Wealth against commonwealth

by Henry Demarest Lloyd

Matthews, on his side, took to the courts. He sued his persecutors as individuals and corporations. He pursued them civilly and criminally. He was successful in defending himself against their suits. All his suits were successful as far as he was able to carry them. One suit for damages produced a $20,000 verdict; another was for $250,000, on the still stronger evidence procured in the criminal trial. It took Matthews two years—from 1883 to 1885—to get his first case for damages for conspiracy to trial. All that time was consumed by his opponents in quibbles about procedure, technical objections, and motions for delay, appealing them from court to court. The judge, in taking from the jury afterwards the three trustees who had been brought to trial for conspiracy, declared that he could see no reason to believe that these suits had been brought without probable cause. But the jury before which the suit for damages was tried saw plenty of such reasons, and gave Matthews' company a verdict of $20,000 damages. The views of the judge and jury might have varied in the same way on the question of the guilt of the three members of the trust.

Matthews woke up one morning to discover, as he had been told he would, that there was no Atlas Company to get his oil from. Corporations may have no souls, but they can love each other. The Erie Railroad killed the pipe line of the Atlas Company for the oil combination.[505] The courts had been kept busy granting injunctions against it on the motion of the Erie. These were invariably dissolved by the courts, but an application for a new one would always follow. At one time the lawyers had fifteen injunctions all ready in their hands to be sued out, one after the other, as fast as needed. The pipe line was finally destroyed by force. Where it crossed under the Erie road in the bed of a stream grappling-irons were fastened to it, and with an immense hawser a locomotive guarded by two freight cars full of men pulled it to pieces. The Atlas line and refinery became the "property" of their enemy. Matthews' supply of crude oil was not cut off immediately. He was tapered off. One of the superintendents of the Atlas testified in the suit for damages Matthews brought against the Atlas after it passed into the hands of the combination, that by the order of the manager of the refinery he mixed refuse oil with the crude which they sold to the Buffalo Lubricating Oil Company. Finally the supply was shut off altogether.

Matthews turned to the railroads connecting Buffalo with the oil country. They all put up their rates. At the increased rates they would not bring him enough to keep him going; they would not give him cars enough, and told him they would not let him put his own cars on the road. Even the lake steamers raised their rates against him. The farmer-refiner was taking his lesson in the course which had driven his first employer to dig oil-wells because "there were restrictions in the shipments." Cut off from a supply by either pipe or rail at Buffalo, Matthews made an alliance with the Keystone Refinery in the oil regions. War was now made upon the Keystone. It was finally ruined.

Packs of lawyers were set upon Matthews, and they finally brought him down. An attorney appeared before a judge and made a motion that the property of Matthews' company be taken out of Matthews' hands and be placed in the charge of a receiver, as officer of the court, to secure a debt due a Buffalo bank. This done, the lawyer appeared before the judge who afterwards decided that $250 fine was punishment enough for criminal conspiracy, with an offer from the monopoly to pay $17,300 for the discontinuance of the suits for damages which Matthews had instituted, and $63,700 for all the other assets. The other creditors and all the stockholders opposed the motion, but the judge granted it. There were two suits. One had produced a verdict of $20,000, and the other one for $250,000 was brought on the new and much stronger evidence secured in the criminal trial. As to the value of the property, Matthews had brought his enterprise to the point where it was worth $20,000 a year. It was capable of producing many times that amount of profit. Had not Albert been enticed away, the new works would have yielded a profit of over $100,000 the first year. They had a capacity of 70 to 80 barrels a day of lubricating oil, and the profit was $5 to $6 a barrel at the time Matthews and Albert went into the business.[506] The judge, overruling a majority of the creditors, ordered the receiver to accept the offer. He gave as his reason for selling these damage suits that a criminal prosecution had already taken place for the same offences, and a person could not be punished twice for the same offence. As they had not yet been punished, this meant, if it meant anything, that the suits were to be sold out for this inconsiderable sum, and the guilty men were to get their punishment in the sentence he was to pass upon them in the criminal court.

Three months later, before the same judge, these convicted agents stood up to receive their criminal sentence. The judge gave them the lightest sentence in his power, "nominal punishment." He did so, he was reported by the Buffalo press to have said, because "it has come to the attention of the court that civil suits have been brought to recover damages sustained by reason of the same overt acts. Large punitive damages are demanded in those actions. It is fundamental that a person cannot be punished twice for the same offence."

The judge released them from the suits for damages because they were to be punished criminally. Then he released them from any but nominal punishment, because there had been suits for damages. One would infer that the civil suits for damages were in full career in the courts, to end possibly in hundreds of thousands of dollars' damages against the convicted. No one would infer what was the truth—and who should have remembered it so well as the judge, for it was he who had done it?—that the civil suits had been ordered sold. The judge had ordered his officer—the receiver—who had the luckless Matthews' affairs in his grip, not to try the cases, but to sell them. The suits had been ordered sold in February preceding, and they were as dead as—justice. But as all the technical formalities and slow proceedings needed to consummate the sale had not been completed when sentence was passed in May, the damages they might produce were made a reason for inflicting none but nominal punishment. The order of sale made it impossible that they should ever be tried.

Of the money paid into court, nearly half—$30,000—went to the lawyers, and, crudest stroke of all, the attorney who had made the successful motion before the judge to take Matthews' property away, and to order the forced sale, got $5000. Matthews got nothing. Even his right to sue his destroyers had been sold to them on their own motion and at their own price.

The crime was plotted in March, 1881. The participants were indicted in 1886. It took until May 15, 1887, to secure conviction. While sentence was still unpronounced Matthews' property was put into the hands of a receiver of the court, January 16, 1888; the property was sold by order of the court, February 17, 1888; sentence was pronounced May 8, 1888; the formalities of the sale were consummated July 11, 1888; and the sentence, coming last of all—the fine of $250—was executed May 1, 1889.