200 GILBERT HOLLAND MONTAGUE 



risen above that figure. Iron tankage of the capacity of 

 3,000,000 barrels was erected during these months, and fifty 

 three miles of pipe laid in a territory of twelve square miles. 

 Had the National Transit company, with its $30,000,000 of 

 invested capital, not been in control, it may be seriously 

 doubted whether local enterprise could ever have effected so 

 remarkable an extension of pipe lines in so short a time. 



Associated with its advantages in transportation is the 

 advantage the Standard Oil company has in distributing its 

 refineries in strategic locations. Not only is a saving in trans- 

 portation charges thus effected, but advantages accruing from 

 cheaper land, labor, and fuel, are also secured. To gain this 

 economy, the Standard Oil company spent millions in new 

 plants near New York and Philadelphia. It bought the 

 entire output of the refineries in the newly discovered oil 

 region in Colorado, and secured control in 1898 of 75 per cent 

 of the refining business in Canada; and for the same purpose 

 it has recently rebuilt refineries in Pennsylvania, in order to 

 profit by the cheapened fuel. 



The vexed question of the effect of the Standard Oil com- 

 bination on the price of refined oil will probably never be 

 settled. Opponents of the Standard Oil company declare 

 that the Standard has not reduced the price of refined oil as 

 compared with crude oil to any such degree as would be the 

 case under open competition. The effect of the combination, 

 they point out, is to be gauged only from the margin between 

 the prices of refined and crude oil; and the reduction of this 

 margin, though steady, is, in their opinion, by no means com- 

 mensurate with the improvements in the processes of refining. 

 In reply, Mr. Archbold of the Standard Oil company has 

 declared that his company is unable permanently to exact ex- 

 cessive prices. Temporarily, it might have such power; but, 

 if it used this power arbitrarily, it would provoke heavier com- 

 petition. There is, he admits, a certain amount of monopolis- 

 tic power, coming from the aggregation of capital itself, which 

 keeps prices higher than they would be under severe compe- 

 tition; but, at present, this power and its effect upon prices are 

 very slight, and the lessened cost of doing business on a large 

 scale more than compensates in lowered prices for the slight 



