Introduction

xiii

About the Editor

xxi

Note

xxii

Author's Preface

xxiii

The Birth of an Industry

Petroleum first a curiosity and then a medicine---Discovery of its real value---The story of how it came to be produced in large quantities---Great flow of oil---Swarm of problems to solve---Storage and transportation---Refining and marketing---Rapid extension of the field of operation---Workers in great numbers with plenty of capital---Costly blunders frequently made---But every difficulty being met and overcome---The normal unfolding of a new and wonderful opportunity for individual endeavour.

(21)

The Rise of the Standard Oil Company

John D. Rockefeller's first connection with the oil business---Stories of his early life in Cleveland---His first partners---Organisation of the Standard Oil Company in June, 1870---Rockefeller's able associates---First evidence of railway discriminations in the oil business---Rebates found to be generally given to large shippers---First plan for a secret combination---The South Improvement Company---Secret contracts made with the railroads providing rebates and drawbacks---Rockefeller and associates force Cleveland refiners to join the new combination or sell---Rumour of the plan reaches the oil regions.

(12)

The Oil War of 1872

Rising in the oil regions against the South Improvement Company---Petroleum Producers' Union organised---Oilblockade against members of South Improvement Company and against railroads implicated---Congressional investigation of 1872 and the documents it revealed---Public discussion and general condemnation of the South Improvement Company---Railroad officials confer with committee from Petroleum Producers' Union---Watson and Rockefeller refused admittance to conference---Railroads revoke contracts with Petroleum Producers' Union---Blockade against South Improvement Company lifted---Oil war officially ended---Rockefeller continues to get rebates---His great plan still a living purpose.

(12)

``An Unholy Alliance''

Rockefeller and his party now propose an open instead of a secret combination---``The Pittsburg Plan''---The scheme is not approved by the oil regions because its chief strength is the rebate---Rockefeller not discouraged---Three months later becomes president of National Refiners' Association---Four-fifths of refining interest of United States with him---Oil regions aroused---Producers' Union order drillings stopped and a thirty day shut-down to counteract falling price of crude---Petroleum Producers' Agency formed to enable producers to control their own oil---Rockefeller outgenerals his opponents and forces a combination of refiners and producers---Producers' association and producers' agency snuffed out---National Refiners' Association disbands---Rockefeller steadily gaining ground.

(10)

Laying the Foundations of a Trust

Evidence of reappearance of rebates soon after agreement of March 25 is signed---Principle thoroughly established that large shippers shall have advantages over small shippers in spite of railroads' duty as common carriers---Agreement worked out by which three roads are to have fixed percentage of eastern shipments---Oil regions robbed of their geographical advantage---The Rutter circular---Rockefeller now secretly plans realisation of his dream of personal control of the refining of oil---Organisation of the Central Association---H. H. Rogers' defence of the plan---Rockfeller's quiet and successful canvass for alliances with refiners---The rebate his weapon---Consolidation by persuasion or force---More talk of a united effort to counteract the movement.

(15)

Strengthening the Foundations

First Interstate Commerce Bill---The bill pigeon-holed through efforts of Standard's friends---Independents seek relief by proposed construction of pipe-lines---Plans for the first Seaboard Pipe-line---Scheme fails on account of mismanagement and Standard and railroad opposition---Development of the Empire Transportation Company and its proposed connection with the refining business---Standard, Erie and Central fight the Empire Transportation Company and its backer, the Pennsylvania Railroad---The Pennsylvania finally quits after a bitter and costly war---Empire Line sold to the Standard---Entire pipe-line system of oil regions now in Rockefeller's hands---New railroad pool between four roads---Rockefeller puts into operation system of drawbacks on other people's shipments---He proceeds rapidly with the work of absorbing rivals.

(12)

The Crisis of 1878

A rise in oil---A blockade in exports---Producers do not get their share of the profits---They secretly organise the Petroleum Producers' Union and promise to support proposed independent pipe-lines---Another Interstate Commerce Bill defeated at Washington---``Immediate Shipment''---Independents have trouble getting cars---Riots threatened---Appeal to Governor Hartranft---Suits brought against United Pipe-lines, Pennsylvania Railroad and others---Investigations precipitated in other states---The Hepburn Commission and the Ohio investigation---Evidence that the Standard is a continuation of the South Improvement Company---Producers finally decide to proceed against Standard officials---Rockefeller and eight of his associates indicted for conspiracy.

(11)

The Compromise of 1880

The producers' suit against Rockefeller and his associates used by the Standard to protect itself---Suits against the transportation companies are delayed---Trial of Rockefeller and his associates for conspiracy postponed---All of the suits withdrawn in return for agreements of the Standard and the Pennsylvania to cease their practices against the producers---with this compromise the Second Petroleum Producers' Union comes to an end---Producers themselves to blame for not standing behind their leaders---Standard again enforces orders objectionable to producers---More outbreaks in the oil regions---Rockefeller having silenced organised opposition proceeds to silence individual complaint.

(6)

The Fight for the Seaboard Pipe-Line

Project for Seaboard Pipe-line pushed by independents---Tidewater Pipe Company formed---Oil pumped over mountains for the first time---Independent refiners ready to unite with Tidewater because it promises to free them from railroads---The Standard face to face with a new problem---Day of the railroads over as long distance transporters of oil---National Transit Company formed---War on the Tide-water begun---Plan to wreck its credit and buy it in---Rockefeller buys a third of the Tidewater's stock---The Standard and Tidewater become allies---National Transit Company now controls all pipe-lines---Agreement entered into with Pennsylvania Railroad to divide the business of transporting oil.

