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The Standard Oil Company

The Standard Oil Company image
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"Whenee art tlioii, execrable BhapeT" - l'ararfixc Lost. If there is any cornpany carrying on an enormous business, in whose employ there are thousands of persons, ana in whicli millions are interested, that has aimed to maintain secrecy as to its real inner workings, and to mislead the public, thereby taking undue advantage of the state of things ; and has in great part succeeded in all this, - it is the Standard Oil Company. Secrecy was the mainspring upon which its greatest reliance was placed. But, owing to the exertions of Congress, State Legislatures and numerous trials conducted against it in court, together with the efforts of many investigating committees, instituted both officially and by private parties, evidence has been obtaiued from whicli may be deduced the niain points of its history. That referred to in the heading of this article is nót only a corporation, but, since it extends itself over many other concerns it may rightly be called an in8titution. It flrst had its existence in Cleveland, twenty years ago ; its only office for transacting business being in a small grocery store in that place. There were at least a score of other renning compauie8, in and about the city of Cleveland, that were carrying on exactly the same business, many of which were in no wise less important the íirm which has becoiue the most suecessful "corner" of the century. They all had to buy the crude oil from the producers, reflne it, and then ship it to dealers in the various markets of the world ; the last transaction incurring by far the greatest expense. Consequently, that company which could " handje" kerosene the most cheaply would drive all competition out of the market. There was this diilerence between these pioneer concerns ; that the man who managed the affairs of the Standard was troubled with no eonscience, and he had a ready and persuasive tongue. He so managed affairs as to secretly obtain from the three raüway companies rentered in Cleveland, (and all of which were supposed to be eharging equal rates to all persons,) sucli reductions on the cost of the shipping of the refined product for the Standard, that it was enabled to far undersell its competitors. The method pursued by Mr. Rockafeller has never been divulged, but may very reasonably he supposed to be that on the plan of "you help me and I will help you." He would say to each company, "If you will give me this and that advantage over my opponents, I will, when I have gained control of all of the refineries in this section of the country, give you the entire trarlic." Whatever the course of Mr. Hockafeller, this is certain, that the firm he represented, owing to its uufair privileges, soon incorporated within itself, bought up or crushed out of existence the other refining companies. Moreover, the Standard having bought np the United Pipe Lines Company, the railroads now fouud out that they had aided in building up a huge monopoly over which they had lost all control, and which dictated its own terms, paying thein, for services rendereil, whatever it saw fit, and even compelling them to fix the rates of shipment, for all new refineries entering the field, such that, trade being destroyed, bankruptey ensued, and reiiniug was given up in despair. All renners, except those at Pittsburgh, had now been bought out by the Standard Oil Company, or had been compelled to close their plants, afterward selling them to their death-dealing foes for whatever they could get. But the Pittsburg people still held out, and to be able to supply themselvee with the crude oil needed in their business they laid a pipe line of their own. The only railway by which they could transport their refined oil to the seaboard was the Baltimore & Ohio. The Pennsylvania and other railway companies, by direction of the Trust, coerced this railway, under the threat of cutting rates, to charge the refiners, for whom they were shipping kerosene, such an exorbitant price that they too were compelled to shut their works. If this great combination, together with the Pennsylvania Railroad Company, had not, by united effort, manaL_riMl to stop the refimng Imsiness iu Pittsburgh, being nearer the coast and as near the oíd fields as Cleveland, in time there might have oped a stronger coinpany than the Standard. But, under existing conditions, those who have been the most unscrupulous, using the greatest amount of money to influence courts and legislatures, are those who have most effectually succeed ed in erushing their opponents and in best promoting their own h'nancial interests. This great combine bas gone even further ; it lias bought up many newspapers in the oil regions, by which it endeavors to mould public opinión, and also does not hesitate to use any means in winning over those who may be against it in literary circles, business life, among railway managers, in National or State Legislatures, and in the courts of justice. Jno. D. Rockafeller has evidently caught the spirit of several other public benefactors (? ). The life's blood of the oil country being constantly sapped away ; he, receiving an income of over $18,000 a day, inay well aiford to spend a few millions in erecting a monument to bis everlasting glory, in Btifling "the still small voice vnthin," and so that posterity may say "he was not such a bad man alter