC STATES— Continued. Massachusetts: Boston Brockton Fall River..... Lowell Lynn Springfield Worcester Connecticut: Hartford New Haven... New London . . Rhode Island: Providence New York: Albany Binghamton .. Buffalo Elmira New York Rochester Syracuse Yonkers Pennsylvania: Altoona Chambersburg Chester Harrisburg Philadelphia . . Pittsburg Reading Scran ton Williamsport. . Delaware: Wilmington New Jersey: Bridgeton Camden Newark Trenton.. Jersey City Price. 11.00 11.00 10.50 10.50 11.00 8.00 8.00 9.00 9.00 10.00 10.00 10.00 9.50 10.00 10.00 10.98 10.00 10.00 11.00 11.00 9.50 8.50 10.50 8.00 8.50 9.50 9.00 10.00 8.50 10.00 9.50 11.00 9.50 10.94 Margin. 2.82 2.18 2.15 1.72 2.61 .88 .08 .18 .99 1.61 1.21 1.66 1.00 2.01 1.08 2.31 1.61 1.38 1.56 2.98 1.30 .30 2.47 .28 .87 1.32 .82 1.63 .27 1.27 1.03 2.60 .83 2.59 Per cent of competi- tion. 11.3 3.2 21.7 5.0 21.7 11.4 28.9 10.1 39.1 10.4 26.8 8.6 "io.'e "7.5 2.8 O20.9 10.3 017.6 32.8 26.7 7.5 13.5 06.5 09.9 18.6 al2.4 07.5 SOUTH ATLANTIC STATES. Maryland and District of Columbia: Baltimore 8.50 .09 Frederick 10.00 1.70 Cumberland 9.50 1.65 Washington, D. C 8.50 .18 " Includes city and its substations. 16.5 2.6 10 Price of water-white illuminating oil and margins, on October 15, m •*> by specific towns throughout the United States — Continued. SOUTH ATLANTIC STATES— Continued. Virginia: Norfolk Portsmouth . Richmond . . Petersburg . . Eoanol5:e West Virginia: Charleston . . Wheeling... North Carolina: Durham Winston Wilmington. Charlotte ... Raleigh South Carolina: Columbia... Greorgia: Atlanta Macon Savannah... Florida: Jacksonville Key West. . . Tampa 9.50 10.00 8.00 10.00 11.50 10.00 9.50 12.00 12.00 11.00 12.00 12.00 13.00 13.00 13.50 12.50 13.00 16.50 14.50 Margin. .68 1.02 a. 27 1.01 2.29 2.56 1.66 1.79 1.93 1.99 1.30 1.56 2.27 1.98 1.05 2.48 3.10 4.42 3.93 Per cent of competi- tion. NORTH CENTRAL STATES. Ohio: Cincinnati Cleveland Columbus Dayton Toledo Canton Youngstown Indiana: Evansville Indianapolis Lagrange South Bend Illinois: Chicago Decatur Joliet Peoria Freeport • Jacksonville a Petitioner's Exhibit 631 is in error in showing this as a profit. The exhibit from the records of the Standard Oil Company, petitioner's Exhibit 391, from -which Exhibit 631 was compiled, shows it as a loss 7.00 1.09 7.00 .16 9.50 1.72 7.50 .31 9.50 1.63 9.50 1.17 9.50 1.14 9.00 .05 8.50 .12 10.50 2.19 10.00 1.90 8.50 .56 9.50 .08 9.00 .73 9.50 .35 9.00 .15 9.50 .56 11 Price of water-white illuminating oil and margins, on October 15, 1904, hy specific towns throughout the United States — Continued. NORTH CENTRAL STATES— Continued. Price. Margin. Per cent of competi- tion. Michigan: Detroit Battle Creek Jackson Port Huron '. Calumet Marquette Grand Rapids Wisconsin: La Crosse Milwaukee Eau Claire Janesville Kenosha Minnesota: Duluth Minneapolis Mankato Sauk Center Iowa: Clinton Cedar Falls Davenport Des Moines Keokuk Sioux City Missouri (not including Waters-Pierce territory): Kansas City - St. Joseph Sedalia Kansas: Lawrence Leavenworth .■ Fort Scott Wichita Salina Nebraska: Omaha Lincoln Hastings Fremont ■ North Dakota: Fargo South Dakota: Huron Sioux Falls 8.60 10.00 10.00 10.00 12.25 11.75 9.50 9.00 8.50 10.75 9.00 9.00 8.50 9.50 11.50 12.50 10.00 12.25 10.00 10.75 10.50 11.00 10.00 n.oo 11.50 11.00 10.50 12.00 10.00 11.00 10.00 11.00 13.00 12.00 13.50 14.50 12.00 .24 1.51 L57 1.51 2.40 2.38 1.14 .17 .65 1.36 .44 .70 .88 .24 2.24 1.90 .17 2.10 .75 .53 1.21 .44 .27 L52 1.12 .98 .48 1.98 .48 .40 .41 .77 1.49 1.45 2.10 2.27 .35 17.6 38.6 38.6 9.9 41.8 41.8 4.9 26.6 24.2 32.1 21.7 12 Price of water-white illuminating oil and margins, on October 15, 1904, by specific towns throughout the United States — Continued. SOUTH CENTRAL STATES. [Exclusive of Waters-Pierce territory.] Kentucky: Louisville . . . Frankfort Lexington... Paducah Tennessee: Chattanooga. Nashville ... Memphis Alabama: Birmingham Montgomery Selma Huntsville .. Mississippi: , Jackson . Louisiana: New Orleans Baton Eouge Price. 8.50 11.00 11.00 11.50 13.00 12.00 10.50 13.00 13.50 14.00 13.50 13.50 9.50 ILOO Margin. 0.38 1.38 1.54 1.85 3.73 2.11 .18 2.46 L56 2.06 3.23 2.11 1.35 .21 Per cent of competi- 'tion. WESTERN STATES. Montana: Butte... Wyoming: Cheyenne Colorado: Denver Leadville Pueblo. '. New Mexico: Albuquerque . Utah: Salt Lake City Washington: . Seattle Spokane i Tacoma Oregon: Portland California: Fresno Los Angeles.. Marysville ... Oakland Sacramento . . San Diego San Francisco San Jose Stockton 23.00 18.00 5.76 4.32 16.00 3.39 20.00 5.47 16.00 5.08 23.00 6.48 20.00 4.09 15.50 4.17 2L50 6.10 15.50 3.99 15.00 4.12 14.00 L82 7.50 3.16 13.50 2.37 12.50 2.46 13.00 2.45 9.50 1.30 12.50 1.73 13.00 2.83 13.00 2.71 a Includes city and its substations. 13 This table shows an enormous variation in the prices of oil at different places in the country, ranging from 7 cents at Cin- cinnati and Cleveland to 23 cents in Albuquerque, N. Mex., and Butte, Mont. Though part of this great difference is due to differences in the freight rates and cost of marketing, a large part of it is due to difference in the rate of profit, and that difference in the rate of profit, it will be seen, is largely dependent upon the percentage of competition encountered. Thus at Cincinnati the price of 7 cents resulted in a loss of 1.09 cents per gallon, and there was 45.3 per cent of compe- tion; while in 'Butte, Mont., there was a profit of 5.76 cents per gallon, and in the entire territory of which Butte is the center, covering practically the State of Montana, there was only eight-tenths of 1 per cent competition. In Albu- querque, N. Mex., the price of 23 cents resulted in a profit of 6.48 cents per gallon, and in the Albuquerque territory there was only 7 per cent of competition, which apparently was mostly confined to a few cases, as would appear from the differences in the prices in different towns in that terri- tory. Again, compare the price at New Orleans with the price at points in the State of "Washington. At New Or- leans there was 51.2 per cent of competition, and the price of 9J cents resulted in a loss of 1.35 cents per gallon. In Spo- kane, Wash., where there was no competition whatever, the price was 21^ cents, with a profit of 6.10 cents per gallon; and approximately the same high profits appear in other towns in Washington covered by the table. One does not need, however, to go to widely different parts of the country to find wide variations in the prices and profits. Take the State of Massachusetts. At 'Springfield, where there was 21.7 per cent of competition, the price was only 8 cents per gallon, resulting in the loss of 0.88 cent. At Boston the price was 11 cents and the margin of profit 2.81 cents, and it appears that although there was 11.3 per cent of competition in Boston there was an agreement regarding prices. (Todd, 6/3217.) At Fall Eiver, where there was no competition, the price was 10^ cents, and there was a margin of 2.15 cents profit. Again, compare the price at Duluth, Minn., 8^ cents, resulting in a loss of 0.88 cent, with the price at Mankato, Minn., where there was no competition, llj cents, resulting in a profit of 2.24 cents. Most striking 14 of all is the situation in California. At Los Angeles the price of oil in October, 1904, was 7^ cents, resulting in a loss of 3.16 cents per gallon, while in the Los Angeles territory, which includes also some towns outside the city, there was 33.4 per cent of competition. At Sacramento, where there was no competition, the price was 13 cents, with a margm of profit of 2.45 cents per gallon ; while at Seattle, Portland, and Tacoma, where there was no competition, the price was 15 and 15^ cents, with a profit of about 4 cents per gallon. Another exhibit compiled from the records of the Stand- ard Oil Company is petitioner's Exhibit 632, which shows for each of the various marketing divisions of the Standard Oil Company, about 100 in all, the extreme differences in prices and margins of profit. This is significant particu- larly as showing the differences within the same general vicinity. In that exhibit there has been selected the town or towns in each given division in which the margin of profit was the lowest (often a loss) and the town or towns in which the margin of profit was the highest, and the cor- responding prices are also presented. The following are some of the more conspicuous differences in the prices and mar- gins shown in petitioner's Exhibit 632. It should be under- stood that the names given are the names of the divisions, each of which includes a considerable number of towns, with the city named as headquarters, and the margin for that city itself is not given unless it be the highest or lowest margin in the division. Refined oil — Low margins and, prices and high margins and prices in the same marlceting division. [Losses In red.] [Cents per gallon.] Name of division. Albuquerque Baltimore .. Birmingham Cincinnati . . Cleveland .. Dayton Davenport . . Lowest margin. 0.26 .09 1.56 1.09 .16 .31 .04 Highest margin. 7.12 2.11 3.76 1.86 2.48 1.05 1.54 Price corresponding to- Lowest margin. 14.00 8.50 13.50 7.00 7.00 7.50 10.00 Highest margin. 23.00 11.00 14.50 11.00 10.50 9.00 11.50 15 Refined oil — Low margins and prices and high margins and prices in the same marketing division — Continued. Name of division. Decatur Detroit Duluth Dubuque Joliet Kansas City Los Angeles Louisville Memphis Minneapolis Nashville New Orleans Peoria Richmond Sioux City Springfield Wichita Wilmington, N. C Lowest margin. .08 .24 .88 .19 .48 .23 3.40 .38 .18 .24 .73 1.35 .35 .27 .35 .88 .40 .62 Highest margin. 1.98 2.53 3.23 2.85 1.80 2.66 .54 2.10 2.78 2.58 3.24 2.46 2.19 2.85 2.77 1.29 3.57 2.79 Price corresponding to- Lowest margin. 9.50 8.50 8.50 10.00 8.00 10.00 7.50 8.50 10.50 9.50 12.00 9.50 9.50 8.00 12.00 8.00 11.00 11.00 Highest margin. 11. CO 11.50 13.00 13.00 11.00 13.00 10.50 13.00 14.00 13.50 14.00 12.50 11.00 12.00 15.00 10.00 15.00 14.00 When it is remembered that a cent a gallon (Westgate, vol. 6, p. 2879; Bayne, vol. 2, p. 800) constitutes a good profit on the refining and marketing of oil, the differences in the profit shown in these divisions for different towns, amount- ing in a number of cases to more than 3 cents a gallon, shows most strikingly the policy of discriminating in price accord- ing to the amount of competition. Taking petitioner's Ex- hibit 632 as a whole, which includes 101 marketing divisions, it appears that in 65 of these there was a difference in the profit, as between the town having the lowest profit and the town having the highest, of 1 cent per gallon or more, and in 22 the difference exceeded 2 cents per gallon. Petitioner's Exhibit 633 shows that sharp disparities in prices and margins of profit which petitioner's Exhibit 632 shows to exist between extreme towns in the same division are not exceptional, but that there are in a large proportion of the divisions several towns which have very low margins and several towns, on the other hand, which have very high margins. Petitioner's Exhibit 634 contains still another form of evi- dence of the practice of discriminating in price. In this exhibit the prices and margins at the various main stations 16 of the Standard Oil Company, about 100 in number, are pre- sented, and in comparison therewith is given the average price and margin at all the substations of that main station. The main stations are, in general, the large towns, and have usually a larger percentage of competition than the small towns constituting substations. Consequently, it appears that in many instances the margin of profit on the market- * ing of oil at the main station is very much less than at the substations of the same divisions. We present a few illus- trations of the situation taken from this exhibit : Comparison of margins at main stations and substations. [Red Ink Indicates loss.] [Cents per gallon.] DiTision. Baltimore Cincinnati Cleveland Decatur Des Moines Dubuque Duluth Evansville Indianapolis Kansas City La Crosse Louisville Memphis Minneapolis New Orleans Omaha Peoria Richmond Sioux City Springfield, Mass Wichita Worcester Margin at — Main sta- tions. 0.09 1.09 0.16 0.08 0.53 0.19 0.88 0.05 0.12 0.27 0.17 0.38 0.18 0.24 1.35 0.41 0.55 0.27 0.44 0.88 0.48 0.08 Substations. 1.36 0.65 1.68 1.66 1.47 1.88 .52 .30 .02 .71 .82 .42 ,10 .52 0.46 1.32 1.61 2.03 1.87 1.19 2.63 1.45 Percentage of competi- tion. Main sta- tions. 16.5 45.3 11.7 12.9 41.8 55.1 9.9 29.0 22.0 24.2 38.6 16.1 27.6 41.8 51.2 21.7 31.2 12.0 23.6 21.7 32.1 5.0 Substations. 7.1 7.2 20.0 4.6 12.7 10.3 4.6 10.4 9.0 3.8 L5 3.7 4.5 0.7 6.5 5.3 12.9 5.5 5.4 8.6 3.6 6.5 It will be seen that in all these cases the profit at the main stations was much less than the average profits in the sub- stations; indeed, in eight cases there was a loss at the main stations while in every case there was a profit at the substa- tions. In practically every case above mentioned the amount of competition at the main stations was much greater than at the substations. Take, for example, Springfield, Mass. At the main station, the city of Springfield, there was 21,7 17 per cent of competition and the Standard sold oil at a loss of 0.88 cent, while at the substations around Springfield there was only 8.6 per cent of competition and the Standard sold oil at a profit of 1.19 cents, a disparity of more than 2 cents per gallon. ^ All the comparisons we have thus far presented related to one date, October 15, 1904. It would have been an undue burden upon the court to introduce similar evidence cover- ing thousands of towns for a larger number of dates. The: Government, however, did introduce from the records of the Standard Oil Company the figures of prices and margins on refined oil for some sixty of the larger towns in the country, month by month, from 1902 to 1906, inclusive. (Petitioner's Exhibit 395.) In petitioner's Exhibit 635 these same figures are presented, the towns being grouped geographically in such a way as to make possible a ready comparison of the price movement in towns in the same general vicinity. For instance, on pages 1636 and 1637 of volume 10 the prices at Worcester, Springfield, Boston, and Fall River, Mass., with the corresponding margins, are compared, on the next two pages other New England towns, and on the next two pages towns in New York, etc. We have also shown, as far as available from the exhibits in evidence, the percentage of competition during each year in each of the towns. This exhibit shows in a striking manner that the wide difi- ferences in, prices and in the corresponding margin of prices which we have seen for October 15, 1904, appear also throughout this period of five years. In some cases through- out the period the prices in one city have ranged very much lower than in a neighboring city where there was less com- petition. Even more striking, however, is the fact that in. many cases the prices in one city show an entirely different direction of movement from time to time than the prices in a neighboring city, the difference being clearly shown by the statistics of the percentage of competition to be largely due to changes in the degree of competition at different times. That the court may grasp the significance of these compari- sons more readily we have prepared the accompanying dia- grams which are merely graphic presentations of the actual prices and the. actual margins of profit shown in petitioner's 72064— VOL 2—09 2 18 Exhibit 635. We have omitted a few of the towns in order to make the diagrams simpler. Comment upon these diagrams is scarcely necessary, as they show for themselves sharply the wide differences in margin of profit and in the direction of the movement of prices. Take, for instance, the diagram showing the com- parison of New Orleans and Atlanta. In January, 1902, the prices at these two cities were the same, 10 cents. By Octo- ber, 1902, the price at New Orleans had fallen to 8 cents and the price at Atlanta had risen to llj cents, a difference of 3^ cents. The margin at New Orleans had fallen from a profit of 1.69 cents to a loss of 0.19 cent, while at Atlanta the margin of profit had increased from 0.87 to 1.93 cents. The statistics show that throughout the years 1902 to 1905 there was no competition reported at Atlanta, while evi- dently there was a great increase in the competition at New Orleans, presumably beginning some time after January, 1902. For the entire year 1902 the percentage of competition at New Orleans was 11.2 per cent, and for the following year it had risen to 34 per cent. Very striking also are the changes in the prices shown in the diagram comparing Washington, Richmond, and Balti- more, three cities in the same territory, where under normal conditions of steady competition the prices would have kept substantially parallel. Instead of doing so they vary from one another in movement in a most remarkable fashion. Again, we call the attention of the court to the diagram comparing the prices at Los Angeles with those at other Pacific coast towns. The prices at Los Angeles show an astonishing decline from 1902 to 1904, while the prices in San Francisco, Seattle, and Portland show either little de- cline or an advance. Thus at Los Angeles in January, 1902, the price was 11 cents, resulting in a profit of 0.36 cent, while during the latter part of 1904 it was only 7J cents, resulting in a loss of 3.41 cents; at Seattle, on the other hand, the price had risen from 14 cents to 15.5 cents, and the margin of profit had increased from 3.05 to 5.30 cents. Throughout this period there was no competition, or practically none, in the entire Seattle division, while in the Los Angeles division, which includes some towns outside PRICES OF REFINED OIL CHARGED BY THE STANDARD OIL COMPANY AT NEW YORK, BINGHAMTON. AND ALBANY N. Y.. AND MARGINS OF PROFIT THEREON. f^^ 1902 1903 19c >4 1905 906 |^,„^ IfliAMJ JjASbNDJFMAMJ JASONDJFMAMJ J A S N D J F M A MJ JaIs N|D J If M A M J J A S NiD sallon I j . ..1 __, 1 h i I ^ _s^ \ -\ —^ -4 -p - |-H ^-^ V- -f- 7I: j:-t---T_ _l:.i|_.ii ,^t^fi5 " ^"Tr^^TV'r'TV^T J_ ' lo '^ "^tt tt It iiii -|- -4- H 1— _^ _|_j._ _|_ 12 ^l-^-^t-^S^-X^xjl-iJl 1 u.„/L:- ^ tz„,..,i^. "i'^YT t'"^"""4 ^ ' ^ / 7^. ^ s^__-J- V /^filKrcwr ,r> '° . ^itttL^— -^L__„!S I' ij-i:t"'i :""T"^t" .t-i.-i.^ 4__Lfl:2 H iLT~-—J/-~ -h -J t- I - « L\"W:t:"^' 9 kt rtm TT +t_± ® IL^JP^I Tf___ Tth'tnT'^'i \ 1 _JL_ ^ I J_ 1 ^-V"ix.ivfATt~ii''~ e -|- J — L^ -^ _L _j 1 L. 1_ Iq 4-4- -4- 1 1 1 A i A II I _^ m?i^(fis \ "1 -^ h* M _ H- 7^"^ H - ^_ ^:^ ^:-3, ^^=^ f 2 4- ^—^^ c— ^'^ Lm y'^'^v^^ s/ ^ /Mf/^MaPAl rV „ f ^T_1t,/_„_X-lTt3. ^ :" ..._ jTrlT d "^ I . ' - Z'^S-c^-^ i*^ =^\ , I ,„-^^Ni 1 ' Ja ^^^'^'^'^'I 1 ^ -=t-, ^^■-~-- ' * ^'^/ ^J- IT" V-^^ J r--' _^ ^1" "^^^t11^-I^ia^^^ > 1 / I I i V=/T-'' A_f'fi,7\ \ T^ t.._7[^ itTltT T 1 ,"- — -T" ~~ -t-h:.. _r 1 1 2 I_ '1 "^l_I_ "^H-^IIl. J —^ . _^_i. i ^_ EOS, WiSHiNGTOH. t PRICES OF KEFI.NED OiL CHARGED BY THE STANDARD OH. COMPANY AT SAVANNAH, GA.. RICHMOND, VA. PRICES "^ BALTIMORE. MD.. AND WASHINGTON, D. C, AND MARGINS OF PROFIT THEREON |(0^-:.-- ^ <,i(AHlM -o PHOTO- LIT H0'3B*PHERS. WlSHiNGTOH, P. C. PRICES OF REPINED OIL CHARGED BY THE STANDARD OIL COMPANY AT COLUMBUS, CLEVELAND. AND CINCINNATI, OHIO, AND MARGINS OF PROFIT THERFX)N. 1902 1903 190 4 1905 !906 T.? GALLON TTnj'A M TTT'5 N D TT¥T¥T TXT D"¥Ti TT"H A H J iT-^innsTintrxffTTrs o n d j r'ff7rrTr/srrs"¥TT,,^^^^ r L J -L ij'^^'^s^ i I 1? „.. ...i . , .],,,,. ,, \n \l -]- -1— ■ \d. ' \ 1 lA • ..Jl_. „ A ••irmn » in '" t../.±,__L_„IIlP.t ; " • H — |— -j- — h lU V. _ . 1 L. ___^-t4Li^ tA\ coLlitma ! / ,\ I ^ V ^ '-— / X i 4- 8 „Z /.TSAfiM u-it-tt— -"""tit ' ^-i- 8 T t ^\ 1 --«=-( CLEVtJNLi \ 1 \ \ -- • J-~ _ Q ^1- -^- -+ 4- :tEt..XLL_:t.t:3i:t-""" U...4 ^"3/ i""r 1 c^uli'Noni I 1 T^ \::::::iz-tttr"i ::::::: \....5^ :^"- e 1 4 tt ii-i- __i^M T^ r TIT F" . ^ — f .-...-. -. —\ — _ r"i"'" "■■ "1 — "T cyLuns'Ji^ _ y ''\ ,'' '•^-_ ^. it y.^ ' — "^ 1 7 --^" ^ "^^ .^: ^^A _iJ^-=n::.^ ■■ ; / ^ ' ' ,-j_..', ' : L \ , _j A J \ fv-J-^'^^ 1 i ^ _r_ X X ^' ^jtv it r:t:~$'" 4^"""'''4t"tttti _ .____H_.___..^x, M 11 7 "■ — ~i-h — ^Z-cS ^ £=^ =i=9^ i- |A 1- -\ f ----hx — ' \- .\h-,iJ-c:i---I :S J. $^„^r_.t= ,/^XT ^'- \''^\\j T i ^ T' y^ t^ 7_ "\if~±"""t1i"xu:^[ ' ■ '1 — _2 \ i«i L, — l1„._1., ^ , 2 oo,/.ir« OF REFINED OIL CHARGED BY THE STANDARD OIL COMPANY AT SOUTH BEND, EVANSVILLE, AND INDIAN- I'KH-J!.--' VI! APOLIS, IND., AND MARGINS OF PROFIT THEREON. F^-^iqOZ 1903 190- 4 1905 1906 'Tj; ^^" -T-rrapfTfrT"""^ ndjfmamjjasondjfmamT) JASONDJ F MAMJ JASONDJFMAMJ JAS3ND gallon oMi£2.iJii--^-l \ — .^.^t-^^-'t-lt—l^^lj L_.__L_1^ i^_ 1 1 1 10 12 - „,. — ..... . J- - -••''"" MTii „ -""++ i J^--i.T- -, L„ _J 10 '° " tt tr—..~-itV^ ^'^ f X - -t-^f ^ vs. J r--^- - ^ - ^^ ^r/i UN.i i/ \ \i \ _ L_H X' \ — — A ' ' 7 ^ ^ =^«„-_^^^ — ^^^ b +^- i T J£'''/!YM^/:/£, / tr^:::::::::::::::i:Ti::: /Iwm/wp^'TjN / J _ ,_ _ u 6 -^ ^ . M f 4- ^ + -[ ^>f^^/^ "^ ^ ] 4 "-|- - -| - j 5qw:-/Vfl,f/0 2 ^^ A r\ ^""^^^ ^' ^^ "^iv zt. txl t^C'lllt" A \^-K fz^'""'% J -U ..-+-- +^ \-;::y "YiA^^ *r '75/'=' 'is - 1-ai— t 1^" _..!:">^5::::: ^^-^"^ (^ — ■'!" \,/ «S5^1 I ,, ._ n " 3:--" ^^j/T"T T — t --1-4- '^1 \l /> ' 1 rr\fv/^'=^ T^ ^j t -i— Lil II ^ .^ IjIIL j. 1 r r "^ 2 PRTOR.* fW WVWED OIL CHARGED BY THE STANDARD OIL COMPANY AT RCX'KFOED. DAVENPORT, PEORIA, AND rttlCfcb W Kf^i CHICAGO, ILL., AND MARGINS OF PROFIT THERKON. PRICES OF REFINED OIL CHARGED BY THE STANDARD OIL COMPANY AT FARGO, N. DAK., MANKATO, DUL0TH, AND MINNEAPOLIS, MINN., AND MARGINS OF PROFIT THEREON. f^ 1902 1903 190^ \ 1905 I906 (,fl'!,DH")fMAMJ JASONOJFMAMJ JASONDJFMAMJ JASONOJFMAMJ JASONjDJFMAMJ JASONO 6/\li.oi< i \ --31-1— -li-O-i- -^TT+h j±lt±"t"~"T^'^Tr >/?/<:t^ 1 i \_ ,1 L . . . - '\ '^ irt"rl'itT~t^iTltr" \ i '^ — ^ . j~ — \ ; h'f^c ! f ** — ^ ^ Tltr '^ ^T~"T"~LSlx' X4- X-^~^^^1-ZL- -4^ - 12 ■2 ^+-_+_- +^+|.-4j-^4-- \ 1 ' ir""""t::.tt:ffl::JTT,r _ ^ 1 1 \ _^ ^-- I T -1— 'S Iti t J -iL- Kttl > ,0 -^-::^~^— -^ _, t ]T ^v hiST"^"'"ii:tt::::A: V \ j_l / "\ ._ iL4:_:L.l-I..lLi-4^-tiS _^ X^ / 8 ^ tU""?" ii i 1 fvvy/^-^'a/s 1 / „.,. „., . „, , .J. „ .4- 6 (J — [ 1 1 \ — . . ! fX^/.r^fs':') T |_L -L +4- "^1 J^ ^-''^''' _L A, 1 _ FAndo ; 1 \ .... ^ H ____I_ll t-S=^- 7 -I, I P ./3i-7 '^:l — _J=rzE^^r:j^.^ri::iL_,=J 2 2 +^--p^Er--rp75>';::" t -J- -T'^^ r N 1 _j_ _|_ -/ Vr "^1i"~V — x-^--\-x J /s j/4-ki w] \] r '^''X 1'""^4 i !J ..4^fc^^*, fZ^JL —- 'u:i'--"^""~'i±"T ^^ I^±i:L_-+Si-::.::i4.-— U -frt-)C 'f^ J^ i — Al- 4 -1- i r 1 V -\_±^ lit T -^H ill ±_ "^ __L_ O-LITHOGRAPHESS, WHSHINGTON, D C. PRICES OF REilNED OIL CHARGED MEMPHIS, TENN., . BY THE { \ND NEW STANDARD OIL COMPANY AT BIRMINGHAM, ALA., NASHVILLE, ORLEANS, LA., AND MARGINS OF PROFIT THEREON. TENN • StTT" 1902 1903 1904 1905 1906 CfNTS PER ' 6ALLON - » A"M J J A- SON D J F M ^ M J i A S N D F M AU 1 J J A s c ) N D ■JTf M A M j J A S N J F M A M J J A S|0 N L ! i r r-h- 1/ ■^ V 14- ' 1 If -'\ ^V t / ^ P k - A :,5 - 12 - 10 1 .11 r^ \ \ \ / t 1 ■Y* \ > \ iz - /3//W m H/l ■/ // ■7 I \ \ V V / 1 ( V 1 1 / I 1 V \ ^ \ \ 1 / MMH yili r '/ "y \ », ^ \ 1 i 1 ] /! \ \ 1 1 1 \ .\ > V \ f. ei^l^H iS u j \ \ v \ 1 1 \ 1 "\ \ i t j t V 1 — ~f i t \ • \ 1 \ / \ > } \ ^~ a \ Xj . 1 1 - 8 /Vi '"mT cm £■/ )A<> , 1 - fc b ji yi ^^ 16 ill 5 - 4- Or ^ IRMM 'r 'lh 1 t1 i.- y — \ 1* /' V. 1 \ ^ — - <-^ =5=^ i \ V f ^ J '/ \ V ^ h > •'~\ ^ '\ ^f firt 'J/ f \ ~ ""s J K ./ V J 'b \ . ■p L ■c — ■^ / s. .A c V hi //r - V -- - n i \ A f \ ■* _■,, c: - V— I t ■ \ 1 -V r \ \ \ \ 1 i 4 J \ ^ I ■^■. d — n -. \ ^■v (' _.. 4- • A r ^ 'J > "% \ v.- L^ \ ^— ' ■ V - -'3, ■J f - U "• » Lj ' — * / '? 'v' \ 1 \ V 1 .1^ r x. . 'T f V ^ — 1" > V \ 'ij V. 1 2 iLtt HE. WL 3?/l £V IAS\ V r-' \ \ ■i 1 V J r L. J_ I. 1 ^ 1 f — ? QHlHAW CO, PH010 LfTHor.RAPHERS. WASHINGTON, t PRICES OF KEFINED OIL CHARGED BY THE STANDARD OIL COMPANY AT SANTA FE, N. MEX., BUTTE, MONT., LAS CRUCES, N. MEX., AND DENVER, COLO., AND MARGINS OF PROFIT THEREON. PItlCKS OF EEFINED OIL CHARGED BY THE STANDARD OIL COMPANY AT SEATTLE, WASH., PORTLAND, OREO., SAN FKANCISCO AND LOS ANGELES, CAL., AND MARGINS OF PROFIT THEREON. ";.? 1902 1903 i904 1905 !9 06 ^r GALLON ] fjIV! AlM j JIA S' N D J!F|M A iV! j J AiSONDJFMAMj JASONDJFM/ ^ M J J A ; N D .1 F M A M J J A S N 6ALL0^ IS 1 ^H-— |~-K-j|-^- \ L ia '^ i .^Sft-~M^'^^iT 1 i i j [ 1 ^^JilR.^1 iT. !:__^ fiT^t.!^ 4 IK ^ .4----.^-,-ir_Tfc5:xL __.*' \ \..L- ..-.. 1 i \— —1— —f- ID L|„jl^Ii-^..>n4lLJ 4- . i f^ \ j4 ^^^dm£=.-^^==# Xu,-.\lL ti- t —.^4^11 1 ~ 'J s ^ 1 A '^- ^Ift-j., .: ^ / ^^ 1 1 1 1 u 11 X^ ! ■ - I4- .3/PA' .'^fewCAiO) 1 ' ~j 1 1 1 « n 1 U Li 1 1 \ ii X t 17 1 - - n ... 1 1 lO 1^ -f- H- r^^Y^ 1 \ 1 i 1 \— — r- 1^ IJ0.AM71US 1 \ \ :^:iiit. ._:'■■["] ^ h4^-.|.4..|__ 1 . \ ^ lA vJ Tv r \ \ 1 ... ^ ...L. _- .^ lA |U ittl TTT t ("■^^■^^r-"- lU T--Jri::±T::+: j t + t ttiTl t- A , 1 fi A i , Lj L _ . / t> ! t, 4X ^'^^'^^ t, D Ik i t t'r"""" i 4-- i tt tt A -iii-i^-- ^-- A ^r -f,i^^ ., r If-. \\ ^ 1 T- -/^s.^ / -^J^ ""■^0^1 1 fi^ ^-1 — :i--v --5l ^ 3£irr4£ tT^-:^^# — t' ' T ""^'--~.II..j..'^\^T V % ^' '^ ? ^ r>AN rk/i vd/sx \ iN„ J 1 /-- - . \— > 1 rr-^^--.^. '\J_ \ 1 ^ - - ■ -X 1 1 v-.X J- -H-f '-f ■ .... ———Z—~Z A Lh 4.,-. :^_ ._ ^^ -t itJ t V — ■ i— *- (J L 4_ ___ >v. „ _/ i It 4 ^1 I^ - " ? ^ --| / ? C 1 _J__ V 1 / _. ...L^— :^ _.^>^ r-- / ^^^^ r-J ^ 1 ^ \_„> J^xLji_i_LlI„""__ 1— — i — L__J I 1 4- =^»«n.«n OH COMPANY AT FALL RIVER, WORCESTER, BOSTON, AND mCES OF REFINED OIL CHA^^EDJVJHE^STA^^^^^^^^^^^ ,^,«,0N. .;[.--: - TF.'.^l'* -.0 P;)0fC-iJTHt.3S IP ''£*'&. 19 of Los Angeles as well as that city, the percentage of com- petition increased from 13.4 in 1902 to 33.4 in 1904. We shall farther on in this brief discuss the evidence in- troduced by the Government regarding the history of the competitive concerns in many of the towns covered by these diagrams and the particular causes of the variations in price, and also the evidence of the defendants on the same subject. The Standard Oil Company, of course, can not deny these wide differences in price and in the margins of profits in the different towns, since the figures presented by the Govern- ment were taken from their own records. They have, how- ever, sought in a considerable number of instances to show that the low prices in some of these towns were brought about by price cutting initiated by independent concerns. We shall discuss in detail the evidence on this subject in connection with the various individual situations. It is sufficient at this point to say that, even were it true that the low prices were in all cases due to cuts initiated by independent concerns, the statistics we have presented would nevertheless be most conclusive evidence of the monopoly power of the Standard Oil Company, in that it is able in a very large proportion of the towns throughout the country to maintain prices so high that, despite low prices in other towns and even losses, its total profits on the marketing business are enormous, as well as the total profits on its entire business. By reason of its monopoly power it can make up in the territories where it has little or no competition the losses or small profits in ter- ritories where the competition is active. By these means it is able practically to keep the profits of competitive concerns within narrow bounds, or to cause them losses, while itself making enormous aggregate profits. The peculiar method of marketing employed in the oil industry, and particularly by the Standard Oil Company, ex- plains the possibility of the maintenance of such wide differ- ences in prices in different localities in accordance with the degree of competition. The Standard does not market its principal products, such as refined oil and gasoline, at central markets or through the ordinary channels of wholesale trade, as most other large manufacturers do. For the most part it markets these products directly to the retail dealer or to the 20 consumer in every city, village, and community of the United States. It ships the oil to these places by tank cars and dis- tributes it for the most part directly to the door of the retail dealer in tank wagons or sometimes in barrels. The retail dealer who is compelled to pay a high price by reason of the absence of competition has no recourse. He can not send to the central markets and take advantage of lower prices there, for the reason that if he ships in less than carload lots the freight rates are practically prohibitive, and even if he ships in carload lots he would have to ship in barrels, which in- volves an additional cost of transportation on the weight of the barrel both from and back to the shipping point. More- over, the use of barrels is much less satisfactory than the use of metal tanks. Several witnesses testified that retail dealers, even if the oil were actually delivered to their stores by the seller, would be willing to pay practically half a cent a gallon more for the oil from tank wagons than in barrels. For this reason would-be competitors of the Standard Oil Company have either to establish similar marketing methods, including the operation of tank cars, the construction of local tank stations, and the operation of tank wagons, or, if they ship in barrels, they are at a disadvantage for the reasons just mentioned. The Standard Oil Company sells sub- stantially 85 per cent of the oil sold in the United States, leaving only about 15 per cent for all of its competitors combined. Even if all this 15 per cent were in the hands of one concern, such concern could not afford to have marketing stations and marketing facilities in every town and every section of the United States as the Standard does. It would have to get a considerable volume of business in each place where it established itself in order to operate at all econom- ically. It would therefore necessarily confine itself to par- ticular districts where it could have adequate facilities. Since, moreover, this 15 per cent of the business is divided among a large number of independent concerns, this still more compels such concerns to confine their operations to a small territory. Under these conditions it is obvious that the Standard Oil Company has an enormous advantage growing from its im- mense proportion of the total trade and from the fact that it does business throughout the entire United States. It can 21 maintain low prices in the localities where the independent concerns establish themselves, while more than recouping itself in the vast areas where the independents can not afford to establish competition at all. Moreover, by thus limiting the profits of the independent concerns where they do busi- ness, the Standard can practically prevent them from acquir- ing the means to extend their business elsewhere and is in a position to perpetuate the monopoly which it already enjoys. IKTDIVIDTXAL INSTANCES. Hisgen Brothers' axle grease business. — In 1895 the Hisgen Brothers, of Albany, were engaged in the manufacture and sale of the Four Brothers' axle grease, and they were buying a mineral oil, used in the manufacture of grease, of the Standard Oil Company, and continued to do .so up until about 1895, when they commenced to buy of independents. At this same time the Standard Oil Company were also manufac- turing and selling what is known as the Mica axle grease. The Hisgen Brothers and the Standard Oil Company were competing with each other for the same trade in axle grease. Soon after 1895 the Standard Oil Company commenced to cut the prices upon its product in all places where the Hisgen Brothers were competing with it, sometimes below cost and to such an extent that it was difficult, if not impossible, for the Hisgens to continue in business in competition with it, and at the same time in other near-by territory where the His- gens were not competing with the Standard the price was not cut. This method of competition was carried on through- out the entire United States. The Standard Oil agents cir- culated false reports in reference to the Hisgens, told the trade that they were not safe in handling their axle grease because it was stated that it was good for medicinal purposes, and it had not been properly stamped under the revenue laws, which subjected the Hisgens to great annoyance and in- convenience and was very detrimental to their business ; and, notwithstanding the fact that the revenue officers had held that no stamps were necessary, they were compelled to use stamps in order to satisfy the demands of the trade. (T. L. Hisgen, 4/1795-1802.) 22 The defendants called "William J. Calkins to contradict the testimony of the Hisgens in reference to the competitive methods of the Standard in its sale of axle grease. Mr. Calkins is the manager of the specialty department of the Standard Oil Company of New York, and in that depart- ment axle grease is handled. He has been manager of that department and in the office for nineteen years, and the only knowledge he has as to competitive methods in the field is that which he acquired in the office. The Hisgens were in the field selling their own product and coming in contact with the trade from day to day, and were better qualified to know what the competitive methods of the companies selling axle grease were than was Mr. Calkins. All that Mr. Calk- ins said might be true to the extent of his knowledge, and yet it would not amount to a contradiction of the Hisgens' testimony. It may be true that the axle grease was sold at the regular price, but that rebates and concessions were allowed so as to bring it down to the price for which the Hisgens testified that the Mica axle grease was sold. He was not asked whether by any method the regular selling price of the Mica axle grease was not reduced to such a point that the Hisgens could not successfully compete with the Standard. It also appears from the testimony of Mr. Calkins (12/709) that since 1900 his territory covers Greater New York and Long Island up to Poughkeepsie, and east of there. This takes in only a small portion of the territory in which the Hisgens sold axle grease; they sold it everyAvhere throughout the United States, and had some traveling men on the road ; so that Mr. Calkins was not in a position where he could know whether or not the Standard cut the price of its axle grease at the places where the Hisgens sold. The Hisgens were actively in the business of the manufacture and sale of axle grease from 1900 to 1905, the period in which Mr. Calkins's territory was entirely different than the terri- tory in which the Hisgens sold. Prior to 1900 Mr. Calkins had the balance of the State of New York, the State of Penn- sylvania, and the State of New Jersey. The Hisgens did operate, prior to 1900, in this territory, but they also oper- ated outside of this territory and all over the United States. 23 The defendants did not see fit to call witnesses upon this sub- ject who were qualified to testify on the subject in the terri- tory and during the time that the Hisgens' testimony cov- ered. For some time prior to 1900 the Hisgens occupied a build- ing which was owned by the Standard Oil Company of New York, but which stood upon the right of way of the Dela- ware & Hudson Railroad, and when the Hisgens ceased to purchase paraffin oil from the Standard, the Thompson & Bedford Company sent their representative, Mr. Bourne (who was then in charge of the New York department of the Standard Oil Company, or of the Thompson & Bedford branch of it), to Albany, and he notified the Hisgens that the Standard wanted the building immediately. The His- gens had no place to go, and they took the matter up with the railroad company on whose right of way the building stood and over whose road the Hisgens were then quite ex- tensive shippers; the railroad company interceded with the Standard Oil Company and the Hisgens were permitted to remain in the occupancy of the building until they were able to provide other quarters. (T. L. Hisgen, 4/1796-1797.) The defendants in their efforts to contradict Mr. Hisgen asked Mr. McMillan whether or not anything was done by the Standard Oil Company to force the Hisgens to vacate the premises which they occupied at Albany after they ceased to purchase paraffin oil of the Thompson & Bedford department, and he testified that they were not forced out by the Standard, and that one of the Hisgens came to his office and talked with him, and that he told the Hisgens that they might remain there. (McMillan, 12/712.) This does not contradict the testimony of Thomas L. Hisgen, who says that Mr. Bourne came up to Albany and notified the His- gens that they wanted the building immediately and gave them notice to vacate it. If the defendants intended to challenge the statement of Mr. Hisgen, they should have called Mr. Bourne or somebody connected with the Thomp- son & Bedford department who would be familiar with what transpired at the time; but instead of doing this they called Mr. McMillan, whose knowledge upon the subject necessarily is only general, and who was not in any way (so far as the testimony shows) connected with the Thompson 24 & Bedford department, but had formerly sold paraiRn oil to the Hisgens for use in their axle grease business, and could not be expected to know whether or not the Thompson & Bedford department sent Mr. Bourne to Albany to notify the Hisgens to vacate the premises. No reason whatever has been given why Mr. Bourne was not called by the defend- ants on this subject. Albany, N. Y.— The Hisgen Brothers started to erect stor- age tanks in Albany, in the latter part of 1899 or early part of 1900, for the purpose of going into the oil business. Just immediately before the Hisgen's were ready to go into the oil business, and after it had become Iniown that they were going into that business, the bottom dropped out of the price and they were unable to sell oil at the market price at that time, and they practically abandoned their attempt to start, and it was two years after that before the price in Albany reached a point sufficiently high so that the Hisgens could market oil in that city. (H. A. Hisgen, 4/1947.) After the Hisgens got under headway in the oil business, they covered the territory as far south as Tarrytown, as far north as Saratoga, as far west as Schenectady, and as far east as Pittsfield, Mass., which territory was afterwards extended. The territory in the immediate vicinity of Albany was sup- plied by tank wagons, and outside of that shipments were made to dealers in barrels. In cases where the Hisgens sold oil in a town to some particular dealers, the Standard would cut the price to those dealers below the price for which the Hisgens had sold, but would still maintain the price as to ■other dealers. (T. L. Hisgen, 4/1803-1804.) After the Hisgens opened up the business at Albany, Mr. Thomas L. Hisgen made a trip to the towns along the Hud- son Kiver between Albany and New York City. Prices in those towns were all the way from 3 to 4 cents higher than the Albany price. This gave the Hisgens a chance to sell oil in barrels to the trade down the river, paying the freight and realizing their Albany price, and then making a good profit. The Hisgens established their price in Albanj', and that was the basis of their price throughout the entire Al- bany territory where they did business. In selling oil at the outside towns they sold at the Albany price plus the freight, 25 which ordinarily was under the price for which the Stand- ard was selling in that particular town. This enabled the Hisgens to do quite a business on the basis of their Albany price. Thomas L. Hisgen was upon the road himself and selling oil for his company. He would go into a town and there sell his oil at the Albany price, with the freight and expense of handling added, and immediately some repre- sentative of the Standard Oil Company would call upon those customers and offer to sell them oil at a loWer price. After the Standard had extended this lower price and the trade learned about it, they would buy oil of the Hisgens for the very purpose of bringing the Standard prices down. They sold oil to the persons to whom the Hisgens had sold for less than they did to others in the same town. The His- gens would sometimes be able to sell a customer twice, and sometimes only once, and they used the argument that if the trade would buy of them the Standard would come to them immediately with a lower price. The trade tried it and found it to be true, but after the Standard lowered the price below the price for which the Hisgens could sell, they would get the trade back, and this is the way the Hisgens had to do business everywhere. (T. L. Hisgen, 4/1813-1815; H. A. Hisgen, 4/1977-1978.) When the Hisgen Brothers started in business at Albany they met the prevailing price of the Standard Oil Company, .but immediately that company commenced to cut prices. It had been selling before that at prices as high as from 9 to 10 cents, and the price was cut down to 6 and 6^ cents. The Hisgens followed the price down as low as 7^ cents, and the Standard Oil Company must have lost money in sell- ing at that price. That method of competition has continued in Albany ever since. (T. L. Hisgen, 4/1816.) It was difficult to tell what the Standard Oil Company's, price really was. They had so many prices that it was hard to keep track of them. There was, however, supposed to be an open, general price, and the Hisgens never sold under the Standard Oil Company's price, and as soon as they com- menced to sell the price went down. They followed this decline at times as far as they could, but never got as low as the Standard did. As new territory was opened up and the Hisgens made sales in that territory, the Standard 26 dropped the price from 2 to 3 cents a gallon, and the His- gens often were compelled to drop out of that town, and where they did sell they were forced to sell at a higher price than the Standard was selling for. This was true not only with Albany but with all the cities down the Hud- son River on both sides, as many as fifty or seventy-five all told. This was also true of towns farther back from the river on the Harlem Branch, and in Connecticut and Mas- sachusetts. Everywhere that the Hisgens entered the mar- ket they were compelled to meet the same cut in prices. (H. A. Hisgen, 4/1948-1949.) Shortly after the Hisgens opened up in Albany, in 1900, the Standard Oil Company's price of oil was 12 cents a gal- lon, and it immediately declined to 8i, 8, and 7 cents. (Win- nie, 4/1932; H. A. Hisgen, 4/1948.) Wellington Winnie was called by the petitioner and tes- tified that he had been buying oil of the Hisgens and that a Mr. Hafley, salesman for the Standard, called upon him at his place of business and wanted to sell him oil. He learned of the price Winnie was paying the Hisgen Brothers, and offered to sell Winnie at one-half cent below the Hisgen price. The offer was made in a conversation in which Hafley indicated the price for which he would sell oil by raising up five fingers on one hand and then one finger and a half a finger on the other. (Winnie, 4/1933.) He also told Mr. Winnie that the tickets would be made out at the regular price and the amount of the cut returned to him. (Winnie, 1937. Mr. Winnie declined to accept the offer, because he appreciated what the Hisgen brothers had done for the oil trade in Albany. (Winnie, 1933.) Mr. Hafley was called to contradict the testimony of Mr. Winnie, but he finally admitted that he used his fingers ex- actly as Mr. AVinnie had said he did ; but put a different con- struction upon the meaning of what he said and did, he claiming that he was simply trying to find out the price that W^innie was paying the Hisgens. When the question was put to him as to whether he had offered oil to Winnie at a cut price, he did not at first answer positively, but said that he could not remember. This answer he repeated two or three times. After he was badgered into it by his counsel, he got up his courage and said that he never made such an 27 offer, and after considerable questioning and cross-question- ing, he got out of the predicament as best he could by saying that one of the late questions of his counsel had refreshed his memory so that he was able to swear positively. The examination was too long and the testimony too unimportant for us to take much time in discussing it, but an examination of this witness's testimony will satisfy the court that Win- nie's version of the matter is correct and that Hafley's is incorrect. (Hafley, 12/737-743.) John Ahearn, a grocer at Albany, testified that after leav- ing the Standard and purchasing for sometime from the Hisgen Brothers, the Standard's tank-wagon driver, Pete Wagner, came to him and wanted to know why he could not sell Ahearn oil; that Ahearn replied to him that he knew the Hisgen boys, and there was no object in his changing; that Wagner then asked him if he could do better with Ahearn than the Hisgens, would he (Ahearn) buy of Wag- ner, to which Ahearn replied " I certainly will ; " that Wagner thereafter made him a proposition to sell him oil for the next six months at 2 cents a gallon less than the then prevailing price, the 2 cents to be paid to Ahearn as a re- bate, which proposition Ahearn accepted, and the Standard began to supply him with oil ; and that afterwards the Stand- ard refused to keep its agreement about the price, but Ahearn deducted the amount of the rebate to which he was entitled from a bill for candles owing to another department of the Standard Oil Company, and the Standard never thereafter attempted to enforce collection of the amount which Ahearn so deducted from the candle bill. (Ahearn, 4/1970-1972.) Wagner was called by the defendants to contradict the testimony of Mr. Ahearn. His explanation of the way he succeeded in getting Ahearn's trade away from the Hisgens was that he played a trick upon Ahearn and deceived him by making him believe that he was going to get his oil for 2 cents below the market price, when, as a matter of fact, Wagner says he knew at the time he talked with Ahearn that the price was to be reduced on the following day to 7 cents a gallon. He concealed this information from Ahearn and led him to believe that he was to have a 2-cent reduction. (Wagner, 12/838-842.) 28 The question is, whether the court will believe Mr. Aheam, a reputable business man in Albany, or whether it will be- lieve Wagner, who admits that he practiced this deceit upon Ahearn. If Wagner's testimony is true, then the Standard would certainly have collected from Ahearn the full amount of its bill for candles, and the fact that it did not do so or attempt to do so in the courts is conclusive proof that Ahearn's version of the transaction is the true one. The testimony, when all taken together, shows the fact to be that when this reduction of 2 cents was made to Ahearn it was not on account of any lowering of the price in Albanyj but was held out as a special inducement to him individually. Wagner's story is unreasonable ; how could he expect that a general reduction of 2 cents a gallon could be made to the general trade in Albany without Ahearn's quickly finding it out; and how could he expect Ahearn to go on buying the Standard oil for six months under that contract unless he understood that he was to receive some benefit by taking his patronage from the Hisgens and giving it to the Standard, for at the time the contract was made Ahearn had told Wag- ner that there was no object in changing, and when asked if he would give his trade to the Standard if they would " do better," he promtly replied that he would. All the circumstances tend to support the testimony of Ahearn and to disprove the statement of Wagner. A man who will resort to the trick which Wagner admits to have used upon Ahearn to get his business, is, to say the least, unworthy of belief. Mr. Thomas McMillan, who is now and, since January 1, 1903, has been manager of the Boston department of the Standard Oil Company, and who for five years before that was manager for the same company at Albany, was called by the defendants. His testimony corroborates, rather than contradicts, the testimony of the Hisgens in reference to price cutting in Albany at about the time that the Hisgens were prepared to go into the refined oil business. Mr. McMillan says (12/713-714) that the tank-wagon price of refined oil in Albany in October, 1899, was, he thinks, SJ or 9 cents, but about that he is not entirely certain; that on the 1st of January, 1900, the price was 10 cents; and that then the market was reduced so that in the early part of 29 1900 the Standard price in Albany was 7 cents a gallon. He says that there was a general lowering of prices throughout the entire field at about that time, and that this lowering of prices was in no way connected with the fact that the His- gens were about to open up in Albany. The fact, however, remains uncontradicted that the price was reduced so low that the Hisgens were unable to market oil, and, although they had built tankage and prepared to go into the business extensively, they refrained from doing so, only because of this abnormally low price. Let us see, now, what explanation Mr. McMillan does make for the slump in prices at Albany at about the time the Hisgens were prepared to start. On page 714, he says that in about 1900 the Tiona Oil Company, then doing busi- ness in Troy, a city a few miles from Albany, cut the price in Troy, sometimes a cent below the Standard price, and that the low price in Albany was made because of this cut. This in no way explains the general cut throughout the territory where the Hisgens had prepared to do business; and it is scarcely believable that the Standard Oil Company, which at that time had nearly all of the business in that territory, would lower the price of oil 3 cents a gallon in the entire territory merely to meet a cut in the price made by one tank wagon in a city of the size of Troy. The Standard had other methods of meeting that kind of competition, to which it was quite willing to resort, and that was by putting bogus companies in the field to meet the cut, while the Standard maintained its regular price; and the Standard did have a bogus company running in Troy at this very time, known as. the " Troy Oil Works," and if any cutting was necessary to meet the cut of the Tiona Oil Company, it would have been made by the Troy Oil Works, and the Standard would have been enabled thus to maintain its price throughout its entire territory, and to drive out the competition by means of this bogus company. Mr. McMillan also admits that for a few months in 1902 the Standard's price of refined oil in Albany was 6J cents, and he says the reason for tliis price was that the Tiona Oil Company sent a wagon, accompanied by an escort of two salesmen, into the city of Albany, and that it solicited the 30 business at 6| cents a gallon; that this fact was communi- cated to him; and that the price was reduced to 6^ cents, where it was kept for four months and until the Tiona peo- ple discontinued their trips to Albany, and that then the price was advanced to 7^ cents. (McMillan, 12/716.) Mr. McMillan's statement that the low price in Albany in 1902 was because the Tiona came there from Troy with a wag- on and made a 6-cent ptice is completely overcome and shown to be entirely untrue by the testimony of Mr. L. T. Messner, who was called on behalf of the Government in rebuttal in this case. The attention of Mr. Messner was called (20/50-51) to this testimony on the part of Mr. McMillan, and he says, " No tank wagon of the Tiona Oil Company ever went to Albany with kerosene oil, from November 15, 1900, until the 1st day of January, 1906." He says he knows this be- cause he was manager of the Tiona Oil Company during that entire period, and was himself both a tank-wagon driver and, city salesman; that they kept books, and knew where the tank wagon was every day. He does say, however, that a tank wagon of the Tiona Company did go to Albany to sup- ply the Wilbur-Campbell-Stevens Company, which was oper- ating a laundry at Albany, and supplied that company in tank-wagon lots with gasoline, and with nothing else; that the Tiona had no other customers in Albany during that period, and did not sell a gallon of oil there to anyone. So that Mr. McMillan's pretended explanation of the Standard Oil Company's cut in Albany in 1902 is entirely without foundation. The fact remains, however, that for two years after the Hisgens erected their tanks in Albany the Standard kept the price of oil so low that the Hisgen Brothers were not able to go into business at all, while before that the price had been so high that the Hisgens were induced to erect their tanks for the purpose of going into the oil business in competition with the Standard. There is no claim made that during these two years the Hisgen Brothers cut prices or attempted to sell at any price in Albany. It would have been folly for them to go into the business with a market that was down so low that whoever sold at the pre- vailing prices must sell at a loss. 31 Mr. L. J. Drake was placed upon the witness stand to account for the 7-cent price of oil in Albany during the year 1905, and he states that that low price was made because of the competition of the Tiona Oil Company ; and he bases his statement upon defendants' Exhibit 86. The paper of which this exhibit purports to be a photographic copy has not been introduced in evidence, nor its nonproduction properly ex- cused. It is not signed by anybody, nor do the parties to this alleged agreement appear upon its face ; and there is no proof that it ever went into effect. It does not appear whether the stores mentioned in it were all owned by one person or company or not. They were all located either in Troy or in little near-by towns. There is nothing in the exhibit to show what grade of oil was to be delivered to the stores that are mentioned ; nor is there anything in the testi- mony to indicate whether the oil delivered, if any was de- livered, under this contract was Water "White or an inferior grade; and there is nothing to show that it was the same grade of oil upon which the cut was made by the Standard in Albany. If this arrangement, or whatever it may be termed, went into effect and is to be made the basis for the cutting of prices by the Standard, it displays an unusual and unique situatioji; that is to say, that because to a few cus- tomers in little towns a cut was made, the Standard Oil Com- pany, having the great bulk of the trade, lowered its price at a central station in Albany, and thereby necessarily low- ered its price throughout its entire territory. The contention of the defendants is that, when the price was lowered in Albany, it was lowered throughout the territory. At this same time the Standard was operating the Troy Oil Works, which was selling oil in that same territory; and the price could have been met by the Troy Oil Works in the towns only where the alleged cut was said to have been made by the Tiona, and by so doing the general prices of the Standard Oil Company in the city of Albany and the territory within that district need not have been disturbed or changed. Dur- ing this period when the low price prevailed in Albany the Standard was selling a part of the time at a loss and all the rest of the time at a very small margin of profit. (Exhibit 635, vol. 10, 1640-1641. ) The unreasonableness of Mr. Drake's 32 testimony is apparent from the fact that it was not necessary for the Standard to make this cut in Albany, because none of the stores mentioned in defendants' Exhibit 86 are in Albany, and all of them could have been reached by the Troy Oil Works, and doubtless were reached by that company. Furthermore, Mr. Drake was the general sales agent of the Standard Oil Company for the eastern part of New York and was located at New York City. He was not on the ground and in a position to have any personal knowledge as toi the prices or price conditions. Mr. Van Dusen was at that time, and is yet, the manager of the Albany branch of the Standard Oil Company, and he, and not Mr. Drake, was in touch with the price conditions and the reason for the pre- vailing prices, and for any cuts which were made in those prices ; but Mr. Van Dusen has not been called as a witness in this case. King testified to the marketing methods of the Standard Oil Company in the Boston and Albany districts, over which at different times he had charge ; and also as to the sources from which the oil used in those districts came. He was asked on cross-examination about competitive methods and comparative prices in different localities, but was not able to give any definite information. He would not swear, how- ever, that the Hisgens had not, for the two years during which he had charge of the Albany and Springfield districts, sold oil for from one-half cent to 1 cent higher than the Standard was selling. He admitted on his cross-examina- tion that rebates to some extent were allowed in his territory up until a recent period, thus corroborating and not contra- dicting the testimony of the Hisgens as to the marketing methods. (King, 12/703, 704.) Springfield, Mass.— When the Hisgens started in at Spring- field early in 1901, the Standard Oil Company had control oi that market and was selling at 12^ cents a gallon. Within a few weeks the price went down to 9 cents, and then down one-half cent a gallon at a time until it reached 7 cents. The Hisgens met the cut until it got down as low as 7^ cents, and there they stopped and appealed to the trade to stand by them at the 7^-cent price. It was apparent to the dealers that this competition had been highly beneficial, and the Hisgens were able to retain most of their customers at a 7i-cent price, 33 although the Standard at the same time was selling for 7 cents. (T. L. Hisgen, 4/1817.) Thompsonville, Conn.— After the Standard had lowered its price in Springfield to 7 cents a gallon, it still maintained the price as high as 10 and 11 cents in outside towns, where there was no competition ; and the Hisgens entered the mar- ket in Thompsonville and commenced selling to the trade in that city, and as soon as they did so the Standard reduced the price in that town to 7 cents a gallon. The Hisgens went down to 7i cents and sold at that price, and retained most of their customers. (T. L. Hisgen, 4/1817.) Windsor Locks, Conn. — The same conditions prevailed in Windsor Locks that prevailed at Thompsonville, but the Standard only reduced its price in the latter place to 7^ cents a gallon, and the Hisgens sold at the same price. They were unable to increase their trade in Springfield, and were compelled to go out in the near-by towns as far as their wagons would reach and solicit new trade on a 7^ -cent basis; but as soon as they entered new territory the Standard gave in that territory the Springfield price of 7 cents. The Standard method of doing business is illustrated by the case of the American Writing Paper Company, of Hol- yoke, Mass. This company had a branch at Windsor Locks. The Hisgens had been selling this company in Holyoke, and the Standard had giyen them a lower price and had taken the business; but at Windsor Locks the Standard was charging this same company 9 cents a gallon, while at the same time they were furnishing the grocery stores oil at 7J cents a gallon. This condition of things was made known to the purchasing agent of the paper company at Holyoke, and it was investigated by him, and he compelled the Standard Oil Company to pay back to him the difference between the price which it had paid and the price for which the Standard was selling oil to other customers in the same town. (T.L. His- gen, 4/1818-1820.) Mr. P. M. Watt, general manager for the Providence de- partment (which has' jurisdiction over Connecticut, Rhode Island, the eastern part of Massachusetts, and a part of Vermont), attempted to explain (12/801) the deal with the American Writing Paper Company, about which Mr. 72064— VOL 2—09 3 34 Thomas L. Hisgen testified. Mr. Watt, however, does not contradict Mr. Hisgen, but seeks to explain the situation by saying that it was all a mistake. He admits that they were charging this company 9^ cents a gallon when they were selling to others in that locality for 7^ ; and it is uncon- tradicted that this state of affairs continued until Mr. His- gen called the attention of the American Writing Paper Company to the fact. It is also admitted by Mr. Watt that the American Writing Paper Company took the matter up with the Standard Oil Company, and the result of it was that the Standard Oil Company paid back to the writing paper company what it had charged it over and above what it was charging other purchasers. Mr. Hisgen says (4/1819) that the American Writing Paper Company remained his customer after that. Mr. Watt in a feeble way attempts to deny this, and states on his cross-examination (12/806) that as far as he knows the Standard sold the paper company oil pretty nearly all of the time after that. But he doesn't state how far he knows and says that the books would show, but that he has not ex- amined them. When asked if he had this paper company for six months after the money was paid back, his reply was, " It is my impression we did ; yes, had them right straight along." He says the Hisgens did not have them exclusively after that. The testimony of Mr. Watt is equiv- ocal and uncertain, and his position was such that he prob- ably could not know whether the paper company remained his customer or not; while the testimony of Mr. Hisgen is straightforward and positive to the effect that it became his customer after he disclosed the situation. Windsor, Mass. — ^Windsor is about 5 miles below Windsor Locks. The wagons of Hisgen Brothers reach Windsor Locks, but do not reach Windsor, and at the time when the Standard was selling oil in Windsor Locks at 7^ cents it was selling at Windsor for 9 cents a gallon, and the cost of getting oil to Windsor was no greater than it was to Windsor Locks. The Standard has a distributing plant there. The Hisgens finally went into Windsor and called the attention of the merchants to the difference in price be- tween that place and Windsor Locks, and they were able to sell some oil to the merchants at Windsor, but as soon as 35 they had done this the Standard gave them an 8-cent price at Windsor, and there is still a difference in the Standard's price of 1 cent a gallon between Windsor and Windsor Locks. (T. L. Hisgen, 4/1820-1821.) Windsor Hill, Mass.— At Windsor Hill the Hisgens were unable to make any sales, and the price at that place re- mained at 9 cents a gallon. Windsor Hill is across the river from Windsor, and there is no difference in the cost of get- ting oil to the two places; in fact, the Standard draws the oil farther to Windsor than it does to Windsor Hill. Tank-wagon tickets were here presented by the witness which show the discrimination between Windsor and Wind- sor Hill on January 6, 1908. These tickets were offered in evidence and marked " Petitioner's Exhibits Nos. 636 and 637." (Vol. 10/1660; T. L. Hisgen, 4/1821.) Tariffville, Conn., and CoUinsville, Mass. — Tariffville is about 14 miles from CoUinsville, and the oil sold at the former place is hauled from CoUinsville over rough roads in wagons. In 1905 or 1906 the Hisgens had a customer in Tariffville by the name of Sanford. At that time the Standard were selling oil in Tariffville at 11 cents, and at the same time they were selling in Springfield at 7 cents. After the His- gens had sold Mr. Sanford oil, the Standard Oil Company made a contract with him to sell him oil at 8^ cents a gal- lon, and at that time the prevailing price in Tariffville, as well as in CoUinsville, was 11 cents a gallbn. The Standard was thus selling oil to Sanford in Tariffville for 2^ cents less than it was selling it in CoUinsville, where its tank station was located ; and every other dealer besides Sanford in Tar- iffville was paying 11 cents a gallon out of the tank wagon. The contract between the Standard Oil Company and San- ford was here offered in evidence and marked " Petitioner's Exhibit No. 638" (vol. 10, p. 1660). After this contract expired the Standard refused to renew it, and the Hisgens again sold Sanford more oil, and after this sale by the His- gens the Standard renewed the contract with Sanford, which contract was produced upon the hearing and marked " Pe- titioner's Exhibit No. 639," and offered in evidence. There was another dealer in the sam6 town by the name of Smith, who was buying oil of the Standard. When he 36 learned that the Standard was selling oil to Sanford for less than they were selling it to him, he quit buying oil of the Standard and commenced to buy of the Hisgens. In the early part of 1906 oil was selling in CoUinsville, where the Standard had no competition, for 4 cents more a gallon than it was selling for at Springfield, where the Stand- ard was meeting the competition of the Hisgen Brothers. There was no difference in the freight rate between these two places, and, in fact, it did not cost them as much to get their oil into CoUinsville as it did into Springfield. Tickets to show this price condition were offered in evidence and marked " Petitioner's Exhibits Nos. 639, 640, and 641." (Vol. 10, 1661). Mr. Hisgen, who testified upon this point, said that he was familiar with the trade in those two places, and he knew the difference in the range of prices independently of these tickets; that he was in the market selling oil, and that it was a part of his business to ascertain what oil was selling for in those towns, and he gathered up the tickets that had been offered in evidence from the trade, and were tickets of the Standard Oil Company. (T. L. Hisgen, 4/1822-1824.) Cheshire, Mass. — Cheshire is 10 or 15 miles from Pittsfield. There is a dealer there by the name of Dean, who formerly purchased oil of the Standard, but in about July, 1902, he learned from Mr. Thomas L. Hisgen that the Standard Oil Company was selling to a Mr. Bowen — one of Mr. Dean's competitors in the same town — oil for less than it was selling to Dean. Both of these dealers were buying the same kind of oil, out of the same tank wagon, and from the same driver. After Mr. Hisgen had informed Mr. Dean that the Standard was selling to his competitor for a lower price, and also that the Standard was selling at a lower price in Pittsfield, Mr. Dean gave Mr. Hisgen an order for some oil. Before Mr. Bowen received the lower price from the Standard he had bought a carload of independent oil, and this is the reason that the price was made lower to him than it was to Mr. Dean. (Dean, 4/1892.) At this time Mr. Dean was selling twice as much oil as any other merchant in Cheshire. Mr. Hisgen informed him that the only way he would get a price as low as Mr. Bowen had obtained was to buy some inde- pendent oil. A few days after Mr. Dean purchased this oil of the Hisgen Brothers, Mr. Akin, who was at that time the 37 manager of the Pittsfield branch of the Standard, called upon Mr. Dean, and a day or two afterwards Mr. Tuthill, who was the manager for the Standard at Springfield, also called upon Mr. Dean. The matter was talked over between these gentlemen and Mr. Dean, and the result of it was that they gave him a contract which was 1 cent or 1^ cents per gallon lower than he had been paying. This contract was for 3,000 gallons of oil, but it was to be delivered into Mr. Dean's tank from time to time as the trade required it, and Mr. Dean paid for the amount of oil he received on each delivery in exactly the same manner as he had previously done, the only differ- ence between the method of doing business under this con- tract and before the contract was made being that Mr. Dean agreed to take at least 3,000 gallons of oil. Mr. Dean paid for the oil as he received it at the open-market price prevailing in that town, and later along the agent of the Standard came around and paid him back in cash the difference between the open-market price and the contract price. (Dean, 4/ 1894.) The agent of the Standard also paid back to Mr. Dean $11.18, which made up the difference between what Mr. Dean and Mr. Bowen had paid for oil during the period be- fore the contract was made when the lower price had been given to Mr. Bowen. (Hisgen, 4/1826-1827; Dean, 4/1892- 1893.) Mr. Dean had his first conversation with Mr. Akin, who was the Pittsfield manager, and who claimed that he had not full authority to make an arrangement with Mr. Dean for the same price that they were extending to Mr. Bowen; but Mr. Tuthill, who has charge of the Springfield station, and who is also over Mr. Akin in authority, came along after Mr. Akin's interview with Mr. Dean and made the con- tract above referred to. This arrangement with Mr. Dean was renewed from time to time until 1905. In 1905 the Standard refused to give Mr. Dean as good a contract as he had heretofore had, and he went back and purchased oil of the Hisgen Brothers. The Standard then came around to him and made a better contract with him. (Dean, 4/1894.) Pittsfield, Mass.— Pittsfield is a town of some 25,000 in- habitants, and one in which there was constant strife and warfare by the Standard from the time the Hisgens started in business there. In 1905 the Standard was selling oil in 38 Pittsfield for 10 or 10^ cents (Mandigo, 4/1964). The His- gen Brothers proposed to open up a station there, consulted with the trade, and agreed to do so if they could be guaran- teed a price on which they could make a reasonable profit. They said to the trade that if they started the Standard would immediately cut the price; and, if their customers all left them because they got a lower price from the Standard, their enterprise would be a failure, and they wanted to know whether the trade would stand by them and pay them 9 cents a gallon for oil if they would open up this station at Pittsfield. This was the Springfield price at the time. The dealers there, among them Mr. Dean, agreed to do it, and the Hisgens established there, located their tank station, and put their tank wagon on the streets. The Standard imme- diately cut the price to 7^ cents a gallon, and have been selling at that price ever since. The dealers at Cheshire, who are served by tank wagons from Pittsfield, are still paying 9 cents a gallon for their oil, while the Standard is selling oil in Pittsfield at 7^ cents a gallon. Mr. Dean says that a feeling prevails that if it had not been for the competition of the Hisgen Brothers that they would be pay- ing more even than they are now paying, and, for the sake of keeping competition there, the people were willing to pay the extra price. Mr. Dean issued circulars twice a month explaining the situation to the consumers in Cheshire, and they were willing, under all of the circumstances, to pay the extra price. (Dean, 4/1895, 1896-1899; Mandigo, 4/1963-1966.) James H. Kelley, a grocer at Pittsfield, purchased his oil of the Standard until 1906, when the Hisgens put their plant in at that place, and then he commenced buying of the HiS' gens. Soon after that Mr. Akin, who was the manager for the Standard at Pittsfield, asked Mr. Kelley if he could not sell him oil. Mr. Kelley informed him that he did not care to purchase any of the Standard ; that he was purchasing of the Hisgen Brothers. Mr. Akin then offered, if he would purchase oil of him, to fill Mr. Kelley's tank free of charge, but Mr. Kelley declined even to permit him to do this. Mr. Akin contradicts this (12/747), but in the discussion of Ms testimony at another point in this brief we think we will 39 satisfy the court that Akin's testimony on that point is tin- reliable. A few days afterwards another person came to Pittsfield, a stranger in the place, and said that he was representing the Standard and tried to sell oil to Mr. Kelley. Mr. Kelley refused to take any from him, and he made the same offer that Mr. Akin had made, to fill his tank free of charge. There is no direct testimony that this person was connected with the Standard Oil Company, but it is uncontradicted that he came there representing himself so to be, and made the same proposition that had previously been made by Mr. Akin, an agent of the Standard Oil Company. Mr. Kelley made an affidavit of these facts, which was published in the newspaper, and later along Mr. Akin and Mr. Tuthill asked Mr. Kelley to give them a retraction, which Mr. Kelley refused to do. At that time the Standard was selling oil in Pittsfield for 8 cents a gallon, and the Hisgens were selling for 9 cents. (Kelley, 12/1905-1907; Akin, 12/761-762.) John DriscoU, who was in the grocery business at Pitts- field in 1900, and who had been purchasing oil of the Stand- ard, in that year commenced to buy of the Hisgen Brothers. Soon after that the manager for the Standard at Springfield called upon Mr. Driscoll and wanted to make a contract with him to sell him oil, and offered him a reduction from the regular price, and Mr. Driscoll entered into a contract with him, but afterwards wrote him a letter withdrawing from the contract. The manager again called upon Mr. Driscoll and offered him another one-half -cent reduction if he would pur- chase from the Standard; and since that time Mr. Driscoll has bought some from the Standard and some from the His- gens. (Driscoll, 4/1910-1918.) In 1907 George T. Mandigo, of Pittsfield, told Mr. Akin, the Standard agent at that place, that he was going to change over his tank so as to use barrel oil from Springfield. At this time the Hisgen Brothers were doing business at Spring- field, selling oil in barrels. Three or four weeks after that talk Mr. Akin met Mr. Mandigo on the street and handed him a handful of silver. Nothing whatever was said about it, but it was understood by Mr. Mandigo that it was to keep 40 him from buying oil in Springfield. Mandigo had pre- viously been paying cash for oil, and on one or two occa- sions afterwards Akin came into the store and gave Mandigo money; the amount Mandigo was not able to state, but he figured it out and it amounted to about a half a cent a gal- lon on the oil he had purchased during the month preceding. All of this took place after Mr. Mandigo had spoken to Mr. Akin about buying his oil at Springfield. (Mandigo, 4/1963-1964.) Archie Couch testified (4/1968) that Mr. Cowlin, who was then a driver for the Standard in Pittsfield, offered to fill the tank of Mr. Root, his employer, free of charge, after Root had purchased of the Hisgens. Mr. Cowlin contra- dicted this and said that the conversation testified to by Couch never took place. (Cowlin, 12/798-799.) Mr. Cowlin said that after he learned that the Hisgens were selling or were going to sell Mr. Root oil, that he never went near the store and never made any effort to get Root's trade back again, although the Standard had previously had all his trade. If this be true, then the Standard adopted an entirely different method in dealing with Mr. Root than they did in dealing with all other customers. The testimony shows that in every instance where an independent sold oil to any customer that had been a patron of the Standard, that the Standard sent its drivers jind salesmen to see the cus- tomer, and made every possible effort to reclaim his trade, by price cutting, rebates, or whatever method seemed best at the time to accomplish the result. Why Mr. Root was treated different, and why no effort was made whatever to get his trade away from the Hisgens, is not explained by Mr. Cowlin, yet his testimony is in direct contradiction of the uniform practice of the Standard Oil Company in that re- spect, and is unreasonable. The testimony of Mr. Couch is entirely consistent with the general practice of the Standard Oil Company, and is therefore worthy of belief. Mr. Couch had no interest in the business except that he was an em- ployee of Mr. Root; nor could Mr. Root have had any interest whatever in misrepresenting the facts or inducing his em- ployee to testify falsely. Mr. Cowlin was then and is now in the employ of the Standard Oil Company, driving a tank 41 wagon at Pittsfield. We submit that the testimony of Mr. Couch, a disinterested witness, is worthy of greater credence than that of Mr. Cowlin, an employee of and under the domi- nation of the Standard Oil Company. When the Hisgens were about to open up their branch in Pittsfield, Mr. Akin, who was then the general manager for the Standard at that place, caused the business men in Pitts- field to write to the Hisgens, urging them to employ Mr. Akin ; and in a conversation between Mr. Akin and Thomas L. Hisgen at about that same time Akin said to Hisgen that he had decided to quit the service of the Standard Oil Company, and it mattered not whether the Hisgens hired him or not; that no man could work for the Standard and retain his honor ; that the most disagreeable duty was going down to the depot, watching and keeping track of barrels that the Hisgens had shipped ; and that he was allowed to give only 1 cent rebate over the prevailing price, while at Providence he was satisfied they were allowed to give a larger rebate. A verbal contract was made between him and the Hisgens, but about the time he was to start on the work he changed his mind and did not enter the employment. (T. L. Hisgen, 4/1834.) Mr. Akin, who is still in the employ of the Standard and in charge of that station, was called to the witness stand by the defendants. This witness was, of course, anxious to hold his position and unwilling to state anything that would prejudice his interests, and while he does not at this time admit all that Hisgen says that he stated in the conversation which they had in 1906, when Akin was ready to leave the employment of the Standard, he does, however, say enough to establish the truth of what the Government claims and the falsity of what the Standard Oil Company claims in reference to its competitive methods in that territory. It will be remembered that the Hisgens started in the refined-oil business, selling in barrels in Pittsfield, in 1902, and that they continued their deliveries in barrels until 1906, when they erected tankage there and established a station. On his cross-examination Mr. Akin said: There were some things in Pittsfield that I did not like. I did not like more than one price. There were some places where they sold oil in given quantities at a less price than at others, and 42 I did not like that. And I told Mr. Tuthill (who was his superior officer and located at Springfield) that I did not like it. But he did not say that he would change it if I would stay. I was thinking of leaving the Standard Oil Company because I did not like their methods at about the time that the Hisgen Brothers came into Pittsfield, and I thought some of going with the Hisgens. I do not know that I particularly tried to help them get started ; I showed them the Standard Oil Company's blank forms, to assist them in making up theirs ; and I think that I did notify the Hisgen Brothers when their tanks were coming in there. And I think that I told the Hisgens that I didn't want to work any longer for the Standard. What came over me and changed me was that the Standard in 1906 made one price throughout the district. It was in 1906 that I was talking about quit- ting, and this was about the time that the Hisgens opened up at Pittsfield. The change in the methods by the Standard was a very few weeks after I made up my mind to go with the Hisgens. I do not remember whether I made up my mind not to go with the Hisgens before the change was made. I am not able to state what the reason was that caused me to reconsider and remain with the Standard. The only reason that I complained was that they had different prices to dif- ferent customers ; and I didn't like the idea of going over to the depot and check over the number of barrels and the names of the consignees, and so on, that were shipped into Pittsfield by our competitors. I did not make it a business to go over and take this information ; I took it off when I happened to be there, and I reported what came into the station. I know that Mr. Smith wrote a letter to the Hisgen Brothers in my behalf. He did this voluntarily. I told Mr. Smith that I did not want to work for the Standard Oil Company any longer. I talked over a great many things with hun, and the result of it was that Mr. Smith wrote a letter in my interest to the Hisgens, and mailed it to them, and I never saw it. (Akin, 12/757-760.) The Pittsfield situation is typical of the methods adopted by the Standard Oil Company, and we have here from the lips of their own witness and their own employee the state- ment that they did not adhere to prices, but that they cut 43 the prices where necessary to destroy competition. We were compelled to call a great many witnesses to prove this state of facts, and the Standard have called many witnesses to contradict it. But this witness was in a position where he did not dare to contradict it; he had talked not only to Mr. Hisgen, but had talked to Mr. Smith, and he was compelled to admit upon the witness stand that the Standard Oil Com- pany in the Pittsfield territory did exactly what the Govern- ment claims it was doing there and elsewhere. long Meadow, Mass. — At Long Meadow in 1904 the Hisgen Brothers were selling oil to a merchant named Allen, when Allen was several times approached by Mr. Tuthill, agent of the Standard Oil Company, and finally Tuthill offered him oil at 6 cents per gallon, when the prevailing price was 8 to 8i cents. (Hisgen, 4/1828; Allen, 1900.) Afterwards a statement that oil had been offered to Allen at 6 cents per gallon appeared in the Boston papers, and Mr. Tuthill wrote Mr. Allen a letter asking that he contradict the statement. To this Allen never replied, and afterwards in conversation with Mr. Tuthill told him that he could not contradict this statement because it was true. (Allen, 1900.) On cross- examination Allen was asked if it was not the fact that what Tuthill said to him was that he did not suppose he could sell him oil if he offered it to him at 6 cents ; to which question Allen replied " No, sir ; that was not the way he put it," and then stated that it was an inducement to him to take oil ; it was an offer to him of oil at 6 cents per gallon as an inducement to buy of the Standard Oil Company. (Allen, 4/1903-1904.) ■ Mr. Tuthill (12/784) attempts to contradict the testimony of Allen. He admits that he had a conversation with Mr. Allen, and that he was trying to sell him oil, and that a 6-cent price was talked of, but tries to turn the conversa- tion into a different channel by stating that he only said in a joking way that he did not suppose Allen would buy of him if he should sell him for 6 cents a gallon. He seeks to make it appear that the whole thing is a joke. Allen seemed to take it seriously, and apparently beheved exactly what he said to the newspapers, that Tuthill had made him that offer, because, when Tuthill returned to him after it had been pubUshed in the newspapers and asked him to 44 retract, he refused to do so, still insisting that hia version of that conversation was the true one. Mr. Allen, unless actuated by malice and with a disguised purpose, would not have made that statement and caused it to have been pub- lished; and there is nothing in this record to show that he was actuated by any motives of that character, or that there were any unfriendly relations existing between him and Mr. Tuthill. On the contrary, it appears that their relations were friendly. He was not a competitor of Mr. TuthiU's; he had no interest in the oil business except to buy his oil of whoever he saw fit to patronize; and why should he make that state- ment if it were not true? Mr. Tuthill is called in here now by the Standard Oil Company to contradict that statement; he was then and is still in their employ; and they of course were very much dissatisfied when they saw a publication of that kind in the newspapers, that was calculated to do them harm with their other customers; and Tuthill undoubtedly went to Mr. Allen at the suggestion of some of his superior ofiicers to endeavor to get a retraction. What h\irt the Standard Oil Company was that this offer, at this unusually low price, was published in the newspapers, and their trade got hold of it all over that territory. They never com- plained of any cut in the price if they could get rid of a competitor; that was the weapon which they used in every locality. But in every instance where the newspapers pub- lished anything of this kind they immeditaely made efforts to get retractions. We might cite here the instance of the peddler Hosier, at Chardon, Ohio, in which Mr. Cobb pro- cured an affidavit to contradict a certain article that appeared in the newspapers. Hyannis, Mass. — In about January, 1907, while the Stand- ard Oil Company was selling oil at 7 cents a gallon in Springfield, the Standard was charging 11| cents at Hyan- nis. The Standard had no competition at this latter place. It is located on the cape, and the refined oil is pumped into barges and delivered along the coast of New England, while the oil that is received at Springfield comes from Wilsons Point, about 80 miles away. So that the freight rates are not as high to Hyannis as they are to Springfield, and Hy- annis should receive a lower price rather than a higher price than Springfield. (T. L. Hisgen, 4/1829.) 45 Mr. McMillan made a labored effort to show that Thomas L. Hisgen made a comparison of prices between Springfield and Hyannis, Mass. ; that in doing so he took the 1906 price in one town and compared it with the 1907 price at the other town ; and had caused an interview with him to be published in a Boston paper, in which it was stated that in 1907 oil was selling in Springfield at 7 cents a gallon and at Hyannis, at the same time, for 11| cents a gallon. Mr. McMillan stated that Mr. Hisgen had compared the 1906 price at Hy- annis with the 1907 price at Springfield, and had thereby created a false impression. Without taking the time to dis- cuss the question as to whether or not Mr. Hisgen did, either purposely or by mistake, if he did so at all, compare the 1907 price in one place with the 1906 price in another, let us see what the facts are in reference to the prices at these two cities, at identically the same time, as stated by Mr. McMil- lan himself on cross-examination: He was first asked if he had any tickets to show what the price was in Hyannis in 1907, this being the year in which the tickets showing sales in Springfield had been offered, and he said that he had no such tickets, did not bring any with him, and that it did not occur to him that it would be necessary. He did say, how- ever, that during the entire month of January, 1907, oil sold in Hyannis at 10 cents a gallon, and at the same time oil was selling in Springfield for 7 cents a gallon. This was shown by the ticket which Mr. Hisgen compared with the Hyannis ticket, and is also shown by the Exhibit 635 in evidence. Mr. McMillan was asked if he could explain this difference of 3 cents, and he was utterly unable to do so, although he had been engaged exclusively in the business of marketing oil in the Boston territory and in the Albany and contiguous territory for nearly twenty years. Mr. McMillan admitted that in 1906 his company was selling oil at Hyannis for 11^ cents. It is shown by Exhibit 635 that at the same time oil was selling in Springfield for 8| cents, a difference of 3 cents a gallon. Mr. McMillan's attention was called to this discrepancy of prices in these two places and was asked to account for it, and he said he was unable to do so. (McMillan, 12/726.) Mr. McMillan's attention was then called to the prices at Fall Kiver, Mass., during the months of January, February, 46 March, April, and May, 1906, in which oil was selling by the Standard for 11 cents a gallon, and at the same time it was selling in Springfield for 2J cents less; and Mr. McMillan was unable to give any explanation for this. His attention was also called to the fact that there was no competitioBi whatever reported from Fall Eiver, and that there was con- siderable competition reported from Springfield, where oil was selling at 8^ cents. Mr. McMillan was asked if he ac- counted for this difference in price on the theory that there was competition in one place and not in the other, and he said he was not able to do so, and unable to account for it in any way. (McMillan, 12/726-727.) His attention was then called to the year 1905. In that year it is shown by Exhibit 635 that the competition in Springfield, as reported, was 30.5 per cent, and that there was no competition reported at Fall Eiver ; and that during the month of January of that year oil was selling for 8 cents a gallon in Springfield and for 10^ cents a gallon in Fall River; and he was unable to explain this (12/727). Fall' Eiver is about 50 miles from Boston. Springfield is about 125 miles from Boston. So that there could be but slight difference in the freight rates. Exhibit 635 also shows that the margin of profit in Fall Eiver during the year 1905 ranged from 2.6 to 3.4 cents a gallon; while at Springfield the business showed a loss during every month of the year except in December, when the profit was 0.05 cent a gallon^ (Exhibit 635, 10/1637.) Mr. McMillan's attention was also called to the year 1904. In December of that year oil was selling in Springfield at 8 cents a gallon ; and in Boston it was selling at 11 cents. It appears from Exhibit 635 that the percentage of competition reported in Springfield was 21.7 per cent and in Boston 11.3 per cent ; and he was asked to explain this if he could do so, and he said he could not (12/727). Mr. McMillan had said in reference to Springfield, Hyan- nis, and Fall Eiver that they were not in his territory; but Boston was in his territory. Exhibit 635 shows that the Standard was selling at a loss in Springfield during that time, and that it was selling at a profit in Boston. The differ- ence in the margins between Boston and Springfield at this time was a loss of 0.88 cent a gallon in Springfield and 47 a profit of 2.82 cents a gallon in Boston; a total difference between the two of 3.7 cents per gallon in the margins. Mr. McMillan's attention was then called to the year 1903, and it is shown by Exhibit 635 that during the month of January of that year oil was selling at Springfield at 9 cents a gallon, and selling in Fall Eiver at 12| cents a gallon ; and at this price there was a loss in Springfield of 0.88 cent on every gallon sold during that month, and there was a profit of 3.42 cents on every gallon sold in Fall Eiver during that month. He was asked to explain why such a great discrep- ancy as this should exist between those two Massachusetts towns, and he was unable to do so. His attention was also called to the fact that there was no competition whatever re- ported from Fall Eiver during this time, and that there was 13.9 per cent of competition reported at Springfield. And yet, when this was called to his attention, he was still unable to account for the difference in the prices. He was asked by his counsel if Springfield and Fall Eiver were in his terri- tory, and he said they were not, but he admitted that he had been in the oil business for nearly twenty years, in Massa- chusetts and New York, and, while these towns were not in his territory, they were close to it; they took substantially the same rates, they received the oil from the same sources, and the only reason that could possibly be given for a differ- ence in the price was the reason which Exhibit 635 shows — that where there was competition the price and margin of profit was low, and where there was no competition, or slight competition, it was kept to an exorbitantly high figure, (McMillan, 12/727-728.) The testimony of Mr. McMillan shows, taken in connec- tion with Exhibit 635, that competition in a town in some cases made a difference of over 4 cents a gallon in the price of oil. Mr. McMillan was unable to throw any light upon these market conditions in Massachusetts. There was a sub- ject, however, upon which his counsel could have interro- gated him, upon which he was thoroughly posted, and which was fully gone into by the petitioner in its side of the case, namely, the Charles Farrel transactions, discussed in a sub- sequent part of this brief under the head of " Bogus inde- pendents." 48 Danbury, Mass.— In about June, 1902, the Hisgens sold oil to a dealer by the name of Marsh at this place, but while it •was on the way the Standard Oil Company gave him a lower price and he countermanded the order, and at the same time the Standard lowered the price to other dealers in Danbury. The Hisgens had dealers there to whom they made one sale, and they were selling at the Albany price with the freight added. These sales were countermanded, and the Hisgens were not able afterwards to get any of that trade. In explanation of the Marsh incident, a telegram dated June 13, and another of June 14, 1902, from Marsh, and one of June 14, 1902, from the Danbury Grocery Company were marked " Petitioner's Exhibit 642 " and offered in evidence. (T. L. Hisgen, 4/1830-1832.) Boston, Mass.— In about 1897 the New England Oil Com- pany was doing a tank-wagon business in Boston, selling to grocers and peddlers, had storage tanks there, and was in competition with the Standard. At about this time the Corn- planter Eefining Company purchased the New England Oil Company and operated it. Mr. Royal, from whom the busi- ness was purchased, continued to manage it after its purchase by the Cornplanter. Shortly after the purchase of the New England Oil Com- pany by the Cornplanter the Standard lowered its price in Boston from about 10 cents, a half a cent at a time, until it got down to about 6J cents. The New England Oil Com- pany followed these cuts and adopted the policy of extending its business out into other towns in Massachusetts and Rhode Island, such as Providence, Fall River, Springfield, and Holyoke and other large towns, and selling oil at these out- side towns for the price which prevailed in Boston, which was a much lower price than the Standard had been selling for in those towns. The New England Oil Company con- tinued in business at these places in competition with the Standard for about a year and a half and worked up a large trade throughout the territory, but was losing money on the business, and lost altogether from $30,000 to $35,000. Finally Mr. Royal, on behalf of the New England Oil Company, entered into an arrangement with the Standard whereby the New England Oil Company was allowed to market a carload of oil a day (for working days of the week only) at a stated 49 price based on the cost of crude. Under that arrangement the Cornplanter Refining Company, which furnished the New England Oil Company with the oil which it sold, shipped to that company from 25 to 26 carloads a month. Before this arrangement had been made the Cornplanter had been shipping the New England Company about 125 car- loads a month, which it marketed in this Boston territory. The agreement and its effect was to cut down the New Eng- land Oil Company's business from about 125 carloads a month to 25 or 26 carloads a month; the New England company withdrew from the outside towns, and thereafter marketed only a carload a day in the city of Boston; and the Cornplanter Eefining Company agreed not to ship burn- ing oil east of the Hudson Elver, except this carload a day to the New England Oil Company at Boston. When this arrangement went into effect the prices of oil soared at once, and went up 3 or 4 cents, to 10 cents a gallon, and there remained for a long time. This arrangement was for three years, and at the expira- tion of that period it was renewed for five years, and was in force until the Cornplanter Refining Company sold the New England Oil Company to the Gulf Refining Company in 1906. (Todd, 6/3216-3218.) Troy, N. Y.