"Since Mr. Rice commenced shipping by water to Little Rock;" "the average price independent of competition in Texas"—these are telltale phrases. Where the combination was "independent of competition" the price was one-third greater.
The committee of Congress which investigated trusts in 1889 gathered a great deal of sworn evidence—the details of which remained uncontradicted, and which were met only by general statements like those quoted at the head of this chapter—showing how extortionate prices had been charged until competition appeared, that in all cases a war of extermination had been made upon those competitors, and that when their business was destroyed prices were put up again. Losses in competitive wars were merely investments from which to draw dividends in perpetuity. The "cheapness" of the combination followed the cheapness of competitors, and was merely a feint, one of the approaches in a siege to overcome the inner citadel of cheapness, a strategic cheapness to-day on which to build dearness forever. This battle of prices is shown in a table covering fifty towns in Texas, Mississippi, Louisiana, Alabama, Tennessee, Georgia, Kentucky, for three to five years. The appearance of competitive oil, for instance, cut the prices of oil from 15 cents a gallon down to 10 in Paris, Texas; from 25 to 15 in Calvert, Texas; from 22 cents to 10 in Austin, Texas; from 16 to 5 in Little Rock, Arkansas—evidently a war price; from 16 to 8½ in Huntsville, Alabama; from 16 to 8 in Memphis, Tennessee, and so on.[615] The committee of Congress submit pages of evidence of the reimposition of high prices the moment competition was killed off. If the combination found a rival dealer out of oil for only a day it "popped the prices up 3½ cents."[616] "One day," wrote one of the dealers, "oil is up to 20 cents and over, and when any person attempts to import here, other than the vassals 'of the oil combination,' it is put down to 7 cents a gallon."[617]
Prices were frequently put higher after the war than before. In the debate in the Canadian Parliament last year on the proposal to reduce the Canadian tariff, supported by a strong lobby from the American oil trust, it was shown by affidavits that at Selma, Alabama, oil was reduced during the "war" against outside refiners to 8 from 15 cents. After "competition was overcome," in the language of the South Improvement Company contract, the price was put up, not to 15 cents where it had been, but to 25 cents. In the same debate a large number of affidavits were exhibited showing how the price charged by the oil trust in America varied in places near each other in arbitrary and extraordinary ways, as 7 cents a gallon at Port Huron, Michigan, and 14½ cents at Bay City, only a few miles distant. Under the rule of the trust prices are on a mechanical basis everywhere, from the retail markets to the seaboard, where the refined, the manufactured article, is quoted at a lower price than the crude, its raw material.[618]
In the report of the tenth United States census in 1886, on the necessaries of life, the retail price of kerosene is given for thirty-five places. At a few of these there was competition; there the price was 12½ to 15 cents a gallon. At all other points it ranged from 20 to 25 cents. Such a tax on the 400,000,000 gallons of oil consumed in this country is the only kind of income-tax that is "American."
Application was made in May, 1894, by the Central Labor Union of New York City to the Attorney-General of the State to vacate the charter of the principal corporation in the oil trust. In the argument to support it, it was shown that New York consumers were then paying twice as much for their lamp-oil as the people of Philadelphia, and three times as much as the foreign consumer buying in New York for export.
The trust, notwithstanding its powers of "producing the very best oil at the lowest possible price," compels dealers to sign away their rights to buy oil where they can buy it the cheapest or best. When opposition is encountered from any of the retailers in a town the plan of campaign of its "war" is very simple. Some one is found who is willing for hire to sell his oils at a cut price until the rest are made sick enough to surrender. Then contracts are made with all the dealers, binding them to buy of no one else, and prices are put up to a point at which a handsome profit is assured. After this competitors can find no dealer through whom to sell, and the consumer can get no oil but that of the monopoly. Price and quality are both thenceforth such as the combination chooses to make them. There are bargains in oil, but one party makes both sides of them. "We do not wish to ruin you without giving you another chance," said an agent of the combination gently to a merchant who persisted in selling opposition oil. "Look at this map; we have the country divided into districts. If you insist on war we will cut the prices in your territory to any necessary extent to destroy you, but we lose nothing. We simply make a corresponding advance in some other district. You lose everything. We cannot by any possibility lose anything."