all." Another phase in the transactions of this great "corner" may be fouud in the fact that it speculates in both the crude and refined commodity in which it deals. It has been estinmted that within late years over one-half of tbc profits of the Standard Oil Company, tbc wealth of which, flowing into its already overflowing coffers, may be counted by millions, ia obtained from tliis om' aource. lloldinu; the felicitoua position of perfect acquaintance with and absolute control of all of the agencies which act upon the market, and being made up of the only body of men which possesses that most vital and complete knowledge so essentíal to the earrying on of a business in which the market value of the commodity is open to wide fluctuations, it may act boldly and unhesitatingly where those who have little or no actual knowledge of the real state of things must act with fear and trembling. Chiefly to this one fact, instead of to extraórdinary business ability, as may clearly be seen from the above stated circumstance, must be attributed the signal success ■which it has met in the last ten or fh'teen years The Interstate Commerce Bill became a luw ou the 4th of February, 1887. [mmediately a number of enterprising capitalista made large inveatmenta in independent refineries. Some of them having a capital upwards of a million, tlie rcsult was new and marked ímpetus given to the independent refining business, great benefit to the railroads, a rise in the price of petroleum - which had fallen below profitable producing ratea - the lowering of the retail cost of kerosene, the general bettering of the condition of the entire oil country, and of all those connected with the trade. But the Trust, observing the prosperity attending these new companies, seemed to deern its especial privilege and care to be that of seeing that they were summarily annibilated, as were those before them. At any rate, it entered into a secret agreenient with the managers of several of the most important railway companies - acquiescence to the behests of the "combine" being made of personal ailvantage to these wen - to secure an advance of nearly fifty per cent. in rates on shipments hy independent refineries. These rates were prohibitory to the trafile and rendered competition with the "combine" impossible. Either business had to be done at a loss or else plants ahut down. The independent refiners of northwestern Pennsylvania, having obtained informatiou as to the state of thinps endeavored, last winter, to get from the Interstate Commerce Commission a decisión restoring the rates formerly made, and which are essential for a continuation of the business. They ship in barrels, while the Standard iises tank cars. In their defense the railway companies made the plea that the shipment of oil in the barrel car was a more expensive operation than in the tank car. But the barrel car, when returning west from the seaboard, generally carries freight, while the tank car always returns enipty. This being the case, the shipment of it in barrels is the more profitable to the railways, and their discrimination in favor of the Standard was so apparent that the Interstate Commerce Commission made the deci sion that oil nmst be carried for the same rate per barrel measure, whether in tanks or in barrels. Co-incident with the advance in rates on barrel shipment, the Standard placed a premium on crude oil, in that section in which the Independents were doiug business. This premium, which at times was as high as thirty cents per barrel, is given only in that rêgion in which independent refineriea are Bituated. When the monopoly has driven competitors Erom the iield the premium ceases. In addition to the facilities which the Standard has for controlling the price of oil, it is enabled, by a system of information agencies, to kuow continually the state of the local trade, and where competition arises prices are reduced below a livingfigure uutil all rivale are driven i'rom the iield. Afterward the public make good the conipany's loss by paying increased prices for oil, which can then only be purchased from the Standard Oil Coinpany. lts motto is, "All competition must be destroyed," and being in control of eighty-four per cent. of the refining business, with almost limitless resources to relyupon, it can, by a relatively small outlay, silence any competitor. Also, it employs agents to buy up, secretly, all obtainable shares in independent refineries. When the controlling interest in any company is once aequired, its identy is lost in that of the great leviathan, which, like the sea, never gives up its dead. This gigantic business combination, which is without a parallel in modern history, haviug already aequired a practical monopoly of one of our most important industries is seeking other iields to conquer. lts managers have so increased their gaina that the enornious capital can no longer be profitably employed in a single business, and within a few weeks the controlling interest in one of the trans-continental unes has passed into their hands. This will prove an important factor in maintainnig their unjust advantages, and, judgjng the future by the past, these capitalista seek further control of the arteries of commerce with the view of subordinating public interests to private ends. It is with good reason that public attention is directed to this rapidly growing monopoly which seems destined to become the devil-fish of our internal commerce.


Old News
Ann Arbor Courier