— Mr. L. T. Messner (20/44) testified that he became connected with the Tiona Oil Company on July 1, 1900, at Binghamton, N. Y. At that time there was no inde- pendent oil company at Troy, N. Y., a city of about 60,000 inhabitants, and oil was selling there at 9 cents a gallon. Mr. King, of the Standard Oil Company, however, says that it was selling there at that time for 8J cents. In Binghamton, where there was competition, oil was selling for 7^ cents a gallon, and the Tiona people concluded to establish a plant at Troy. The Tiona Company commenced selling oil in Troy in July, 1900, at 7^ cents, which was the Binghamton price, the freight rates from the refinery at Warren, Pa., to Binghamton and to Troy being exactly the same. Mr. W. D. McMillan testified (12/714) that the Tiona went to Troy and made a cut of a half a cent a gallon ; Mr, Messner testified (20/44) that he put in the Binghamton 72064— VOL 2—09 4 50 price, which was then 1^ cents under the Standard's Troy price. Whether this shall be considered a cut depends en- tirely upon what is meant by a cut. The Tiona people knew that the price at Troy was excessively high, because of the lack of competition, and could see no reason why the same price should not prevail there that prevailed in Bing- hamton, and it followed the general plan of the independent companies of making their price equal to all points where the freight rate was the same. Mr. Messner says (20/45-46) that between July 1 and August 1, 1900, the Standard reduced its price to 7 cents a gallon, which brought it a half a cent below the price of the Tiona Oil Company; that soon afterwards the Standard lowered the price to 6^ cents a gallon; and that this was as low as the price went during that summer. He says that on the 15th of December, 1900, the Tiona Oil Company raised its price to 7 cents a gallon, and the Standard followed the raise; that this price prevailed until December, 1901; that the Tiona then raised the price to 7^ cents, and that the other companies followed ; that the price remained at 7 or 7^ cents a gallon up until the fall of 1902 ; and that at various times after that the Standard Oil Company or the Troy Oil Works (a bogus company) instituted cuts in the price, but Mr. Mess- ner is not able to give the dates. He says (20/47) he knows this by seeing the price slips, and by talking with his drivers and with the trade. In June, 1903, oil was selling in Troy for 10 cents a gallon ; the Standard cut the price to 9^ cents, and the Tiona followed. On June 19, 1903, the Standard cut the price to 9 cents, and the Tiona followed this cut ; and afterwards that the Tiona raised the price, and the Standard followed it. Mr. Messner says (20/48, 54) that during the time that he was manager at Troy every cut in the price was initiated by the Standard, and that every raise in the price was initiated by the Tiona. Mr. Messner testifies on his cross-examination (20/61) that the Tiona Oil Company did not cut the price in Troy after it entered that city. He was being interrogated here in reference to open cuts in the market price, and his atten- tion was then called to a grocer by the name of R. W. Munn (p. 61), who was running three stores in Troy in 1904. 51 The witness' attention was called to defendants' Exhibit 396, which is a statement in wHting on the part of Mr. Messner that he would allow Mr. Munn a cent off from the prevailing market price on all of the oil that Munn would buy, and he says this proposition was accepted by Mr. Munn (20/62), but that the agreement was not carried out and no oil was delivered under it. On his redir.2ct examination (20/64), he was asked about defendants' Exhibit 396, and said that Munn had been purchasing from the Standard and that this offer was made as a retaliation for secret agree- ments and rebates that were then being given by the Stand- ard to the customers of the Tiona; that he learned of these secret arrangements by the statements that were made to him by the dealers; that his customers would stop buying from him, and he would call upon them to see why they did so; that whenever a customer was lost he investigated the rea- sons and went out to the trade to find out the facts about it; that in that way he learned that the Standard was making secret cuts and giving rebates in a very general way to the customers of the Tiona Oil Company; that about the time defendants' Exhibit 396 was written he had lost in the neigh- borhood of twenty customers by means of these secret ar- langements made by one or another of the employees of the Standard Oil Company; that these secret arrangements were carried out by a return at the end of the month of from a half a cent to a cent and a half a gallon on the oil purchased; that in some instances he saw the checks of the Standard Oil Company for these payments (20/66) ; that when he learned that these secret arrangements would be made he went to the dealer, and in case he could not induce him to remain with the Tiona he met the price made by the Standard Oil Company, and if he was not able to get the customer by doing that he went to the customers of the Standard in retaliation and made them a price, and in case that did not avail he went to the trade of the Standard in general and told the trade what the Standard was doing in certain localities in the way of secret arrangements. He says that this practice on the part of the Standard prevailed generally during the time that he was in Troy; that he never made any secret arrangement, except in cases where he became satisfied that the Standard had done the same 52 thing; that while the Standard was making these secret rates and arrangements it maintained openly its regular market price; that these arrangements were made by the Standard only with the customers of the Tiona; that he never made a cut, secret or otherwise, below the cut that had been made by the Standard; and that he always told the customer the reason why he made the arrangement, and gave him the name of the person to whom the Standard had made its secret arrangement (20/67). Mr. Messner says that he con- tinued to meet these methods of the Standard Oil Company in the same way during the entire time that he was there; that Mr. Munn was a customer of the Standard Oil Com- pany; that he explained to Mr. Munn that he made this arrangement because the Standard had made the same kind of an arrangement with his customers; and he gives the name of one of his customers with whom the Standard had made a similar arrangement. He says he wrote defendants' Exhibit 396 right there in Mr. Munn's store, and. Munn agreed to it; but that it was repudiated by the Tiona Oil Company, because L. T. Messner had no authority to make a written arrangement of that kind ; that he then went back to Mr. Munn and explained to him the reason why he could not carry it out ; and that Mr. Munn then bought oil of him at the regular market price. He says he thinks he made other writings of the same kind, but that none of them were carried out. He says, however, that he did make verbal agreements to the same effect, under the circumstances al- ready explained, which were carried out (20/68). He says that these secret arrangements were made by the Standard Oil Company and not by the Troy Oil Works. It was stipulated into the record that Mr. King, of 26 Broadway, who had general charge of an extensive territory, including Troy, if called to the stand on sur-rebuttal, would testify that according to the records of the Standard Oil Company of New York, at 26 Broadway, certain changes would be shown in the open-market price of the Standard Oil Company for Water White oil sold by tank wagons at Troy during the years testified to by Mr. Messner. The information as to the changes in prices at Troy which Mr. Messner testified to was taken by him from the books of the 53 Tiona Oil Company at Binghamton, N. Y. The true situa- tion at Troy, however, is not shown by any comparison of the Standard Oil Company's open market price with the Tiona Oil Company's open market price, for, as we shall hereafter show, Mr. Messner testified that during all of these years the Standard Oil Company and the Troy Oil Works were paying rebates and making secret concessions to the trade of the Tiona Oil Company. The defendants have not pretended to give the prices, either open or secret, that the Troy Oil Works made at Albany during this same time; and Mr. Messner, in testifying that whenever a cut was made, says, not that it was made by the Standard, but that it was made by the Standard or the Troy Oil Works (20/47-48). So that even if Mr. King's figures are correct as to the Standard's prices in 1900, Mr. Messner may also be correct in his figures, because he knew that the Troy Oil Works was a Standard concern, and the Troy may have remained at a low price for a considerable period of time after the Stand- ard had raised its price. Take, for instance, the testimony of Mr. Messner that the Tiona and the St^dard were selling at 6^ cents a gallon until the Tiona raised the price to 7 cents on December 15, 1900, Mr. King's schedule does not show that the Standard had a 6|-cent price during that period. It shows that at no time was the Standard Oil Com- pany's open-market price below 7 cents, and this discrepancy is readily accounted for by the fact that the Troy Oil Works' prices have not been given by Mr. King, nor by any other witness. When all of the testimony is taken together, it can not be shown that after deducting rebates allowed by the Standard, and after deducting the rebates allowed by the Tiona, that the Tiona sold oil at a price which at any time netted a lower cost to the merchants than did the Standard Oil Company. As a matter of fact, there is nothing in the situation which is at all inconsistent with Mr. Messner's re- peated declarations that the Tiona Oil Company initiated the raises in the actual net prices that prevailed, while the Standard Oil Company initiated the actual cuts that were made, leaving out of the question the open-market prices. The testimony of Mr. W. D. Todd, which is uncontra- dicted and unexplained, throws light upon the real situation at Troy. Mr. Todd is the manager of the Cornplanter Re- 54 fining Company, of Warren, Pa., and is also connected with the Tiona Oil Company at Troy. Mr. Todd had called upon Mr. Jennings in regard to the situation. Mr. Jennings was director and member of the executive committee of the Standard Oil Company of New Jersey, and at the time of the conversation hereinafter related was in charge of the marketing department of the Standard in New York State. The testimony of Mr. Todd in regard to this conversation is very significant, and it is as follows (6/3215-3216) : My talk with Mr. Jennings was that I considered the business, the way we were conducting it there at that time, it looked to me like a foolish one. After I got through he said : " The argument you put up, Mr. Todd, I can't meet that argument; it is all on one side; it is all on your side, but," he said, " you have got to take into consideration that the Standard Oil Company have to operate differently from what a small concern would." He said, " we have got a policy to pursue, and that is to make it just as difiicult for an independent to put out oil as we possibly can ; in other words, we want to drive them out of business if we can; if we can't, why, we sometimes buy them out, and sometimes make a dicker; but our first move is to make it just as expensive as we can. Now," he says, " you can readily see this, because if we didn't, where would we be in a few years ? The independents would have the bulk of the business." He says, " that is our policy." Binghamton, N. Y.— Mr. W. D. Todd testified that the Tiona Oil Company had wagons in five small towns around Binghamton ; that the prices were cut by the Standard Oil Company in all of these towns to such an extent that the Tiona Oil Company was losing money on the business ; and that the Tiona Company was finally compelled to abandon the business, and sold out these outfits to the Standard. (Todd, 6/3220-3221.) Baltimore territory.— From 1892 to 1895 the Standard Oil Company had its traveling salesmen follow the salesmen of the Eed "C" Oil Manufacturing Company continually through the Southern States, with a view of preventing the sale of oil by that company in carload lots and securing the countermand of orders already given by offering and giv- ing special inducements and rebates and by price cutting. The method was followed of securing the largest buyer in 55 a carload of independent oil to countermand his order by offering him a rebate on all of his oil for a year. (Fehsen- feld, 5/2303.) On one occasion at Yorkville, S. C, the salesman of the Standard Oil Company having caught up with the salesman of the Red " C " Oil Company, who had previously eluded him, stated that he hated to hound the Red " C " salesman, but he was instructed from the Standard Oil office to stay at Yorkville thirty days, if necessary, to prevent the sale by the Red " C " man of a carload of oil. At this time, in order to elude the Standard Oil salesman, the Red " C " salesman left Yorkville in the early morning without letting his desti- nation be known, and after traveling 10 miles returned and found the Standard Oil salesman at the depot ready to follow his trail. The Red " C " man concealed himself until the Standard man had departed, and then was able to sell a carload of oil. This was the general method adopted throughout the southern territory by the Standard Oil Com- pany. (Fehsenfeld, 5/2307-2308.) New Windsor, Md. — ^At New Windsor, Md., the Standard Oil Company gave away oil to the customers of independent companies. They drove their wholesale tank wagon from house to house and gave 2 gallons, 5 gallons, or 10 gallons of oil to the consumers, and in each store in the town there was a tank presented by the Standard Oil Company to the storekeeper and filled with oil, and coupons distributed over the town good for a gallon of oil at any store. At that time the Standard was fighting the Red " C " Oil Company, which had been doing business in that town since 1878. The Stand- ard Oil Company continued to give away oil in that way for about two months. (Metzel, 5/2413.) W. W. Waters, of Rockville, Md., formerly a city sales- man for the specialty department of the Standard Oil Com- pany at Washington, testified (13/1463-1465) that he was in charge of the tank-wagon service at New Windsor, Md., in 1898-99. Mr. Waters's attention was called to the testi- mony of Mr. Metzel in reference to the giving away of oil at New Windsor, Md., by the Standard Oil Company, and he was asked to give his version of the facts in that trans- action. He says that the Standard Oil Company loaned to each of four merchants in New Windsor a 60-gallon tank 56 filled with oil; that the merchant paid the tank-wagon driver for the oil ; that he went around and visited the users of the oil and left a ticket good for 1 gallon of oil at the merchant's store ; that he gave out enough of these tickets to cover four 60-gallon tanks of oil, but that there might have been a few more given out than enough to cover the 240 gallons. He says that he only did this once, and denies that this was carried on for a couple of months. These tickets came back to the company. An arrangement was made by which the merchant, when he received these tickets, gave the oil to the customer; he delivered the tickets to the tank-wagon driver, and the Standard gave the merchant credit for them. He says that there were enough of these tickets returned to take out all of the oil except 5 gallons in the hands of one merchant. Mr. Waters was asked what was the occasion for his giving away this oil, and he stated that Mr. Metzel had visited the trade and tried to create prejudice against the tank-wagon oil — ^the Standard's Aladdin water-white oil — by telling them that the oil was of inferior quality ; that if they patronized the tank wagon it would be a matter of only a few days before the Standard's tank wagon would be driving over the country selling to the farmers and serv- ing the merchants in the town, and that the oil was of an in- ferior quality, would char the wick and smoke the chim- neys, and that it had an offensive odor. Mr. Waters says he thinks this kept the Standard from selling any tank-wagon oil there, or from selling any oil at all ; and so he went to the customers, cleaned up their lamps, and gave them coupons each good for 1 gallon of oil as a working sample to show them that the oil was just as good as what they had been buying. He says that he finally packed up the tanks and sent them back, but does not state when. The testimony of Mr. Waters and Mr. Metzel does not differ very much after all. Mr. Waters makes an excuse that will hardly be taken seriously by anybody. No com- petitor could go into a town and secure any permanent trade simply by running down his rival's goods, as Waters says that Metzel did in this case. The truth is, as Mr. Metzel states, that the Red " C " was selling oil in New Windsor, and the Standard wanted to prevent it, and for the purpose of getting the trade of this concern it gave away at least 57 240 gallons of oil, and furnished the tanks to the storekeep- ers in which to store it, and in that way sought to get this trade. Winchester, Va. — Cooper Brothers, a wholesale grocery firm in Winchester, Va., had for a long time been buying oil of the Standard Oil Company. In about 1895 they com- menced buying oil from independent dealers. This was be- cause of the inferior grade of oil that had been sold to them by the Standard. Immediately after that the Standard Oil Company cut the price below what Cooper could sell the oil for at a profit. (Cooper, 5/2392-2393.) Cooper Brothers' shipments were followed up by the Standard Oil Company's agents and traced to their destinations, and the Standard's agents would get to the consignee, if possible, before the goods arrived, and if not, very soon afterwards. They would offer a price less than the regular price, and at times they gave away oil and offered as much as a barrel of oil to a cus- tomer if they would open up an account with them and stop buying of Cooper Brothers. (Cooper, 5/2396.) In about 1897 Cooper Brothers purchased a piece of land of the Baltimore and Ohio Eailroad Company for the pur- pose of building an oil warehouse, and later Cooper Brothers concluded to turn it into a tank station. Mr. Baughman, from Washington, a Standard representative, came to Win- chester to fight Cooper Brothers. Shortly after the first tank-car load of oil was received by Cooper Brothers from an independent refinery, which was some time in 1895, Baughman employed an attorney and caused an ordinance to be introduced and passed by the city council of Winchester, which ordinance contained a provision that no tank stations should be built within 150 feet from another building. This ctt-dinance was passed about 10 o'clock at night. Mr. Baugh- man and his attorney, Mr. Boyd, were present at the time it was passed, and immediately after its passage they left the council chamber, which was before the session was over. They got some men together and drove a few stakes in the ground and wrapped twine around it and had some plank delivered there by about 11 o'clock that night, and by 8 o'clock next morning a cartload of stone had also been deliv- ered upon the ground, and by 9 o'clock in the morning Cooper 58 Brothers were served with a notice, which had been prepared by Mr. Boyd, warning them that the Standard Oil Company had already an erection at that place, which was less than 150 feet from a place where the Cooper Brothers had intended to build their station. This notice was served by Mr. Boyd, the attorney who had appeared the night before before the council and urged the passage of this ordinance; and while urging its passage before the council he used the argument that as the Cooper Brothers had an application in to build, which application was on file before the application of the Standard for the same purpose, that it would be beneficial to the citizens of the city to have the ordinance passed, and because this would result in the erection of two tank stations at Winchester and would bring competition in the oil busi- ness. The attention of the city council was called to this unique situation by the Cooper Brothers on the following morning. The result of it was that a compromise was ef- fected by which the 150-foot limit was withdrawn, and both parties built their tanks. This instance is cited as illustrat- ing the methods to which the Standard Oil Company resorts to kill out competition and to prevent its competitors put- ting themselves in a position where they can successfully compete for the oil trade. (Cooper, 5/2399-2400.) Mr. Baughman, Avho had charge of the division in which Winchester is located, continued fighting the Cooper Brothers for about two years. (Cooper, 5/2400.) Charlotte, N. C— Repeated efforts of the Eed "C" Oil Company to sell oil at Charlotte, N. C, were without avail, because the merchants of that town stated that they were afraid to buy independent oil, as to do so would cause the Standard Oil Company to cut prices to such an extent that the merchants would be unable to make a profit. In towns where the Red " C " Oil Company sent its salesmen the price collected by the Standard Oil Company was invariably lower than in towns which were not visited by Red "C" salesmen. (Fehsenfeld, 6/2310.) Greenville and Spartanburg, S. C— Mr. Fehsenfeld testified (5/2307) that when he was traveling for the Red " C " Com- pany in South Carolina that company was doing business with Ferguson & Miller, of Greenville, S. C; that the 59 Standard Oil Company's price was 11 cents per gallon ; and that at Spartanburg, where the Red " C " Company was not doing business, the Standard's price was 13^ cents. This statement of Mr. Fehsenfeld was called to the atten- tion of Mr. CoUings (12/914), and with respect to it he said: I think he must refer to the barrel price at one place and the tank-wagon price at another, because we never maintained any such differential between those two towns on tank-wagon oil. Mr. Fehsenfeld knew well what he was talking about. He has had more than twenty-one years' experience with the Red " C " marketing in that locality (5/2302), and is far too intelligent a man to compare a tank-wagon price with a barrel-delivery price, without making deduction for the value of the package. Mr. CoUings's mere opinion upon the point does not amount to much as an answer to the positive sworn testimony of Mr. Fehsenfeld. Mr. Collings does not give the price the oil was selling for in either of these places at any time, nor does he state that the methods of delivery in these towns were different, nor that the Standard delivered in barrels in one town and from the tank wagon in the other. If he has knowledge sufficient to qualify him to contradict Mr. Fehsenfeld, it must be because he knows that in one town there is one method of delivery and in the other town the other method. He does not state that he knows anything of the kind, but gives it as his opinion that such a state of things exists. He could have readily ascertained, had he seen fit to do so, what the facts were, and could have then given to the court some positive statement that would throw some light upon the situation, but he chose rather to pass it off by the mere expression of his opinion, founded upon noth- ing whatever. While Mr. Fehsenfeld was testifying on rebuttal for the Government, and for the purpose of illustrating the method of the Red " C " Company in making prices when local con- ditions govern and necessitate its departure from the rule of taking the base price and adding the freight to destination (20/183), he compared Goldsboro, N. C, with Wilson, N. C, and said that at Goldsboro, where the Red " C " Com- pany had been selling oil for years through an agent who receives the oil and delivers it to the storekeeper, meeting 60 the Standard's tank-wagon price, the oil is sold for 10^ cents a gallon ; while at Wilson, N. C, some 30 or 40 miles distant on the railroad, where there was no competition, the Stand- ard's price is 11| cents. It could not be that in this com- parison Mr. Fehsenfeld was comparing the tank-wagon de- livery with a barrel delivery, for here the difference in price between the two points is only 1 cent, while the value of the barrel always represents a difference of 2 cents a gallon. This shows that the situation at Greenville and Spartanburg is not an isolated case, and stiows that Mr. Fehsenfeld was perfectly familiar with just and proper comparisons between prices, and that he spoke advisedly in comparing the prices at these places, while Mr. Collings gave only his opinion, Mr. Fehsenfeld was on the ground and in contact with the trade; Mr. Collings was in the vice-presidential chair at Cincinnati. Augusta, Ga. — In about 1886 the Standard Oil Company reorganized the business of the Chess-Carley Company, of Louisville, Ky., which it had long controlled, putting it in the name of the Standard Oil Company of Kentucky. The signs at its place of business at Augusta were changed and the name of the Standard Oil Company painted after business hours over night, and the next day they started out as the Standard Oil Company. The Standard had not theretofore had a plant in Augusta. Mr. H. C. Boardman, of Augusta, Ga., was in the em- ploy of the Chess-Carley Company, and after this change he continued in the employ of that company, sta- tioned at Augusta, Ga.' (Boardman, 5/2164.) Wlienever competition appeared in that territory the prices were cut, if it was necessary, for the purpose of eliminating that com- petition. The Standard maintained a system — though not as strictly in this territory as in some — of receiving reports of competitive shipments coming into that territory, and it also looked out to see if drummers came in there. They were reported to headquarters, and required to pay a license fee. A report was made from this office to the main office of the Standard Oil Company on a yellow slip, showing sales by competitive companies, and to whom the sales were made; and the information was obtained from railroad offices, sometimes from clerks and sometimes by the agent of the 61 Standard himself going to the depots and taking the infor- mation oflF from the barrels. It seems that no money was paid to the railroad employees furnishing this information ; that it was done as a favor to the manager of the company at Augusta. Several small companies, and some large companies, went into Augusta and commenced competing with the Standard. When this was done the price was immediately cut as much as seemed necessary to get the business. The Standard Oil Company, in making its cuts, figured on what the competitor was able to do, and would generally shade .that price a little. They could figure out what the oil would cost the competitor and what it would cost the competitor to market it, and then they would put the price slightly below that amount, and thus secure the trade. (Boardman, 5/2165.) The first competitor that came there to compete with the Standard was J. T. Thornhill. He had formerly been in the service of Chess-Carley Company, and he opened up a branch house in Augusta and did some barrel business there, but he did not remain more than a year. The Standard cut the price when he started, his oil leaked out of the barrels, and he finally abandoned the business and moved to Charles- ton, S. C. The next competitor that came was Blodgett, Moore & Co. Blodgett had formerly been at Charleston for the Chess- Carley Company, and Moore was also connected with that company. They formed this company called the Blodgett- Moore^ Company, and opened a branch at Augusta. This was in about 1888. The price was cut when they went into business, and they only remained about two years. They were unable to make any money in the business, and sold out to the Standard. After this company sold out, and after the other companies had gone out of business, the Standard immediately raised the price of oil. (Boardman, 5/21C6.) When the Blodgett-Moore Company left the price went from 6J cents to 7^ cents, and in the course of time up as high as 14J cents. The next independent company to come to Augusta was the Tidewater Oil Company, of New York. This is the same Tidewater Oil Company that has already been dis- cussed. When the Tidewater Company opened up there the 62 Standard immediately lowered the price from about 14 cents to 8 cents. This company only remained in Augusta about a year and a half, and it sold out to the Standard, and the Standard took over the stock of goods and some real estate which the Tidewater had purchased, and the Standard after- wards sold the land. . The next company that came there was the Crew-Levick Company, of Philadelphia, in about 1898. As soon as this company entered the field the Standard lowered its price. Crew-Levick remaining there only about a year, and then withdrew and moved away. (Boardman, 5/2167.) With reference to prices at Augusta in 1898, Mr. Collings testified as follows (12/910) : Q. He [meaning Boardman] also testified that in 1898, when Crew, Levick & Co. came into Augusta to do business, the Standard at once instituted a price cut. What is the fact in regard to that? ***** A. The facts are that our price January 1, 1898, at Augusta, was 8 cents, and it advanced in July to 8^, where it remained the balance of that year. Q. So that instead of there being any price cut dur- ing the year 1898 in Augusta, the fact is that the price advanced a half a cent. A. That is correct, sir. Q. AVhat was the price in 1897 ? To which he replied that he had no prices back of 1898 and could not tell. Why counsel takes the date of the entry of Crew, Levick & Co. into Augusta as 1898 we are not able to see. There is no testimony in the record to warrant the assumption. Mr. Boardman, who testified on that subject, said that he couldn't tell within two or three years the time that Crew-Levick went into Augusta, but supposes that it was about ten years ago (Boardman, 5/2167). The price prevailing in Augusta in 1898 throws no light upon the question as to whether the Standard cut the price when Crew, Levick & Co. first entered that field, and therefore Boardman's testimony that the Standard cut the price when Crew, Levick & Co. entered Augusta remains uncontradicted. Mr. Boardman testified (5/2175) that in 1907, which was after he had started an independent business there, the Stand- 63 ard Oil Company was selling oil at Augusta, Ga., at 9 cents, while in other places in the Augusta district it was selling as high as 16 cents; and that it cost only about a cent a gallon more to market the oil in these outside towns. When Mr. Collings was on the stand his counsel put this question to him (12/912) : Q. What is the fact about that? A. I don't think we ever sold oil at 9 cents in Augusta ; that is, during the period that he refers to. Q. In the first place, then, you never sold oil during the year 1907 at 9 cents Counsel's question was calculated to lead the witness a step beyond what he had testified to, but he answered : " No, I don't think so." Then witness referred to some memoran- dum, and said that the lowest price for water white oil dur- ing 1907 was 10 cents. Mr. Boardman was in a far better position to know what the price was in Augusta in 1907 than Mr. Collings, because Boardman was there upon the ground. Mr. Boardman, it will be noted also, in speaking of the oil that was sold in Augusta, Ga., at 9 cents in 1907, simply says it was 150-degree oil, and does not say that it was Water White oil ; and being an old and experienced man in the oil business, if it had been Water White oil he would have saicj so ; so that Mr. Boardman was talking about one kind of oil and Mr. Collings was talking about another. Mr. Collings, to contradict this testimony of Mr. Board- man, says that in two towns, namely, Thomson and Waynes- boro (near Augusta), oil was selling at 11| cents. That may be entirely correct. Mr. Boardman did not name either of these towns in his testimony ; he simply said that there were several towns in the Augusta district at which oil was selling as high as 16 cents a gallon. Besides, these towns that are mentioned by Mr. Collings were the two towns nearest to Augusta, and it would be quite natural in those towns that the prices should be lower and nearer to the Augusta prices. Had Mr. Collings searched among his records for the prices in the other towns throughout this district, and more remote from Augusta, he would doubtless have been able to corrobo- rate Mr. Boardman. 64 On Mr. Boardman's cross-examination it appeared that he had been discharged by the Standard Oil Company be- cause it was claimed that, while working for the Stand- ard, he had an interest with his brother in the Crystal Oil Company, which was selling oil to consumers in At- lanta, Ga. The Crystal, however, had been buying its oil of the Standard, and the officers of the Standard had known for some time before that Mr. Boardman was connected with that company. Some other complaint, it seems, was made about Mr. Boardman along the lines that he had al- lowed some of the employees of the Standard to assist in painting some houses for him and, perhaps, in doing some other work. There is nothing, however, in the facts as they appeared from this examination to cast any discredit what- ever upon the testimony of Mr. Boardman, and it is so strongly corroborated and so well fortified by other testi- mony in the case that it is not subject to criticism. On May 1, 1904, Mr. Boardman left the Standard Oil Company and went into business for himself at Augusta. After the Standard learned that he was about to do this, and on the day before he left them, the Standard reduced the price in Augusta 1 cent a gallon, and after that there were several cuts made. On the day before Boardman quit pil was selling in Atlanta for 14^ cents a gallon; cuts were made in quick succession, and within ninety days the Stand- ard was selling oil at 9 cents a gallon. (Boardman 5/21G9.) A Mr. Nolls succeeded Boardman as manager at Atlanta, and before Mr. Boardman actually got started in the oil business Nolls tried to induce him not to go into the business, and told him that the Standard would spend money to put him out of business, if necessary $50,000 to $75,000. This report Nolls circulated about the town for the effect it would have upon Boardman. He advised Boardman not to go into business; told him he would lose everything he had; that he could not hope to live in the business; and offered to take the tanks off his hands and pay him a salary for a short time. Mr. Boardman finally commenced the business, and when he had got fairly started, along in the month of July, 1904, the Standard had dropped the price of oil down to 11 cents a gallon from 13 cents. He was working up quite 65 a trade, and the Standard cut the price one half a cent. Boardman did not follow the cut. Finally they cut it to 10 cents; and also put in another grade of oil, which they sold at 9 cents; but Mr. Boardman continued to sell his oil at 11 cents. Boardman had by this time secured about half of the trade in Augusta, but when the Standard again cut the price to 9 cents and 10 cents for, the respective grades, Boardman's business suffered so that he had only about one- third of the business in Augusta, with which he was satis- fied, so long as he could sell his oil at 11 cents a gallon. About one-third of the trade stood by Mr. Boardman because they appreciated the fact that but for his competition they would be paying a much higher price for their oil. The trade was satisfied to pay an average of 10 cents a gallon for oil; they could buy from the Standard at 9, and from Boardman at 11, and this would average them 10 cents a gallon. When there was no competition they knew that they were paying 14^ cents. (Boardman, 5/2171-2172.) The Standard Oil Company had their agents watch Mr. Boardman while he was building his plant. They placed a man in a pottery next door, who remained there until driven out by the proprietor, watching the progress Board- man was making with his plant. He afterwards hung around the plant until driven away by Boardman. This same man was afterwards jnade agent for the Standard at Augusta. Mr. Nolls, the then local manager for the Stand- ard, also watched the progress of the building of Mr. Board- man's establishment; Boardman found him hidden back in the grass and weeds watching him just as he was commenc- ing in business and after he had commenced to get in oil. The Standard also employed a colored man to find out when Boardman got his first carload of oil and to let the Standard CD agent know. They offered to pay this colored man $1 a car for every report of cars that Boardman received. The colored man informed Boardman of this situation, and Boardman assisted him in telephoning to the Standard Oil Company and reporting the arrival of the first car. (Boardman, 2172-2173.) Mr. Nolls and Mr. Bowler, both agents of the Standard at Augusta, circulated reports that Boardman was robbing 72064— VOL 2—09 5 66 the trade and stealing from his customers. (Boardman, 5/2173.) Atlanta, Ga.— Mr. Boardman testified (5/2174) that m about July, 1906, he opened up a branch at Atlanta, Ga.; that the Standard and the bogus People's Oil Company were the only concerns then doing an illuminating oil business in Atlanta; that the Standard and the People's were selling oil at 12 cents a gallon, and the Standard put the price in Atlanta down to 9^ cents. Mr. Collings contradicts this (12/911). Denmark, S. C— In about August, 1906, Mr. Boardman opened a station at Denmark, S. C. This town had been sup- plied by the Standard's tank wagon from Blackville, and it was selling oil at that place for 15 cents a gallon. Wlien Boardman was erecting his tank and purchasing his mules the Standard commenced to lower the price, and by the time Boardman was ready to put his oil on the market the Stand- ard's price had gone down to llj cents. Mr. Boardman started in selling oil at 13 cents or 13J cents, and he obtained about 40 per cent of the trade. Mr. Boardman afterwards reduced his price to 12 cents a gallon, but the Standard continued to sell at llj cents, and is still selling at that price, and Boardman is selling at 12 cents a gallon (5/2175). Mr. CoUings's attention was called to the testimony of Mr. Boardman in reference to Denmark (12/912). He became facetious and ridiculed the idea that there should be a war- fare in Denmark, saying that Denmark, Ga., was a little town of from 12 to 15 inhabitants. He said that when his atten- tion was called to it he looked up Rand-McNally's map and located the place ; that he could not have made the cuts that Mr. Boardman said were made at Denmark, because the Standard had no station there ; and that there was no market at Denmark ; and that this is among the statements made by Mr. Boardman about which he is mistaken. Mr. Boardman did not state that the Denmark to which he referred was in Georgia. He did not say what State it was in, but he did say that it was supplied by the Standard's tank-wagon station from Blackville. Here was information furnished by Mr. Boardman which should have led Mr. Collings to an exami- nation of the Blackville situation and the towns near by 67 reached by its tank-wagon service, and had he searched Kand- McNally's map faithfully to find out what the situation was at Blackville and vicinity, as he did to find Denmark, Ga., he could readily have learned that the Denmark referred to by Mr. Boardman was in South Carolina and not in Georgia. R. P. Fair, a witness called on behalf of the defendants, testi- fied (13/1418) that Denmark is a town of from 500 to 1,000 people, located on the Coast Line road, about 32 miles south or southeast of Augusta, and that Boardman markets oil at that place. Washington, Ga. — Mr. Boardman testified (5/2176) that it was the custom of the Standard to go into a town where an independent was doing business and make an arrangement with some dealer there to make a low retail price and to furnish the dealer oil at a price so that he could drive out the competition. About ten years ago the Standard sent Mr. Boardman to Washington, Ga., where the Eed " C " Oil Company had shipped a carload of oil, and directed that arrangements be made with one Almond so that he should sell oil for 5 cents a gallon. At this time the retail price in Augusta was about 15 cents. The oil was sent from Augusta to Washington in barrels over the railroad at something of an expense. This arrangement continued about four weeks, and it made the merchants of that town very much dissatis- fied, as they had the Eed " C " oil on hand which they were unable to sell. Mr. CoUings's attention was called (12/913) to the state- ment of Mr. Boardman on this subject, and he was asked what he had to say about it. His answer was: " A. Well, I say that is not true." ' Mr. CoUings then said it would be absurd to make such a price in an interior town; that he did not believe the Eed " C " Oil Company ever sold a carload in that town ; that they kept out of Georgia for very good reasons, which were that its oil Vould not stand the Georgia test requirements. How does Mr. CoUings know that to be true? What au- thority has he to characterize the testimony of another wit- ness as untrue, unless he is able to present some facts or fig- ures to corroborate his own statement? Mr. CoUings's opm- ion on that subject is of little consequence. If Mr. Board- 68 man was mistaken about the fact, Mr. CoUings had at his command the facts and figures showing it; but instead of producing those figures he appears better satisfied to char- acterize the whole thing as untrue, because he thinks it is absurd that the Standard should make a price of 5 cents a gallon. However, we think it is not at all absurd; it was exactly in line with what the Standard was doing all through the South. The Standard did not care anything about the price which it received for oil in a little town like Washing- ton, Ga., because it could at little expense cut the price there to any figure that became necessary in order to drive out the competitor. Mr. CoUings also said (12/913) that Mr. Boardman's statement could not be true, because a carload of oil would last more than a month in Washington, Ga. ; but Mr. Ceilings overlooked the fact that this oil was doubt- less distributed to a number of points in that vicinity. It was barreled oil, and the Red " C " Oil Company frequently made up carload orders which were consigned to one point and distributed from there to dealers in other near-by towns. With regard to the oil-inspection laws of Georgia, we have no doubt that they were severely enforced against the inde- pendent companies. In the subdivision of this brief dealing with bogus independent companies employed by the Stand- ard, and especially under the head of " The Peoples Oil Com- pany, Atlanta," we call attention to the use which the Stand- ard Oil Company made of its bogus companies for the purpose of defeating legislation with reference to inspection of oil in Georgia hostile to its interests, using these bogus companies ostensibly as independent for the purpose of de- feating the measure, while itself appearing as in favor of the passage of the measure; when, in truth and in fact, it was doing its utmost to defeat it. We also, in a later subdivision, call attention to the testimony of several witnesses with regard to the influence which the Standard Oil Company had upon oil inspectors in various States. It is not surprising, therefore, that even the high-grade oils of the Red " C " Company might have found diiSculty in passing the inspec- tion of some of these state oil inspectors. Atlanta, Ga. — In 1892 the Commercial Oil Company was doing business in Georgia and contiguous States, with its principal office at Atlanta, in competition with the Standard Oil Company. (Wootten, 5/2094.) The competition of the Standard against the Commercial was of that relentless character which was calculated to accomplish what it finally did accomplish, to wit, the driving out of the Commercial Oil Company. Prior to 1892 the prices had been lowered in Atlanta by the Standard until practically there was no profit in the refined-oil market, and the only way that the Commer- cial Oil Company at that time could make a profit was in selling lubricating oils, and by distributing their sales over a large territory. In 1897 the Standard had lowered the price of oil to 6^ cents, and oil could not be sold at that price at a profit, and the trade of the Commercial Oil Company became indefinite and irregular. It was forced to meet the lower price made by the Standard, and this could not be done without a loss, and customers had to be abandoned by the Commercial and they were taken over by the Standard. By this time the refined-oil business of the Commercial had be- come very small, and it was scarcely able to continue in the business on the profits which it made from the sale of lubri- cating oils, and these sales were distributed over very exten- sive territory, and it was expensive to handle this trade. The business of the Commercial in both the refined and lubricat- ing oils was followed up closely by the Standard Oil em- ployees, and wherever it obtained a customer special efforts were made to get that customers over to the Standard. (Wootten, .5/2096-2097.) Kebates were given to the custom- ers of the Commercial of from 50 to 75 cents a barrel; and these conditions prevailed until 1898. During that period the Peoples Oil Company, an independent concern, was attempt- ing to do business in Atlanta in competition with the Commer- cial and the Standard. The Commercial purchased its oil from the Peerless Refining Company, an independent concern. In 1898 the Commercial and the People's Oil companies were compelled to abandon the fight, and they were both sold to the Standard during that year (5/2098). They were coalesced and thereafter run by the Standard in the name of the Peoples Oil Company, and the name of the Commercial was no longer used. Mr. E. N. Wootten, who had been man- ager of the Commercial Oil Company during the entire 70 period when that company was independent, was taken over by the Standard and retained to represent it as manager of what they termed their independent branch, the Peoples OU Company of Atlanta. For a few years after this there was no competition in Atlanta. The price of oil was advanced by the Standard from 6^ cents on the 1st of January, 1898, to 13 cents in 1899 from tank wagons. The Peoples Oil Company was operated as an independent concern, but as a matter of fact it was owned and controlled by the Standard Oil Company. It received its oU from the Standard refinery at Whiting. Eeports were made by the Peoples Oil Com- pany to E. C. Kimball, of Cincinnati, who was the cashier in the main office of the Standard Oil Company of Kentucky. Mr. Wootten was directed by C. T. CoUings to send his re- ports to Mr. Kimball. (Wootten, 5/2099.) They were not sent to the Standard Oil Company at Cincinnati, but were directed to Mr. Kamball at box 824. Mr. Wootten was directed by Mr. CoUings to run the company as an inde- pendent concern, and to maintain the markets on an even basis with the Standard. It was agreed that the Peoples Oil Company should get whatever business it was able to, but that it must get this business at the price adopted by the Standard. Whenever inquiry was made as to the Peoples Oil Company, it was represented to be independent; it was not generally known to the trade that the Standard had pur- chased the Commercial or the Peoples. There was no an- nouncement in the newspaper to that effect. Thereafter the Standard was without competition in At- lanta until 1901, when the Lake Carriers Oil Company, of Cleveland, Ohio, an independent company, started into busi- ness there. As soon as this company started the prices were reduced by the Standard to 9 cents from approximately 13 cents. The 13-cent price had been maintained in Atlanta from 1899 until 1901, when the Lake Carriers OU Company made its appearance. (Wooten, 5/2102.) The price which the Peoples Oil Company adopted was fixed by the special agent of the Standard Oil Company at Atlanta, he undoubtedly getting his instructions from the Cincinnati office. Usually the Peoples Oil Company would be notified somewhat in advance of any change of price that was contemplated. 7] This branch of the Lake Carriers Oil Company was a short-lived concern, and it was sold out to the Standard in the winter of 1901, and the plant was dismantled and part of it was shipped away from Atlanta. (Wooten, 5/2101.) Inmiediately after this the price of oil advanced, and within six months went up to 15 cents a gallon from the tank wagon. The agent of the Peoples Oil Company at Atlanta was advised that this rise was on account of a rise in the price of crude, but whether this was true or not he was not able to state. (Wooten, 5/2102.) Mr. E. IST. Wooten remained the manager of the Peoples Oil Company at Atlanta until 1904, except for a short period beginning in 1899, when he was transferred to New Orleans where he had charge of the Dixie Oil Works. In 1904 he became connected with the regular agency of the Standard Oil Company at Atlanta, and the Peoples Oil Company con- tinued to run the same as before under the direction of the Cincinnati office of the Standard, and the correspondence was carried on with Kimball and CoUings, of that office. (Wooten, 5/2102-2113.) ATLANTA TERRITORY, PARTICULARLY SOUTH CAROLINA POINTS. During the time that Mr. Wooten was connected with the office of the Standard at Atlanta reports were received from traveling salesmen and from the agents of the Standard Oil Company throughout the territory covered by the Atlanta office. These reports show all independent shipments coming into the territory that these salesmen became cognizant of; records were kept with reference to the consuming ability of the customer, and the salesmen were posted from these re- ports, and the instructions were to take this information and to acquire the business for the Standard Oil Company. (Wooten, 5/2105.) The testimony of Mr. Wooten was fully corroborated by a file of letters, received while he was connected with the Standard Oil concerns at Atlanta, which letters were intro- duced in evidence as exhibits, commencing at No. 679. While Mr. CoUings was testifying on his direct examina- tion his attention was called to petitioner's Exhibits 680, 682, 683, 684, 685, 692, 700, 702, and 709 (12/895). These are 72 letters which pertain to competition and price cutting throughout the South, and particularly as to price cutting by the Eed "C" Oil Company. Mr. CoUings said that the Red " C " had a way every once in a while of sending out one or two men, rushing them around over the South Caro- lina field, making up carload orders by cutting the price from one-half to 1^ cents a gallon, and that it was finally decided that the Standard must be more alert and watchful, and that whenever it became known that any Red " C " sales- man entered the southern field they would send a Standard salesman there and find out what prices the Red " C " was actually making. He said that prior to that the Red " C " salesmen would go in there and sell a carload of oil, and that the first the Cincinnati office would know of it would be when the customer quit buying of the Standard, and that the Standard tried to have a man on the ground wherever the Red " C " salesman turned up, so that he could communicate with the Atlanta office, and that office in turn communicate with the Cincinnati office. Mr. Collings corroborates the testimony of Mr. Woflford, Mr. Fehsenfeld, Mr. Metzel, and Mr. Wootten, all of whom testified to the follow-up methods adopted by the Standard in the southern territory, and he directly contradicts the testimony of Mr. Pauley, the present special agent of the Standard at Birmingham, Ala. The , testimony of Mr. Collings shows the extremities to which the independents were driven in their efforts to market oil in the South. Mr. Collings boasts (12/896) over the claim that the Standard went in advance of anyone else and established sta- tions all over the South. In another subdivision of the brief of the Government we have cited and fully discussed the acquisition of a great number of companies that in the early days had stations at numerous points throughout the South ; that at many of these points the Standard did not have sta- tions; and that the Standard acquired these companies and took over their facilities. It is true that the Standard has established stations and tank-wagon deliveries generally throughout the South and that the independents have not done so ; that this gives the Standard an advantage over the independents; and that the independents are forced to deliver in barrels, which is more expensive and less desirable. The independents who are still 73 doing business throughout the South well know the methods that have been adopted to drive out and buy up other inde- pendent companies that have in the past done business in that territory ; they know that it would not do for them to put an investment into a plant at any point because they could not long survive the competition which the Standard would subject them to; and that they would be obliged to lose money and finally abandon such an enterprise. It comes with poor grace from the Standard to boast of its supremacy in the markets of the South. That supremacy has been built up entirely as the result of its predatory methods of competition. It is fair to assume that had the independents been required to meet only that fair and just competition and rivalry which properly exist between com- peting companies, they would have been as well intrenched in the South as is the Standard Oil Company ; but the war- fare against them has been such that they have not deemed it wise to make investments in permanent stations. The experience of the independent companies in the past has educated those at present in the business that they can not hope to establish stations in the South, maintain them, and do business through them at a profit. Mr. CoUings made the statement (12/896) that the Red " C " Company sold Columbia headlight oil and claimed that it was Water White and as good as any oil the Standard ever made. Mr. Fehsenfeld, president of the Eed " C " Company, testified (20/173) that the Columbia headlight oil is next to the lowest grade which it sells ; that it has two other higher grades, to wit, Excelsior, which in the market sells at 1 cent above the price of Columbia headlight, and White " C " oil, which sells in the market at 2^ cents above the price of Columbia headlight. Will Mr. CoUings admit that the Columbia headlight oil is as good as any oil the Standard ever made when Mr. Fehsenfeld is marketing two higher grades of oil than the Columbia headlight ? Mr. CoUings also said (12/897) that most of the Stand- ard's competitors have been casual. They would go into a town and attempt to sell a carload occasionally, " and they flimflammed the trade by talking about trusts and monopo- lies and making millions for Rockefeller and all that sort of talk, and give the poor man a chance ; and work up all the 74 prejudice they can in a customer's mind by talking that sort of riffraff." We have no doubt that the independent com- panies did the best they could to stay in the market, and the fact that they were independent was an argument which they had a right to use. Exhibit 679 (vol. 10, 174Y) was a letter written by R. N. Eeed, special agent of the Standard Oil Company, Atlanta, Ga., to Mr. C. T. CoUings, vice-president of the Standard Oil Company of Kentucky, on January 20, 1904 (Wootten, 5/2117), and is as follows: We have just wired you the Red " C " Oil Company has a representative in Union, S. C, trying to make up an order fOr a carload of oil at 15 cents per gallon in barrels, 2 per cent cash discount, also agreeing to allow the purchaser $1 for the empty barrels f. o. b. their rail- road station. This would make their oil cost them 13 cents bulk, whereas our tank-wagon price on fireproof is 14| cents, or a difference of 1^ cents per gallon, less their loss by leakage. This information comes through our lubricating representative, Mr. Adams, who states if the Red " C " Oil representative goes over his usual route he will visit Greenville, Pelzer, Laurens, Clinton, An- derson, Honea Path, Seneca, Walhalla, and Westminster. We are now trying to locate our Mr. Bohler, our refined-oil salesman, with a view of having him locate the Red " C " Oil man and remain with him until he leaves our territory. We will certainly do all we can to prevent Mr. Metzel, of the Red " C '' Oil Company, landing any orders for carload lots in this territory. Exhibit 680 is a reply to Exhibit 679 (Wootten, 5/2118), and is as follows : Standard Oil Company (Incorporated), Cincinnati, January £1, 1904.. COMPETITION AT UNION, S. C. Mr. R. N. Reed, S. A., Atlanta, Ga. Dear Sir: I received late yesterday afternoon your telegram in regard to the Red " C " Oil Company's rep- resentative being at Union, S. C, trying to make up a carload of oil at 15 cents per gallon in barrels delivered. I immediately wired you to lower all of your South Carolina points J cent per gallon on refined oil ; and I presume you will have a refined-oil salesman on the 75 ground to follow the Ked " C " man around and prevent his making up any more carloads. There certainly must be something wrong about this price. Figuring on the inside jobbers' price at Baltimore for common prime white oil, 12 cents per gallon, in barrels, adding the freight in carloads, 3.68 cents per gallon, would make 15.68 cents delivered ; and I can not believe they would sell below the oil jobbers' net price at Baltimore. How- ever, I have wired to Baltimore for information. Since I wired you last night I have received your letter of the 20th instant, and note you stopped the car at Union by agreeing to allow the Union cotton' mills i cent off your open-tank wagon price. This is all right. You say the price on this oil is 15 cents in barrels, less $1 for the empty. Do you mean f. o. b. Union? They have never allowed $1 for the barrel f. o. b. point of delivery heretofore. I am anxious to know whether or not you succeeded in getting your salesman on the track of this man, in reference to his movements to other points, and whether or not the reduction I have recommended will satisfy the trade. Yours, truly, C. T. Collings, F. B. This letter illustrates that the price which the Standard Oil Company fixed for oil did not depend upon trade condi- tions, but was fixed entirely upon competitive conditions. It also shows the system which the Standard Oil Company had of keeping track of independent salesmen as they passed from one marketing district of the Standard into another, and how this trade was followed up and secured by the cut- ting of prices. Exhibit 681 is also a letter from the special agent, Keed, at Atlanta, to CoUings, in Cincinnati, dated January 22, 1904 (Wootten, 5/2118), and is in part as follows: You may rest assured that as soon as we heard of the Red " C " oil man being in our territory we located Mr. Bohler by phone and had him go to Union at once. He phoned me ^s late as 11 o'clock to-day and advised the Eed " C " man had crossed the border line and returned to Baltimore territory, but we anticipate a visit from him again in a few days. I have all the agents in South Carolina on the alert and they are watching for this gentleman. Should he again visit any point in OTir territory they are to wire us at once, and I am keeping in close touch with our refined oil man 76 so I can advise him promptly to locate the Red " C " oil man and follow him until he leaves our territory, and by all means prevent him from securing orders for carload lots of refined oil. In view of the Red "C" representative leaving our territory, we did not follow the advices in your telegram and letter of the 20th to reduce our market at all South Carolina points one-half cent per gallon, as we did not deem it necessary unless we were forced to, but in wiring you on the 20th I wanted to know what we could do if the case demanded, and we are prepared to reduce the market one-half cent if we feel it necessary. Now, if you think it advisable we reduce the market, even though it is not necessary, kindly advise us by wire to-morrow, and we will mail our notices to our agents so the reduction will become effective on Monday, January 25, and I will keep you fully advised of any new developments. Mr. CoUings was interrogated about this letter (12/971). He said that he did not reprimand Mr. Reed, and he thought that the course he was about to pursue as outlined in the letter was perfectly legitimate. He told what the Standard had done in the way of establishing tank-wagon delivery, the conveniences which it had furnished to the trade, and that it had delivered oil the whole year around; and said that the independents shipped in barrels and could not sup- ply the trade so steadily or so satisfactorily, and that .the dealers have been educated up to the Standard's method of doing business. It would hardly be supposed that a concern so beneficient would be so poorly appreciated, and that in order to keep the trade it must resort to price cutting, break- ing up carload shipments, and keeping a force of men in the field to watch the salesmen of the independent companies. Mr. CoUings said (12/972) : A bushwhacking concern, like the Red " C," shoots a man out only at limited seasons, selling oil in barrels that leaks out and cutting our price 1 to 1^ cents, selling a cheap grade of oil that is not as good as ours, but rep- resenting it as being better, and talking, of course, about trusts and monopolies and every other thing of that sort, hocus-pocusing the trade to make it buy a carload of oil. Now, we were not going to let them take away our business on any such terms or conditions. 77 It IS a little strange that a bushwhacking, hocus-pocusing concern would cause Mr. CoUings so much alarm. If he is correct in his statement that the Eed " C " was selling in- ferior oil and that its method of delivery was not steady and satisfactory, it would soon be compelled to retire from the field, and could not long compete with the better facili- ties of the Standard. The truth is that the Standard was not selling a better grade of oil, and that it was selling oil in those small towns in South Carolina at exorbitant prices. The Eed " C " sold a grade of oil equally as good as the Standard's at the Baltimore price, with the freight added, which often brought the price below that of the Standard. The Standard does not have any fixed principle of making prices. It charges whatever the trade will bear. Where there is competition, it may sell at a low price; where there is no competition, it maintains abnormally high prices. Exhibit 682 is a letter from C. T. CoUings, of Cincinnati, on the Standard Oil Company's letter head, to Mr. Reed, its special agent at Atlanta, Ga. (Wootten, 5/2118), and is in part as follows : I note that you did not put into effect the one-half cent per gallon reduction at any of the South Carolina points because the Red C man left Union and went back to Baltimore. I very much fear this is a ruse on the part of your competitor, and that he will turn up at some other point in South Carolina. I trust you will keep in close touch with the situation and get prompt advices by wire, and if he is still offering goods at 15 cents delivered, that you will put into effect the reduc- tion of one-half cent per gallon at all South Carolina points. Keep me advised by wire in regard to this competition. While we do not want to sacrifice mar- gins unnecessarily, we are in a different position than we were three months ago, and do not want to lose a gal- lon of your trade on account of price.'^ The concluding sentence of the above letter is quite in- dicative of the competition of this company. Exhibit 683 is a letter between the same parties, and is written on the stationery of the Standard Oil Company. (Wootten, 5/1218-1219.) This letter shows that where nec- essary the Standard Oil Company took advantage of the li- " Italics are ours. 78 cense laws to keep out competition, and in speaking of the Red C Oil Company, it concludes as follows : If they place a car at Anderson, then they are apt to place one at several other towns in South Carolina, where the trade has shown a disposition to encourage this competition. Exhibits 684 and 685 are a letter and a telegram, respec- tively, from C. T. CoUings to Reed, of Atlanta, directing him to lower the price of oil one-half cent a gallon at South Car- olina points. Exhibit 686 is a carbon copy of a letter written by Reed, special agent at Atlanta, to Mr. A. C. McGee, agent of the Standard at Pelzer, S. C, dated January 25, 1904. (Woot- ten 5/2110.) In ^ this letter Mr. Reed complains to Mr. McGee because he did not sooner notify him by telegram that the Red " C " salesman was in Pelzer on Saturday, and states that had he received such notice he would have had his refined-oil salesman in Pelzer on Monday morning. It seems that the Red " C " oil man was making up a carload at Pelzer. Mr. Reed directs Mr. McGee that, if necessary to break up this carload order, he may reduce the price one- half cent a gallon at Pelzer, and directs him to interview the merchants of the town, offering this one-half cent cut if they will cancel their orders. The balance of the letter is as fol- lows: Now, the main thing you have overlooked; you have failed to give us the price at which they made sales. I am now trying to locate Mr. Bohler, so he will visit you ; also other points where the Red " C " man may go. If you can break up this carload order, you have my perniission to reduce your price one-half cent per gal- lon in Pelzer. Now, please interview all of the mer- chants at once, explaining you will give them one-half cent below the market if they will cancel their order, and if you are successful, please wire me at once and I will send you regular form reducing your market; but you need not wait to receive that, but put the reduction into effect at once. I feel reasonably sure if you will throw this on personal grounds and will interview the mer- chants as you should, you will be successful in having a sufficient number of them to cancel their orders so it will be impossible for the Red " C " representative to ship m the car. While on this subject, I would like to in- quire whether our man Smith, the peddler, purchased 79 any part of this car. If so, and he will not cancel, we will certainly withdraw the special arrangement that we now have with him. So get a move on you and see what can be done, and let me have a reply to thife letter. This letter was called to the attention of Mr. CoUings on cross-examination, and he was asked to explain that part which authorized the agent at Pelzer to reduce the market one-half cent a gallon, if by that means he thought he could be successful in having the merchants cancel the order given to the Ked " C " Company. Mr. CoUings tried to explain this authority to cut the price by the letter dated two days later, which shows that the price of the Red " C " Company at Pelzer was 1 cent less than the Standard's price there, and that it was perfectly legitimate for the Standard to meet the Eed " C " Company's price. His attention was called to the sentence in this letter, as follows : Now, the main thing you have overlooked; you have failed to give us the price at which they made" the sale. Mr. CoUings was asked, in view of that statement in the letter, if he was able to say that Eeed knew that the Red " C " sold below the Standard's price, and he finally said that he thought Reed did know the Red " C " Company's price ; that he may have had other sources of information ; that he might have got it from the salesman or some other source, and just wanted to put the agent at Pelzer on notice that every time he reported competition he should state exactly and defi- nitely what the competitor's price was. Again we have more of Mr. CoUings's speculations and theories as to what was in the mind of the author of the letter. Exhibit 687 is also a letter from Reed to McGee (Wootten, 5/2120) , and while it is quite lengthy, we give it in full be- cause of the light which it throws upon the general methods of the Standard Oil Company in its competition with inde- pendents : Atlanta, Ga., January £6, 190^. Mr. A. C. McGee, Agent Standard Oil Company, Peher, S. G. Dear Sie: I have your favor of January 25, advising all of the merchants in Pelzer joined in the purchase of the carload of oil from the Red " C " Oil Company, with the exception of W. C. Walburn & Co. You do not men- 80 tion the name of Winston Smith, the peddler. I have a personal letter from him this morning givmg me the same information, also stating the Red " C " representative called on him and tried to induce him to buy a part of the car, claiming the oil would cost him 13^ cents after de- ducting the allowance for the empty package. In other words, the price was 15^ cents, less $1 for the empty bar- rel, but he has failed to state whether this price is f . o. b. Pelzer or Baltimore. As I figure the total proposition, the oil will cost the merchants 1 cent per gallon less than they are now paying us for our fireproof, and they will have to stand the loss by leakage, etc., which will amount to more than 4 gallons per barrel— that is, by the time they have used up their entire purchase — therefore they will not be securing their oil for less than they are now paying us ; and, besides, they will get a lower grade, what we would call "diamond headlight," which is always worth 1 to li cents per gallon less than our fireproof oil. It is certainly unfortunate we could not hold the trade in Pelzer, and I have every reason to believe that now, if you would throw this matter on personal grounds, ex- plaining to the merchants that your position with the company depended entirely upon your holding the trade in Pelzer, calling their attention to your affliction, I cer- tainlj' believe they would become more patriotic and perhaps cancel their orders with the Red " C " Oil Com- pany. But one of the most importaiit points you over- looked in your report. You failed to give me the num- ber of barrels purchased by each customer. No doubt there is some one merchant who has bought 15 or 20 bar- rels out of this car, and if we were successful in getting him to cancel his order with the Red " C " by wire, we paying for the message, it would mean it would break up this carload shipment; and in consideration of said merchant canceling his order we would agree to deliver him the same quantity of oil that he bought in barrels from our tank wagon. In other words, our present mar- ket price is 14| cents in Pelzer. If the merchant who bought the largest portion of this carload of oil could break up the car, we would sell him the same quantity at 1 cent per gallon below our regular market. This is rather a delicate question to handle, and it certainly would not be wise to let more than one man in on the scheme, and you should certainly know some of them well enough to line them up on this question. As stated in the first part of this letter, I think you can have that car canceled on personal grounds if you give the mer- chants the right kind of talk, without making any con- cessions in price. Make up your mind you are going to 81 do it, and I am sure the results will work out satisfac- torily to you and the company. I think I have proven to you that I have been looking out for your welfare, and you understand if this car comes in, it will be criticism on my management. There- fore you can readily understand why I am so anxious to have the car stopped. Yours, truly, Special Agent. The Standard Oil Company here directs its agent to cut the price 1 cent, if necessary, to any merchants who got a sufficient quantity of the oil that made up this carload, so as to break up the carload, the result of which would be to pre- vent the Red " C " Oil Company from getting carload rates on this oil. The writer says this is rather a delicate question to handle, and that it would not be wise to let more than one man into the scheme. The writer of this letter also begs Mr. McGee, who evidently is suffering from some physical in- firmity, to call the attention of the dealers to his affliction, hoping thereby to gain their sympathy, and thus enable them to accomplish their laudable and patriotic purpose of break- ing up this carload of Red " C " oil. Exhibit 689 is a carbon copy of a letter written by Mr, Reed, special agent for the Standard at Atlanta (Wootten, 6/2120), and is as follows: Atlanta, Ga., January 85, 190^. CARLOAD or OUTSIDE OIL. Mr. B. O. Driver, Agent Standard Oil Company, Roanoke, Ala. Dear Sir : Upon receipt of your letter of a few days ago, I reported the receipt of the carload of oil to our general office, and I am in receipt of a letter from Mr. Collings, and he approves of the reduction I instructed you to make in last Saturday's mail, and certainly hope you will be able to retain your trade and cause the Roanoke Grocery Company to sustain a loss by leakage. He also suggests it might be well for you to appear before the council in a personal way, explaining the license question thoroughly, and unless it is applied to the Roanoke Grocery Company they are discriminating 72064— VOL 2—09 6 82 against you and the company you represent. I believe you can throw this on personal grounds and bring about the desired result. Of course if the Grocery Company will agree not to bring in any more outside oil, then I think it would be well for the council to make an excep- tion in their case and not cause them to pay the annual license of $25 ; but if they do not give some kind of assur- ance on these lines they should pay it the same as our- selves, as we are handling barreled oil and selling direct to the trade, and they are doing the same thing. With the prices we gave you in last Saturday's mail, after allowing the merchants $1 for the empty packages, it would make their oil cost them 14J cents bulk. Now, if you are unable to hold your trade at that price, and the Grocery Company are getting any percentage to speak of, it looks as though it would be advisable for us to make still further reduction, provided we can get two or more retailers to establish a price of 15 cents per gallon. In your opinion, how much profit would two or more be satisfied with to make a special run on oil? I believe another 1 cent reduction would bring about the desired results, as that would enable them to make a profit of 1^ cents per gallon when sold at 15 cente. Now, please do not say anything to the trade along this line, but let me have your suggestion and what the pros- pects are on the license question also, and I will certainly appreciate it if you will make it a point to reply at once. Exhibit 690 is a letter from R. N. Seed, special agent of the Standard at Atlanta, Ga., dated January 27, 1904, di- rected to Mr. Collings, and which Mr. CoUings admits hav- ing received (12/961). A number of sentences in this letter are very significant, and although the letter is very lengthy, we quote considerable of it : I regret to advise the Eed " C " Oil Company have succeeded in placing a carload of oil with the merchants at Pelzer, S. C. It seems there is an organization be- tween the merchants in that town, and it was practically impossible for our agent to secure any information until one day after the car was sold and the Eed " C " repre- sentative had left for other points. The sales were made at 15^ cents per gallon in barrels delivered, they agree- ing to allow $1 for M. T's [empty barrels] f. o. b. Pelzer, which would make the oil cost the merchants 13i cents per gallon bulk less loss by leakage and expense of dray- age to and from depot, against our price of 144 cents. From what I can learn, the Pelzer merchants have never 83 been friendly toward us, and are inclined to buy their oils from others, even at an advanced price. As soon as I received the information I made every effort to break uj) the carload, but was unsuccessful. * * * j ^.gj.. tainly regret the sale has been made, but you may rest assured we did everything in our power to prevent it. The Eed " C " man is again in our territory, and has been since last Saturday afternoon. Mr. Bohler located him at Greenville and they have visited Seneca and An- derson and other points together. I have a wire from Mr. Bohler, who is in Greenville with the competitor, this afternoon, stating that he has not been successful in securing any more orders. In order to hold the trade in Anderson, Mr. Bohler followed my instructions and reduced our tank-wagon price in Anderson proper one- half cent per gallon. Mr. Bohler has been thoroughly instructed in regard to this competition. I have also corresponded with our agents in the South Carolina field, and they fully understand we want to retain our business, and would reduce our market one-half cent per gallon rather than see the business go to other oil companies, but I have impressed upon their minds that we do not want to put this reduction into effect unless it is absolutely necessary. Mr. CoUings was asked to explain the sentence, "As soon as I received the information I made every effort to break up the carload, but was unsuccessful." His answer was that the salesman was probably still on the ground; that he did not reprimand Mr. Eeed for his attempt to 'prevent this car- load sale because he assumed that Eeed would pursue a per- fectly legitimate method to do so. Mr. Collings failed to throw any light upon what he meant by " legitimate meth- ods." He then testified, as follows (12/962) : Q. Now, the object in breaking up that carload was so that the Eed " C " would not sell any more oil there, was it not ? — A. Sure. Exhibit 691 is a letter from Eeed, special agent at Atlanta, to McGee, agent of the Standard at Pelzer. (Wootten, 5/2121.) In this letter Mr. Eeed complains very bitterly to Mr. McGee because he permitted the Eed " C " Oil Company to sell a carload of oil in that town. This letter follows right along after the letter from Mr. Eeed explaining the 84 situation to Mr. Collings, which is Exhibit 690. Mr. Seed's letter to Mr. McGee concludes as follows : I regret to be compelled to say to you that if another car of Red " C " oil comes into your territory and is not reported or looked after as I think it should be, es- pecially when I advise you in advance to be on the look- out for their representative, it will be equivalent to your resignation. Mr. CoUings's attention was called (12/972) to the letter written by him to Mr. Reed on January 29, 1904 (Exhibit 692) in which Mr. Collings said: I note that in order to take no chances of a car being made up at Anderson your salesman reduced the price at that point one-half cent. This is all right, as I au- thorized you to make a general reduction if necessary. Mr. Collings said this is all right ; that he figured that if the Red " C " cut the price at Laurens or Anderson, as the case might be, they will pursue the same policy at other points, and in advance of their going in there and taking the business that he said it was only fair to give all of the other towns in that territory the benefit of the reduction. Q. So you cut the price at every place where you thought they would be likely to go ? — A. Where we knew they would go; where they had gone before and per- formed. He was then asked if a carload had ever been sold by the Red " C " Oil Company at Anderson, and he said that there had been on previous occasions, but he could not recall when. He was pressed on cross-examination to know the source of his information about the Red " C's " selling oil at a cut price in Anderson, and said he had it at one time; that he got this information from the agent at Atlanta, who had a man on the ground ; he could not tell whether he got it by a letter, but he presumed that he did, and finally stated that while he was not able to say whether it was six weeks or six months or two years before that the Red "C " had been in Anderson, but that they were in the habit of raiding trade at Anderson and selling in carload lots. He was asked to produce any letter that he had received upon that, but he did not do so. This letter shows that the prices of the 85 Standard Oil Company are not controlled by the price of crude or by trade conditions, but controlled entirely by com- petitive conditions. Exhibit 693 is a letter from Mr. Eeed, of Atlanta, to Mr. C. T. Collings, in which he regrets to inform Mr. CoUings that the Eed " C " Oil Company's representative has dis- posed of 30 barrels of oil to the merchants in Laurens, and he fears that a whole carload has been disposed of in that place, and complains of their agent, Mr. Bohler, for not keeping them in closer touch with that situation. In this letter Mr. Reed gives to Mr. Collings a list of the persons in Pelzer who bought the carload of oil from the Red " C " Oil Company, and the number of barrels that each one re- ceived, and says that this shipment will also be reported on the regular form soon. (Wootten, 5/2121.) Exhibit 694 is a letter written by W. R. Keith, agent of the Standard at Anderson, S. C, to R. N. Reed, of Atlanta. (Wootten, 5/2122.) In this letter Mr. Keith informs Mr. Reed that he is sorry to advise him that the Red " C " Oil Company has sold a carload of refined oil in Anderson. He also states to him that Mr. Bohler, the Standard's sales- man, reduced the price one-half a cent to prevent the making up of a carload for Anderson, but that the Red " C " man immediately met the cut and then left the town before he had made up his carload, and went to some other near-by towns and completed it. Mr. Keith says he got this in- formation from Mr. Sparks (Sparks was the salesman for the Red " C " Oil Company) by telling Sparks he did not care how much oil he sold, and only wanted Sparks to tell him when Sparks was making up a carload order, and what his prices were. Exhibit 695 is a carbon copy of a letter from Reed, special agent at Atlanta, to Collings. (Wootten, 5/2122.) Mr. Reed informs Mr. Collings of the carload sale by the Red "C" Oil Company to the merchants in Anderson and the other towns. He states also that Bohler had telegraphed him that the Eed " C " man has now gone out of the terri- tory and toward Baltimore. He closes his letter by saying: This Mr. Metzel is rather a smooth individual, and it seems we are having an awful hard time keeping track of him. 86 Exhibit 696 is a letter from Warren D. Arthur (who was a wholesale grocer and also agent for the Standard at Union, S. C.) to the Standard Oil Company at Atlanta, Ga. ("VVoot- ten, 5/2122.) This letter is in reference to a carload of oil which it was rumored had been sold in that town by the representative of the Red " C " Oil Company, and the letter concludes as follows : I find, however, this afternoon, upon hard work, that it is possible that a jobber here by the name of Hames Grocery Company is very anxious to represent Red " C " people, and it is possible he has agreed to take a car from them on consignment. This matter I will watch out for, and if he is going to get a car I would like to know it, and if he does get a car I would like to have you assist me in seeing him and the Eed " C " people " sorry " they every attempted such a thing. I will do my part if you will do yours. I have had some experi- ence in business, and, in case this is facts, I would like for you to give me some little discretion and I will see if I can't make some of that car lose in leakage. Tt is pos- sible that this thing is only rumor^ still the car might bo coming. I give it to you as I get it. Mr. CoUings (12/966) disclaimed any knowledge of this letter. He theorizes as to what it means. The letter itself is not ambiguous and is couched in plain language. It is inter- esting to know how Mr. Arthur was going to make the Red " C " Oil Company people " sorry " that they ever attempted to sell a carload of oil to anybody. He either means that he is going to cut the price, so that the concern that purchased this oil from the Red " C " will not be able to sell it, or he means that he will destroy it by causing it to leak out of the barrels and waste. Mr. CoUings said (12/968) that Mr. Arthur was not au- thorized to do anything but sell oil at a price given him. He was then asked whether or not he did not authorize Mr. Reed to make special arrangements with some of the merchants in order to get the carloads they were sending to Pelzer, Green- ville, and Laurens canceled, and he said that he did not recall any special arrangement, but that he might have done it. Exhibit 697 is a letter from Mr. Beasley, agent of the Standard Oil Company at Greenville, S. C, written to the Standard Oil Company at Atlanta, Ga. (Wootten, 5/2122.) In this letter Mr. Beasley states that the Red " C " car has 87 not reached there yet, but that it is at Easley, 12 miles away. He also notifies him that he heard to-day that a car had been made up at Greenville. Exhibit 698 is a letter written by the same party to the same party (Wootten, 5/2123) with reference to another car- load shipment by the Red " C " into Greenville and giving the quantities and the names of the persons to whom the oil was delivered. Exhibit 699 is a letter written by the agent of the Standard at Laurens, S. C, to Mr. Eeed at Atlanta (Wootten, 5/2123), in which he states that a carload of Red " C " oil is sup- posed to have been sold at that place for 15^ cents a gallon and $1 each for empty barrels. Exhibit 700 is a letter from CoUings to Reed (Wootten, 5/2123), in which Mr. CoUings states that he regrets that the Red " C " Oil Company has succeeded in placing several cars of oil in South Carolina points, and in which he says he thinks it was a mistake that the general reduction of a half a cent a gallon was not put in at those points when he sug- gested it. Exhibit 701 is a letter from Mr. Reed to CoUings (Wootten 5/2123), in which he admits that it might have been well to have reduced the price of oil in South Carolina points before the Red " C " made sales in that territory, but states that at all points now, except Spartanburg, the reduction has been made. Mr. CoUings's attention was called (12/968) to Exhibit 702, which is a letter written by him to Mr. R. N. Reed, of Atlanta, Ga., and headed "Carloads of Red 'C oil at Greenville and Laurens, S. C," dated February 25, 1904, reading as follows : Mr. R. N. Reed, S. A., Atlanta, Ga. Dear Sir : I am in receipt of your letters of the 24th instant, and regret to note that in addition to the car of Red "C" oil company sold at Green viUe, and which has just arrived, a car has also arrived at Laurens. I note that 40 barrels of the car that was shipped to Greenville was taken by Phillips, Majors Company and Mills Manufacturing Company, each firm taking 20 barrels. Who are these concerns and how will they dis- pose of this oil ? Do they retail the oil, and have they been buying regularly from your tank wagon? If so, 88 you should have a pretty good idea as to how long these 20 barrels will last them. If they are jobbing the oil, where do you figure they can sell it? Is there any rea- son why we could not make some special arrangement with one or the other of these concerns so that we would be safe against their going into any future carload orders ? In the Laurens car I note one concern, Fuller & Dar- lington, took 20 barrels. Please give me the same infor- mation in regard to this concern as asked for concerning the two at Greenville. It seems to me the key to the situation is to tie up these parties. However, I assume, now that the consumption is falling off, and as the season is coming on when the chances of handling oil in barrels is great, there is little likelihood of their experimenting with another carload order ; but we should not have lost sight of these concerns and have been in touch with them at the outset of the season and have them lined up, so that we would not have been caught with these two carloads. Yours, truly, C. T. Collings, F. B. Mr. CoUings explained this letter by saying that the mer- chants referred to bought 20 barrels; that a merchant who can handle 20 barrels of oil without risk of leakage must do in part a jobbing business; that those merchants were treated with more liberality than the small buyer ; and that every one of these men who took a 20-barrel lot received half a cent better price than the man who bought 5. Mr. CoUings would have us believe that he suggested the making of a special arrangement with one or the other of these con- cerns because they were jobbers. The letter in which he makes the suggestion about special arrangements shows that he did not know whether they were or were not jobbers, because he asked Mr. Reed in the same letter who they were and whether they were jobbing oil and where they sold, and without waiting to obtain this information and in the same letter he asked Reed if there is any reason why a special arrangement should not be made with one or the other of these concerns, so that they would be safe against their going into any future carload orders. Mr. CoUings's explanation that the concession was offered because the dealers mentioned in the letter were jobbers will not do, because if that were true, all of them would have 89 been entitled to it, and he would not have told Reed to make an arrangement with some one or the other of them. Exhibit 703 is a carbon copy of a letter from Mr. Reed to Mr. Lee Beasley, who was agent of the Standard at Green- ville, S. C. (Wootten, 5/2124), in which Mr. Reed asks Mr. Beasley to watch very carefully and find out what customers bought from the Red " C " Oil Company the late shipment into that town, and he concludes by saying : It is quite important that we know this, as it may be found advisable to make some kind of an arrangement with them for their future supply of refined oil. Exhibit 704 is a letter from Mr. Reed to Mr. W. S. Beck- man, agent for the Standard at Laurens (Wootten, 5/2124), in which he asks Mr. Beckman to keep his weather eye open and see if he can learn of any sales that Fuller & Darling- ton make to smaller dealers in Laurens. Fuller & Darling- ton had purchased a part of the carload of Red " C " oil that went into that town. Exhibit 705 is a letter from Mr. Reed to Mr. CoUings (Wootten, 5/2124), dated Atlanta, Ga., March 1, 1904, in which he gives him the names of the different concerns who bought the Red " C " oil that was shipped in the carload into Laurens and Greenville, and discusses trade conditions gen- erally. The last paragraph of this letter reads as follows : Laurens, S. C, Fuller, Darlington & Co.: This concern has only purchased a few barrels of oil from us in the past twelve months. In fact, they did not buy a barrel during October, November, December, and January. It is very evident they are going to make an effort to secure some oil business from the country merchants adjacent to Laurens, S. C. We have a very good tank-wagon agent there, and I am reasonably sure they will find it uphill work to market their oil, except- ing occasional barrel they may be able to dispose of to a farmer. We will watch all of the concerns mentioned in this letter and give you all the information we are able to gather. I have arranged to keep a memorandum of all parties who buy from the Red " C " Oil Company, but I do not believe they will make an effort to dispose of any more oil in carload lots until next fall, and be- tween now and that time I will figure out the parties it might be advisable to make special allowances to and submit for your approval. 90 This letter was shown to Mr. CoUings, and he admitted that they kept close track of the details of competitive ship- ments, and in speaking of these carload shipments to the South, said (12/969-970) : This is the lifeblood of our business. If those fellows can go into South Carolina and unload 5 or 10 carloads of oil on you, that puts you out of business in that terri- tory from six weeks to three months, according to the consumption. Here was the explanation of it all. This shipping in car- load lots and getting the carload rates into the southern territory was reaching the lifeblood of the business, because where a carload was sold by an independent it took the place of a carload which otherwise would have been sold by the Standard. The Standard was determined that this method of marketing in the South must be stopped, and that if the independents marketed there at all they must do it in less than carload lots. It was well known to Mr. CoUings and the other managers of the Standard Oil interests that this could not be done, as the freight rates would bring the oil up to a point where it could not be sold in competition with the Standard. He was also asked (12/971) whether he did not testify that it was not the custom of the Standard Oil Company to have its salesmen follow up the independents, and he an- swered : A. Not as a rule. In this South Carolina field it was a little different from anything else, as I have just told you. They skirmish through there, bushwhack around on a carload basis in a way that we are not troubled with anywhere else. Q. You were not troubled with that anywhere else? — A. Not on the carload basis. Our competitors fight us with tank wagons, but some of these fellows would go in for it in carloads and barrels. Q. Then, you did direct your agents to follow these Red "C" men around, did you? — A. No; I did not direct them; but I would not have reprimanded them for finding out what they were doing. That is part of the business, to see what your competitors are doing. When they go out to bushwhack your trade, you go out to see what the men have got, who they have bagged, and what they have caught, especially to find out what 91 prices they are making, so as to get in line with them, if necessary, to hold your business. Exhibit 706 is a letter from Keith, agent for the Standard at Anderson, to Eeed (Wootten, 5/2125), in which he gives Mr. Eeed the names of the concerns and the amount that each bought from the carload of oil that was shipped into An- derson. Exhibit Y07 is a carbon copy of a letter from Reed to Keith (Wootten, 5/2125), and it suggests that he see to it that the parties selling the Red " C " oil there pay a license fee of $75 a year for the privilege of handling oil in that town. Exhibit 708 is a letter from McGee, agent at Pelzer, S. C, to Eeed, agent at Atlanta, Ga. (Wootten, 5/2125), in which he gives Mr. Reed the names of the concerns that bought from the Red " C " carload shipment into that place, and the amount that each took. Exhibit 709 is a letter from CoUings to Reed (Wootten, 5/2125), in which he asks Mr. Reed to furnish him a state- ment as to where the Red " C " Oil Company has placed car- load shipments in South Carolina since January 1, and the prices named, and if the shipments have arrived, to give the numbers of the cars in each case, and in which the subject of shipments by the Red " C " Company into that territory is discussed. The letters that have been introduced in connection with the testimony of Mr. Wootten (Exhibits 679 to 709) were written while Mr. Wootten was assistant to the chief clerk in the office of the Standard Oil Company at Atlanta, Ga. Mr. Wootten was for a time connected with the Dixie Oil Works, at New Orleans, but he returned again to the Atlanta office. This correspondence passed through his hands and the letters actually passed through the mails. Those which are carbon copies are carbon copies of letters written to the Cincinnati office. The original letters were letters received at the Atlanta office in the regular course of the mails. Mr. Wootten left the employ of the Standard on account of illness in 1904. The reason for his quitting the service of the company at this time is shown by Exhibit 711 (10/1776), which is a letter from R. N. Reed to Mr. E. N. 92 Wootten (5/2146). It seems from this letter that Mr. Wootten had been ill for some time and that there was no immediate prospect of his gaining his health. Mr. Reed closes the letter by saying : We regret we have found it necessary to take this step, and should you fully recover we would be very glad to consider you for another position should there be a vacancy. The letters which have been introduced in evidence came into Mr. Wootten's hands while he was in the service of the Standard Oil Company and prior to the time that he left that company, and it is a complete file upon that subject. (Wootten, 5/2126.) Mr. Wootten was quite seriously attacked by counsel for the Standard Oil Company on his cross-examination, charg- ing him with having stolen the letters that had been intro- duced in evidence. This does not come with very good grace from the attorney representing the Standard Oil Company, when it is conceded that Mr. Wootten, the manager of the bogus independent concern called the People's Oil Company, and Mr. C. W. Bender, the manager of the Dixie Oil Works, which was a pirate in the business extending from New Orleans to Baltimore, were the instruments which Good- willie and Ceilings saw fit to use not only as the managers of those companies, but also to carry out their scheme to defeat the legislation in Georgia which was hostile to the Standard's interests. These important officers in the Standard Oil Com- pany did not hesitate to sail under false colors and to compel their agents working on salaries to lie and deceive for the sole purpose of accomplishing the results which they desired to accomplish. Mr. J. Flem Johnson, traveling salesman for the Standard Oil Company in the Wilmington (N. C.) territory, on his cross-examination testified (13/1455-1456) that the inde- pendent oil companies frequently make up carload lots of barreled oil which are shipped into his territory and dis- tributed to the different customers; that he makes it his busi- ness to keep track of such shipments; that when he learned of them he would notify the Wilmington office, sometimes by wire and sometimes by letter; that he also went after that 93 business and tried to see what the trouble was and get it back to the Standard if he possibly could. He says he has been in towns when the salesman for the independent company was trying to make up a carload order and that he imme- diately got his tank wagon busy and endeavored to prevent the independent company from taking his trade away from him. He would not say that he had never succeeded in breaking up any carloads after the order had been given to the independent salesman, but said that he had no knowledge of having done so. Birmingham, Ala., and surrounding territory. — Mr. Wofford, who had been a traveling agent of the Standard in the Birmingham territory, testified (5/2154-2155) that there was a system in use by the Standard of following the traveling men of the independent companies on their trips through the South, and notifying their agents in advance of the location of the man and when he would pass into the territory of that particular agent. For instance, an independent traveling man would start out from Nashville, Tenn., and the Standard traveling man would follow him until he reached Birmingham territory, and then the Standard man would wire the Bir- mingham oiEce of the Standard and give the name of the traveling man, whom he represented, and what town he en- tered in the Birmingham territory, whereupon the Birming- ham office would send a man from Birmingham to get on the track of this independent salesman, and stay with him as long as he was in that territory, and prevent him from taking any orders if possible. The instructions were to cut the prices in every case where the independent salesman succeeded in getting an order; and this practice was kept up in a general way all the time— that is, from 1894 to 1902. Mr. G. T. Wofford testified (5/2156-2157) that in Feb- ruary, 1903, the Southeastern Oil Company began doing an independent business in Birmingham. At that time the tank-wagon price was 14 cents per gallon. The Standard cut the price first to 13 cents, then to 12, and then to 11 cents, and there it remained. The Southeastern Oil Com- pany followed the price down to 12 cents, and found itself unable to sell much oil at that price ; and after three or four months dropped to 11 cents; and, finally, in June, 1904, it was forced to give up its attempt to do business and sold out 94 to the Standard Oil Company, about fourteen months after it had started. While Mr. CoUings was upon the stand testifying for the defendants his attention was called to Mr. Wofford's testi- mony concerning the decline in prices at Birmingham, and Mr. Collings said (12/908) that he can not exactly recollect about those prices, but if there was a reduction in the price it was not on account of the Southeastern Oil Company, but may have been a general reduction in the market. If Mr. Collings did not know about the prices, how is he able to give reasons for the cut which was made by the Standard? It is simply the opinion or conclusion of Mr. Collings, not based upon knowledge of the facts. Mr. Elbert H. Pauley, special agent, of Birmingham, Ala., testified that he was familiar with the Southeastern Oil Company ; that it was organized by W. H. Faulkner, O. E. Smith, and Haskin Williams. Mr. G. T. Wofford was also connected with this company. This was about the time that Mr. Pauley entered the service of the Birmingham office. Mr. Wofford testified that about the time the Southeastern Oil Company started in business that the price was cut by the Standard from 14 to 11 cents. Mr. Pauley denies this and says that there was a reduction of the price from 14 to 13 cents, and that he was instructed by his superiors to make this reduction, and that this cut was general throughout the Birmingham territory. Petitioner's Exhibit 395, however, taken from the Stand- ard's own records, states that the price was reduced from 14 cents in April, 1903, to 12 cents in June, 1903, and shows also that at the same time the reduction at Atlanta and Nashville was only 1 cent. Mr. Pauley brought no records whatever to corroborate his statement. As his statement is a contradiction of that of Mr. G. T. Wofford, who was then actively in the business; and as Mr. Pauley had the records in his office to show exactly what oil was selling for in Birmingham during that period, it was his duty to produce those records. On the con- trary, Mr. Wofford was not connected with the office of the Standard at Birmingham, and would not be in possession of any such documents with which to corroborate his state- ments. 