Only by thus contracting themselves out of their rights could these "free" merchants get oil with which to supply their customers. "Their agent," wrote a dealer of Hot Springs, Arkansas, "has made threats to some of our merchants that they must or shall buy oil from them and no one else, or if otherwise they would come here and ruin them—by fair means if they could, by underhand ways if necessary." Another firm in Pine Bluff, Arkansas, wrote that the agent of the combination had called upon them and several of the other large dealers to make a "contract, ... and, failing to do so, in a short time he threatens opening a retail house," as at Columbus.[619] Another wrote, December 13, 1886, from Navasota that the monopoly "will not sell unless you sign an obligation to buy from them and them only."[620]
This maintenance of prices until some "power for evil" appears with lower rates, then wars to kill, and raising of prices if the war ends in victory—these phenomena of cheapness continue to date. Many chapters could be filled with accounts of these wars of which record has been kept. To merely name the battle-fields would require pages. When the combination, through its agents, attacked Toledo in the courts for undertaking the municipal supply of natural gas, it "urged," as it is quoted in the language of the decision, "that the main object and primary purpose of the act is to enable the city to supply its individual inhabitants with fuel for private use and consumption at a cheaper rate than they can obtain it from other sources." The act of the Legislature gave Toledo "a power for evil." At Denver oil was sold at 25 cents a gallon until an independent company began refining the petroleum which abounds in the Rocky Mountain basin. During the Colorado war of 1892 all the familiar tactics—cut rates, espionage, and all—were employed. This continued after the dissolution of the trust as before, showing that its change of name and form meant no real change. In Pueblo and Colorado Springs the price was put down to 5 cents a gallon from 25 cents. In Denver the price was made 7 cents. Spotters followed the wagons of the independent company to spy out its customers, and get them, by threats or bribes, to sign away their right to buy where they could buy cheapest. The comments of the local press did credit to the inspiriting mountain air of the American Switzerland. The complaint recently filed with the Interstate Commerce Commission by a dealer of the Pacific coast charges that, among other discriminations injurious to the public, the rates between the Pacific coast and Colorado were so manipulated that the oil found in the Rocky Mountains and refined in Colorado could not be shipped to California and the other Pacific states. Consumers there had to buy the oil of the trust hauled all the way from Cleveland or Chicago. When an independent refiner ran the blockade into New York, in 1892, and began selling to the people from tank wagons, the price fell in New York, Brooklyn, and Jersey City from 8 and 8½ to 4 and 4½ cents. The St. Louis Chronicle of May 19, 1892, reports a reduction of the price of the best grade of oil to 5 cents a gallon—"the fortieth reduction," it says, made since an independent company "entered the field three years ago, at which time the price was 14½ cents," as it would be still but for competition.
War has been made on poor men, paralytics, boys, cripples, widows, any one who had the "business that belongs to us." An instance taken from abroad will be the last. The combination between the American and the Scotch refiners, formed several years ago, fixed the price of the principal product, scale, at threepence a pound in 1892. The break-up in that year was followed at once by a decline from threepence to twopence. This is a saving to the public of $1,000,000 a year. "All the relative products," says the London Economist, November 12, 1892, "have practically collapsed in value." Candles, for instance, declined 20 cents a dozen, "and the finer qualities were sold at the same rate as the commoner sorts."
These are the facts, to fit the phrase of one of the monopoly who described to Congress how it "bridges it to the consumer at the lowest reasonable rate." The "bridge to the consumer" spans 1872 to 1894 and Europe and America, but it is not a bridge of cheapness.[621]