cted the giving and taking of
rebates it must be remembered that the railroads were all eager to
enlarge their freight traffic. They were competing with the facilities
and rates offered by the boats on lake and canal and by the
pipe-lines. All these means of transporting oil cut into the business
of the railroads, and they were desperately anxious to successfully
meet this competition. As I have stated we provided means for loading
and unloading cars expeditiously, agreed to furnish a regular fixed
number of car-loads to transport each day, and arranged with them for
all the other things that I have mentioned, the final result being to
reduce the cost of transportation for both the railroads and
ourselves. All this was following in the natural laws of trade.

PIPE-LINES VS. RAILROADS

The building of the pipe-lines introduced another formidable
competitor to the railroads, but as oil could be transported by
pumping through pipes at a much less cost than by hauling in tank-cars
in a railroad train the development of the pipe-line was inevitable.
The question was simply whether the oil traffic was sufficient in
volume to make the investment profitable. When pipe-lines had been
built to oil fields where the wells had ceased to yield, as often
happened, they were about the most useless property imaginable.

An interesting feature developed through the relations which grew up
between the railroads and the pipe-lines. In many cases it was
necessary to combine the facilities of both, because the pipes reached
only part of the way, and from the place where they ended the railroad
carried the oil to its final destination. In some instances a railroad
had formerly carried the oil the entire distance upon an agreed rate,
but now that this oil was partly pumped by pipe-lines and partly
carried by rail, the freight payment was divided between the two. But,
as a through rate had been provided, the owners of the pipe-line
agreed to remit a part of its charges to the railroad, so we had cases
where the Standard paid a rebate to the railroad instead of the
reverse--but I do not remember having heard any complaint of this
coming from the students of these complicated subjects.

The profits of the Standard Oil Company did not come from advantages
given by railroads. The railroads, rather, were the ones who profited
by the traffic of the Standard Oil Company, and whatever advantage it
received in its constant efforts to reduce rates