Wealth against commonwealth

by Henry Demarest Lloyd

As soon as the petroleum began to flow out of the ground, refineries started up at every available place. They were built near the wells, as at Titusville and Oil City, and near the centres of transportation, such as Pittsburg and Buffalo, and near the points of export, as Philadelphia, Baltimore, New York. Numbers of little establishments appeared on the Jersey flats opposite New York.

There was plenty of oil for every one; at one time in 1862 it was only ten cents a barrel. The means of refining it had long before been found by science and were open to all; and even poor men building little stills could year by year add on to their works, increase their capital, and acquire the self-confidence and independence of successful men. The business was one of the most attractive possible to capital. "There is no handsomer business than this is," said one of the great merchants of New York. "You can buy the (crude) oil one week, and sell it the next week refined, and you can imagine the quantity of business that can be done." Men who understood the business, he said, "if they had not the capital could get all of the money they wanted."[43]

Whatever new processes and contrivances were needed the fertile American mind set about supplying. To carry the oil in bulk on the railroads tubs on flat cars were first used; but it was not long before the tub was made of iron instead of wood, and, laid on its side instead of bottom, became the tank of the cylinder car now so familiar.

The fluid which lubricates so many other things on their way through the world is easily made to slip itself along to market. General S.D. Karns was the author,[44] in 1860, of the first suggestion of a pipe line. He planned only for oil to run down hill. Then Hutchinson, the inventor of the Hutchinson rotary pump, saw that oil could be forced through by pressure, and the idea of the pipe line was complete. The first successful pipe line, put down by Samuel Van Syckel,[45] of Titusville, in 1865, from Pithole to Miller's Farm, four miles, has grown into a net-work of thousands of miles, running through the streets of towns, across fields and door-yards, under and over and beside roads, with trunk lines which extend from the oil regions to Pittsburg, Cleveland, Buffalo, Baltimore, New York, Williamsport, Chicago, and the Ohio River.

There was a free market for the oil as it came out of the wells and out of the refineries, and free competition between buyers and sellers, producers and consumers, manufacturers and traders. Industries auxiliary to the main ones flourished. Everywhere the scene was of expanding prosperity, with, of course, the inevitable percentage of ill-luck and miscalculation; but with the balance, on the whole, of such happy growth as freedom and the bounty of nature have always yielded when in partnership. The valleys of Pennsylvania changed into busy towns and oil fields. The highways were crowded, labor was well employed at good wages, new industries were starting up on all sides, and everything betokened the permanent creation of a new prosperity for the whole community, like that which came to California and the world with the discovery of gold.

But shadows of sunset began to creep over the field in its morning time, and the strange spectacle came of widespread ruin in an industry prospering by great leaps. Wherever men moved to discover oil lands, to dig wells, to build refineries or pipe lines, to buy and sell the oil, or to move it to market, a blight fell upon them.

The oil age began in 1860. As early as 1865 strange perturbations were felt, showing that some undiscovered body was pulling the others out of their regular orbits.

Before the panic of 1873—days of buoyant general prosperity, with no commercial revulsion for a cause—the citizens of this industry began to suffer a wholesale loss of property and business among the refineries in New York, Pittsburg, Cleveland, and elsewhere, the wells of the oil valleys, and the markets at home and abroad.

To the building of refineries succeeded the spectacle—a strange one for so new a business—of the abandonment and dismantling of refineries by the score. The market for oil, crude and refined, which had been a natural one, began to move erratically, by incalculable influences. It went down when it should have gone up according to all the known facts of the situation, and went up when it should have gone down. This sort of experience, defying ordinary calculations and virtues, made business men gamblers.

"We began speculating in the hope that there would be a change some time or other for the better," testified one who had gone into the business among the first, and with ample capital and expert skill.[46]