100

(10)

Cutting to Kill

Rockefeller now plans to organise oil marketing as he had already organised oil transporting and refining---Wonderfully efficient and economical system installed---Curious practices introduced---Reports of competitors' business secured from railway agents---Competitors' clerks sometimes secured as allies---In many instances full records of all oil shipped are given Standard by railway and steamship companies---This information is used by Standard to fight competitors---Competitors driven out by underselling---Evidence from all over the country---Pretended independent oil companies started by the Standard---Standard's explanation of these practices is not satisfactory---Public derives no benefit from temporary lowering of prices---Prices made abnormally high when competition is destroyed.

110

(15)

The War on the Rebate

Rockefeller's silence---Belief in the oil regions that combined opposition to him was useless---Individual opposition still conspicuous---The Standard's suit against Scofield, Shurmer and Teagle---Seeks to enforce an agreement with that firm to limit output of refined oil---Scofield, Shurmer and Teagle attempt to do business independently of the Standard and its rebates---Find their lot hard---They sue the Lake Shore and Michigan Southern Railway for discriminating against them---A famous case and one the railway loses---Another case in this war of individuals on the rebate shows the Standard still to be taking drawbacks---The case of George Rice against the Receiver of the Cincinnati and Marietta Railroad.

125

(12)

The Buffalo Case

The Standard buys three-fourths of the Vacuum Oil Works of Rochester---Two Vacuum employees establish Buffalo Lubricating Oil Company and take with them an experienced Stillman from the Vacuum---The Buffalo Lubricating Oil Company has an explosion and the Stillman suddenly leaves---The Buffalo Lubricating Oil Company is sued by Vacuum for infringement of patents---Matthews sues the Everests of the Vacuum for deliberately trying to ruin his business---Matthews wins his first civil suit---He files a second suit for damages, and secures the indictment of several Standard officials for criminal conspiracy---Rogers, Archbold and McGregor acquitted---The Everests fined.

137

(7)

The Standard Oil Company and Politics

Oil men charge Standard with intrenching itself in state and national politics---Election of Payne to Senate in Ohio in 1884 claimed to establish charge of bribery---Full investigation of Payne's election denied by United States Senate Committee on Elections---Payne himself does not demand investigation---Popular feeling against Standard is aggravated---The Billingsley Bill in the Pennsylvania Legislature---A force bill directed against the Standard---Oil men fight hard for it---The bill is defeated---Standard charged with using money against it---A growing demand for full knowledge of the Standard a result of these specific cases.

144

(10)

The Breaking up of the Trust

Epidemic of trust investigation in 1888---Standard investigated by New York State Senate---Rockefeller's remarkable testimony---Inquiry into the nature of the mysterious Standard Oil Trust---Original Standard Oil Trust agreement revealed---Investigation of the Standard by Congress in 1888---As a result of the uncovering of the Standard Oil Trust agreement Attorney-General Watson of Ohio begins an action in quo warranto against the trust---Marcus A. Hanna and others try to persuade Watson not to press the suit---Watson persists---Court finally decides against Standard and trust is forced to make an apparent dissolution.

154

(12)

A Modern War for Independence

Producers' Protective Association formed---A secret independent organization intended to handle its own oil---Agreement made with Standard to cut down production---Results of agreements not as beneficial to producers as expected---Producers proceed to organise Producers' Oil Company, limited---Independent refiners agree to support movement---Producers and refiners' company formed---Lewis Emery, Jr.'s, fight for Seaboard Pipe-line---The United States Pipe-line---Standard's desperate opposition---Independent refiners almost worn out---They are relieved by formation of Pure Oil Company---Pure Oil Company finally becomes head of Independent Consolidation---Independence possible, but competition not restored.

166

(18)

The Price of Oil

Earliest designs for consolidation include plans to hold up the price of oil---South Improvement Company so intends---Combination of 1872-1873 makes oil dear---Scheme fails and prices drop---The Standard's great profits in 1876-1877 through its second successful consolidation---Return of competition and lower prices---Standard's futile attempt in 1880 to repeat raid of 1876-1877---Standard is convinced that making oil too dear weakens markets and stimulates competition---Great profits of 1879-1889---Lowering of the margin on export since 1889 by reason of competition---Manipulation of domestic prices even more marked---Home consumers pay cost of Standard's fights in foreign lands---Standard's various prices for the same goods at home---High prices where there is no competition and low prices where there is competition.

184

(12)

The Legitimate Greatness of the Standard Oil Company

Centralisation of authority---Rockefeller and eight other trustees managing things like partners in a business---Newsgathering organization for collecting all information of value to the trustees---Rockefeller gets picked men for every post and contrives to make them compete with each other---Plants wisely located---The smallest details in expense looked out for---Quick adaptability to new conditions as they arise---Economy introduced by the manufacture of supplies---A profit paid to nobody---Profitable extension of products and by-products---A general capacity for seeing big things and enough daring to lay hold of them.

196

(13)

Conclusion

Contempt proceedings begun against the Standard in Ohio in 1897 for not obeying the courts order of 1892 to dissolve the trust---Suits begun to oust four of the Standard's constituent companies for violation of Ohio anti-trust laws---All suits dropped because of expiration of Attorney-General Monnett's term---Standard persuaded that its only corporate refuge is New Jersey---Capital of the Standard Oil Company of New Jersey increased, and all Standard Oil business taken into new organisation---Restriction of New Jersey law small---Profits are great and Standard's control of oil business is almost absolute---Standard Oil Company essentially a realisation of the South Improvement Company's plans---The crucial question now, as always, is a transportation question---The trust question will go unsolved so long as the transportation question goes unsolved---The ethical questions involved.

209

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The History of the Standard Oil Company Briefer Version

9780486428215

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