[Report of the Industrial Commission, 1900. Volume I, pages 569–570.]
Q. Now, the general result then is this: By virtue of your greater power you are enabled to secure prices that on the whole could be considered steadily somewhat above competitive rates?
A. Well, I hope so. I think we have better merchandising facilities, better marketing facilities, better distributing facilities, and better talent than a competitor can have.
Q. I am not asking with reference to your power of making profits, but it is with reference to getting the prices from the consumer.
A. Prices are what make the profit. If we had a better average price, we could get a better profit.
Q. You think, generally speaking, that you get prices for oil slightly above competitive prices?
A. Well, I should think so; I could not answer—that is a very general question, and very difficult to answer. I could not answer that specifically. I hope that we do.
Q. Of course, in this investigation, we are seeing if we can get some general principles on which legislation might be based, and these questions are to bring out, if we can, the power that so great an organisation has in fixing prices. Would you say, then, that in the case of an organisation that controls perhaps eighty per cent. of the markets of the country, there is a monopolistic element that enters in which enables them to hold prices above the regular rate? Is there a monopolistic power that comes merely from the power of capital itself?
A. Undoubtedly, there is an ability, and when that ability, as I have said, is unwisely used, it is sure to bring its own defeat.
Q. If that ability goes to get an exorbitant price, of course it will invite competition, but when that ability is kept within modest limits, would you still say that it was in the power of such an organisation to get the benefit of the monopolistic power that comes merely from the power of capital itself?
A. Well, I should say that that would be a very restricted power, a very restricted limit. The competitors in this country are very active.
Q. What?
A. The competitors are very active; they are alert at all points with their small offerings in the hope to find just such a condition as you describe.
Q. Certainly.
A. But as I say, as business is and as it has been for many years, we could not have that ability to any considerable extent as merchants.
Q. If the ability were operative only to a slight extent, would it still be enough, do you think, to make a difference between what we may call a moderate dividend, say 6 or 7 per cent., and a pretty high dividend of between 15 and 20 per cent.?
A. Well, that involves so nice a question that I could hardly undertake to answer it; but generally as to the effect on the community, I should say——
Q. Generally on the prices in the United States?
A. I should say that the lessened cost incident to doing business in a large volume would more than compensate the consumer for any ability in getting higher prices.
Q. Then that leads to this point, whether the large capital does itself give an organisation the power to get a somewhat higher price than it could in the market provided the competitors were substantially equal in power?
A. Oh, it may be so, but that is a difficult question to answer.
NUMBER 59 (See page [2254])
W. H. VANDERBILT’S CHARACTERISATION OF STANDARD OIL MEN
[Report of the Special Committee on Railroads, New York Assembly, 1879. Volume II, pages 1668–1669.]
Q. Can you attribute, or do you attribute, in your own mind, the fact of there being one refiner instead of fifty, now, to any other cause except the larger capital of the Standard Oil Company?
A. There are a great many causes; it is not from their capital alone that they have built up this business; there is no question about it but that these men—and if you come in contact with them I guess you will come to the same conclusion I have long ago—I think they are smarter fellows than I am, a good deal; they are very enterprising and smart men; never came in contact with any class of men as smart and able as they are in their business, and I think a great deal is to be attributed to that.
Q. Would that alone monopolise a business of that sort?
A. It would go a great way toward building it up; they never could have got in the position they are in now without a great deal of ability, and one man would hardly have been able to do it; it is a combination of men.
Q. Wasn’t it a combination that embraced the smart men in the railways, as well as the smart men in the Standard Company?
A. I think these gentlemen from their shrewdness have been able to take advantage of the competition that existed between the railroads for their business, as it grew, and that they have availed themselves of that there is not a question of doubt.
Q. Don’t you think they have also been able to make their affiliations with railroad companies and railroad officers?
A. I have not heard it charged that any railway official has any interest in any of their companies, only what I used to see in the papers some years ago, that I had an interest in it.
Q. Your interest in your railway is so large a one that nobody would conceive, as a matter of personal interest, that you would have an interest antagonistic to your road?
A. When they came to do business with us in any magnitude; that is the reason I disposed of my interest.
Q. And that is the only way you can account for the enormous monopoly that has thus grown up?
A. Yes; they are very shrewd men; I don’t believe that by any legislative enactment or anything else through any of the states or all of the states, you can keep such men as them down; you can’t do it; they will be on top all the time; you see if they are not.
Q. You think they get on top of the railways?
A. Yes; and on top of everybody that comes in contact with them; too smart for me.
NUMBER 60 (See page [2259])
FAC-SIMILE OF ONE OF MR. KEMPER’S SHARES
[From History of Standard Oil Case in Supreme Court of Ohio, 1897–1898. Part II, page 271.]
No. S. 11 509,104
972,500
of one share.Incorporated under the laws of the State of Pennsylvania. Whole Shares
$50 each.NATIONAL TRANSIT COMPANY
This certifies that J. L. Kemper is the owner of Five Hundred Nine Thousand One Hundred and Four 972,500ths of one share of stock in the National Transit Company. The holder or assignee of this Scrip will be entitled to a Certificate of Stock, and to have his name entered on the corporate books as a stockholder, on presentation of sufficient fractional Scrip to entitle him to one full share.
Witness the corporate seal of said Company, attested by the signatures of its President and Treasurer at Philadelphia, Pa., this 20th day of February, 1896.
H. H. Rogers,
President.
Geo. W. Colton
Treasurer.
[Seal]
[On the reverse side.]
For value received .... hereby sell, assign, and transfer unto .... 972,500ths of one share of the Capital Stock represented by the within Certificate of Scrip, and do hereby irrevocably constitute and appoint .... Attorney to transfer the said Scrip on the books of the within named company, with full power of substitution in the premises.
Dated, ......
J. L. Kemper.
In the presence of Harwood R. Pool.
Notice.—The signatures to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever.
| No. S. 11 | ||
| 509,104 972,500 of one share. | Incorporated under the laws of the State of Pennsylvania. | Whole Shares $50 each. |