95 The result of the Southeastern Oil Company enterprise tells the story of what happened in Birmingham during its existence. It went into business in February, 1903, and it was sold out to the Standard Oil Company some time in 1904. The sale was made by Mr. Williams, one of the mem- bers of this company. He told Mr. Pauley that he had fur- nished a part of the money to start this concern, and that they had not made any money and that they wanted to get out of it. (Pauley, 12/848, 869.) If no money had been made by this company there was some reason. It was be- cause the price at which they could sell their oil in competi- tion with the other companies in Birmingham was not high enough to render a reasonable return to the company. Mr. WoflFord, who was the active man in this company, had been for years with the Standard and in the Birmingham oiSce. Presumably he was well acquainted with the trade in Bir- mingham and knew how to handle the business, and when he went into it he knew what profit would result from it, and about what this new company could do. He probably did not count on the fact that the Standard would immediately crush him and drive him out of business, although his expe- rience with the company should have taught him that lesson. However this may be, the Southeastern Oil Company lived but a year, and was then acquired by the Standard. The question at once presents itself : Why did the Stand- ard buy the Southeastern ? It did not run it a day ; it was immediately closed up. (Pauley, 12/848.) It was not pur- chased, then, to extend or enlarge the Standard's business in that territory ; it was not purchased because the Standard had any use whatever for it, but it was purchased because it was the cheapest way to dispose of a competitor. The South- eastern Oil Company had no motive to cut prices to a ruinous point or to attempt by price cutting to drive the Standard out of the field. Mr. Wofford testified (5/2157) that in about August, 1904, the G. T. Wofford Oil Company began business in Birming- ham; that at that time the tank-wagon price of oil was 11 cents per gallon ; that the Standard cut the price to lOJ cents, and finally to 9| cents, and that the Wofford Oil Company followed the price down to the latter figure. Mr. Wofford also testified that the Standard followed the Wofford tank 96 wagons. Mr. CoUings (12/908) attempted to contradict the testimony of Mr. Wofford as to prices in Birmingham when the Wofford Company started. He did not pretend, how- ever, to have any personal knowledge as to the conditions there at that time, but testified from some memorandum which he held in his hands. Mr. Pauley (12/848) testified to prices in Birmingham in 1905, which of course have no bearing upon the case, because Wofford started in 1904, and the prices which Wofford gave were the prices for the first three or four months of his operations. Mr. Wofford waa not asked while upon the witness stand whether this cut was made directly by the Standard or whether it was made by the Standard through its bogus Alabama Oil Company. The Standard Oil Company used these bogus companies through- out the entire country to cut the prices in cases where it did not itself want to make a cut. As neither Mr. Wofford nor Mr. Pauley was questioned upon this branch of the case, it is fair to assume that both of them told the truth ; that when Wofford said the price was cut to 9^ cents by the Standard, he meant that it was done through the Alabama Oil Com- pany ; and when Collings said that the Standard did not cut the price, his statement was literally true but misleading, if the price was cut by the Alabama. This is exactly the con- dition which we have shown existed at Troy, N. Y. Mr. Wofford also testified (5/2157-2158) that in the terri- tory surrounding Birmingham the Standard Oil Company's prices are not uniform, being low where there is competition and high where there is no competition, taking into account freight rates and expenses. The Standard's prices are based on competitive conditions. Mr. Wofford said that at the time he was testifying the price in Birmingham, where the Wof- ford Oil Company was doing business, was 9^ cents, while at Bessemer, Ala., a town 14 miles away, where the Standard had a tank station and where there was no competition, the price to dealers was 14 cents a gallon for the same oil. Mr. Collings (12/909-910) attempted to contradict Mr. Wof- ford by making a general statement that the difference in prices at Birmingham and in the surrounding towns is made up by the difference in the cost of marketing. He does not, however, give any figures showing the comparative cost of marketing in these outlying stations, nor the freight rates 97 or prices. Mr, Pauley testified that the prices outside of Birmingham were no higher than the prices at Birmingham, with the freight and marketing expenses added. This is a direct contradiction of the testimony of Mr. "Wofford. Mr. Pauley did not produce any books or records from the office of the Standard Oil Company, or pretend to swear from any examination of them as to the prices and marketing condi- tions in Birmingham and its territory. He should have done so and furnished facts and figures. Mr. Pauley called attention to some instances, in which he said that the Wofford Oil Company had cut the price and secured the business, and he mentioned the Tennessee Coal, Iron and Railway Company and a certain lubricating-oil contract which the Wofford Oil Company obtained by mak- ing a lower price. (Pauley, 12/853.) There is no regular market price for lubricating oils. These are usually sold on contract. Often a contract is let by receiving bids from the various companies. This was a large contract, amounting to about $5,000 a month, and probably was obtained by com- petitive bidding. Furthermore, there is great variety in the grades and quality of lubricating oils, and there is no stand- ard of quality such as is found in refined oils. Each com- pany produces its particular brands and grades. Mr. Pauley also states that somebody told him that the Wofford Oil Company made a cut on refined oil to the Woodward Iron Company, located at Woodward, and as a consequence secured the business. He does not know how much of a cut was made, if any was made. In fact, he knows absolutely nothing about it except what somebody told him. These were the only cases that Mr. Pauley was able to give in which the Wofford Oil Company had cut the Standard's price. (Pauley, 12/853.) Mr. Pauley also stated (12/853-855) that the Gulf Refin- ing Company has been a great offender and has frequently and persistently cut the price, in some cases making contracts and in others cutting the tank-wagon price, in the Birming- ham territory. Mr. Pauley also produced a contract, dated January 18, 1906, in which it is agreed that the Gulf Refin- ing Company will sell to Barton & Allen, of Alexander City, Ala., a certain brand of oil called " Lusterlite " for 1 cent 72064— VOL 2—09 7 98 per gallon below the Alexander City tank-wagon price. Mr. Pauley said (12/857) that this is an ordinary grade of kero- sene oil, that it was sold throughout the country for illumi- nating purposes, that it is sold alone by the Gulf Eefining Company, that about 40 contracts like the one above men- tioned were made in his territory, and that the Standard lost all of these customers. He said that the Standard never cut the price in their territory to his recollection, leaving it to be inferred that his memory on that subject might be quite defective. Mr. Pauley was not asked on his direct examina- tion whether or not this was the same quality of oil that was being sold in Alexander, or whether it was of a lower grade, but on cross-examination he admitted that it might have been a cheaper grade of oil ; that it might have been a lower fire test, that if it was made out of Texas oil, and it was assumed that the Gulf Eefining Company used that oU, it might be a much cheaper grade. He did not know what the fire test was, or the flash test was, of this oil sold by the Gulf Refining Company, and he admitted practically that the Whiting oil, which his company was selling, had a higher fire test than that sold by the Gulf Refining Com- pany. (Pauley, 12/871-874.) Now, it is quite apparent that this cut was made just as Mr. Pauley said it was made, at 1 cent below the prevailing price in Alexander ; and it is just as apparent that it was an inferior grade of oil, made out of Texas crude. Mr. Cooke testified that while he was assistant manager at Birmingham, which was late in 1903 or early in 1904, and while the Alabama Oil Company was operating there, the market was very low in Birmingham, while at the same time the prices outside of Birmingham and in that same territory where there was no competition were considerably in excess of the Birmingham price, ranging from 12 and 13 cents up as high as 17^ cents for bulk oil delivered from tank wagons. (Cooke, 5/2524.) Mr. C. T. CoUings was called upon to contradict this testi- mony (12/919-920), and he stated that in the latter part of 1903 and the early part of 1904 oil sold in Birmingham at 14 cents. This is no contradiction whatever of the testimony of Mr. Cooke, because the price given in petitioner's Exhibit 395 (8/947) for September, 1903, was 12 cents, October 12 cents, 99 November 13.5 cents, December 14 cents, and for May, 1904, it got back to 13 cents. It is true there was a period at the very end of 1903 and the very beginning of 1904 when oil was selling at 14 cents in Birmingham, but it makes little differ- ence whether it was selling for 13 or 14 cents during a short period of time ; the price at which it sold in the terri- tory outside of Birmingham, where competition was not pres- ent, was altogether out of proportion to the Birmingham prices. The Standard had substations throughout the Bir- mingham territory, and the testimony shows that often the oil was shipped directly from the refinery to these substa- tions — in fact, it is generally so done — and there can be but a slight difference, if any at all, in the freight rate to these substations and to Birmingham. Mr. CoUings answers Mr. Cooke by saying that in order to verify the differentials between Birmingham and the other stations he would have to have the names of the other towns, and not having the names of these towns he is not able to contradict Mr. Cooke. He said, however : I would say in a general way that in the smaller towns in the interior of Alabama the expense of operating them is much greater than in Birmingham, and some of them have a considerably higher freight rate from the refinery. This is dealing in altogether too general a way. It is a mere opinion or conclusion of Mr. CoUings; it is not based on any definite fact; it is not based on any knowledge of freight rates. Mr. CoUings then takes up the town of Troy and dis- cusses the difference in price between that town and Birming- ham. Troy was not mentioned by Mr. Cooke. Mr. Cooke was substation auditor, and later assistant to the special agent at Birmingham for a short time during this period, and he was upon the ground and far more capable of knowing what the local conditions were and what the prices were than was Mr. CoUings, who was vice-presi- dent of the company and in charge of the whole territory. Petitioner's Exhibit 390 (vol. 8, 920) has some significant figures as to the competition in Birmingham and Birming- ham substations, and gives a far better explanation of the 100 reasons why the prices at the substations in 1903 and 1904 were very much higher than they were in Birmingham. This exhibit shows that in the year 1903 at the main station in Birmingham the independents did 17 per cent of the busi- ness, and at the substations around Birmingham the com- petitors did only eight-tenths of 1 per cent. In the year 1904 at the main station the competitors did 11.6 per cent, while at the substations the competitors did only four-tenths of 1 per cent. This shows that during these years in Birmingham proper there was a considerable amount of active competi- tion, while at the substations there was practically none, the little which did prevail being undoubtedly in those sub- stations which were very close to Birmingham. Cleveland, — Mr. Castle, who had been in the employ of the Standard Oil Company since 1886, in the year 1900 severed his connection with that company and went into business for himself at Cleveland under the name of Columbia Refining Company. He purchased his supplies of independent re- finers and sold to dealers and not to consumers. Within four or five months oil went down 2 cents a gallon, which greatly reduced the margin of profits, but Castle still re- mained in the business. The peddlers were doing a fair business, because they got a rebate. Mr. Castle said that on different occasions the Standard had spies out following his wagons, getting a list of his customers. (Castle, 6/3054- 3057.) When the Standard had reduced the price to a point where Mr. Castle could not remain in business, he let them take the trade and stopped for a while, knowing the Stand- ard's tactics, and afterwards, when the prices went up again, he would go back into the business. Sometimes he would lose his trade for a long time, and then, again, it would only be a short time before the Standard would change its plan and its price, and he would dip in again. For the last two years prior to the time the witness testified, which would take it back to about the time of the investigation by the Bureau of Corporations of the Department of Commerce and Labor, the Columbia Refining Company and the Standard have been selling for the same price. (Castle, 6/3057.) S. K. Brusman was called by the defendants, and his atten- tion called (13/1483) to the testimony of Mr. Castle, to the 101 effect that the Columbia Refining Company never cut the Standard's prices. Mr. Brusman said that he remembered making one or more trips with tank wagons of the Columbia Refining Company through northern Ohio, outside of Cleve- land, from Cleveland to Akron, through Macedonia, Hudson, Cuyahoga Falls, and Barberton. He says that he made but one trip through to Akron, which was in 1905 or 1906 ; and that he sold oil at a half a cent under the Standard's prices ; and that he gave a rebate also to Quigley, a grocer of Bar- berton (p. 1484) ; that he was acting under the instructions of C. J. Castle to establish a tank-wagon business in Akron ; that he was instructed to make a trip every week or ten days through Macedonia, Hudson, and Cuyahoga Falls, but the principal business was to establish a tank-wagon station, and that this cut of a half a cent was made to demoralize the Standard's market. He was then asked whether or not he made any secret cut or gave any rebate to customers of the Columbia Refining Company at Cleveland. He says that he did, under instructions from Mr. Castle, but did not know how frequently he had done it. Mr. Brusman testified to only one secret concession, which was the one above mentioned, made to Quigley, at Barberton, but he doesn't tell what that amounted to; and he did not name a company or a customer to whom he gave any conces- sions in Cleveland, nor give any time or place, but testifies in the most general manner. It may be true that he sold oil in these towns out of Cleve- land at a half a cent below the Standard's price, because the Standard always made a higher price in outlying towns than it did in stations like Cleveland, where there was competi- tion. Mr. Squire denied (13/1516) the truth of the statement of Mr. Castle to the effect that the Standard Oil Company had spotters to obtain lists of tank-wagon customers who were purchasing oil of competitors; and said that every tank-wagon driver had his own route, that he currently and constantly canvassed the same trade, and therefore knew every customer on the route and knew whether he supplied him or whether others supplied him. Mr. Squire, so far as we know, was never a tank-wagon driver, was never a man- 102 ager, never came in contact with either of them, never re- ceived a report from any of them, and never came in touch with the trade ; he is simply theorizing. It has been proven too often in this case by too many different witnesses that the Standard Oil Company did follow up its competitors and see where they delivered oil, and made all kinds of efforts to get these customers away from its competitors, for Mr. Squire to dispose of that subject by one general sweep- ing statement that the Standard had another method of get- ting the same information. He confined his testimony, how- ever, to the situation in large cities. Much of the testimony of the witnesses upon this subject pertained to the smaller cities of the country; therefore the testimony of Mr. Squire can not be claimed to be in any degree a contradiction of the Government's testimony on that subject. Chardon, Ohio.— M. M. Hossler testified (6/2941-2943) that from 1890 to 1901 he was peddling oil at Chardon, Ohio, buying from the Standard Oil Company; that he stopped buying from the Standard in 1901, at which time he was paying 8^ and 10^ cents for the two grades of oil and sell- ing them at 10 and 12 cents, respectively. At about the time that he stopped buying from the Standard many of the grocers in Chardon also stopped buying. Immediately thereafter Mr. Cobb, the agent for the Standard Oil Com- pany in charge of that territory, came to Hossler and made him a proposition that he should sell oil for 8 and 10 cents to the retail trade in order to get the grocers back into line, saying that Hossler should pay the wholesale wagon of the. Standard 8^ and 10^ cents, just as he had been doing, and every two or three weeks he would be rebated the half cent that he had paid the wagon and 3 cents per gallon for all the oil he sold. Hossler refused the proposition, and Cobb told him that if he could not arrive at some agreement the Standard would have to put a wagon in Chardon to keep up their gallonage. The night after the last talk with Cobb, the wagon appeared and commenced to retail oil at 8 and 10 cents a gallon. Hossler was then paying 8^ and 10^ and re- tailing at 10 and 12. This wagon got all of its oil from the Standard. It remained there until the summer of 1902 and at different times secured as much as two-thirds of Hossler's trade. Later on the Home Oil Company came to 103 Chardon and sold one grade of oil in square cans at 10 cents per gallon. It left before the first wagon did. On cross-examination, Mr. Hossler was shown a letter, dated April 6, 1905, signed by him, in which he stated that certain newspaper articles published about a fight against the Standard in Chardon were without founda- tion, and that a grocer was selling other than Standard oil in Chardon in 1901 and 1902 at 8 cents when the Stand- ard was wholesaling at 8 cents, and that the Standard simply did what another business concern would have been expected to do under like circumstances. In a general way this letter tends to contradict the testimony of Mr. Hossler. It was apparently written for the purpose of correcting some newspaper article; was brought to him by Cobb at his barn, already prepared, and was signed by him at the urgent request of Cobb out of friendship and without being read by Hossler or understood by him; and while the letter stated that oil was selling at Chardon for 8 and 10 cents, Hossler on cross-examination denied that it was selling for that until the Standard came there, and he also denied that the grocer mentioned ever sold for 8 cents, although it is so stated in the letter. (Hossler, 6/2942-2949.) lincoln, Nebr. — In 1904, at Lincoln, Nebr., the Lincoln Tank Line Company was peddling oil to the consumer, and pur- chased its supplies from the Standard Oil Company of In- diana at that place. In the fall of that year the Marshall Oil Company, an independent concern, began business in Lincoln, and the Lincoln Tank Line divided its purchases between the Marshall and the Standard. The agent of the Standard, Mr. Gamerl, called upon the owners of the Lincoln Tank Line Company and tried to induce them to purchase all of their oil from the Standard Oil Company. Failing of his purpose, he exhibited to the owners of the Lincoln Tank Line Company a letter which he had received from Mr. G. H. Winslow, the acting manager of the Standard Oil Company at Omaha, who had jurisdiction of the Lincoln territory. In that letter Mr. Gamerl was instructed as follows: Inasmuch as these parties have broken faith with us and there is nothing to be expected from them, we will be compelled to protect our own interest in Lincoln. "With this end in view I wish you would kindly go over 104 the situation very carefully and advise me how many peddling wagons you will need to cover the town thor- oughly. Please let me have this information promptly, with any new suggestions or arrangements you think of that we ought to make there. You understand, of course, that we must hold our business in Lincoln at all risks. After I hear from you I will decide as to prices and advise you how I want this business handled. (Exhibit 838, vol. 10, 1896; Gamerl, 6, 3138-3139.) The Standard agent said to the Lincoln Tank Line Com- pany that this letter meant that they would be driven out of business. The company saw it that way, and immediately quit buying oil from the Marshall Oil Company. (Gamerl, 6/3139.) Portland, Mich. — In November, 1905, at Portland, Mich., there were nine merchants dealing in oil ; six of them bought from the Standard Oil Company and the other three from the independents. Mr. Gamerl was sent to Portland from the Grand Rapids office of the Standard Oil Company to try to induce these three merchants to buy from the Standard tank wagon instead of from independents. They declined to do so and were told that unless they did the Standard would put in a low market. At that time the consumer was buying from the merchant at 12 cents per gallon. The mer- chants were advised that if they did not stop buying inde- pendent oil the Standard would put in a 6-cent price to the consumer. The merchants still declined to buy from the Standard and the 6-cent market was put into effect. The Standard arranged with some of its customers to retail oil at 6 cents a gallon, the prevailing wholesale market being 8 or 8^ cents ; allowing them a rebate sufficient to bring the cost of the oil down to 3 cents ; thus netting the merchants a profit of 3 cents a gallon. This arrangement was put into effect and continued for a considerable period, and the agent re- turned to Portland four or five times and paid to the mer- chants the rebates above indicated. This was done under the instructions of Mr. Drake, the manager of the Grand Rapids Branch of the Standard Oil Company. (Gamerl, 6/3139-3141.) Saranac, Mich. — ^At the same time there was a precisely similar situation at Saranac, Mich., and the same agent of the Standard Oil Company called on the merchants there 105 and told them what had been done at Portland, and that if they continued to buy independent oil the same thing would be done at Saranac. The merchants had heard about what had been done at Portland, and the agent of the Standard Oil Company was later advised by Mr. Drake, manager at Grand Rapids, that it was unnecessary to return to Saranac, because after his visit the merchants had agreed to and already had stopped purchasing independent oil and bought from the Standard exclusively. (Gamerl, 6/3141.) St. Paul, Minn., and vicinity. — In about 1893 Mr. James A. Moffett was the manager of the Whiting refinery of the Standard Oil Company and also had charge of the market- ing of oil in a number of the Northwestern States. The St. Paul territory was then handled by Mr. Moffett and Mr. Drake from the Chicago office. The Cornplanter Refining Company was doing business in St. Paul at about this time, and Mr. W. D. Todd, of the latter company, had a conversation with Mr. Moffett, at 26 Broadway, New York, in regard to that situation. Mr. Moffett told him that the Cornplanter was putting out about 30,000 barrels of oil in St. Paul, and that that was more than they could stand for unless the Cornplanter made an, arrangement with them. He said that they were willing to agree to allow the Cornplanter to put out 30,000 barrels of burning oil, provided they bought it from the Standard. Mr. Todd informed him that this territory was one of the outlets for the product of the Cornplanter, and that he did not believe his people would consent to buy oil from the Standard as long as they needed this outlet for their own oil. A considerable discussion took place between these gentlemen at this time, and Mr. Todd was asked to return to talk the matter over further. When he did return Mr. Moffett told him that he had had the question up before the committee (presumably referring to the executive com- mittee of the Standard Oil at New York) , and that the com- mittee had authorized him to say that unless Mr. Todd would buy his burning oil of the Standard at St. Paul that it was up to him (Moffett) to get the business. Mr. Todd said to him : " The only way you can get the business is to cut the market. If you cut the market in St. Paul, we wiU 106 cut it for 200 miles around." On the same day these gentle- men met on the New York Central, and Mr. Moffett asked Mr. Todd to take the matter up with him again, which was done. Mr. Moffett said, " You know I have to do as I am instructed. I might do a good deal different if it was left to me, but I have not the authority." This interview be- tween Mr. Moffett and Mr. Todd was the result of an invi- tation to Mr. Todd to come to 26 Broadway, New York, and talk over the northwestern situation with him. While this conversation was in reference to the St. Paul situation, it shows clearly what the policy of the Standard Oil Company was in dealing with competitors. It would not permit a competitor to increase his business beyond a certain point, and when it reached the point that it commenced to be felt by the Standard Oil Company this company immediately took steps to dispose of that competition, either by buying out or crushing out the competitor, or by making some agree- ment which would restrain the trade and kill the competi- tion and leave the Standard Oil Company in the ascendancy in that particular market. (Todd, 6/3213-3214.) Waters-Pierce territory. — Mr. H. J. Cohn, formerly sales- man and division auditor for the Waters-Pierce Oil Com- pany and at the time of his testimony doing an independent oil business, said the price of the Waters-Pierce Oil Com- pany varied in different parts of their territory according to the amount of competition, being high where there was no competition and low where there was aggressive competi- tion, without regard to the grade of oil or the cost of trans- porting it, the variation being from 1 to 3 cents per gallon without regard to freight rates. (Cohn, 2/907.) Whenever an independent sold oil at a certain point for less than the Waters-Pierce Oil Company, or shipped any oil at all to that point, the Waters-Pierce price was imme- diately reduced, and this reduction was carried " far enough to get the business." (Cohn, 2/908.) When a shipment of independent oil went into a sales- man's territory he was charged with that oil, and if after- wards he caused a part or all of that shipment to be re- shipped out of his territory he was credited with the amount reshipped. (Cohn, 910.) 107 Jefferson City, Mo. — ^At Jefferson City, Mo., whenever a car- load of independent oil was received the Waters-Pierce Oil Company would, several days prior to its receipt, reduce the price of oil; this price would be maintained until the car- load was about sold out, and it would then be again advanced. (Lohman, 2/935.) St. Joseph, Mo.— At St. Joseph, Mo., in 1901 and 1902 the Republic Oil Company made a special effort to get the Na- tional Oil Company's trade by giving a rebate of 1 cent per gallon, which was to be paid in cash after the oil had been sold at the regular market price. At this time the Republic Oil Company was being held out to the trade as independent of the Standard Oil Company, the agent of the Republic at St. Joseph being informed by the manager of the Republic that it was absolutely independent; and he, the agent, in turn made this same representation to the trade, and the tank-wagon drivers were also directed to represent that the Republic was an independent company and that it handled Pennsylvania goods, and that it had no connection with the Standard Oil Company whatever and was out for a share of the business. (Shiers, 2/980-981 ; Kuenster, 2/995-996.) Sedalia, Mo. — William A. Morgan was in the employ of the Standard Oil Company for about threje. years, commencing in 1898; was a part of the tim& a traveling salesman, and afterwards had charge of the station for the Standard at Sedalia. Wlien Mr. Morgan started in at Sedalia, Scofield, biiurmer & Teagle was the only competitor that the Stand- ard Oil Company had in the Sedalia territory, and they were very active, and had about 50 per cent of the business. When he left the Standard Oil Company had 90 per cent Mr. Mor- gan was instructed by Mr. Mayer, who was his superior offi- cer, to get into the field and sell the goods and destroy all competition and not allow a competitor to sell a barrel of goods anywhere. Morgan was instructed to secure the coun- termand of orders in this territory whenever he could. This was one of the places where Scofield, Shurmer & Teagle were making a very hard fight for business. Where competition was brisk the Standard salesmen were furnished with gauges with which to gauge the barrels of competitors, for the pur- pose of making them appear short from 4 to 5 gallons, and 108 in that way to cause the customers to be dissatisfied. Some of these gauges were sent to Mr. Morgan to be used in that territory, but he did not use them, although he was so in- structed. The managers of the stations had authority to cut the price in order to get business from a competitor, but if this price was cut for more than a certain amount express authority had to be obtained from whoever had charge of that particular district. The manager of the district was expected to get the business and to kill out competition and to do whatever was necessary under the circumstances to accomplish that result. (Morgan, 3/1003-1014.) Pierce City, Mo.— Between 1888 and 1903 Mr. T. E. Hop- kins was agent of the Waters-Pierce Oil Company at Pierce City, Mo. This company had the whole field in that locality to itself with the exception of two instances in which Sco- field, Shurmer & Teagle sold oil in that territory, and these two instances of competition were suppressed by means of a rebate of half a cent a gallon given by the Waters-Pierce Oil Company. (Hopkins, 3/1027-1028.) Mr. Hopkins was familiar with the price of oil at Carthage and Joplin as compared with the prices in Vernon and Lawrence counties. The prices at Joplin, Carthage, Webb City, and Springfield were from 1^ to 3 cents less than in his territory. He took the matter up with .i^^egeneral manager of the Waters- Pierce Oil Company, Mr. A^ert^^j^d complained to him that it was unfair to charge 3 cents more at PIomp City than at Carthage and Springfield for the same oil. Mr. AcKeri said it was none of his business ; that he was there to sell oil ; that the reason for the difference in price was because there was no competition in his territory; and Ackert instructed Hopkins that if he would keep out competition the Waters- Pierce Company might as well have 3 to 5 cents more per gallon. (Hopkins, 3/1028-1029.) When Scofield, Shurmer & Teagle sold any oil in the territory around Pierce City, and rebates were given by the Waters-Pierce Oil Company to get back this trade, the prices were not generally reduced, but only reduced to the man who had bought independent oil. The amount of rebate was fixed so that it would just come below the price at which an independent had sold. The agent at Pierce City received information from the head 109 office as to competitive shipments coming to his territory before the shipments got there, and on one occasion at Webb City, the agent received a telegram from St. Louis advising him to look for a car of National oil, and later the oil came, but he had been around and seen all of the cus- tomers and told them that the Waters-Pierce would fight the introduction of independent oil and thus defeated the sale of this car. (Hopkins, 3/1030-1031.) Joplin (Mo.) territory.— Mr. E. M. Wilhoit testified (3/1031- 1037) that after nine years' service with the Standard in Kan- sas he left that company and went into the oil business for himself at Joplin, Mo., in about May, 1898, selling in south- west Missouri and in Kansas; that in some of the territory in which he does business he meets the competition of the Waters-Pierce Oil Company, and in the other territory that of the Standard Oil Company, but that as those two companies did not do business in the same territory he did not meet the one where he did the other. Mr. Wilhoit said (3/1033) that it has been his experience that the prices of those companies is determined by the pres- ence or absence of competition, and varying according to the extent of the competition. He said (3/1037) that if an independent dealer, in opera- ting against the Waters-Pierce Oil Company, attempts to get all the business that he might possibly secure, he would not last long in the business because the price would be made so low that there would be no profit. He said that his experi- ence while employed by the Standard, and while he has been in business for himself operating in opposition to the Waters-Pierce, has been that the independent dealer can mar- ket a small percentage of goods in any territory at a profit ; and possibly then market such goods at 10 or 15 per cent less than the regular price of the Standard or Waters-Pierce ; but if he increases his business above a certain percentage, say 15 or 20 per cent, their prices will be cut so low that he will either lose his business or go broke on low prices. Dexter, Mo.— About 1898, at Dexter, Mo., the Waters- Pierce Oil Company was practically the only oil company doing business. An independent salesman came there from St. Louis and made up a carload of oil among the mer- no chants. This fact was communicated to the Waters-Pierce Oil Company by the manager of a general store who was buying oil of the Waters-Pierce, and he was instructed by the Waters- Pierce Oil Company to keep out of this deal, as the merchants who got this oil were going to keep it. The price at Dexter at that time for the merchants was 14 cents, and they were selling it to consumers for 20. This carload of independent oil was put in at 12 cents to the merchants, and when it arrived the merchants interested put it on the market at 15 cents. The general store whose manager had notified the Waters-Pierce Company of this shipment im- mediately cut the price to 12 cents. The merchants met the 12-cent price, and it was again cut to 10, and so on down until the price got to 5 cents per gallon, and the general store simply remitted Waters-Pierce Oil Company the amount which they got for the oil, whatever it was. This was the last shipment of competitive oil that went into Dexter. (Lederer, 3/1044-1046.) Wichita (Kans.) territory. — Every agent of the Standard Oil Company was held responsible for the sales of the oil in his territory, and if an independent shipped oil into that territory, unless the agent could show it was reconsigned to other territory, it was a reflection on his salesmanship. In the Wichita (Kans.) territory the agent was frequently ad- vised that independents had made shipments into that terri- tory, and that the financial standing of the parties who had bought was good, and that there was no reason why the busi- ness could not be enjoyed by the Standard Oil Company. Upon receiving this advice the agent would go to the mer- chant buying from the independent, and he would know ex- actly what independent oil that merchant had and would make him such a price as would induce him to buy from the Standard, while to the merchant next door, who was not buy- ing of an independent, the Standard made the old price. (Wilhoit, 3/1215.) Kansas City, Kans. — In one instance at Kansas City, Kans., where the Rocky Mountain Oil Company, an independent, had sold a carload of oil to a jobber, the agent of the Stand- ard was directed to go to that jobber and make him a price which would tie him up; that is, make him whatever price Ill was necessary to get a contract with him and jJrevent him from interfering with the market of the Standard in that territory. This jobber was offered $1 a barrel less than the regular price and refused it, although 1 cent a gallon had been sufficient to secure business of this kind. The agent reported this fact and was advised that he was sent to that point to make a contract and that he should return and make such price as would get the business. Before he got at this, however, the Rocky Mountain Oil Company failed in busi- ness and it was not necessary for this contract to be made. When the jobber who had bought this oil came back and asked for the price which had been offered him the Standard would not give him such a price, although he was willing to sign the contract then, and it was necessary for him to pay the regular Standard market price. (Wilhoit, 3/1215- 1216.) The attention of L. J. Drake, a witness for the defendants, was called (13/1073) to Wilhoit 's testimony to the effect that he had an unlimited price while he was selling for the Standard at Wichita, Kans., and that after he got informa- tion of competitive shipments he would go to the consignee and sell that consignee oil at a price below what he sold to his competitor, his next-door neighbor. Mr. Drake answers that by saying that Mr. Wilhoit never had any instructions or any prices different from anybody else, and he never had any instructions to make any prices to get business; that Wilhoit was only a salesman and that he had no unlimited price. This is followed right up by a question to Mr. Drake as follows : Q. Where did he get his prices from ? A. Kansas City. Q.. Where did Kansas City — the salesmen — get their prices from — from you as the general manager? A. No, sir ; the salesmen got them from the local man- ager at Kansas City. So that, after all, Mr. Drake doesn't know, and can not possibly know, what authority Mr, Wilhoit had as to prices. Mr. Drake at this time, which was about 1893 or 1894, was the general manager for the Standard Oil Company of Indiana, located at Omaha or Chicago, far away from the scene in which Mr. Wilhoit acted. He also states that Wil- 112 hoit had no authority to go to the customer and sell oil cheaper than he was selling to anyone else. That may be very true, and at the same time he may have had special authority from the agent at Topeka to do exactly what he says he did. At any rate, no witness has been called here to contradict Mr. Wilhoit on this point who knows anything whatever about it. Mr. Drake's attention was called (13/1074) to the testi- mony of Mr. Wilhoit, to the effect that if he was selling Standard oil at a high price and a competitor came into his territory and sold at the same or a less price, he, Wilhoit, under instructions, was supposed to substitute a cheaper oil and guarantee its quality as being superior to that of the competitor, and he was asked : Q. Is that true or false ? A. That is false in every respect. Q. Where did the agents at Topeka get their prices from? A. The Kansas City office. Q. Had they any authority to make their own prices? A. Kansas City? Q. No; Topeka. A. No, sir. This testimony shows that the Kansas City office, and not Mr. Drake, had the power to make prices. Mr. Drake's attention was also called (13/1075) to Mr. Wilhoit's testimony to the effect that it was quite a common practice to sell as many as three different brands of oil from one storage tank. Q. What about that? A. I do not know of any such practice. But it seems that Mr. Wilhoit did know of such practice, and he said (3/1262) that they were supplied with various kinds of oil, and if they were selling oil at a high price and a competitor came in and sold at the same price or for less money they were supposed to substitute the cheaper oil and guarantee the quality of that to be superior to what the com- petitor was furnishing, and he says the facts were that they might sell the same oil exactly, but sell it under another brand, and sell it at a less price to overcome the competition. He says that the Standard never allowed any of its employees to know the quality of their oil, and that a man who seeks 113 information and wants to know the exact specific gravity and fire test or quality of the oil is not retained with the Standard very long. And he says that he has known it to be a fact that three different brands were taken out of one storage tank and sold at different prices in filling orders sold for different pur- poses. One brand of oil was "water white," for example, another "perfection," and another "headlight," all drawn out of the same tank and sold under these different brands. Mr. Wilhoit was manager of the station at that time, and knew what the practice was, that it was done by the direc- tion of his superiors, and that the daily reports showed those things (3/1263). Nobody contradicts Mr. Wilhoit in his statement that daily reports were made showing exactly what he did. Those reports must now be on file in the office of the Standard Oil Company. If Mr. Wilhoit is not testifying truthfully, he could have been contradicted by those reports, but he has not been. Mr. Maywood Maxon, who was the manager at Decatur, 111., tells of a similar practice (3/1300) , and, although he was with another Standard, it is not likely that a different prac- tice would prevail with one than prevailed with the other. He says that in his territory different named oils were drawn out of the same tank, or the same grade of oil under differ- ent names, and sold at different prices when the competition was hot, and that this was one of the methods of destroying it; that this was done frequently and he might say continu- ously. It was drawn from the same spigot, but different names were put upon it. They would start out a wagon in one direction furnishing Water White, and another with another brand on it — out of the same general tank; and this oil under the different brands was sold at different prices. Mr. Maxon also said (3/1301) : And I will state further that the general officers of the Standard Oil Company of Kentucky knew that every day, for a report had to be made every day, and you had to show exactly what oils were sold in that way. The reports showed, if you used Water White, 150-degree oil, for 175 Headlight, that so many gallons of Water White was used for manufacturing so many gallons of 175 Headlight. 72064— VOL 2—09 8 114 Mr. Drake (12/1100) repeats the oft-told story that the Standard never, never cut the price below that which the competitor was charging, but that they always waited for the competitor to cut first and then followed him down. Most of the general managers that have been put upon the witness stand have testified in the same way, but that testi- mony has been contradicted and overwhelmed by the testi- mony of the men in the field, who were actually transacting the business in every territory in this country, concerning which no testimony whatever has been offered in this case. There is not a single town that has been mentioned by any of the witnesses here in which a preponderance of the evidence does not show that the Standard, either in its own name or by some of its bogus concerns, did cut the price when compe- tition entered, and the testimony is clear and convincing in this case that the price which the Standard charges through- out all of its divisions and territories is based, not upon any principle of trade, but upon the competition present in the particular place ; and where no competition was present they have sold their product for as high a price as they dared to charge in view of the fact that too high a price would limit the consumption, and in that way they would lose more than they would gain. PAYMENT OF REBATES ON OIL PURCHASES. Another unfair method of competition alleged in the petition (pp. 181-182) to have been pursued by the defend- ants was the payment to retail dealers in oil, in those places where competitors attempted to sell their products, secret rebates from the price paid for such products on purchases made during a given period of time, which rebates have been made on the condition that during the period of such sales the dealer should purchase his supply of oil exclusively from the defendants; that this practice was employed generally throughout the country wherever occasion arose; and that the purpose and effect of this practice was to take away from such competitors their customers, and prevent them from securing customers, and to destroy and eliminate their competition. The allegations of this subdivision are denied by the answers, except that they admit and aver that in some instances the defendants, or some of them, have, as they properly and legally might do, made allowances and deduc- tions to customers on the price of oil sold to them, by reason of purchasing their entire supply from the defendant or de- fendants making such allowance or deductions (1 ans., 61). A great deal of testimony on the subject of paying rebates on oil purchases is discussed in the other subdivisions of the brief on unfair competiton, with reference to the competition in particular locahties, rebates having often been used in the same places and at the same tune as open price cutting or the operation of bogus independent companies, in fact, was very extensively used by the bogus companies as well as by the Standard. The testimony treated in this subdivision consti- tutes only the cases which require separate treatment. Cleveland territory. — Mr. C. J. Castle, of Cleveland, Ohio, who has been in the oil business over twenty-seven years, and who was in the employ of the Standard Oil Company of Ohio principally in the sales department from 1886 to 1900, testified on behalf of the Government that the Standard Oil Company used extensively in his territory a system of paying rebates to purchasers of oil. The amount of rebate paid, and the method (115) 116 adopted in paying the same, depended upon the circumstances in each particular case. In some cases it would be a small rebate in consideration of a contract to purchase oil exclu- sively from the Standard for a certain period of time, based on the regular market price of oil. In other cases the rebate was given in consideration of the dealer's maintaining a low retail price, the Standard agreeing to make a net price to the dealer, and the dealer agreeing to sell the oil at a retail price named from time to time by the Standard, and the rebate would be in- creased or decreased according to the open market price at that town. The dealers usually would pay the market price to the tank-wagon man, and the payment of the rebates, or adjust- ment, was made by some special man. Those rebates were paid for the purpose of getting the trade away from the inde- pendents. This method was adopted by the Standard be- cause to make an open cut in the price might affect other dealers in the town and in neighboring towns. In other words, it was a quiet arrangement which enabled the Stand- ard to fix the price at which oil should be retailed. The Standard never allowed a rebate except where it expected to drive out competition, or where some dealer was about to leave the Standard and purchase from an independent when the rebate would be paid to hold him in line. These rebate arrangements were usually verbal contracts, and settle- ments were made monthly or at longer intervals. (Castle, 6/3037-38.) Exhibit 829 (10/1886-87) is a copy of a report that was turned into the Standard Oil Company by Mr. C. J. Castle in April, 1898 (Castle, 6/3038). Mr. J. W. Hoag, to whom the report was addressed, was then manager of the Cleveland station of the Standard Oil Company, and now resides in Cleveland; and Mr. Castle was, at the time of making this report, ' ' a sort of special man in the sales department, with duties directly under the manager" (Castle 6/3030). The occasion which called for the making of this report by Mr. Castle, as testified to by him, was that they "vv^anted a list of all the special arrangements in effect at that time; and others did the same thing." (Castle, 3071.) The report was a cor- rect statement of the situation at the time it was made (Cas- tle, 3043) . The reports he made on these matters had usually been verbal (Castle, 3039). 117 Youngstown, Ohio. — K. Jeremiah, mentioned in Exhibit 829, was a peddler at Youngstown, Ohio, operating three wagons on the streets. Because of competition here, Mr. Castle, for the Standard Oil Company, made an arrange- ment with Jeremiah, in consideration of his putting in a low retail price. Castle fixed the retail price at which Jeremiah should sell his oil, and during a portion of the time Jeremiah was working on a salary and during that time he would report his profit, and any deficiency was made good by the Standard; and at other times Jeremiah had a net price, which was different from the open market price, and the Standard (through Castle) rebated down to the net price, and Jeremiah sold at a retail price, which was fixed by Castle. The statement in this exhibit, "Eebate to net the following prices: Water White and gasolene, 4^ cents, in consideration of retail price of 7 cents, in effect since January 24," meant that Jeremiah at that time was on a rebate arrangement to make him a net price of 4^ cents, in consideration that he retail the oil at 7 cents per gallon. The market price to dealers at that time was about 6 cents, as compared with this price of 4^ cents at which Jere- miah got his oil. A similar arrangement was made between Castle and W. Vahey, another peddler of the same town, who was also buying of the Standard. These arrangements were made because the Freedom Oil Company, an independent, had a station at Youngstown, and some peddlers and other people were buying goods from it, and these arrangements were made for the purpose of securing that trade. There was no profit in this trade to the Standard Oil Company but it made the business of the peddlers who were buying from the Freedom Oil Company unprofitable. (Castle, 6/3039-40.) Mr. George L. Lane, who for some time prior to 1902 v,^as in the employ of the Standard Oil Company of Ohio, under C. M. Lines, testified that in the territory around Youngs- town, where the independent companies would sell oil in bar- rels, the Standard would immediately offer the purchaser a rebate of from one-half a cent to 2 cents a gallon, and make a contract to supply oil for a year at that price. The oil would be delivered at the regular market price and the slips made 118 out accordingly, and then when settlement was made the pur- chaser would be rebated from one-half to 2 cents, according to his contract. The amount of rebate which would be allowed in the contract depended upon the amount which was neces- sary to get the business of that customer. (Lane, 3/1362-63.) Minerva, Ohio. — Exhibit 829 also gives an arrangement which the Standard Oil Company had with H. H. Hart and A. M. Hoopes, dealers, of Minerva, Ohio, by which the Stand- ard rebated them down to 4 cents a gallon in consideration of a retail price of 5 or 6 cents. The reason for this arrange- ment' was that competitive oil of the Freedom Oil Company was being sold in that town. No money was made out of this by the Standard. (Castle, 6/3040.) Silas W. Hart (13/1511-15), of Minerva, Ohio, was called by the defendants, and testified that he was in the oil busi- ness as a company. Hart & Millner, before 1887; that he was employed by the Standard in 1897 and worked for them three years; that H. H. Hart is his cousin, and that he was in the retail business at that time in Minerva. Mr. Hart's atten- tion was called to the testimony of Mr. Castle about the rebate arrangement with H.H.Hart; he was asked if he was familiar with that transaction, and rephed "I know nothing of it whatever." He said that he started the bullc station at Minerva for the Standard; that on his first trip he sold 40 gallons, on the second 70, and on the third 250 gallons; that Mr. Weston, a grain and general warehouse man, represented the Freedom Oil Company at Minerva, but he did not know which was in the field first. He said that he laiew of a price cut that was made by Weston, who represented the Freedom at Minerva, in 1897; that Weston did not feel good toward him, because he got so much business there in the first three trips; and that the Freedom was delivering in barrels. He said it was reported to him that L. L. Hart, a grocery dealer there, L. H. Hart, Mr. Weston, and another party, had made a cut of a cent a gallon ; that he went to the people and found it was true; that he went to the dealers to whom he was selling, told them to meet the price, and that the Standard afterwards approved of what he had done. On his cross- examination (p. 1514) he says that the cutting was done by three dealers and that there was quite a fight, but that he does not remember much about it, as it was eight years ago, 119 This is no answer whatever to the testimony of Mr. Castle to the efJect that H. H. Hart and A. M. Hoopes, of Massillon, received a rebate on Albaiae oU of 4 cents a gallon in consid- eration of their making a 5-cent retail price. If the defend- ants wished to contradict Mr. Castle, they should have called Mr. H. H. Hart instead of his cousin Silas W. Hart, a Standard employee, who does not pretend to remember what was going on at that time. The testimony does not show that any of the rebate arrangements were made or carried out by the local representatives such as Hart, but on the contrary were handled by special men such as Castle. Malvern, Ohio. — Exhibit 829 also mentions Hoft'ee & Robertson, at Malvern, Ohio. It is the next town to Mi- nerva and only a few miles away, and a rebate arrangement was made with them which enabled them to meet the cut in the Minerva district. (Castle, 6/3041.) Columbiana, Ohio. — ^An arrangement was made with a peddler by the name of Emmett Tullis, of Columbiana, Ohio, in consideration of a low retail price. Here oil of the Free- dom OU Company was being sold in competition with the Standard. The result of this arrangement was that the peddler there who had been buying from the Freedom was driven out of business, and finally bought out by the Standard. This is the same Emmett Tullis that is mentioned in Exhibit 829. (Castle, 6/3041.) leetonia, Ohio. — ^Arrangements similar to the last above were made with L. W. Skiles and A. A. L. Wyand, peddlers, of Leetonia, Ohio, where a peddler named Peterson and a dealer named Helman were selling independent oil. Wyand was held out to be an outsider entirely and was hired a little more on the quiet than the other bogus independent peddlers. He went altogether under the instructions of Castle, operated exactly as if he had started on his own accoimt, and held himself out to be independent. He was put in there because certain trade in that town was suspicious of Skiles, which Skiles could not get, and the arrangement was in a measure successful. (Castle, 6/3041-42.) Massillon, Ohio. — ^At Massillon there was a variation of rebates, both with peddlers and dealers, for a considerable period of time. The Freedom Oil Company had a station at Massillon, and a wholesale tank wagon on the streets, and 120 were also selling oil to two peddlers there. The Standard Oil Company had a wagon on the streets deUvering to the dealers, and also a wagon deUvering to consumers. An arrangement was made by the Standard with C. Reed, a peddler handhng Standard oil, to rebate him down to a cer- tain price in consideration of a certain retail price. Similar arrangements were made with L. T. Steeley and C. Miller, peddlers in the same town. Another peddler by the name of C. Stoitz was also hired by the Standard to work in this town; the rig he used was furnished by the Standard, and for five or six years he held himself out to the trade as an independent, when in fact he was and had been employed by the Standard. Another peddler in the same town by the name of Krier was hired on a salary; he got his wagon from the Standard, and held himself out to be independent. (Castle, 6/3042-43.) Jacob Graze, who has been in the grocery business at Mas- eiUon since 1894 or 1895, was called by the defendants for the purpose of explaining the cuts to which Mr. Castle tes- tified. The substance of Mr. Graze's testimony is that the price was very low at the time referred to ; that the Standard Oil Company was paying a rebate of one-half cent a gallon; that its competitor, the Freedom Oil Company, was giving 5 gallons free with every purchase of 50 gallons; that he had been dealing with the Freedom, receiving this 5 gallons free, and that the Standard had offered him the one-half cent rebate in order to get his trade. He said also that he did not think he ever told the Standard people that he was get- ting the 5 gallons free on every 50 from the Freedom, but that he thought it was generally known in the trade. Coun- sel for the defendants then put this question to the witness (13/1576): Q. Don't you remember having this kind of a talk with the agent of the Standard Oil Company? Did you not say in substance to the representative of the Stand- ard Oil Company with respect to the Freedom Oil Com- pany competition that it was a business proposition witn you, and that if you were to buy of the Standard you must have a price equal to the Freedom price, so that you could meet the price made by your competitors in the grocery business who were selUng Freedom oil? The witness had akeady said that he did not remember whether he ever talked with the Standard Oil people or not 121 upon this subject and he didn't remember whether he ever told them, but counsel for the defendants was not satisfied with the answer, and put a question to him in which the answer is included, and which it is very easy for him to answer when put in that form, so that the witness had nothing to do but agree with his counsel, and he answers "Yes," but didn't know as he did it in just that many words, but that he would have to buy oil where he could buy it the cheapest. Counsel is not even satisfied with this answer, and he puts another leading question to the witness, in this form: Q. Well, didn't you say that to him, in substance, Mr. Graze? I don't mean whether you said it in those exact words. — A. I think I did; yes. Q. But wasn't that the gist of the talk that you had with him? — ^A. Yes, sir. The witness had apparently forgotten all that had trans- pired, and about all that he remembered was that he did get 5 gallons of oil on every 50 purchased of the Freedom, and that he also got a one-half cent rebate from the Standard. The questions of counsel were leading and suggestive, and clearly incompetent. On his cross-examination (p. 1576) the witness said the Freedom Oil Company had been doing business in Massillon several years before the transactions in question took place. He was then asked if he knew who made the first cut in prices at Massillon, and replied that he did not. He was then asked (p. 1577) whether it was the Standard or the Freedom, and he said that he did not know. Therefore, nothing whatever is established by the testimony of this witness which contradicts Mr. Castle. Ifavarre, Ohio. — At Navarre, Ohio, which is about 5 mUes from Massillon, rebating arrangements were made with the friendly dealers to make a low price, to fight a peddler who was buying independent oil; and with two of these peddlers who lived in the lower end of the town where a dealer handling Freedom oil was quite aggressive, especially favorable arrangements were made. (Castle, 6/3043-44.) Crystal Springs, Ohio. — A similar arrangement was made with a dealer at Crystal Springs, but this was simply done to hold him in line so that he would not buy the independent oil; and the arrangement did not require the dealer to main- tain a retail price. 122 Dalton, Nortli Lawrence, Greenville, and Canal Fulton, Ohio. — These towns are in the MassUlon district, and rebate arrangements were made with peddlers at all of these places. (Castle, 6/3044.) Cuyahoga Falls, Ohio. — At Cuyahoga Falls the Standard had competition by the Cleveland Refining Company, an independent from Atron. Here an arrangement was made with a peddler to make a cut for the purpose of driving out another peddler by the name of Blackburn, who was buying from the Cleveland Refining Company. They succeeded in making it unprofitable for Blackburn, and he finally sold out to the Standard. (Castle, 6/3044.) Damascus and Garfield, Ohio. — ^At Damascus the Free- dom Oil Company was competing with the Standard, and an arrangement was made with E. E. Walker, a dealer, for rebates in consideration of a low retail price. The same situation existed at Garfield, Ohio. (Castle, 6/3044-45,) lorain, Ohio. — In September, 1904, the Columbia Oil Company established a station at Lorain, Ohio, a place of about 35,000 inhabitants. When it began business, the Standard Oil Company's price for Water White oil was 10 cents a gallon, and the Columbia started selling at the same price. After about a week the Standard cut the price down to 8 cents, by means of a rebate arrangement, stipulating with the dealers to whom it sold at that price that the oil should be retailed at 10 cents. The Columbia Oil Company met the cut with an open price of 8 cents, and not by means of the rebate method. A little later the Standard made further cuts in the price until it got down to 6 cents. The Columbia followed the cut down to 6^ cents, which was as low as the Columbia could do business without a loss, and even at that price no profit could be made. The Stand- ard continued the 6-cent price, and the result was that the trade went to the Standard. The Lorain branch of the Columbia Oil Company was abandoned for a year without doing any business, and finally was dismantled and removed. The Standard has now no competitor at Lorain. (Castle, 6/3057-3058). R. E. Mills was called by the defendants for the purpose of contradicting Mr. Castle's testimony about the price cutting 123 at Lorain. Mr. Mills was the agent for the Standard Oil Company at Lorain at the time the Columbia began business there. It appears upon the cross-examination of Mr. Mills (13/1494) that there had been some talk about the Columbia Oil Company locating at Lorain before it did so; that during the winter and spring before the Columbia went there the price at Lorain for Water WTiite oil was 11 cents a gallon; that during the three months immediately prior to the Columbia's going to Lorain the price was 9 J cents; and that the price was lO cents in September, 1904, when the Columbia went there. It further appears that the price in September, 1904, was reduced to 9i cents by the Standard, but the wit- ness said he thinks this was not done until the Columbia came there. Petitioner's Exhibits 922, 923, 924, and 925 show that in June, July, and August the Standard sold in Lorain for 9J cents a gallon, and that on September 15, 1904, the Columbia sold at 9 J cents a gallon. On his direct ex- amination (13/1491) Mr. Mills had said that the price was 10 cents when the Columbia went to Lorain; that the Columbia had cut the price 1 J cents ; and that the Standard only reduced its price, one-half a cent for Water White oil. The tank- wagon tickets above referred to do not bear out Mr. Mills's statement; on the contrary, they bear out the statement of Mr. Castle that rebating was going on in Lorain. Defend- ants' Exhibits 100-A to 100-E were identified by the witness as tank-wagon tickets of the Standard and Columbia, which showed the sales in December, 1904, and January, 1905, two by the Standard at 9^ cents and three by the Columbia at 8 cents. On his cross-examination (13/1496) the witness was shown Standard Oil Company tank-wagon tickets for oil sold in Lorain during 1905 at 6 cents a gallon. There was nothing on these tickets to show what kind of oil was sold at this price, except that it was a white oil ; the witness said that he thought it was for Diamond Wliite oil, because it was reported that the Standard Oil Company was selling Diamond White oU there at the time. On page 1499 the witness said that the Water White oil sold by the Columbia was supposed and recomraended to be as good as the Standard's Water White, although he had never tested it. The record is silent as to the quality of the oil which the Standard was selling at 6 cents a gallon. 124 This establishes beyond question that the Standard Oil Company was selling, during that time, an oil of some kind in Lorain for 6 cents a gallon, which was lower than any price at which the Columbia Oil Company sold oil there. Mr. Mills on the direct examination was testifying concerning water-white oil. Mr. Castle was also testifying about a high- grade oil which he was selluig; but it appears in the cross- examination of Mr. Mills that the Standard had another grade of oil which it was selling at a cut price in Lorain. So, after all, Mr. Castle is correct when he says the Standard cut the price to 6 cents, and Mr. Mills is correct, so far as he goes, when he says that for water-white oil they were charging a higher price from the tankwagon than Mr. Castle was charging for the same grade of oil; but Mr. Mills evidently knew noth- ing about the rebates of IJ cents a gallon which Castle testi- fied were being paid to the customers who had paid the Standard's tank-wagon drivers the 9^ cent price. Mr. H. R. Potter (13/1502), who was the first tank-wagon driver of the Columbia at Lorain, was also called by the defendants, and testified to certain alleged conversations in which Castle said that his purpose in going to Lorain was to make trouble for the Standard; that he was instructed to get the business even if he did not make a cent, and that he cut the price from 10 cents to SJ cents (13/1503). On his cross- examination (13/1505), petitioner's Exhibit 925 was identi- fied by the witness as a tank-wagon ticket issued by him on September 15, 1904, for water-white oil sold in Lorain at 9^ cents a gallon; and on page 1506 he denied having said that the Standard's price was 10 cents (although the record shows that he did), but held to the statement that he had cut the price 1^ cents. This witness was not questioned with regard to the oil which it was proven by Molls the Standard was selling in Lorain for 6 cents, and his testimony, therefore, can not be said to cover the entire Lorain situation. The testimony of Mr. Castle is by far the more reasonable. It would be suicidal for a little concern like Castle's to go into a town of 35,000 inhabitants and attempt to drive out a com- petitor like the Standard Oil Company by cutting prices so low (as-Mr. Castle testifies) that there was absolutely no profit in the business for him. Mr. Castle had been in the employ of the Standard Oil Company a great many years, engaged in 125 the very practices which we here find it was employLog against him. He knew that the Standard had never been driven out of a town by a competitor, but, on the contrary, that it had successfully used these very practices in driving out its competitors. It has been claimed, and doubtless wiU be claimed, that price-cutting is the only way that a new con- cern can get business, but this is not borne out by common experience, especially in the oil business. There is always a class of trade which will deal with an independent rather than a company that is reputed to be a monopoly. There is also an inclination to patronize a new concern that brings competition to a town, because it is well known to the trade that competition is wholesome. Any independent going into a town will get customers at the start, even at the same prices, if he serves them well. For these reasons we urge that Mr. Castle's statement should be believed. On his direct examination, Mr. R. E. Mills testified (13/1493-1494) that pursuant to instructions of Mr. Castle, of the Columbia OU Company (whose employ he entered in January, 1905, after leaving the Standard), he paid secret rebates of one-half a cent to 2 cents a gallon to certain dealers to get the business away from the Standard, and that he got some business in that way. On his cross-examination (13/1498) he was asked to give the names of the persons to whom he had paid rebates for the Columbia Oil Company, and he was able to give only two. This contradicts nothing, for it appeared upon the cross-examination of Mr. Castle (6/3095) that in cases where he had a customer which the Standard took away from him by means of rebating, when he would learn of that he would, as a matter of retaliation, go to some place where the Standard had a customer from whom they were getting the full market price and offer that cus- tomer the same cut price or rebate which the Standard was giving Castle's customers. One of the leading witnesses of the defendants called to con- tradict Mr. Castle on the subject of unfair competition was F. B. Squu-e, of Cleveland. This man has been connected with the Standard Oil Company of Ohio since 1885, and since 1900 has been its vice-president. He testified in the contempt proceedings brought by the attorney-general of Ohio following the ouster suit of 1892 (see record of that case 126 introduced in evidence). He is thoroughly famiKar with the Standard's business, and yet this man swears, on cross-exam- ination (13/1581 et seq.), that he does not know anything about the ownership of the Standard Oil Company of Indiana, the National Transit Company, the Ohio Oil Com- pany, the Buckeye Pipe Line Company, the Union Tank Line Company, and the Solar Refining Company, all of which were prominent companies in the Standard combination and everyone knew were controlled by the Standard Oil Company of New Jersey and by the Standard trustees. The Union Tank Line Company is the company in whose cars every barrel of oil shipped by the Standard Oil Company of Ohio is transported. The following is a sample of this man's testimony (13/1584): Q. Do you Icnow anything about the Union Tank Line Company? — ^A. I do not; no, sir. Q. Is it a company owning tank cars? — ^A. I have seen tank cars with that name on them. Q. You know nothing about what company they belong to? — ^A. No, sir; I absolutely do not. Q. Nothing whatever. Do you ship your oil in Union Tank Line cars ? — ^A. We do. Q. Who pays for the use of them ? — A. I could not teU you. Q. You don't know. Does your company? — ^A. I don't think — I am not certain. Q. You don't know that the Union Tank Line Com- pany belongs to the Standard Oil Company of New Jersey? — ^A. I have already said I did not. Q. Oh, I did not understand you. You have no knowledge whatever of its ownership? — ^A. No, sir. Q. Did you ever hear that it belonged to the Stand- ard Oil Company of New Jersey? — A. Only through the newspapers. Q. Only through the newspapers? — ^A. That is all. Q. But in your business relations, in shipping oil in Union Tank Line cars, you never received any informa- tion as to the ownership of the Union Tank Line Com- pany ?^A. Absolutely none. Any man who will testify to anything of this kind is utterly and absolutely unworthy of belief. To give Mr. Squire an opportunity to say something derog- atory of the character of Mr. Castle, who had given so much 127 damaging testimony against the defendants, the counsel put this question: Q. This man Castle, who was the star witness but one for the Government at Cleveland, vfho was he anyway; was he ever in the employ of the Standard? — A. He was. Q. When? — A. He entered the service of the Standard Oil Company ia 1885 and was discharged in September, 1900. And Squire says he was discharged because he j)ersisted in making special arrangements contrary to instructions; that he did not report these arrangements until he v»'as discovered; and now Mr. Squire remembers one case in particular that seems to have come back to his mind. He says statements had been made that Castle was making special arrangements contrary to instructions, and instructions were issued for him to come to Cleveland and make a full report of all special arrangements that he had made, and that it was in response to that that he furnished Mr. Hoag with petitioner's Exhibit 829, being a letter dated April 26, 1898, addressed to Mr. J. W. Hoag, showing all rebate arrangements in effect in Castle's field at that time. He says that prior to this time neither he nor Mr. Hoag knew anything about it. Now, it is all right for Mr. Squire to speak for himself, and it may be true that he knew nothing about it, because he had not anything what- ever to do with this business. Mr. Hoag was running the Cleveland station, and it is hardly competent for Mr. Squire to swear that Mr. Hoag didn't know it, because Mr. Hoag him- self might be called upon that subject and he might know some things which Mr. Squire does not know. Why was Hoag not called ? Mr. Castle testified that these arrangements had been in effect for a long period of time, and that every one of them were carried out and the rebates paid with the Standard's funds. In the aggregate they amounted to a very con- siderable sum of money which was constantly being paid out. It is difficult to beUeve that this practice could have been carried on without the knowledge of the officers of the Standard Oil Company in Cleveland who were responsible for its funds. Mr. Castle testified on his cross-examination (6/3072) that he discussed all of these arrangements with 128 Mr. Hoag, his superior officer; and that he turned in the vouchers and settlements for the money paid. If, as Squire testified, the Standard wished to put a stop to this practice, it would have been a very simple manner of effectively doing so by refusing to furnish the money to Castle which was paid to the customers who received the rebates. Let us see now whether Castle was really discharged. Squire makes an effort to link his discharge with Exhibit 829. First, attention should be caUed to the fact that this letter was dated April 26, 1898, and that Castle did not sever his connec- tion with the company until September, 1900, two years and five months afterwards, so that the attempted connection between these two events is not very well estabhshed. Be- cause some questions had been asked him on cross-examina- tion, Mr. Castle was asked on his redirect (6/3104) whether he was discharged when he left the Standard, and he replied that the company proposed to cut his salary $500 a year in July, 1899, which was a year before he left them; that at that time he was getting $2,000 a year; that he told them then and there they could have his resignation, but he would not accept a cut; that he continued along and they gave him no answer until the end of the following year, when he says the matter was again brought up and he was asked how he felt about it and he told them that he felt just as he did before; and the result of it was that he severed his connection rather than accept the cut in his salary. He says that Mr. Taplin did the talking, but that Taplin told him that it was Mr. Squire he was talking for. Castle saiys (6/3105) that Taplin was Squire's assistant, that Taplin said they had to reduce their expenses, and that in order for them to hold their terri- tory they had to niake a showing in the expenses or cost of doing the business. Castle refused to accept any cut on his salary and quit, and that is all there is to the discharge ques- tion. He says that he was on friendly terms with them, that he didn't leave the Standard for several months after that, and that he then turned over what he had in his hands and they paid him up. He says it took him probably six weeks to dispose of things, and from that time until the 1st of Octo- ber he drew his salary from the company; that no complaint was made about the service that he had rendered. Mr. Castle said he knew of a number of other employees whose salaries were 129 cut that year and the year before; that at the time he does not think anyone, except some of the officers of the com- pany, got more than he did; and that there was no complaint whatever made to him by Mr. Hoag or anybody else about the arrangements shown in Exhibit 829. This testimony on the part of Mr. Castle is uncontradicted by anybody. Mr. Squire chooses to say that he discharged Mr. Castle, but this is his conclusion from what took place. Squire does not pre- tend to tell what did take place, he does not say what was said by anybody to Castle, and he does not pretend that he ever passed a word with Castle or that he ever wrote him a letter or a communication of any kind upon that subject. What conversation was had was between Mr. Taplin and Mr. Castle, and it appears that Squire was not present. Mr. Squire (13/1510) says that Mr. Castle's duties had been restricted because he had been detected in doing similar things before — that is, giving concessions; but he does not say how Castle's duties were in the least restricted, nor is there anything in the testimony of Castle to indicate that his duties were ever restricted. During all that time they were paying him $2,000 a year (if not that much, they must have raised it from time to time, because that is what they were paying him when he quit). It is a little strange that they would restrict his duties, as Squire says, rather than direct him about his duties. But Squire glides along with his narrative regardless of the transparency of his story. ' Squire says that Castle was a general man, looking after the trade with Mr. Goodwillie, and in that capacity he was expected to investigate and report reasons why business was lost and not make special arrangements to regain the business; that such arrangements were to be made by the manager, and on investigation of the facts to find whether a reduction in the price was necessary or wise. So it appears from Squire's testimony that Goodwillie was working with Castle, and that the manager of the Cleveland office had im- mediate supervision over him and was the person to direct. Where does Mr. Squire come in ? He does not seem to have anything to do about it. Finally, he says that, because Castle was making these arrangements they restricted him to the Youngstown 72064— VOL 2—09- 9 130 valley, and yet they continued for years after that to pay him $2,000 a year and were not able to control him at all and had to keep cutting off his territory to keep him from violating instructions. Castle must have been an exceedingly valuable man or he could not have remained in the employ of this company for fifteen years and constantly be violating the instructions of the manager. It is not the first time, by any means, that the Standard Oil Company, when it has been guilty of violating the law and of unfair competition, has insisted that some of its subordinates have violated in- structions. This claim was made in the Tennessee case, in the suit which resulted in the ouster of that company from Tennessee, but it was not taken seriously by any of the courts that passed upon that case. Decatur (111.) territory. — ^Mr. May wood Maxon, who for many years was special agent for the Standard in the Decatur district, testified (3/1295) that when an independent dealer would go into a town and, by getting a number of merchants jointly to purchase a carload of independent oil, secure a freight rate which would enable the independent to compete with the Standard, the Standard would go to the largest purchaser in that carload, state to him how much it appreciated his business, that it desired to help him finan- cially, and offer him a special rebate from the regular market price to induce him to countermand his portion of the car- load order. This would break up the carload shipment and prevent the independent oil coming into that locality. This scheme was used twelve or fifteen years throughout the ter- ritory of the Standard Oil Company of Kentucky. Paris, Urbana, and Vandalia, III. — ^Maywood Maxon testified (3/1294) that at Paris, in about 1899, the agent of the Standard Oil Company left its service and put in a plant of his own, and secured the trade of a majority of the dealers in that town. Acting under instructions from C. T. CoUings, vice-president of the Standard Oil Company of Kentucky, Mr. Maxon sent a man to Paris and made a deal with a merchant of that town to sell Perfection brand of oil for 5 cents a gallon to the consumer. The price had previously been 10 J cents a gallon to dealers. This merchant sold the oil at 5 cents a gallon, and once every sixty days he was given a rebate of 1 cent per gallon by the Standard. In 131 addition, advertisements were inserted in the newspapers and paid for by the Standard, although appearing in the name of the merchant. This plan was successful, and the man upon whom the fight was made was forced out of business. The plant was bought by the Standard, dismantled, and shipped to other points. It took about a year to wreck the man financially. After the purchase of the plant by the Standard the price of oil in that town was restored to the former basis. The same situation existed at XJrbana and Vandalia at different times, and the same tactics were used by the Standard. Mr. Collings's attention was called (12/890) to the testi- mony of Mr. Maxon to the effect that, under instructions from him, E,. N. Reed, and E. B. Stanley, he made deals with merchants at Paris, 111., in 1898, at Urbana, 111., in 1891, and at VandaUa in 1900 whereby a 5-cent price was made in those towns in order to drive out a competitor; and with respect to it he said: That is not true. I never heard of it, and it could not have been done without my knowledge. Mr. R. N. Reed and Mr. E. B. Stanley would know whether or not it was true. They were employees of the Standard Oil Company, fully as convenient to the place of taking testi- mony as Mr. CoUings was ; they might have been called ; they would have corroborated either Mr. Maxon or Mr. Collings. When Mr. Collings makes a statement that this could not have been done without his knowledge, he makes a state- ment which is not borne out by the testimony in this case. Mr. Collings's testimony shows (12/946, 959) there were several persons in the Standard Oil Company's office that transacted this kind of business, who dealt directly with the managers of bogus concerns, and who not only wrote letters and transacted business in their own names, about which Collings knew nothing, but that they often signed his name to letters which he never saw. Aledo, III.— Mr. F. L. Hibbs testified (3/1332-34) that while he was a refined-oil salesman for the Standard, travel- ing in the Peoria territory, at one time, while he was at Astoria, he received instructions by telephone from the Peoria office to go to Aledo, where the Royal Oil Company 132 had sold a carload among the peddlers and merchants, and endeavor to break up this carload order; that this was over a week before the car arrived; that he succeeded in getting some of the merchants and peddlers who participated in this carload to cancel their orders by giving them a rebate of one-half cent a gallon on all that they might buy during the succeeding year, and that to two of the merchants he gave 50 to 75 gallons of oil to coimtermand their order; that he got the consent of these merchants and peddlers to send telegrams in their names to the Royal Oil Company at Pe- oria, canceUng their orders; and that he sent such telegrams at the expense of the Standard. By this means he suc- ceeded in getting cancellations from the purchasers of about half of this carload. Exhibit 906 is a letter which Mr. Lashley admitted ema- nated from his office (12/1018). It is dated Peoria, 111., September 10, 1903, addressed to F. L. Hibbs, salesman, and is signed " R. E. Lashley, R." In it we find the following significant statements: I am going to take the liberty of sending you a copy of Mr. Colhngs's letter to me of September 8 in regard to our policy as to contracting on Elaine. This is in line with my talk of a few days ago in regard to agreeing to sell a customer 10, 15, or not over 20 barrels of Elame, T^Tiite Seal, or Eocene at a stipulated price, to replace so-called mgh-grade National Light oil, sold by the Royal Oil Company. I want to impress on you the importance of having aU such orders you may take to replace National Light from the Royal Oil Company, or White Seal from the Brooks Oil Company, or so-called high-grade competitive oils. Now I want each Refined Oil salesman to make a thorough canvass of his territory, getting all of this business in hne. It will be noted that this letter states it to be the poUcy of the Standard, as against the Royal Oil Company, to allow a cut of 1 cent a gallon below the prevaihng market price when it is done for the purpose of replacing brands of the two independent oil companies named. Farmington, 111. — Mr. Hibbs testified (3/1333) that after he left the Standard Oil Company and went with the Royal Oil Company he sold a carload of oil at Farmington, lU., 133 and that the Standard Oil Company sent a man by the name of Jerry SaflFord from Monmouth, and also a man named Firebaugh, to follow him up and get the orders counter- manded by cutting prices and giving rebates and giving oil or giving money or giving anything in the world to kill him. Mr. Hibbs did not state that the order was countermanded, but simply states that men were sent there to use these methods for the purpose of procuring the countermanding of that order. Mr. Trann said (12/1028) that this is not true to his knowledge, and that if such instructions were given it was unknown to him. This falls far short of contradicting the positive statement of Mr. Hibbs, and inasmuch as Mr. Hibbs gave the defendants the names of the men who were sent there to procure the countermanding of that order, it would have been better to call one of those men than to call a man who can at best only say that he has no knowledge of the transaction. Mr. Trann was asked whether he instructed any of the salesmen, or any of the employees, or SaflFord or Firebaugh, to cut prices below competitors' prices, and he replied: "No, not below competitors' prices. I have instructed them to make contracts often, to meet competitors' prices." He said that he had no authority except a leeway permitting him to make contracts with large dealers at a half a cent below the market, and that this was a common practice where competitors were underselling to get the business. On his cross-examination upon this subjecthesaid(12/1031) that contracts were made for half a cent less than the market price with large dealers where the Royal Oil Company had gotten the trade away from the Standard, but that this was not done to get trade away from the Royal Oil Company. Later along, when asked if this was not done to get it away from the Royal Oil Company, he said: "Maybe we did it in some cases; yes, we might have done it." Further on he qualifies the statement by saying that any large dealer in that territory could get that half cent under the market if he asked for it, but the small dealers could not; that (1032) all of the large dealers did not get this concession; that this was not necessarily because they were buying of some inde- pendent company, although he said that some of these large 134 dealers who had these contracts were buying of other com- panies. Exhibit 907 was shown to Mr. Trann, which is as follows: STANDARD OIL COMPANY. (Incorporated.) Peoria, III., August 19, 1904- Mr. F. L. HiBBs, Salesman. (Elaine orders.) Dear Sir: We are in receipt of three future orders taken by you for Elaine, 16 cents per gallon f. o. b. Peoria. We have written you several letters on this same subject, which no doubt you have received by this time, and we trust that from now on you wiU use better judgment in taking future orders on Elaine. What we wish to call your attention to particularly is the fact that two of these parties, C. A. Knappenberger, of La Harpe, and J.A.Wright, of La Harpe, have never bought any outside goods at all, and we have no record of George Grigsby, of BlandinsvUle, getting anything since last March. This low price on Elaine oil was given us to compete with National Light, and was to be used only where it was absolutely necessary, where the party was buying from the competitor, and by making this price on Elaine we could get the business. I wish you would give this matter careful study and thought before you make any further contracts on Elaine at the minimum price. Yours, truly, J. L. Trann, S. A. Die, J. L. T. This letter does not accord very well with the statement of Mr. Trann that cuts were not made for the purpose of securing the trade of the Royal Oil Company, and that the question whether or not the large dealer was buying of a com- petitor cut no figure. Exhibit 908 is a circular letter, dated Peoria, 111., August 6, 1904, signed "J. L. Trann, per J. C," addressed to "Refined oil salesmen," in which we fiad the foUowiog significant paragraph : We also want you to watch the high-grade oil business closely, and if you come across any parties where we are unable to hold the business unless we get them on con- tract you can say to them we will have a price ready for 135 them in the next fifteen or thirty days which will be of much more interest to them than the competitor can make at this time. We think we can hold them off at least that long, and at that time we will undoubtedly be in a position to name them a price on contract. Exhibit 913 is a letter from Trann to Hibbs, dated August 17, 1904, the first paragraph of which is as follows: We are in receipt of your report for the 15th, together with 7 future orders. I note in these 7 future orders you have taken 4 of them are for Elaine at 16 cents. I thought you understood plainly the instructions I gave you here in the office about selling Elaine. The price I gave you of 16 cents was a minimum price and sup- posed to be just used where it was absolutely neces- sary to get the business. This looks somewhat as if this low price was made to get business away from competitors, notwithsanding Mr. Trann's denial of that fact. In reference to the cut of a half-cent a gallon which was made to certain dealers throughout the territory where com- petition was present, Mr. Trann sought to make it appear that these dealers were larger than the ordinary ; that they were jobbers or wholesalers. This is not the fact. They were ordinary retail merchants in the small country towns. On page 1041, on his cross-examination, he was asked about some of these dealers who had contracts for rebates. Among them were Cady Brothers and Memler Brothers. He said that they were retail merchants at Brimfield, and that Brim- field is a town of a couple of thousand inhabitants; that they were not wholesalers. On his redirect examination (12/1046) Mr. Trann said that in every place where the Royal Oil Company made a sale in a town it was invariably a half cent below the market that the Standard was carrying at that point, and that when they gave the rebate of half a cent that brought them to the same price, and that the Standard did not cut the price under that of the Royal Oil Company. On recross-examination this question was put to him: Q. Do you swear that the Royal Oil Company had sold oil to Cady Brothers at a half cent under this price named by you? — A. I presume they did, or we Q. Do you know anything about it? — A. I don't know positively, no, sir. 136 He was then asked with reference to Mr. Winn, and he made the same reply, that he did not know^ but that he did know the Standard would not have made the contracts unless the competitor had made some cut. There is not a word written in any of the exhibits that have been introduced in connection with Mr. Trann's testimony to indicate that the Royal OU Company, or any other independent company, had been cutting the Standard's price. That is nowhere given as a reason for making these rebate contracts which Mr. Trann testified to. Even if it were true, would it justify the Standard's practice of meeting the price only as to deal- ers who bought from independent concerns, and keeping up the price to others? Mr. Z. D. Ells testified (3/1375) that in 1905 the Royal Oil Company sold a carload of oil in Farmington, 111.; that in Farmington there are only five dealers, and to make up a carload of oil it is necessary for all of them to join in the order. A year later, when he visited Farmington and tried to sell another carload to these merchants, he found that the dealer using the largest amount of oU was receiving a rebate from the Standard Oil Company, and, for that reason, would not join with the other dealers in the purchase of a carload from the Royal Oil Company, and he was unable to again sell at Farmington. Mr. Trann, salesman for the Standard Oil Company, admits (12/1030) having thus effectually destroyed the possibility of the Royal Oil Company again doing business ia Farming- ton by a rebate of one-half cent below the Standard's market price allowed to the largest dealer there; but Mr. Trann attempts to justify this rebate on the ground that it was the usual allowance to large dealers. On page 1031 he admits having in some cases made these contracts for the purpose of getting trade away from the Royal Oil Company. Exhibit 912 is a letter which Mr. Trann identified (12/1040) as having been sent out from his office by Mr. Busch, with Mr. Trann's name signed thereto, addressed to F. L. Hibbs, salesman, dated December 29, 1904, and which reads as follows : Referring to your report of the 19th in regard to the situation at Brimfield, ,we took this matter up with Mr. Collings, and have his authority, under date of the 27th, to close contract with Cady Brothers, Memler Brothers, 137 and Winn, covering their requirements on Perfection oil from tank wagon until April 1, 1905, at one-half cent off our regular Brimfield market, they to send their tickets in at the end of each month. Make this as verbal agreement, and have it clearly and distinctly understood that it expires April 1st, and is in consideration of their giving us all their business. Mr. Trann was asked why these merchants who were to receive one-half cent off the regular market price were to send their tickets in at the end of each month, and he answered that he did not know anything about it. The letter, how- ever, explains itself, in view of the testimony as to the practice of paying rebates. They were to send their tickets in at the end of each month and receive a rebate of this one- half cent a gallon. This letter, as to the authenticity of which there is no question in this case, shows that the rebate arrangements of the Standard were not matters of written contract, but were verbal agreements. Manitoa, 111.