PROGRESS OF PETROLEUM.
The efforts of the great majority of the Western Pennsylvania petroleum producers to obtain relief from what they deem the oppressive acts of the Standard Oil Company and the unjust discriminations of the United Pipe Lines, and the various railroads traversing the oil regions, have attracted more than usual attention to the present condition of this industry and its possible future.
We would here explain that the Standard Oil Company originated in Cleveland, Ohio, about twelve years ago, and was incorporated under the laws of Ohio, with a nominal capital now, we are informed, of $3,000,000, which, however, very inadequately represents the financial strength of its members. It is now a combination of the most prominent refiners in the country, and has before been credited with manipulating the transportation lines to its own special advantage.
We can recall no instance of such serious hostility between parties whose interests are at the same time of such magnitude and so nearly identical; nor can we see what substantial, enduring benefit would accrue to the producers in the event of their victory in the struggle.
They charge that the Standard Oil Company has become the controlling power to fix prices and to determine the avenues by which the oil shall be transported eastward for home consumption and for foreign exportation; that the railway companies have given this company lower rates than other parties for transporting the oil; and that through the rates given to it by the railways the value of their property is destroyed.
The reply, in effect, is, Granting all this to be true, what does it amount to? Neither more nor less than that the managers of the Standard Oil Company, by combination of capital, by intelligence and shrewdness in the management of their operations, have built up a successful business, and that they have so extended it by the use of all practicable appliances, and by the purchase of the property of competitors, that they do practically control the prices of oil, both crude and refined, and that the uncombined capital of the other oil producers, lacking the power, the intelligence, and the business skill which combined capital can secure, cannot compete with the Standard Oil Company. Now, is there any great wrong or injustice in this?
When brains can command capital it is always more successful in business matters than any amount of brains without capital or capital without brains. This result is the natural working out of the same principle that is everywhere to be seen—some men are successful and others are not.
It is the essence of communism to drag down those who succeed to the level of the unsuccessful.
If men cannot compete with others in any business they must accept the fact, and try some other employment.
If, through superior intelligence and capital, the Standard Oil Company can control the oil business of Pennsylvania, then, according to the principles of common sense, it must be permitted to do so.
What right, then, has the oil producer to complain? Why, if all that is alleged is true, will they persist in sinking more wells, when, as they say, they are controlled by the Standard Oil Company? No one forces them to lose money by continuing in the business. Let them find other employment. They do not show that the Standard Oil Company does anything that combined capital on their part and equal business ability could not effect.
The cry of monopoly in this case is altogether unfounded, those opposed to the Standard Oil Company having just as much right to do all that that company does, and, therefore, there can be no monopoly, because they have no exclusive powers.
As to the railway companies, they can afford and have a right to transport the tonnage offered them by the Standard Oil Company at less cost, because it costs them less to do a regular and large business than an irregular and smaller one. They would simply be acting in accordance with business principles the world over.
These are the arguments, the statement of the position of a successful combination confident in its resources and of victory in the coming struggle. The justness, the correctness of the doctrines enunciated, and the wisdom of so doing at this crisis, we do not propose to criticise; but it is very safe to say that if the prosperity of the complainants depends upon relief in this direction they may as well cease producing.
There are too many of them for harmonious and concerted action against the powerful corporations they complain of; and if they should succeed in securing equal transportation facilities the prices would still be regulated by the monopolists, who carry more than four-fifths of the accumulated stock of the oil regions.
The proposed appeal to Congress to pass some law whereby each producer can compel railroad companies to carry his produce at regular rates, amounts to a confession of the desperate straits of the producers and of their weakness as well; and even if successful, which is most improbable, would not remedy the deplorable existing state of things.
Still lower rates would fail to give relief, with all the present avenues of trade filled to repletion and with an increasing output at the wells. Relief and permanent relief can be found only in the direction we have before indicated: in the general application of petroleum and its products to the manufacture of gas for illuminating and heating purposes, and its substitution for coal in the metallurgic and other prominent industries of the world.
