John Howard Brown, Georgia Southern University

A remarkable feature of the Standard Oil antitrust case is that a substantial portion of the testimony and exhibits revolves around StandardŐs practices in selling lubricating oils to railroads. Dozens of contracts for the sale of these lubricants and data about their execution appear in the trial record. This paper explores the governmentŐs theory that StandardŐs sales practices represented price discrimination as an exercise of monopoly power. StandardŐs defense was a remarkably modern assertion that the lubrication contracts were relational contracts involving a service not a commodity. It analyzes these contracts in terms of the modern law and economics approaches to contracting and antitrust. Data from the trial record is subjected to modern statistical analysis techniques to determine if the evidence presented at trial favors the prosecution to StandardŐs defense. Specifically, data from the case record is used to determine the demand and price elasticity of demand for lubricants. The elasticities are then used as explanatory variables in an estimate of the determinants of the guarantees incorporated in StandardŐs lubrication contracts. These estimates indicate that Galena did price discriminate against the different railroads.