- — About 1905 the Royal Oil Company was selling oil to J. A. Marshall & Co. at Manitoa, 111., at 14J cents a gallon in barrels f. o. b. Peoria. The Stand- ard Oil Company sent a special man from Cincinnati to Manitoa and offered Marshall oil at 11 cents and Hi cents, under a year's contract, delivered free at his store door. Marshall was undecided on the question of changing to the Standard and he said to the salesman that the Royal Oil Company were nice people and had assisted him in building up a large trade and that if he should enter into that deal it would kill the Royal Oil Company in Manitoa. The sales- man replied "That is just what I was sent here for — to kill the Royal Oil Company." (Ells, 3/1375-76.) Port Huron, Mioli.— Exhibit 836 (10/1894) is a letter from Thomas Goodwillie to Castle. At the time of the writing of the letter, in 1889, Castle was at Detroit and at Port Huron, Mich., looking after the interests of the Standard there. The Mr. Foster mentioned in this letter was the manager of the Detroit station; and Mr. Lockley was the assistant manager of that station. Saunders & Co. were dealers at Port Huron. This letter discusses trade conditions at Detroit and Port Huron, and suggests to Mr. Castle the payment of a one-half cent rebate to Saunders & Co., of Port Huron. (Castle 6/3059.) 138 Exhibit 837 is a letter from Goodwillie to Castle relating to the Port Huron situation. The Mr. Campfield mentioned was a dealer at Port Huron who was buying independent oil. In this letter Mr. Goodwillie says : Our object of course in holding this price at Port Huron is to compel Mr. Campfield to sell his oil at 6 cents if possible, and our idea would be to have jou sell only the two or three parties with whom you had an arrangement who agreed to retail oil at 6 cents, with the understanding that they shall advertise the matter and compel the other grocers to sell at same price; this will oblige Mr. Campfield to sell at 6 cents in order to supply his own trade. We woidd not have our tank-wagon man call on any trade supplied by C. & Co. and would not allow him to sell, as we sdid before, only to the few parties with whom you arranged to maintain a 6-cent retail market at that place. These parties should be so situated as to advertise the low selling price all over the town; that is to say, we should not have them all in one loca- tion. We notice your sales there are increasing, which we do not like, and would very much prefer to have our competitors' sales increase at present prices; if you do not think that this arrangement as we suggest in this letter is being carried out by your tank-wagon man at Port Huron, we advise that you go there and get them started right and see that they do not gather up any new trade; whenever any of the other dealers outside of the few you are supplying want to know the price of oil we suggest that he name his regular market there, which is 7i cents, and whenever they are willing to enter into an arrangement to purchase their supply of oil from you then we can take the question up of advancing the retail market. At the time of the writing of this letter the prices were cut to 6 cents with even a rebate of a cent off from that. Campfield was driven out of business, and the Standard (represented by Mr. Castle) bought his outfit. (Castle, 6/3059-60.) Gallatin, Tenn. — Mr. Collings was asked on cross-examina- tion (12/946-7) in reference to the legal proceedings against the Standard Oil Company and some of its officers in the State of Tennessee, which resulted in the ouster of that company from that State. He said that Mr. Holt was a 139 young man who sold oil for the Standard Oil Company in Tennessee with headquarters at Nashville; that Holt and one Rutherford of Gallatin, Tenn., and the Standard Oil Company of Kentucky, were indicted for entering into a conspiracy and making an unlawful agreement with a man by the name of Love and other merchants for the purpose of restraining competition, and that Mr. Holt was tried and convicted and sentenced to pay a fine of $3,000; that the Standard Oil Company paid this fine for hiin; that the record shows that the Standard Oil Company was ousted from the State of Tennessee; that an appeal was taken to the Supreme Court of Teimessee, where the decision of the court below was affirmed; and that the case is now pending in the Supreme Court of the United States. Mr. Collings heard the testimony of Mr. Holt, and was himself a witness, in that case. He looked up the circumstances in the case (12/948) and directed the company's lawyers to defend it. Mr. Collings stated that what was done was done by Mr. Holt on his own initiative and without the knowledge and approval of the Standard Oil Company. It appears that a carload of oil was sold by an oil company in Evansville, Ind., to some merchants in Gallatin, Tenn.; that Rutherford and Holt broke up this carload by agreeing to give to each of the merchants 100 gallons of oil if they would respectively countermand their orders, and they succeeded in getting some of the merchants to revoke their orders. Mr. Collings testified that, when the matter came to his knowledge, he told Mr. Holt he felt very much like discharging him because this was absolutely contrary to the rules of the Standard Oil Company; and that the Standard Oil Company had no knowledge whatever of it and would not have permitted it had it known what Holt and Rutherford were doing. It seems that Mr. Collings's feelings were not so outraged that he even discharged Mr. Holt, but retained him in the employ of the company until he left it of his own accord (12/950). Mr. Collings in his testimony before the court in the Ten- nessee case stated that the Standard Oil Company did not tolerate that kind of practice, and that it had no knowledge whatever that Holt and Rutherford had made the corrupt agreement; but it seems that the court paid but little atten- tion to Mr. Collings's testimony and could not have believed 140 it and found as it did. If this were an isolated case and was contrary to the principles and practice of the Standard Oil Company, and the transaction was carried on by these men without the knowledge of that company, or without that company's approval in any way, no court would have sen- tenced Holt to pay a fine of $3,000, and no court would have driven the Standard Oil Company out of Tennessee because of that deal. The Evansville Oil Company, whose orders were counter- manded by the efforts of Mr. Holt and Mr. Rutherford, was an independent concern doing business in Evansville, Ind., and in active competition in that territory with the Standard Oil Company of Kentucky, and it was therefore quite impor- tant that the Standard Oil Company should break up this practice of making up carloads in small towns by the inde- pendent dealers because by so doing they could get carload rates and compete with the Standard Oil Company's tank deliveries in that territory. If there were no more to this case than what Mr. Collings said, it is strange, indeed, that a court of justice would impose such severe penalties upon the company and the individuals connected with it. On his cross-examination Mr. Collings was asked (12/956) whether his company had procured the countermand of or- ders that had been given to competing companies, and he said that it never had in the same way that it was done in the Tennessee case; that is, by giving oil to the merchants as an inducement to get them to revoke their orders. He admitted that he testified on that subject in the Tennessee case as follows: Q. You say that your company does not do this kind of business about revoking orders? — A. It does not; I never heard of such a case until this came up. Q. Your company does not do anything to crush out competition? — A. It does not do anything in that way; there are a great many ways of crushing; some crush out themselves. He was then asked what he meant by that testimony, that he had never heard of a case of his company doing that kind of business, and his reply was that he never heard of its giving away oil to have an order countermanded. He finally said that he did not recall any cases in which his company had procured the countermand of orders, and that he did not 141 permit his people to countermand orders; that the practice was not universal over his territory, but that there were one or two sporadic cases. We have shown how false this was by detailed evidence that, under Mr. CoUings's direction, that very practice was systematically pursued against the Red "C" Oil Company in South Carolina. Other evidence on this subject is as follows: Birmingham (Ala.) territory. — Mr. Wofford said (5/2155) that in the Birmingham territory, when he was employed by the Standard Oil Company rebates were offered to per- sons who were about to buy or who had brought independent oil into the Birmingham territory; that when an independent company came into a town in that territory to make up a carload of burning oils the Standard would generally find out that the salesman was there before he got out of town, or at least before the oil had been shipped; that the Standard would then undertake to send a man to that town and by offering a rebate to some one of the dealers who was to take a portion of the carload break up the carload lot; and in some cases the Standard would give one dealer who had ordered a portion of a carload lot his oil for a year at 50 cents less on the barrel than the prevailing market price in case he would buy oil of the Standard and not assist in making up carload lots. leighton, Ala. — At Leighton, at a time when the price of oil was 15 cents per gallon, the General Oil Company of Mem- phis, Tenn., an independent concern, began shipping oil in barrel lots. The Standard immediately sent a man to Leigh- ton with instructions to select the best merchant in the town, the principal dealer, and to make arrangements with this merchant to retail oil at 10 cents a gallon, with the under- standing that he should have a rebate at the end of each month of 1 cent or IJ cents a gallon on all oil that he sold. This arrangement was carried out and the principal portion of the oil business went to the dealer who was selling at 10 cents. (Wofford, 5/2155-56.) Mr. Colhngs said in reference to this testimony (12/908) : I don't beheve a carload of oil could be made up in Leighton. It isn't big enough. In disposing of 60 or 75 barrels of oil, half of it would leak out before they could dispose of it. 142 He said also that there were only three or four dealers there. The independents were in the habit of making up car- loads and dehvering in some convenient town, from which the oil would be distributed to dealers in near-by places. It may well be that this oil was not all to be sold at Leighton, but that Leighton was a distributing point for other places in that neighborhood. It was a carload of oil in barrels, so that it could be distributed to other points or held for use there. Mr. CoUings was asked (12/906) in reference to the testi- mony of Mr. Wofford (5/2154), who said that when a com- petitor's salesman would leave Nashville for the Birmingham territory a Standard salesman would follow him from Nash- ville until he reached the Birmingham territory, and then a salesman from the Birmingham office would take his place and follow the competitor's salesman around through the Birmingham territory, staying with him and preventing his getting orders by cutting prices; and CoUings is asked what he had to say in respect to that. His reply is: I say that I don't recall any such instance of one of our salesmen being sent out to follow the competitor's sales- man from Nashville and then communicate with Bir- mingham and getting a Birmingham man after him. I don't recall anything of that sort. He excepts from that what he calls "one sporadic case" in the CaroHnas (12/907). This is not a contradiction of Mr. Wofford. Mr. Wofford did not testify that Mr. Colhngs could recall these instances. He stated the facts positively. He was in a position to know what the facts were. Mr. CoUings did not recaU them. Springfield, Mo. — At Springfield the Standard Oil Com- pany or the Waters-Pierce Oil Company would give to the dealer who was purchasing suppHes from an independent a rebate of from one-half to 1 cent a gaUon, or whatever amount was necessary in order to get him to stop purchasing from the independent. The manner of giving the rebate was to charge the dealer a fliat price the same as they were charg- ing to other customers and to make out the biU regularly for that amount, then at the end of the month a special man would caU on the particular merchant and present him with a certain amount of money, depending upon the number of 143 gallons purchased and the rebate agreed on. This manner of paying the rebate was for the purpose of preventing a gen- eral reduction in price, as the Standard or the Waters-Pierce could control probably 75 or 80 per cent of the business at their price , and it was not necessary to give customers who did not buy of independents this rebate. (Wilhoit, 3/1268- 69.) Kansas City, Mo.— In 1890 to 1905 and 1906 at Kansas City, Mo., the Consolidated Tank Line Company first, and later the Standard Oil Company, which succeeded the Con- solidated, used every method which could be adopted to secure the business of the independent dealers in oil. Mr. W. H. Hawkins, who was superintendent of tank wagons for the Standard in Kansas City during that time, testifying in the Missouri case said: Q. What was your work as superintendent of the tank wagons? — A. Seeing that the Standard Oil Com- pany got all the business. Q. What was some of the methods that you adopted to accomplish that result?— A. Most any method that seemed necessary or fit the case — rebates, keeping per- fect tab on the other people as to what business tney were doing, and getting the business away from them. It didn't make much difference what the methods were. The Standard Oil Company during this time employed a man to follow the wagons of the independents, putting in a week or two for each wagon and following several blocks behind them and keeping a careful record of how much oil or gasoline they sold to each merchant. (Hawkins, 2/985-86.) In Kansas City, from 1890 to 1906, the Consolidated Tank Line, and its successor the Standard Oil Company, also the Kepublic Oil Company, would agree to give a rebate, large enough to secure the business, to the customer of an inde- pendent, paying the rebate at the end of the month. This was a secret rebate, and there were at one time as many as 250 customers receiving the rebate, which in the aggregate amounted to something like $3,500 a month. (Hawkins, 2/985-88; Phipps, 2/997-98; Weinberger, 2/1000.) The Standard Oil Company had a regular department at Kansas City where they kept a record book with a list of the names of every town in Kansas and Missouri, and under the headings of the towns they had the names of all purchasers of 144 oil in such towns . Under the town and opposite the name of the consumer they would keep a record in black ink of the number of barrels sold by the Standard in this particular town; which information was compiled from the reports of their agents. In red ink they would keep a record of each barrel of independ- ent oil sold in that town, which information was taken from the reports of competitive shipments. This gave the Stand- ard a record of all of the oil they were selling and all of the oil the independents were selling in that particular place. The Standard's traveling men would then take these lists and go over them, and where the black figures predominated they would pay no particular attention to that town, but where there was a large showing of red figures they would immedi- ately go to that territory, lessen the price, and go among the merchants and endeavor to get that business. If it was an important point they would go to the outer edge of the town and make an arrangement with a dealer whereby he would be given a large rebate, his advertising would be done free in order that he might sell oil to the consumers at the whole- sale price, and thus prevent the other dealers from making a profit on their oil. After the independents in this manner were driven out the higher price would be restored. (Wil- hoit, 3/1270-72.) Mr. L. J. Drake's attention was called to the testimony of W. H. Hawkins, who was superintendent of the tank-wagon service of the Consolidated Tank Line Company, in which Mr. Hawkins said that while he was superintendent he had a rebate system whereby if a person was not buying from the Standard he would offer him a sufficient rebate to obtain his trade. Mr. Drake was asked what authority Hawkins had for making these arrangements, and his reply is that he never had any authority from him in regard to it, and then he says that the only authority he could get wotdd be from the local manager at that point, Mr. George Mayer (13/1069, 1070), and that Mr. Mayer would have to get his authority from him if there was any radical change made in the prices; and this is the only answer that Mr. Drake gives to the positive testimony of Mr. Hawldns. Of course he would have to get his authority from the local manager, and would not think of applying to Mr. Drake for such authority. The local manager, Mr. Mayer, had authority to make any 145 changes necessary that were not what Mr. Drake termed "radical" changes. On page 1098, on his cross-examination, Mr. Drake said that rebates were not customary, that discounts were allowed to jobbers and wholesale dealers and a few retail grocers; and he was then asked if at the end of the month these persons who had rebates would send in their tickets, and he replied that he never had any cases of that kind, and there were none of that kind, to his knowledge; that he never did any of that business. That is exactly what we claim, that Mr. Drake, as general manager of the sales department of the Standard Oil Company of Indiana, had nothing to do with rebates and special arrangements made in the territory of the local agent. Later along, on page 1099, he says that these tickets, if sent in at the end of the month to anybody, would not be sent to him, and that the local agents would have charge of this rebate business, and that he didn't know anything about rebates or tickets and never had the matter brought to him; that matters of this kind were mostly done by managers under him, but that he saw the jobbers throughout his terri- tory quite frequently and made some arrangements with them. Now, we agree with Mr. Drake exactly on that point — that if any arrangement was to be made with a large jobber involv- ing a large consignment of oil or covering a long period of time, an arrangement of that sort might be made by the general manager of the sales department and might not be made by the local manager. ' This is entirely aside from the question that we are discussing and entirely aside from any testimony given by Mr. Hawkins, and we have here in the record testi- mony which shows how the marketing was done, what the general manager looked after, and what the" local manager looked after. Thegeneral manager might have, if he saw fit, looked after the large jobbing trade, but the entire manage- ment of the trada with the retail dealer who received his oil from tank-wagon deliveries was under the control of the local agent, subject only to general directions, and we assume that if a question arose with the local manager as to what he should do in some particular important matter, he might refer that question to the general manager and be guided by him. 72064— VOL 2—09- ]0 146 On page 1099 this question was put to Mr. Drake: Q. You do not pretend to say you did not cut the prices a great many times in your territory? — ^A. I did not pretend to say anything of the kind, for we did. When they cut our business, we went after it and got it if we could. Then, on page 1100, after a suggestion by his counsel, he said that they followed the prices of the competitors, but did not make a cut below anybody else's price that he knows of. He was anxious to qualify that statement by basing it upon his knowledge of the subject, and it has already been shown that he might not have any specific knowledge of any specific case. He was then asked if he was wiUing to say on his oath that he never did in his territory cut the price below the com- petitor's seUing price, and his reply was: "I do not make any such oath at aU," and then says that cut prices were made to dealers and possibly to retail merchants. (13/1100.) On his redirect examination, he says they seldom ever cut the prices below the competitor's prices, unless they had strong competition and were forced to do it after the competi- tor had cut the price. (1100.) Then he says that he never initiated a cut in prices. We have no quarrel with Mr. Drake on that proposition. He wasn't the man to cut prices ; it was the business of the local agent to do that. He says also that they were in the field first, and the com- petitors were trying to get their business away from them. On recross-examination (1101) he says they were in a great many places. He was then asked if the firm of Scofield, Shurmer & Teagle, which was one of the strong competitors in the Kansas territory, were not an older concern, and he said that they were in business before the Standard; that they were one of the oldest refineries in Cleveland and had busi- ness scattered all over the western country. He was asked if he did not cut their prices, and he replied: "Not very often," but that they did sometimes, if it was necessary. Then he says they bought them out finally. He was asked if they didn't run the Republic Oil Company afterwards as a secret company, and he replied, "We ran it as the Republic Oil Company." He also stated that they did not advertise it as their own business. (13/1101.) 147 DISCREDITING COMPETITORS' OILS. Mr. CoUings said (12/939) that he never furnished any agent or employee of the Standard Oil Company, during all the years he had been in charge, any money with which to pay employees of manufacturing or other concerns which were using oil, so as to bring about the more favorable use of the oils of the Standard Oil Company, and that he never authorized anyone else to do so. This statement was per- haps offered as a general contradiction of several witnesses who had testified that money was so used. On this subject, we call attention to Petitioner's Exhibits 889, 890, 894, and 825, which are impression copies of letters written by May- wood Maxon while special agent of the Standard Oil Company at Decatur, 111., to Mr. E. B. Stanley, general manager of the Standard Oil Company of Kentucky, and which are as fol- lows : Petitioner's Exhibit 889. Aug. 31st, 1898. Mr. E. B. Stanley, Cincinnati, Ohio. Dear Sir : I have to-day settled all commission due on lubricating oil sales to date, and should be pleased to have you send me check for $4.00, amount paid. Yours, truly. Petitioner's Exhibit 890. Mr. E. B. Stanley, Cincinnati, Ohio. Dear Sir: I have settled for Nov. commissions on lub. oils, 9.00, so please have check sent me for the amount, and oblige. Deaf & Dumb Institute, Jacksonville $7. 00 Street railway, Decatur 2. 00 19.00 Yours, truly, M. Maxon, Mgr. 148 Petitioner's Exhibit 894. Deoatue, Slst, 1898. Mr. E. B. Stanley, Cincinnati, Ohio. Dear Sir: I settled with Mr. Traim to-day for all commissions due for this year — $2.50 — except a small item at statehouse, Springfield. Please send me the $2.50 at your convenience. Yours, truly, M. Maxon. Petitionee's Exhibit 825. STANDARD OIL COMPANY. Incorporated. General oflce, Cincinnati, O. Alexander McDonald, president. Decatur branch and agencies. M. Maxon, manager. Decatur, Ills., Fel. 20ih, 1900. Mr. E. B. Stanley, Mgr. L. D., Cincinnati, Ohio. Dear Sir: I have to-day settled with the engineer of the Decatur Traction Co. for his commission on 5 brls. Eenown Engine at 5.00 2 " Capitol Cylinder at 2.00 total $7.00 As he has left their service and gone to Chicago, this ends this arrangement. Please send me draft .for the $7.00 and oblige. Yoxu-s, truly, M. Maxon, Mgr. At Augusta, Ga., which is also in Mr. CoUings's territory, Mr. Boardman testified (5/2168-69) that he remembered an instance in 1904 (which was at the time he was manager for the Standard in Augusta) when the Crown Oil and Wax Company of Baltimore, an independent company, secured a contract for furnishing lubricating oils to the electric road, "which had previously purchased its oil from the Standard. Mr. Reed, special agent of the Standard for this territory, came from Atlanta to Augusta on this matter, and conferred with Mr. Boardman. The contract had already been let to the independent company when Reed reached Augusta, but they were told by the electric road people that if the inde- pendent oil was not satisfactory the Standard would have another chance to get the contract. Reed had just been appointed special agent at Atlanta and disliked to lose this 149 business. He went with Mr. Boardman to the hotel, and finally said: "Boardman, the only thing I see for us to do is to go into the engine room and open up our purse strings." Mr. Boardman made no reply to this. Eeed seemed to be studying the matter, and in a few minutes repeated the statement to Boardman. Whether the plan was carried into effect or not does not appear from the evidence; Mr. Board- man, who testified on the subject, did not know. It will be remembered that the special agent at Decatur, Mr. Maxon, was the person who handled these matters in his territory, not the local agents; and in all probability the same course was followed in the Atlanta territory, and Mr. Eeed, the special agent, handled all such arrangements, not leaving it to the local agent, Mr. Boardman. OPERATION OF BOGUS INDEPENDENT COM- PANIES. It is alleged in the petition (pp. 178-181) and denied in the answer (1, ans. 59-60) that as another of said unfair methods of competition the defendants have at various times and points throughout the country established, maintained, and operated bogus independent concerns, engaged in the manu- facture and sale of petroleum and its products, which bogus companies have done business under individual, firm, or. corporate names, and have held themselves out to the trade as entirely independent of the defendants, but which were in truth and in fact operated in their interest and used to secure the trade of the independent refiners and dealers; that such bogus independent concerns have been used to cut the prices of petroleum products to the customers of the inde- pendent refiners and dealers, thus enabling the defendants to carry on a competitive warfare against the independent dealers and cut the prices without involving the defendants' prices directly, and without reducing the defendants' prices on the larger part of their product sold in the same localities; that the defendants have from time to time purchased, owned, and controlled the stocks and business of various firms, limited partnerships, and corporations previously engaged in competition with the defendants in such business, and there- after operated the same, and held them out as being inde- pendent, keeping the said purchases secret ; and that various of the defendants herein were from time to time held out to the public as independent concerns and as competing with the Standard Oil Company and its subsidiary corporations, when in truth and in fact they were controlled by the defend- ants; all of which was done for the purpose and with the effect of eliminating competition and monopolizing the com- merce in petroleum and its products. Mr. C. H. Mahle, who was in the employ of the Standard at the Baltimore office from 1890 to 1903, and during the last five years of which he was assistant to the manager of the refined oil sales department, described a bogus inde- (150) 151 pendent concern, as used in that territory, as follows: A bogus independent company is a concern handled by the Standard Oil Company through an agent, representing to the trade that he and his company are independent of the Standard, but which in fact is backed by the poli- cies dictated by the competitive department of the Stand- ard Oil Company. These agents ordinarily operated under some company name, and sometimes they operated in the name of the agent himself. The bogus companies appear in a place where independent oil is being sold in competition with the Standard, and announce that they are independent of the Standard and in no way connected or affiliated with it. They usually cut the price immediately, and also give rebates and concessions in the prices to the trade which they solicit. They usually solicit only that trade which is being supplied by a competitor of the Standard, and solicit the Standard trade only so far as may be necessary to give the bogus con- cern color of independence and to keep the public from suspecting its true character. (Mahle, 5/2354-55.) A comprehensive idea of the extent to which the Standard employed such bogus concern as a means of competition to drive out the independent oil dealers may be had from the following list of individuals, companies, and corporations which have from time to time operated in various parts of the country, as disclosed by the evidence in this case : Operating in New York and New England: Charles E. Farrell (peddler), Oneonta and Troy, N. Y. Troy Oil Works, Troy, N. Y. Paragon Oil Company, Troy, N. Y. Jenny Manufacturing Company, Boston, Mass. Household Supply Company, in and around Holyoke and Springfield, Mass. Cordner (peddler), Springfield, Mass. Operating in the Baltimore division: Paragon Oil Company, in Maryland and Delaware. Eureka Oil Company, Norfolk, Va., and many points in Maryland, Virginia, and North Carolina. . Argand Refining Company, Richmond, Va. Southern Oil Company, Richmond, Winchester, and other points in Virginia. 152 Eagle Oil Works, Baltimore. William G. Davidson, Baltimore. Home Safety Oil Delivery, Baltimore, Norfolk, and Washington. Dixie Oil Works, very extensively through the South. Operating in territory of the Atlantic Refining Company: Special wagons, called "fake" wagons, Philadelphia. Operating in territory of the Standard Oil Company of Kentucky, reporting to the Cincinnati office : Peoples Oil Company, Atlanta, Ga. Alabama Oil Company, Birmingham, Ala. Haynes peddling wagons, Columbus, Ohio. Home Safety Oil Company, Terre Haute, Ind. Hamilton Oil Company, Terre Haute, Ind. Hults and Day (peddlers), Terre Haute, Ind. ' Paragon Oil Company, Decatur, 111. Banner Oil Company, Springfield, 111. Kercher Brothers, Springfield, 111. Springfield Oil Delivery, Springfield, 111. Consumers Oil Company, Macon, Ga. Kercher and Vincennes Oil Company, Vincennes, Ind. Kercher, at Mobile, Ala. Kercher's peddler, at Pekin, 111. Brooks Oil Company, Indianapolis, Ind. Capital City Oil Company, Indianapolis, Ind. Domestic Oil Company, Indianapolis, Ind. Cassetty Oil Company, Nashville, Tenn. Operating in territory of the Standard Oil Company of Ohio, reporting to the Cleveland office : C. M. Lines, in many towns about Cleveland. Red Line Wagons, Cleveland. Cleveland Oil Delivery, Cleveland. Home Oil and Gasoline Delivery, in towns about Cleveland. Morgan (peddler), Oberlin, Ohio. New American Oil Company, Mansfield, Canton, and other Ohio places. Toledo Oil Works, Toledo, Ohio. Moore (peddler). New London, Ohio. 153 Operating in territory of the Waters-Pierce Oil Company and Standard Oil Company of Indiana: Republic Oil Company (a corporation), operating in Ohio, Indiana, Illinois, Michigan, Iowa, Missouri, Kansas, and Nebraska. International Oil Works, St. Louis, Mo. D. M. John (peddler), Joplin, Mo. Sutton Bros., Kansas City, Mo. Excelsior Oil Company, various Kansas points. The testimony also discloses the following additional bogus concerns doing business in various large cities (some of them with the one-gallon square can) , the operations of which were not gone into in detail: Eastern Oil and Gasoline Supply, Boston (King, 3/1508). Liberty Oil Co., Boston (King, 3/1511-12). Mehlen's Family Oil Co., New York (King, 3/1509). Funke Bros., Brooklyn (King, 3/1510). Mill and Stanley Works, Long Island City (Lines, 6/3206). Electric Light Oil Delivery, Philadelphia (Lines, 6/3206). Oakdale Oil Works, Philadelphia (Cutler, 2/851). Denlinger Bros., Pittsburg (Cutler, 2/849). Sunlight Oil and Gasoline Delivery, Cincinnati (Westcott, 2/722; Lines, 6/3206). White's Golden Lubricator Co., Cincinnati (Westcott, 2/717). Protection Oil Co., Cincinnati (Westcott, 2/718). C. P. Wagner Company (Westcott, 2/718). One-gallon peddling concern at South Chicago, 111., name not ascertained (Lines, 6/3206) . One-gallon peddling concern at New Orleans, La., name not ascertained (Lines, 6/3206). THE PATENT ONE GALLON SQUARE CAN. This can, which was used by many of the bogus companies in large cities throughout the country, is about 12 inches high by 4 inches square, having a patent nozzle at the top which is the only opening in the can, and it can only be filled and emptied through this nozzle. It is devised so that by 154 turning this nozzle to one side the opening becomes locked; and in order to pour out oil the nozzle must be turned back straight. These cans can only be filled by the use of a pat- ented machine contrived for the purpose. The control of the patent is held by the Standard Oil Company, so that no independent company can use it, and none but Standard companies ever have used the square can. The square can companies do business direct with the consumer, loaning the cans to the consumer with the understanding that they will be returned. (Crawmer, 6/3109; Lane, 3/1356-57; Hisgen, 4/1832-33.) CHARLES E. FARRELL, PEDDLER, AT ONEONTA, N. Y. Mr. Farrell had been a driver for the Standard Oil Com- pany at Cohoes, N. Y., for about thirteen years, and quit the service of that company some time in 1897. In March, 1899, Mr. Thomas H. Burke, who was then an agent for the Standard at Troy, N. Y., went to Mr. FarreU's house in the night and informed him that Mr. McMillan, who was then the agent for the Standard in Albany, wanted to see him; that he had some important work for him to do ; that it was a big job and one that must be kept a secret; and that nobody should know about it, not even Mr. FarreU's own family. On the following day Mr. Farrell went to Mr. McMillan's office in Albany, and there met him and a Mr. Mason, who was then the manager for the Standard at Bing- hamton, N. Y. They instructed Mr. Farrell on that occasion to go to Binghamton and meet Mr. Mason there, where he would receive more definite instructions, although at this interview the general duties which he was fexpected to per- form were outlined by Mr. Mason and Mr. McMillan. They told him that he must not tell anybody for whom he was working, but that he must say that he was working for him- self. They told him to tell the manager of the Tiona Oil Company, from whom he was instructed to buy his oil, that he had been working in a mill and that he was tired of the mill and wanted outside air, so he started in the oil business. They also told him that they had competition at Oneonta with the Tiona; that that company had the bulk of the trade and they wanted to get it; that they must do something to demorahze the trade and get the storekeepers fighting among 155 themselves; that the storekeepers would naturally think that the Tiona Oil Company was putting Farrell in there to retail oil to the consumers in competition with them. (Farrell^ 5/2433-34.) Very soon afterwards and following out the instructions he had received, Mr. Farrell went to Binghamton and there met Mr. Mason. Mr. Mason gave him a little over $200, and told him to go to the Tiona office and buy 25 barrels of oil and have it shipped to Worcester and from there to reship it to Oneonta. The reason that he was directed to ship the Tiona oil first to Worcester was that the Tiona Oil Company were not doing busiaess at Worcester, and they would be wUling to sell it to him for shipment to that place, while, if they knew that it was going to Oneonta, where they had nearly all of the trade, they would not have sold it to him. The money was given to Farrell in small bills because it was feared that if he had the money in large bills the manager of the Tiona Oil Company at Bing- hamton might be suspicious of him. The conversation at Binghamton between Mason and Farrell lasted about an hour. (Farrell, 5/2435.) Mason told FarreU to write his letters to a man by the name of George Craven, in Albany,, who was at the time in the employ of the Standard Oil Com- pany, and to send them to a certain post-office box, and that Mr. Craven would forward the letters to Mason. Mr. Mason also told him that his letters for Farrell would be forwarded to the same Mr. Craven at Albany. The stationery upon which the letters were written, by both Farrell and Mason, was not the Standard Oil Company's stationery, but the letters were written on plain paper, and most of those ad- dressed to Farrell were unsigned. Mr. FarreU followed out the instructions that were given to him, and finally got the oil to Oneonta. A wagon and harness were sent to him by- Mr. McMillan from Albany, and he purchased a horse at Oneonta under the direction of Mr. McMillan. He put this wagon on the streets, with a sign "Tiona oil" upon it, and went out to solicit the trade of the consumers, selling the Tiona oil at 8 cents a gallon. He was instructed by Mr. Mason at the Albany office and in the presence of Mr. Mc- Millan to sell the oil for 8 cents a gallon. Oil at that time was selling to the consumer in Oneonta for 10 cents a gallon; the wholesale price of it was 8 cents, and that was the price 156 which Mr. Farrell had paid the Tiona people for his oil. He told the consumers that he was seUing oil at this price as an inducement to the consumers to give him their trade; that he was starting in the business and wanted to build up a trade. He also loaned the consumers 5-gallon cans in which to keep the oil. The 25 barrels of oil which he pur- chased at Biaghamton were all sold on the streets of Oneonta for 8 cents a gallon. He was instructed by Mr. Mason that it did not matter how much oil he sold and that he was not very anxious to secure trade, but that he should just keep on going and if the consumers wanted it, all right, but if they did not, all right, that he should just keep on going. The result of this was that the merchants got to fighting among themselves and commenced cutting the price of oU, and finally sold it on the streets at 2 cents a gallon, and one of them even went so far as to put out a sign "Free oil; come and get your cans filled." After Mr. Farrell had sold out his oU, he notified Mr. Mason and the latter directed him to go to a little town (the name was not given) and purchase 15 barrels more of oil at 8 cents a gallon and have it shipped to Oneonta direct. These instructions were carried out. During the time that Mr. Farrell was at Oneonta, Mr. Messner, who was one of the managers for the Tiona Oil Company, came to him and told him that he was not on the level, and accused him of working for the Standard Oil Com- pany. This Mr. Farrell denied. Mr. Messner told him that he was making a great deal of trouble; that there was not any money in it for him, and offered to buy all of the oil that he had and pay him 10 cents a gallon for it, but Mr. Farrell had been instructed to pay no attention to anybody and to go on about his business, and he did so. The same Mr. Burke that first spoke to Mr. Farrell about this business came over to Oneonta once to see Farrell, and on one occa- sion gave him $50 to use in the business. Burke came over secretly; nobody knew who he was; he wore glasses, some- thing that he never wore before; and he told Mr. Farrell on that occasion that he had registered at the hotel in the name of Messner. It will be remembered that Messner was the manager of the Tiona Oil Company at Binghamton. Mr. FarreU had been in. Oneonta, at the time of this first visit from Burke, about three months. Later along Mr. Burke 157 came back to Oneonta and had another conversation with Farrell about the business. (Farrell, 5/2438.) After this last consignment of oil was sold, Farrell attempted to buy- no more Tiona oil, but the Standard Oil Company shipped him oU, and he took the Tiona oil sign off his wagon, and continued after that to sell the Standard oil at 8 cents a gallon. Mr. Farrell remained at Oneonta about six months, and the merchants were still fighting when he left there. He received a letter directing him to dispose of his property, and went back to Albany. There he met Mr. Mason and Mr. McMillan and they complimented him on what he had done, and fixed a day for settlement with him. Before Mr. Farrell went to Oneonta, Mr. Mason told him that he would write to him at that place, and that it would be mailed to Mr. Craven at Albany, and that Mr. Craven would forward it to him. While there he did receive from Mr. Mason a letter, which was introduced in evidence and marked "Petitioner's Exhibit 759" (10/1805), and which reads as follows (Farrell, 5/2440) : BiNGHAMTON, N. Y., April 17, 1899. Mr. Charles Farkell, Oneonta, N. Y. Dear Sir: I have your various letters, especially the one of the 14t]i. Let me say to you that our tank- wagon man, who came to see you, has no knowledge whatever of who you are, and I learn from him that he came on behalf of the merchants of the town, who are anxious to get rid of you. Our salesman who visits Oneonta knows nothing whatever of who you are, nor does anyone except those you saw in our ofBce, and under no circumstances whatever do we want anyone to get the slightest hint that we are in any way con- cerned in this matter. The Tiona people are denying that they have anything to do with it, and claiming that we started you there. Of course we are denying this, and you must be very cautious and not allow any- one to try to piunp you, to draw out any facts. Don't allow anyone to tell you that they come from the Stand- ard Oil Company, and try and learn anything from you. In regard to your saying that you think you "had better come up and see how the feeling is," I would say that I have been up there, and know just what the situation is. Of course I did not come near you, but so far the whole plan is working all right; but it must 158 be kept a strict secret. You are doing first-rate, and carrying out the plan excellently, and very much to my satisfaction. Of course I only warn you against parties who may come, pretending that they represent us; should any such parties come, don't listen to them, because when there is any change made I myself wiU personally see you, or have Mr. Burke do so; so until you see either Mr. Burke or myself pay no attention whatever to any- one's talk. As soon as you have read this, set a match to it and burn it up, so that there can be no possible chance of it being seen by anyone. Write me, through Mr. Craven, that you have received this letter and that you have de- stroyed it after reading the same. Don't tear it up, for some person might get hold of the pieces of paper, and put them together, but if you bum it with a match, then it is out of the way whoUy. Some of the merchants are inclined to beheve the Tiona's story, that we have started you there. Of course we have denied this emphatically, but some of them are suspicious, and are therefore watching very close to get hold of any facts they can. I tell you these things so as to put you on your guard to be doubly cautious. Yours, truly, Wm. Mason. Mr. Farrell had written Mr. Mason several letters whUe he was at Oneonta and sent them around through Mr. Craven, as directed, and received replies to these letters. The "tank- wagon man" referred to in the letter was a tank-wagon driver of the Standard Oil Company, who had come over to see Mr. Farrell and with whom FarreU had a talk about the business ; but this man did not know that Farrell was then in the service of the Standard Oil Company, and Farrell did not teU him that he was. The letter (Exhibit 759) fully corroborates the testimony of Mr. FarreU, and bears out what has been stated with reference to the Oneonta transaction. It is also appar- ent from this letter that Mr. William Mason fully realized and appreciated the moral turpitude of the enterprise in which he was engaged. This letter is most significant. It shows the methods which the Standard Oil Company were willing to and did adopt in order to drive out competition. We have here the manager of the BLnghamton division and also the manager of the Albany division (both of them important branches of 159 the Standard Oil Company) conspiring together with Farrell to send him into Oneonta, where the Standard had competi- tion, and there to do business ostensibly for himself as an independent, and with instructions to deceive the trade as to his identity and as to his purpose. The Standard Oil Com- pany was willing to sell oil for six months at a loss^ not in fair and honest competition, but with its identity hidden, for the purpose solely of creating a disturbance among the dealers there who were handling the Tiona oil, with the hope and design that ultimately the Standard would get this business. Exhibit 760-A (10/1807) is an unsigned letter from Mason to Farrell, and 760-B is the envelope which inclosed it. (Farrell, 5/2443.) It corroborates Farrell's testimony that Burke paid him a visit while he was at Oneonta, and directs Farrell as to what he shall say to the customers concerning the low price at which the merchants are selling oil, and tells him that oil win be shipped to him in barrels, freight prepaid, and directs him to let them set on the depot platform a day or so and then have them carted to his place. Mr. Mason closes his letter with the following significant language: Please treat this letter the same as the former one, and bum it up after you have read it. The Mr. Eggleston who is mentioned in this letter keeps a grocery store at Oneonta. Mr. Farrell received the cans which were mentioned in this letter. Exhibit 761-A is another unsigned letter from Mr. Mason (Farrell, 5/2444), and it simply states that the 5-gallon cans mentioned in the previous letter have been shipped to Mr. Farrell. Mr. Farrell replied to this letter and sent it through Mr. Craven, as directed. Exhibit 762-A was also a letter from Mr. Mason (Farrell, 5/2444) and is as follows: Mat 27, 1899. Mr. Chas. Farrell, Oneonta, N. Y. Dear Sir: I have yours of 25th, and am pleased to see that you secured the oil all right. I also note that Mr. Eggleston is endeavoring to learn where you came from. Of course that is a matter which you are sharp enough to keep to yourself. Doubtless Mr. Wilgus will be over to see you again, 160 - as soon as he finds that you have this oil on hand, and if anybody says anythiag to you about it, I would try and look wise and say that your oil was shipped in to you from Windsor, and if anybody questions you how you keep agoing with the low price the merchants are selling at, you say you have no trouble in getting 8 cents a gallon for your oil. Of course you have got to have some reason to give for apparently keeping agoing. Kindly let me hear from you as soon as convenient. Yours, truly. Exhibit 763-A (10/1810) is an unsigned letter from Mr. T. H. Burke, the person wh6 asked Mr. Farrell to call at Mr. McMillan's office and to receive instructions about an impor- tant matter, directing Mr. Farrell what to say when he is questioned concerning the change that he makes in the oil that he supplies his customers. Exhibit 764-A is a letter from Mr. Mason simply stating that six "more barrels of oil have been shipped to Farrell and that the situation at Oneonta was encouraging. Farrell re- ceived this oil from Albany in dark barrels which did not bear the Standard stamp. The color of the Standard barrels is green. (Farrell, 5/2446-47.) Exhibit 765-A is an unsigned letter from Mr. Mason read- ing as follows : JtiLY 26, 1899. Mr. Charles Fakrell, Oneonta, N. Y. Dear Sir: We have your letter addressed to Mr. Burke, telling about somebody from West Troy recog- nizing you. We do not understand from your letter whether this man is permanently located in Oneonta or whether he was just there on a short visit. At any rate we see nothing about this to be alarmed at, as it is a very easy matter for you, in case you can not get around speaking to him, if called upon for an explanation, teU- ing that you lost your job and took this up as the next best thing. You say in your letter that you don't think it best for you to peddle on Saturday. We don't understand why there should be any more trouble on Saturday than on any other day. However, if it is better for you to keep quiet on Saturday you had better do so. We would ad- vise your keeping off of the main street and away from the business portion of the town as much as possible, while not actually engaged in peddling oil, as the store- keepers are quick to notice the fact that you are not 161 trying very hard to sell oil because they see you around so much with your good clothes on. The only thing for you to do is to peg away and make as much show as possible. We think we see the end of this thing and the harder you work and the more you hit the Oneonta Grocery Company and H. H. WeUs's customers, the better the effect will be. We suppose you received the six barrels of oil all right, and that you took them away from the depot at once on their arrival. It would be wise to keep this oil inside your stable, out of sight. This letter was a reply to a letter which Mr. Farrell had written either to Mr. Mason or to Mr. Burke, in reference to working on Saturdays. The reason that Mr. Farrell wrote about this matter was that there seemed to be more people on the streets of Oneonta on Saturday than any other day, and Farrell had seen men on the streets on Saturdays that knew him, and for that reason he thought it was wise not to appear in public on Saturdays. The Oneonta Gro- cery Company which is mentioned in this letter was a large concern and it was selling Tiona oil. Mr. H. H. Wells kept a large store there and was also selling Tiona oil. (Farrell, 5/2447-48.) Exhibit 766-A was another letter from Mr. Mason and states that more oU had been shipped to Farrell and that things were working satisfactorily in Oneonta. (Farrell, 5/2448-49.) Exhibit 767-A is the last letter from Mr. Mason and is as foUows: (FarreU, 5/2449.) Septembbe 21, 1899. Mr. Charles Farrell, Oneonta, N. Y. Dear Sir: Upon receipt of this letter take your horse and wagon and draw aU your empty barrels to the freight depot and ship the same to James G. Newcomb, agent, National Storage Company, Communipaw, N. Y. Get a shipping receipt from the railroad company and mail the same to us through the Albany office, the way you are mailing your letters. Should anybody ask you how it is that you are sending oil barrels to the National Storage Company, just tell them that you had these barrels to selland you wrote to two or three parties and the National Storage Company gave you the best price. Then after you have done this you had better arrange to sell your horse and the harness at the best possible 72064— VOL 2—09 11 162 price you can get. You ought to be able to get at least within $20 of what you paid for the horse, and then when you have done this you had better go to Albany, as they want you there, and report to Mr. McMillan, but write us the day you expect to be in Albany so we can be there and meet you, and settle up the money matters. Be sure and have all your papers and everything with you, so that when we meet you in the Albany office we can have a voucher for everything. Now, as an explanation to the people why you are going to give up, you can say that the price tor oil has gone up so high that you can not buy any oil at a price which wiU allow you to sell it and get a living, and you see no chance of doing any business because the mer- chants are selling at such a low figure and people will buy of the stores rather than from you. You want to circulate this story carefully around. Tend to this without any delay, so that you can get back to Albany at the earliest possible moment. If you have any oil on hand write us how much, and if you have got two or three barrels on hand try and sell it by the barrel, if you can not do any better, to some board- ing house. Yours, truly, . Mr. Farrell received this letter in the morning, he sold the horse and wagon, shipped the barrels to the National Storage Company, took a receipt for them, left for Albany that night, and immediately had an interview with Mr. McMillan to settle up their business matters. Mr. McMillan gave him $25 and a two weeks' vacation, and he then returned to Cohoes, where he had formerly been driving a tank wagon for the Standard Oil Company, and resumed the same business. (Farrell, S/2449-51.) CHARLES E. FABBELL, PEDDLEB, AT TBOY, N. Y. About six months after Mr. Farrell returned from Oneonta to Albany, to wit, in the spring or early summer of 1900, the aame Mr. Burke told Mr. Farrell that Mr. McMillan, who was still the manager of the Standard at Albany, wanted to see him. Mr. Farrell went to Albany, and Mi. McMillan told him that there was a man by the name oi Starks at Troy buying oil from Dauchy, a wholesaler handUng independent oil. He directed Mr. Farrell to get a horse, and told him that Mr. McKenzie (the manager of the Troy Oil Works, a 163 bogus independent concern which the Standard was operating in Troy) would give him the wagon and cans the same as those used by Mr. Starks, the peddler who was buying inde- pendent oil. McMillan directed Farrell to follow Starks's wagon around for two weeks to get the addresses of Starks's customers. He also directed Farrell to go to Dauchy and buy some oil there ; to hire a barn, have an expressman draw the oil to the barn, get him to fill the cans, and go to Mr. Starks's trade and deliver oil to his trade for 8 cents a gallon. Mr. McMillan told Mr. Farrell that the price which he would have to pay Mr. Dauchy would be 8 cents a gallon. Farrell bought two lots of oil from Dauchy and sold it, but when he returned for the third lot Dauchy would not sell him any, and told him that he knew his game and that he could not have any more oil. By this time Farrell had gotten about half of Starks's trade away from him. TVhen he was unable to buy more oil of Dauchy he began buying it from the Troy Oil Works. Mr. Farrell was instructed by Mr. Burke to tell the people in Troy that he was an independent dealer, and he carried out these instructions. Farrell was in Troy about two months, and had secured a good portion of Starks's trade, and the result was that Starks quit buying independent oil and went back to buying his oil from the Standard. When this result had been accomplished by Mr. Farrell he was di- rected by Mr. McMillan to leave Troy. He sold his equip- ment and returned to Albany and settled up the business with Mr. McMillan. Starks is still peddhng oil in Troy but is buying it of the Standard. (Farrell, 5/2452-53.) Mr. Farrell remained in the service of the Standard Oil Company for eight years after he left Oneonta, as a tank- wagon driver, and he then quit the service of his own accord and has since been engaged in other business. He said that the letters which had been introduced in evidence were kept by him in a drawer at his home ever since he had received them; that he had not exactly expected to use them and did not know whether he would ever use them or not, but thought that he might probably have some use for them, which was the reason he had kept them. (Farrell, 5/2455-59.) Mr. W. D. Todd corroborated the testimony of Mr. Farrell in reference to the Oneonta and Troy situation. He said that his company, the Tiona Oil Company, had been fun- 164 Tiing a tank wagon at Oneonta and selling oil to the grocers; that a fellow came there and wanted to start a retail peddling wagon; purchased Tiona oil in barrels which was shipped to him; that he put a Tiona oil sign on his wagon the same as the real Tiona wagons carried; that he went to the con, sumers and sold oil at the same price that the Tiona Oil Com- pany was seUing to the grocers ; and that the grocers objected, and the manager of the Tiona Oil Company refused to sell this peddler any more oil. (Todd, 6/3220.) WiUiam D. McMillan, who was in charge of the Albany office, and who, with Mr. Mason, manager at Binghamton, instructed Mr. Farrell to go to Oneonta, was called to the witness stand by the defendants to testify as to marketing methods and conditions, both in the Albany and Boston dis- tricts. Mr. McMillan was unable to throw any light upon the subject upon which he testified. He could, however- have been interrogated by his counsel in reference to the Charles Farrell episode had they seen fit to do so. This was a subject with which he was thoroughly famiUar. The raid which Mr. Farrell made at Oneonta was planned and mapped out by Mr. McMillan and Mr. Mason. Mr. McMillan's silence upon this subject while on the witness stand is a confession of the truth of the testimony of Mr. FarreU. Had Mr. Far- rell's testimony not been true, Mr. McMiUan would have been asked to contradict it. And attention should here be called to the fact that not one of the Standard Oil Company agents or employees connected with the Farrell transactions has been called to the witness stand to contradict the testimony of Farrell. Mr. Mason, manager at Binghamton, and Mr. Burke, who acted as the intermediary between Mason, Mc- Millan, and Farrell, have both been discreetly left off from the witness stand. Not a word has been said, and absolutely no testimony, written or verbal, has been offered by the defend- ants to contradict, modify, or explain any part of FaireU's testimony. TBOY Olli WORKS. On his cross-examination (12/720), Mr. W. D. McMillan was asked whether or not the Troy Oil Works was known to the trade as an independent company, and he replied:. "That I don't know. I presume so; yes, sir. Yes, sir; I presume 165 they were." A little later he says he thinks the trade knew it all along, but this qualification will not stand, in the light of the other testimony in this case. Mr. L. T. Messner (20/48) says that the Troy Oil Works was held out in Troy as an independent company, and continued to be so held out until after he left Troy. Mr. Messner says that Mr. John McKen- zie, manager of the Troy Oil Works, and claiming to be the owner, came to his house one night in November, 1900, and begged of him to raise the price on oil, which at that time was 6J cents a gallon, because, McKenzie said, he could not live on a 6i-cent price. This is significant on the question of the conflict of testimony between McMillan and Messnet as to the prevailing price in Troy in 1900 (see pages 49-54, ante) , and it shows what we have already claimed, that the Troy Oil Works were selling at that time at 6^ cents; and this shows that Messner, in speaking of prices at Troy during that period, referred to the Troy Oil Works as the Standard. Mr. McKenzie also said in that same conversation that he had to buy his oil and sell it again; that the price of oil de^ livered in Troy at that time was 6 cents ; he asked Mr. Mess-' ner how a man could put out oil for half a cent a gallon; and said he was obliged to buy some of his oil of the Stand- ard Oil Company and to compete with the Standard Oil Company. Mr. Messner testifies further that McKenzie sought the trade of the Tiona Oil Company, not the trade of the Standard (20/49) ; that the trade, or at least a part of it, believed the Troy Oil Works to be an independent concern; that McKenzie and his drivers so represented it; that McKenzie pretended to be the owner of the Troy Oil Works; and that some time after Messner left Troy, which was January 1, 1906, the Standard's name was put upon the wagons of the Troy Oil Works. Mr. McKenzie is the same McKenzie that Charles E. Far- rell mentions in his testimony, in which he says (5/2452^53) that when he was sent to Troy to operate against an inde- pendent peddler by the name of Starks he was directed by Mr. McMillan to get his cans and wagon from Mr. McKen- zie of the Troy Oil Works, which he did. In the spring pre- ceding the time when Mr. McKenzie was trying to impose upon Messner by telling him his pretended troubles, he was operating with McMillan and Farrell against the peddler 166 Starks, who was handling independent oil in Troy. This strengthens and gives clearness to what Messner says took place when his company entered Troy, and it shows that the Standard Oil Company was using the Troy Oil Works there to kill competition. PARAGON OIL COMPANY, TROY, N. Y. Mr. W. T. Messner testified (20/51-52) that the Paragon Oil Company was a bogus independent concern operating under the management of James Smith in Troy, both before and during the time the Tiona OU Company, an independent company, was doing business in Troy that the Paragon got its oil from the Standard, and retailed to the consumer from house to house; that Smith solicited the trade in the neigh- borhood of the stores that were buying oil from the Tiona Oil Company; that he does not know whether he solicited other trade or not; and that Smith was still there when Messner left Troy. Mr. Messner does not claim that Smith cut the price, but he says that they loaned a very fine 5-gallon can to the consumer, which the storekeepers handling the Tiona oil could not afford to do; that Mr. Smith claimed that he owned the business; that he did a large business, and it af- fected the trade of the Tiona. Mr. Messner says (20/53-54) that the Paragon Oil Company kept its horses in the Stand- ard Oil Company's barn in Green Island, and its equipment in the Standard's yard, for the last three years that he was in Troy; and that prior thereto Mr. Smith had a place on North Adams street in Troy. JENNY MANTJPACTXTRING COMPANY, BOSTON, MASS. Mr. Thomas L. Hisgen testified in substance as follows: There have been bogus independent companies in our terri- tory (New York and Massachusetts), companies that were controlled by the Standard, but were pretending to be inde- pendent. One of these was the Jenny Manufacturing Com- pany, of Boston. The Jenny Manufacturing Company appeared as an inde- pendent company before the committee of the Massachusetts legislature in opposition to an anti-discrimination bill which was under consideration by that body. That company was accused of being owned by the Standard and this was denied. 167 Later, upon investigation by the committee, it was learned that the Standard Oil Company owned all of the stock of the Jenny Manufacturing Company, and this representative was called upon to explain his testimony, but he disappeared. This company held itself out to be independent, and competed with the Hisgen Brothers. (T. L. Hisgen, 4/181 1-12.) HOTJSEHOLB SUPPLY COMPANY, HOLYOKE AND SPBINO- FIELB, MASS. The one-gallon square can was used in the territory around Holyoke and Springfield Mass., by a concern known as the "Household Supply Company," which held itself out to the trade as being independent. The name of the Stand- ard Oil Company did not appear upon the cans, but the name "Household Supply Company" was used, until a law was passed in Massachusetts requiring the name of the real owner to be placed on receptacles of that kind. The Standard Oil Company at first had denied having any connection with this company or the use of this can, but after this law went into effect the Standard Oil Company's name appeared upon the cans. (Hisgen, 4/1832-33.) COBDNEB, PEDDLEB, AT SPBINGPIELD, MASS. The Consumers Oil Company, owned by Slater and Cord- ner, as partners, had been doing a retail business in Spring- field, purchasing its oil principally from the Standard, but some from the Hisgen Bros. In about 1900 Slater bought out Cordner's interest, giving Cordner a mortgage on the property; and then Slater sold the business to Hisgen Bros. (Hisgen, 4/1803-4.) Mr. George Tuthill, agent of the Standard in charge of that district, called on Mr. Hisgen and told him that he had instructions from 26 Broadway to say to him that the Stand- ard was not going to lose a gallon of oil in that town, that it intended to maintain its gallonage; that it would do so if it had to sell oil below cost, and would drive the Hisgens out of business, and that he thought the Hisgens were very fooUsh to go into the business. (Hisgen, 4/1806.) The Hisgens continued to run the business of the Con- sumers Oil Company, and immediately Mr. Cordner, acting for the Standard, went into business again; went on the streets with wagons painted the same color as the Consumers 168 Oil Company; hired the entire force of the old Consumers Oil Company away from the Hisgens; obtained lists of their cus- tomers, followed up the routes, and filled the cans of the cus- tomers of Hisgen Bros., who did not know that any change in ownership had taken place and supposed they were taking oil from the Consumers Oil Company. Cordner was connected with the Standard Oil Company. He bought his oil from that company, and was still doing so at the time of the taking of this testimony. He had no means with which to go in the business and buy horses and equipment. (Hisgen, 4/1806-7.) Cordner disposed of the mortgage on the property of the Con- sumers Oil Company, which Slater had given him, to Mr. Kimball, who was also connected with the Standard. Kimball was inspector of oils at Springfield, and at the same time was engaged in gathering up empty barrels and selling them to the Standard Oil Company. At this time the Hisgens were driving the wagons upon which this mortgage had been given, not only in the State of Massachusetts but also in the State of Con- necticut in the regular course of their business delivering oil to their consumers. (Hisgen, 1807-) Kimball threatened to prevent the Hisgens from doing this, claiming that they had no right to take mortgaged property out of the State. Hisgen offered to pay up this mortgage and was very anxious to do so, because while it remained upon the property it gave Kimball the right to keep a supervision over it. Kimball at first agreed to take the money but later along refused. The points outside of the State of Massachusetts to which the Hisgens were driving their teams were competitive points; the Standard Oil Company was also selling oil in those places. Kimball inspected the oil of Hisgen Brothers and took it to the Standard Oil Company's office to make the test. After doing so he came back and condemned it and went to the dealers who were purchasing and told them that they were liable to prosecution for handling that oil, and he also forbade the Hisgen Brothers to sell this oil. (Hisgen, 1808.) Mr. Thomas L. Hisgen laid the matter before the mayor of the city, in the presence of Mr. Kimball, and the mayor directed Mr. Kimball to discontinue these practices, and told him that if there was anything wrong with the oil to bring it to him, the mayor, and he would have it tested. Mr. Hisgen told the mayor in the presence of Mr. Kimball that he was 169 willing to have his oil tested by anyone outside of the Stand- ard Oil Company, and that Mr. Kimball had taken their oil to the office of the Standard Oil Company and there made the test. At that same meeting the Hisgens presented to the mayor, in Mr. Kimball's presence, the certificate of the state inspector of oils of Pennsylvania, showing that the oil that they were selling came fully up to the test. (Hisgen, 4/1809.) At about this time Cordner bought the outfit of a peddler in Springfield by the name of Carpenter. Carpenter was indebted at the time to the Hisgens, from whom he had pur- chased oil, and while Carpenter and Cordner were closing up the deal, Mr. Hisgen went to the lawyer's office where the transfer was taking place for the purpose of collecting what was due him. He found in this office Mr. Kimball and the lawyer for the Standard Oil Company from New York par- ticipating in the negotiations. Mr. Hisgen did not get the money from Mr. Carpenter, but Mr. Cordner gave him a due- bill on that day and later along paid it. Kimball at the time of the taking of this testimony was still selling barrels in Springfield to the Standard Oil Com- pany. (4/1810-11.) These facts and circumstances are, we think, sufficient proof that both Cordner and Kimball were connected with the Standard Oil Company. Mr. Tuthill, the manager of the Springfield station, was called by the defendants for the purpose of contradicting portions of the testimony of Thomas L. Hisgen. He denied that Cordner was in any way connected with the Standard Oil Company, but he did not deny the testimony of Mr. Hisgen, who said that Cordner used the square can, which is conclusive proof that he was in the service of the Standard Oil Company. And Tuthill does not deny that Cordner assigned to Kimball the mortgage that Slater had given him on the Consumers' OU Company property and subject to which the Hisgens purchased that property; nor is it denied that Kimball, while oil inspector at Springfield, took the Hisgen's oil to the Standard Oil Company in that city and there analyzed it and condemned it; nor is it denied that Kimball vi^as called before the mayor for this conduct, and was there accused by Hisgen of inspecting the oil in 170 the office of the Standard, and of unfairly condemning it; nor is it denied that the mayor warned Kimball at that time to cease that kind of practice against the Hisgens, and told him that thereafter if he had any oil of the Hisgens to inspect he should bring it to his (the mayor's) office and there make the inspection in his presence. Mr. Tutlull admits that Cordner got all of his oil from the Standard, and he does not deny that Cordner followed up the route of the Hisgen Brothers and filled the cans of consumers who supposed they were getting their oil from the Hisgens. For some reason best known to the defendants in this case they have not seen fit to call Mr. Cordner or Mr. Kimball to the witness stand. Mr. Tuthill was asked by counsel for the defendants whether he knew of any Standard Oil New York lawyer who participated in the Slater-Carpenter deal, about which Mr. Hisgen testffied on page 1810, and he at first answered that he did not know of any, finally stating that no lawyer repre- senting the Standard Oil Company was there. Mr. Tuthill was not present et the meeting and therefore is not in a position to state who was present. His counsel adroitly omitted to ask him whether he was present at that meeting. Mr. Hisgen, in testifying concerning that meeting, gives the names of those who were present, and does not include Mr. Tuthill. He could truthfully say that he did not know any New York lawyer was present, but he could not truthfully say that no New York laAvyer was present at that meeting. He does not in his testimony state, nor does any other wit- ness, that he had anything to do with the transaction about which Mr. Hisgen testified. Had he participated in that affair he certainly would have said so while on the stand. If the defendants were desirous of showing he was present and what took place, they should have called some person who attended that meeting and participated in the trans- action. Mr. Tuthill also says that Mr. Kimball was not connected with the Standard Oil Company. What he means by the word "connected" is not defined; but that he was working in the interest of the Standard is, we think, firmly established by the testimony. 171 PARAGON OIL COMPAMTT. This Paragon Oil Company was a bogus independent peddling outfit, managed by C. W. Bender, agent of the Standard, operated at Seaford, Del., Havre de Grace, New Windsor, Tawneytown, and Union Bridge, Md., during 1899 and 1900. The Paragon was not a corporation; it was simply a name selected by Bender xmder which to conduct the business. It held itself out to the trade to be inde- pendent of the Standard, and it cut the prices wherever it operated below the Standard's prices and below the prices of the other companies operating in the same places. The account of the business of the Paragon was kept on the books of the Standard Oil Company in the name of C. W. Bender, agent. (Mahle, 5/2356-57; Metzel, 5/2411-12.) The Paragon Oil Company was sent to Seaford, Del., to make a fight upon the Seaford Oil Company, which was then managed by C. G. Purse and Artie Purse. The Purses claimed that they were running this company for the Crew- Levick Company, of Philadelphia, and it received its oil from that company. The Paragon was sent to Havre de Grace, Md., to clab a peddler there named Barnes, who was the agent of the Eed "C" Oil Company, into buying of the Standard. The Paragon, in 1900, appeared in New Windsor, Taw- neytown, and Union Bridge under the management of Mr. C. G. Purse. The fight in these towns was made upon the Red "C" Company that was delivering in barrels (5/2412.) Soon after the Seaford Oil Company commenced business at Seaford the Paragon appeared upon the scene. At this time C. G. Purse and Artie Purse were managing the Seaford Oil Company for the Crew-Levick Company, competing with the Standard for the trade at Seaford. C. G. Purse claims that the Paragon was managed and owned by a Mr. Horn, of Baltimore (13/1219) . In a very short time after the appear- ance of the Paragon at Seaford the scenes commenced to shift and change, and C. G. Purse became its manager and conducted the business both at Seaford and Havre de Grace. Just what relations C. G. Purse bore to the Seaford Oil Com- pany while he was managing the Paragon Oil Company is not disclosed by the evidence; but it does appear from the 172 evidence that his brother, J^rtie Purse, continued with the Sea- ford as long as it did business under that name. After C. G. Purse had managed the Paragon for a time at Seaford, he claims to have purchased it of Mr. Horn and to have imme- diately turned the Seaford branch of the business over to his brother, Artie Purse; and at about the same time he claims to have purchased the Seaford Oil Company of the Crew- Levick Company, and to have also turned that over to his brother, Artie Purse; that Artie Purse consolidated the busi- ness, dropped the names Paragon Oil Company and Seaford Oil Company, and ran the business under his own name. By these various shifts and devices, for the nature of which we must rely upon the testimony of C. G. Purse and Artie Purse, the Crew-Levick competition in Seaford was entirely elimi- nated and the Standard Oil Company, through the Purses, was in control of the situation. At the same time that the Paragon was operating in Sea- ford against the Seaford Oil Company it was also fighting the peddler Barnes at Havre de Grace, but not so successfully. Barnes was a resident of that place and was well known to the people and to the trade, and he managed to stay in busi- ness. C. G. Purse said that in 1900 he sold the Havre de Grace branch of the Paragon's business to Mr. Ivin, who in turn sold it to Mr. De Joy, and the latter has conducted the business ever since, buying oil of the Standard. W. J. Metzel testified (5/2412) that the Paragon disap- peared from Havre de Grace and went to New Windsor, Taney town, and Union Bridge, Md., and peddled oil from house to house, the same as it had done in Havre de Grace; that it was in charge of Mr. Purse (not stating to which Purse he referred); that it received its oil from the Standard Oil Company, and attacked the customers and the trade of the Red "C" Company only; and that it cut the prices there. C. G. Purse testified (13/1212) on his direct examination that he believes this testimony of Metzel to be not true, and that none of the family except himself sold any oil in any of these towns. He then gave the following testimony : Q. Did you yourself ever peddle oil in New Windsor, Taneytown, or Union Bridge in the same way that you did at Havre de Grace? — -A. I did not; no, sir; but I sold at Union Bridge, but not in the same way that the Paragon did at Havre de Grace. 173 He said that he was representing J. H. Repp & Co., who were hardware dealers and who handled groceries and oil, and denied that he made any cut in the prices. He said that Repp was selling the Aladdin brand of oil at 12 cents a gallon; that the Red "C" had one brand which it marketed at 12 cents a gallon; that the Red "C" charged 14 and 15 cents for its better grades; and that he solicited from house to house, irrespective of any trade. On his cross-examination (13/1220) he said that he was with J. H. Repp & Co. but a short time in 1900; that in July, August, or September of that year he peddled oil at Union Bridge and New Windsor; that he did not peddle oil in Tawneytown, but that he solicited, trade there; that J. H. Repp & Co., whom he represented, obtained their oil from the Standard Oil Company. There is no contradiction in the testimony between Mr. Metzel and Mr. Purse, except that Purse claims to have been repre- senting J. H. Repp & Co. at these towns instead of the Paragon Oil Company. As the Standard furnished Repp & Co. oil, the contradiction which he seeks to make is a distinction without a difference. Metzel, knowing that he was managing the Paragon at Havre de Grace, naturally reached the conclusion that he was operating under that name at these places. Purse admits that he was selling his Aladdin at a price below that for which Mr. Metzel was sell- ing his White " C " oil. If Mr. Purse had not cut the price in these towns and had not sought the trade of the Red "C" Company's customers, there would have been no occasion for importing him into that field. Both C. G. Purse and Artie Purse (13/1220, 1295) said that they did not know at the time they were connected with the Paragon that it was owned and controlled by the Stand- ard. It seems incredible that they could have participated as they did in what transpired at Seaford, Havre de Grace, and elsewhere without knowing that it was a Standard con- cern. They knew that the Paragon converted the business of the Crew-Levick Company at Seaford into Standard chan- nels. They knew that the fight at Havre de Grace was made against the Red "C" Company, and that they dis- posed of the Paragon there to parties who purchased their oil from the Standard, and in that way all of the trade which 174 the Paragon acquired at Havre de Grace was converted into Standard channels. C. G. Purse testified that Mr. Horn found him on the streets of Seaford and engaged him to take charge of the Paragon; that he did not know who Horn was, nor where he lived in Baltimore, nor what his business was; that he did not know what company was furnishing the oil; and that all he did know about it was that the oil came to him in barrels without any marks upon them to indicate from whom they came. In this he corroborates Mr. Mahle, who said that the oil was shipped from Baltimore by the Standard to the Paragon in blank head barrels. C. G. Purse said that he reported his business, remitted money, and wrote letters to Horn directed to a post-office box in Baltimore, without the name of any person or com- pany appearing upon the envelopes (13/1220) . He was cross- examined at considerable length, and displayed a marvelous lack of knowledge concerning the mysterious Mr. Horn. The bogus companies which the Standard put into the field always cut the prices; they were started principally for that purpose; they were the price-cutting machines of the Stand- ard in territory where the Standard itself did not deem it advisable to make the cut. What reason can be given for sending the Paragon to Seaford and Havre de Grace un- less it was to cut the prices? The Standard was selling in its own name in both of these places. The Crew-Levick Company was selling in Seaford through the Seaford Oil Company; the Red "C" was seUing in Havre de Grace through the peddler Barnes; and the sole purpose of send- ing the Paragon into these towns was to secure the trade that was using the oil of these two companies. In response to leading and suggestive questions put to them, C. G. Purse and Artie Purse tried to create the im- pression by their testimony that the Crew-Levick Company was running the Seaford Oil Company as a bogus concern. According to their testimony, when construed most strongly in favor of what they wish to imply, it can not be said that the Seaford Oil Company had any of the essential elements or characteristics of a bogus concern. They do not pretend that there was any concealment whatever of the fact that 175 the Crew-Levick Company owned the Seaford and that the Seaford obtained its oil from that company. It never cut the prices or used any of the methods ordinarily used by the bogus concerns. There was not a single false statement made by them or by anybody representing the Crew-Levick Company concerning this company. What earthly reason was there for the running of a bogus concern by the Crew- Levick Company? A bogus concern is only useful when it can make the trade believe it is an independent company. The Crew-Levick Company was then and is now a real independent company. BOaxrS COMPANIES 2IANAGEB BY L. BLAUSTEIN. The next four bogus companies, to wit, the Eureka Oil Company, operating at Norfolk, Va., and in neighboring North Carolina towns; the Argand Refining Company, at Richmond; the Southern Oil Company, at Richmond, Win- chester, and other points in Virginia; and the Eagle Oil Works, at Baltimore, were imder the management of L. Blaustein. His management of these companies covered a period from 1898 to 1906. The only witness called by the defendants with reference to these companies was Mr. Blaustein. It is difficult to give the court an idea of Blaustein's character and his utter unreliability without a very lengthy review of his testimony, and this we have not taken the space to give. Blaustein said that (15/2430) he is a Hebrew, bom in Prussia; that he came to thiscotmtry when 19 years of age; that his native tongue is German. For the purpose of parading his accomplishments, and to give color to his subsequent remarkable stories about the way he obtained business, counsel took imusual pains to show that he was the master of seven languages, and that he spoke English poorer, perhaps, than any of the others. Blaustein said (15/2431-33) that his relations with the Standard commenced in 1895, selling to the trade in Balti- more on a commission of 1 cent a gallon, which arrange- ment continued about two years, when his commissions were cut down to three-fourths of a cent a gallon, and then to one-half cent a gallon; that when the last cut was made he was in doubt about how long he would receive even that much commission, and abruptly quit the Standard; that he 176 attempted to get employment with, the Red "C" Oil Com- pany, but that Mr. Fehsenfeld offered him no inducements; that he then went back to the Standard and entered the employ of that company on a salary of $150 a month, can- vassing the same trade which he had theretofore sold on a commission basis. Mr. Fehsenfeld said (15/2314) that when Blaustein came to him he cared to have very little to say to him, because he was suspicious of Blaustein' s motives, and offered him only the wages of a tank-wagon driver. Mr. Blaustein' s testimony covers such a wide field, and is, in our opinion, so erratic, sensational, and imtrustworthy that it is very difficult to extract that which is of real value from that which is of no value. He tried to explain the reason why these bogus companies were started under his management and why they took assimaed names. Hia testimony in which he attempted to give reasons is so fan- tastic and so absurd that it might well be dismissed from consideration as ridiculous. Many of his explanations are grotesque in the extreme, and serve only to illustrate his recklessness. A reading of his testimony wiU be sufficient to condemn it as unworthy of serious consideration. ETTBEKA OIL COMPANY. The Eureka Oil Company was a bogus independent con- cern operated by L. Blaustein. It first commenced to operate in 1897 or 1898 at Portsmouth, Newport News, and Norfolk, into which places there had been shipments of independent oil by the Seneca, Red "C," and National Oil companies and the Southern Oil and Supply Company. The Eureka's operations were afterwards extended to Suffolk, Va., Dur- ham, Winston, Burlington, and Greensboro, N. C. (Far- quharson, 5/2311; Mahle, 5/2360.) It obtained its oil from the Standard Oil Company, and its account on the books of the Standard was kept in the name of "L. Blaustein, agent." The effort of the Eureka was to convert the business of the independents into Standard Oil channels, and it was suc- cessful in converting a large portion of this business. Blau- stein reported all of his business to Mr. Frank Powell and Mr. C. H. Mahle, of the Baltimore office of the Standard. The oil was shipped to Blaustein in what were called blank- head barrels, that is, barrels upon which there were no marks 177 to indicate where the shipment originated or whose product it was. The billing for the Eureka was done by Mr. Blau- stein in the Baltimore office, in which he was sometimes assisted by Mr. Mahle. (Mahle, 5/2360.) Blaustein cut the prices; took orders for deferred deliveries; allowed one gallon on each barrel outage; and gave commissions to dealers; as a result of which he secured a large portion of the business. The Eureka Oil Company was not a corporation or associa- tion of any kind, but was simply a name adopted by Blau- stein. He managed the concern during the entire time of its existence under the direction of Mr. Powell, of the Baltimore office of the Standard, and he also, in Mr. Powell's absence, received advices from Mr. Mahle. (Mahle, 5/2362.) The Eureka was held out by Blaustein to the trade to be inde- pendent of the Standard, and he was directed so to do by the Baltimore office. (Farquharson, 5/2211.) Just prior to the time Blaustein began doing business at Norfolk under the name of the Eureka Oil Company, a ped- dler there named Fivel was doing a business of considerable importance, and buying partly from the Standard. The agent at Norfolk, Mr. Farquharson, and Mr. Powell, in charge of the competitive department at Baltimore, together took up the matter of securing Fivel's trade, Mr. Powell saying that it was important not to let even their own customers get too large, because they were apt to think too much of them- selves and drift away from the Standard. (Farquharson, 5/2211.) The Standard had made an effort to buy Fivel out through the Norfolk office. Failing in this, Blaustein was sent to Norfolk to operate in the name of the Eureka Oil Company, seeking particularly the trade of Fivel, and with instructions not to visit the trade of the Standard Oil Com- pany. When Blaustein went to Norfolk he called upon Mr. Farquharson, agent of the Standard at that place, -for advice as to how he could get his oil into Norfolk, and Mr. Farquhar- son gave him to understand that Mr. Powell had directed that all his communications should be with the Baltimore office direct. Farquharson later complained to the Balti- more office because it had gotten beyond mere suspicion that Blaustein was working for the Standard Oil Company, and it was having a damaging effect in Farquharson's office. 