Capitalists are usually supposed to be hard of heart and head, suspicious, great sticklers for "black and white," and careful to have all that is due them "nominated in the bond." This arrangement, by which this witness and his associates put themselves entirely at the disposal of others—as to how much they should manufacture, what freight they should pay, what price they should receive, etc.—was not in writing.
"It is a verbal one."[609]
The purchase of the refineries at Baltimore by the oil combination in 1877, under the name of the Baltimore United Oil Company, was immediately followed by an advance in price. The Baltimore Sun, in December, 1877, said: "The combination has already begun to exert its influence on the market. Oil for home consumption was yesterday quoted at 14 cents, having raised from 11½ cents, the quotation on Wednesday. The combination will not make contracts ahead, which might be interpreted to mean an intended advance in price." In Buffalo the manager of one of the properties of the oil combination said in evidence: "My son is on a committee, he told me, that regulates the price of oil."[610] While the trust had the trade of Buffalo to itself, it held the price of oil at a high rate. "In Buffalo there were then no rival works," said State's Attorney Quinby to the jury who were trying its representatives for conspiracy against a competing refinery, "and we were paying for kerosene 18 cents a gallon. To-day, with the little Buffalo company in the market making kerosene, you can get it for 6 cents a gallon."
This Buffalo competitor was a very modest affair, insignificant in capital and resources, but it cut down the price of oil as far away as Boston. It established there an agent who "went around" and "cut the prices down," and then the agent of the combination "went around and cut the prices further," as its Boston employé described it. He was instructed, he said, "to follow them down, ... only not to sell at a loss." Before this competitor came he had been selling oil as high as 20 cents a gallon. "We got the price down to 18 cents, and got down then, I believe, to 8 cents, so that I have been selling them since then at 8 cents."[611] Eight cents, then, was not at a loss—since he had been told "not to sell at a loss"—and yet these passionate pilgrims of cheapness had been making the Boston buyer pay 20 cents! "I have been selling since at 8 cents," he says. This testimony was given in 1886; the reduction to 8 cents from 20 was made in 1882. Four years' consumption of this oil had been given to the buyer in Boston at 8 cents a gallon instead of 20, in consequence of the entrance of so insignificant a competitor.
When a member of the trust was testifying before the New York courts, he referred to the competition of the independent of Marietta as "his power for evil." Asked to define what he meant by his phrase "power for evil," he said, "It was to make prices that would be vexatious and harassing." He was asked if it harassed the oil trust, and the corporations connected with it, to have prices in any part of the country lower than they fixed.
"Lower than a reasonable basis."
"What they consider a reasonable basis?"
"Yes."[612]
That we can understand. But we cannot understand what the president of the trust meant when he said, "We like competition," for that would imply a natural proclivity for fellowship with the power of evil.
"Who fixes the price of oil in New York?" was asked of one of the witnesses before the Interstate Commerce Commission at Washington. That was done, he said, by the selling agent of the oil combination. He "has the price marked in the New York Produce Exchange daily—the price at which they will sell oil."[613] When the vice-president of the company representing the trust in St. Louis and the Southwest was on the stand before the Interstate Commerce Commission, he was asked what was the price of oil in the territory in which he was operating. The price of oil in tank-cars, in Arkansas, he said, "is now and has been during about three years or more—since Mr. Rice commenced shipping by water to Little Rock—10 cents per gallon. The average price, independent of competition, which I suppose is what you want, in the State of Texas is about 13 cents per gallon in bulk, covering the whole State of Texas. The average price per barrel would be about 17 cents, and the average price in cases about 20 cents."[614]