72064— VOL 2—09 ^12 178 (Farquharson, 5/2211-12.) Blaustein failed to accomplish his designs on Fivel's trade, and he then made an offer for his business and bought him out. Mr. Blaustein testified that in the summer or fall of 1897 Mr. Powell told him that they were having some trouble with their agents and that they were losing business in Nor- folk and Portsmouth, and directed Blaustein to go there, investigate conditions, and report (15/2434). Blaustein said that the Standard's tank wagon went to Portsmouth, which was a suburb of Norfolk, but once a week (15/2435); that independents were selling oil to the merchants in Portsmouth in barrels for one-half cent a gallon under the Standard's tank-wagon price; that the people were dissatisfied with the Standard because that company employed two colored drivers on its tank wagons (15/2508) ; that the people were also dissatisfied because the 20-galIon can system was in force, that is, that deliveries from the tank wagons would not be made in less quantities than 20 gallons; and also that there was a jobber by the name of Fivel who had a little tank wagon in Norfolk, who was doing a considerable business because of these conditions (15/2436-7), and who was buying some oil of the Seneca Oil Works, which was an independent company (15/2501-2). Blaustein testified that while he was investigating the situation he did not represent himself to be a representative of the Standard; that he said nothing about what company he represented; that he did not try to sell oil; that he had a general talk with the dealers; that he did not know there was such a man as Fivel before he went to Norfolk; that Fivel learned that he was talking with his customers and was going to start selling oil in Norfolk; and that on the evening that he arrived at Norfolk Fivel came to see him at the hotel and wanted to sell out his business. Blaustein testified (15/2436-7) that he returned to Balti- more and reported to Powell the conditions as he found them in Norfolk and Portsmouth, and also that Fivel wanted to sell his business; that Fivel at that time had a tank wagon, an old horse, a few dozen 5-gallon cans, and the good will of the business; that about a week later Powell sent him back to Norfolk to buy Fivel's business; that he gave him a letter of introduction to Mr. Farquharson, and instructed Mr. 179 Farquharson to put up $400 with some reliable merchant, so that Fivel would live up to his agreement to go on the route with Blaustein for thirty days ; that Fivel told him it would be a good idea for his company to run under a different name ; that the people down there were so prejudiced against the Stand- ard because it had employed colored people on the wagons that the merchants would pay more for oil to another com- pany than they would to the Standard. Blaustein said : I thought at that time that it would be a good idea, and while I was passing by an office or warehouse, I have noticed a sign by the name of "Eureka Harness Oil," so I thought at that time that Eureka would be a pretty good name for this company. Blaustein said he then went back to Baltimore and told Powell about Fivel's suggestion of using a different name from the Standard, and that Powell directed him to go ahead and sell under the name of the "Eureka Oil Company;" but Blaustein adds, "Everybody knew it was the Standard Oil Company." On his cross-examination (15/2499) Mr. Blaustein said that Mr. Powell knew that Mr. Farquharson had colored drivers; that Powell had many times directed Farquharson to dis- charge those colored drivers; that Farquharson would not do it; and that the company told Mr. Farquharson that it was not sufficient to send the tank wagon to Portsmouth once a week (15/2503), but that Farquharson could not be made to change his methods of doing business. Mr. Farquharson was the manager of the Norfolk station, which is an important place. He had been connected with the Standard Oil Company and its predecessor since 1874 (5/2203), and it is hard to believe that the Standard sent a man of Blaustein's type into Norfolk to instruct Mr. Farqu- harson how to conduct the business in that city. Mr. Blau- stein was asked why Mr. Powell did not instruct Mr. Farqu- harson to dispense with the colored drivers and the 20-gaIlon system, and if the whole situation could not have been righted by such instructions, and Blaustein said that Mr. Powell would have to answer for that. He was asked whether it would have been necessary for him to go to Norfolk if Powell had directed Farquharson to correct the matters there about which complaint was made, and he replied, 180 "After I was there he told him, he corrected him" (15/2500), If Mr. Powell had told him and corrected him before he sent Blaustein down there, if Blaustein's theory is correct, it would not have been necessary for Blaustein to hare gone to Norfolk. He follows this up by saying that Mr. Powell sent him over there to learn the true conditions and to prove to Farquharson that the colored drivers were a failure. Was it necessary to send Blaustein there for that purpose? Is Blaustein truthful when he makes that statement ? Accord- ing to BlausteiQ, soon after he went there conditions were corrected, which, if he is to be believed, dispensed with the further necessity of the Eureka Oil Company in Norfolk. At this time Mr. Blaustein was receiving $150 a month, and it was no little expense to equip and run this company, and these expenses were not incurred for the purpose of in- structing Mr. Farquharson how to market oil successfully. Mr. Blaustein was asked if it sounded r3asonabl8 that the Standard Oil Company should send him to Norfolk for the reasons which he had given, and he repHed, "To show Mr. Farquharson that Mr. Powell may have told him to do away with the colored drivers, which he would not do. Mr. Powell sent me over there to learn the true, condition and prove it to him that these colored drivers have been a failure to the company." When his attention was called to the fact that it was some- what expensive to send him there with the Eureka, he said, "The Standard Oil Company sent me there to show Farqu- harson how to market oil." He was asked (15/2501) whether it was not Fivel rather than Farquharson that the Standard Oil Company wanted to educate, and he rephed, "I don't know that." Mr. Blaustein also said that he learned (15/2502) that the company was dissatisfied with Mr. Farqu- harson's services; that Mr. Farquharson had been there a long while, and, as a rule, they gave a man plenty of chance, and that he beheved he was sent there to wake up Farqu- harson, and to give him a show or to let him quit; that he would show Farquharson that he (Farquharson) could not market oil, and then Farquharson would quit, and that would not be discharging him. Mr. Blaustein denied that he canvassed only Fivel's trade in Norfolk before he bought out his business, and said that he 181 did not sell any oil in Norfolk, and did not operate under the name of the Eureka there until after he purchased Fivel's busi- ness (15/2458). Mr. Blaustein is contradicted by both Mr. Farquharson and Mr. Mahle. Farquharson said (5/2210-11) that Fivel was getting quite a trade there; that the matter was up for discussion between him and Mr. Powell; that he had tried to buy out Fivel, but was not successful; that the Standard was seUing him oil, and he was growing to be quite a customer; that then they sent Blaustein to head him off by seeking the trade that Fivel was getting; that Fivel and Blau- stein were of the same religious denomination; that Blaustein was not able to get his trade away from him; and that finally he was bought out. He said that before Blaustein went to Norfolk it was all talked over about his going there, and the purpose for which he was going; that Blaustein only visited Fivel's trade, and that he was instructed not to visit the Standard's trade except when a grocer or merchant stopped him. C. H. Mahle corroborated Mr. Farquharson. The tes- timony of both of these witnesses has already been discussed. Mr. Blaustein said (15/2438) that he employed a driver at Norfolk and told him to get all the business he could; that about 50 per cent of the customers that he got were Hebrews ; that he did not confine his canvass to any partic- ular set of customers; that he went to all the trade and told his driver to see everybody; and that this included dealers who had previously been customers of the Standard. This testimony is not reasonable, and is wholly inconsistent with the situation that existed at Norfolk. The only compe- tition that the Standard had in Norfolk was the competition of Fivel. Wbile the Eureka was operating against Fivel, there could be no motive whatever for any attempt to get the customers that were then patronizing the Standard. All that the Eureka could do after that would be to hold the trade that Fivel had built up and turn it into Standard chan- nels, rather than to take the trade which the Standard already had and turn it into Eureka channels. What reason can b^ given why the Standard should go to the expense of running the Eiu-eka in Norfolk for the sake of getting trade which it already enjoyed? Mr. Blaustein was questioned on his cross-examinatioti about running the business in Norfolk under the name of 182 Eureka. He stated that it was the suggestion of Fivel that the company should have a name other than the Standard, on account of the prejudice against that company because of the colored drivers and the 20-gallon system. He also said (15/2510) that Fivel did not want the merchants in Norfolk to know that he had sold his business to the Standard; that he did not want them to know the true story, that he did not get much for it; that he did not want them to know whether he might not have received a great deal of money for it ; and that therefore he suggested that it would help him along for the company to have the name Eureka. He also said (15/2508) that owing to the prejudice against the Stand- ard he could not sell any oil under that name, and there would be plenty of room perhaps for a competitor to come in and market oil. He said several times during his examination that everybody knew that the Eureka was owned by the Standard, and he was asked if that were the case how he expected to fool the people by taking the name Eureka, and he repHed that he could not tell. The testimony of Mr. Mahle and Mr. Farquharson shows the real reason for sending Blaustein*to Norfolk and the real reason for transacting business there under the name of Eureka. Both of them testified that the Eureka was held out to be an independent company. Blaustein does not deny it, except by stating that everybody knew it belonged to the Standard. Blaustein is contradicted by these witnesses when he states he bought Fivel out before he did any busi- ness in Norfolk. They both say that he was sent there to make a fight on Fivel, and that he cut the prices and finally succeeded in buying Fivel's business. Mr. Farquharson testified (5/2212-15) that later Blaustein went to Durham, N. C, and operated undsr the nams of the Eureka Oil Company, holding himself out to be independent. While there, the Standard Oil Company shipped from Balti- more to Blaustein certain stencils to be used for marking the heads of his barrels, and through a mistake these stencils were addressed and sent to the agent of the Standard Oil Company at Durham. In this way it leaked out at Durham that the Eureka was a part of the Standard, although an effort had been made to keep it secret from the company's own regular agent there. Another instance cited to show 183 that Blaustein persistently represented himself to be inde- pendent ol the Standard was at a time when Mr. Powell left a letter for Blaustein at the Carolina Hotel in Durham; when the letter was handed to Blaustein he created a scene in the hotel by denouncing Powell, claiming that Powell was follow- ing him up, and calling him harsh names, all of which was done on Blaustein's part for the purpose of trying to deceive the people in Durham as to his real identity. It soon became generally known in the trade, howevsr, that the stencils used by the Eureka had been shipped by the Standard Oil Com- pany, and the disclosure had a very bad e£Fect upon the Standard's trade at Durham; whereas it had previously sold to all except eight of the customers in Durham, thereafter the Standard's trade went down to as low as 50 per cent of the refined oil sold there. Mr. Fehsenfeld said (5/2311) that ths Eureka had a list of the customers of the Red "C" Oil Company at Durham, and visited those customers exclusively, ignoring the customers of the Standard Oil Company. Mr. Fehsenfeld and Mr. Metzel testified (5/2311, 2312, 2414) that the Eureka followed the usual practice of bogus companies and cut the price at Durham; and that it with- drew from the field after a few months because of the dis- satisfaction it created among the Standard's trade when it became known that the Eureka belonged to the Standard. With reference to Durham, N. C, Blaustein said (15/2439) that while he was at Norfolk Mr. Powell sent him to Durham, which is also in Mr. Farquharson's district, to investigate conditions there; that he found that the Standard had 80 per cent of the business in Durham, but that Griswold, the Standard's agent at Durham, was not supplying the trade in East Durham, West Durham, and Hayville, all suburbs of Durham, because he refused to drive his two horses with the tank wagon over there, and that the Red "C" Oil Company was reaping a harvest in these outlying towns. He said also (15/2440) that the Red "C" Company's agent was represent- ing to the merchants that the red oil sold by his company was a natural product, that it came out of the ground red, and that he was charging a fancy price for it, from 18 to 22 cents a gallon, while the Standard was selling just as good an oil for 184 14 cents a gallon; and that he reported these conditions to Mr. Powell; (15/2442) that when he made his report to Powell the latter wrote a letter to Farquharson, and he assumes that Earquharson communicated the substance of it to Griswold; and that thereafter Griswold sent his wagons into these out- lying places which he had not covered before. This testimony shows that the principal trouble in Durham, which Blaustein claims to have been sent there for, was righted before Blaustein was sent with the Eureka, and all that remained there for correction by Blaustein was to remove the impression which he said prevailed in the minds of people there that the Red "C" oil, instead of being colored after it came out of the ground, was a natural product. It seems quite improbable that the Standard would incur the expense of sending Blaustein and the Eureka Oil Company to Durham to right up so small a proposition. Blaustein went there, however, and continued his operations, and he said (15/2440, 2516) that he went there to show Farquharson that it was his fault that the Standard was not getting the business there, and to show him that it was perfectly possible to get that business; and that he explained to the people that this red oil did not come out of the ground red, but that it was a colored product and he c )uld furnish the root which was used by the Red "C" to color the oil. Blaustein appointed Thomas & Co., commission agents there, to handle the Eureka oil. At this same time Mr. Gris- wold was the Standard's agent at that place. Thomas & Co. sold in barrels; the Standard delivered from tank wagons. The Standard had the city trade of Durham; and Mr. Blau- stein admits that Thomas & Co. sought only the outlying trade which was being supplied by the Red "C" Company. To show how ridiculous the testimony of this witness is, we call the court's attention to his examination upon the subject of his representations that the Eureka was an independent company. Blaustein was asked whether or not he held the Eureka out to be an independent company at Durham, and he said that everybody knew the Eureka was the Standard; that Griswold had gone out and told everybody that it was a Standard concern, and that Blaustein had come down there 185 so that Griswold would lose his job. He was asked on his cross-examination if he did not represent the Eureka to be independent of the trusts, and he replied (15/2519), I don't remember if I did. I may have told people that the Standard Oil Company, according to my view, my belief, is independent, wliich I believe now. Mr. Ceawfoed. That what is independent? Witness. The Standard Oil Company is the only independent oil company in this country. Q. You think that is the only independent oil com- pany in the country? — A. According to my belief. Q. And that was your belief then? — A. Yes, sir. * * * * * Q. Did you or did you not represent that the Eureka was independent of the trusts? — ^A. I did not. Q. What did you represent? — A. I represented the Eureka Oil Company as the Standard Oil Company, but under a different management. Q. You told the public that it was the Standard Oil Company? — A. Whoever asked me. He said (15/2520) he did not remember who asked him, but he believes he was asked. He was asked if he ever told any- body that the Eureka was independent, regardless of the question as to whether he was asked about it or not, and he replied : A. I used to ask the merchant's opinion of his own. Q. No, answer my question. — A. I don't remember that. Q. You don't remember that. Well, why didn't you go under the name of the Standard down there, if you were doing business for the Standard Oil Compaiw? — A. For the simple reason that the Standard Oil Com- pany had a branch there, and they could not put another Standard Oil Company in Durham. Q. They could not have two branches there? — ^A. No, sir. Q. Could not have one branch running the barrel business and another running the tank-wagon busi- ness? — ^A. No, sir; the same man got a commission on . barrel and on tank wagon. Q. So that it was an impossibility to run it under the name of the Standard, and that is the reason you ran it under the name of the Eureka?— A. I suppose it was. Q Yes. — ^A. The same company under different management. 186 Q. Didn't you say repeatedly while you were there that you were independent, that you were an independ- ent company, and you were not connected with the Standard? — A. I never mentioned that I am an inde- pendent company, not connected with the Standard, to anybody. Q. Weren't you frequently asked that very question by the trade? — ^A. Do you want to hear my answer to that? Q. First answer the question: Weren't you frequently asked whether or not you were connected with the Standard? — A. Yes, sir. Q. What did you say? — A. I asked him his opinion, "What do you think?" He says, "I know you are nothingbut the Standard Oil Company." My answer was, "Well, I leave it to you, then. If you know it, it is no use for you to ask me. " Q. You always said that? — A. Yes, sir. Q. Whenever a man asked you a question ^A. Yes, sir. Q. — Whether you were connected with the Standard, you said, "What do you think about it?" — A. Yes. I used to tell them, "You heard all about me. " Q. "What do you think about it?" you would say to them? — A. Yes. Q. And then what would they say to you? — ^A. They know that I am nothing else but the Standard Oil. Q. What would you say? — ^A. "Then what do you ask me for, if you know it?" Q. You never told them right out? — ^A. Well, he knew it. Q. Just answer my question. You did not tell them right out that you were connected with the Standard, did you ? — A. It was not necessary. He knew it. Q. Answer my question. Did you or didn't you? I have not asked you whether it was necessary. — ^A. No, sir, because he knew it. Q. And that is the only reason you did not tell them, was because they knew it ? — A. Yes, sir. Q. If they already knew it, and put a straight square question to you, why didn't you frankly say to them, "Yes, it is connected with the Standard Oil Com- pany?" — A. There is no use for me to tell him that, when he tells me that he knows it. Mr. Blaustein has not given the real reason for entering the field with the Eureka at Durham, nor has he stated cor- rectly and truthfully the situation there or what took place while he was there, and he has evaded telling the real reason for his departure from Durham. 187 With the exception of eight, the Standard had every cus- tomer in Durham proper when the Eureka went there (5/2214). The Red "C" had the bulk of the barrel trade in the towns around Durham. It was to acquire this barrel trade that Blaustein was sent to Durham. He was certainly not sent there to supplant the Standard's tank-wagon deliv- ery by barrel delivery. It is idle for Blaustein to say that he was sent to Durham to teach Griswold that oil could be marketed there. Mr. Blaustein's testimony about the red oil is absurd. We must assume that the tradesmen at Durham are endowed with ordinary common sense. No dealer would believe that this oil came from the ground red. If that were true, it would be a well-known fact throughout the entire country, and it would be such an unusual natural product that every- body would be familiar with it. Blaustein's statement that the Red "C" was selling this oil for 3 or 4 cents a gallon more than it was selling the white oil for is equally incredible. On his cross-examination (15/2531) he was asked if he could give the name of one single person to whom the Red "C" had charged more than one-half cent a gallon for the red oil above the regular price for white oil of the same grade, and he said, "Mr. Metzel himself admits on the examination that their prices were higher by 2 or 3 cents a gallon." This statement of Mr. Blaustein is utterly without foundation. Mr. Metzel testified to nothing of the kind. He did testify (5/2416) that the red oil sold only for a half cent a gallon more than the same grade uncolored, and at the same time explained how the oil was colored; and on rebuttal (20/207) he testified that he never, at any time or place, said that the Red "C" oil was a natural product. The Red "C" Oil Com- pany was doing quite a large business throughout the South, and the red oil is sold very extensively in its territory. This company has been doing business for a great many years, and is one of the Standard's principal competitors in the southern field. Will Blaustein be able to make anybody believe that this company has built up its trade and its reputation on the ridiculous representation that its red oil was of that color when it came out of the ground? The attention of Mr. Metzel and Mr. Fehsenfeld was called to the testimony of Mr. Blaustein, and they both testified that the 188 red oil was never sold for more than one-half cent above the price which they had charged for the same white oil uncol- ored, and they both deny emphatically that the red oil was ever represented by them or by the Red "C" Oil Company to be a natural red product. (Metzel, 20/207; Fehsenfeld, 20/1 42.) Mr. Fehsenfeld testified that his company had been selling red oil for thirty years, and the difference in price between this and the uncolored oil had been uniformly one- half cent, and at no time was there ever a greater difference. Mr. Blaustein tried to leave the impression that the red oil was something very unusual, and it was necessary for him to go to Durham to explain it. He was asked (15/2528) by counsel for the Government if he knew anything about a brand of oil which the Standard sold called "Carnadine," and he said that he couldn't remember any more. He was then asked if he did not sell red oil, and he said that he did, but he qualified his answer by saying that he sold the white oil with some of the root to color it. He was then asked the question directly and pointedly whether or not he had received, while he was at Durham, oil that was red when he received it, and if he did not sell it to the trade, and he reluctantly admitted that he did, but he could not remember the brand. After all, there was no particular mystery in this red oil. The trade had been supplied with it by the Standard, the Red "C," and the other companies doing business in the South. Mr. Fehsenfeld named four companies that he knew of that handled this red oil in the South (20/145). Mr. Blaustein said (15/2243) that while he was in business at Dvu"ham he was sent to Burlington, N. C, by Mr. Powell; that Mr. Powell said the superintendent of the tank wagon at Biu-lington, N. C, occasionally got on sprees for three or four days at a time, and that he wanted Blaustein to inves- tigate and see whether or not the people had been neglected there; that he went to Burlington and there found prac- tically the same conditions that he found in Durham; that the Red "C" Company was selling oil at the same figures ot a little higher than it was selling in Durham, and that the same representation in reference to the red oil was made at Burlington as was made in Durham; that he reported that to Mr. Powell, and Powell authorized him to go there and em- ploy a commission man, the same as he had done in Durham, 189 aind that he did employ WilHamson & Bros. He said (15/2444) that this was done to wake up Mr. Plummer; that Powell said that Plummer was asleep and that he would show him how to sell oil, and show Mr. West (who was special agent at Richmond) that somebody can sell oil in Burlington if he can't. He said he went out with Williamson and ex- plained the matter to the trade, the same as he did in Dxir- ham, and offered to fm-nish the coloring material there to make the red oil; that some of the merchants accepted the oil and the coloring matter and used it, and that Williamson got a large portion of the trade in that town; that he sold in that town at the price at which the Standard Oil Company was selling, and that he remained there until a change was made in superintendents at that place. It appears, then, from this testimony that the only trouble in Burlington was that a superintendent having charge of two tank wagons was a drunkard and had neglected his business. Instead of removing the drunkard, the Standard Oil Company, according to Mr. Blaustein, sent him there with the Eiu-eka Oil Company, a bogus concern, to awaken him. This was a novel and rather an expensive method of waking up a drunkard. Mr. W. H. Fehsenfeld (5/2313) testified while the Govern- ment was putting in its main case that the Eureka went to Burlington and Greensboro, N. C, cut the prices, and used the same methods that it had employed elsewhere, which he ex- plained in his testimony, and the Red "C" Company was obliged' to entirely withdraw from Burlington and Greens- boro, N. C. The Eureka went out of existence when the Standard Oil Company acquired the Southern Oil Company, of Richmond, Va„ in .1899. (Mahle, 5/2362.) ABGAND REFINING COMPANY. We have shown in another part of the brief that the Stand- ard acquired the Argand Refining Company, having a refinery at Marietta, Ohio, in about 1897, and dismantled the refinery. The bogus independent Argand Refining Company which we now refer to, doing a marketing business at Richmond, Va., had no connection with the former, the latter being merely a name under which Mr. Powell directed Blaustein to operate at Richmond. (Blaustein, 15/2537.) 190 In the latter part of 1898, under the direction of Mr. Powell, of the Baltimore office, Blaustein changed the scene of his operations to Richmond, Va., where it appears the Southern Oil Company, an independent company owned by Warner Moore of that city, was doing a "right smart business" in competition with the Standard (Blaustein, 15/2445). Blau- stein started in with one wagon, with which he worked up ar good business. Later along Blaustein entered into negotia- tions with Mr. Moore for the purchase of the Southern Oil Company. At the time these negotiations were consum- mated and Blaustein took over the Southern, according to Blaustein's own testimony, "They did not have very much trade" (p. 2448). His own admissions, therefore, show the effect which the competition of the Argand had upon the business of the Southern, and imdoubtedly was the strong factor which induced the owner of the Southern to sell out to the Standard. Mr. Blaustein was the only witness called by the defend- ants to explain the reasons and the purpose of the Standard in running the Argand at Richmond. He testified (15/2445) that he was sent from Baltimore to Richmond by Mr. Powell to investigate the conditions. It is strange, indeed, that the Standard Oil Company, with its many capable employees, should have delegated to a man of the caUber of Blaustein the duty of investigating the conditions at any point. Blaustein said that he found the conditions in Richmond very much the same as at Norfolk, to wit, that the special agent, Mr. West, had colored drivers upon some of the tank wagons; that he sold from the tank wagons in 20-gallon lots only, while the independent company there sold in lesser quantities; that the Standard did not have enough tank wagons to get all the business, and that as a result of the prejudice against the Standard Oil Company the Southern Oil Company, an independent concern, was doing "a right smart business." Blaustein said that Mr. Powell directed him to go there with the Argand, and that after he would be there awhile the Standard's local manager, Mr. West, would wake up and get the business. These, then, are the only reasons given by the defendants for putting the Argand Refining Company into Richmond. It is unbelievable that the great Standard Oil Company, with all of its wealth and 191 power, had any need to resort to this method of educating its manager. Its undoubted purpose was to drive the Southern Oil Company out of business. As Blaustein was at liberty to cut the prices with his bogus company, while the Standard Oil Company's regular wagons maintained a higher price to its regular customers, it was quite natural that Blaustein succeeded in making inroads upon the business of the South- ern, and that the owner of that company was more than will- ing to close out his business to the Standard. For the purpose of showing how Blaustein contradicts himself, and the inconsistency of all his testimony, we will only call attention here to that pertaining to the number of wagons. He says (p. 2542) that when he went to Rich- mond to investigate the situation he found that the Standard did not have enough wagons to get the business; that when he started, under the name of the Argand, he had one wagon, and that he afterwards put on another small one which he called a half a wagon (pp. 2445, 2552); that his purpose in acquiring the Southern Oil Company was to enlarge hia equipment and faciUties (pp. 2447, 2549, 2550) ; yet he says that after the Southern was acquired they had more wagons than were necessary at Richmond, and his two wagons with which he had been doing business in the name of the Argand were shipped back to the Standard Oil Company at Baltimore (p. 2552). Blaustein's testimony that the Stand- ard purchased the Southern for the purpose of providing him with the additional facilities which his growing business at Richmond necessitated is unworthy of beUef. Its only purpose was to eUminate the competition of the Southern Oil Company. It was to accomphsh this purpose that Blaustein was sent to Richmond to operate under the name of the Argand Refining Company. The testimony shows that immediately after the Southern Oil Company was pur- chased, Blaustein discontinued the use of the name Argand, and began doing business as the Southern Oil Company; that, as there was no further competition in the city of Richmond, his operations there became less active, and the trade gradually went over to the Standard Oil Company; and that Blaustein, doing business in the name of the South- em Oil Company, then began to extend his operations to Winchester, Va., and other competitive towns in the Valley of Virginia. 192 It may also be remarked in passing that this Mr. West, who Blaustein claims to have been sent to Richmond to educate in the ways of securing business, has since been promoted from the position of agent at Richmond to that of special agent in charge of a large territory includii^ Baltimore and Washington. (Blaustein, 1 5/2546-47 ; Exhibit 738, 10/1791; Parsells, 16/2612.) At the same time Blau- stein has risen to the dignity of manager of a subsidiary tank station in Baltimore. (Testimony of Blaustein, direct, 15/2445-48; cross, 2537-52; testimony of Mahle, 5/2358.) SOTJTHEBN OIL COMPANTy. As stated in the preceding pages, the Southern Oil Com- pany was originally an independent company, owned and operated at Richmond, Va. On August 5, 1899, Blaustein, who was in the service of the Standard operating in Rich- mond under the name of the Argand Refining Company, acquired the Southern in the name of the Argand, and con- tinued his operations under the name of the Southern Oil Company as a bogus independent concern. He thereafter received his supplies from the Standard in tank cars which had originally been Union Tank Line cars, but which were repainted and marked with the name of the Southern Oil Company. After the Southern was acquired by the Stand- ard there remained no independent companies competing with the Standard in Richmond, and the price immediately advanced a cent a gallon on oil delivered from the tank wagon. (Mahle, 5/2358.) The business at Richmond needed little attention of the kind that Blaustein gave it after the Southern was elimi- nated as a competitor, and Blaustein then extended his operations to Winchester, Va. Cooper Brothers, wholesale grocers at Winchester, had for many years, up to 1894 or 1895, purchased their oil from the Standard Oil Company, but because they felt they were being imposed upon, and because their trade were dissatisfied with the quality of the oil they were receiving, the Cooper Brothers quit buying from the Standard and commenced to deal with the inde- pendent companies. Mr. Baughman (the Standard's man- ager in charge of the territory in which Winchester is situ- ated) called on Cooper Brothers and said that he had come 193 to see why they were handling independent oil, and in the conversation said (Cooper, 5/2394) : The Standard Oil Company owns this trade. They will take the oil we give them and pay us our prices, and we are not going to let independent oil come in here. When Blaustein first went to Winchester he said that the Southern Oil Company was an independent company with headquarters at Parkersburg; that they had a distributing point at Richmond, and he was engaged in establishing a line of independent tanlts from Richmond to Parkersburg to make intermediate distributing points for his oil; and that he represented the largest independent company in the world. He said his reason for going to Winchester was to see if he could make arrangements to use the Cooper Brothers' tanks to store his oil in and distribute it; that he would either buy the tanks or rent them, or, if the Cooper Brothers would handle his oil exclusively, the Southern Oil Company would give them a clear profit of a cent a gallon on all the oil they handled. Cooper Brotliers refused to enter into any agreement with Blaustein, suspecting him; whereupon Blaustein said he would have to establish a station there; that he did not like to do it, that they were independents Uke himself, and he would rather not come in competition with the Cooper Brothers. (Cooper, 5/2393-94.) Blaustein began business at Winchester by shipping in his oil in barrels and distributing it from that point. A little later he put up two iron tanks, received his oil in tank cars, and drew it off in barrels. He made a special drive for the business of Cooper Brothers. In 1899, when he first went there, the price of oil was 7 cents ; he cut it to 5 cents, which was less than oil could be sold for at a profit; and at times the Southern Oil Company's price was as much as 3 cents under the Cooper Brothers' price. (Cooper, 5/2392; Mahle, 5/2359.) Blaustein was so emphatic in his protestations that the Southern Oil Company was independent that Mr. Cooper, in describing what he said, stated (5/2395) : He fairly swore that it was independent. ***** He talked against the Standard Oil Company and told about the way they had treated him, the way they 72064— VOL 2—09 13 194 had fought him. * * * And? he spoke "of their being oppressive in all their methods, and that it was hard for independent people to live. Hedid that to show me that he was independent. Mr. Cooper said that Blaustein made the same statements to the trade, and that he learned this by coming in direct contact with the trade. That Blaustein did so represent the Southern Oil Company to be independent in the trade is evidenced by Petitioner's Exhibit 758, which is a -postal card written by Blaustein to J. S. Oglesbee, Waynesboro, Pa., in which, after quoting prices on oil, he says: "We are strictly independent of trusts." The card is signed "South- ern Oil Company. L. Blaus." (Cooper, 5/2398, 2401 ; Blau- stein, 15/2475.) Blaustein also stated to the trade that the Cooper Brothers were connected with the Standard Oil Company and were not genuine independents (Cooper, 5/2397) . The price at which oil was sold in Winchester and other places where Cooper Brothers were doing business was so much lower than at places where there was no such compe- tition that the merchants of Winchester contracted with Blaustein for fifty barrels of oil at a time, shipped it back to Chambersburg, Pa., where there was no competition, and there sold it at a profit. (Cooper, 5/2396.) It was hard to tell how much the price was cut in Winchester ; sometimes it was as much as 3 cents, and sometimes it was less. It was reported in the trade that the Southern some- times sold oil for 4 cents a gallon less than Cooper Brothers were selling at. During this competition the Standard Oil Company was also openly selling its oil at a lower price in Win- chester than it was in other surrounding towns where compe- tition did not exist, but Blaustein sold lower still. (Cooper, 5/2396-97.) For the purpose of trying to intimidate Cooper Brothers and get them to purchase oil from the Southern, Blaustein caused a report to be circulated that he was going to open up a general wholesale business in Winchester in opposition to Cooper Brothers. Articles appeared in the newspaper to that effect, and it was even stated that a building had already been rented for that purpose; but this had no effect upon Cooper Brothers. (Cooper, 5/2397.) 195 Cooper Brothers did not meet the cuts that were made by the Standard Oil Company and the Southern Oil Company. It had an advantage in the business because its customers usually purchased other commodities besides oil, and the oil would be but a part of a large order, so that it was more difficult for the Standard to break up the oil trade of Cooper Brothers than was ordinarily the case where the concern dealt exclusively in oil. (Cooper, 5/2398.) The Standard also kept itself well informed as to the oil shipments by Cooper Brothers into the territory outside of the city of Winchester during a long period of time. Its agents were seen to take the information from the barrels at the depots and write it down; and, when a tank car would arrive in Winchester for Cooper Brothers, they would take down information as to such shipment. They also applied to railroad employees for this information, but whether or not they got it is not definitely known. The Standard used the information that they received to follow up the ship- ments of Cooper Brothers, and some of their agents would see the consignees and try to get them to buy oil of the Stand- ard at a lower price than that at which they had bought the oil from Cooper Brothers. (Cooper, 5/2395-96.) For some months after the bogus Southern Oil Company ceased to do business in Winchester, its office there was maintained for the purpose of spying on the business of Cooper Brothers. (Cooper, 5/2396.) The Southern Oil Company was not successful in getting the business of Cooper Brothers, and in the latter part of 1900 it ceased to do business there. (Blaustein, 15/2448.) Mr. Fehsenfeld testified (5/2316.) that the Southern Oil Company entered into competition with the Red "C" Oil Company in the valley of Virginia, and cut the price so low that it netted only 3 cents per gallon for the oil f. o. b. Bal- timore, including the barrels; the price of the barrel, includ- ing cooperage, was equivalent to the 3 cents per gallon, leav- ing the oil free. Mr. Blaustein in a feeble way denies this (15/2473), but his entire testimony as we show is utterly unworthy of belief. In 1899, Mr. R. N. Greathead, a traveling salesman for the Standard under R. C. Baughman of the Washington district, stated to Mr. Metzel, traveling salesman for the Red "C" Oil 196 Company, that he knew nothing whatever about the Southern Oil Company, and that his superior officer, Mr. Baughman, had written him that the Southern OU Company was inde- pendent of the Standard, and had directed him to tell the trade that it was independent. (Metzel, 5/2407-8.) The bogus independent Southern Oil Company went out of existence in 1901 or 1902, and its business was taken over by the Dixie Oil Works, another bogus independent concern conducted under the management of C. W. Bender, of Bal- timore. (Mahle, 5/2358-59.) On Mr. Blaustein's direct examination (15/2474) counsel for the defendants showed him Exhibit 768, which is the postal card heretofore mentioned containing the sentence "We are strictly independent of trusts." It must be remem- bered that this exhibit was introduced in evidence at Wash- ington on March 2, 1908, so that defendants' counsel had access to it from that time until it was shown to Mr. Blau- stein on the 4th day of November, 1908. We have a right to assume that Blaustein had seen this exhibit before; in fact, Blaustein stated that he had read some of the testimony of the witnesses whom he was called upon to contradict. We also assume that Blaustein had told the attorneys for the defendants that the card was not in his handwriting. If he had not told them so, they would not have produced it them- selves and asked him whether or not he had written and signed it. This is borne out by Blaustein's testimony in ref- erence to it: Q. I show you petitioner's Exhibit 758, being a postal card purporting to be signed "P. Blaus." Was that pos- tal card signed by you? — ^A. No, sir; I don't remember it. I never sign my name "P. Blaus." Q. Well, is that your handwriting ? — A. It is not; no, sir. No, sir; I don't tliink it is. I don't, think it is. (A recess until 2 o'clock was announced.) Witness. I want to correct that. I want to see that postal again after recess. Mr. MoKEisoN. Let him see it right now. (The postal card, petitioner's Exhibit 758, was handed to the witness.) Witness. That was Mr. Edelstein, who took the pho- tograph of Crook's contract. Mr. Morrison. Does it need any time for you to tell your own handwriting? Mr. Crawford. Let the witness alone. 197 Mr. Morrison. I want the record to show how long he is studying over it. Is it necessary for you to read the contents to know whether it is your handwriting? Witness. It looks like my handwriting. Mr. Morrison. Yes. Witness. It looks like my handwriting. Mr. Campbell. What is the date of that? Witness. January 1 — I can't make out the date my- self—" 1/5-19," 1900, or whatever it was— I don't know. Mr. Campbell. Is that a "P" or an "L" in the signature ? Witness. It looks hke a "P" to me. But I think it is my writing. But I don't see how I ever Mr. Crawford. Well, never mind that, Mr. Blaustein. Mr. Campbell. Now, we have proved it for you. It was not proved before. Mr. Crawford. Well, we will adjourn. Witness. Mr. Crawford, pardon me a minute, please. Mr. Crawford. We will adjourn. Court has ad- journed, Mr. Blaustein. Witness. All right, sir. Mr. Crawford. Any other matter we will take up after recess. (A recess was here taken until 2 o'clock p. m.) By Mr. Crawford: Q. I show you again petitioner's Exhibit 758, being the postal card referred to in your last answer, and ask you to examine it carefully and state now what your conclusion is as to whether you wrote it or- not. Mr. Campbell. Take plenty of time, Mr. Blaustein, and look it through if you like. Mr. Morrison. Oh, I do not suppose it is necessary to see what it states in order to know whether he wrote it or not. He Icnows his handwriting. He has already said that he wrote it. I don't know what more you want. Mr. Campbell. He said he thought so. Mr. Morrison. He said he wrote it, and you yourself conceded here that it had been proven, Mr. Campbell. A. Yes, sir. Q. You did write it ? — A. I did write it. Q. Now, what is the date of that postal card? Or, if you are unable to make out the date, see what the postmark is that is on the other side. — A. 1900. Q. January, 1900, isn't it?— A. Yes, sir._ Q. Has your handwriting changed any since January, 1900? — A." Considerably. I write a better hand than I used to write. 198 Q. Does the writing on that postal card resemble your present handwriting? — A. No, sir. Q. Is that the reason why you hesitated in deciding whether it was yours or not ? — A. Yes, sir. After I had it the second time I noticed the figures 8 J and 7 J, and I know this is my writing. Q. How did you come to sign the name as it appears at the foot of the postal card ? — A. That is something I don't know myself. I must have been in a hurry. I never signed that name "P." It is an "L" cut down the top piece. I must have been in a hurry in writing it, because I never signed my name in that shape before. When this witness was being cross-examined with refer- ence to the handwriting in defendants' Exhibit 211, counsel for the Government called his attention to Exhibit 758, and he testified as follows (15/2489) : Q. Didn't you first swear that you didn't think you wrote it? — A. I did; I didn't recognize it. Q. How is that? — A. I didn't recognize it. Q. You read it all through, didn't you? — ^A. No, sir; I had not read it all through. I just glanced over it. Q. You spent a minute or so studying it over, didn't You?— A. About. Q. And then after you saw me hand that card to Mr. Chase here and make a remark to him you wanted to look at it again, didn't you? — A. I wanted to see that again; yes, sir. I recognized my figures. What caused Blaustein to hesitate and pause was what took place between counsel for the Government and Mr. Chase at that time, and but for that Blaustein never would have admitted the writing of the card. He was further cross-examined in regard to this exhibit (16/2598) as follows : Q. Now, I call your attention again to this postal card. Petitioner's Exhibit 758, and ask you who this J. D. Oglesby is, of Waynesboro, Pa., to whom this card was written. — A. I don't know the gentleman; never met him. This postal card must have been written asking inquiries — making inquiries, rather — for the price of oil. Q. Well, writing how, making inquiries as to the price of oil? — A. He wrote to me, to the company, to make inquiries Q. Oh, yes. — A. As I understand, that postal card reads "In reply to yours." Q. What do you mean by this sentence: "We are strictly independent of trusts?" — A. I have explained that yesterday. 199 Q. That is what I would Mke to have you explain now. Mr. Crawford. He has explained it already. A. And he must have asked me in his letter. Q. Oh, no; just answer my question. What did you mean by that sentence? Mr. Crawford. That is a part of his explanation. Give him a chance. A. He must have asked me in his letter if I have any connection with trusts, which I didn't mean what he meant or how he meant. According to my view of that point, that we were not trusts, as you~ remember, I stated yesterday about the Standard Oil Company being inde- pendent, according to my idea. I think I have a right to answer the man that we are independent of trusts, because I didn't know to whom he was alluding, to the trusts. I didn't answer him that I am independent of the Standard Oil Company. Q. Whom did you mean when you said you were inde- pendent of trusts? — A. I must have answered the same as he asked me. He must have asked me whether we are independent of trusts. Q. Oh, well, you say he must have. Do you remem- ber anything about it ? — A. I do remember that I would not write a man that we are independent of trusts unless he asked me about it. Q. Have you got that letter? — A. No, sir. Q. You don't even remember who the man is? — ^A. I never knew him; I never saw him. We used to get a good many of those inquiries for oil. Q. Suppose he had asked you if you were independ- ent of the Standard Oil Company, what would you have said? Mr. Crawford. One moment. I object to that as incompetent, hypothetical, and not a proper question. It makes no difference what this witness would have done. The question is what did he do, what is the fact. A. I can't tell you what I would have stated at that time. I don't know. . , -„7- n Q. You don't know what you would have said. Well, you regarded yourself, didn't you, I understood you to say yesterday, as independent of the Standard Oil Com- pany ?— A. Oh, I used to tell the people, as far as inde- pendent was concerned, the Standard Oil Company are the only independent people in the oil busmess. Q That does not answer the question. You regarded yourself as independent, didn't you, and your company as an independent company?— A. I don't understand the question by regarding myself. You mean I went out to tell the people that I am independent? 200 Q. No; you understood yourself to be an independent company ? Mr. Ckawfokd. I object to that as inomaterial and irrelevant. Mr. Campbell. And misleading. Mr. Crawford. And misleading. Mr. Campbell. Independent of whom ? Witness. Read the question to me again, please. (The reporter read the question as follows: "You regarded yourself as independent, didn't you, and your company as an independent company?") A. I never — the question used to rise about inde- pendent. I used to explain what independent means, yirhat I mean by my word, telling them I am independent, but I never Q. That does not answer my question. I am not asking you how you used to explain. I am asking you whether you understood yourself to be operating an independent company at the time you wrote this postal card. Mr. Crawford. Same objection. It is absolutely im- material to this case what this witness thought. Mr. Campbell. And he has already testified that the name under which he operated was not a company, that he was part of the Standard Oil Company. A. According to my view, I was an independent oil company. Q. What did you mean here, and to whom did you refer, when you used the word "trusts" in this postal card? — A. I must have answered in the same wording that he wrote to me. Q. You don't remember what he wrote to you? — A. It is the only time or the only way I would have answered him that, unless he did ask me whether I am independent of trusts. Q. What did you mean when you said you were inde- pendent of trusts ? — A. As I have stated before, accord- itig to my view I was independent, and I never recog- nized the Standard Oil Company to be a trust. I was never told so. Q. What company did you understand to be a trust? — A. I didn't know to whom he was alluding in his letter. Q. You don't know that he alluded to anybody, do you? — A. Why, I simply answered the wording which he gave to me. Q. You have said two or three times that you did not remember what he did write you, haven't you? — A. He must have wrote me; otherwise I womd no answer that. 201 Q. No, no; you have no recollection? I am not ask- ing you what he must have done. I am asking you now for your recollection. — A. I believe he did. Q. Do you remember it?— A. Or otherwise I would not have answered him that. Q. No, no; I am not asking you that. Do you re- member a single word or sentence in the letter that was written you by Oglesby to which this card is a reply? — A. No; I do not. Q. You do not? — A. No, sir. Q. Did you understand that there were any trusts at that time m the oil business? Mr. Crawford. The question is objected to because it is obscure, ambiguous, and indefinite, there being no definition of the word "trust," it never having been determined what a trust is, and this witness and no other witness could have known then or now what such aphrase meant. A. No, sir; I did not. Q. You did not know what a trust was, did you? — ^A. No, sir; I did not. Q. Did you know what the word trust meant as ap- plied to oir dealers? — A. Well, I have heard of saying the word trust mentioned, but I never knew really the meaning of a trust. Q. You didn't know what it meant? — ^A. But I was positive that the Standard Oil Company, according to my knowledge, were not a trust. Q. That if there were any trusts in the oil business, it was not the Standard Oil Company; that was your understanding and belief at the time? — A, Oh, I could not say to that. I don't know. There may have been a trust in the oil business, but I didn't know. Q. Well, were you referring to those trusts that you did not know about? A. I may have done so. Q. In replying to this letter? — A. I may have done so. I am almost positive I answered the question as he asked me in his letter. Q. Did you ever hear the Standard Oil Company called a trust? Mr. Crawford. I object to that as immaterial and irrelevant. A. Oh, I have seen newspapers a good many times mention the name "Standard Oil Company trust." Q. Yes; didn't you hear it in the trade as you went from one customer to another? — A. Yes, sir. Mr. Crawford. Same objection. Witness. But after I used to explain to them accord- ing to my view that they were not a trust, they believed me that they were not a trust. 202 Q. What explanation did you make to your trade to satisfy them that the Standard was not a trust? — A. That was what I was never told — that they were a trust. Q. What is that? — A. I was never told they were a trust. Q. You were not. I thought you said a moment ago you read it in newspapers, and you have heard it as you went from one customer to another? — A. But the Standard Oil Company never told me they are a trust. Q. I am not talking about that. What explanation did you give to these customers when they told you the Standard Oil Company was a trust? Mr. Crawford. I object to that as immaterial and in- conipetent and involving a term undefined and obscure.— A. It all depends who the customer was. Q. Go ahead and tell. — A. If the customer told me the Standard Oil Company is a trust or I am a trust, I used to explain to him the benefit of the Standard Oil Company. Q. How did you explain the matter to him so as to satisfy him that the Standard was not a trust? — A. I was not arguing with that man about the trust business. I was arguing the oil business, and I told him as a matter of fact the majority of them is a trust, as far as I know. Q. All of them are trusts as far as you know ? — A. As far as people say. Of course I never believed it. I didn't know it was a trust and what it meant, but I never ar- gued with a man about a trust. All that I argued with the merchant is to buy oil from me. Q. But when a man told you right to your face that the Standard Oil Company was a trust, what did you say to him? — A. I used to tell him to drop the trust business and let us talk oil. Q. Oh, yes; you dropped the subject. — ^A. Yes. Q. You never did try to explain, then, to your trade why the Standard was not a trust? — ^A. I could not; I was not told they were not and I was not told they were. Q. How is that ? — A. I was not told that they were a trust, nor was I told that they were not a trust. Q. You were not told by whom ? — A. By the company. Q. I am talking about what you were told by your cus- tomers. — A. I used to tell them not to argue trusts with me; that I am not there to argue trusts with them; that I am not enough posted in the trust business; I can talk to him oil all he wants; but as far as trusts is concerned, to ask somebody who laiows more than I do. Q. Did you tell him the Standard was not a trust, ever? — ^A. According to my view I told them; yes, sir. 203 I didn't believe they were a trust. I was never told them to be a trust. Q. You never told the Standard that they were a trust? — ^A. No, sir. Q. And for that reason you did not think they were a trust ? — A. For that reason I didn't believe they were a trust; no, sir. Q. You thought if they were a trust they would have told you so? — A. I thought they would. They may; I don't know. Q. Did the Standard tell you they were not a trust ? — A. No, sir. Q. But you say you were convinced that they were not a trust? — A. I did not hear that. Read the ques- tion to me, please. (The reporter read the question as follows: "Did you say you were convinced that they were not a trust?") A. Personally, in my own ideas. Q. What convinced you that they were not a trust? — A. Well, I can't explain you that. Q. You don't know? — A. I don't know. Q. Did Oglesby explain to you in his letter what he meant by trusts? — A. I don't believe it was. I must have answered the same wording that he asked me, or otherwise I would have explained him in that postal card what he meant by it. Q. You would have written back and asked him if he had not explained what he meant by trusts; you would have written back to him, and asked him what he meant? Mr. Ceawford. He did not say that. A. I may have done so. Mr. Ckawfoed. I object to that as misrepresenting the testimony. Q. I am asking this witness a question. Mr. Crawford. You have no business to misstate his evidence. He has not said what you say. He said quite the contrary. Mr. Morrison. If you think you have sufficiently in- structed him, we will go ahead. Mr. Crawford. I don't propose to let you misstate the testimony. Q. 1 will put the question to you. If he had asked you if you were independent of the trusts, would you have written back to him to find out what he meant by the word "trusts?" — A. I maybe would have done so. I don't know what I may have done at that time. Q. You would have been up a stump. You would not know how to answer him, would you? Mr. Crawford. I object to the question. 204 A. I would have waited until the next letter to see what he explains me in that letter. Q. You would have written to him, then, for an ex- planation and waited for the letter? — A. I maybe would have done so. I don't say I would do it. I can't tell you what a man would have done ten years ago. Q. If he wrote you asking if you were independent of the tmsts, it is quite likely, then,_ that you wrote back to him before answering him, asking what he meant by trusts, isn't it? — A. No, sir; I must have wrote this postal card when I was in a hurry, according to my sig- nature, and I must have answered to him as he asked me in his letter. Q. Without knowing what he meant, did you answer him? — A. I just answered according to his language, if I am independent of the trusts. I told him I am inde- pendent of trusts. Q. And yet you didn't know what a trust was? — A. Well, maybe there was a trust. I don't know. Q. You didn't know what a trust was when you wrote that postal card, did you? — A. I didn't know what he meant, but I simply answered his letter. Q. Were you located at Winchester at that time with the Southern Oil Company? — A. I must have been. The postal card is dated Winchester, isn't it? Q. This Southern Oil Company did business at Win- chester, didn't it? — A. It did. Q. Did you operate any other company at Winches- ter? — ^A. No, sir. Mr. Blaustein, on his direct examination (15/2450), gave as a reason for going to Winchester that it was a favorable location, and that the Baltimore & Ohio had a direct line of railroad from there to Parkersburg, W. Va., which would give him a favorable freight rate. Later along he gave his reason for leaving Winchester (15/2453), as follows: Q. What was the reason you gave it up? — A. Because I could not exist. I could not compete with the Stand- ard Oil Company; of course their own brands they had to have the business there, but I mean by that that the traveling and shipping oil was too expensive. My mar- keting was too high ; in other words, I could not compete with Cooper Brothers to sell oil against a grocerj^man who had a right; in other words, they used to sell a bar- rel of oil and a bag of coffee under the same freight bill, or a chest of tea for the same rate to the merchant. I had nothing but oil to sell, and I covildn't ship any other merchandise with it. So of course he was underselling me right and left, and I could not exist. 205 it appears that Mr. Blaustein, while operating various bogus independent companies, from time to time had letter heads and other stationery for each of these cornpanies. Blaustein was asked (15/2577) if the Southern Oil Company- had a letter head, and he replied that it had; that he got it up himself and had his name, L. Blaustein, as agent, put upon it. He was asked if the Southern Oil Company refined oil, and he replied that he didn't know; that he couldn't answer the question. He then testified as follows (15/2578): Q. Did you refine any oil, or did the Southern refine any oil, while you were connected with it? — ^A. Before I bought them the}'' didn't; no, sir. Q. Oh, I am talking about while you were connected with it. — A. Yes, sir; while I was connected with the Southern Oil Company, after we bought them out, we used to refine oil — the Standard Oil Company. Q. I am not talking about the: Standard Oil Com- pany. — A. Yes; that was the Southern Oil Company. Q. I have not asked you a word about the Standard Oil Company, and you know it, Mr. Blaustein, don't you? I am asking you about the Southern. Did it refine a gallon of oil while you were with it? — A. I don't know, sir; I don't think so. Q. You know that it didn't, don't you? Why not get to it and answer the question? — A. I know the - Standard Oil Company's money Q. I have not asked you about the Standard Oil Company? — A. Was there, and they refined oil. Q. I have not asked you about that, have I? You are trying to evade, aren't you? — ^A. I am not. I will answer you. Q. Just answer my question. Did the Southern Oil Company refine a gallon of oil while you were connected with it ? — A. After I bought out the Southern Oil Com- pany? Q". Yes. — A- I have reported my sale to the Standard Oil Company, and the Standard Oil Company Q. Will you answer my question now, or won't you? I am not going to fool away time if you are determined not to answer. — A. I don't think they have, but^the Standard Oil Company did. Q. Who is asking you about the Standard Oil Com- pany? Haven't you got that through your head yet? — A. No, sir. I am willing to tell you who they were. Q. You are willing to tell me that the Standard refined oil? — A. Yes, sir; it was their money I was doing busi- ness with. 206 Q. I knew that long before I knew you, Mr. Blaustein. Now, I will come back and put this question and give you a chance to answer it fairly. Did the Southern Oil Company refine a gallon of oil while you were connected with it ? Mr. Campbell. Now, one moment, Mr. Blaustein, that is objected to. The witness has already stated that after the Southern Oil Company was purchased by the Standard Oil Company it became a part of the Standard Oil Company. The Standard Oil Company did do a refining business, and therefore the Southern Oil Com- pany, as part of the Standard, also had a refinery. Mr. Morrison. Now, Mr. Campbell, if you have suf- ficiently instructed him so that he can answer as you want him to Mr. Campbell. He has answered that question a dozen times. Mr. Morrison. I will put the question to him again. Now, repeat this question to him again and let us see what he, is going to say about it. Witness. I will tell you the same thing, Mr. Morrison (The reporter read the question.) A. The Southern Oil Company direct had no refinery; no, sir. Petitioner's Exhibit 937 was shown to the witness, and he identified it as the letter head of the Southern Oil Company which hs had used. His attention was called to the following language in the letter head (15/2580): "Refiners of high-grade oils and petroleum products," and he then testified as follows: Q. You put that on there, did'nt you? — A. Yes, sir; I did. I was told by the Standard Oil Company, Mr. Powell, to do that. Q. Oh, the Standard Oil Company told you to get that up? — A. Yes; I was told, being for the Standard Oil Company, I could put on, being petroleum refiners. Q. Then you consulted with the Standard Oil Com- pany before you got out this letter head? — ^A. The Southern Oil Company before, I believe, had the same model of a letter head. Q. Will you swear they did? — A. I believe they did. I could not swear to it. Q. We will show you in a moment what their letter head was before. — A. I believe they did. I could not swear to it. Q. So, then, this letter head here as it appears was approved and a part of it at least suggested by somebody 207 connected with the Standard Oil Company, was it? — A. I beheve it was. Q. Well, was it or wasn't it, now? — A. I could not say positively. Q. Didn't you say a few minutes ago that A. Mr. Powell told me "You can call yourself a refiner now, being that you are with the Standard Oil Company; the Southern Oil Company is the Standard Oil Company, and that we are refining our own oil, or are sending it from our own refinery." Q. That is to say, because the Standard Oil Company had refineries, you could put on the letter heads of the Southern Oil Company that it had refineries? — ^A. Yes, sir ; they were the same thing. Q. Now, is it or is it not true that the Southern Oil Company was a refiner of high-grade oils and petroleum products? — A. Their money was; yes, sir. Q. Was the Southern Oil Company a refiner? — ^A. Their money worked in the refinery. Q. Whose money? — ^A. My money I used to get from the trade, sent to the Standard Oil Company refinery, and we get oil for it. Q. And so you called the Southern Oil Company a refiner? — A. I did. Q. Then, as I understand you, the Eureka Oil Com- pany was also a refiner, wasn't it? — A. No, sir; I have never made any !;• Q. Wasn't it just as much of a refiner as the South- ern? — A. Maybe it was; maybe it was. Q. Well, "maybe." Was it or wasn't it, now? — A. Maybe it was. Q. Yes, that was a refiner, too? — ^A. I never made any Q. Why didn't you put that on your letter heads? — A. I had no occasion. Q. What occasion had you for putting it on here? — A. Well, because this was a business we bought. The Southern Oil Company, they had no refinery, but after the Standard Oil Company bought them out, we had — we paid for that, and we had occasion to put "refiners" on there. Q. Sure, but after you started the Eureka you were in the same condition, weren't you? — ^A. We did not buy anybody's name. Q. Did that make them any more a refiner because you bought them of somebody else than if you had created them? — A. I may have had the same right then, too, to state, "I am a refiner." 208 Q. You operated the Eagle afterwards, didn't you? — A. Yes, sir. Q. Was that a refiner of oils? — ^A. About the same thing; yes, sir. Q. About the same thing, just the same way as the A. As the Southern. Q. As the Eureka was? — ^A. All the money went to the same party. Q. You did not buy the Eagle of anybody, did you? — A. The Standard Oil Company — I did not buy the Eagle of anybody; no, sir. Q. You started that? — ^A. The oil I got from the Standard Oil Company. Q. Did you call that a refinery, too? — ^A. Well, I could have called it so had I wanted to. EAGLE OIL WORKS. The Eagle Oil Works was started early in 1901 with L. Blaustein in charge, with a marketing plant in Balti- more, and it was the especial effort of this company to se- cure the tank-wagon business of the Red "C" Oil Company and the Crew-Levick Company of Baltimore. Blaustein re- ceived the same instructions in reference to this company that he had received concerning the other bogus companies which he operated. He made reports to the superintendent of the tank-wagon department of the Standard Oil Com- pany, and Blaustein sought to get the customers of the Red "C" and Crew-Levick Oil Companies, both of which were doing a tank-wagon business ia Baltimore. The price was cut by Blaustein in the name of the Eagle Oil Works, and Blaustein himself adnaits that his prices were below the Standard Od Company's regular market prices in Baltimore (Blaustein, 15/2465). He ran the busi- ness as an independent concern the same as if he owned it himself, but as a matter of fact the Standard Oil Company put up the plant. Blaustein also got the oil which he used while running this company from the Canton refinery of the Standard Oil Company. He represented to the trade that the Eagle was in no way connected with the Standard (Mahle, 5/2365; Fehsenfeld, 5/2325). He talked frequently with Mr. Mahle and others connected with the office of the Standard about what he was doing, and the methods he 209 was adopting were well known in the oflSce of the com- pany. He would often come into the office and tell funny- stories and laugh about the jokes that he had played upon other men and the way he had obtained the business. (Mahle, 5/2364-65-66; Metzel, 5/2410.) When the Eagle went into business Blaustein attempted to hire the tank-wagon drivers of the Red "C" Oil Company, offering them an increase in salary. This concern sought only the customers of the independents. The arguments used by the Eagle were that it cut the Standard Oil Com- pany's prices, disregarding them entirely, whereas the real independents did not, which was proof that the latter were controlled by the Standard. Blaustein also circulated the report that the Red "C" Company was a part of the Stand- ard. Blaustein said that the two companies. Standard and Red "C," were connected by underground pipes, and offered to take a man down and show him the pipes. The Red "C" was only able to convince the trade of its inde- pendence by offering a supply of oil for one year free to any person who could show that they got their oil from the Standard Oil Company, if any of the bogus companies would make the same offer. (Fehsenfeld, 5/2320-2321.) The Standard employed men to follow the wagons of the independent concerns in Baltimore, especially the Crew- Levick Company, and make lists of their customers, which were turned over to Blaustein. This work was done under Mr. Bender. In corroboration of his testimony, Mr. Mahle, who was at that time employed in the Standard's office in Baltimore, cited an instance in which there was a controversy between Bender and a Mr. Gause over the payment due to Gause for following the wagons; Gause appealed to the Baltimore ofl&ce and got his money. (Mahle, 5/2374.) Mr. Blaustein was the only witness called by the defend- ants with reference to the Eagle Oil Company. Blaustein described his return to Baltimore (15/2453) by saying that he was tired of being away, and he told Powell that he wanted a position there, and Powell took the matter under consideration. Blaustein said that while Powell was considering the matter he learned that about 90 per cent of the old trade that he had served while selling on a commission 72064— VOL 2—09 14 210 had been taken by the Crew-Levick and the Red "C" com- panies, and that these companies had been extending credits to that trade. The Standard Oil Company had refused to extend these credits, and that is the way the Standard lost the business. He said (15/2454) he suggested that Powell let him start, and that he would sell to these people on credit, so that it would not hurt the Standard Oil Company's business; that he would confine himself to that class of trade consisting largely of foreigners. Powell consented, and Blaustein rented a place in South Baltimore. Powell sent the Standard Oil Company's construction man there to put up the tanks, warehouses, and offices, and Blaustein said: "I started in business there under the Eagle Oil Company." He said (15/2455) he canvassed, as far as possible, the trade which he formerly had. No doubt this statement is true, because he said earlier in his testimony that Crew-Levick and the Red "C" Company had 90 per cent of that trade. Blau- stein said" (15/2455) : Well, my business did not amount to a great deal when I started it, but the Red " C" Oil Company and the Crew- Levick have advertised me so heavy in town — they used to go around to their customers and tell them, "Did you hear about the Eagle Oil Company?" They said, "No." They said, "You just wait a whUe. They will come here and sell you oil or try to sell you. They are nothing but the Standard Oil Company, and very likely," he said, "they are going to sell you cheaper, too," and they advertised me so heavily that people used to call me up over the telephone. We was compelled to put on more wagons to haul the business, to hold the trade in line. Mr. Fehsenfeld explained (5/2325), months before Blaustein was called to the stand, the fight made upon his company by the Eagle, and said that he met this competition by having our traveling salesmen come into Baltimore; we furnished them the facts, and instructed them to go to the Standard Oil Company's customers and try to secure the business, oflermg them oil at 8 cents per gallon. The customer replied, 'That is no inducement.' We would say, 'Yes, it is an inducement. You buy from us at 8 cents per gallon, the Eagle Oil Company, who supplies Bill Jones, one of our customers now, at 6 or 6^ cents a gallon, will come to you, and, if the Eagle 211 Oil Company can't sell you, the Standard Oil Com- pany will send the Davidson oil wagon to you and sell you oil at 5 or 5^ cents a gallon.' And we so aroused the ire of the grocers in Baltimore that the Davidson wagon was withdrawn, the Standard Oil Company reduced their price to 7 cents a gallon, and the Eagle Oil Company advanced their price to 7, making a uni- form price of 7 cents per gallon in Baltimore, which be- came effective in August, 1904. The large number of customers who Blaustein says were telephoning the Eagle Oil Company to send their wagons around were undoubtedly these customers of the Standard whom Mr. Fehsenfeld's salesman called upon and who, at the suggestion of these salesmen, gave orders to the Red " C" Company for the purpose of bringing the Eagle around. Mr. Blaustein said (15/2440) that about three months before the Davidson Oil Company started, the Crew-Levick Company was arrested and fined for selling oil which had not come up to the city test. Mr. Wolff, the manager in Bal- timore of the Crew-Levick Company, was called on rebuttal and his attention called to this statement of Mr. Blau- stein. He said (20/101) that not only was the Crew-Levick Company arrested, but about 35 dealers, customers of the Crew-Levick Company and of the Eed "C" Company, were arrested at the same time. He was asked if any of them were fined or if any conviction resulted following any of these arrests, and said that some of them were dismissed in the sta- tion house before the police justice; others were sent to the grand jury and dismissed there, and there was but one fine imposed, which was upon Mr. Crook. Mr. Wolff said he was right there and knew what took place and knew all about all of these cases. He was asked what magistrate Mr. Crook was tried before, which was the only trial that resulted in a conviction, and he testified that he was tried before Mr. Blau- stein's brother-in-lav/. Counsel for the defendants cross-ex- amined the witness at this time, and he told what he knew about the relationship ; that he did not know it at the time, but afterwards learned it, and he gave the magistrate's name in full. Blaustein said (15/2465) that the market price for oil in January, 1904, when the Crook contract (defendant's Exhibit 212 210) was made, was 9 cents. He was then asked whether Fehsenf eld's testimony to the effect that he (Blaustein) sold oil for 6 and 6^ cents a gallon was true, and he said he never sold for 6, but he believed he did sell for 6|. He was asked how he came to sell for 6^ cents, and said because the Standard Oil Company reduced its price to 7 cents a gallon. We call attention now to the following testimony of Mr. Blaustein (15/2479): i Q. Did you get that trade back by cutting prices? — A. I did not cut any prices. Q. Except as far as you have testified in regard to this Crook episode, did the Ea^le Oil Company cut prices there in Baltimore? — A. Not to my recollection. Q. Did the Eagle Oil Company offer or pay any re- bates to the trade which you handled there in Balti- more? — A. When? Q. In Baltimore, the Eagle Oil Company. — ^A. What year was it ? Q. When the Eagle was operating there in Balti- more. — ^A. When we first started ? Q. Yes. — ^A. No, sir. The effort of counsel to get the witness to state that the Eagle had not cut prices in Baltimore was successfully par- ried by the witness. Counsel tried to have his question cover the entire period of the Eagle in Baltimore, but the witness did not dare make so broad a statement, and finally limited his answer to the time when the Eagle first started in Baltimore, and omitted entirely the years 1904 and 1905, when it is shown by this testimony that the Eagle Oil Com- pany was persistently and continuously cutting prices in Baltimore. Blaustein's attention was called (15/2481) to the testi- mony of Mr. Fehsenfeld (5/2321) to the effect that the Eagle cut the prices and disregarded the Standard's prices entirely, and he testified in reference to it as follows: A. I don't remember of any except in 1904, the time that Crew-Levick made the contract with Crook. Q. You mean that Crook affair? — A. Yes, sir. Q. Apart from that A. I don't remember of any. Q. Mr. Fehsenfeld testified, page 2342, to. the effect that your company cut prices against his tank wagons. Did the Eagle Oil Company ever cut prices under the tank-wagon prices of the Eed "C" Oil Company? — A. I don't remember of any except in 1904. 213 Q. That is Crook?— A. Yes. Q. Well, apart from that Crook episode, to which you testified? — A. I don't remember any. Blaustein would not swear that he did not cut the prices, although counsel gave him every opportunity to do so by leading and suggestive questions. The best that he could say was that he did not remember any. Warren S. Dixon testified (20/193) that he worked for the Eagle Oil Company under Blaustein in 1904 and 1905, and drove a tank wagon; that Blaustein told him to go after the Crew-Levick Company's business, and he says that he sold at a rebate of about one-half to three-fourths cent below the Standard's market price; that he paid this rebate right out as the oil was bought; that he gave tank-wagon tickets to the customers, which showed the regular Standard market price, but that he settled with the customers at the net price, after deducting the rebate. He said (20/193-4) that Blaustein told him that the Eagle Oil Company was not owned or controlled by the Standard; that Blaustein showed him a list of Crew-Levick's customers and told him where they were; that he did not go to any trade in particular except the trade of Crew-Levick & Co. ; that he was instructed not to bother with the Standard's trade except at the straight market price; that he did make some sales to the Standard's customers and charged them the open-market price, the same as the Standard charged them, and that he gave no rebate to them and made no particular effort to get that trade. Mr. Dixon said (20/124) that the Eagle had five or six wagons on the street at this time; that he was not instructed to go after the Eed "C's" customers by Blau- stein, except in one instance, and that was the trade of a JMr. Langf elder; that he got that customer by making a cut in the price of a half a cent, effected in the form of a rebate. Mr. Blaustein testified (15/2481-91) that prices were cut and rebates were given to various dealers in Baltimore. He names 1 cut by the Crew-Levick Company, 4 by the National Oil Company, and 11 by the Southern Oil Com- pany during the last three years, which is since the Eagle went out of existence — a total of 16 cuts. The Southern Oil Company has since gone out of business; the National Oil Company is a small concern which only recently entered 214 Baltimore and is just developing its trade there. It is significant that counsel for the defendants did not ask Blaustein about cuts made prior to the last two or three years. We show in a later subdivision of the brief that for a long period of time the Eagle Oil Company, by means of rebates, cut below the prices of the others; yet during the last three years this same witness gives only 16 instances in which he claims prices were cut by the independents in Baltimore. In the discussion of the testimony of Bruce Robinson, under the heading of price cutting at Baltimore, we have shown exactly what the Eagle Oil Company was doing in 1903 and 1904. Mr. Wolff said (20/71) that at that time the Eagle Oil Company was selling at 6 cents; that Blaustein went out openly on the street and dared the Crew-Levick Company to come down to 6 ; that if it did, he would go down to 5. Mr. Blaustein said (15/2465) that the Eagle reduced its price to 6J cents a gallon, because the Standard had reduced its market price to 7 cents a gallon. This statement con- firms the position which the Government takes that the bogus independent companies were used by the Standard for the piu'pose of selling oil to a limited portion of the trade at a lower price than the Standard Oil Company's open market price, to enable it to reach the competitive trade at the lower prices while maintaining higher prices to its regular trade and thus avoid lowering its market price throughout the entire city or territory. The Eagle Oil Company had, by the latter part of 1905, outlived its usefulness, and in 1906 it was absorbed by the DixieOil Works (Mahle, 5/2366). Blaustein,its manager, went to the trade with a false lamentation, saying that he had lost all of his money in the oil business, that he had to sell out to the Dixje, and the Dixie would not allow him to give rebates and make concessions any longer (Wolff, 20/76). The fact is that during all the time he had been working on a salary. WILLIAM G. DAVIDSON, BALTIMORE. Early in the year 1904 William G. Davidson, who for some years had been manager of the Crew-Levick Company's tank- wagon business in Baltimore, was discharged for cause. Just prior to his discharge, he endeavored to get Mr. Wolff, then 215 one of the Crew-Levick Company's tank-wagon drivers, to enter the employ of the Standard Oil Company with him, saying that he had made arrangements with Mr. Goodwillie, of the Standard, to reequip the old Canton station in Balti- more and to have five wagons, to be repainted in the colors of the Crew-Levick Company, with the name William G. Davidson upon them; that they would thereafter get better wages, and also would not have the worry of Mr. Blaustein on the streets, and everything would be harmonious; and that they were to go to work on the following Monday morning ; but Mr. Wolff refused to do this (20/96-97). It appears that Mr. Eoth, manager of the East Baltimore station of the Standard Oil Company was also endeavoring at about the same time to get the services of Mr. Wolff, and had several interviews with him with that in view (20/97, 99). Mr. Blaustein, of the Eagle Oil Company, it also appears, made efforts at about the same time to get Mr. Wolff to leave the Crew-Levick Company and go to work for him (20'96). Both Mr. Roth and Mr. Blaustein called at Mr. Wolff's house, morning and evening, importuning him to leave the Crew- Levick Company and go with the Standard or Eagle. Mr. George J. R. Wolff succeeded Davidson as the manager of the Crew-Levick Company's tank-wagon business in Balti- more. On the first morning that he took charge every one of the Crew-Levick Company's tank-wagon drivers quit, and he had nobody to start out with his wagons. Two of these drivers immediately found employment with the Standard OU Company and two with the Eagle Oil Company (20/100-101). The route books of the Crew-Levick Com- pany also disappeared at the time of Mr. Davidson's dis- charge, and Mr. Davidson had these books (20/100-101). About three weeks after Mr. Davidson's discharge, he appeared upon the streets of Baltimore with a wagon painted in identically the same colors that the Crew-Levick Company's wagons were painted (yellow running gear and red tank and cab), and with the name William G. Davidson upon it. The Eagle Oil Company's wagons were painted white (20/101). Mr. Davidson canvassed the customers of the Crew-Levick Company and represented himself to be independent. The open market price of the Standard and the independent companies in Baltimore at this time was 8 216 cents. The Eagle Oil Company was selling at 6 or 6^ cents, working only the trade of the Crew-Levick Company and the Red "C" Company; and where the Eagle could not secure the trade by this cut hx the price the Davidson wagon would go over the same route and oflFer oil at 5 or 5i cents a gallon. (Fehsenfeld, 5/2325.) This practice, however, was broken up by the Crew-Levick Company and the Red "C" Oil Company sending their salesmen to visit the trade of the Standard Oil Company and offering its customers oil at the regular market price, 8 cents a gallon. When the customer would say that the price was no inducement for him to leave the Standard, the salesman would advise the customer that if he would make a purchase from the independent company the Eagle wagon would immediately come around and offer oil for 6 or 6^ cents a gallon; and if the Eagle could not secure the trade at that price, the Davidson wagon would call and offer oil for 6 or 5i cents. This means of retaliation by the independent companies so disturbed the regular trade of the Standard in Baltimore that the Davidson oil wagon was withdrawn soon, the Standard reduced its regular open market price to 7 cents, and the Eagle advanced its price to 7 cents, making a uniform market of 7 cents in Baltimore, which continued for some time. (Fehsenfeld, 5/2325-26.) The defendants offered in evidence, in connection with the testimony of Mr. Blaustein, Defendants' Exhibit 209, which is a contract signed by Mr. Davidson for the rental of the tank wagon from Mr. Blaustein, under which he was to pay to Blaustein $15 a month for the use of the wagon; he was to purchase oil from the Eagle Oil Company at 1 cent per gallon below the market price; and Mr. Davidson agreed not to solicit any of the trade enjoyed by Mr. Blaustein. This was offered by the defendants ia an attempt to show that, so far as the Eagle Oil Company was concerned, Davidson was upon a contract basis ; and by the testimony of Mr. Blausteia the defendants sought to show that Davidson was not under the control of Blaustein, or that he made any arrangements with Davidson to sell at 5 or 5J cents a gallon, or that there was any community of action between Davidson and the Eagle Oil Company. (Blaustein, 16/2461.) The defendants have not shown that there was no agreement between the Standard Oil Company and Davidson with respect to prices 217 and the practice testified to by Mr. Fehsenfeld, of calling upon only the trade of the Crew-Levick Company and the Red "C" Company; they rest their case in this respect upon the testimony of Mr. Blaustein, who says that he has no knowledge of any such arrangement. Mr. Blaustein said (16/2460) that Davidson continued on the streets only about two months; that he carried out the terms of this contract during that period, but that he found that he could not do business on the margin of 1 cent a gallon allowed him under the contract with Blaustein; that he could not put out enough gallonage with this one wagon and, therefore, he abandoned the contract. Mr. Blaustein said (16/2594) that in the spring and summer when Davidson entered into this contract allowing him 1 cent a gallon mar- gin, Blaustein could not market oil for a cent a gallon, because it was the dull season. Mr. Davidson had for many years been in the oil business in Baltimore, in charge of the Crew-Levick Company's tank wagons; he was in a position well to know what the expense of operating a tank wagon was, and he should have known whether or not he could with one wagon sell enough oil on a margin of a cent a gallon to pay his expenses and make a i;'easonable profit for his time and efforts. There is no contradiction by the defendants of thfe testi- mony of Mr. Fehsenfeld that Davidson did, in fact, sell oil for 5 or 5i cents a gallon. Therefore, there must have been some other arrangement between the Standard and Davidson than the one which is embraced in the contract, Exhibit 209, between Blaustein and Davidson. What this further arrangement may have been is not disclosed by the record. We have said that Mr. Davidson was discharged by the Crew-Levick Company for unfaithfulness to that company while he was in its service. He not only took away from the Crew-Levick Company, when he quit, all of its tank-wagon drivers in Baltimore, but also made improper use of a certain contract which he had entered into on behalf of the Crew- Levick Company with James W. Crook, a grocery man having 13 stores in Baltimore. This contract is defendants' Ex- hibit 210. The defendants offered this contract in evidence for the purpose- of showing that the Crew-Levick Company was making secret arrangements with Mr. Crook for a price 218 which was slightly below the open market price. The con- tract provides that in consideration of Crook purchasing, for all of his 13 stores, oil from the Crew-Levick Company during the year 1904, Crook shall receive prices as follows: Oil from January 1 to May 1 at a reduction of three-fourths cent a gallon below the regular tank-wagon price, and stove gasoline during the same time at one-half a cent below the regular tank-wagon price; oil from May 1, 1904, to October 1, 1904, at a reduction of one-half cent a gallon, and stove gasoline during the same period at a reduction of three-fourths of a cent a gallon; and from October 1, 1904, to December 31, 1904, at a reduction on oil of three-fourths of a cent, and on stove gasoline one-half of a cent a gallon. We submit that to a purchaser of such quantities as Mr. Crook, owning 13 grocery stores, a reduction of a half a cent a gallon on oil during the dull summer months and three-fourths of a cent during the winter months is perfectly reasonable. Mr. Wolff said (20/100-101) that Mr. Crook had been a customer of the Red "C" Company; that the Eagle Oil Company took him away from the Red "C" Company; and that the Eagle Oil Company always gave him a rebate, as well as the Standard. This exhibit is a photographic copy of the original contract entered into by Davidson and Crook. Mr. Blaustein admitted (16/2595-96) that after making his ar- rangement with Davidson, the latter furnished the original of this contract to Blaustein, which, with Davidson's consent,. Blaustein had photographed; and the photographic copies were used generally with the trade of the Crew-Levick Com- pany for the purpose of disturbing its business. This incident has no significance except to show the character of man Davidson was, and to throw light upon and explain his subse- quent career as a bogus peddler. Mr. Blaustein was asked by his counsel (15/2460) if he knew whether the Davidson Oil Company offered oil at 5 to 5 J cents a gallon, and he answered, "I do not." Then he proceeded to argue that Davidson could not sell for that price, because the oil cost him more than that, but he does not deny Mr. Fehsenfeld's testimony. Mr. Fehsenfeld had testified (5/2325) that the Davidson Oil Company furnished oil as low as 5 or 5 J cents a gallon; that the Eagle Oil Com- pany was at this time selling at 6 or 6^ cents a gallon; that 219 the Standard Oil Company's tank-wagon price in Baltimore was 8 cents per gallon; and that where the Eagle Oil Com- pany could not secure the independent trade at its cut price the Davidson Oil Company would come around and offer the oil at 5 or 5 J cents, and no one contradicts him. Mr. Blaustein was asked (15/2461) if, in substance, such was the practice, and he replied: A. Not that I know of. Q. Was there any such practice? — ^A. There was not that I know of. Q. Was there any practice whereby if the Eagle Oil Company was not able to secure a customer sold by the Red "C" Oil Company, then the Davidson Oil Company was to go to that customer? — ^A. No, sir; not that I know of. Blaustein cautiously avoided denying the testimony of Mr. Fehsenfeld upon this subject. HOME SAFETY OIL DELIVERY, AND DIXIE OIL WORKS, AT NORFOLK, VA. In 1896 the National Oil Company was organized and commenced doing business with a capital of $1,000 in what is termed the Norfolk field, which is from Norfolk south through the two Carolinas. For a number of years the National confined itself to the lubricating oil business, and in the early part of 1901 it put on its first wagon in Norfolk selling refined oils to dealers. It was then purchasing its oil from the Standard, and continued to do so for a short while, until the Standard raised the price so high that the difference between what the Standard charged and the price at which the National could purchase the same oil from independent refiners amounted to nearly 3 cents a gallon, and because of this difference the National quit the Standard and com- menced buying from the independents located in Phila- delphia and in the oil regions of western Pennsylvania. The Standard had so regulated the prices at Norfolk that it allowed the National only 1 cent a gallon margin on which to do its business, which did not permit the National to make a sufficient profit. As soon as the National com- menced purchasing from the independent refiners, the Standard cut its prices to the stores for bulk oil in Nor- folk, going down a half a cent at a time imtil the decline 220 in the market amounted to 2 cents a gallon. The National met this price, and even at this reduced price could realize as much profit on the business as it had realized when it purchased from the Standard. At this time Mr. W. W. Zachery, the manager for the Standard at Norfolk, said to Mr. Finlayson, who was managing the National, "If you continue to bring outside oil in, there will be more wagons on the streets." The National continued to handle the independent oU, and very soon thereafter the wagons of the Home Safety OU Delivery appeared in Norfolk, and drummers were also put on the streets to solicit the business of consumers who were purchasing oil of the National. (Finlayson, 5/2275-77.) This is the Home Safety Oil Delivery about which Mr. Mahle, of the Baltimore ofl&ce of the Standard, testified. He said that it was sent there by the Standard, and held out to the trade and generally acknowledged to be independent, but was under the management of C. W. Bender and its business reported to the Baltimore office in the same manner that the business of all the other bogus companies was handled. (Mahle, 5/2367-68.) Prior to this time the Stand- ard had no wagons in Norfolk delivering direct to consumers. The Home Safety did business with the 1-gallon square can. It secured about half of the National Oil Company's trade, but not succeeding in completely driving it out of business, or compelling it to purchase from the Standard, after some months the wagons of the Dixie Oil Works appeared in Nor- folk and commenced soliciting the store trade of the National. The wagons of the National were followed and the Dixie endeavored to get its customers, avoiding the customers of the Standard. (Farquharson, 5/2219-20.) The Dixie not only cut the price to the trade, but, where necessary to get the trade, gave away oil. They would go to the stores that were buying of the National, and if they could not induce the merchants to buy by claiming that the Dixie was inde- pendent, they would ofl'er 5 gallons free on a purchase of 25 gallons, as an inducement to the merchant to buy of the Dixie. The Home Safety Oil Delivery and the Dixie Oil Works both represented that they were independent and in no way connected with the Standard. Mr. Finlayson, of the National Oil Company, went to the trouble of looking 221 up the history of the Dixie, and found that it was originally organized as a corporation under the laws of Georgia under the name of Dixie Oil Company, and after it was bought by the Standard the name was changed to Dixie Oil Works, and that there was no head to it except the Standard Oil Company. After Mr. Finlayson secured this information, he and his employees stated publicly on the streets of Norfolk that the Dixie Oil Works was owned and controlled by the Standard. These bogus companies also tried to employ the salesmen and drivers of the National Oil Company, and, regardless of salary; they would tell these employees that they had better come with the Dixie and secure permanent positions; that the National would soon be off the streets. (5/2280.) The Dixie also cut the price on lubricating oil as much as 33 J per cent, and below a point where such oils could be sold at a profit. This cut extended throughout North and South Carolina. (Finlayson, 5/2280.) These conditions continued until 1905, gradually grow- ing worse, and the business of the National Oil Com- pany was seriously crippled. Finally Mr. Finlayson con- sulted ex-Governor Aycock, of North Carolina, who was then practicing law at Goldsboro, N. C, laid before him the whole situation, and he advised Finlayson that it was a con- spiracy to ruin the business of the National Oil Company. Governor Aycock and Mr. Finlayson then went to Washing- ton to lay the matter before the Bureau of Corporations. They had an interview with Commissioner Garfield, in which the whole situation was gone over, and after that they called upon the President and laid the matter before him in the hope that the Government could do something to prevent the ruin of the business of the National Oil Company. After the interview with President Roosevelt, Governor Aycock and Mr. Finlayson went to 26 Broadway, New York, and there had an interview with Mr. Elliott, the general attorney for the Standard Oil Company. After this interview with Mr. Elliott, Governor Aycock returned to his home in Goldsboro. About four or five weeks after that Governor Aycock had an interview with Mr. Goodwillie, manager of the Baltimore branch of the Standard Oil Company of New Jersey, at Gover- nor Aycock's office in Goldsboro. Shortly after that another interview was had with Mr. Goodwillie, and Mr. Cull, attorney 222 for the Standard Oil Company at Baltimore, and Governor Aycock, at which Finlayson was present. Governor Aycock stated plainly to these Standard Oil representatives the griev- ances which the National Oil Company had . The general mat- ter of competition in the Norfolk territory was discussed, the unfair methods employed by the bogus concerns were fully gone into, and the whole matter was thrashed out at that interview. There was some clashing at this interview with Mr. Good- willie, but he did not claim to know anything about the facts. He did say in the interview that the Standard had taken the Dixie over a few days before. Governor Aycock said to him it was many months before that the Standard had taken the Dixie over, and Mr. Goodwillie laughed about it. Gover- nor Aycock also told him that the Standard's name had not yet been put upon the Home Safety Oil Delivery's building. It seems that in the previous conversation with Mr. Good- willie he had agreed that this should be done, and he then said that he had ordered the name put on the building at Norfolk and that it was strange that it was not there. Mr. Finlayson, representing the National, insisted that Governor Aycock should prosecute the Standard Oil Company and these bogus concerns as vigorously as the law would permit, and to commence suit against all parties participating in the conspiracy to recover the damages which his company had sustained. At this meeting Governor Aycock said to Mr. Cull, in the presence of the others, that he would commence a suit in the courts of North Carolina, in which State the National Oil Company had secured its charter, unless these methods of competition were entirely abandoned. After this interview the conditions improved considerably in Norfolk ; the wagons of the Dixie Oil Works were taken off the streets and the Standard had its name put on the Home Safety Oil Delivery's warehouse, the giving away of oil ceased, the price conditions as to lubricating oil improved, and conditions generally improved. The Standard had not cut the prices directly itself, and when the Dixie disappeared the cut prices were withdrav;-n. (Finlayson, 5/2281-84.) Bruce Robinson, now superintendent of certain tank-wagon stations in Baltimore, testified that he was employed in July, 1902, by C. W. Bender to operate the Home Safety Oil Delivery at Norfolk, Va. (13/1102); that he managed this 223 company until Februaiy, 1903; that when he took hold of the Home Safety the plant consisted of some 5-gallon cans, two old wagons and two old horses in a stable in an alley in Norfolk; that about two months later the plant was enlarged, two storage tanks and a warehouse were built, and three new wagons and additional horses were added to the outfit (13/1 103) . Mr. Robinson says that when he first commenced business in Norfolk he sold about 75 gallons a day from each of the two wagons which were then in service, and that his business increased right along; that when he got the new equipment he sold about 150 gallons a day from each wagon (13/1105); that when he left there he was selling from each of the three wagons in use 250 gallons a day; that at the time he left Norfolk the Home Safety had altogether five wagons, but two of them were the old wagons that were on hand when he first went there, and were only used to scout around with and in cases of emergency. He says that his competitors cut the prices at Norfolk, and that by reason of it he lost business. This statement agrees poorly with his other testimony, to the effect that he increased his business from 150 gallons a day to 750 gallons, and more than doubled his plant equipment. He said he had no authority to meet prices when his competitors made cuts, and that he did not meet them, but sold at the prices publicly displayed upon his wagons each day. Mr. Robinson was then asked (13/1106) to give the several instances in which cuts were made by his competitors, and he says that he remembers that cuts were made to the larger consuming trade; that the National Oil Company cut the price to a fruit dealer, he thinks, a cent a gallon, and also to another large dealer who ran a fruit stand and had several large torches to light his stand by night; that a cut was also made by the National to a dyer and cleaner (13/1106), and also to a restaurant keeper; and these are the only cuts that he has mentioned. He said on his direct examination that he got the fruit dealer first mentioned back very soon after- wards, and on his cross-examination (13/1150) he says he don't know how he got him back, but that perhaps the cut prices did not last very long. He stated that he got all but one of these customers back, and he denied that he did so by cutting the price, but was unable to give any explanation as 224 to how it happened that they came back to him after once leaving him on account of a cut made by his competitors. The cuts appear to have been made on gasohne to purchasers whose consumption was so large that they might be treated as dealers and might reasonably be given a lower price than a small concern, such as a family. The Home Safety Oil Delivery was a peddling concern, going from house to house and not selUng to retail merchants. Mr. Finlayson, the manager of the National Oil Company, the company which Mr. Robinson said made the cuts, testi- fied that a large number of solicitors were put upon the streets of Norfolk by the Home Safety to solicit the trade of the National. Mr. Robinson's attention was called to this testimony, and he was asked how many there were, and he said there were only four or five of these; that (13/1121) for about the first two months after he went there he had the two drivers and himself, and that then these solicitors came along from Baltimore. The solicitors, then, must have come about the time when he enlarged his plant and got his three new wagons and as he increased the number of his wagons. When he put on the third Wagon another driver was hired. The four or five canvassers, he says, were on the streets for a couple of weeks (13/1120). These canvassers were not residents of Norfolk, and not acquainted with the people there or familiar with the trade. They were sent to him from Baltimore by Mr. Bender, and there miist have been something unusual ia the conditions at Norfolk to warrant Mr. Bender in sending these four or five men there to sohcit the trade on the streets, in addition to Mr. Robinson, who was also soliciting trade, and the respective drivers of the peddling wagons. While these canvassers were on the streets, the Home Safety was operating regularly three peddling wagons, and had in its employ nine or ten men. We think Mr. Finlay- son was justified in characterizing it as he did. Mr. Mahle testified that the Home Safety was used by the Standard as a club over other peddlers doing business in Norfolk and to prevent them from leaving the Standard. Mr. Robinson says this is not true; that he never used the Home Safety for any such purpose. On his cross-examina- tion (13/1150) Robinson was asked for what purpose the Home Safety was sent to Norfolk, and he says that he could not tell; 225 that all he laiew about it was that it was sent there to sell oil; that he did not know anything about Bender's reason for sending him there; and that he did not even know that he was running a bogus independent concern. Mr. Mahle was, at this time, connected with the refined oil department in the Standard OU Company's Baltimore office, and the Norfolk office was under the Baltimore office. He was in direct con- tact with Mr. Bender and with the business of all the bogus independent companies which were then being run from the Baltimore office, and was in a position to know the reasons that existed for sending the Home Safety to Norfolk. It is not strange that Mr. Robinson is not able to tell for what p\ir- pose the Home Safety was sent to Norfolk. It was not the policy of the Standard Oil Company to let its local managers and tank-wagon drivers know much about the plans and pur- poses of its bogus concerns. They were mere instruments under Bender. There are persons connected with the Standard Oil Company who know what the reasons were for sending the Home Safety to Norfolk, and if the defendants desired to contradict Mr. Mahle, the proper person to call for that pur- pose was Mr. Charles W. Bender, the man who sent the Home Safety to Norfolk. His laiowledge upon the subject would be as valuable as that of Mr. Mahle, and when a witness of that kind contradicted Mr. Mahle, it would then be a question of veracity between these two men; but no such question exists as between Mahle and Robinson; Robinson was kept iu blissful ignorance, and it was years afterwards that he even learned that the Standard owned the Home Safety while it was operating in Norfolk. The defendants called Mr. Robinson to testify that, so far as he knew, the Home Safety was not sent there for any improper purposes, but they did not see fit to call anyone to explain for what purpose it was sent there. On his cross-examination, Mr. Robinson said (13/1134) that the cuts which were made in his prices were not general cuts, but cuts made to the particular persons whom he mentioned in his direct examination, and that sometimes the cuts con- tiuued for awhile and sometimes they did not. He was unable to state whether the Home Safety made or lost money in Norfolk; the money that he took in was 72064— VOL 2—09 15 226 sent to Bender, and Bender sent him checks to use in pay- ment of the bills; that he did not know what he paid for oil, and could not remember what he sold it for; and that his price was lowered and raised as Bender directed. The books of the Standard Oil Company would show whether or not the Home Safety made or lost money in Norfolk, and these books could have been produced by the defendants if they wished to contradict the Government's testimony that they were operated at a loss. An effort was made on cross-ex- amination to ascertain the cost of running the Home Safety, but Mr. Robinson knew so little about the busiuess that he was unable to furnish the facts upon which a reasonable calculation could be based. Mr. L. Wilmer says (13/1251) that in 1903 he went to Norfolk and took charge of the Home Safety Oil Delivery there, succeeding Bruce Robinson. He had previously been a salesman for the Dixie Oil Works, and why he was switched from one bogus company to another at this time is not ex- plained. He says that he did not cut prices at Norfolk, but that on the contrary he raised the price a cent, and displayed the price upon the wagons, and that he gave back this cent to the customer for the return of the empty can; and he says that the fact that he displayed a higher price on his wagon than he actually charged for a time interfered with his business. Mr. Artie Purse testified (13/1283) that in 1903 he became manager of the Home Safety Oil Delivery at Norfolk; that he made a house-to-house canvass and got all the trade that he could without regard to what company had previously enjoyed this trade; that (1285) his method of delivery was to leave a full gallon can with a customer and take up the empty can; that when he took charge of the Home Safety in Norfolk he thinks he was selling oil for 1 1 cents, and gasoline for 13, and that the merchants were selling it to consumers at about the same price; and that the Home Safety had signs with the price painted upon them which were attached to the wagons. He said that the National Oil Company cut the price, and that all the customers the National got from the Home Safety were obtained in that way; and he gave the names of several dealers which he lost, as he says, by reason of a cut made by the National; that (1287) he did 227 not reduce his price to meet these cuts, and that the Home Safety maintained its price. He also complains that the National Oil Company hired some of his drivers and that this also interfered with his trade. It was not thought worth while to call witnesses from Nor- folk to explain the situation there at the time when Mr. Purse says that the National was cutting the price, because, as ap- pears from the names of customers whom he mentions, this is evidently another instance like those described by the wit- ness Robinson, in which large consumers such as garages, dry cleaning establishments, etc., which could properly be given wholesale prices, were furnished gasoUne by the Na- tional at less than the prices the Home Safety was making to ordinary consumers. On his cross-examination (13/1291) Artie Pmrse was asked where the Home Safety got its oil, and he said of the Stand- ard Oil Company. He was then asked if he advertised his company as belonging to the Standard and he said that he did not; that he did not know who it belonged to; that he never asked any questions about that, and never had any curiosity; that he made his reports to C. B. Osborn at a cer- tain post-office box in Baltimore. Pm'se admits that he was asked by the trade whether or not the Standard owned his company, and he said he told the trade that he did not know, and when he testified he said he did not know whether the Standard owned the company or not. He was asked if he had not heard it frequently, and if he had not heard it stated more than once that the Standard owned it, and his reply was that there are many things that you can hear more than once. Mr. Purse could not have been mistaken about the ownership of the Home Safety. Can it be believed that a man of ordinary intelligence could be the manager of a company of this kind for four or five years and not know who was running and operating that company? The very fact that he bought his oil of the Standard, and did not report his business to the Standard, but reported it to an individual, was notice enough to him that there was some- thing suspicious about the whole transaction, and we very much doubt the truthfulness of Mr. Purse when he says that he did not know that the Standard owned the Home Safety. But whether he did know it or not, it is now conceded 228 in this case that the Standard always owned it, and that it sent it to Norfolk. It goes without sayiag and without need of further proof that it was sent there to get the busi- ness that the Standard did not already enjoy. HOME SAFETY OIL DELIVERY, BALTIMOBE, MD. Mr. C. H. Mahle testified (5/2367-68) that when the Stand- ard acquired the Peuss Oil Company, which had been doing business ia Baltimore and Washington peddliag oU to the consumer, the name was changed and the business was con- tinued under the name Home Safety Oil Delivery at both places, under the management of C. W. Bender, with C. G. Purse and others under him. The Home Safety did business with the 1-gallon patent square can, selling from house to house. Bender had an office separate from that of the Standard in Baltimore, and all of the business was reported to him. The Home Safety was held out to the trade and generally acknowledged to be independent. Some of the grocers in Baltimore learned that it was run by the Standard, and others did not know it. Its wagons and cans had no name on them except Home Safety Oil Delivery, until the latter part of 1905, when the Standard came out openly and acknowledged its ownership. In Baltimore the Home Safety Oil Delivery was used to hold the trade of grocers and peddlers supplying consumers so that they would not leave the Standard or purchase inde- pendent oil ; if they did so the Home Safety wagons would be sent after their trade. Mr. C. G. Purse was called on behalf of the defendants (13/1217-18) and in answer to the testimony of Mr. Mahle said that, under his management of the Home Safety, no special effort was made to get the trade of peddlers who did not purchase their oil from the Standard ; that he never gave any instructions to use the Home Safety for any such pur- pose ; or that it was used as a threat to the grocery trade that if the grocers bought from independent companies the Home Safety would become aggressive in their immediate vicinities; but said that the Home Safety solicited trade from house to house irrespective of anybody's trade, and that his efforts were directed toward getting all of the customers he could whether they bought of the Standard or not. 229 On rebuttal the Government called Warren S. Dixon, who testified (20/190-192) that prior to May, 1901, he was work- ing for an independent peddler named Wm. S. Schmitz, who was buying his oil from the Red "C" Company; that in about May, 1901, which was the time the Standard took over the Peuss Oil Company, under the sohcitation of C. G. Purse, Dixon left Schmitz and entered the employ of Mr. Purse; that under the directions of Purse he went upon the streets with a wagon having no name upon it, supposedly in business for himself and holding himself out so to be, and solicited trade, selling to consumers; that there were at that time other peddlers in Baltimore besides himself, some of whom were buying independent oil; that Purse directed him to cut the price 1 cent a gallon, and to go on the same route that he had previously covered for Schmitz and to solicit Schmitz's trade alone, selling to his customers at the reduced price, which instructions Dixon carried out; that after he had been working on Schmitz's trade for about six weeks Schmitz began purchasing his oil from the Eagle Oil Com- pany (Blaustein's bogus concern) and that then he was noti- fied by Purse to leave Schmitz's trade alone. Mr. Dixon says that (20/191-2) he was then instructed to follow up the trade of Leo Blank, a peddler in Baltimore, who was buying his oil from the Red "C" Company. Under instructions from Purse, Dixon went after Blank's trade, cutting the price in some instances as much as a cent or a cent and a half; that he got about half of Blank's trade; that Blank then began to purchase his oil from the Eagle Oil Com- pany, and Dixon was instructed by Purse to stop going on Blank's route. (See also Fehsenfeld, 5/2320-21.) After that Dixon was instructed by Purse to go on the route of a peddler named John Ruehl, who also was buying from the Red "C" Company; but Dixon was not successful against Ruehl, and after a month or a month and a half he quit work- ing for Purse and went into another line of business. It will probably be claimed by the defendants that Dixon was not operating one of the Home Safety wagons because the Home Safety name did not appear upon it, and further be- cause Dixon held himself out to be in business for himself. But this is dodging the question; C. G. Purse was then in Baltimore building up the Home Safety, using the old equip- ment of the Peuss Oil Company; one of these wagons with 230 the name blurred out was given to Dixon, and he was in- structed what particular trade to go after from time to time. The fact that the Home Safety Oil Delivery name was not put upon Dixon's wagon can make no appreciable difference, because he was working for Purse, and Purse was then run- ning the Home Safety at Baltimore. This testimony squarely contradicts the testimony of Mr. Purse and completely corroborates the testimony of Mr. Mahle, that the Home Safety was used for the purpose of clubbing peddlers to purchase from the Standard or drive them out of business. In the light of this testimony con- necting Purse with the attack upon the trade of independent peddlers, and shawing his cooperation with the bogus inde- pendent Eagle Oil Company to secure the trade of these peddlers for the Standard, it can scarcely be imagined that Purse did not laiow for what purpose he was running the Home Safety Oil Dehvery at Baltimore and its connection with the Standard. Purse's testimony with regard to the Baltimore situation is somewhat interwoven and confused with his testimony on the Washington situation, and we will treat his cross-examination on this subject under the next subdivision, the Home Safety Oil Delivery at Washington. HOME SAFETY OIL DELIVERY, WASHINGTON. D. C. Mr. C. H. Mahle testified (5/2367) that when the Standard Oil Company acquired the business of the Peuss Oil Com- pany, which was doing business in Washington and Balti- more, and which had been doing a peddling business selling to the consumer, it changed the name to the Home Safety Oil Delivery and continued that business. Mr. Dixon tes- tified (20/189-90) that the acquisition of the Peuss Oil Company was at about the time he went to work for Purse in Baltimore in May, 1901. Mr. C. G. Purse, caUed on behalf of the defendants, testified (13/1209, 1224) that from some time in 1902 until February 1, 1908, he was in charge of the Home Safety Oil Dehvery at Washington. [On his cross- examination (p. 1224) he says that he thinks he went to Washington some time in 1902, but this witness, in tes- tifying to other situations during his employment by the Standard operatiag its bogus concerns, repeatedly makes con- tradictory statements of this kind. The latter date, how- 231 ever, is no doubt the correct one, because he was in Balti- more for a time in 1901.] Mr. C. G. Purse left Washington and the Home Safety, and on the latter date it was tixmed over to his brother, Artie Purse, who has since been the man- ager of this concern at Washington (13/1278). C. G. Purse said (13/1213-15) that the Home Safety sold to the consumer in the 1-gallon square can; that it always sold at the prices displayed on its wagons, and sold to all consumers at the same price; that he had no discretion and had nothing whatever to do with fixing the prices at which oil was sold, but such prices were given to him by the Dixie Oil Works. He says his competitors were the stores, certain peddlers [some of whom, he says (1233), were buying their oil from the Standard], and the independent companies, of which he names several. He says that, so far as he knows, he did not cut the prices of the storekeepers, and that when he found that his competitors had cut prices he did not cut his price, but maintained it right along. He says the house- keepers liked the cans of the Home Safety, because it was an unspillable can, having a spout which rendered it unnec- essary to use a funnel in filling a lamp ; that another advan- tage of the 1-gallon can was in the weight, because the house- wife did not have to lift the weight in pouring the oil into a lamp or stove, and that he got his trade by reason of the popu- larity of this can. Mr. Purse said (cross-examination, 13/1227-28) that he did not know what the cans cost; that they were not given away, but were simply loaned to the customers; that they sometimes gave a cent apiece for their return when empty when they were short of cans; and he practically admitted that this amounted to a cent a gallon rebate. On page 1230 he said he could not tell whether the Home Safety Oil Dehvery made a profit at Washington or not, and that (1226) it was simply his duty to look after the extension of the business. He said (cross-examination, 13/1221-22, 1226-27) that he got his oil from the Standard Oil Company; that he reported his business to C. W. Bender or to a Mr. McKenzie at the office of the Dixie Oil Works in Baltimore; that he remitted his collections to Bender; and that Bender paid his bills. Some of his mail, he says, was addressed to 210 East Lexing- ton street, Baltimore, and some of it to a certain post-office 232 box in Baltimore; that there was no name upon the envel- opes, simply the address 210 East Lexington street or the post-office box; that his mail was so directed by order of a Mr. Osmond, who was at 210 East Lexington street; that the envelopes for tliis purpose were furnished to him printed. He says that this manner of addressing his mail continued until October 1, 1905. Mr. Purse said (13/1222-24, 1226-27) that at first the money he collected was deposited in banks to the credit of the Home Safety Oil DeUvery, and he paid his biUs by checks which were signed Home Safety Oil Dehvery, C. G. Purse, manager. After a time, he says, the checks for his biUs and salaries were mailed to him signed by C. W. Bender, and that since October 1, 1905 (the date on which he says the Standard Oil Company "came in possession" of the Home Safety Oil Dehvery), the bills and salaries have been paid by the Stand- ard Oil Company. Mr. Purse was asked (cross-examination 13/1223) that if prior to October 1, 1905, he knew that the Standard had any connection with the Home Safety, and he repHed, "Not di- rectly, no." He says (1223) that he heard people sometimes mention it, but never had any occasion to deny it, and that he had no occasion to hold the Home Safety out as an independ- ent; that (pp. 1226, 1229) he did not know he was working for the Standard Oil Company; that he never knew he was run- ning a secret company for the Standard until the Government brought out the fact, and that he is now under the impression that he was working for the Standard, although he did not know it at the time and was not conscious of that fact. Mr. Purse could not have been deceived about the identity and ownership of these bogus concerns. The fact that he had instructed Dixon in Baltimore to foUow the trade of particu- lar peddlers who were purchasing from the independent oil companies until those peddlers began buying from the Eagle Oil Company, after which he instructed Dixon to discontinue following the trade of those particular peddlers ; the fact that his mail while at Washington was being sent to a post-office box or to a street number without any name on the envel- opes ; that all of the business of these companies, so far as it related to ownership and control, was kept secret ; that when the oil was not bought directly of the Standard Oil Company 233 it came to him in blank-head barrels ; and many other facts which might be cited, were sufficient to satisfy any man of average intelligence that he was running a secret concern, particularly as he had been in the oil business for many years. Why he was sent from Baltimore to Washington is not disclosed by the evidence. DIXIE OIL WOBKS. The Dixie Oil Company was organized as a corporation by S. P. Shotter Company, of Savannah, Ga., in 1897 or 1898. The Shotter Company's business had theretofore been devoted entirely to naval stores. It was in the beginning an inde- pendent company and competing with the Standard for busi- ness. The Dixie Oil Company at first did a general lubricat- ing and refined oil business at Savannah, New Orleans, Mobile, and Birmingham, selling from tank wagons and in barrels, and it employed as its general manager a former general manager of the Standard Oil Company of Kentucky. The Standard soon entered into sharp competition with the Dixie, cut the prices very heavily at the points where it was doing business, and finally, in about 1899, the Dixie Oil Company capitulated and was purchased by the Standard. Its name was then changed to Dixie Oil Works, and it was thereafter run by the Standard as a bogus independent con- cern, doing business in numerous places . ( Wootten, 5/21 07-8 ; Finlayson, 5/2279-80.) The Dixie had stations at Savannah and Charleston. The Charleston station was abandoned in about a year and its business turned into Standard Oil Company channels. Mr. C. W. Bender, having charge of the Dixie, had the oil shipped to him wherever he operated by the Standard Oil Company chiefly from Baltimore, in the name of C. W. Bender, agent. He reported the business of the Dixie to the Standard Oil Company in the same manner that he reported the business of the other bogus independent companies which he operated. In about 1901 the Dixie began to do business in other towns in the Carolinas north of Savannah, in Virginia, and in Maryland, all the way up to Baltimore. (Mahle, 5/2363-64; Fehsenfeld, 2317-19.) As it moved northward it made a special effort at all competitive points to convert the competitive business to the Dixie Oil 234 Works. In addition to the methods ordLnarUy adopted by this company, the Dixie gave special commissions to dis- tributing agents who had formerly handled independent goods, and, in cases where they could not secure these agents by this method, they followed up such methods as invokiag the fire ordinances in towns where the independent companies had oil stored within the fire limits, compelling them to re- move the oil. (Mahle, 5/2364.) Prices were cut to secure the business and after the business was secured it was man- aged in such a way as to turn it over to the Standard Oil Company. Whatever methods seemed best calculated to de- stroy competition were adopted. This Dixie Oil Works held itself out as an independent concern, leading the public to believe that it was dealing with an independent company and not with the Standard. By these methods of competition it secured the Eed "C" Oil Company's agencies at Columbia, S. C, Marion, N. C, Newton, N. C, Lenoir, N. C, Charlottes- ville, Va., Smithfield, Va., and Silver Spring, Md. (Fehsen- feld, 5/2317-18.) Special efforts were made to secure the trade of the independent companies, but now and then, for ' effect only and for the purpose of making it appear that the Dixie was really independent, they would take a customer of the Standard. (Mahle, 5/2364.) The Dixie Oil Works was also operating at New Orleans. In about 1899, Mr. E. N. Wootten, who was then assistant to the chief clerk at the Atlanta office of the Standard Oil Company, and who prior to that had for some time been the manager of the bogus independent Peoples Oil Company, was called to the Cincinnati office to have a conference with the officers of the Standard Oil Company of Kentucky. As a result of this conference Wootten was sent to New Orleans to take charge of the New Orleans branch of the Dixie Oil Works, and he was instructed to run the business there as a bogus independent concern in the same manner that he had conducted the bogus independent Peoples Oil Company at Atlanta (see pp. 250-258, post) , which instructions were car- ried out by Wootten. He was instructed to confer with the special agent of the Standard Oil Company at New Orleans whenever a bid on a contract was to be made, and, if it was essential that the Standard Oil Company should get the busi- ness, the price which the Dixie was allowed to bid was put a 235 little higher than the Standard, in order that the business might be turned into "legitimate" Standard channels. The Dixie was held out to the public at New Orleans to be inde- pendent, and the public was not aware that it was owned and controlled by the Standard. While managing the Dixie at New Orleans Wootten received his directions from the Cincin- nati olRce of the Standard. His letters and communications with the Cincinnati office were not addressed to the Standard Oil Company or to any person in care of that company, but were directed to the Dixie Oil Works at a certain post-office box in Cincirmati. These letters were received by the officers of the Standard Oil Company at Cincinnati, and the cor- respondence from that office to Wootten was principally from Mr. CoUings, the general manager, Mr. Stanley, then manager of the lubricating-oil department, and Mr. Holmes, treasurer, of the Standard Oil Company of Kentucky. (Wootten, 5/2108-9.) At New Orleans there were a large number of customers who were dissatisfied with the Stand- ard Oil Company and whose trade the Standard could not get, and the Dixie Oil Works was instructed to make a par- ticular effort to get those customers. When the Dixie ac- quired any trade, it was switched over to the Standard as soon as possible. It was the purpose of the Dixie in New Orleans to cooperate with the Standard in switching over to that company the trade which the Standard could not get in its own name in the first instance; and Mr. Wootten was instructed, before he went to New Orleans, to work and cooperate with Mr. Morris, the local manager of the Stand- ard, to this end. In cases where both the Dixie and the Standard bid for contracts for furnishing oil, they would sometimes bid the same prices and sometimes they would bid different prices, depending upon which seemed to be the best method of ultimately getting the business into direct Standard channels. At the time this bidding between the Dixie and the Standard was going on, there were also inde- pendent companies in New Orleans bidding for the same business. (Wootten, 5/2110-12.) For the last eight months that the Dixie Oil Works was in New Orleans it was pur- posely losing customers which were going over to the Stand- ard Oil Company, and the result was that the Standard got practically all of the Dixie's trade, it being the chief object 236 in maintaining that branch in New Orleans to ultinaately turn all of that trade into Standard channels. When that purpose was accomplished the New Orleans branch of the Dixie Oil Works was abandoned and the stock and property were transferred. (Wootten, 5/2110-12.) In 1903 the Richmond Oil Company, an independent com- j)any, began doing business in Richmond, Va., under the management of Mr. C. H. Mahle. When it was about ready to do business it found the Dixie Oil Works there, under the management of L. Wilmer. Just before the Richmond Oil Company entered Richmond the market price for bulk oil from the tank wagon was 11^ cents. The Dixie immediately cut the price down to 6^ cents. At this price there was no profit in the business, and the Richmond Oil Company would have been obliged to go out of business had it not been for the fact that it was also handling lubricating oil and gasoHne, on which there was a good margin of profit, so that the general average of its business showed a fair profit. The Dixie. Oil Works at Richmond, while holding itself out to be absolutely independent, made efforts to produce the impression that the Richmond Oil Company was a Standard concern, point- ing to the fact that Mr. Mahle, its manager, had formerly worked for the Standard at Baltimore. The Dixie Oil Works also had lists of the customers of the Richmond Oil Company. Mr. Mahle saw Mr. Wilmer, the Dixie's representative, stand- ing on the streets checking over some of the yellow sheets containing the names and addresses of customers supplied by the independent companies, and the amount of oil furnished to each. These yellow sheets were famihar to Mr. Mahle, he having frequently seen and handled them in the Baltimore office of the Standard; and which he testified usually came into his office from the office of Mr. C. W. Bender, who was in charge of all the bogus independent companies in the Balti- more territory at that time, and in charge of other special work for the Standard. (Mahle, 5/2369-71, 2374-75.) The defendants called Mr. C. T. Gollings to give his opinion as to the reason for the organization of the Dixie Oil Company by the Shotters and to explain its career while it operated in New Orleans. Mr. CoUings is of the opinion that the Shot- ters organized the Dixie Oil Company to fight the Standard Oil Company in the illuminating-oil business, because the 237 Standard was competing with that company for the naval- stores business. Mr. CoUings would have us beheve that the Shotters intended, through this company, either to drive the Standard out of business or compel it to relinquish its hold upon the naval-stores trade (12/1904). Mr. CoUings's attention was called to the testimony of Mr. Wootten about price cutting by the Standard as against the Dixie during the period that it was actually an independent company. He said in a very general way that the dechne in prices in the year 1897 was owing to a general decline in the markets; and in reference to the year 1897 he was asked this question: Q. That is the basic year taken by the Bureau of Cor- porations? — A. Yes; I think that is borne out by the facts that prices were lower. Yes; the low prices pre- vailed generally in 1897. Mr. CoUings was mistaken. The basic year taken by the Bureau of Corporations was 1898 and not 1897. Mr. Col- lings did not state that he had any knowledge of prices. He did not give the price of oil at any time during the year con- cerning which he testified, but was satisfied to say that there was a decUne in the markets ; and this is the only explanation that he gives in answer to the positive statement of Mr. Wootten (5/2107) that the prices were very heavily reduced when the Dixie commenced doing business. His attention was also called to the testimony of Mr. Wootten, to the effect that as soon as the Standard acquired the Dixie the price of oil in that territory immediately advanced, and he explains this by saying (12/905) that it was owing to an advance in the price of crude; that crude went up in 1898 from 41 cents to 75 cents at the end of the year. ^ It is not necessary, however, to go into any extended discussion as to price cutting, because the result of the warfare between the Dixie and the Standard tells the whole story. Its independence lasted only from some time in 1897 or 1898 until 1899, when the Standard became the owner of it and thereafter operated it. Mr. CoUings said (12/905) that the main thing that the Standard was interested in after it acquired the Dixie was to get rid of the large stocks of oU that it then had on hand and to supply the demands of the trade for certain brands which the Dixie handled. He says his recollection is that the Standard 238 did not run the Dixie very long — just long enough to clean up and get rid of their stocks. When the Dixie had con- verted the competitive trade into Standard channels, it did leave New Orleans and the territory of the Standard of Ken- tucky, but it did not go out of business. It thereafter oper- ated in the territory of the Standard of New Jersey. Mr. Collings was asked (12/905) if it was his policy to have the Dixie seek merely the trade that was dissatisfied with the Standard Oil Company, and he replied : A. It was not. He [meaning Mr. Wootten, the man- ager of the Dixie] did not disturb our trade, because it easily could handle business which came to him, much easier and at much less expense. After denying that it was the policy of the Standard Oil Company to seek only the dissatisfied trade, he qualifies that with a long sentence, the effect of which is to say that it did seek only the dissatisfied trade. It is of little consequence what &nj witness shall testify upon that subject. The only purpose of putting a bogus company into the field is to acquire that trade which the Standard can not otherwise obtain, and this Mr. Collings testified to during his examina- tion. In his desire to injure Mr. Wootten, who had testified on behalf of the Government, he stated that Mr. Wootten was discharged for intemperance, and that he was a dope fiend, as he (Collings) had always heard (12/906). Mr. CoUings limits his testimony upon this subject to what he had heard, and does not claim to have any knowledge upon the subject. Exhibit 711 (10/1776) is a letter from R. N. Eeed, special agent of the Standard at Atlanta, Ga., which shows the rea- son why Mr. Wootten's connections with the Standard were severed; and this letter corroborates the testimony of Mr. Wootten upon that subject. It is as follows: Standard Oil Company (Incorporated) . Atlanta, Ga., Oct. 6, 1904. Your Illness. Mr. E. N. Wootten, City. Dear Sir: On account of your continued illness it was necessary for us to employ a clerk to take care of your 239 work, and judging from your continued absence and the reports we have received from time to time, you will not be able to resume your duties until some time next year, if then; therefore, we have decided to dispense with your services. Mr. Hooks will tender you, with this, your salary for the last half of September, and it is also understood that you will remain on our pay roll until the close of October business. We will either mail you a check on the 15th and last of October, or you may caU at oiu" office for same. We regret we have found it necessary to take this step, and should you fully recover we will be very glad to consider you for another position, should there be a vacancy. Yours, truly, R. N. Reed, Special Agent. The Dixie Oil Works continued in business in the territory of the Standard Oil Company of New Jersey from Savannah to Baltimore. During the entire time of its existence in this field it was under the management of Mr. C. W. Bender, who was connected with the Baltimore office of the Standard. Bender made reports of its business, both verbally and in writing, to Mr. Powell of the Standard, and in Mr. Powell's absence these reports came to Mr. Mahle, who was in the same department. In his verbal reports, Bender went over the situation in various towns. He often requested and was furnished information concerning competitive ship- ments. This information was furnished him from the records of competitive shipments kept in the Baltimore office, which are described in a later subdivision of this brief. All of the bogus independent companies made use of these competitive reports. (Mahle, 5/2364-65.) The Dixie Oil Works became the principal bogus com- pany in the Baltimore territory until it went out of existence in the spring of 1906, which was at the time the investigation of the Bureau of Corporations was proceeding. (Mahle, 5/2359-60, 2364.) Mr. H. G. Westcott, first vice-president of the Standard Oil Company of Kentucky, testified early in the hearings of the case that the Dixie Oil Works was operated at many points in the South, both within and without the particular marketing territory of his company, and that its ownership was kept a secret. He tried to leave the impression that this was done only for the purpose of turning the business of the 240 original Dixie Oil Company over to the Standard Oil Com- pany, but it does not seem possible to have taken a period of seven years to accomplish this, and his theory is refuted by the fact that the Dixie Oil Works operated at a great many places where the original Dixie Oil Company had never done business. (Westcott, 2/725-27.) Lemuel Wihner was called on behalf of the defendants (13/1235). His connection with the oil business commenced with the Dixie Oil Works in Baltimore on January 6, 1902; on January 5, 1903, he was transferred to Norfolk, Va., where he took charge of the bogus independent Home Safety Oil Delivery; in December, 1903, he was sent to Richmond, Va., to again take charge of the Dixie OU Works at that place; he remained in Richmond for a time, and was then placed on the road for the Standard in the Baltimore territory; in the fall of 1904 he was again transferred back to the Dixie, with which concern he remained until October 22, 1905, when the Dixie Oil Works went out of existence; and he then entered the regular service of the Standard Oil Company. His oil experience, until 1905, was with fraudulent concerns operated by the Standard. During all of this time he pretended to be independent, securing trade by false statements and repre- sentations. Mr. WUmer has not had that kind of schooling which is best calculated to make him overtruthful. During his entire service with these bogus companies he was employed to live an untruth day by day, and it does not appear from the record in this case that the kind of work he was engaged in was at all distasteful to him, but on the contrary that it was entirely to his liking. It will not do for Mr. Wilmer to say that he did not know that these concerns were owned by and operated in the interest of the Standard; his intelligence could not be so imposed upon. After describing the business of the various companies with which he was associated, he denied (13/1239) the state- ment of Mr. Fehsenfeld to the effect that the Dixie sold regardless of price. Mr. Wilmer said he was also very greatl}^ imposed upon by Mr. Mahle, who was connected with the Richmond Oil Company. Mr. Mahle even had the audacity to tell Mr. Wilmer, who was then operating this bogus company, that he would make Wilmer sweat blood, but the record is silent as to whether or not he carried out that threat. Wilmer im- 241 agines that Mr. Fehsenfeld was in some way interested Avith Mr. Mahle because he had seen Fehsenfeld at the plant of the Richmond Oil Company, and had even seen him go there at about dark, and this greatly aroused Mr. Wiliner's suspi- cions. He denied Mahle's testimony to the effect that the Dixie tried to get obnoxious fire ordinances passed, and said he never had anything to do with it. He also denied that the Dixie cut the price, but said that the Dixie was trying to get all the customers it could, even from the Standard OU Company, and yet the fact remains that the Standard Oil Company absolutely owned the Dixie. He said that Mahle got business away from him by going around and telling that the Dixie was controlled by the Standard Oil Company, and was a part of the trust; and this is undoubtedly true, because Mahle said he made this statement. The statement itself was true, nobody disputes it now, and Mahle knew it at the time to be true, because he had been in the employ of the Standard Oil Company and himself came in contact with the management of the Dixie Oil Works, as has already been stated in the discussion of Mahle's testimony. After his counsel asked him if Mahle did not get the business away from him by cutting the price, WUmer said that his recol- lection is that Mahle cut the price a half cent. Mr. WUmer is himself quite indefinite about this cut; he makes no posi- tive statement that any cut was made, and he said Mahle worked on the sympathy of the people and tried to get cus- tomers in that way and finally demoralized the market in Richmond (13/1247). He said finally that, if his opinion goes for anything, the Richmond was a bogus concern of the Red "C" Oil Company. Now we will concede that on the question of bogus companies Wilmer's opinion ought to be worth as much as any man in the oil business, for he had an extensive experience in bogus companies, in fact never did much of anything else except run bogus companies. But we hardly think that the question as to the character of a company should rest upon the opinion of a witness of the character that Mr. Wilmer appears to be. It appears by the testimony of Mr. Mahle (5/2380-81) that the Richmond Oil Company was not a bogus company, but was a bona fide corporation, and he gave a list of its stockholders. 72064— VOL 2—09 — -16 242 Mr. Wilmer said (13/1245) that it was the Kichmond Oil Company that initiated the price cutting in Richmond; and he denied that he ever gave away oil or paid rebates. On his cross-examination (p. 1271) he was asked if he did not say to Mr. Rosenthal that he never paid a rebate, and he said that he did so state, and that it was absolutely true. This question was then put to him: Q. Did you ever allow it in any settlement that you made for your company, ever allow a rebate to a dealer? — A. Oh, no. He was then asked if he knew certain dealers in Richmond, and admitted that he did, and had sold them oil; and when asked again if he did not allow a rebate he stated that he made a contract with them but that it was not a rebate; that the dealer had to buy of him exclusively; that he would make contracts with them for a certain number of gallons of oil; that he lived up to his contracts with them; that they paid the full price of the oil to the driver, and then he paid the dealers what he had promised to do; he don't remember what it was in any particular case, but thought it was about a half cent a gallon (13/1272). He was asked what the terms of the contract were, and was not able to state, but did remember that the dealer must buy his oil exclusively of biTin and not a gallon from any other company, and that they would get a certain amount off and that he would pay back to them a certain amount on each gallon. He also stated that the Dixie Oil Works' drivers did not know that he was making this arrangement, that it would not do to let them know it, however honest they might be, and so, in order to protect himself, he would tell the merchant to pay the driver the regular price, that he could not allow liis tank-wagon drivers to sell oil at any but one price. Mr. Wilmer's attention was called specifically to a number of merchants in Richmond and he admitted that he had made these arrangements with them, and yet on his direct examination he was willing to swear positively that he never had paid a rebate. He was quibbling on the word rebate. However, the fact remains that whenever the exigencies of the case required it he did allow a rebate to dealers who were williug to agree to buy their oil exclusively of him, 243 and contract to buy a certain quantity. And even on hia cross-examination, when asked whether or not he had ever in his settlements with his customers allowed a rebate to certain dealers, he seemed horrified and answered, "Oh, no." Mr. Wilmer denied Mr. Mahle's statement that he ever followed the Richmond Oil Company's wagons, or kept a list of its customers, but does admit that he had a paper upon which he made notations from time to time of Mahle's cus- tomers. He said (13/1250) that he did not to his knowledge make up a list of customers on yellow sheets of paper, but that he might have had a list of persons whom he wanted to call upon. Mr. Wilmer (13/1250) denies the testimony of Mr. Metzel about discussing prices and other subjects with him; said he never said a word to him in his life, and never spoke to him; and denied Metzel's statement that he sold oil while he was handhng the Dixie for 6 cents a gallon while the gen- eral prevailing price at that time was 4 or 5 cents a gallon more. He said he never sold oil at 6 cents a gallon in his life. On page 1250 he was asked whether the Dixie Oil Works ever cut under the price of the Eed "C," and he said he did not think that he ever did; he did not think the Dixie was governed by the Eed "C's" prices at all, that they main- tained the market price, and that his instructions to his salesmen were to maintain that price; that he competed with Metzel in Montgomery County, Md., while he was representing the Dixie and Metzel was representing the Eed "C," and that the Dixie got some of the business, which he thinks was through his salesmanship and through the efforts of his agent, Mr. Waters, who was well known in that com- munity, and had formerly been cormected with the Eed "C" agency. He was then asked if he got it by cutting prices (13/1251), and his reply was that it was never neces- sary, and that he did not do it. He stated that Metzel's testimony to the effect that the Dixie passed by the cus- tomers of the Standard and only paid attention to getting the trade of other companies, is absolutely untrue ; that he called on all the trade, and tried to get trade away from the Standard as well as away from everybody else, and he named customers that he got who had been customers of 244 the Standard. It is quite true that the Dixie did get some customers of the Standard, or customers who were pur- chasing in part from the Standard and part from the Red "C" Company; it was necessary to do that in order to suc- cessfully carry out the scheme of deceiving the pubUc; but it is not likely that the Dixie got enough of the Standard Oil Company's customers to do very much harm. Crediting the Standard Oil Company with ordinary business sense it would not be expected that it would put a bogus company into the field to solicit its own trade and to sell oil to people that the Standard itself could sell to. If the Dixie ever got a customer that belonged to the Standard Oil Company there was some reason for it other than a desire on the part of that company to build up the Dixie at the expense of the Standard. The principal reason for putting the Dixie in the field was to get customers which the Standard could not get, and to get them by any method that seemed best calculated to accomplish results; and in the end it was expected, when the competitor was driven out, that the Dixie could withdraw and leave the entire trade to the Standard. Bruce Robinson, called by the defendants, testified (13/1110) that early in 1903 he went to Durham, N. C, as the agent of the Dixie Oil Works; that he established a one- horse tank wagon and necessary equipment and started in the business; that the Dixie at the time had a few customers there; and that it did not reach the consuming trade in Durham. He sold to the dealers in Durham and in the out- skirts; that his principal competitors there were the Standard Oil Company and the Red "C" Oil Company, and they aU maintained the same price. Mr. Robinson said that his oil was shipped to him in barrels, and that he pumped the oil from the barrels into the tank wagons and delivered it. At this time the Standard Oil Company, which owned the Dixie, had a tank station at Durham and could deliver to the trade in bulk from its tank wagons. What explanation can the Standard give for going to this extra trouble and expense of shipping oil to Durham in barrels and pumping it from barrels into tank wagons when it operated a tank-wagon station there if it was not for the purpose of concealing the identity of the Dixie Oil Works and its relations with the 245 Standard ? It appears from the testimony of Mr. Robinson that the trade could be served by tank wagons, because, he said (p. 1111), that in about six months he got practically all of the barrel business that was in that town, and (1141) that all of that barrel business was converted to a tank-wagon business. The Standard had practically all of the business in Durham proper before the Dixie was sent there, dehvering in tank wagons. The Red "C" Oil Company was supplying barrel trade around Durham. Robinson was sent there to get this barrel business away from the Red "C" Company, and he did so by extending the tank-wagon service. On page 1139 he testified: Q. Then your customers were principallyjthe Red "C" customers? — ^A. Yes, sir. Mr. Robinson said that he held the Dixie Oil Works out to be an independent company while he was at Durham and while he was upon the road; that he believed at that time that it was an independent company; that his com- petitors accused him of operating in the interests of the Standard; that he always denied it; that Mr. Bender gave him to understand that it was an independent concern; and that he never learned to the contrary until Mr. Bender introduced him to the Standard Oil Company's people in the Baltimore office. (13/1141-44.) With regard to the prices at which the Dixie Oil Works sold in Durham, Mr. Robinson testified (13/1110) as follows: Q. Who were your principal competitors, or aU of your competitors, at Durham at the time you went there ? — ^A. At Durham, the Standard Oil Company and the Red "C" Oil Company; that is all. Q. How about prices there? — ^A. I don't remember the actual Q. How about your prices, I mean, as compared with the Standard and Red "C" Oil Company prices?— A. My price was the same as theirs. Q. Did you always maintain their prices ? — ^A. Always. Q. And how long were you there? — A. I was there about six months, I think. Yes; about six months. Q. Did you succeed in building up that business at all at Durham? — ^A. Yes, sir. Q. To what extent?— A. I practically got all the barrel business that was in the town. 246 On rebuttal Mr. Fehsenfeld, president of the Red "C" Company, testified (20/146-148) that through a personal visit to Durham, and also from reports of his salesmen who were sent there to investigate and report to him, he learned that the Dixie Oil Works sold at prices which were uni- formly less than that of the Standard, and he produced tank- wagon tickets of the Standard, the Dixie, and the Eed "C" companies (petitioner's Exhibits 948 to 951) showing that in August, 1904, the Standard was selling for llj cents; that the Red "C" was selling for 11 J cents (after deducting 2 cents for the returned barrel) ; and that the Dixie Oil Works was selling for lOJ cents per gallon; all for the same grade of water-white oil. Here is a sharp conflict of testimony. The testimony of Mr. Robinson was called to Mr. Fehsen- feld's attention before the testimony was given by him on this subject. The fact that the Dixie Oil Works obtained all of the barrel business in and around Durham, coupled with the fact that the Red "C" Company did business there only in barrels, shows conclusively that the Dixie Oil Works was making a special effort and did get the customers of the Red "C" Company. It will not be presumed that Mr. Fehsenfeld is in error in his testimony, which is supported by the tank- wagon tickets introduced in evidence (petitioner's Exhibits 948 to 951), showing that the Dixie did sell at 1 cent below the Standard's and the Red "C" Company's prices. Robert E. Hodson, a traveling salesman for the Standard Oil Company, testified (13/1386-87) that for about two years he was a travehng salesman for the Dixie Oil Works, reporting to the Savannah, Ga., station; that he traveled ' in the southern portion of Georgia, and for a few months he was in the office of the Dixie Oil Works at Baltimore; that he commenced travehng for the Dixie in about April, 1903, selKng refined and lubricating oils; that his com- petitors were the Standard Oil Company and the Crew-Levick Oil Company; and he said that the Dixie, which was then operating in southern Georgia, endeavored to get all the customers that it could away from the Standard Oil Com- pany; that it put forth just as much effort to get customers from the Standard in the refined oil business as it did from the Crew-Levick Company in the lubricating business; that this territory is not reached by the Standard Oil Company's 247 tank-wagon service; that the Dixie and the Standard were both shipping in barrels, and that he thought the Dixie had more of the refined oil business than the Standard had. Mr. Hodson was then asked (1387) if while he was run- ning the Dixie any competitor came into the field and he says not to his knowledge during the time that he was with the Dixie. This is quite a significant statement on the part of Mr. Hodson, because it corroborates the testimony of sev- eral witnesses to the effect that the Dixie Oil Works, as well as other bogus companies, were operated at different places to keep competition from appearing. The Dixie was posing as an independent company, as a competitor of the Standard Oil Company, and real independents would not care to enter the market where the Dixie was running, whether they knew it to be the Standard's or whether they beheved it to be an independent company. It was therefore an important ad- junct to the Standard to have the Dixie going along side by side with it, apparently competing with it, but after aU simply serving a purpose and not competing at all, because there coul'd be no reason whatever for the putting of the Dixie into this field to get business that the Standard already had; its only purpose could be to keep independent compa- nies from coming in there and attempting to share in the trade. Mr. Hodson said (13/1387) at one time he was employed by the Dixie at Eichmond; that the Dixie sold refined oU from tank wagons to the trade in Richmond and Manchester, and barrel shipments to the country trade; that the Stand- ard Oil Company and the Richmond Oil Company were doing the business in Richmond, and that if there were any other companies there seUing refined oil that he was not aware of it. According to his testimony he was with the Dixie in Richmond in 1902 or 1903. General methods of competition engaged in by the bogus independent companies as directed more especially against the trade of the Red "C" Oil Manufacturing Company. — Several of the bogus independent companies have been separately dealt with and discussed. They did not, how- ever, always operate separately, and at times more than one of the bogus companies would be present in a given locality. They operated extensively over all the territory in Baltimore, 248 and south of there in the seaboard States clear to the mouth of the Mississippi River. They were sent wherever compe- tition of sufficient importance appeared to warrant it. C. W. Bender and L. Blaustein principally managed these companies, and one of the principal independent companies which these bogus concerns fought was the Eed "C" Oil Manufacturing Company. This company did business in the territory from Mason and Dixon's line south to Florida. Mr. W. J. Metzel, a traveling salesman for the Red "C" Com- pany, met all of these bogus concerns at one time or another, and was familiar with their methods and with all the methods that were adopted by the Standard Oil Company to kill com- petition. From his testimony it appears that the Eureka Oil Company, the Southern Oil Company, the Dixie Oil Works, the Eagle Oil Company, the Paragon Oil Company, and the Home Safety Oil Delivery were the principal bogus concerns operating in the same territory with the Red "C" Company. The Standard Oil Company, through these bogus concerns and otherwise, followed up the trade of the Red "C" Company, and when a sale was made in a town by the Red "C" Company an agent of the Standard would appear on the next train, go to the people to whom the sale had been made, and induce the purchaser if possible, by cutting the price or offering him rebates and granting concessions, to cancel the order given to the Red "C" Company and purchase oil from the Standard; and this they very often succeeded in doing. By cutting the price a half a cent or a cent they could often induce a dealer who did not care with whom he dealt to break his contract with the Red "C" and purchase from the Standard. The Red "C" Company, like all other independents, who had to ship their oil in barrels, sought to ship it in carload lots to a town in order to take advantage of carload freight rates. This class of shipments were particu- larly fought by the Standard Oil Company. Some agent of the Standard would appear upon the scene, generally before the carload had reached its destination, but some times not imtil afterwards, and would endeavor to break up the car- load order by offering a cut price or some other concession to one or more of the merchants participating in that carload, before the oil had been delivered. Very often the salesman of the Red "C " Company, after he made a carload sale, would 249 have to go back to the town, and practically make the sale over again, and insist that the contract should be carried out, to prevent the customer from breaking up the carload order. (Metzel, 5/2405-06.) The traveling salesmen of the Atlantic Kefining Company (a branch of the Standard Oil Company), were particularly aggressive along these lines. Mr. Metzel says that his company has often received as many as ioxa telegrams a day countermanding orders which he had taken. These agents of the Standard Oil Company did not wait until contracts had been made with the merchants suf^cient to make up a carload of oil, but when they learned that the Red "C" salesman was to be in a certain town they would get there on the next train and prevent him from getting enough orders to make up a carload shipment. Mr. R. N. Great- head, of Staunton, Va., a representative of the Standard Oil Company, told Mr. Metzel that he had been instructed to follow him wherever he went and to undo as much of his business as he could, and that he had to do it in order to hold his job. He said he was trying to run Metzel out of that territory. The bogus independent companies also played a part in the scheme and represented to the trade that they were independent and in no way connected with the Standard, and the salesmen for the Standard Oil Company pretended that they had no knowledge whatever concerning these bogus inde- pendent concerns, but insisted that they were real independ- ents. (Metzel, 5/2407-08.) These transactions took place along in 1899. In 1901 a man by the name of Hoffman, a trav- eling salesman for the Dixie Oil Works, stated to Metzel that he had instructions from Mr. Bender (who it will be remem- bered was the manager of the Dixie) to tell everybody that the Dixie Oil Works was an independent company, and that the Red "C" Company was really the Standard representative; also that Bender instructed him to sell oil wherever he could find a Red " C " customer, and that it did not make any differ- ence what the price was, that he must get the customer, and that he could tell anything he saw fit if it would bring a cus- tomer away from the Red "C " Company. All of these bogus independent companies cut the price; it was the only way that they could be effectual. (Metzel, 2408.) The Dixie Oil Works sold oU as low as 6 cents when the regular prevail- ing price was 4 or 5 cents higher. Samuel Cropman, who in 250 certain territory went by the name of J. C. Knight, was a salesman for the Dixie Oil Works and a brother-in-law of Blaustein's, and he stated in the presence of Mr. Metzel of the Red "C" that the Dixie was an independent com- pany; that they had fought the Standard Oil Company clear out of South Carolina; and that the Standard was not selling a barrel in that State. This statement was made by Mr. Cropman to a customer in the presence of Mr. Metzel. This man Cropman also stated that the Dixie Oil Works refined their oil at Savannah, that the crude was shipped from the Pennsylvania oil fields to Savannah and refined, and the oil was then shipped back to Baltimore in barrels and dis- tributed and sold, and that this company was making barrels of money. (Metzel, 5/2409.) At that time there was no refinery in Savamiah, Ga., and the Dixie was receiving all of its oil from the Standard. Cropman also said that the Red "C" Company was a part of the Standard Oil Company, that they got their oil from the Standard, that there were imder- ground pipes in Canton to the Red "C" Company's works at Highlandtown, and that he had seen the pipes. The same statement was also made by L. Blaustein, who was the manager of certain of the bogus independent companies that have been discussed. These statements were all utterly false and without any foundation whatever. Blaustein stated publicly that the Dixie Oil Works, the Eagle Oil Com- pany, and the Southern Oil Company were independent. Mr. Blaustein also stated in the presence of Mr. Metzel that he was a refiner, that his principal business was handling lubri- cating product, that the refined oil was simply a by-product and he had to get rid of it somehow, and that it did not make any difference what he got for it, that all he got was clear profit. This assertion was utterly without foundation and was made to deceive the trade. These bogus concerns cut the prices, not only directly, but they did it by means of rebates and rake-offs of all kinds. These bogus independent companies never solicited the trade of the Standard Oil Company. (Metzel, 5/2410-11.) The Red "C" Oil Company was pursued by the Dixie Oil Works in Montgomery County, Md., which adjoins the Dis- trict of Columbia. It cut the price there and solicited the business of the Red "C" customers only and did not inter- fere with the customers of the Standard. After the Dixie 251 Oil Works got a customer, the way that it handled that cus- tomer afterwards depended upon whether or not the Red "C" Oil salesman called upon him; if the salesman continued to call upon him the Dixie would also continue its calls and retain the trade by adopting whatever method seemed neces- sary at the time. If the salesman for the Eed "C" ceased to call on a customer after the Dixie had secured him, it would not be long before the Dixie would neglect to call upon him, the Standard Oil Company would call instead and fill his tank, and in that way the customers were soon turned over to the Standard Oil Company. (Metzel, 5/2415. ) PEOPLES OIL COMPANY. E. N. Wootten testified (5/2094-95) that the Commercial Oil Company commenced business in about 1888; that he became connected with it in 1892; that it continued in busi- ness in the State of Georgia, with headquarters at Atlanta, as an independent company until 1898; that before his con- nection with this company the Standard had so reduced the price of oil in its territory that there was no profit in illumi- nating oil, and but a slight profit in the lubricating oil busi- ness. There has been no denial or explanation made con- cerning this on behalf of the defendants. Mr. Wootten said (5/2096) that the price of oil went as low as 6 J cents a gallon in Atlanta in 1897; that the Commercial was compelled, in order to retain any of its trade, to meet these prices of the Standard; that this could not be done except at a loss; that the trade of the Commercial Oil Company became irregular and indefinite, and a considerable portion of it was taken by the Standard ; that this was not true to so great an extent in the lubricating oil business as it was in the refined oil busi- ness; but that the price of lubricating oil was so cut and so reduced by the Standard that there was but little profit remaining. Mr. CoUings's attention was called to the testi- mony of Mr. Wootten, and he said that he had a record of prices in Atlanta, Ga., for the years 1895 and 1896. Coun- sel then put questions concerning the prices in 1897, the year for which he has no record of prices, as follows (13/897) : Q. What was the price of refined oil in Atlanta dur- ing the year 1897? — A. Eight cents._ Q. Did it ever go to 6i cents during that year? — A. Never at any time that I remember. 252 This is no contradiction of the testimony of Mr. Wootten, who said positively that the prices went down to 6J cents in the year 1897. Mr. Wootten testified (5/2094) that the agents of the Standard followed the tank wagons of the Commercial Oil Company and learned the names of the customers, and made great eflForts, often successfully, to obtain this trade. They paid rebates of from 50 to 75 cents a barrel to the wholesale trade, and cut the prices by one method or another until there wasno profit left in the business (5/2498) ; that the Commercial was compelled by this method of competition to cover a large territory in order to secure trade, which made it ex- pensive and prevented it from realizing a profit from the business. Mr. CoUings testified (12/897) that it was a uni- form practice to give jobbers an allowance of from 50 to 75 cents on the barrel, depending upon the amount of business that was done, and that this was the uniform practice of all oil companies. This is not a contradiction of the testimony of Mr. Wootten. He is not speaking of jobbers but of his cus- tomers in general, which were the merchants and the deal- ers. The Commercial sold to the trade in general, delivering from tank wagons, and did not sell to consumers, and Mr. Wootten calls this selling at wholesale, thus distinguishing the business from that of the peddler who reaches the con- sumer. If there was such a custom as Mr. CoUings speaks of, this custom was as well known to Mr. Wootten as it was to Mr. CoUings, and he would not claim that the ordinary allowance given to jobbers was a cut from the price. He said in reference to the statement of Mr. Wootten to the effect that as fast as the Commercial got a customer the Standard cut the price, and that every attempt was made to get the busi- ness away from them along those lines (13/898) : A. Well, that is not true. What he means is that whenever they got a customer of ours by cutting the price, we would meet that cut and get birn back again. That is about the size of it. This is not a fair answer, and is no contradiction what- ever of the positive, unequivocal testimony of Mr. Wootten, who was upon the ground managing the business at the time, and who knew what the facts were. 253 ^Mr. CoUings'; further testified, in answer to the testimony of Mr. Wootten to the effect that the Standard cut the prices against both the Commercial and the People's Oil Com- panies in 1897, both of which were independent concerns doing busiaess in Atlanta, as follows (13/898): Q. Did the Standard Oil Company ever cut its price as against the Commercial ? — A. Not that I can recall. Q. For the purpose of driviag the Commercial out of business and getting its business away from it? — ^A. Certainly not for that purpose. Q. If any cuts were initiated there, by whom were they initiated % — A. Most likely by the Commercial Oil Com- pany; that was the only way they could get business. The utmost that Mr. CoUings said was that he could not recall whether the Standard ever cut the prices against the Commercial or not, but in answer to a leading and suggestive question put to him by counsel, he said, "Certainly not for that purpose," and that if cuts were initiated, that "most likely" the Commercial Oil Company was the offender. Mr. CoUings (12/897) said that he had with him a record of the prices in Atlanta for 1895 and 1896, but counsel for the defendants did not ask him to give those prices. He did give the prices of South Lima crude at the wells for those two years, but these prices contradicted nothing whatever that Mr. Wootten testified to. Wootten did not state that during those two years there was any particular fluctuation in prices. He stated that there was a low price from 1892, when he be- came connected with the Commercial Oil Company, down to the time when the Standard acquired that company. It is no doubt true that the rise and fall in the price of crude at the wells affect the price at which the refined product m?iy be sold, but the contention of the Government is that in Atlanta the prices were so low during the period covered by Wootten's testimony, in comparison with the price of crude oil or the billing price of refined oil, that no profit could be made. Mr. Wootten testified (5/2098-99) in reference to the Peo- ples Oil Company that it did both a wholesale and retail busi- ness in Atlanta; that the Commercial Oil Company did oidy a wholesale business; that these companies were operating in Atlanta during at least a portion of the same period of time; that the Peoples Oil Company had tank wagons and 254 storage tanks; and that both of these companies were buying independent oil. By the beginning of 1898, the condition of these companies was desperate. Neither had been making any profit, and neither company cared to longer continue this contest and do business at a loss. Mr. Wootten said that both companies were purchased by the Standard Oil Com- pany in January, 1898, and consohdated into one company under the name of the Peoples Oil Company; that the phys- ical property of both companies passed into the hands of the Standard ; that the name Commercial Oil Company was no longer used; that Mr. Wootten, who had been the man- ager of the Commercial, was retained by the Standard to represent that company as manager of their so-called inde- pendent branch, the Peoples Oil Company. Mr. Wootten said that after the purchase of these two companies there was no independent competition in Atlanta and the tank-wagon price of oil advanced from 6^ cents on the 1st of January, 1898, to 13 cents in 1899. Mr. CoUings's attention was called to this testimony by the defendants, and he said (12/900-901) that in 1897 the price of refined oil from tank wagons in Atlanta was 8 cents, that in 1898 it was 9 cents, and the highest during the year was 10 cents, and that there was a rise in the price of crude of nearly a cent a gallon, so that the advance in the price of refined at Atlanta during 1897-98 corresponded to a general advance through- out the territory, based on a change in the primary market. On cross-examination, however (12/1054), he admitted that the memorandum from which he testified regarding the prices in 1898 merely showed a change in price in May to 9i cents ' ' and the inference was that that was the last change that year." Being shown tank-wagon tickets from Atlanta containing a price of 11 cents in October, 1898, Mr. Collings admitted that these were Standard tank-wagon tickets and said he could not understand how his record stopped with the change in May. (12/1054-5.) Mr. Collings thus ad- mits an advance from 8 cents at the beginning of 1898 to 11 cents toward the end of the year, and his testimony by no means controverts that of Mr. Wootten. In the first place, Wootten was not talking about the Standard's price, but about the price charged by the Peoples Oil Company. In the second place, Wootten said that the advance was 255 from 6i cents on the 1st of January, 1898, to 13 cents in 1899, and Mr. CoUings gave no testimony as to the prices in 1899, but only in 1898. Even the advance which Mr. Col- lings talks about, from 8 to 11 cents, was much greater than the advance in the price of crude to which he refers. As to the question whether the advance in Atlanta corresponded to a general advance in the entire territory, Mr. CoUinga was asked to look up the prices in other towns in Georgia during this period and promised to do so, but never did. (12/1056-7.) Mr.Wootten testified (5/2099) that after the purchaseof the Peoples and Commercial Companies by the Standard and the consolidation of the two companies, it received its oil from Whiting, Ind., from the Standard; that it reported to Mr. E. C Kimball, of Cincinnati, Ohio, the cashier in the main office of the Standard Oil Company of Kentucky; that he was directed to send these reports to Mr. KimbaU by Mr. Ceilings, who was then the general manager for the Stand- ard of Kentucky; and that these letters were sent to a post-office box, the number of which he believes was 824. He said (5/2110) that Mr. CoUings directed him verbally how to run the business, and told him to maintain the market on an even basis with the Standard ; that the Peoples should get all of the business it could, but that the business must be largely derived from those who are not satisfied to trade with the Standard Oil Company. Mr. Wootten said that he made a special effort to reach and succeeded fairly well in reaching the customers who did not wish to buy of the Standard ; that whenever inquiry was made he told the trade that the Peoples was an independent company; and that it was not generally known to the trade that the Standard was its owner. Mr. Wootten also said (5/2103), while he was manag- ing the Peoples Oil Company for the Standard, he corre- sponded with Mr. C. T. ColHngs; that he sent the letters addressed to Mr. CoUings to a post-office box, which was the same box to which he sent letters addressed to Mr. Kimball; that he forwarded regular reports to this post-ofl&ce box; and that generally the name of the person to whom the letter was directed appeared upon the envelope. Mr. CoUings ad- mitted (12/901) that Mr. Wootten made reports to Mr. Kim- baU at the post-office in Cincinnati, and said that Mr. Kimball 256 was the assistant to Mr. Holmes, the treasurer; and that he thmks the box was Mr. Hohnes's regular box. No further admission is necessary on the part of Mr. ColUngs. The fact that the business was reported to an individual who was the cashier of the Standard Oil Company at Ciucumati and sent to a post-office box, rather than sent directly to the Standard Oil Company, characterizes the methods iu which the business was done. The testimony of Mr. CoUings also shows that Mr. Holmes and Mr. Kimball were directly in touch with Mr. Wootten, and that if Mr. Collings knew any- thing about the business of the Peoples Oil Company and how it was conducted, he must have received that informa- tion either directly from Wootten or indirectly through Holmes or Kimball; and it makes it quite easy for Mr. Col- Ungs to say, when he is questioned concerning these bogus companies, that certain conditions did not exist to his knowledge. Mr. Collings did not deny the testimony of Mr. Wootten that Collings directed him personally how to manage and control the Peoples Oil Company, nor does he deny Mr. Wootten's statement that he wrote CoUings letters concerning the business of the Peoples Oil Company and directed them to a post-office box. Mr. Collings gives as a reason why the Peoples Oil Company operated at Atlanta as an independent company, when, in fact, it was owned and controUed by the Standard, that he wanted to get the benefit of certain brands of oil and of their trade-marks and property, and that for that reason he maintained the organization. The secret method of running these companies after they had been purchased by the Standard has already been described. The business was for seven years thereafter run under the name of the "Peoples Oil Company" after the Standard pur- chased them and aU the while held out to the trade as inde- pendent. Did it take aU of this time for the Standard to accompUsh this result ? It continued this company in Atlanta as a bogus company until the investigation by the Bureau of Corporations. While Mr. Wootten was in charge of the Peoples Oil Company at Atlanta there was more or less friction between him and the manager for the Standard at the same place. Mr. Wootten was anxious to make as good a showing and do as much for the Peoples OU Company as he possibly could, 257 and he seemed to believe that the methods adopted by the Standard in running the Peoples Company were not calculated to bring about that result, and he protested against it; he did not like to see the company that he was managing losing its business to the Standard, notwithstanding the fact that the Standard owned and controlled both companies; and at different times he wrote to the officers of the Standard Oil Company in reference to it, and Exhibits 713 and 714 (10/1778-81) are two of those letters. (Wootten, 5/2147.) They simply corroborate, if any corroboration is necessary, the testimony that has already been introduced, show- ing that the Standard Oil Company owned the Peoples Oil Company and was running it as a bogus independent company. Mr. Wootten said (5/2099-2100) that after the purchase of the Peoples and the Commercial Oil Companies by the Standard no competition appeared in Atlanta until about 1901; that at that time the Lake Carriers Oil Company, of Cleveland, Ohio, started to market oU in Atlanta; that prices were immediately cut by the Standard and the Peoples Oil Company to as low as 9 cents a gallon for refined oil in tank wagon from approximately 13 cents, which latter price had prevailed from 1898 down to that time; that the price at which the Peoples Oil Company sold at Atlanta was regulated by the special agent of the Standard Oil Company at that place; and that when there was to be a change in the price the Peoples Oil Company was notified in advance, so that it could change at the same time. Mr. Wootten said that the Lake Carriers Oil Company met the cut which the Standard made when it entered Atlanta; that it was doing principally a business in lubri- cating oils ; that it owned a warehouse and had tank wagons on the streets; that it did a barrel business over the territory tributary to Atlanta; that in the winter of 1901 this com- pany succumbed, its property was purchased by the Standard and its plant dismantled (5/2101); that immediately after the purchase of the Lake Carriers Oil Company the Standard and the Peoples Oil companies advanced the price of refined and lubricating oils; that in the spring of 1902 (within six months after the purchase of the Lake Carriers Oil Company) 72064— VOL 2—09 17 260 box in Cincianati; the letters were not addressed to the Standard Oil Company. The Alabama Oil Company was expected to go principally after the class of trade which was prejudiced against the Standard, and its manager was in- structed to that effect. (Wofford, 5/2151.) In bidding on contracts for oil in Birmingham, in cases where there was no prejudice against the Standard, the Alabama Oil Company was instructed to bid a little higher than the Standard did; in cases where there was prejudice the Alabama Oil Com- pany was instructed to make the same bid as the Standard, which was agreed upon after conferring with the Standard agent, both of these companies bidding on the same contract as if they were independent of each other. (Wofford, 6/2152; Cooke, 5/2523-24; Westcott, 2/721.) The defendants called Elbert H. Pauley, of Birmingham, Ala., who was assistant special agent of the Standard Oil Company at Birmingham from January, 1903, to July, 1905, and since the latter date he has been special agent. He succeeded Mr. A. J. Mapes, who had been special agent there for a good many years. Mr. Paxiley was evidently called with reference to the testimony of G. T. Wofford, who was assistant to the chief clerk, and chief clerk in the Birming- ham office imtil some time in 1902. (Wofford, 5/2150.) During the time covered by the testimony of Mr. Wofford there were several persons in the Birmingham office aside from the special agent there, and if the testimony of Mr. Wofford was not true in all respects there were many persons who were connected with the business while he was there who can testify upon that subject. We are somewhat at a loss to understand why Mr. Pauley was called to contradict Mr. Wofford, owing to the fact that Mr. Pauley did not go into the Birmingham office, and was not in that territory and not familiar with that trade until several months after Mr. Wofford left the service of the Standard Oil Company, in- stead of calling Mr. A. J. Mapes, or the chief clerk, or some of the employees in the Birmingham office who had knowl- edge of what transpired during the time that Wofford was in Birmingham. Mr. Pauley's attention was directed to Wofford' s testimony in reference to the Alabama Oil Company, and he said (12/843-44) that he knows nothing about the operations of 261 the Alabama Oil Company except that it is in the oil business; that it was operated tmtil the latter part of 1903, or the fore part of 1904, as the Alabama Oil Company, agents for the Standard Oil Company. This was his testimony on the direct examination. On the cross-examination he admitted that it was some time in 1905, and that it might have been in the latter part of that year, thus extending his estimate of the time when the Alabama OU Company advertised the fact that it was an agency of the Standard Oil Company about two years, which brings it up to the time when the Bureau of Corporations was making its investigation, and to about the time that the Standard Oil Company admitted its owner- ship of many of its bogus concerns. (12/858-60.) He says that this company is now independent of the Standard Oil Company and in no way connected with it, and that it is still doing business as the Alabama Oil Company. He says that some time in 1905 the Alabama put out a sign over their office door, "Alabama Oil Company, agent for Standard OU Company," and that about a year later, when the lease which the Standard had of the Alabama expired, it was not renewed; and that from that time on it has been an iude- pendent company. A review of the testimony of both Wofford and Pauley as to this Alabama Oil Company makes it apparent that it was •the principal bogus independent concern operated by the Standard in that territory, and that all of the methods of deceit and fraud and unfair trading which characterized its bogus companies in general were used by the Alabama Oil Company. The Alabama Oil Company was formerly an independent company, and honestly competing with the Standard Oil Company for trade. A fight was made upon this company by the Standard, which resulted in its acquisi- tion by the latter company in 1901. (Wofford, 5/2150). It may have been by virtue of a lease, as is suggested in Mr. Pauley's testimony. However that may be the fact remains undisputed that the acquiring of this company by the Standard was kept a profound secret throughout the Birmingham territory, and it was operated the same after the lease or purchase as it had been operated before, and so continued until the latter part of 1905, which was two years after Mr. Pauley entered the Birmingham office. 262 John W. Davis and Charles G. Davis, the managers of the Alabama Oil Company while it was independent, were retained, and ran this company for the Standard Oil Com- pany on a salary. (Pauley, 12/874.) The Davises, the salesmen, and the employees of the Standard in general, held the Alabama Oil Company out to be an independent concern, and this Mr. Pauley was compelled to admit upon his cross-examination, and when they were accused of being connected with the Standard they stoutly denied it, and Mr. Pauley, in fact, says in his cross-examination that they had lied about it. (Pauley, 12/860.) This was done, of course, to deceive the public and lead it to believe that this com- pany was under the same management that it had formerly been. In 1905, after the investigation by the Bureau of Corporations had commenced, the Standard Oil Company made a feeble effort, and a very feeble effort indeed, to notify the public that the AJabama Oil Company was acting as its agent. Mr. Pauley testified that some time in 1905 the Alabama put the words "Agent for the Standard Oil Company" over its door, and on his redirect examination (12/882), he having talked fluently of the fact that in 1905 the Standard put out a sign over the door of the Alabama Oil Company, the examiner asked the question of Mr. Pauley how large that sign was that he was speaking about, and he replied as follows : The "Alabama Oil Company" is about 10 feet long, the name, Alabama Oil Company; the words "Agent for Standard Oil Company" are not any larger than your paper here in a circular form. Question put to witness by counsel for defendant : Q. You refer to a piece of paper about 8 inches long by 6 inches wide?- — ^A. I do, sir. Q. Which lies on the table here? — A. I do. Q. You mean to say that the words "Agent for Stand- ard Oil Company" as they appear on that sign would be included in a space no larger than that paper?— A. No larger than that paper. Q. Is that what you mean? — A. Yes, sir; that is what I mean. It is quite apparent from this testimony that the Standard Oil Company did not intend to put out any sign which would 263 furnish any information to the public in general as to the real relations that existed between it and the Alabama Oil Company. It was a ridiculous farce to put a sign out over a door containing the words "Agent for Standard Oil Com- pany," which was only 8 inches long and 6 inches wide, while the name "Alabama Oil Company" was on a sign about 10 feet long At the end of a year the lease expired and was not renewed, and because of that fact Mr. Pauley says that it has since been an independent company. Let us see whether or not it has since then been an independent company. It seems from the testimony of Mr. Pauley that this same sign, insig- nificant as it is, still remains over the door of the Alabama Oil Company. It is not believable that if this Alabama Oil Company was a real independent that it would permit that sign, however small, to remain over its door for a single day, because it would be a complete negation of the fact that it was an independent concern. No really independ- ent company would permit anything to remain that would cause the trade to believe that it was connected with the Standard. Mr. Pauley was asked (12/876) if he believed that if this company was entirely independent that they would advertise themselves as the agents of the Standard Oil Com- pany, and he said that three or four months ago he asked the man running the Alabama why he had not taken the sign down, and that the man said he had not had time, although it had been about two years since the lease had expired and since the Alabama was pretending to be an independent com- pany. It is not true that the man had not had time to take down the sign. If he had been operating in good faith, he would not have had time to do anything else until he got that sign out of sight. On cross-examination (12/861) lii. Pauley was asked if the Alabama was not buying its oil of the Standard, and he admitted that it was, although he said he had seen some of the Gulf Refining Company's cars on the company's side- tracks, and he inferred from that that they must have bought some from the Gulf Refining Company. What is more significant perhaps than any other one fact tending to show that the Alabama Oil Company is still a bogus independent concern is the fact that it does not do any 264 refined oil business in the city of Birmingham, but it does deliver solely in barrels in the surrounding country. (Pauley, 12/875.) The significance of this is that the Standard is doing a tank-wagon business in Birmingham. The inde- pendents deliver in barrels. As tank-wagon delivery is always preferred to barrel delivery, the independents can only secure their business principally in the outlying terri- tory, where the Standard also delivers in barrels; and the Alabama Oil Company is employed only to meet that com- petition. It has already appeared in evidence in this case that the independents doing business in the South are doing it almost exclusively in barrels. They have few tank-wagon stations, and the reason is that their business is not perma- nent enough to warrant them in investing money in a plant. To do that would be to invite hostile, unfair competition, that in time would crush out the independent and make his investment practically valueless. CASSETTY OIL COMPANY, NASHVILLE, TENN. It appears upon the cross-examination of Mr. Collings (12/951-55) that the Cassetty Oil Company was an independ- ent company at Nashville, Tenn., which had been doing busi- ness in competition with the Standard; that on October 30, 1899, an agreement was entered into between the Standard Oil Company of Kentucky and the Cassetty Oil Company, under which for a period of five years from that date the business of the Cassetty Company was to be conducted in the interest of the Standard Oil Company. The full agree- ment on this subject is set out in the cross-examination of Mr. CoUings (12/953-55). The fourth paragraph of this agreement is as follows : The party of the second part hereby agrees and binds itself to conduct the said refined oil and gasoline busi- ness in its own name as heretofore, giving the business such time and attention as required, utilizing all em- ployees in the handling of the business as it has hereto- fore been handled, and in all particulars to give the business the same attention as if it were still being con- ducted in the interest of said second party; the party of the second part further agrees to be governed by and to follow in all particulars the directions of the party of 265 the first part in the handling and marketing of said re- fined oil and gasoline during the existence of this con- tract. The agreement provides that the Cassetty Oil Company shall furnish the requisite storage facilities for doing the business; it shall furnish the requisite labor, drayiag, de- livery, clerical help in the office, the keeping of accounts, etc., used in the conduct of the business of the Cassetty Company; to furnish the requisite salesmen for selling and marketing oils; to furnish to the Standard monthly reports of sales, stocks on hand, and any other reports deemed neces- sary to intelligently follow the business; that the Cassetty Conipany shall assist in every way possible to develop the refined oil and gasoline business, and give its support and cooperation toward furthering the general interests of the Standard. The Standard Oil Company agrees to furnish all such stocks of refined oil and gasoline empty barrels, glue, paint, bungs, etc., as may be required for handling the busi- ness of the Cassetty Company, such oils to be consigned to the Cassetty Company in tank cars. The cash consideration to be paid by the Standard to the Cassetty for running its business in the interest of the Standard amounts to $6,000 per year (payable $500 per month), of which $2,000 a year is compensation for labor and expenses. The agreement further provides that should the number of gallons of refined oil and gasoline handled by the Cassetty Company exceed during any one year 200,000 gallons, the Standard shall pay to the Cassetty Company 1 cent per gallon on such excess. The 200,000 gallons is the equivalent of 4,000 barrels of 50 gallons each, for handling which minimum quantity, by this agreement, the Standard agrees to pay the Cassetty Com- pany $6,000, or $1.50 per barrel, or 3 cents per gallon. Three cents per gallon is an exceedingly high selling cost for bar- reled oil or gasoline; from which it is fair to infer that the purpose of the Standard Oil Company in entering into this agreement was not solely because of the quantity of the oil which the Cassetty Company would market, but that the Standard had some other and further purpose to serve. Provision for that purpose is doubtless contained in the paragraph above quoted, which provides that the business 266 shall be conducted in the name of the Cassetty Company^ as if It were still being conducted in the interest of its owners, but to be governed by and to follow in all particulars the directions of the Standard Oil Company in its marketing business. It is apparent from the agreement that the Cassetty Com- pany confined itself to barrel business, as the contract makes no reference to tank wagons or tank-wagon business. Mr. CoUings admitted (12/951-52) that the Cassetty Com- pany had been doing an independent business, selling in competition with the Standard, and that after the contract referred to was made it still held itself out as independent. He said (12/955) that he thought the reason the Cassetty Company kept secret the fact that it had made this contract with the Standard was because the Cassetty Company had certain trade-mark brands and that its trade would be injured when it went back into an independent business if it were known that it had entered into this agreement with the Standard Oil Company. It appears (12/951) that there were two or three other oil concerns doing business in Nashville at this time, and this furnishes an explanation of the real reason for the operation of the Cassetty Oil Company ostensibly as an independent. The record does not show how the Cassetty Oil Company was operated, further than that it was held out to be independent; and nothing to show how it operated against its competitors. But it does appear that the Standard Oil Company was itself doing business at NashvUle; therefore, there could have been no legitimate reason for the Standard entering into an agree- ment of this kind with the Cassetty Company and operating it secretly. This contract and arrangement with the Cassetty Com- pany was proven in the case of Tennessee v. Standard OU Company of Kentucky, in which the Standard was ousted from that State. The Cassetty Oil Company was no different from the rest of the bogus companies which the Standard had in the field. The reason for leasing this company was twofold: First, to eliminate a competitor; and second, to fight other competi- tors with this secret company. The Standard did not need to use this company to extend its own trade; it was well equipped to do that without the help of this company. 267 HAYNES PEDDLING WAGONS, COLTTMBTJS, OHIO. Beginning some time prior to 1892, the Paragon Oil Com- pany was an independent marketing concern, doing business at Columbus, Ohio, and in some twenty to twenty-five other towns in Ohio and Kentucky, selling oil from wagons to con- sumers. Up until some time in 1896 it purchased its oil from the Standard Oil Company. The oil was furnished to the wagons in the different localities from the stations of the Standard. Some time in 1896 the Paragon Oil Company ceased purchasing its oil from the Standard and commenced buying from the Penna Kefining Company, of Pennsylvania, and the New American Oil Company, of Mansfield, Ohio, both of which were then independent companies. Very soon after this four or five wagons appeared on the streets of Columbus. These wagons followed the trade of the Paragon Company and sold oil to consumers for the same price that the Paragon had formerly purchased at from the Standard. These wagons were in charge of a man by the name of Haynes. They were held out to the trade by the drivers as independent, and they claimed to be operating in their own interest. At this time Charles Kercher was superintendent for the Paragon Company at Columbus (5/2803) . When this competition commenced the Paragon had thirteen wagons on the streets of Columbus, and this competition of the Standard reduced the number of Paragon wagons to six, while the number of wagons operated by Haynes was in- creased to seven. The Paragon did not attempt to meet the price that the Haynes wagons sold for. There was at all times a difference of 2 or 3 cents. (Kercher, 6/2805-06.) About three months after these wagons appeared on the streets of Columbus some arrangements were made between the Standard Oil Company and the Paragon Oil Company, and the drivers of the Paragon were instructed to go back to the Standard to get their goods. The controversy was set- tled, and thereafter the Paragon purchased of the Standard and ceased to buy of the independents, and the wagons that had been put on the streets gradually disappeared until finally but one remained. After this the Paragon leased some of its wagons to the Standard, and finally sold them to the Standard, as will be shown under the following subdivision. 268 Hamilton Oil Company at Terre Haute. It gradually dis- posed of its wagons and disposed of the last one in 1899, and went out of business. It never recovered from the disas- trous consequences which resulted from the conduct of the Standard in putting the peddling wagons on the streets of Columbus to destroy its business. (Kercher, 6/2809-10.) As we shall discuss in a succeeding subdivision, the name Paragon Oil Company was afterwards used by Kercher, when he entered the service of the Standard, for the purpose of cov- ering up the real identity of the business which he conducted; but the company had failed and gone out of business long before, and this name was used by Kercher because he had formerly been connected with the company of that name, and the use of that name would tend effectually to conceal its true bogus character. (Kercher, 6/2810.) Mr. Squire, vice-president of the Standard Oil Company of Ohio, who at the time under discussioii hved in Cleve- land, testifying on behalf of the defendants, was asked (13/1533-34) in reference to the Paragon Oil Company of Columbus, about which Mr. Kercher testified. He said the Standard never had any interest whatever in this business; that the Paragon purchased its supplies generally from the Standard Oil Company, and he supposed that it sold its outfit to the individual peddlers; and that the Standard had to take some of the Paragon's outfit in payment of its indebt- . edness. So far there is no contradiction between Mr. Squire and Mr. Kercher. Mr. Squire says that they never put spot- ters on to follow the delivery wagons of the Paragon Oil Company; that there would be no use of it, because the Standard had no peddlers on the street. He says that there was no price war or trade conflict between the Standard and the Paragon that he knows of. There is nothing in this record to show that Mr. Squire was in a position to have any knowledge upon these matters. The record does not show that Columbus was in his territory. Kercher testifies positively to the trade conflict that was carried on between the Standard and the Paragon, and h« gives the result of it. Kercher was on the ground, daily in contact with the trade, and the superintendent of the company that was driven out of business and ruined, while Squire does not appear ever to have been on the ground. 269 HOME SAFETY Oil, COMPANY, TERBE HAUTE, IND. In 1892 O'Connell & Shea commenced peddling oil to con- sumers in Terre Haute, and up to 1895 had purchased their oil from the Standard. They were building up quite a large peddling business, and endeavored to get the Standard to sell them oil in tank-car lots, in order to get a better price, but the Standard refused to quote them prices on tank-car lots or to sell them except from the Standard tank station in Terre Haute. In 1895 they put up a storage tank of their own, quit buying from the Standard, and began buying in carloads from the Independent Oil Company, getting a better grade of oil and a better price. Mr. Noles, manager at Terre Haute for the Standard, then went to O'Connell & Shea and asked if they would not purchase from the Standard in tank cars, but they told him they were satisfied with the product they were getting, and continued to purchase the independent oU. After a while (in 1896) the Standard shipped a carload of oil to Terre Haute and two tank wagons from Indianapolis. (Shea, 5/2460.) G. F. Calvert and Fred Calvert were put in charge to drive these wagons. Before starting out to sell oil they followed the wagons of O'Connell & Shea for about two weeks to get a list of O'Connell & Shea's customers. They commenced to peddle oU from house to house, working only the trade of O'Coimell & Shea and making daily canvasses. (Shea, 5/2460-62.) The Calverts operated these wagons in the name of the Home Safety Oil Company, and they got out circulars, which were distributed generally in Terre Haute, containing the following: Down with monopolies. Up with honest prices. Here we are with them; all we want is 10 per cent on our investment. A copy of this circular was introduced in evidence as petitioner's Exhibit 788. (Shea, 5/2460-61.) There were other peddlers in Terre Haute at this time, all of whom were handling Standard oU, the same as O'Connell & Shea had done; and all the peddlers had theretofore and were then selling to the consumer at the uniform price of 15 cents a gallon. The wholesale price (at which the Standard sold this oil to the peddlers) was about 8 cents a gallon. When O'Connell & Shea began peddling the independent oil, the Standard lowered the price in Terre Haute one-half cent, 270 and outside of the city raised the price one-half cent. At this time O'Connell & Shea did not reach any trade outside of the city, but simply peddled in the city. (Shea, 5/2461.) The Home Safety OH Company offered oil to O'Connell & Shea's customers at 8 cents a gallon, and 5 gallons for 35 cents, and this was the same grade of oil that the Standard was furnishing to other peddlers and which the other peddlers were selling to the consumer at 15 cents a gallon. (Shea, 5/2461-62.) This competition of the Home Safety contiaued for a few weeks (5/2462), and they secured about 10 per cent of the trade of O'Connell & Shea (5/2464). Mr. Ritchie and Mr. Edwards, then manager and assistant manager, respectively, of the Standard Oil Company at Cin- cinnati, came to Terre Haute and offered to sell oil to O'Con- nell & Shea in tank cars for 3 .cents a gallon less than the regular wholesale price charged to grocers and other peddlers, and said to O'Connell & Shea that if they would resume pur- chasing oil from the Standard the Home Safety wagons would be taken off the streets. This proposition was ac- cepted by O'Connell & Shea, and as soon as the contract was made in November, 1896, the Home Safety wagons were taken off, the horses sold, the wagons shipped back to Indianapolis, and the oil which the Home Safety had on hand was taken into the Standard Oil Company's warehouse at Terre Haute. (Shea, 5/2463.) After the withdrawal of the Home Safety wagons O'Con- nell & Shea and the other peddlers, who had not reduced the price of oil when the Home Safety did, continued to sell to the consumer at 15 cents a gallon. (Shea, 5/2463.) HAMILTON OIL COMPANY, TERBE HAUTE, IND. O'Connell & Shea carried out their part of the contract referred to in the preceding subdivision, and purchased oil from the Standard for one year, but the Standard refused to carry out its part of the agreement, and allowed O'ConneU & Shea only 2 cents a gallon under the regular wholesale price, instead of 3 cents, as they had agreed to do. (Shea, 5/2464.) When Mr. Shea went after the Standard for the other cent a gallon, Mr. Frohmeyer, manager at Indianapolis, declined to pay it, saying that the contract was not under his jurisdic- tion, but that it was made by Mr. Edwards and Mr. Ritchie. As a consequence of this, when the contract expired O'Con- 271 nell & Shea refused to renew it or to continue purchasing oil from the Standard. Mr. Noles (manager at Terre Haute) and Mr. Frohmeyer (manager at Indianapolis) met O'Connell & Shea at Terre Haute and wanted to sell them oil, but Mr. Shea informed them that they had decided to buy from the independent companies. Mr. Frohmeyer then said, ' ' You know what hap- pened a year ago?" To which Mr. Shea answered, "Yes, we know what happened." Mr. Frohmeyer then said, "Well, then, if you don't buy our oil we will put on those wagons agaiu." To which Mr. Shea replied, "AU right; you have got the privilege of doing that." Mr. Shea further said, "I will tell you what I will do: We wUl write you for prices when we are in the market, and if your prices are right we wUl buy from you, and if not we will buy from other people." To which Mr. Fromeyer said, "We want the whole hog-or none." . C, the Red "C" Oil Company cut the Standard's tank-wagon price IJ cents a gallon. It appears by his testimony that at each of these points the Sta,ndard's price was IJ cents above its Washington tank- wagon price. Therefore, it appears that the Red "C" Oil Company merely made Washington tank-wagon prices at these points (Fehsenfeld, 20/154). Mr Parsells said (13/1189-90) that subsequently the Standard reduced its price at these various towns to the Washington price. This shows that by reason of the absence of competition at the suburban towns the Standard was maintaining a much higher price than in Washington, where there was competition, and that as soon as the independent companies began doing business in the suburban towns the Standard made a uniform price through- out the territory. It can scarcely be said that the independ- ent companies cut the price when all they did was to take the Standard Oil Company's Washington price and apply that to all points reached by their tank-wagon service. 460 ftt.Mr. Parsells said (13/1187), without giving dates, that the Columbia Oil Company secured the patronage of J. H. Acton, of Anacostia, a peddler, by giving him a price of a half a"cent below^the Standard's price on gasoline, and that this is the only case of a cut made by the Columbia which he could give. On his cross-examination (1198) he was again asked about cuts made by the Columbia Oil Company, and said that it had reduced the prices to the towns mentioned around Washington to the same as the Washington price; but that in Washington, with the exception of this man Acton, of Anacostia, the Columbia had not cut the price that he knew of. Some days afterwards Mr. Parsells was recalled by the defendants to further explain what he meant by this statement on his cross-examination just referred to, and he said that he did not mean to convey the impression in that statement that the Columbia at Washing- ton cut the Standard Oil Company's price to his knowledge only in the one case of the man Acton; that he was not in a position to know whether the Columbia was cutting prices at any other place; that all he knew about the Acton instance was that llr. Acton came to the Standard's warehouse to order oil on several occasions, and each time stated that he was getting a one-half cent rebate and that if the Standard would do the same he would give it his business. This is the only instance which he can give of a cut by the Columbia Oil Company, and it is based entirely upon what was told to him by Mr. Acton. Mr. W. H. Fehsenfeld said (20/153) that the price made at Anacostia is the same as the Wash- ington price; that Anacostia is a suburb of Washington and reached by the Columbia's tank-wagon service; that the Washington price has prevailed at Anacostia for years by both the Columbia and the Standard; and he says that he knows there was no cut made to Mr. Acton at that place. It appears upon the cross-examination of G. E. Parsells (13/1191-93) that the Independent Oil Company was organized in 1901 by Mr. Baughman, who had formerly been with the Standard Oil Company at Washington; that at this time the prices were very low in Washington; and that the Independent Oil Company survived about two years. The witness said (p. 1192) it was his recollection that the price in Washington in 1901 was 6^ cents; and 461 (p. 1193) that the price at Falls Church at this time was H cents above the Washington price. Petitioner's Exhibit 915 was identified by the witness as a Standard Oil tank- wagon ticket, showing a sale of oil at Falls Church at 7 cents a gallon. He was then asked if the Falls Church price was 14 cents above the Washington price, that it would not show that the Washington price must have been 5i cents a gallon, and he replied that there was no question of that. He tried to explain this by saying that the driver of the tank wagon who made out this ticket could not be depended upon very much, but admitted that the sales as shown by these tank-wagon tickets were reported back to the Stand- ard, so that the Standard Oil Company had no excuse for not Imowing the exact prices that oil was being sold for in Falls Church. Silver Spring, Md. — Silver Spring is within the Wash- ington tank-wagon service of both the Columbia and the Standard, but because considerable testimony was intro- duced by the defendants with regard to this point it wiU be given separate consideration. George E. Parsells, who from 1901 to 1905 had charge of the refined oil department of the Standard at Washington, and since that time has been supervisor of the warehouse at that place, testified (13/1186) that the Red C Oil Com- pany sold oil to a Mr. Hewitt at Silver Spring, in barrels, at one-half a cent below the Standard's tank-wagon price at Silver Spring, after allowing a deduction for the returned empty barrels. He does not give the date of the transac- tion. He was asked how it compared with the Standard's barrel price, and he said he did not remember, but that the Standard's barrel price usually was 2^ cents a gallon above its tank-wagon price. He compared the Standard's tank- wagon price with the Red " C " Company's barrel price. Two cents a gallon represents the average price of the barrel. This shows that the barrel delivery price of both companies at Silver Spring was identically the same, and also that the Standard's barrel delivery price was one-half cent below its tank-wagon price, after deducting the price of the barrel. Frank L. Hewitt, of Silver Spring, Md. (presumably the person referred to by Mr. Parsells), was called by the defend- ants and testified (13/1330) that in 1903 he was in the grocery 462 business at Silver Spring, purchasing his oil from the Red "C" Company; that the Eed "C's" prices were below the Standard's, and he remembered that at one time he paid 9^ cents a gallon for oil in barrels. During this time he said he went to Norbeck, Md., and talked to a friend there, who, he found, was paying the Standard 10^ cents for oil delivered from the tank wagon. Interrogated further by counsel for the defendants, he said that a further reduction for the returned empty barrels brought the Eed "C's" price down to 7i cents a gallon at Silver Spring. According to his direct testimony, therefore, the Standard's price at Norbeck would be 3 cents above the Eed "C" Company's price in Silver Spring. At the same time, he said on his direct examination that the Standard Oil Company's price in Silver Spring for oil from the tank wagon was 10 J cents, which would also be 3 cents above the Eed "C" Company's price. On his cross-examination, however (13/1334-5), he would not commit himself on the exact figures which either the Standard or the Eed "C" were selling for in Silver Spring, but thought that the Eed "C" sold for between 9 and 10 cents a gallon. With reference to the Silver Spring situation, Mr. W. J. Metzel, traveling salesman for the Eed "C" Oil Company, testified (20/210, 219) that the prices around Silver Spring, Md., were most any kind of prices; there were three or four different prices in and around the place; it was a sort of converging point for two of the Standard's wagon routes — the Washington and the EockvUle routes; that the Inde- pendent Oil Company was selling there, and nobody knew hardly what the prices were; and that the prices made to Hewitt at Silver Spring were at all times the Baltimore price with the freight added. Mr. Metzel said (20/220) that there was a wide variation in the Standard OU Company's prices dependent upon the station from which it was delivered; that Rockville is 16 miles from Washington and the Standard has a station there; Silver Spring is about 7 miles from Washington, and is reached by tank-wagon delivery from either Washington or Rockville, but is supplied from Washington. The mer- chants at Norbeck received their oil from Rockville, where the Standard's price was 2 or 3 cents higher than at Wash- 468 ington. The price which the l{ed"'C" gave to Hewitt, at Silver Spring, Mr. Metzel said, was the prevailing Balti- more tank-wagon price of the Standard Oil Company with the freight added. Metzel said that they made a deliv- ered price at Silver Spring, but the price at times was a little lo-wjer than that in order to meet the Standard Oil Company's competition at Silver Spring and Washington. Mr. Hewitt also said (13/1333-4) that while he was in the grocery business he purchased oil from the Dixie Oil Works, which was sold to him by Knight, and he said that this Knight is the person who sometimes went under the name of Cropman; that he learned that Cropman was going under both names, but he did not tell him the reason for doing so. He said (13/1331) that in June, 1904, he sold out his gro- cery store and became agent of the Dixie Oil Works, which, as we have heretofore shown, was a bogus independent concern. It seems that Mr. Hewitt and Mr. Metzel were not on very friendly terms; Mr. Hewitt said that Metzel always claimed that his oil was better than the oil of the Dixie ; that samples of the oil were taken from the barrels of both companies, and the Dixie oil was found to be the better,- that afterwards Metzel tried to get these samples away from Hewitt, but Hewitt would not give them to him, but used them to build up the Dixie Oil Works' trade. Mr. Hewitt stamps his own testimony with unreliability when he said he used these samples to build up the business of the Dixie Oil Works, and immediately thereafter said that he sold to the trade that only bought from tank wagons, and did not try to sell to the Ked "C's" customers alone. The Red "C" Company sold in Silver Spring in barrels 6nly; if the Dixie did not come in competition with. the Red "C," what trade could it have supplied in Silver Spring, and what conceivable purpose could the Standard have for putting the Dixie Oil Works into this town ? On his cross-examination Mr. Hewitt denied (13/1335) that Mr. Bender, the manager of the Dixie, told him to make a special drive for the customers of the Red "C" Company, and when asked to give the names of some of the customers of the Standard that he took away from that company he named Walter Waters, of Takoma; Stonestreet, of Norbeck; Harris Brothers, of Oakdale; Carson Ward, of Gaithersburg. 464 He was told to go ahead and give more names, but did not do so. He was asked if they purchased exclusively from the Standard, and he replied simply that they were buying from the Standard. He was asked if the Dixie sold to them at less than the Standard, and he said, "I don't think so; I don't know; they bought from me." Mr. Metzel testified on rebuttal (20/220) that Stonestreet, of Norbeck; Harris Brothers, of Oakdale; and Carson Ward, of Gaithers- burg, to whom Mr. Hewitt referred, and a great many other people in that country were purchasing from the Red "C" Company occasionally, and that whenever he had a customer the Dixie made a "dead set for him." Mr. Hewitt said (13/1332) that the Dixie Oil Works sold in Silver Spring at about the same prices as the Standard sold from its tank wagons. The Dixie delivered in barrels; the usual difference between barrel delivery and tank-wagon delivery (eliminating the value of the barrel) is one-half a cent. If the Dixie was selling in barrels for no lower price than the Standard Oil Company was selling from the tank wagon, we venture to say its trade would not have grown to be very large. He said (13/1334) that he did not know the Dixie Oil Works was owned by the Standard; that Bender did not tell him it was controlled by the Standard; that when Mr. Metzel, of the lied "C" Company, told him that the Dixie was owned by the Standard, he did not believe it, but that he now beKeves Metzel's statement. Sligo, Md.— Mr. Parsells says (13/1186) that a man by the name of Butt and another by the name of Moss, at Sligo, Md., claimed that they were getting the same price on the lied "C" oil that Hewitt got at Silver Spring, which was a half a cent below the Standard's tank-wagon price, and that the Standard lost the trade of these two men. Mr. Metzel says (20/210) that the same explanation applies to Messrs. Butt and Moss that was given concerning Mr. Hewitt, of Silver Spring. Price cutting by National Oil Company, of Washington, D. C. — A number of witnesses for the defendants, including Mr. Parsells, Mr. Purse, and Mr. Sparks, testified that the National Oil Company, of Washington, D. C, constantly sold oil at prices which were lower than the Standard's in Wash- 465 ington and that vicinity. This is not the National Oil Com- pany doing business at Baltimore, Norfolk, and in the Norfolk territory. The National Oil Company was owned, managed, and run by one L. S. Nicolai, of Washington, D. C. This company did cut the prices. It sold an inferior grade of oU made from Texas crude. This oil was not worth as much in the market as that which the other companies were selling, and therefore should have sold at a lower price. This company did, how- ever, by reason of these lower prices, somewhat demoralize the trade. The National, of Washington, had a short and erratic career. It only remained in business about a year and a half and was then placed in the hands of a receiver, its affairs were liquidated; and Nicolai, the manager, com- mitted suicide. (Sparks, 13/1182-83; Fehsenfeld, 20/169.) Baltimore, Md. — Bruce Robinson, after he left the Dixie Oil Works, went to Baltimore and became tank-wagon super- intendent for the Standard, and had charge of the Fulton and Camden street stations (13/1111). He says that in July, 1905, the Red "C" Oil Company cut the price on gasoline a half a cent a gallon and secured the trade of the Motor Car Company, and he says that when this cut was made he had the business, but that before that the Red "C" had it. W. H. Fehsenfeld says (20/149) that the Red "C" was selling the Motor Car Company; had sold them for several years before that, and always at the prevailing market price; that he did not make the cut; and that no cut was given to this company. He says that at one time the Motor Car Company, in a monthly settlement, tendered a check deducting 2 per cent discount for cash, which he refused to allow, and that subsequently the Motor Car Company sent another check covering the amount of the discount which they had deducted. Mr. Robinson was recalled and testified (16/2612) to other outs made in Baltimore by the same company, and on page 2612 his attention was called to Exhibit 635, which shows that the Standard Oil Company's price' in Baltimore declmed from 10 cents in March, 1904, to 7 cents in Sep- tember, and Mr. Robinson said that this decline in 1904 was on account of the cutting of prices continually by the Crew- Levick Company, and that the Standard's price was not lower during that year than the Crew-Levick's. 72064— VOL 2—09 30 466 Mr. Wolff, manager in Baltimore for the Crew-Levick Company, called on rebuttal, said (20/71-2) that the Eagle Oil Company (which was then in Baltimore and which Mr. Blaustein claimed to be the owner of, though, as hereto- fore shown, the Standard owned it) began a war against the Crew-Levick Company, cutting the price a half a cent to its trade ; that the only way the Crew-Levick could hold the trade was by following down the Eagle Oil Company's price; that after the Crew-Levick Company followed down the Eagle's price a half cent the Eagle went down a half cent further; from there it went down still further, the price gradually dechn- ing until the Crew-Levick Company was selling at 7 cents and the Eagle Oil Company was selling at 6 cents. When the prices were at these figures, Mr. Blaustein went out openly on the street and dared Mr. Wolff, the manager of the Crew- Levick Company, to come down to 6 cents, saying that if he did so the Eagle would go down to 5. At this time the Standard Oil Company was selUng at 8 cents for oil and 9 cents for gasoUne ; the Crew-Levick Company was selling at 7 cents for oil and 8 cents for gasoline; and the Eagle Com- pany was seUing at 6 cents for oil and 7 cents for gasoline. Mr. Wolff says that the price cutting started in the early part of May and was practically continuous until October, 1904. He said he went to- the Crew-Levick Company's cus- tomers, stated the case to them, and told them that it was impossible for him to continue to go down any further; that it was losing money then, and it would only be a matter of time when they would have to go out of business altogether. Mr. Wolff asked the customers to continue buying of the Crew-Levick Company, saying to the customers that later on, when the price advanced and the fight was over, for the same period of time that this fight lasted he would allow them a reduction equal to that which they could get from Blaustein during the time that the fight was going on; that the Crew-Levick's customers took this proposition up, and Mr. Blaustein was not able to get any more trade away from the Crew-Levick Company, which ended the fight. During this fight Mr. Wolff said that Blaustein sohcited the Crew- Levick Company's customers alone and did not soUcit the customers of the Standard Oil Company. Mr. "Wolff says (20/74) that in 1904 he met the cuts of the Eagle Oil Com- 467 pany by open prices, which he extended to the entire trade of the Crew-Levick Company, and not by means of special arrangements with particular customers. After the fight was over the prices began to go up, and in the latter part of 1904 reached 9 cents (20/74). On his cross-examination Mr. Eobinson said (16/2620) that the Eagle Oil Company also took some of the customers of the Standard during this time. He was asked to give the name of a single customer so taken and he was unable to do so ; but he says they got some of their business, although they did not operate so extensively in his territory. This cor- roborates the testimony of Fehsenfeld and Wolff and all of the witnesses who testified concerning the Baltimore situa- tion, that the Eagle Oil Company sought the trade that the independent companies had, and not the trade that the Standard Oil Company had. On page 2621 he first said that the Eagle met the open-market prices. He then said that he knew that a part of the time the Eagle was cutting the prices, and that he did not know how much the Eagle was cutting the prices of the Crew-Levick Company, if at all. This is a square contradiction of the testimony of Mr. Blau- stein, who said that the Eagle Oil Company never cut the prices, except during the time of the Crook contract in 1904; and it corroborates the testimony of the Government's wit- nesses, all of whom testified that the Eagle was cutting the prices in Baltimore from the time it entered the market there until it went out of business. Mr. Robinson was asked to explain the dechne in the prices, as shown by Exhibit 635, in the year 1905, from 9J cents in February to 7J cents in the summer. He said that prices ordinarily decUne in summer, but that his competitors were trying pretty hard to keep up their gallonage and were apt to cut prices, and that the Crew-Levick Company did cut prices, which lowered the market from time to time. He says his observation is that this cut was made only to a por- tion of the trade, and that, so far as he saw the tickets, the oil was billed at the open-market price, but that the customers were getting a lower price. Mr. Robinson (16/2615-19 and 13/1112-13) gives the names of 42 customers to whom he says the Crew-Levick Company cut prices below that of the Standard in the years 1905 and 468 1906. Mr. WolflE (20/77-90) says that to all but four of these customers named by Robinson the Crew-Levick Com- pany did not cut the prices, except to meet prices made to those customers by Mr. Blaustein. The four exceptions were special arrangements made with the Standard Oil Company's customers in retaliation, because Blaustein had taken the customers of the Crew-Levick Company at similar reductions. With the exception of the four just mentioned, Mr. Wolff says that he did not make cuts or concessions of any kind or character to the persons named by Mr. Robin- son, and that he sold to everybody else at his open prevailing market price during those years. He admits that that pre- vailing market price was at times lower than the Standard's price, but never lower than the price made by the Eagle Oil Company. Mr. Wolff explains with clearness and definite- ness the conditions that prevailed in Baltimore during the year 1905, and at the time when Mr. Robinson says he was cutting the price. Wolff says that Blaustein started in again in 1905 to cut prices to his customers; that he went to them and offered them oil below the prevailing market price; that he represented that Crew-Levick had to meet that price; that Wolff did nieet it; and that for the purpose of ending this price cutting and of carrying the price-cutting war into the ranks of the Standard Oil Company, where it rightly belonged, he went to the customers of the latter company and told them what Blaustein was doing with the Eagle Oil Company, how he was cutting the prices to the customers of the Crew-Levick Company, while the customers of the Standard Oil Company were compelled to pay the prevailing price, and sought to create dissatisfaction among them, and he made a proposition quite generally that if they would buy of him one single week, and if that did not bring Blaustein around to them with a better price within thirty days they should have that oU at a half a cent below the prevailing' market price, but that if Blaustein did come around within the thirty days then they were to pay the Crew-Levick Com- pany the full market price. He says that this was accepted by many of the Standard Oil Company's customers, and that in every instance in less than fourteen days from the time he delivered them oil Blaustein did come around and offered them a lower price ( 20/75-76) . The testimony of Mr. 469 Wolff on this subject goes into details and is interesting reading, but is too long to put into this brief. This con- tinued until the latter part of 1905. The effect of the fight was to end the price-cutting war which Blaustein had insti- tuted in Baltimore upon the Crew-Levick Company's trade. This fight, which Blaustein started and carried on by deceit and misrepresentation, ended in falsehood. The Eagle Oil Company shortly thereafter went out of business. Blau- stein went upon the streets and among the trade and said that he had lost all of his money in the oil business, and that he was now a poor man and could no longer continue in it. This was not true. Blaustein had not lost a penny. He had been working on a salary all the while for the Standard Oil Company. C. & W. Railroad. — Mr. Eitel was asked (13/1322) about the Red "C" making a cut in its price on oil to the Chesa- peake and Western Railroad, and he said that in 1906 and the early part of 1907 his company had the business of that railroad; that it went back to the Red "C" because the Red "C" made a lower price, which it represented to be as good as the Standard's; that he called on Mr. Williamson, super- intendent of the railroad, with a view of renewing the con- tract for 1908, and that Williamson told him that the Red "C" had made a heavy cut in the price, and by reason of that cut the Red "C" got the business. Mr. W. J. Metzel, who travels in that territory for the Red "C" and who trans- acted the business with this railroad company, testified (20/215) that the Red "C" had the business of this railroad from 1905 until 1906 at fairly remunerative prices; that the Standard Oil Company came in and cut the prices heavily and secured the contract for the en'suing year of 1 906-7 and enjoyed the business. When this contract expired, Wilham- son asked Metzel if he could not sell the railroad oil for the coming year, and told him all that he had to do was to match the Standard's price; Williamson showed him the contract he had with the Standard, and the Red "C" made the same price for the coming year that the Standard had made for the year ending 1907 and got the business. Seaford, Del. — Artie Purse ran the business which he acquired from the Seaford Oil Company and the bogus Paragon in Seaford for about three years. He testified 470 (13/1279-82) that during the last year that he was in Seaford the Red "C" Company sold oil at 8i cents, which was one-half cent a gallon below the Standard's price at that place; that certain of the Red "C" Company's customers advertised to retail oil at 8h cents a gallon in 5-gallon lots; that at the same time he was selling in quantities over a gallon at 11 cents, and that the Red "C" Company undersold him in some of the towns surrounding Seaford, and the consumers had a price from 1 cent to 1^ cents above that which he charged the trade at Seaford. W. J. Metzel testified (20/212) that the price made by the Red "C" Oil Company in a.nd around Seaford was the Baltimore price with the freight added over the steamboat line that plied from Baltimore to Seaford. He did not know whether or not that brought the price down below the Standard's; and the usual course was followed in the sales through the towns around Seaford, which doubtless took the same freight rate, and which accounts for his selling oil in those surrounding towns at the same price for which he sold at Seaford. Purse did not follow the custom of the independent dealers in that respect, but followed the custom of the Standard of making a higher price in outlying towns, regardless of the question as to whether or not those towns were reached by his tank-wagon service. Federalsburg, Md., and Seaford, Del. — R. L. Purse, who succeeded to the business of his brother, Artie Purse, in Seaford, Del., in 1903, testified (13/1305) concerning the Sea- ford and Federalsburg situation. He said that in October, 1905, the Red "C" Company shipped carload lots of oil to Seaford; that he took particular notice to see to whom this company was selling, and he saw a big load of oil (he thought as much as 12 barrels) go out of Seaford in a wagon with four horses; that he made inquiry about it and found that it was going to Federalsburg; that this same thing was done several times; that he then followed the wagon over to Federals- burg to see what the trouble was, and found that the Red "C" Company had cut the Standard's price there 2 cents a gallon; that the Standard was delivering oil at Federalsburg from its station at Hurlock, Md., in tank wagons; that the Standard's price was 11 cents a gallon, and that the Red "C" sold this oil therefor 9 cents a gallon; that at this time the Seaford price was 8 cents a gallon; and that the Seaford 471 price was generally 2 cents a gallon under the Maryland price. It appears that in this particular case it was 3 cents a gallon under the Maryland price. Mr. Purse said that after he learned of this situation he went over to Federals- burg with his wagon and met the price of the Red "C" Com- pany, and finally succeeded in getting every store in the town, and that then the Red "C" Company cut the price 2 cents, and he lost the business (13/1307). Mr. Purse said (13/1308) that he had never sold oil in Federalsburg before; that the Standard Oil Company was doing business in that town; that the Standard did not suggest to him to go over there, but that he thought he told the salesman of the Atlan- tic Refining Company of whom he purchased the oil what the Red "C" was doing there. He said (13/1309) that he did not go over there for the purpose of getting after the Red "C"; that he just went over there to sell all the oil he could. Mr. Purse does not explain why he left the territory of the Atlantic Refining Company, of which he was purchasing his oil, and went into the territory of the Baltimore division of the Standard Oil Company to market oil. He had before then confined his trade to Seaford, which is in the territory served by the Atlantic Refining Compay, and that was the first time he ever attempted to do business in Maryland. There can be no question but that he went there to prevent the Red "C" Oil Company from marketing oil at that place. He could have had no other purpose whatever. Mr. Purse was asked if he could see any reason why oil should be 2 or 3 cents a gallon lower in Seaford than it was in Federalsburg, and he said that he could not see any reason for it, and did not know why it was so ; but he said that Dela- ware was under the Atlantic Refining Company, and Mary- land was under the Standard, and he could give no other explanation. Mr. Purse gave the only reason and the only explanation that could be given for this discrepancy in prices. This situation has a significance far beyond the mere consid- eration of these two towns. Seaford and Federalsburg are about 8 miles apart, and transportation rates must be the same or about the same to both places. An explanation of this situation Ues in the fact that the Atlantic markets in one town and the Standard in the other. The Standard companies do not maintain the same prices in adjoining mar- 472 keting divisions or in neighboring towns. The prices in each division or town are regulated by the competition which exists in the particular case. We have here an excellent illustration of the price-making methods of the Standard. This situation accounts for nearly all of the pretended cuts which have been testified to by the witnesses on behalf of the defendants. The fact that the prices of the Stand- ard's companies in adjoining districts are not the same has been taken as a basis upon which to build a theory that the independents were cutting prices. A sale at the market price in one division would, if made in an adjoining division where the prices were higher and where marketing conditions were exactly the same, be a cut; and in the case which we now have under consideration a sale of oil in Sea- ford, Del., at 8 cents a gallon would have been a sale at the prevailing market price at that time and place; but a sale of the same oil at the same time in Federalsburg, across the division line between the Standard and the Atlantic, amounts, according to the witnesses for the defendants, to a cut of 3 cents a gallon. There is another significant feature in the Seaford and Federalsburg case. No explanation was given why the Standard Oil Company, which was dehvering from its station at Hurlock to the trade in Federalsburg, did not itself cut the price of oil there to meet the price made by the Red "C" Company. It was delivering there in tank wagons, presum- ably at less expense than it could deliver from Seaford; but instead of making these cuts itself in its own division and in its own name, it called in Mr. Purse, who was a representa- tive of, or who at least purchased his oil from, the Atlantic Refining Company, from another State and another division, and had him make the cut. There was a reason for this method of meeting the Red "C" Company's price. It was not mere chance, and the reason for it was this : If the Stand- ard itself should make the cut in that division, it might be required to lower its prices all through that division; it could, however, cause Purse to come over into its territory and make a cut without subjecting itself to a general cut. Secretary, Md. — Mr. D. Parran, a general salesman for the Standard Oil Company at the Baltimore office, covering six counties on the eastern shore of Maryland, was called 473 by the defendants and said (13/1153) that when a cut is made in his territory he reports it and usually gets a sample of the goods, and if the price is reduced, it is done by the order of his superior. He was called upon to give some specific cases in which the prices were cut and said that the Red C "Oil" Company shipped to its commission agent at Sec- retary, Md., 10 barrels of oil in June, 1908, on consignment; that the agent did not live there, and the agent made an arrangement with some hauler to dehver oU to merchants as they wanted it; that this oU did not sell very rapidly; that when 5 barrels were sold the remaining 5 barrels stood there a long while; and finally the commission agent of the Red "C" Oil Company went to Secretary, Md. , and offered a commission equivalent to the freight on the oil back to Baltimore rather than have the oil returned. On his cross-examination (13/ 1162) Mr. Parran said that there was no complaint what- ever as to the first 5 barrels of this consignment. It appears that after the sale of the first 5 barrels the Standard's sales- man visited this customer and made a sale; that the second 5 barrels remained unsold about sixty days; and that then, to get rid of them, the Red "C" Company's commission agent offered to reduce the price an amount equivalent to what the freight would be to reship the oil to Balti- more, and that the freight amounted to about five-eighths of a cent a gallon, which netted the merchant at Secretary a lower price than the Standard's price. Perryville, Md.— Mr. Parran testified (13/1157) that the Red " C " Oil Company's coramission agent at Perryville, Md., in July, 1907, sold gasoline for 13^ cents a gallon, when the Standard's price was 14 cents delivered from the tank wagon. On his cross-examination (3/1163) he was asked whether the Red "C" oil shipped into Perryville was in barrels, and he testified that it was. Mr. Metzel (20/208-9) testified that this oil was delivered from their station at Havre de Grace, which is across the Siisque- hanna River; that the Standard's Havre de Grace price at the time was 1 cent below its Perryville price; that the bridge toll was 5 cents a himdred, or about a half cent a gallon; and that they merely gave the Perryville merchants the benefit of the Havre dc Grace prices, adding thereto the cost of taking the oil across the river. The Standard 474 Oil Company had been delivering oil in Perryville from its Port Deposit station, and it appears, as is often the case with the Standard, that the price of oil delivered from the Port Deposit station was a cent a gallon higher than that delivered from the station which supplied Havre de Grace. Mr. Parran says (13/1157-58) that about a year before the sale at Perryville last referred to, the Red "C" Oil Company sold a merchant there 500 gallons of oil, allowing him thirty days in which to make payment, or 1 per cent discount for cash, which Mr. Parran considers a cut in the price. He says that the Standard sold from the tank wagons for cash, and that the Red "C" Oil Company paid the purchaser for hauling the oil from the depot. The Red "C" simply hired a man to haul the oil from the depot to his store, in order to compete with the Standard's tank-wagon delivery. No customer would buy oil in barrels and go to the expense of hauling it from the depot to his store if he could buy at the same price from the tank wagons. The 1 per cent dis- count for cash is a very ordinary commercial transaction. Easton, Md. — IVIr. Parran says (13/1158) that in the latter part of 1907, or in the early part of 1908, Martin Wright, of Easton, Md., bought 10 barrels of White "C" oU from the Red "C" Oil Company, which was billed at the price at the time the shipment was made; but that the Red "C" Oil Company offered a 60-gallon storage tank as a premium or inducement; that Mr. Wright did not -jyant the tank; and that finally the Red "C" Company gave him credit for the equivalent of the tank, which was $4.50, and he did not take the tank at all. At this time the Standard Oil Company was selling oil at 12 cents a gallon to everybody iu that town. The Red "C" Company charged Wright 13 cents a gallon for these 500 gallons, which was $5 more than the Standard Oil Company's price would have been for the same quantity. Deducting the value of the tank, S4.50, leaves 50 cents more that Wright paid the Red "C" Oil Company for this oil than he would have been obliged to pay to the Standard Oil Company for the same quantity of oU. Galena, Md. — Mr. Parran says (13/1158) that in the latter part of 1907, or in the early part of 1908, the Red "C" Oil Company made a sale of 10 barrels of White "C" oil toW. W. Dempsey, of Galena, Md., for 13 cents a gallon, with the in- 475 ducement of a tank. This is exactly like the Wright case at Easton, Md., which we have just discussed. The Eed "C" Oil Company got a higher price for its oU, and the dif- ference between that price and the Standard's price on thei quantity of oil purchased was more than equivalent to the value of the tank. Cambridge, Md. — Mr. Parran says (13/1159) that the Red "C" Oil Company sold at the same nominal price as the Standard did, to certain customers in Cambridge, but gave thirty days' time for payment or 1 per cent discount for cash. On his cross-examination (1169) he admitted that the Standard delivered in tank wagons in all of these towns, and that the Red "C" Company delivered in barrels; and he also admitted, though rather grudgingly, that the tank- wagon delivery was preferred by the merchants, and that, everything else being equal, the merchants would ordinarily buy of the company that delivered from tank wagons rather than be bothered with the barrel delivery. In this respect the witness is in accord with all of the testimony in this case. It is somewhat remarkable then that the Red "C" Oil Company was able to retain any business at all in these localities, even when offering the thirty days' time for pay- ment or 1 per cent discount for cash. St. Michaels, Rising Sun, and Colora, Md. — ^Mr. Parran says (13/1159) that the National Oil Company of Baltimore, since May, 1908, sold oil at 11 cents (which was the Standard Oil Company's price in Baltimore) and offered a tank free as long as the customer would buy from the National Oil Company, and that this was done at St. Michaels, Rising Sun, and Colora, Md. This is quite likely true, because it is the practice of the independent companies operating in Baltimore to charge the Baltimore price for oil in near-by towns reached by the Standard Oil Company's tank wagons from Baltimore; and it is not an unusual custom for the oil companies to loan a tank to the dealer, to be used as long as he patronizes that company. Northeast, Md. — Mr. Parran recalled an instance (13/1156- 57) in which he figures out that a cut was made in a sale of 3 barrels of oil by Sherwood Brothers to J. A. Roney, of Northeast, Md. The price was 10 cents a gallon f. o. b. Baltimore; adding the freight from Baltimore to Northeast, 476 and deducting, as he figxu-es it, $1.18 for each empty barrel, made a net price to the merchant of about 8.76 cents a gal- lon; that the Standard's price at Baltimore at the time was 10 cents. And he says that the Standard's price in Northeast, from the tank wagon, "is" 10 cents. No date whatever is given by him as to when the transaction took place and therefore we are unable to look up the facts. It is the only instance in the entire record of a cut said to have been made by Sherwood Brothers, and we beUeve if aU the facts could be collected it would be found that no cut was made, but that it was merely another instance of giving the Baltimore price with the freight added, and that the Stand- ard's price in Northeast when this sale was made was higher than the Baltimore price with the freight added, making it a cut under the Standard's Northeast price but not a cut under the Baltimore price. Easpburg, Md. — Mr. Robinson said (13/1112) that on about October 1, 1906, the Eed "C" Oil Company offered to J. Charles Raspe, of Raspburg, Md., a cut of a half a cent a gallon. He did not state whether this cut was offered on oil or gasoHne, nor that any sales were made. Mr. Fehsen- feld said (20/149) that the Red "C" sold Raspe at the pre- vaihng tank-wagon market price at the time, which was the same price which it sold to its customers in general; that it did not make any cut ; that Raspburg is in Baltimore County and may have been just beyond the end of the northern route; that wherever the tank wagon goes, the Baltimore market price prevails; that beyond the line where the Red "C" Company's tank wagon ordinarily delivers, the Standard may charge a higher price ; that sometimes on the solicitation of a merchant just beyond that point the Red "C" will make a deUvery, and always at the Baltimore price; and that Raspe was reached by the tank-wagon service and received the Baltimore price. SoUey, Md. — ^Mr. Robinson said that (13/1113) as late as the spring of 1908 the Red "C" Oil Company cut the prices at SoUey, Md., a suburb of Baltimore, 1 J cents a gallon. He did not state the price at which the Standard was selling at the time. Mr. Fehsenfeld says (20/150) that the same conditions prevailed at SoUey that prevailed at Raspburg; that it is a point on the Annapolis road leading out of Baltimore; that 477 SoUey was reached by the tank-wagon service; that no cut was made there; that his company sold oil there at the market price, and never sold it there at any other or different price; and he does not know whether this was above or below the Standard's price, as he paid no attention whatever to that. ' Mr. Kobinson says that two years ago a cut of IJ cents a gallon was made by the Red "C" out on the Annapolis road leading out of Baltimore. This is explained in the same way that the Raspburg and SoUey situations are explained. The testimony shows that the Red "C" Com- pany's tank wagon did go out on this Annapolis road from Baltimore and served the trade there at the Baltimore price ; that at this time the Standard was maintaining higher prices outside of Baltimore than it did in Baltimore, where the competition was fierce, and that sales were made at these suburban points reached by the tank-wagon service of the Red "C," regardless of the Standard's price. Pikesville, Md. — Mr. Robinson says (13/1114) that the Red "C" cut the price a half a cent a gallon to Robert Corbett, of Pikesville, Md. He does not give the date, and does not state what was sold. Mr. Fehsenfeld says (20/150) that the Red "C" never made a cut to Robert Corbett; that Pikesville was reached by tank-wagon service from Balti- more; that he always sold him at the prevaihng price; and that the Standard Oil Company and the Red "C" Oil Com- pany were both selling to Corbett, and are both selling to him now. Kensington, Md. — E.L.Lillard,nowsubagent of the Stand- ard, and who from 1900 to 1907 was a tank-wagon driver for the Standard in its Rockville district, was called by the defendants, and testified (13/1378) that the Red "C" Com- pany sold oil to H. C. Hickerson at Kensington, Md., at lOi cents in barrels f. o. b. Silver Spring; deducting the barrel, 2J cents, made a net price f. o. b. Silver Spring of 8 cents per gallon; that the Standard's tank-wagon price in Kensington was 9 cents. Lillard figures out that the Red "C" Company's price delivered at Kensington was one-half cent below the Standard's price. With reference to this W. J. Metzel said (20/221) that the Red "C" Oil Company never sold Hickerson, of Kensington, any oil for less than 13 478 cents per gallon; that Hickerson always bought the White "C" oil, and never bought any other kind from the Red "C" Company; and always paid from 13 to 14 cents for all he ever bought from the Red "C" Company. Therefore, Mr. Lillard is squarely contradicted by Mr. Metzel. Mr. Metzel knows exactly what j5rice the Red "C" Company Bold its oil for, because he was its salesman; and Lillard can only know what somebody told him, because he was not present when any sale was made. Germantown, Md. — Mr. Lillard said (13/1378) that in 1904 or 1905 the Red "C" Company sold at a cut price to Perry Waters, of Germantown, Md., but he was not asked for any of the details. With reference to this customer Mr. Metzel said (20/222) that Mr. Waters bought several different grades of oil from the Red "C" Company, and that on all of his purchases the prices given were the Baltimore prices with the freight added. Mount Savage, Md. — Charles W. Beamer, who has been traveling salesman for the Standard Oil Company, Baltimore division, for nine years in Maryland and West Virginia terri- tory, said (13/1422) that gasoline is graded by degrees and that all gasolines of the same degree are supposed to be of the same kind, and that it is an easy matter if you know the de- gree of gasoline that your competitor sells to compare his price with your price; but while there may be many different grades the prices can always be followed in that way. This establishes the Government's contention that it is impossible, without knowing something about the different grades of the product, to know whether a price is a cut or not. Mr. Beamer said (13/1422) that the Crown Oil and Wax Company cut the Standard's tank-wagon price on oil from 9 to 8 cents at Mount Savage, Md. ; that this company had tried to do business at Mount Savage before at 10 cents per gallon, and finally made a cut to 8 cents ; and that the Stand- ard met the cut. On his cross-examination (1424) he ad- mitted that the oil sold by his competitor was a cheaper grade of oil, and that it ought to sell for less money than the oil which the Standard was selling at that place. Mr. Beamer testified (1422) that the Waverly Oil Company of Pittsburg made a cut in connection with the sale of gaso- line to the Potomac Hardware Company; that it sold gaso- 479 line at 18 cents f. o. b. Pittsburg, while the Standard's price was 18^ cents f. o. b. Pittsburg for the same degree of gaso- line. Now, if the witness had stopped here it might have been successfully claimed that here was a cut of one-half a cent, because he gives the degree of gasoline here, and this is the first witness on the part of the defendants who has at- tempted to compare products of the same grade. But the witness goes further and figures on the barrel and the freight and concluded finally that the Waverly's price was higher than the Standard's. Wheaton, Md.— Mr. Lillard testified (13/1379) that the Red "C" Company cut the price to Mr. Cissell, of Wheaton, Md., the same as at Kensington, Md., with the addition that the Red "C" Company paid Cissell 10 cents a barrel for haul- ing the oil from Silver Springs to Wheaton, which he said made even more of a cut than that made at Kensington. This is undoubtedly the same hauUng allowance testified to by Mr. Wilmer (13/1240). Mr. Metzel, traveling salesman for the Red "C" Company, who made the sales to Cissell, testified (20/221-22) that Cissell always bought the Sunbeam brand of oil, which is a cheaper grade; that all sales to Cissell were at the Baltimore market price at the time of sale with the freight added to Silver Springs, Md. ; and that Cissell did his own hauUng from Sil- ver Springs to Wheaton, except on one occasion when he made this allowance of 10 cents a barrel to match the same hauling allowance that J. C. Knight, salesman for the Dixie Oil Works, had made to Cissell on a previous sale, by which the Dixie had taken Cissell's trade away from the Red "C" Company. Mr. Wilmer also said (13/1240) that the Red "C" Company sold its Water White oil to Cissell under the brand of Sunbeam (the latter being a Prime White), for the price of Prime White oil, which was something below the Standard's Water White price; that is to say, the Red "C" was pretending to deliver Sunbeam oil, but in fact was delivering a higher-priced oil, leading Cissell to beHeve that he was getting only a Prime White; and Mr. Wilmer thought this was a concealed cut of 1 cent a gallon. If so, it was so well concealed that the dealer did not know he was receiving the benefit of it, or that the Red "C" Company was cheating itself, for Mr. Metzel said 480 Cissell bought the Sunbeam brand regularly. This accusa- tion, however, does not seem very strange or remarkable, coming from the long-time salesman for the bogus independ- ent Dixie Oil Works and one-time manager of the bogus Home Safety Oil Dehvery at Norfolk. Pinetta, Va.— Mr.WUmer said (13/1241)that inPmetta,Va., the Red" C" sold Thomas Morley a prime white oil for a water white oil. This, it will be noted, is exactly the reverse of the transaction which he complained of with Cissell at Wheaton. In both instances he claims that the resiilt was a cut in the price, so that Mr. Wihner does not make much difference whether the reduction is iu favor of or against the dealer, to him it was a cut anyway, seeing this as he does from the point of view of a manager of a bogus independent concern. He does not pretend that he tested the oil by any test which would ascertain whether or not the oil was water white or prime white; he said that he simply put some of it into a bottle and compared it with oil which he says was water white, and from the color of it he at once assumed that it was a prime white and not a water white oil, and so stated to Mr. Morley. Evidently Mr. Wihner had some remarkable powers of persuasion, to have convinced one customer that the Red "C" Company was giving him a water white oil for a prime white oil, and to have convinced another customer that he was getting a prime white when he ought to have received a water white oil. On his cross-examination upon this subject Mr. Wihner said (13/1270) : ^ If I had a sample of water white oil and prime white oU to compare, I could tell you which was the closest to a water white; but with the naked eye I could not do it, I mean with just simply one. He said that the one has an amber cast or straw color, and yet he said that there are some prime white oils that have a higher fire test than water white oils. Later along he testi- fied as follows: Q. As I understand you now, if you get two bottles before you, one filled with prime white and the other with water white, by looking at them with the naked eye you can tell the difference ? — A. I can teU which one is nearest to the pure water white. Now you might show I me two prime whites, you might show me a prime white that was diluted with water white, and as a comparison I could teU you which was nearest to water white oil. 481 And he said that the clearness or whiteness of the oil is not always a test of the quality of the oil; that in order to deter- mine the difference accurately you must make a test; that he made no tests of these oils except by putting them into lamps and comparing them; that when it gets down to fire tests and all that kind of business he did not know anything about it; that he did not know whether these oils which he compared came from the same refinery or not ; that he did not know whether water white oil produced by different refineries is exactly alike; that he is not an oil expert; that all water white of the same quality is not of the same color; and that he did not know whether the color is the same regardless of the crude from which it is manufactured ; that that is getting down to technical points. It is clear from the testimony of this witness that he made no such tests of the oil as would enable him to state whether or not the Red "C" was sub- stituting the one for the other, and it requires considerable ingenuity to work out from his testimony the conclusion which he reached. Norfolk, Va.— Mr. J. A. Brockett (13/1297), who was a tank-wagon superintendent for the Standard Oil Company, ^testified that since 1906 the National Oil Company, of Nor- folk, cut the price of oil in Norfolk, Va., and he names eight cases in which he says a cut was made. He said (13/1298) that he saw a ticket showing a sale of gasoline to a Mrs. Mendleshom at one-half a cent below the prevailing market, but does not state the quality of the gasoline; also that this company gave a Mr. Lubschutz a 5-gallon can, and he figures out that this was a rebate (1299); that it gave a Mr. Garfield a 30-gallon tank, and this he figures out to be a rebate; and that he saw a driver's report that Mr. Lavitt had bought under the market price, but did not state what the market price was, nor what was charged by the Na- tional, nor what the quality of the oil was (1300); that the National gave Mr. Vita two or three 5-gallon gasoline cans; that Vita gave the National a part of the trade, and that finally the cans were taken back by the National, and then he gave the Standard his entire trade; that the National gave a Syrian family by the name of Tabet oil at 1 cent below the market, makiug the ticket at the market price (1301); that the National gave Mr. Faverman 5 gallons with every 50 that 72064— VOL 2—09 31 482 he bought, and that the National also gave a Mr. Levinson 3 to 5 gallons with every 20 gallons that he bought. In no case is either the selUng or market price given nor is there any proof that the quality of the oil or gasoline was the same as that being sold by the Standard. Mr. Brockett admits (1304) that Mr. J. R. McCumber and E. L. Price were peddlers for the Standard Oil Company at Norfolk and Portsmouth, respectively, and that he does not know anything about what these Standard peddlers or the Home Safety Oil Delivery was selling oil for in Norfolk at that time. The cuts and concessions which Mr. Brockett tes- tified about, if undisputed and unexplained, are trivial and inconsequential. Norfolk district. — ^Victor H. Browne, who has been gen- eral salesman for the Norfolk branch of the Standard for the past two years, and who before that was local tank-wagon superintendent at Norfolk, testified (13/1337) that the National Oil Company sold oil at cut prices in his territory, which includes six or seven counties, as follows : At South HiU, Va., in 1907, the National sold to four or five concerns at one-fourth of a cent a gallon under the Standard's price. At Edenton, N. C. (13/1338), the National sold at a cut of about 2 cents a gallon. At this point it is not clear from his testimony whether the deduction for the empty barrel was proper or not, but he leaves the impression that it amounted to a 2-cent cut. At Suffolk, Va., he said that the Standard was selling at the Norfolk price plus the freight; and that the National sold at the Norfolk price, without adding anything for freight. It does not appear how the National deUvered the oil at Suffolk. At Elizabeth, Va., he said the National sold to J. B. Flora at the Standard's price, but allowed a 2 per cent discount for cash, while the Standard allowed no discount. At Smoke Yard, Va., he said the National sold 5 barrels of oil to Mr. Raney, giving him the 5-barrel price; that Raney had not theretofore purchased in 5-barrel lots; that Raney was permitted to order the oil out as he wanted it ; and this, he claims, amounted to a cut of one-fourth cent a gallon. 483 At Port Norfolk, Va., which is a suburb of Norfolk, he said that in 1905, while he was tank-wagon superintendent, the National Oil Company sold at the Norfolk price, while the Standard had always maintained a price one-half cent above the Norfolk price; as a result of which the National took all of the trade away from the Standard. At Norfolk, he said that he had never been able to get the trade of the Barnes Grocery Company, because the National had a contract with this firm for 1,500 gallons at one-half cent below the Standard's price; that after the expiration of this contract he again tried to get the trade of this firm, but they declined to purchase from the Standard, saying that they were getting 5 gallons of oil extra with every 50 gallons they bought. It is quite apparent that this customer is a large purchaser, and one who has always obtained a better price by reason of the fact that they purchased in large quantities ; being just such a customer as the defendants have repeat- edly given special prices to, in consideration of that customer purchasing exclusively from the Standard. The witness Browne makes complaint because the National Oil Company has a similar arrangement with the Sawyer Grocery Com- pany, of Norfolk. As to each of the towns to which he testified outside of Norfolk, the prices at which the National Oil Company sold can probably be accounted for, either by the extension of the Norfolk price as far as the tank-wagon delivery would extend, or by reason of differences in prices where the towns were in different marketing divisions of the Standard. At Jarretts, Va. (13/1340), he said the Richmond Oil Com- pany sold at a cut of one-fourth of a cent a gallon, and, figur- ing on the freight and the return of the empty barrel, he reaches the conclusion that it amounted to a cut of about 2 cents a gallon. At Lawrenceville, Va., he said a cut was made by Har- wood Brothers, of Richmond, to a Mr. Ryland, but he does not give the prices nor tell what the cut amounted to. At Wakefield, Va., he said that he had never been able to get a customer by the name of Stevenson, who, he said, had always purchased from Harwood Brothers, of Richmond; giving as his reason for not getting Stevenson that Stevenson was purchasing at prices below the Standard's. He says he 484 had a talk with Stevenson, in which Stevenson told him he was getting his oil a cent cheaper than the Standard's price. Eiclmioad, Va. — Richard R. Burnett, who has been a tank-wagon driver for the Standard since January 1, 1907, in Richmond, was called by the defendants and testified (13/1450) that a short while ago somebody who had charge of the Coast Line boat harbor told him that he went to the Standard to see if it would offer any inducements; that it would not do so, and that he went to the Richmond Oil Company and got a 110-gallon tank, and some engine oil tree, and that for that reason he was imder obligation to buy of that concern. This is clearly hearsay. He named iovx persons on his tank-wagon route whom he has known for a long time and who are buying from the Standard, and so far as he knows have bought from no other company. He said that in about the middle of February, 1908, the Richmond Oil Company's tank-wagon driver called on these parties and offered a 7^-cent price for a low-grade oil, and an 8J-cent price for a higher grade oil; and that the Standard's price at that time was 8 cents for Standard White, and 9 cents for Aladdin; and that he did not lose the business, but that these customers insisted that he must meet the price, and that he finally took it up with the Rich- mond office and met the price. There is no testimony here that throws any fight on the question as to whether the oil offered by the Richmond company was as good a grade as that sold by the Standard or not. It was doubtless a case where the Richmond Oil Company was seeking to extend its tank-wagon service into^ new territory and encountered higher prices than in Richmond. But whatever the fact may be with regard to the quality of the respective oils, the Standard here admits that it met the price offered by the independent company and the competitor never got any of the business. Blackstone, Va.— Mr. Barrett testified (13/1394-1400) that the Richmond Oil Company sold oil to Mr. Jones at Blackstone, Va., for 9^ cents a gallon, allowing 1 per cent discount for payment in ten days; whereas the Standard Oil Company's price was 9f cents for 5-barrel lots. Both deliveries were in barrels. Later in his testimony he says that the Richmond sold first at 9^ cents and then at QJ cents 485 at different times. On his cross-examination, he was asked if the oils sold by the respective companies were of the same grade, and he said he was informed by Mr. Jones that they were, and that he supposed that they were, because it sat- isfied Mr. Jones's trade in the same way. This is no proof whatever that the oils were of the same grade or that they should be sold for the same price. Staunton, Va.— Mr. J. W. Duling, a general salesman for the Standard Oil Company, testified (13/1315-16) that the Red "C" Oil Company cut the prices on oil at Staunton in the fall of 1907, and in April or May, 1907, to a number of customers,' whom he names, in Staunton, three-fourths of a cent per gallon under the Standard's tank-wagon price, which was lOi cents, and that the Red " C " Oil Company got the business by reason of that cut. W. J. Metzel, traveling salesman for the Red "C " Company, called in rebuttal, testi- fied (20/212) that the Red "C" Company's price in Staun- ton was made by taking the Baltimore market price and adding the freight rate of 50 cents per barrel from Baltimore to Staunton, which was the same price that the Red "C" Company had at Harrisonburg, Va. (26 miles away), where the Standard's tank-wagon price was 9| cents per gallon. Mr. Metzel said that the Red "C" had previously done busi- ness in Staunton, but had been frozen out by the Standard, and that the merchants at Staunton, learning that the Harrisonburg merchants were getting oil from the Standard and from the Red "C" at 9 J cents a gallon, importuned Metzel to come to Staunton; that the Staunton merchants secured an agent for the Red "C"; and that the Red "C" finally shipped a carload of oil, making the price llf cents a gallon delivered at Staunton, aMowing $1.10 for the return of empty barrels, which made a net price of 9J cents a gallon at Staunton, which was the Baltimore price with the freight added. What the Red "C" Company did in this case was merely to equalize the Staunton and Harrisonburg prices. The Standard was delivering to both of these places from its tank wagons, the freight was the same from Baltimore to both places, and the Red " C " Company made the same price at both places, while the Standard had charged three-fourths of a cent more in Staunton than in Harrisonburg. 486 Millboro, Va.— Mr. Duling testified (13/1315-16) that in May or June, 1907, at Millboro, Va., the Red "C" Oil Com- pany sold oil to the Trade Supply Company at a price repre- senting a cut of one-half a cent a gallon. With reference to this Mr. Metzel said (20/214) that the Eed "C" Company sold the Trade Supply Company Aurora oil at 12 cents per gallon f. o. b. Staunton, which was the Standard Oil Com- pany's prevailing price in Staunton. Mr. Duling did not give the prices at which either company was selling, but merely gave the amount of the cut. Craigsville, Va. — Mr. Duling testified (13/1315) that the Red " C " Oil Company sold Aurora Water White oil to Craig & Doyle, of Craigsville, in the winter of 1907-8, at 11^ cents a gallon f. o. b. Staunton, when the Standard's price at Staimton was 12 cents a gallon. With reference to this, Mr. Metzel testified (20/214) that the Red "C" Company had sold Craig & Doyle from time to time at 12 cents f. o. b. Staimton (the Standard's price) ; that the next time he went to Craig & Doyle he found Duling had sold them five barrels of Aladdin oil at a cut of three-fourths of a cent ; that the Red " C " Com- pany matched this price and sold five barrels of Aurora oil; that on Mr. Metzel's next trip to Harrisonburg he foimd that they were buying from the Staunton Safety Oil Company, a subsidiary of the Standard, at Hi cents per gallon, repre- Company did not meet this price, and has never sold Craig & senting another cut of one-fourth of a cent; that the Red "C" Doyle since. So that Mr. Metzel completely contradicts Mr. Duling that the Red "C" Company sold at Hi cents and shows on the contrary that the Standard twice cut the Red " C " Oil Company's price to this customer, and in that way obtained the trade. Lexington, Va.— Mr. Duling testified (12/1316) that the Red "C" Oil Company sold J. Gassman & Co., of Lexington, Va., one barrel of paraffin oil in the fall of 1907, at 15 cents a gallon; when the Standard's price for paraflBn oil was 16 cents f. o. b. Staunton, plus the freight from Staunton to Lexington (16 or 18 cents per hundred), making a cut of 1 cent and freight. In reference to this, Mr. Metzel said (20/214) that the Red "C" Company sold a carload of oil to a munber of merchants in Lexingtoh; that this carload ship- ment contained one barrel of paraflSn oil for Gassman & Co., 4S7 which was sold at the Baltimore price, with the carload freight rate added; and that the Red "C" Company to all of these customers at Lexington made a delivered price by- taking the Baltimore market price and adding the freight. Somerset, Va.— Mr. Eitel testified (13/1322) that in March, 1907, the Red "C" Oil Company shipped oil to Somerset, Va., selling it there for 12 cents, giving back $1.15 for the barrel, making a cut of three-fourths of a cent a gallon imder the tank-wagon price of the Standard, and that they bought oil of the Red "C" by reason of that cut; that the Standard before then had enjoyed that trade; and he names several merchants at this town who he says received the advantage of this cut. Mr. Metzel (20/216) said that he sold a carload of Columbia Headhght oil to the merchants named by Eitel, at 12 cents a gallon delivered at Somerset, Va. ; that the Baltimore price for this oil at that time was 11 cents per gallon; carload freight rates 12^ cents per hundred (50 cents per barrel, equivalent to 1 cent a gallon), which made it 12 cents a gallon delivered at Somerset. The value of the empty barrel was at that time $1.10 or $1.15 at Somerset. This carload of oil was not all sold, Mr. Metzel said, to dealers Hving in Somerset ; that carload was made up and distributed over the coimtry; that it took him two days to drive over the country and make up this carload; that the carload was consigned to C. E. Morris & Co., Somerset, Va., and those customers who Hved outside of Somerset drove there with their teams and took the oil away. Mr. Metzel said that he does not know whether this was a cut of the Standard's price or not, that he was simply following instructions to sell at the Baltimore price, with the freight added. Harrisonburg, Va.— Mr. Eitel testified (13/1323) that the Red "C" made a sale to the Troy Steam Lavmdry, of Harri- sonburg, Va., of 86-degree gasoline at 22^ cents f . o. b. Harri- sonburg ; that the Standard's price at that time for 86-degree gasoline was 22 cents f. o. b. Baltimore; and that this gave the laundry company a better price by about 2^ cents than the Standard gave it, taking into consideration the freight. Mr. Metzel said (20/216) that he sold a barrel of 86-degree gasoline to the Troy Steam Laundry at 22^ cents per gallon delivered at Harrisonburg, which was the Baltimore price 488 of 21 cents a gallon; the carload freight rate was 1 cent a gallon, the expense of delivering it in Harrisonburg was half a cent a gallon, making it 22^ cents delivered. He said that no profit was made by his company on 86 degree gasoline, and that it sells it at the same price which the Red "C" pays for it, and for that reason they added all expenses attending its delivery, and he did not know whether this brought the gasoline down below the Standard's price or not. Broadway, Va. — Mr. Eitel speaks (13/1324) of a sale made by the Red "C" Oil Company to J. E. Beard & Co., of Broadway, Va. ; that previous to that time the Standard had Mr. Beard's business; that he asked Beard why they had changed, and he was informed that the Red "C" had made a better price, but he did not indicate how much. Mr. Metzel testified (20/216) that he called on J. E. Beard & Co., asked them to buy oil from him, and gave them his price; that Beard told him he was too high; that Beard then produced a bill of goods bought from the Standard Oil Company, at Winchester, Va., and told Mr. Metzel that if he would meet that price he would give him the order, and Mr. Metzel did so. Mr. Metzel said that he had been selling Beard & Co. oil before that; that this company had divided its trade before this sale was made, and has divided it since. Mr. Metzel (20/217) explained that Mr. Eitel, in his efforts to sell Beard, claimed that if he was allowed to use the Winchester price of the Standard instead of the Harrison- burg price, he could have sold Mr. Beard oil. This illus- trates again the Standard's method of making prices; if deUvery is made from one station it was one price, if from another station it was another price, and the difference in the prices as between the adjoining stations was based entirely upon the absence or presence of competition. Mr. Metzel was asked about the different prices in different towns. He was asked the difference between the Harrison- burg price and the Winchester price, and said it was as much as 1^ cents a gallon lower in Winchester than in Harrison- burg. The towns are about 80 miles apart, and the freight to Winchester is about 10 cents per barrel less than it is to Harrisonburg, which amounts to about a quarter of a cent a gallon. The Standard Oil Company has tank-wagon sta- tions in both of these places. 489 Mr. Eitel said (13/1325) that the Red " C " made a cut to the Adamant Porcelain Company, of Broadway, Va., in August, 1908, and that he was advised by Mr. Tantum, superin- tendent of the Adamant Porcelain Company, that the Red "C" Oil Company had made a better price on oil by about a cent a gallon, and that the business was gotten by the Red "C." Mr. Metzel said (20/217) that he sold in exactly the same way to the Adamant Porcelain Company that he sold to J. E. Beard & Co. luray, Va.— Mr. Eitel testified (13/1326) that in October, 1907, the Red "C" made a cut to A. W. McKim & Son, of Luray, Va., on gasoline; that it sold this company gasoline at 16 cents a gallon delivered, while the Standard's price was 14^ cents f . o. b. Baltimore. The difference in the freight rate would have made about a IJ-cent cut in the price; and he says the Red "C " got the business. Mr. Metzel testi- fied (20/218) that he had always been selling McKim & Son some of their oils and gasoline; that as a rule the Red "C" shipped it to Luray in carload lots, and the carload freight rate was less than the local freight rate; that the Red "C" price was made by taking the Baltimore market price and adding the freight to make a delivered price at Luray; and that he did not get all of the business of this concern, but had a part of it before this transaction, and has had a part of it since, and that the proportion has been about the same. Bassetts, Va. — ^Mr. W. A. Barrett, salesman for the Standard Oil Company, traveling in the southern part of Vir- ginia, testifies (13/1393) that the Red "C " Oil Company sold a carload of benzine to the Bassetts Furniture Company and the Smith River Chair Company, at Bassetts, Va., for 13^ cents f. o. b. Bassetts, and the Red "C" Oil Company paid the freight on the return empty drums; and he says the Standard Oil Company had a contract with those two con- cerns for benziue at 14 cents per gallon f . o. b. Bassetts, and they were to pay the freight on the return drums. Mr. Bar- rett calls- this a cut, and says that by reason of it the Standard lost the trade. Mr. Fehsenfeld, called on rebuttal by the Government, testified (20/156) that on October 30, 1906, he sold a carload of benzine to a number of concerns in Bassetts and Mooresville, Va., at 13i cents a gallon, which was the Baltimore price of 11^ cents, plus 2 cents a gallon freight from 490 Baltimore to Bassetts, and that he did not know whether that was lower or higher than the price at which the Stand- ard was selling in Bassetts at that time. Mr. Fehsenfeld also says that the Red "C" Company pays the freight on the re- turn empty drums, so as to put the purchaser on an equal footing with the tank-wagon delivery. The cut which Mr. Barrett complains of, therefore, on the part of the Red "C" Oil Company is no cut at all. It was merely giving the pur- chasers at Bassetts the benefit of the Baltimore price. Brookneal, Va. — ^Mr. N. Maynard Worley, of Lynchburg, Va., a general salesman under the Richmond branch of the Standard OU Company, whose territory is in the southwest- ern part of Virginia, and who has been selling oil for the Stand- ard about seventeen years, said (13/1345) that his competitors at Brookneal, Va., sold a brand of oil called "Electric Safety" in competition with the Standard's Aladdin brand. When asked how it compared with the Aladdin brand, he said that this competitor represented their Electric Safety oil as being equally as good as the Aladdin, and yet he said they sold it for 1^ cents less a gallon than the Aladdin oil was sold for. There is no proof in this record to show that it was actually worth as much as Aladdin. The Aladdin oil is a well-known brand and the trade understands what it is. If the Electric Safety oil was of an inferior grade, it should sell at a lower price; if the grade was the same, this fact should be proven. The fact that it was sold in competition with Aladdin is not proof that it is as valuable or that it should sell at the same price. The witness said (13/1347) that the Standard has a cheaper brand of oil called the "Diamond Headlight," and that the Electric Safety sold for one-fourth of a cent under this Diamond Headlight. The witness does not state what the method of delivery was ; if it was the barrel deUvery against tank-wagon delivery, then this one-fourth of a cent is more than accounted for. Christiansbarg, Va. — ^Mr. Worley said (13/1347) that his principal competitor, the Frank Oil Company, of Titusville, Pa., by letter which he saw, quoted a price of 16f cents a gallon on deodorized gasoUne, delivered in barrels in Chris- tiansburg, and that the Standard was selliag at 17^ cents a gallon. The witness did not swear that the grade, degree, or value of the gasoline was the same, though in a leading ques- 491 tion put to him the word grade was included. Mr. Worley said that he lost no business by reason of this quotation ; that the trade did not make any purchases. Mi-. Worley complained (13/1348) of the Southern Oil and Supply Company, because it allowed one gallon per barrel outage after the Standard h^d discontinued the practice. He said that the practice was general with all oil companies some years before, and that it had been discontinued by the Standard. Mr. Worley seems to have a keen sense of the ridiculous. Colfax, Va. — Robert F. Epperson, who has been con- nected with the Standard Oil Company since 1895, and since 1901 has been a general salesman connected with the Rich- mond branch, traveling in the extreme southwest part of Virginia, was called by the defendants. He gave (13/1350) the contents of a letter written in 1904 by the Southern Oil and Supply Company to the Blair Grocery Company, at Colfax, Va., in which this company offered to meet the Standard's price on the three grades of oil that the Standard was selling in Colfax, and to allow 25 cents per barrel as brokerage. The testimony was clearly incompetent, and the facts sought to be proven do not show a cut or even an unusual situation. If the Southern had no commission agent there it might appoint the grocery company and make the allowance. The testimony does not show whether Blair Brothers were to retail the oil to consumers or to handle it as jobbers. Lebanon, Va. — Mr. Epperson said (13/1351) that the Brooks Oil Company in January, 1907, sold five barrels of Lighthouse oil to a merchant in Lebanon, Va., at 13 cents. f. o. b. Norton, Va. ; that the Standard's price on Aladdin oil was 121 cents, f. o. b. Norton, Va.; and he says that this was a cut of about three-fourths of a cent. Sylvatus, Va.— Mr. Epperson said (13/1351) that in June, 1907, the Dalton Grocery Company, of Sylvatus, Va., asked him for a price on a carload of oil, that the Standard was selling at 12i cents delivered, and he was told by this grocery company that the Red "C" Company made a price of llf cents delivered on Aurora Safety oil, and that this oil was guaranteed to be equal to the Aladdin. Whether it was equal to the Aladdin or not is entirely a different ques- 492 \ tion. It does appear from the testimony that the Red "C" had other brands that were higher priced and that were better oils and this may account for it. But assuming that it was worth as much as the Aladdin oil Mr. Fehsenfeld and Mr. Metzel both testified that the price made by the Red " C " Company was the Baltimore price with the freight added. Castlewood, Va. — Mr. Epperson said (13/1352) that the Brooks Oil Company made a cut of the Standard's price of about one-half a cent a gallon, to Porter & Co. of Castle- wood, Va., in December, 1906, or January, 1907, guaran- teeing the oil to be fully equal to the Aladdin. We have here another case where a brand of oil was guaranteed equal to the Aladdiii, but no proof that it was equal and no proof that it would seU or did sell in the market for as high a price as the Aladdin either to the wholesale or to the retail trade. • He speaks of another similar case at Raven, Va., and also one at Rose Hill where a cut was made, but the record is silent as to the quality of the oU that was sold here. Hiltons, Va. — Mr. Epperson said (13/1352) that the Crystal Oil Company made a cut at Hiltons, Va., in 1905; that this company made a price of 14 cents delivered on 150 Water White oU, guaranteeing it to be the equal of the Standard's Aladdin oil; and that the Standard's price at that time was 15^ cents deUvered at Hiltons on oil shipped from Gate City. This statement, "shipped from Gate City," explains the situation. It makes a difference with the Standard Oil Company in the price that it fixes as to whether or not the oil is shipped from one place or from another. It would depend upon what price happened to prevail in the particular district in question. On the same page he speaks of another cut made at Gate City on Water White oil by the same company. Preacher, Va. — Mr. Epperson said (13/1353) that he met with one cut (not stating on what product the cut was made) at Preacher in 1905 made by the Atlas Oil Company, of Cleve- land, and never met with any other cut by that company. Also that the Crystal Oil Company made a price of 13i cents dehvered on an oil guaranteed to be equal to the Standard's Aladdin; that the Standard's oil was shipped there from Big Stone Gap and cost them 13| cents; and that the Crystal cut 493 the price one-fourth of a. cent. This is another case in which the quality and value of the respective oils is not stated. lyacliburg, Va. — Mr. Epperson said (13/1353) that the Southern Oil and Supply Company, of Baltimore, made a cut at Lynchburg, Va. ; he did not remember positively what the Red C's prices were, nor what the Standard's prices were, but knew that there was a difference, and that he lost the business by reason of that. He said that these coinpetitors of the Standard invariably allowed 1 per cent discount for cash, while the Standard insisted on having the cash. On his cross-examination (1354) Mr. Epperson stated that the Standard had few tank-wagon stations in southwestern Virginia, and named four places where there were such sta- tions; that the country trade is done in barrels, and that it is a mountainous country and difficult to make tank-wagon deUveries. He was then asked whether or not the Standard had much competition in his territory of about thirteen coun- ties, and he replied, "Not a grejat deal." He was then asked if its prices did not range from 13 to 15 cents a gallon, and he said that they did in the different markets. He was then asked if his company was not selling the same oil at Lynch- burg during the same time at 7J, SJ, and 9 cents a gallon, and he said that he did not know. Mr. Epperson said that most of the cuts have been from a quarter of a cent to half a cent, and in one or two sinstances three-fourths of a cent a gallon, and he named Gate City as a place where there was a difference of IJ cents a gallon, and the Standard at that place was getting 15 cents a gallon. The witness's attention was called to the fact that the rec- ord in this case shows that at that time the Standard was selling for 8 cents a gallon in Richmond. He said that he did not know where the oil that was sold for 15 cents a gallon came from; that the Standard draws from different places, and (1456) he does not know whether the oil sold was Ohio oil or Pennsylvania oil. To test this witness's knowledge as to the subject upon which he testified (1457), he was asked to explain fully the sale, to which he testified, by the Paragon Oil Company in 1907 at Rose Hill in barrels, and on this page and the next he attempts to figure out how the cut was made, but when 494 he got through with it he had to admit that no cut whaterer had been made. This witness was selling in a sparsely settled territory at an exceedingly high price, because there was very little compe- tition. The independents, some of them as far away as Cleveland, shipped oil in there, and according to his testi- mony, if it was of the same grade and value as that sold by the Standard, sold it at a trifle less than the Standard's price, and the reason for this undoubtedly is the Standard was maintaining in that territory an abnormally high price and the independents could sell in there and deliver in barrels at their market price at the home station with the freight added and make a better price to the merchant than the Standard Avas making. Charleston, W. Va., territory. — William S. Moore, who has been a traveling salesman for the Standard Oil Company attached to the Charleston office since April 1, 1903, testified (13/1470) that Chas. H. Moore & Co., of Cincinnati, guarantee its oil to be as good as that which the Standard markets, and yet sell it at half a cent to a cent and a quarter under the Standard's price. He said (1471) that the Paragon Oil Company made a cut to the Vaughan Coal and Coke Company at Roderfield, W. Va. ; that the Standard markets Water White there as a leader and the present price is 11 cents f. o. b. Huntington; that the Paragon sold an oil that they called Black Swan for 10 cents, if he remembers right, delivered in bulk, against the Standard's Water White price of 11 cents f . o. b. Hunting- ton, with a 38-cent freight rate. He said that the Paragon Oil Company sold to Nicol & Yung, of Nolan, W. Va., Black Swan headlight oU at possibly a cent less than the Standard's Water White. He said (1472) that the Nichols & Kendall Furniture Company, the Huntington Chair Company, and the Penn Furniture Company of Huntington, W. Va., were formerly his customers, and that he lost them because Charles H. Moore contracted for a 9-cent price on naphtha, f . o. b. Hunt- ington against the Standard's 11^-cent price. On his cross-examination (1472), he was asked if he knew anything about the quality of this naphtha that was sold at a cut price and he said that he knew nothing whatever about 495 the quality of it, but he knows the price it was sold for because he saw the yearly contracts. This indicates clearly that these oils were not sold on the market but were sold under a contract. The testimony fails to disclose the grade, quality, or market value of the oil sold, and no comparison can be instituted while these necessary elements which must enter into the question of price making are absent. He was then asked about the Black Swan brand, upon which he said some of the independent companies made a cut, and said he did not know anything about the quality of this oil, but that the merchants told him it did not give as good satis- faction as the Water White. Russel R. Middleswart, a salesman for the Standard Oil Company, connected with the Charleston, W. Va., office, (13/1473) said that the Charles H. Moore Company cut the price to several concerns in McDowell County, W. Va. ; that these concerns had formerly been his customers, and that after the Moore Company cut the price he lost them for a while. He did not remember what the cut was, and could not tell what the prices were, but thought that the cut ranged from one-half a cent to 1 cent lower than the Stand- ard's price. He said that the Crystal Refining Company, of Cleveland, sold the Blackwood Coal and Coke Company, at Blackwood, Va., refined oil in barrels at a less price than the tank-wagon price of the Standard, but he did not remember what the Standard's tank-wagon price was, nor what the cut amounted to, nor what the Crystal Company's prices were, but thought that the price was a little more than a cent below the Stand- ard's price. He stated (13/1475) that the Paragon Refining Company cut the price about a cent a gallon to the Roanoke Coal and Coke Company of McDowell County, W. Va., which had previously been buying of the Standard; that this company left the Standard on account of it; that the first shipment gave fair satisfaction, but those that followed did not, and that finally this company came back to the Standard and paid the higher price. He did not know how many barrels the Roanoke Company purchased of the Paragon, but thought there was as much as 10 barrels at one time. 496 On his cross-examination ( 1476) he was asked if the Black Swan oil sold by the Paragon Oil Company was as good as the oil that he was selling, and he said that it was not. On his redirect-examination counsel for the defendants tried to get him to tell what he thiaks the difference in price ought to be, and he sai^ it would be pretty hard to say. We also have in this case barrel deUvery as against tank- wagon deUvery, and this witness said that the tank-wagon dehvery is ordinarily preferable. The competitors were selling an inferior grade of oil and necessarily at a lower price. Elkins, W. Va. — Mr. Chas. W. Beamer, a general sales- man for the Standard, complaiaed (13/1423) of a cut made by the Energine Refining Company to the Elkins Pail and Lumber Company, of Elkins, W. Va., on deodorized naphtha. He said that the Standard was selling at a price of 12^ cents in steel barrels, f. o. b. Cumberland, while the Energine Company quoted them a price of 8 cents in steel barrels, f. o. b. Cleveland. The freight rate from Cleveland to Cumberland is 25 cents a hundred, or $1 a barrel, and the freight rate from Cleveland to Elkins is 35J cents a hun- dred, or $1.36 a barrel, making a cut of about 3J cents. The witness, after stating that naphtha is sold by a degree number, fails to state whether in this particular case the naphtha furnished by the Energine Company was of the same degree as that furnished by the Standard. North and South Carolina territory. — J. Flem Johnson, a traveling salesman for the Standard Oil Company ia the Carolinas, was asked (13/1451) if he remembered any cases of price cutting by any of his competitors, and he rephed he could only repeat a few of them, but he remembered there were many. He says he can call towns, but he can not remember dates. He was then asked the leading question, whether price cutting by his competitors had been frequent during the eight years he had been with the company, and he answered, as the question suggested he should, that it had been, but says that he can not give any estimate of the aggregate number of cases. Lincolnton, N. C. — ^Mr. Johnson was then asked (p. 1452) if he remembered a case, in 1903, of a price cut by the Red "C" at Lincolnton., He said that they had several cuts by the Red "C" Oil Company, but he could not tell what 497 the prices were. Mr. W. H. Fehsenfeld, tesified (20/163) that on January 28, 1903, the Red "C" Oil Company sold 7 barrels of Columbia Headlight oil at Lincolnton at 14 cents, which was, as he remembers it, the Baltimore price with the freight added. Also that on April 1 1903, they shipped a carload into Lincolnton at one-half cent per gallon less than the first carload, the price having declined in the meantime, which also was the Baltimore price with the freight added; that these prices are the gross prices ; that the barrel is to be taken out, which would reduce the price about 2 cents; and that these, so far as he knows, are the only shipments that he made into Lincolnton; that he has examined his records and finds no others. Mr. Fehsenfeld also says (20/168) that there was a shipment on January 28, 1903, to Lincolnton; that a car was consigned to E. & R. Love at that place dehvered to the railroad company, and was hauled by the various buyers at Lincolnton and within a radius of 4 or 5 miles, and no allowance was made to them for hauKng. The 7-barrel shipment above referred to was doubtless a part of this carload. Mr. Johnson further testified (13/1452) that he remembers a cut at Lincolnton, in 1907, through the Eureka Manufac- turing Company, on 15 drums of gasoline or benzine or naphtha at 18 cents f. o. b. Hickory. He says the Standard's price at that time was 18 cents f. o. b. Hickory, and the Red C's price was 17 cents delivered. In reference to this Mr. Fehsenfeld says (vol. 20, p. 168) that on March 2, 1907, the Red "C" sold that company 2 drums of gasoline at 16| cents a gallon; that the Baltimore market price for gasoline at the time was 14 cents; that these 2 drums were part of a carload shipment to Lincolnton, and that they therefore got carload freight rates; and that he does not know whether this made a higher or lower price than the Standard's price at that place. Mooresville, N. C— Mr. Blackwelder said (13/1364) that the Red "C" Oil Company made a cut to the Mooresville Furniture Company at Mooresville, N. C, on benzine; that it made a price, he thinks, of 13i cents delivered in bulk; and he thinks that the Standard's price was about 14 or 14 J cents delivered in bulk. The witness does not pretend to 72064— VOL 2— 09 32 498 know anything about it; he is simply giving his opinion and what he thinks the prices were. Later along he says (1365) that he thinks that the Red "C" made a contract with this company for gasoline, he thinks, at 14J cents, against the Standard's price of 16J cents. He says all he knows about this is that the manager of the business told him that he had made such a contract with the Red "C." Then he says, without giving the year, that afterwards they shipped a car- load to Mooresville at a price of about 10 or 10 J cents, and that the Standard's price was about 1 1 cents, or about a half a cent above that price. Mr. Johnson testified (13/1452) that he also remembers a cut that was made at Mooresville four or five years ago by the Red "C," but he can't state the amount, nor does he give the name of the concern the cut was made to. In reference to this Mr. Fehsenfeld says (20/165) that he examined the records of his company to see whether any shipment was made into Mooresville at about that time, and found that on February 17, 1905, the Red " C " sold a car- load of Sunbeam oil to F. W. Rankin Company at Moores- ville at lOi cents net, which was the Baltimore price with the freight added. Hickory, N. C— Mr. Johnson testified (13/1452) that in 1904 the Red "C" took from the Standard the business of the Martin Furniture Company, the Hickory Furniture Com- pany, and the Piedmont Wagon Works, all of Hickory, at a price of 13J cents, while the Standard's price was 15. In reference to this, Mr. Fehsenfeld says (20/ld6-7) that this was probably benzine; that the Red "C" sold the Hickory Furniture Company on February 18, 1904, at 15 cents f. o. b. Hickory, which would make a net price of 13 cents; and on April 20, 1904, sold to the Martin Furniture Company one drum of benzine at 15 cents; and on June 18, 1904, sold the Martin Furniture Company one drum of benzine at 14 cents; on June 18, 1904, two drums to the Hick- ory Furniture Company at 14 cents; and on October 14, 1904, four drums of benzine to the Piedmont Wagon Works at 13 cents. The freight rate to Hickory was about 3 cents per gallon from Baltimore, and the Baltimore market price from January 1 to June 1, 1904, which period covered all these shipments, was 1 1 cents, and that from June to Novem- 499 ber, 1904, the Baltimore market price was 10 cents. The prices at Hickory were all based on the Baltimore price with the freight added. Monroe, N. C. — Mr. Johnson was asked (13/1452) if he remembered any cuts made by the Eed "C" Company at Monroe in 1903, and he replied that he did, but did not remember the amount. He said it was a half-cent cut. On page 1453 he suggested to his counsel that he knew of a cut to the Piedmont Buggy Company of Monroe by the Ked "C" in which the Standard's price was 18 cents and the Eed "C's" price was 15^ cents, a difference of 2^ cents. No date what- ever is given as to when this cut may have taken place, nor does he give the product on which the cut is alleged to have been made. In reference to the Piedmont Buggy Company, of Monroe, Mr. Fehsenfeld says (20/165-6) that the Red "C" on May 22, 1907, sold 1 drum of gasoline to the Piedmont Buggy Company at 17 cents; and on January 30, 1907, 2 drums of gasoline at 15 J cents; that these were the only sales made during that year in Monroe; that in both cases the prices were the established market price f. o. b. Eichmond, and that the price was made f. o. b. Eichmond because it was impracticable to ship gasoline to Monroe from Baltimore. On page (20/166) Mr. Fehsenfeld says he does not know what the freight was from Eichmond to Monroe, so he can not tell exactly what price that would make at Monroe. Newton, N. C. — ^Mr. Johnson says (13/1453) that the Eed "C " made a cut to J. F. Smyre, at Newton, on 5 barrels of oil. He also says that he has a report showing that Metzel made a cut at Newton in December, 1904, but does not produce any report, and he does not say to whom the cut was made. In reference to Newton, Mr. Fehsenfeld says (20/167) that no such shipment was made; that he has examined the books and there is no record of any shipment to Newton in the month of December, 1904, or within a few months thereof. ■ lenoir, N. C— Mr. Johnson also says (13/1453) that W. 0. Robinson, of Lenoir, N. C, in 1906 sold V. M. P. naphtha at 14^ cents, while the Standard's price was 18 cents, but says nothing about the grade of the respective products. Charlotte, N. C. — William L. Blackwelder testified (13/1362) that he was subagent and general salesman for the 500 Standard Oil Company at Charlotte, N. C. He said the Eed "C" Oil Company is the Standard's principal, competitor there; that in January, 1904, the Ked ''C" salesman sold a carload of Sunbeam oil in Charlotte at a half a cent under the Standard's price, and that the oil was consigned to one man, although it was invoiced to several persons. He says, as he recalls it, the Standard's price at that time in Charlotte for Diamond White was 12 cents, and that the Ked "C" sold Sunbeam for 11 J cents. He says that his recollection is, though he does not make the positive statement, that the Red "C" allowed $1.10 for the barrels, and that prior to that time it allowed but $1. He says another carload was sold there in the same month and year, and (1363) he was asked what the Red "C" sold this second carload for, and he replied : A. Well, it was about the same as the other, as well as I can remember, something like that. He says he thinks it brought the price down to about 10.6 cents per gallon, or something like that, while the Standard's price was 11 cents. Mr. Fehsenfeld says (20/157) in reference to these shipments that when a carload shipment is made in barrels the merchant must haul the oil from the depot to the store, pumping the contents from the barrel into the storage tank, and hauling the empty barrel back from the store to the station. He estimated that the cost to the merchants is 25 cents a barrel, or about a half a cent a gallon, for that service, and if there was any cut he says it was explained in that way, and that this has to be done in order to equalize the cost to the purchaser. He says that this oil sold in January, 1904, for 13 J cents in barrels, and this would make a net price of 11 J cents to the customer, which, after allowing ^ cent for the service mentioned, was exactly the price that Mr. Blackwelder says the Standard was selling its oil for at that time and place. Mr. Blackwelder says (1363) that in January, 1905, some of the Red "C" oil was sold as low as 10 cents a gallon; but he says this is accounted for by the fact that the agent there gave a portion of his commission to induce a customer to buy a given quantity, taking it in 5-barrel lots, and pumping the oil himself into his tank. He thinks this represented a cut of about a half a cent a gallon. This is like most of the 501 cuts complained of. When analyzed, they are too trivial to be worthy of consideration. On his cross-examination (1370-71) Mr. Blackwelder says that the Red "C" Oil Company was delivering in barrels as against the Standard's tank-wagon delivery, and he says that the dealers will buy in barrels in cases where they can •get a little lower market. He was asked (13/1372) at what price he was selling Diamond White oil, Charlotte, in January, 1904, and said that the guessed it was about lOJ or 11 cents. He was then asked if he did not, on his direct examination, say it was 12^ cents, and replied that it might have been; that he can not recall what it was. Henderson, N. C. — H. V. Daniel, a general salesman for the Standard, testified (13/1389) that a cut was made to W. C. Height, of Henderson, N. C, the largest dealer in that town, whose business the Standard had previously en- joyed; that this cut was made by the National in 1908 and that the National had put in an oil that they claimed to be as good as the 12-cent Aladdin oil for one-half a cent less. This was a barrel delivery as against the Standard's tank- wagon delivery. Mr. Daniel said (13/1390) that the National Oil Company also sold to two other firms at Henderson a brand of oil which they called the "White Star" for one-half a cent less than the prevaiUng Standard price. What has already been said of the other sale made at Henderson may be said of this sale. Middleburg, N. C— Mr. Daniel said (13/1390) that a cut was made to Mr. H. M. Church, of Middleburg, N. C, by the Richmond Oil Company, which put in a brand of oil called "Electric Safety" and sold it in barrels f.o.b. Richmond at 9i cents; that the price of the Standard at that time for oil was 10 J cents; and that the Standard's price now on a similar g^ade is 10 cents, and the Richmond Oil Company is now a quarter of a cent below the Standard. There is no proof of the quality of the respective oils. On his cross-examination it appeared that the Standard as well as the Richmond Oil Company were selling a cheap grade of oil at this place, be- cause the Standard was selling it below its tank-wagon price for Aladdin oil. As they were both selling cheap oils, it is impossible to say which was really the lowest. 502 Mr. Daniel also says that there were other merchants at Middleburg to whom the Richmond Oil Company made simi- lar cuts, and (1391) that these are all the cases that he can remember. Eandlemau, N. C. — Mr. Jones, a traveling salesman for the Standard, said (13/1438) that in 1906 the Red "C" at Randleman, N. C, sold a carload of their "Sunbeam" brand at 12^ cents, allowing $1 f. o. b. Randleman for empty pack- ages, maldng a net price of lOJ cents, while the Standard tank-wagon price at that time was 11 cents, and that the Red "C" gave sixty days time, or allowed 1 per cent discount if the oil was paid for within ten days. Mr. Fehsenfeld (20/160) testified that the Red "C" shipped a carload of oil on January 22, 1906, to Randleman at 13 cents a gallon, the barrel included, which was the Baltimore market price with the freight added, and that after deducting the allowance for the returned empty barrel this made a price of about 11 cents. IMr. Fehsenfeld had with him a duplicate invoice showing this transaction and of all of the sales and transactions to which he testified, and he says that this is the only shipment that he has any record of at about that time. To show how he arrived at his figures, Mr. Fehsenfeld said the Baltimore market price on "Sunbeam" oU in 5-barrel lots was lOi cents a gallon; that the freight rate from Baltimore to Randleman was 32 cents per 100 (about $1.28 per barrel, 2i cents per gallon), which added to the lOi cents makes 13 cents per gallon, the price at which oil was sold, allowing $1 net for the return of the empty barrels reduced the cost to 1 1 cents. Madison, TS. C. — Mr. Jones said (13/1439) that at Madison the Standard's price was 14 cents; that the Red "C" sold for 13f cents, and allowed 95 cents for the empty barrels f. o. b. Madison; and that the Standard's price for empty bar- rels was 75 cents. Mr. Fehsenfeld said (20/161) that the Red "C" shipped a carload of oil on January 9, 1907, to Madison, at 13 cents a gallon, including the barrel; that the Baltimore market price at that time was lOJ cents; freight from Baltimore to Madison was 28 cents per hundred ($1.12 per barrel; 2 J cents per gallon), which added to the Baltimore price made a price of 13 cents, and a net price at Madison of about 11 cents a 503 gallon. He said that they probably did allow 95 cents for the empty barrels, which was approximately the correct price, and that the price may have been 75 cents or may have been a dollar. Mr. Jones did not give the date of this trans- action, but Mr. Fehsenfeld had with him the record of the sale. According to Mr. Fehsenfeld's testimony there was a greater difference in the price than Mr. Jones gives. Mr. Jones said (13/1439) that in December, 1906, the Red "C" made a sale of Columbia headlight oil, which corresponds, he said, with Standard's Aladdin, to McGhee & Co. at Madison, but did not remember the price at which the oil was sold; that there was a net cut of a cent a gallon, and that is all he remembered about it. He said that McGhee & Co. was not the sole purchaser of the oil; that it was distributed among other merchants. Mr. Fehsenfeld said (20/161) that there is no record on the Red "C" Company's books of this transaction with McGhee & Co., which means that it had no transaction with them. Thomasville, H. C— Mr. Jones said (13/1439) that the Red "C" cut the price at Thomasville, N. C; that it sold a carload of naphtha, delivered, and paid the drayage from the station to the manufacturing plant ; and that the Standard's price, delivered from tank wagon, was 14J cents. Mr. Fehsenfeld testified in reference to this matter (20/161) that a carload of benzine was sold at 14 cents, which was the price at High Point, N. C, 7 miles distant from Thomasville; and that the carload was never shipped because the orders were countermanded. The reason he mentioned High Point was because that was the Standard Oil Company's price at High Point for tank-wagon delivery. Mr. Jones does not give the transaction in full; he intended that the inference should be drawn that a sale was con- summated, when in fact it was not. Elkin, N. C— Mr. Jones said (13/1439) that the Red "C" made a cut to Atkinson & Co., of Elkin, N. C, on a carload of Sunbeam and Columbia Headlight, which was sold for 13 and 14 cents; that the Standard had been selling its oil previous to that at 13f and 14f delivered on the same basis, making a cut of three-fourths of a cent. Mr. Fehsenfeld said (20/162) that this carload of oil was sold at 13 and 14 cents for Sunbeam and Columbia Headlight, 504 respectively, which was the Baltimore price with the freight added; that the Baltimore price on Sunbeam oil, in 5-barrel lots, was 10| cents, and on Columbia Headlight, in single barrels, was 11 cents; freight from Baltimore to Elkin, 36^ cents a hundred, or 3 cents per gallon, making the price 13 and 14 cents delivered. North Wilkesboro, N. C— Mr. Jones said (13/1439) that the Red "C" made a cut to the F. D. Forrester Company, of North Wilkesboro, N. C. ; that it sold a carload of oil at 13 cents a gallon delivered; that the Standard's price was 14 cents; that the Red "C" guaranteed the oil to be as good as the Standard's Aladdin brand, which it was selling at that time; and that the Red "C" got the business. Mr. Jones did not give any date to this transaction, but Mr. Fehsenfeld said (20/162) that the Red "C" did ship to F. D. Forrester & Co., on November 23, 1907, 50 barrels of Columbia Headlight oil at 13 J cents and 10 barrels of Garnet Red oil at 14 cents; that the Baltimore market price at that time on Columbia Headlight was 11 cents in single barrel lots; the freight to -North Wilkesboro was 36^ cents a hundred (or $1.46 a barrel — a fraction less than 3 cents per gallon), which, added to the 11 cents, made 14 cents delivered. On the same page Mr. Jones said that the North Carolina Oil Company sold a car to the same parties at a cut of a cent a gallon, and they allowed one SO-gallon barrel to take care of leakage while in storage. Mr. Jones does not state when this sale was made nor what brand of oil the North Carolina Company sold. Reidsville, N. C— Mr. Jones said (13/1440) that the Richmond Oil Company sold in Reidsville, N. C, about 15 barrels of oil, taken out at different times, at 12J cents delivered; that the oil was guaranteed to be as good as the grade that the Standard was marketing at that place at 13 cents a gallon; which made a cut of one-half a cent. He does^not give the brand of oil that was sold by the Richmond Oil Company or state what its market value was or what the method of delivery was by the respective companies. Mr. Jones said (13/1440) that the Red "C" Company of Baltimore is the most persistent price cutter of any of them. The transactions which Mr. Jones construes to be cuts on the part of the Red "C" Oil Company have been fully explained 505 by Mr. Fehsenfeld; and Mr. Fehsenfeld did not rely upon his memory, but; brought with him duphcate invoices in every case and statements from his books and records, show- ing the history of each sale in which Mr. Jones says a cut was made. Mr. Jones complained of a sale of a carload made by one B. H. Marsh, without stating whom B. H. Marsh repre- sented (13/1440); and said that he understood from the purchasers that Marsh allowed them one-half cent out of his commission; that he was getting a commission of three- fourths of a cent a gallon and gave the purchasers two-thirds of his commission to induce them to buy oil. We have not attempted to find out whether or not there is any foundation for this statement. Hot Springs, If. C— Mr. Fair said (13/1406) that the Ten- nessee Oil Company made a cut at Hot Springs, N. C; that he visited that place in July, and that his Asheville agent told him that he was not shipping any stuff to Hot Springs, except to one firm who were buying the Aladdin oil at 15 cents f. o. b. Asheville (1407); that he called on the merchants at Hot Springs and found only five or six who were giving the Stand- ard any business; that he then solicited the business of the other firms on Diamond White oil at 14 cents f. o. b. Ashe- ville, and on Aladdin at 15 cents; that there was a freight rate of 1.62 cents a gallon, and he was informed by the mer- chants that they were buying oil from the Tennessee Oil Com- pany, which was similar to the Diamond White, at 12J cents, f. o. b. Knoxville, with a freight rate of 2.4 cents a gallon; and that they were allowed $1.25 for the empty barrels, as against the Standard's allowance of $1 f. o. b. Asheville for empties. These figures show a total difference of 1.12 cents between the two net prices, of which J cent is in the allow- ance foi' the empty barrel. There is nothing to show what grade of oil the Tennessee Company was putting in here. It represents its oil to be as good as the Standard's oil, and of course any merchant selhnghis goods would make such repre- sentations. Moreover, the Knoxville price was the basis named by the independent and was presumably the regular market price at Knoxville. Murphy, N. C— Mr. Fair complains (13/1407) of a cut made, by the Tennessee Company to the Murphy Furniture 506 Company at Murphy, N. C. He said that he had been selling this company a few drums of the V. M. P. naphtha at 14 cents f. o. b. Marion, N. C, with a freight rate from Marion to Murphy of a Uttle over 3i cents a gallon. Mr. Fair was asked for a price and he offered to sell at 13 cents. On his return he was told by the president of this company that he had con- tracted with the Tennessee Oil Company for V. M. P. naphtha at llj cents f. o. b. Knoxville, with a freight rate of nearly 4 cents, and that the Tennessee Oil Company was pay- ing freight charges back on the empty drums. He said the Standard does not pay the freight back, and the president informed Mr. Fair that the Tennessee Oil Company had said to him that if he would give them all of their business in lubricating oils that the company would give him a good price on the V. M. P. naphtha, and he figures out that there was a cut of about 1 J cents a gallon. It takes a process of figuring to arrive at this conclusion, and little fight is thrown upon the transactions. Moreover, the price of naphtha was connected with a lubricating oil contract. Yorkville, S. C— Mr. Wilmer testified (13/1244) thatwhenthe Red " C" Oil Company went to Yorkville, S. C, it made a cut of one-half a cent a gallon under the Standard's tank-wagon price; that the first oil the Eed "C" shipped in there was Water White, but in its next shipment it substituted a Prime White oil which was worth 1 cent a gallon less than the Water White, and says that the Eed "C" Company was selling both kinds of oil under the same brand. With reference to this, Mr. Fehsenfeld testified (20/152-153) that the Eed "C" made no cut; that the first carload of oil it sold at Yorkville was at a price netting the merchant one-fourth of a cent per gallon above the prevailing tank-wagon price of the Standard, and he gave the figures showing how tliis is arrived at. Mr. Fehsenfeld further said that while this first carload was en route, or shortly after it arrived, the Standard reduced its price at Yorkville 1 cent a gallon, and that when the Red " C" made its next shipment to Yorkville, in order to meet the Standard's reduced price, it did not follow the usual course of making the Baltimore price with the freight added, but adopted the then prevailing Standard Oil Company price; that after this second shipment the Standard reduced its price another cent a gaUon; that the Red "C" Company did 507 not meet this cut, refused to make any shipments to York- ville at a price which would net the merchant a price as low as the Standard's, and has done no further business at Yorkville. Mr. Wilmer said (13/1246) that the Red "C" Company was up to all kinds of tricks; that he found them everywhere and he was always looking for them. His efforts in that direction were apparently fully satisfied. It must have been shocking to the sense of justice of Mr. Wilmer, who for years had been the representative of fraudulent concerns, to have met such reprehensible conduct as he attributes to the Eed "C" Company. Chester, S. C— Mr. Johnson also says (13/1452) that he knew of a cut made on burning oil by the Eed "C" in De- cember, 1903, at Chester, to Wyhe & Co., but he does not remember the amount of the cut, and says that Wylie & Co.'s business went to the Red "C" on account of that cut. In reference to this Mr. Fehsenfeld says (20/163) that the Eed "C" Company sold Wylie & Co., on August 30, 1902, and on June 12, 1903, each time a single barrel of lubricating oil; and that the Red "C " never sold them any burning oil during the two years that Mr. Johnson testified to. Therefore these shipments bear no relation to Mr. Johnson's testimony. Whitmire, S. C. — Mr. Johnson also testified (13/1452) that he remembered a cut in about 1903 to Charles Tidmarch, of Whitmire, which arose, he says, by reason of a difference in freight; but that he does not know what the freight was between Chester and Richmond; and that the Red "C" deliv- ered its goods f. o. b. Chester. In reference to this Mr. Fehsenfeld says (20/164) that there is no record upon the books of the Red "C" Company of any sale to Tidmarch, at Whitmire, during 1902 or 1903, the period covered by Johnson's testimony ; and that if any such sale had been made his books would show it. Gaffney, S. C. — Mr. Johnson testified (13/1452) there was a cut at Gaffney, in January, 1904, and he didn't remember how much of a cut was made, but thought it was half a cent; he does not say to whom the cut was made. In reference to this Mr. Fehsenfeld says (20/164) that a sale was made to W. J. Wilkin & Co., of Gaffney, S. C, of 3 barrels of Sunbeam oil at a net price, after deducting the barrel, of 508 ISJ cents, which was the Baltimore market price with the freight added, and that was the only sale made at about that time or during that year in Gaffney. Fort Mill, S, C— Mr. Blackwelder says (13/1365) that the Eed " C" Oil Company offered gasoline shipped from Nor- folk, Va., at, he thinks, 13 cents delivered in Fort Mill, against the Standard's price of 14 cents tank-wagon delivery and 16i cents in barrels f. o. b. Charlotte. He is again asked how much the Red "C" offered its oU for, and said he thinks it was about 13 cents. Now, if it was about 13 cents, that may mean that it was more or less than 13 cents, and the witness does not know. He was asked what the freight was between Norfolk and Fort Mill, and he says he thinks it was something like 3 cents a gallon, and perhaps as much as 4, and he evi- dently does not know anything about what the freight was. Then he says that the freight between Charlotte and Fort Mill was 17 cents per hundred, and he thinks this would repre- sent a net cut of about 2^ cents a gallon, or something like that. The witness was confused, and attempted on his cross- examination (1373-4) to explain the situation further; but he was unable to state anything positive about this situation. His conclusion that there was a cut of 2^ cents a gallon was so unreasonable and so much greater than any other pre- tended cuts that the Standard's witnesses had testified about that Mr. Fehsenfeld's attention was called particularly to this transaction. Blackwelder says this was in October, 1905. Mr. Fehsenfeld says (20/158) that the Sed "C" Oil Company did not sell oil to merchants at Fort Mill, S. C, in the month of October, 1905, or anywhere near that time. He says that the Eed "C" has sold in Fort Mill, but not in recent years, and that it did not make a sale in that town at any time during the years 1905 or 1906; that he made a careful search of his books and records and has found no record of such a transaction, and that if there had been any such transaction, he would have a record of it. Jefferson and Bethune, S. C. — Trabue Barksdale, a travel- ing salesman for the Standard Oil Company, said that he has been traveling out from the Columbia, S. C, office for about two years (13/1425) and that his territory is eastern South Carolina, covering about 14 tank-wagon stations. 509 He said that in March, 1906, the National Oil Company made a cut at Jefferson, S. C, and another at Bethune, S. C, on refined oil in barrels; that (1426) the Standard was marketing refined oil at Bethune, delivered from Camden, S. C; the Standard's price at Camden was 14 cents in barrels; the freight rate on barrels to Bethune would make a price of 15 cents; that the National Company made a price of 14^ cents per barrel delivered, and secured the business; and that this represents a cut of about half a cent a gallon. Whether this was really a cut or not depends on the freight rate; it may have cost no more to ship from Richmond to Bethune than from Richmond to Camden. He did not state what kind of oil he was selling nor what kind of oil the com- petitor was selling; and his conclusion is a result of figuring on freight rates with which he does not pretend to have accurate knowledge. Camden, S. C— Mr. Barksdale said (13/1426) that the Red "C" made a cut at Camden, S.C.; that to the best of his recol- lection the Standard's price at Camden was 12^ cents from tank wagons ; the Red " C " sold a carload of oil to the Camden Grocery Company at 12 cents, and got the business. We have here the tank-wagon delivery as against barrel delivery, which always makes a difference in the price. There is no explanation by this witness as to the grade of oil that either company was selling. In reference to this Mr. Fehsenfeld said (20/158) that the Red "C" made this sale to the Camden Grocery Company on December 27, 1905; that it was a carload of 60 barrels of Sunbeam, and that it was sold at 13^ cents a gallon. The Baltimore price at that time was lOf cents; adding to that the freight, which was 35 cents per hundredweight (or $1.40 a barrel; 2J cents per gallon), made the price for which the oil was sold, 13J cents a gallon. This included the barrel, and when the barrel was deducted it would bring it down to Hi cents a gallon. . So that Mr. Barksdale is mistaken as to the price; the Red "C" was in fact selling for one-half a cent less a gallon than Mr. Barksdale stated; and if he is right in his conjec- ture — and it is merely a conjecture — that the Standard was selling for 12^ cents at that place, then the Red "C" was selling for a cent below the Standard's price. 510 Counsel for defendants asked Mr. Fehsenfeld if he wasn't speaking about a shipment of December 27, 1905, instead of January, 1906, and he said that he was; that no ship- ment was made in January, 1906; and that the shipment which he described is the one that was made nearest to the time mentioned by Mr. Barksdale. lake City, S. C— Mr. Barksdale (13/1426) testified that the National Oil Company sold a brand of oil in Lake City, S. C, called "White Star," at 14J cents a gallon, while the Standard was selling there at that time for 15 cents a gallon; and he calls that a cut. He does not state anything about the qualities of the respective oils, nor whether it was barrel delivery as compared with tank-wagon delivery, both of which are important factors in determining whether there is a cut in the price. Marion, S. C, — ^Mr. Barksdale was asked (13/1427) whether he remembered a sale of kerosene made at Marion, S. C, by the same Mr. Austin who made the sale at Camden for the Red "C," and he replied that he did not remember what the prices were, but was sure it was one-half a cent less than the Standard's price; and that Austin was in the habit of selling from one-fourth to one-half a cent under the price. He also says that the Standard's price at Marion on deodorized gasoUne was 18f cents delivered from Wilming- ton; that his impression is (though he does not pretend to make any positive statement to that effect) that the Stand- ard's price at Wilmington was 15^ cents, and that the freight rate was 33 cents a hundred, which would make it 18.14 cents a gallon. He says that the Red "C" sold in Marion for 17 cents a gallon, delivered from Norfolk, and that this was practically a cut of IJ cents on a gallon. He did not say who paid the freight from Norfolk, nor that both companies were selling the same grade. In reference to this sale of deodorized gasoline at Marion, Mr. Fehsenfeld says (20/159) that as a general rule he is not informed of what the Standard's price is at these various points, particularly at Wilmington, N. C, because his com- pany does no business there. As no date was given by Mr. Barksdale, Mr. Fehsenfeld could not specifically look up this transaction, but he did say that any sales that may have 511. been made by the Red "C" Company at Marion would have been at the Baltimore price with the freight added. Mr. Barksdale said (1427) that the National Oil Company also made a cut at Marion in about June, 1906, on a barrel of deodorized gasoline sold to L. W. Carmichael at 17^ cents, delivered, while the Standard's price was 18.14 cents, dehvered, and that this represents probably a cut of one- fourth of a cent. The degree and quality of the respective gasolines is not proven. Bennettsville, S. C— J. E. Farrar, who has been traveling salesman for the Standard Oil Company for about twelve years m the Wilmmgton, N. C, territory, testified (13/1444) that the Red "C" Oil Company made a cut on a carload of refined oil at Bennettsville, S. C., somewhere in about 1900, as well as he could remember. He did not remember what the cut was, but said it was a cut below the tank-wagon price, which induced the trade there to give the company a carload order. On his cross-examination (1449) he said that he could not say positively when this was; he could not give the price, but said it was a cut basis; that he was told so by the merchants who bought it; that they only bought one carload, and he thought that made them sick; that as a rule they bought only one carload of the Red "C." In all of the years that Mr. Farrar was in the service of the Standard Oil Company this is the only case that he could remember of a cut made by an independent company, and this he so indefinitely described that it is scarcely worth the space given to it. lowndesville, S. C. — Mr. Robert P. Fair, a general sales- man for the Standard Oil Company, was called by the defendants, and testified (13/1405) that until about Novem- ber, 1907, the Standard ran a tank wagon through Anderson to Lowndesville, a distance of 26 miles, and he said that owing to the great distance and the bad condition of the roads this was discontinued; that the Standard was getting practically all of the trade at. that time, but after they withdrew their tank-wagon service they. put in a delivered price on Aladdin oil of 16 cents a gallon, allowing the cus- tomers $1.10 for their barrels dehvered back at Anderson, freight prepaid; but no orders came in. As he was unable at this price to sell any oU there he made a trip to Lowndes- 512 ville and five of the most reputable merchants in that town, he said, told him that Mr. Boardman, of th^ People's Oil Company, had made contracts with them for the delivery of Sunbeam oil at 15 cents a gallon delivered, and as an extra inducement with every 15 barrels that they purchased he would give them 1 barrel free; (p. 1406) that he reported this to his house; that then the Standard reduced its price to 15 cents a gallon, and still he was unable to get the busi- ness at Lowndesville. Recently he was there and learned that the People's Oil Company had sold 1 barrel of Sun- beam oil at 14^ cents with freight deducted, and this company, he says, still delivers the 1 barrel free on every 15. The trouble with this kind of testimony is that it throws no light upon the question as to the quality or market value of the respective oils. On page 1419 et seq. he was cross- examined on the Lowndesville situation, and found it diffi- cult indeed, after comparing the prices, to show that any cut had been made; but he finally concluded, after figuring and calculating on the returned empty barrels and on the barrel of oil given free with each 15 that were purchased, that there was a cut in the neighborhood of a cent a gallon. Westminster, S. C. — ^Mr. Fair complains (13/1407) of a cut made by the Georgia Oil Company at Westminster. He said that his price on deodorized gasoline at Westminster was 19 cents in wood barrels and 17 cents in iron drums, delivered, purchaser to pay return freight to Greenville, which amounted to f cent on the iron package. He said he called on this purchaser at Greenville to submit prices and found that a contract had been closed with the Georgia Oil Company at 12^ cents f. o. b. Atlanta for gasoline equal in every respect to the Standard Oil Company's gasoline, plus a fraction over 3 cents freight, and that the Georgia Oil Company would pay the return charges to Atlanta on all empty drums. He figures out that this makes a cut on the Standard's price of 2J cents. He also speaks (13/1408) of cuts that were made by the Gulf Eefining Company in various places and reaches con- clusions by figuring out freight rates, but without giving any information concerning the quality of the product that was handled by the Gulf Eefining Company. It is well 513 known that the Gulf Refining Company's product comes from Texas crude, and is generally considered inferior. Whitman, Ga. — R. E. Hodson, a traveling salesman for the Standard Oil Company, with headquarters at Atlanta, and who for about two years was a traveling salesman for the bogus independent Dixie Oil Works, was called by the defendants, and testified (13/1388) that a few months ago the Gvdf Refining Company cut the price on gasoline to a cotton mill at Whitman, Ga. He said there was a contract to be let for a year's supply; that the lowest price that he could make was 14^ cents a gallon; that the Gulf Com- pany bid 12 cents, and obtained the contract; and that before this time this cotton-mill company had bought in the open market. This is a very simple case indeed; it is like many others that have been mentioned by the witnesses in which a contract was let to the lowest bidder, and now and then an independent has obtained them. This witness does not state whether or not the gasoline to be furnished by the Gulf Company was as good as that to be furnished by his company. Jakin, Ga. — Mr. Hodson said (13/1388) that at Jakin, Ga., his delivered price on refined oil was 14^ cents; that the Gulf Refining Company's salesman appeared there a short time ago and made a delivered price of 13 cents, and sold practically every merchant in the town. Mr. Hodson finally explained the whole situation, which shows of how httle consequence his testimony really is. He was asked by his counsel if the Gulf people represented their oil to be as good fts that of the Standard, but he did not answer that point. L Thomasville, Ga. — Mr. Hodson said (13/1388) that when the Gulf Company opened its refined-oil station in Thomas- ville, Ga., it met the price of the Standard there, which was 11 5 cents a gallon, and they made a few sales of oil. Duluth and Minneapolis, Minn. — Herman H. Oppel, of Duluth, Minn., manager of the Folz Grocery Company, tes- tified (15/2382) that his firm handled oil, had been buying of the Standard, that in 1904 they changed to the Complanter Refining Company because the Complanter's driver agreed to give him 5 gallons of oil free on every 50 that he bought, 72064— VOL 2—09 33 514 and he bought oil under that arrangement for a month or two, taking oil about once a week in 50-gallon lots; that he then quit because he had complaints from his customers that the oil was not satisfactory, and he resumed buying of the Stand- ard. On his cross-examination he said (15/2384) that it was cheaper to buy of the Standard than to take this oil with the 5 gallons thrown in ; that he never talked to the manager of the Cornplanter nor the driver about it. He didn't know what brand or grade of oil he was buying, and he did not remember what price he paid to either company. On his redirect examination (2384) he said the driver did not tell him that the oil was inferior, but after it was tested by the customers he found it was; and on his recross-examination he said he found that it was cheaper to buy of the Standard at its price than to buy of the Cornplanter. P. C. Crenshaw, general manager of the sales department of the Standard Oil Company of Indiana, located at Chicago, testified that he has charge of making the prices in the terri- tory of that company, and if any change is made at any point in the field the decision is made in Chicago by him. He said (15/2386) that he occupied the same position from 1902 to the end of 1906. His attention was called to Exhibit 635, show- ing that the price at Duluth in April, 1904, was 10 cents, and in May 9 cents, and he was asked the occasion for this decline and said there was some reduction in the Cost, and also at that time the manager at Duluth had reported to him that a competitor was making secret concessions and that he reduced the price to meet this concession. He was advised that the competitor was giving 5 gallons with every 50; that he investigated and became satisfied that it was true. His attention was called to the fact that in July it was reduced to 8i cents, and he said that was on account of a reduction in the cost of the oU. Mr. Crenshaw and Mr. Oppel are both testifying to the same state of facts. Both of them say that this took place in the year 1904. Mr. Oppel explained that the difference in the grade of oil was so much that it was cheaper to buy of the Standard than it was to buy of the Cornplanter, notwith- standing the 5 gallons free, and yet *Mr. Crenshaw says he was reducing his price to meet the cut of a competitor, when, as a matter of fact, there wasn't any cut at all. The Corn- 515 planter's oil was inferior in quality and did not satisfy the trade, but it was a sufficient excuse for Crenshaw to make a fight on the Cornplanter and reduce the price. Crenshaw's attention was called (15/2387) to Exhibit 635, which shows that in January, 1902, the price in Minneapolis was 8 cents and in February it declined to 7^ cents. He was asked to explain the reason for this decline and said again that he was advised by the manager that a competitor was giving secret rebates and concessions in the markets which were equivalent to half a cent a gallon, and that after careful inves- tigation they satisfied themselves that it was true, and so he cut the market to equal the price made by the competitor. On his cross-examination (2393) he said that the cuts which his competitors made, which caused him to reduce his price, were the same kind of cuts that Mr. Oppel, of Duluth, testified to. He was asked as to the reductions in May, 1903, in July, 1903, and in February, 1905, shown by Exhibit 635, and to each of which he said the reductions were due to reductions in the cost of oil and cost of marketing. On his cross-examination (p. 2388) the very first question put to him was this: "Mr. Crenshaw, why did you sell oil in January, 1903, for 9J cents at Minneapolis and charge 12i at Duluth?" He first started to say that these prices were based on different grades of oil, but soon had to recede from that position because these figures taken from Exhibit 635 are all for Water White oil. His attention was then called to the fact that the grade of oil was the same. The question had to be read to him again, and he first said "There are a great many reasons — cost of marketing, freight, and un- doubtedly different competitive conditions at that point." He was then asked if they were not making a profit on their sales in Duluth and if they were not losing on their sales in Minneapolis, and' he replied that it was true and that the difference amounted to 2.86 cents a gallon. The question was then put to him whether he could still account for that in the cost of freight and marketing, and he finally admitted that all these expenses were accounted for in the margins. Finally he said that all this he explained in his direct testi- mony; that the competitor made secret prices which he equaled by the open market. The witness was in trouble here, because he had said that the same concessions exactly 516 were made in Minneapolis that Mr. Oppel said were made in Duluth. He was asked where these secret prices were made, and said that they were made at both points at some times. His attention was called to 1903, and he said he was under the impression that there were no secret prices made by the competitor in Duluth in 1903, but that he is sure there were in Minneapolis. He then was pressed to tell what concessions were made in Minneapolis in 1903, and said "If we lowered our market we found that they were making a reduction equal to the amount that we lowered." This, of course, was a mere conclusion. He was asked if he was willing to swear that any competitor was cutting the price in Minneapolis in January, 1903, and answered, "They probably had been doing so prior to that." He was pressed further to tell what the cuts were and whether any were in fact made, and he was not able to do so. He was then asked to give the source of his information concerning the cuts in Minneapolis, and said that he got it both orally and in letters. When the Ifetters were called for, he said he did not have them ; that they had been destroyed, and he could not give the contents or substance of them. He was asked where the transactions took place in reference to price cutting by competitors, and the nearest that he could tell was that it was either in Minneapolis or Chicago; he did not know which. He was asked whether freight charges were lower to Duluth than to Minneapolis, and he seemed to think that they might be in some instances; but it is a matter of common knowl- edge that freight rates are lower to Duluth than to Minneapo- lis, because Duluth has the benefit of water transportation. His attention was called to Exhibit 635, which shows that the Standard was selling at a loss in Minneapolis- in 1902 and all of 1903 except three months and during all of 1904 except four months; he was asked to account for this, and said it was on account of local conditions governing there; and (p. 2392) he was asked what he meant by local condi- tions, and he got back to the same position again — that some competitor had made a concession. Mr. Crenshaw lives in Chicago and his business is in Chicago, and there is nothing to indicate that he was at Minneapolis or Duluth during any of the time covered by his testimony. All he knows about it is what somebody wrote him or told him. But his testi- mony, when taken as a whole and in connection with that of 517 Mr. Oppel, shows that no cut was made by the independents either in Duluth or MinneapoHs, and that the lowering of prices by the Standard there was not done because of any concessions but for the purpose of driving out competitors. Taking the testimony of these two witnesses together, there was no cut or concession made by the Cornplanter which justified the Standard's reducing its prices to a point where it was losing money on every gallon it sold at those two places for a considerable period of time. No other competitor than the Cornplanter is mentioned by either Crenshaw or Oppel; and the defense has utterly failed to show any reason what- ever why oil should be sold in Duluth and Minneapolis at a loss. The fact is apparent that the reason the Standard made such low prices at these cities was for the purpose of driving the Cornplanter out of there, just as Mr. Moffett had threatened Mr. Todd to do years ago (6/3214) ; and it was not at all because the Cornplanter had directly or indirectly done any price cutting. Denver, Colo. — Mr. H. M. Tilford, president of the Con- tinental Oil Company, the Standard's marketing company in the Eocky Mountain States, was called on behalf of the defendants to explain the conditions which prevailed in Denver, as shov/n by petitioner's Exhibit 635 (10/1656-57), which, so far as it applies to Denver, shows that during 1902, 1903, 1904, and 1905 the range of prices was from 15 to 20 cents a gallon and the net margin of profit from 2.88 to 7.02 cents per gallon; that in the year 1906 the range of prices was from 10 to 15 cents a gallon, and the business netted a profit of 3.41 cents a gallon in January, a profit of 1.16 cents in February, a loss of 0.59 cent during March, April, May, and June, a loss of 0.32 cent a gallon during July and August, a profit of 0.18 cent per gallon in Septem- ber, October, and November, and a profit of 1.18 cents a gallon in December, 1906. Mr. Tilford was asked (17/3499) to explain the decline in prices shown by this exhibit in Denver from 15 cents on January 1, 1906, to 10 cents on February 7, 1906. He says that the first 2 cents was a gen- eral reduction, which brought the price, to 13 cents; but he says that out in that country they deal only in multiples of 5; that the merchants were dissatisfied with the margin which they were going to secure if they sold at 15 cents, and because of this, he says, the Standard reduced its price to 12 518 cents to satisfy them. In other words, the merchants at Denver did not know how to handle the product at a 13- cent price, so the Standard voluntarily threw off 1 cent on every gallon that it sold there to help them out on their arithmetic. He says later on that the Anti-Trust Company, a competitive concern, commenced to sell oil in Denver at a cut price, and it was necessary for the Continental to make a still further reduction in their price, which they did, to 10 cents. Mr. Tilford says that the Anti-Trust Company was selling its oil in Denver at 12 cents a gallon, and that it gave 5 gallons free with every 50 gallons purchased at 12 cents a gallon; in other words, it sold 55 gallons for $6, which is 10.9 cents per gallon. He says that the Standard made its cut to 10 cents in order to meet the price of the Anti-Trust Company. "We here see that the Standard's price was nine- tenths of a cent below the Anti-Trust Company's price. Yet he follows right along with an answer to a leading question put to him by counsel, to the effect that the Standard never initiated or made a cut below its competitors' price. This testimony demonstrates the value of facts and figures over conclusions. On his cross-examination (17/3507) Mr. Tilford says that all he knows about the Denver situation was the information which he received from the gentleman in charge of the Con- tinental's business at Denver. On this same page he was asked whether or not, while his company was selling oil at 10 cents in Denver, it was not selling in Santa Fe, N. Mex., at 20 cents a gallon; and his attention was called to an exhibit showing this price at Santa Fe. He was asked if this was not because there was no competition at Santa Fe, and he replied : A. That was considered a fair price for that market. This question was then put to him : Q. Now, while you were making a loss in Denver, in Santa Fe you were making a profit of 4.25 cents a gallon ? And he says that is correct. Exhibit 635 does show that during four months it was selling at a loss in Denver of 0.59 cent a gallon, and during these very same months was making a profit of 4.25 cents per gallon in Santa Fe; that in the two succeeding months it was doing business in Denver at a loss of 0.32 cent per gallon 519 and doing business at Santa Fe at a profit of 4.90 cents per gallon, a total difference in the margin between these two cities of 5.22 cents a gallon, and a total difference in the seU- ing price between these two cities of 10 cents a gallon. Mr. Tilford justifies this striking situation by saying that a little company over there in Denver, not before heard of in this case and at no other place mentioned in this record, had made a cut in the price; and yet the Continental Oil Com- pany not only met that cut but went down below it nine- tenths of a cent a gallon and sold at a loss. So far as this record shows, the Anti-Trust Company was not marketing oil outside of Denver It could not stand that kind of a contest very long; but the Continental Oil Company, that was marketing in New Mexico and elsewhere, could stand the loss in Denver, where there was competition, because it could much more than make it up in other places where there was no competition. If this method is to be pursued by the Standard Oil Company, having, as it has now, about 90 per cent of the entire business of the United States, and market- ing, as it does, its product in almost every hamlet, village, and city in the United States, it can completely annihilate and drive out competitors, and not one of them ever can get a foothold. Los Angeles, Cal.— Mr. H. M. Tilford, president of the Standard Oil Company of California, whose offices are at 26 Broadway, New York, called by the defendants, testified (17/3500) that he was familiar with the price situation at Los Angeles, and his attention was called to Exhibit 635 (10/1658-9), the substance of which is shown in the foUowiug table : Year. Percent- age of inde- pendent sales. Eange of prices. (Cents per gallon.) Eange of margins. (Cents per gallon.) 1902 13.4 23.4 33.4 28.2 21.6 From 10.5 to 11.5. From 10 to 12.... From 7.5 to 10.... 7.5 throughout yr. From 7.5 to 8.5... From 0.36 profit to 0.91 loss. From 0.15 loss to 2.90 loss. 1903 1904....... From 2.63 loss to 3.41 loss. 1905 From 2.27 loss to 3.47 loss. 1906... From 1.44 loss to 3.04 loss. 520 On his direct examination he was asked to explain why it was that the Pacific Coast Oil Company sold at a loss per gallon in Los Angeles, ranging from 0.41 cent in July, 1902, to 3.47 cents in 1905, and continuiag at from 2 to 3.47 cents from November, 1903, through the years of 1904, 1905, and 1906, whereas the margins in the other Pacific coast towns for the corresponding period show a profit averaging from 2.50 cents per gallon upward. Mr. Tilford said that the compet- itors cut under the price of the Standard from time to time, and that it was found necessary to reduce its selling price in order to hold the trade. He was then asked who these competitors were, and he said there were eight or ten of them and named some. On his cross-examination (17/3508) he was asked about these competitors, and whether they were large or small concerns. He said the Union Oil Company was the largest independent concern produciag refined oU in Cali- fornia, but there were a large number of other refineries there. He thinks all of the others in the aggregate produced more than the Union; but that they were all small refiners, and that the Standard, the Union Oil Company, and the Puente Oil Company were the three largest companies on the Pacific coast. Mr. Tilford said (17/3501) that the base of the California crude is asphaltum, and that the business of the competitors of the Standard was making asphalt out of this California crude; that the refined oil which they pro- duced was a by-product, and asphaltum was their principal product; and that the refined oil being a by-product, these independent refiners, to get rid of it, sold it for whatever they could get; that all of these refiners were located in the vicinity of Los Angeles; that they reduced the prices; and that it was necessary in order to hold the trade for the Standard to reduce the price, even to the extent of selling at a loss; but he said that in the majority of cases the Stand- ard's price was higher than its competitor's. On his cross- examination (17/3508) Mr. Tilford said that all he knew about the Cahfornia situation is what was reported to him by his agents at that place. He said (17/3508-9) that the Puente Oil Company was the largest refining company in southern California. The others were all very small concerns. Mr. Tilford's attention was called (17/3519) to Petitioner's Exhibit 387-B (10/917), which shows that during the year 521 1906 the Standard companies were doing 93.5 per cent of the business on the Pacific coast; so that all of the independents on the Pacific slope taken together were doing only 6^ per cent of the business. It also appears from Exhibit 635 that in the same year the competitive business of the independents reported to the Standard Oil Company at Los Angeles was 21.6 per cent, showing that the competition in Los Angeles was greater than it was at any other place. On his direct examination (17/3501), Mr. Tilford said that the Standard's prices were higher in a majority of the cases at Los Angeles than its competitors and never lower. The reason for this is apparent from his cross-examination (17/3527), where he says that the independent oil companies are manufacturing and selling an inferior grade of oil. Mr. H. C. Wasmann, of Los Angeles, Cal., who has charge of the lubricating oU sales for the Standard Oil Company in that city, was called by the defendants to testify with refer- ence to the Los Angeles situation. He said (17/3620) that the Southern Eefining Company is a manufacturer of as- phaltum; that oil is one of its by-products; that the Puente Oil Company's business is confined entirely to the refining of oil (17/3622); that the Southern Eefining Company was in business prior to 1898; that he was in the employ of the Southern Refiming Company from March 1 to September 1, 1904, as a traveling salesman; that under instructions of the secretary and general manager of the Southern Eefining Company, he sold at a price from a cent to a cent and a half below the Standard's prices; that he had to give those prices in order to get the business; and that purchasers would not change without that inducement. He further said (3621-22) that he was in the employ of the Puente Oil Company at Los Angeles for about four months in the summer of 1906 as a salesman, and with that company he received the same instructions and pursued identically the same methods in making prices that he had done with the Southern. In his direct examination (17/3620), he explained fully that the grade of refined oil manufactured by both the Southern Refining Company and the Puente Oil Company, as com- pared with the refined oil manufactured and sold by the Standard Oil Company, was inferior, uneven and unsatis- factory in burning qualities. On his cross-examiuation 522 (3628), he said that the Standard Oil Company sells the water white oil in California; that they do not sell a lower grade that he knows of; that the Puente Oil Company does not purport to sell a water white oil in California, and that the oil it puts out is merely called bulk oil. It appears by Exhibit 17 to the petition that an agreement was entered into, effective April 1, 1898, and to continue for the term of two years, under which the Standard Oil Com- pany took the entire output of the refineries of the Puente Company. The execution of this agreement is admitted in the second answer, page 32. It appears by the testimony of other witnesses that this agreement was renewed from time to time, and continued in force until about April 1, 1904. Mr. Wasmann was cross-examined (17/3625) concerning the time when the price cutting at Los Angeles was resumed in 1904, and he said that it was when the Puente started busi- ness again, meaning when it discontinued selling its oil to the Standard. It appears all through the testimony of Mr. Wasmann that the oil produced by the independent companies at Los Angeles was of an inferior quality to that sold in that market by the Standard; that the natural difference in value between the respective oils was from a cent to a cent and a half a gallon; and that in order to dispose of their product the independent companies were obliged to maintain a price which was from a cent to a cent and a half lower than the prevailing price of the Standard Oil Company. The Standard gives this as a reason and a justification for selling in that market at prices which show a loss covering almost the entire period from 1902 to 1906, inclusive. The fact is that the Standard Oil Company was maintaining these low prices on its higher grade of oil for the purpose of preventing the independent com- panies from making any profit on the business, and to prevent them from developing and enlarging their business and extending into any other territory than that immediately surrounding Los Angeles, or to compel them to turn their product over to the Standard to market as the Puente had theretofore done. 523 PRICES CHARCrED BY JTHE BED " C " Olli COMPANY FOB ITS BED OILS. Mr. W. H. Fehsenfeld's attention was called to tte testi- mony of witnesses who stated that the Red "C" salesmen in certain locations charged an abnormally high price for its Red "C" oil, pretending that it was a natural product, was of a superior quality, and was worth more than any other oil upon the market. He was asked (20/142) to give the differ- ence in the price charged by the Red "C" for its red oil and its white oil. He said that he recalled no time when there was a greater difference than a half cent a gallon between the red and white oils of the same grade. His attention was called specifically to the fact that one witness testified that this red oil was sometimes sold for 2 or 3 or 4 cents a gallon more than the white oil, and his reply was, "We have never sold the Red "C" oil at more than one-half cent per gallon above the price of the White "C" oil." He said that every order for the sale of oil passes through his hands ; that he is in the office and in charge of the business, and knows the prices for which the different grades of oil are sold. Mr. Fehsenfeld said (20/143) that the printed price cards of the Red "C" Oil Company always showed the difference in the price of the oil to be a half cent a gallon, and that these printed cards are distributed generally to the dealers and to the consumers, and more generally than any other advertis- ing matter or mailing matter that has been issued from the office; that the traveling salesmen carry these price cards with them in many cases; and that they have been issued yearly since 1895 and kept constantly in the hands of the salesmen on the road. On his cross-examination (20/172) he testified that the Red "C" Oil Company put out two brands of red oil, one called the Red "C" and the other Garnet Red. He says that the Red " C " oil is the White " C " oil colored. The Garnet Red is the Columbia Headlight oil colored. The difference in price is one-half cent between the corresponding grades of white and red. The present price of Columbia Headlight oil is 10| cents a gallon. The price of Garnet Red is 11 cents. The price of White "C" oil is 13 cents and of Red "C" oil 13§ cents. The difference in price between the White "C" oil and the Columbia Headhght oil is 2^ cents a gallon, and the 524 difference in price between the Garnet Red and the Red "C" is also 2 J cents a gallon. The testimony of some of the wit- nesses given on behalf of the defendants, to the effect that the salesmen for the Red "C" Oil Company sold the red oil for 2, 3, or 4 cents more on a gallon than it sold the white oil, representing that it was a superior quality, is refuted by this testimony. The White " C " oil is the highest quality of oil that the Red "C" Oil Company sells, and when col- ored it then becomes the highest-priced oil that that com- pany sells. The testimony shows that the Red "C" Oil Company was generally selling throughout the South the Columbia Headlight oil, which is worth 2^ cents less on the gallon. If a salesman of the Red "C" Company should offer his Columbia Headlight oil uncolored in a town and at the same time attempt to sell the Red "C" oil, a colored product, the difference in the price would be 3 cents a gallon; and this might furnish a foundation for the testimony of Mr. Blaustein as to the difference in the price charged by the Red "C" Oil Company for its white oil and its red oil. The difference was a difference in the grade of the oil before it was colored, with a half cent added to cover the expense of coloring it; and it would be perfectly reasonable for the salesmen of the Red "C" Company to endeavor to sell the Red "C" oil, which was in fact a high-grade oil and superior to the ordinary oil and which was sold at a price several cents higher than the oil which it ordinarily marketed. Mr. Metzel's testimony on this subject completely explains all that has been said by the witnesses on behalf of the defendants in reference to the difference in the prices charged for red and for white oil. W. J. Metzel was called as a witness on behalf of the Gov- ernment in making out its main case, and he was questioned (5/2416) concerning the red oils that were handled by his company and by the Standard Oil Company. He stated that he never sold the Red " C " oil for more than a half cent above the price of the White "C" oil, but he thinks he sold the Red "C" oil in the summer of 1896 as high as 18 cents a gallon at Harrisonburg, Va. He corrected this statement, however (5/2429), and said that he was mistaken in the year; that in 1895 the Red "C" sold for 16i cents a gallon; and (2417) he says that the Red "C" oil sold for about 2 or 2^ cents above the Standard's Aladdin brand, and that that is the 525 differential between the Red C's oil at all times and the Standard's oil, which is often a prime white oil, not a water white. On page 2418 he says that the Standard has two grades of oil, and that they make a halt cent difference in the price to the retail trade between the red oil and the white oil of the same grade. RED "O" OIL A "NATtrHAL PRODTTCT." The Red "C" Oil Company sells two grades of oil, Garnet Red and Red "C." The Garnet Red is the Columbia Head- light oil colored, and the Red "C" is the White "C" oil colored (20/172). The Red "C" Oil Company is not the only company selling a red oil. The Standard Oil Company has a brand of red oil which it calls Carnadine, and Sherwood Brothers and the National Oil Company, of Baltimore, each have a red oil they put upon the market (20/145). W. H. Fehsenfeld testified (20/143) that his company never rep- resented that the Red "C" oil was a natural product or that it came out of the ground red, and he never heard that any such representation had been made on the part of any- body representing his company until he read the testimony of Mr. Blaustein to that effect, given in this case. He says that they have advertised their oils quite extensively by pamphlets sent out to the trade and otherwise, and produced a circular (20/144) which is sent out to the trade and which is constantly carried by the traveling men of the Red "C" Company. A portion of that was introduced in evidence, and it is as follows: Facsimile barrels of the Red "C" oil and the White "C" oil. These oils differ only in color, one being a rich red, the other a pure spring-water white, and they afford the highest possible illuminating power, are absolutely safe, and are recognized by experts and consumers wherever known as the best oils made. The Red "C" oil is the original red oil. There are inferior imitations. Get the genuine. An extract from another circular was also read into the record, as follows: The Red "C" oil is a beautiful ruby red, and the White "C" oil is a clear, sparkling, spring-water white. They are the same, except in color, contain the highest .; hght-giving properties, being the very heart or essence 526 of the best crude petroleum produced, and there are more than twenty lower grades, each different from the other. Mr. Fehsenfeld says (20/145) that the Standard Oil Com- pany has a red brand of oil which is called either Red Carna- dine or Carnadine Red, and that the Standard sells either this oil for a cent a gallon more than the ordinary Water White or a half a cent a gallon less than the best Water White; that there is a difference between the red and white which is recognized generally in the trade; and that the price charged by the Standard Oil Company for Aladdin oil, which is white in color, is lOJ cents a gallon, f. o. b. Baltimore. The price which it charges for Carnadine Red oil is 11^ cents. The price which it charges for Pratt's Astral oil (146) is 12 cents a gallon. This is a white oO, and that is the price whether or not the red oil which the Standard puts out sells for more or less than the white oil which it puts out. It depends upon whether or not the Red Carnadine oil is Aladdin oil colored or Pratt's Astral oil colored. Mr. Waters, a -traveling salesman for the Standard, said (13/1466-67) that he heard Mr. Metzel state in the store of Barnes &Snader, at New Windsor, Md., that the Red "C" oil was a natural product, just as it came out of the ground; that Metzel had made this same statement to other store- keepers; that after Mr. Metzel left Mr. Barnes' store, Mr. Waters told Barnes that Metzel's statement was absolutely not true, and offered to demonstrate the fact by sending to Baltimore, getting some root, and coloring the white oil right in his store. Waters also testified that he talked with other storekeepers in New Windsor on the same subject, and made the same explanation or contradiction to them; and that he subsequently got the trade of four out of the five merchants in that town. The attention of Mr. Metzel, testifying on rebuttal, was called (20/207) to the above testimony of Mr. Waters, and he said that he never made a statement of that kind in Barnes & Snader's store or in any other store or place, and that such a statement would be untrue; that he never said it to anybody; that he does not know that he was ever in Barnes & Snader's store when Mr. Waters was there; that 527 he did not lose four customers in that town as Waters said, but that he thought he did lose one customer there at one time for a few weeks, and that this customer afterwards re- turned to him; that he always explained to the trade that the Red " C " oU was the White " C " oil colored ; that they were the same except as to color, and that he never told the trade or anybody else anything different. He says that, as traveling salesman, he distributed literature sent out by the Eed "C" Oil Company explaining the red oil and the white oil, which is the same literature, he says, that Mr. Fehsenfeld produced while giving his testimony. PRICE CTJTTING ON LUBRICATING OILS. The witnesses, Farrar, Epperson, Fair, Duling, Daniel, Browne, Eitel, and perhaps others, testified on behalf of the defendants to cuts made by independent companies on lubricating oils in various places. The same explanation applies to the testimony of each of these witnesses upon that subject. Lubricating oils are generally sold by con- tract, and oft«n bids are submitted by the different companies manufacturing lubricating oils. Every company com- pounding lubricatiag oils has its own formula, and generally has several brands that it puts upon the market at widely varying prices. It is impossible to compare any one brand of any company with any one brand of another com- pany without actual physical tests of the respective oils, because they are materially different; and it does not appear from the evidence that any such tests were made for the purpose of determining the relative value of different brands of lubricating oUs. Large consumers of lubricatiag oils sometimes change the quality and the grade of lubricants which they wish to use, using a larger quantity of an inferior grade rather than a smaller quantity of a high grade; so that the relative prices of any two grades can not be said to repre- sent a cut. The companies operating machinery requiring the use of lubricatiag oils are constantly experimenting with oils of different grades and prices for the purpose of ascer- taiaing which can be used with the greatest efficiency and economy. The price of lubricants varies from 15 cents a gallon up as high as 80 cents a gallon. The formula used 528 by one company is ordinarily not known to other companies, but is regarded as a trade secret; and petroleum is only one of the component parts used in the making of lubricants. It is therefore impossible for any witness to say whether or not the sale of a lubricating oil at a less price than the sale of some other brand of lubricating oil is or is not a cut. ALLEGED OVERGAUfiING OF BARRELS BY INDEPENDENT COMPANIES. Robert R. Jones, a traveling salesman for the Standard Oil Company, testified (13/1440) that at Spray, N. C, he gauged something like 50 barrels of Red "C" oil for a large number of merchants, and he found them all overgauged from 1 to 3 gallons. Iklr. Lemuel Wilmer, a traveling salesman for the Dixie Oil Works, testified (13/1242) that he gauged some of the Red "C" barrels in which oil had been dehvered to Washington Hicks, RockviUe, Md., and that he found them all over- gauged, except one; some of them as much as 2 J gallons. He said he measured these barrels with a gauge stick which be brought with him. Mr. Wilmer also said that he gauged Red "C" barrels at J. B. Benson's store, Grifton, Md., and that they were over- gauged, but he did not state how much ; and that he made a sale of oil for his company to Mr. Benson at that time. Mr. Wilmer said further (13/1243) that he found Red "C" barrels overgauged at Yorkville, S. C, in several stores. Mr. E. L. Lillard, a subagent of the Standard Oil Company at Cumberland, Md., testified (13/1379) that he purchased empty Red "C" barrels occasionally of Mr. Hicks, and that in almost every case he found that they were overgauged about H gallons; and he also testified that he found barrels of the Crown Oil and Wax Company which were overgauged, but he did not give any details. Mr. William A. Barrett, a traveling salesman for the Stand- ard Oil Company, testified (13/1394-95) that he gauged empty barrels of the Richmond Oil Company at Coles Ferry and Keysville, Va., and found that they would not contain the number of gallons when full that the merchants told him the invoices called for. He said the greatest amount that any barrel was overgauged was 5 gallons, and it ran from that down to 2 gallons; and that he gauged them in the 72064— VOL 2—09 34 (529) 530 usual maimer that he gauged all barrels, with a gauge rod that he had for that purpose. Mr. William L. R. Blackwelder, a general salesman for the Standard Oil Company, said (13/1366) that at Charlotte, N. C, he ascertained that some of the Red "C" barrels were overgauged; that he gauged 24 of them with a gauge rod, and 23 of them were overgauged on an average of 2^ gallons to the barrel; He said (1376) that the Pod With which he gauged the bartds at Charlotte was a rod which the Stand- ard Oil Company had on hand there. Mr. Edward E. Eitel, a general salesman for the Standard Oil Company, testified (13/1326) that at one time when he was traveling on the Eastern Shore of Maryland he found a case at Deals Islatid where one of the Red G'S barrels was dvergauged 3 gallons. As most of these witnesses testified to overgauging of Red "C" barrels^ the Government called on rebuttal Mr. W. H. Fehsenfeld, president and manager of the Red "C" Oil Com- pany; Mr. W. J. Metzel, a traveling salesman for that com- pany; and Mr. Washington Hicks, of Rockville, Md., whose barrels were gauged by Mr. Wilmer. Mr. Fehsenfeld's (20/135) attention was called to the testimony of these wit- nesses on the subject of the overgauging of barrels, and he said that the Red "C" buys new and second-hand barrels from all sources; that when an empty barrel is recceived it is sent to the cooperage department and there tecoop- ered, reglued, repainted, and regauged, and then filled; that the barrels are gauged by the employees of the com- pany . with a gauge rod recognized as a standard rod; that the work is very carefully done; that he has giyen particular attention to that branch of the business, and has especially cautioned the superintendent of the works and all employees at the works to be very careful to gauge aU bar- rels correctly; that on various occasions after these barrels have been gauged by the employees of his company he has himself gauged the barrels after they have been filled, for the purpose of aecertaiiaing whether or not any possible mis-* take could be made ; that he generally examines the invoices and determines from the general character of the gauges whether the work is correctly done ; that when oil is received in tank cars he has on different occasions instructed the em- 531 })loyees of the company to recotd the number of gallon^ that have been received and put into a tank and the number of barrels shipped out, in order to ascertain whether the gaug- ing has been correctly done; that thbre is a rfeCord kept of th6 gauging of barrels, because all mvoices ai'e rendered from the gauges that are reported from the works, and the gauge of the barrel is stenciled or stamped upon the head of the barrel where anybody can see it, showing the exact capacity of that barrel according to the gauging, so that any cus- tomer buying a barrel of oil can ascertain what the barrel is claimed to hold by the stencil gauging on the head, and it is a very simple matter for him to ascertain whether the gaug- ing is corrtect. This he can do by drawing out the contents of the barrel into a measure, or by filling the barrel with water and measuring it as he does so. Mr. Fehsenfeld said that the ordinary method of gauging barrels is by means of a standard gauge rod manufactured by a company in New York City and called the TagUabue gauge; that in th6 purchase of new barrels he has found that the average gauge i>t the barrel is 52 to 53 gallons, and that the average gauge of all of the barrels that the Red "G" Company has sent out with oil to its customers is 51^ gallons. Mr. Fehsen-^ feld said (13/169) that he never instructed his men to over- gauge barrels; that he never overgatiged a barrel himself, never permitted it to be done, and never kncA^ thdt it was done; that he has given most positive instructions to his employees to gauge barrels exactly; that he has received barrels from other companies, in some instances from th^ Dixie Oil Works, and that his gauging did not agree with the gauging that was stamped upon these barrels; aiid that his method of gauging showed a lower gailge than the Dixie's. Mr. Fehsenfeld's attention was directed specifically to the testimony of Mr, Wilmer, who said that barrels sent to Carroll Brothers, the agents of the Red "C" Oil Company at YorkvUle, were overgauged, and he said that he had some correspondence with Carroll Brothers in reference to this gauging by Wilmer, but that Carroll Brothers made no com- plaint to the Red "C" Company upon this subject. Counsel for the Government (20/139) stated that this correspondence would be introduced if the defendants wished to have it. Mr. Fehsenfeld said that he had looked over his books and 532 found that no deduction whatever was made on account of any overgauging of barrels shipped to Carroll Brothers. Mr. WUmer evidently was not able to satisfy Carroll Brothers that there had been overgauging. Had he done so, they would have made a complaint to Mr. Fehsenfeld and would have doubtless demanded that the Red "C" Company recompense them for the shortage. Counsel for the defendants did not care to have the correspondence between Carroll Brothers and the Red "C" Oil Company introduced in evidence. Mr. Fehsenf eld's attention was called (20/139) specifically to Mr. Wilmer's testimony concerning barrels that were shipped to Washington Hicks, at Rockville, Md., and he said that he made no allowance to Mr. Hicks on account of any overgauging of barrels, and that he was never re- quested to do so. On rebuttal the Government called Mr. Hides, because this seemed to be a typical case. Mr. Wilmer appeared to make a practice of gauging barrels of competitors, and tes- tified with regard to many cases, but to none so clearly and explicitly as he did to the case of Mr. Hicks. It was deemed sufficient to call this one witness and see whether or not Mr. Wilmer, who endeavored to appear eminently fair ia his method of gauging the barrels, had really convinced Mr. Hicks that his barrels were overgauged. Mr. Hicks said (20/184-5) that he remembered the time when Mr. Wilmer gauged his barrels; that he gauged themwith a rod which he brought with him; that Mr. Hicks stood near Wilmer when he gauged the barrels; and that it appeared from Mr. Wilmer's gauging . that the barrels were overgauged. Mr. Hicks said that he did not know at the time whether or not they were overgauged; that all he kne'jir about it is that by the method which Wilmer used the barrels ap- peared to be overgauged; that he did not think Wilmer ever gauged barrels there at any other time; that this gauging left Mr. Hicks in some uncertainty; and after Mr. Wilmer left Mr. Hicks took one of the barrles of the same lot that Wilmer had gauged (although it does not appear to have been one of the identical barrels which Wilmer had gauged, but was a barrel in the same shipment); he drew the oil out of this barrel and measured it, and the oil over- 533 ran the gauge. Mr. Hicks said that this satisfied him that he was getting the oil that he paid for. Mr. Fehsenfeld's attention was also called to the testi- mony of Mr. Wilmer in reference to the overgauging of barrels of J. M. Benson, at Grifton, Md. He said (20/140) that Mr. Metzel canvassed that territory, and that had there been any complaint it would have been reported to the company; that no report was made; and that Mr. Benson, he thinks, is still one of his customers. Mr. Metzel said (20/205) that Mr. Benson never notified him that his barrels had been gauged by Mr. Wilmer; that he had been calling on Mr. Benson right along, selling to him at every call, and never had any complaint from him on that score. Mr. Fehsenfeld's attention was called (20/140) to the testi- mony of Mr. Eitel in reference to the barrels that were al- leged to have been overgauged at Deal Island, Md. Mr. Fehsenfeld said that he knows nothing about it, and that he has never had any complaint from there to his knowledge. W. J. Metzel testified (20/206) that he had no complamt from any of the dealers at Deal Island about overgauging of bar- rels; that he has frequently since then sold to the trade at Deal Island; and that he has never lost any customer there on any claim for overgauging of barrels. He also says that he was never notified by anybody in the trade that any of the Red "C" barrels had been gauged and found to be over- gauged. Mr. Fehsenfeld's attention was called (20/140) to the testi- mony of Mr. Blackwelder in reference to the overgauging of 23 barrels at Charlotte, N. C. He said that he remembers doing business with. those people; that he has looked over his books and records to see whether any allowance was ever made to anybody at that place on account of the overgauging of barrels, and that there had been no allowance made of any kind in any settlement with any of these parties. Mr. Feh- senfeld said (20/141) that the barrels which Mr. Blackwelder claims to have gauged was the first sale that he made in that town; that the sale in question was made on January 18, 1906; that there were 60 barrels of oil sold; and that his . salesman on his next trip called upon the trade there, which was on February 13, 1906, and made sales to the samepeople. 534 He said also that the average gauge of the barrels in this ship- ment was 52 gallons. Mr. Fehsenfelcl said that he has never been called upon by any dealer to make any allowance on account of the over-- gauging of barrels; that some complaints have reached his office, and these were quite general while the bogus inde^ pendent companies were operating against his company; that these complaints which he did receive came from customers; that they were adjusted by writing letters to the customers explaining the manner in which the Red "C " did business and in which it gauged the barrels; that his company never lost a customer through overgauging ; that he never refunded any- thing on account of any of these complaints ; and that he can recall no instance in which he lost any trade or lost a customer on account of a claim that the Red *'C" Company's barrels were overgauged. The method of ascertaining the capacity of the barrel was described by Mr. Fehaenfeld (20/172) as follows: By the insertion of the gauge rod through the bung- hole of the barrel to the chine of the barrel on the one side, then reversing it to the chine of the barrel on the other side, taking the sum total of the two gauges and dividing it by two, giving the gauge of the barrel. It can readily be seeix that in measuring a barrel in this way, unless tjie rod is carefully handled and by a competent person, mistakes might creep in, even where the person gaug- ing the hajrel intended to do it accurately. It is also appar- ent that g. person handling one of these rods, if he was anxious to have it appear that the barrel was overgauged, by a slight movement of the rod one way or the other at the place where the end touches the chine of the barrel, a difference of 2 or 3 gallons could easily be shown and could not be detected \>j a person watching him, especially if that person was not familiar with that method of measuring barrels. The gauge rods used by these employees of the Standard were rods that, they carried with them in all cases and for no other purpose than to gauge competitors' barrels in order to show that they were overgauged, and by that means to dissatisfy the cus? tomer with the company from which he was buying .his oil and to secure him to the Standard. The traveling salesmen, then, had a motive and an incentive to find that barrels were 535 overgauged. That was their only purpose for having with them these gauge rods. The traveling salesman has nothing whatever to do with the gauging of barrels. The barrels are made at the factories and are sent to the refining eompaniea, where they are glued and painted, and the last thing that is done before the barrel is filled or refilled with oil is to gauge it, and the capacity as shown by that gauge ia plainly stamped on the head of the barrel, where the customer can see exactly what that company claims that barrel holds, and that gauge so stamped on the barrel is regarded as reliable by the com- pany shipping the oil, and the oil is invoiced out in accordance with it. How unwise it would be for a reputable company to attempt to build up its business by cheating its customers, stamping upon the head of the barrel the evidence of their deceit, all of the time being aware that the salesmen of the Standard and its bogus companies were making a practice of gauging their barrels and of claiming that they were over- gauged. They would hardly be foolish enough to put theia* selves in a position where their dishonesty could be so easily detected by their competitors or by the customer himself, because it is a simple matter to drain off these barrels and measure them, or to fill them with water after the oil is out and measure that, or to keep track of the amount of oil that they draw from the barrel as they are dealing it out to the trade. Birminirliain, Ala.— Mr. E. H. Pauley, a witness which the Standard Oil Company relied upon to contradict substantially everything that every other witness from his territory had testified to in reference to unfair competition, and also to en- deavor to show that the independent companies in his terri- tory were a most dishonest set, said that the G. T. Wofford Oil Company, of Birmingham, Ala., overgauged its barrels from 1 to 5 gallons a barrel. (Pauley, 12/851^52.) The Govern- ment did not deem it worth while to call a witness to rebut this remarkable accusation. It means, if Mr. Pauley is truthful, that the Wofford Company was stealing from its patrons from one to five gallons of oil on every barrel of fifty gallons; so that from two to ten per cent was in fact stolen by the Wofford Oil Company on every barrel of oil it sold. This is remarkable, if true. First, remarkable that a com- pany should seek to build up a business o:q robbery and theft. It is remarkable that the trade could be m imposed upon, 536 because this same trade was compelled to sell this oil out by the gallon; and quite remarkable that the Wofford Oil Com- pany, or any other company, should think that this practice could long prevail without detection, because the barrels become common commercial property and are bought and sold by all oil companies and other users of barrels. Each time they are used they are regauged, and if any company followed the practice of overgauging its barrels it would quickly be detected, and the company would certainly be made to suffer. We say that it is remarkable that a com- pany managed by sane men, of long years in the oil business, should adopt that sort of a method of making money and expect to continue in successful business. Mr. Pauley in his loyalty to the Standard Oil Company and in his determination to outdo all others of its witnesses, said that not only the Wofford Oil Cempany overgauged its barrels, and that he frequently bought them in the market and gauged them and found this to be true, but that the Southeastern Oil Company, which was managed by the same Mr. Wofford, did the same thing; and that when he was tak- ing an inventory of the property of the Southeastern Oil Company preparing for the purchase of that company, that Mr. Williams, who was one of the members of the con- cern and who fiunished the money to start the busi- ness, admitted to him that these barrels were overgauged, (12/852-53.) Now, if this statement be true Mr. Pauley should have immediately caused the arrest of Mr. Williams for robbing his customers by this particular method of over- gauging barrels. Mr. Williams must have been in a pecuhar mental state if he made this startling statement; and his explanation of it was, according to Mr. Pauley, that this was the only way that they could make a profit and secure the business. This is quite significant, if true. If true, the Standard or the Alabama must have so cut the price that it was necessary for a competitor to steal in order to make a living. The plan of pretending to the trade that competitors were overgauging barrels was one that was adopted and put into force by the Standard Oil Company itself. It has cropped out here and there in this testimony that Standard Oil agents would go to the dealers and after gauging their cans 537 or their barrels invariably found them incorrect and invari- ably found that the dealer was cheating his patrons, and sought in that way to get the business away from the inde- pendents. This was one of the reprehensible methods which the Standard Oil Company adopted. It is easy enough to so handle the gauge rod in gauging a barrel that you can make that barrel appear to hold either more or less than it actually does. It depends entirely upon where you place the end of the gauge rod in the barrel, and a man expert in handling it, as the salesmen of the Standard Oil Company seem to be, could make it appear that any barrel was overgauged as it might suit the purpose of the particu- lar occasion. It does not appear, however, in all the efforts that have been made by the Standard along these lines, that it has resulted in securing much trade, and the dealers seldom paid much attention to it, and seldom transferred their business on account of the statements of the salesmen of the Standard that the independents were cheating them by overgauging barrels. Hastings-on-the-Hudson. — ^Arnold Doane, a Standard tank- wagon driver, testified that on one occasion, many years ago (he was not able to state within three years when it was), he was told by Mr. Bonnett, a grocer in Hastings-on-the-Hudson, that the Hisgens had cut the Standard's price in that town and that Bonnett had bought some oil; and to get this customer back into line he filled the barrel which had contained the Hisgen oil, using a 5-gallon can, drawing the oil from his tank wagon and emptying it into the barrel ; and he was able, as he says, to satisfy Mr. Bonnett that the Hisgen barrel did not hold as much as the capacity stamped upon the barrel. He attempts to testify that he sold this oil because of that fact, but was finally compelled to admit that the truth is that he filled the barrel and made the sale before Mr. Bonnett knew or could have known that the Hisgen barrel was overgauged. This testimony contradicts nothing, and is of little significance. It may be true that Hisgens did sell below the Standard's price in that town. Mr. Henry A. Hisgen testified that in all of the towns down the Hudson they sold at their Albany price with the freight added; that sometimes this price was lower than 538 tl»e Stiaixdard price. (IJ. A. Hisgen, 4/J9S2, J977-7§,> J| was about the enly way %h^ Hisgeii^ gould get customers, mi it was a perfectly propey method cf competitio^ to adppl % price at a given center as a basis and to bave that price C0?*t trol over the entire territory j and it scarcely can be said thai ai competitor is eiitAhig the market if he follows that pla^. The testimony shows that the Standard sold at Albany, where there was competition during this time, for froip ^ fej 7 cents a gallon. It is inapossible frona this testimony to reach even a con- elusion as to whether or not the Hisgen barrel was over-, gauged. The witness does not pretend tp remember or knqw how much it was overgauged. He was repeatedly asked tci state and he was unable to do so; he thought it was from 1 to 2 gallons, but was not at all sure of that. The method whieh he adopted in measuring this barrel was such that hQ could easily, if he wished to do so, deceive a merchant as to the contents of the barrel. He drew th^ oil from a tank wagon into a can, and then put it into the barrel. Ev^jry-? body knows that a gallon measure, or a 5-gallon measure, is so constructed that it can be made to hold a little over a gallon. This witness testified (12/732) that not more than a spoonful or two in excess of 5 gallons could be put in the can he used. Mr, Akin testified (12/756) that about a cupful in excess of the 5 gallons could be put in the can. An examina" tion of one of these cans by the court, which was offered in evidence as an exhibit, will convince the court that even this witness was crowding the minimum. Anyone used to th« trick of deceiving would have np trouble whatever in making it appear that there was a discrepancy of perhaps a gallon or less ii\ a barrel. And it is quite well understood in tha trade that oil expands and contracts, depending upon tenfc' perature. (Doane, 12/729-737.) Pittsfleld, Mass.^In March, 1902, Mr, Akin, the manager at Pittsfield; Mr. Tu thill, the manager at Springfield, and another man wbpin they brpught with them, went to the) grocery store of John DriscoU and wanted to measure the oil which he had purchased of the Hisgen Brothers, They were permitted to do so^ and measured it in their ow|i can^, whicJb they brought for that pufppse; wd according to thewp 539 HeJ^UU'ement it showed that the barrels were from S to 5i gfillong short of what they should have contained (Driseoll, 4/1912). Before they hftd started to measure the oil from the har- rels, Mr. Akin, who stood beside Mr. Driseoll, told him that the can he used in measuring out the oil to his customers was thort. At this time there was no sealer of weights and meas^ \iries in yittsfield, The next morning Mr. Talbot — who had heen the sealer of weights and measures, but who was not al this time, his term haying expired in the previous January — • 8.nd Mr. Akin came to the store and said they wanted to mieasure Mr. Driscoll's can; that his can would not hold a gallon, and was not a sealed measure. Mr. Driseoll informed Talbot that Talbot's brother had sealed the can while he wag sealer of weights and measures; he could not find the mark on it, but knew he never had more than one can in the store at that time to be i^sed for oil purposes. Later along, when in the course of business Mr- Henry Hisgen called on Mr. Driseoll, Hisgen was informed of what had taken place, and Hisgen then told Driseoll that if there YfBs any mistake he would be willing to correct it. Hisge^ %sked Driseoll for the can and it was given to him; and he ^ked also whether there was a sealer of weights and measures in that town, and was informed there was none at that time. About a week later Hisgen came back to the store with the ^me can and asked Mr. Driseoll to go to a lawyer's office, which he did, and there examined the can and made an ^ffid^vit that it was the same can that he h^id used in his store and that he had given to Mr. Hisgen. (Driseoll, 4/1910-i4.) In the meantime Mr. Henry Hisgen had taken Ih^ can to the sealer of weights and measures at Pittsfield, %nd also to the sealer of weights and measures at Albany, ttnd had it measured and sealed. Both of these sealers ^rtified that it held a full gallon, and their certificates to that effect were pasted upon the can. (H. Hisgen, 4/1 91 Q^- 30.) The can, together with the certificates pasted on the Qame, was offered in evidence and marked "Petitioner's Exhibit 643." 540 Michael F. Nilan, the sealer of weights and measures at Pittsfield, testified that he measured this can, and that it held a full gallon. (Nilan, 4/1921-22.) To contradict this testimony the defendants called Charles H. Talbot, who at one time was sealer of weights and meas- ures in Pittsfield. He testified that he measured the Dris- coll can, and that he was sealer of weights and measures at the time. Driscoll testifies that Talbot's term of office had expired and that he was not then the sealer of weights and measures. (Driscoll, 4/1912-13.) Whatever the fact may be as to whether Mr. Talbot was then sealer of weights and measures, his testimony is wholly unreliable and unworthy of belief. He testifies that he went there at the request of Mr. Akin, and not at the request of Mr. Driscoll, to gauge DriscoU's can; that Akin went there with him, presumably for the purpose of seeing that he did his duty faithfully, although he testifies that never before in his experience did he go at the request of one person into the store of another to measure or gauge that other person's can, and that during all of the time he was in office he only gauged cans at the re- quest of the owner and never before at the request of a competitor. But he seems willing to lend himself to aid the Standard Oil Company, and to make the measurement to help it out of the dilemma in which it had been placed. Further along in his testimony he says that it was his duty to gauge the cans of all the dealers in Pittsfield as often as once a year, and that Driscoll had been in business there for many years to his knowledge and that he had never gauged his cans before, admitting that he had failed in his duty in that respect. Driscoll testified that for years before he had been using this same can, and had never had any complaint whatever concerning it, and had always believed and then believed that it held a full measure. Talbot also admits that it was his duty under the law to keep a record of every case where he gauged the capacity of a can, and that he has no recollection whatever of keeping any record of this particular case; that he did not look for his records before he came to testify, and his impression was that he kept no record what- ever of the measurement of Mr. DriscoU's can; that he put 541 no mark upon the can to show that it was not the proper capacity; that he made no record anywhere of that fact, and he permitted Driscoll to continue in the use of that can, although he says that he told him he could not use it, but that he made no effort whatever to comply with the law or to leave any record on the can or elsewhere that would show that hd had condemned it. Driscoll continued to use the can in his business the same as he had done before, thoroughly satisfied by the gauging of the two official gaugers already mentioned that his can was of the proper capacity. (Talbot, 12/773-77.) While we do not regard the question as to the real capacity of this can as of any significance in this case, because if it was not of full capacity it was clearly a mistake on the part of Mr. Driscoll, the importance of this testimony is far greater than the determination of the capacity of this can; it is iatroduced into this case for the purpose of showing the methods that the Standard Oil Company resorted to to pre- vent a dealer from buying oil of an independent. The Driscoll can that was measured was used only by Driscoll in the sale of oil. He received the oil in barrels, and the oil that was measured by Akin and Tuthill was drawn from the barrels and measured in the cans that they brought along with them. The purpose of measuring the Driscoll can must have been to make it appear that in measuring out oil to customers he did not give them a full gallon, and for this reason would not notice that the barrels he received from the Hisgens did not hold the proper amount. It was necessary, in order to work the scheme, that these agents of the Stand- ard Oil Company first make it appear that the Hisgen barrels did not hold as much as they should, and, secondly, to make it appear that Driscoll in selling the oil did not give full meas- ure. Put these two facts together, if Driscoll could be made to believe them, they would have accomplished their purpose. The measuring of this oil and of this can is of no great signifi- cance except to show the petty methods of the Standard Oil Company in dealing with its competitors. These agents of this company went to all this trouble for the purpose of mak- ing a customer of the Hisgen Brothers dissatisfied, with the 542 Ultim&t6 hope that it would get the trade. The Standard cbuld not beat td have even one single customer buying oil of a competitor, and this was of such vast importance to theM that the manager of the station at Springfield, who had jurist diction over an extensive territory, left his place of business and Came to Pittsfield, and there got the manager of the branch station at Pittsfield and a hired man and went to the Store of Driscbll and measured the oil of their competitoh What Can be expected of a concern that will resort to such methods to secure the trade of one single dealer? They apparently had no reason when they went there for believing or even suspecting that the Hisgen barrels were short. It does not appear from the testimony that any complaint had been made by anybody as to the capacity of Hisgen's baa-rets. Akin learned that Driscoll was buying oil of the Hisgei^) a^nd got Tuthill down there from 50 miles aw&y, and they went there intending to make it appear that these barrels were overgauged, and of course, measuring the barrels them^ selves, with their own cans, they made it appear so. This was one of the methods adopted by the Standard in all the territory in which it operated, to make trouble between the independent oil dealers and their customers. It was a sort of a last-resort method, when they were unable by price cut- ting or otherwise to eliminate competition. The testimony in reference to the Pittsfield situation shows the bitter deter- mination and relentless efforts on the part of the Standard Oil Company to keep competitors from doing business ia that territory. They admit that they made different prices to different dealers — that is to say, a lower price to persons who were buying of the HisgeUs than to persons who were not — and they admit that, without any notice whatever to the competitor, three of them in a body went into the store^ keeper's place of business and tried to dissatisfy him and make him believe that the independent was robbing and cheating him, and that he^ was unconsciously robbing and cheating his own customers. Is this a fair and honorable tnethod, adopted by a great company having control of about 90 per cent of the entire business? Can competition spring up and live against that sort of warfare ? Is there any way by which the consumer of oil can have the benefit of a 543 competitive market if a company having the power and wealth of the Standard Oil Company shall be permitted to club and drive out every effort made to establish a fair market in a community? Respectfully submitted. Geokge W. Wickersham, Attomey-Gmeral, Frank B. Kellogg, Charles B. Morrison, CoRDENio A. Severance, J. Harwood Graves, Special Assistants to the Attomeii-General. Gut Chase, Assistant Attorney. o "^^^ m m ife ^m ^-;:.;^ 'iHi f-v**, ^//:'i^ iiRfef'SB--t 'i'M.^ 'tr"?!**'!! Vii V-^ ' ^^. ^«^ '^^^^ ^. te# .erf ?V-^«|i|i •A :- / ^ f .m -u, KM »■! 1 P 9 >.^ ■" (I? jM / .^: «i» . % ^ ^ ^ ^'S: