Wealth against commonwealth

by Henry Demarest Lloyd

ALL THE WORLD UNDER ONE HAT

"This business belongs to us." This was the reply the president of the oil combination made to a neighbor who was begging to be allowed to continue the refinery which he had successfully established before his tardier but more fortunate competitors had left their produce stores, lumber-yards, and book-keepers' stools. He could remember, the neighbor told the New York Legislature, before there was any such company as theirs, and when the president of the poor man's light was still in the commission business opposite him and his refinery. He described how the president left this commission business, and "commenced to build a refinery there of a small capacity.... He used to say to me, 'What is a good time to sell?' and 'What is a good time to hold?' as he said he thought I knew." The day came when the neighbor who had been first found that the last was to be first. He was making $21,000 to $22,000 a year, but he had "to sell or squeeze." He had several conversations with the new-comer who had been so successful in learning when it was "a good time to hold." To save his livelihood, "I did almost condescend to tease him," he testifies. But the only reply he could get was: We have freighting facilities no one else can get.[625] This business belongs to us. Any concern that starts in this business we have sufficient money to lay aside a fund to wipe it out. "They went on just as if it did belong to them, and there were others started before he did in it which I thought it belonged to quite as much as it did to him.... I am wiped out and made a poor man.... I think they are making a profit out of my ruin."

His refinery had been giving him a profit of $21,000 to $22,000 a year. It had cost him $41,000, but he had to sell it for $15,000. This purchase of $41,000 for $15,000 was one of "the little economies" to which the trust ascribes its success. It was not a "good time to sell," but he sold. Part of the "squeeze" put upon him was the rebate given to the buyer. He could not have got the rebate if he had applied for it, but he would not apply for it. "I made application for lower freights, but not for any drawbacks; I did not suppose that was the right way to do business."[626]

"This business belongs to us." This remark was not prophecy, but history. It was in 1878, and the claim had been already made good. The New York Legislature, in 1879, reported that the speaker and his associates had control of 90 or 95 per cent. of the industry. "It has absorbed and monopolized this great traffic, which ranks second on the list of exports of our country."[627] This conclusion was based on the evidence of officers and stockholders.[628] Their shadow grew no less. The Interstate Commerce Commission found in 1890 that they "manufacture nearly 90 per cent. of the petroleum and its products in the United States."[629]

"Trifles make perfection, and perfection is no trifle." For the perfection of this triumph no trifle has been disdained, from the well in the mountain to the peddler's cart in the city. The bargemen of the Alleghany, the coasters of the sea-shore, and the stern-wheelers of the Western rivers all had to go one way. "We drove out the shipments in the schooners from Baltimore and Washington, and we stopped almost the shipments by river down the Mississippi by boat," said one of the successful men. His plan had been so thorough as even to seek to "drive off the river schooners."[630]

The last stage in their economic development—that in which the people of the oil region lose the ownership of the oil lands and become hired men—is already far along. Although at first the oil combination owned no oil lands to speak of—"It does not own any oil wells or land producing oil, and never did," its president said, in 1880; "an infinitesimal amount," he said later[631]—it has of late years, through corporations organized for that purpose, been a heavy buyer and leaser of the best oil lands in Pennsylvania, New York, Ohio, Kentucky, and the West.

Monopoly anywhere must be monopoly everywhere. At the beginning it was enough to control the railways; by these the pipe lines, refineries, and markets were got. These were secured, only to find that it was vital to control the source of supply. The producers once gave an illustration of what it would be for the sole buyer to come to the market and find that the oil he must have was not on sale at his price.[632] "We have during the past year," one of the combination said, in 1891, before a committee of the Pennsylvania Legislature, "invested a very large amount of money, and have induced our friends to come forward with new capital to engage in the business of producing oil."[633] By the policy of becoming producers the combination has changed its position from that of mere intermediary—though one as irresistible as a toll-gate keeper—to that of absolute owner. The spectre it has seen rise before it, of the producers organized as one seller to meet it as the only buyer, has been laid to rest.

"We are pushing into every part of the world, and have been doing so," the president told the New York Legislature in 1888.[634] Their tank-steamers go to all the ports of Europe and Asia, and their tank-wagons are as familiarly seen in the cities of Great Britain and the Continent as of America. An agitation of extensive proportions was begun in 1893 in the press of Canada and in the Dominion Parliament to admit American oil at a lower duty. There was no popular demand for such a step. No general reduction of the tariff was proposed. The movement was simultaneous in the press of different parts of Canada, and it was promoted by papers as important as the Toronto Globe and Montreal Star. It was resisted with desperation by the 20,000 persons who are employed in the Canadian oil industries, the growth of thirty-two years—"not a rich, gay, bloated population, rioting with the plunderings of the farmers, revelling in all kinds of luxuries, making merry with their friends," says a newspaper correspondent, who visited them in December, 1892, "but a hard-working community, in which all live comfortably; few are rich."

This opposition was successful with the Dominion Parliament in that year, and it refused to admit American oil at a lower tax. But the finance minister then, by executive action, did in part what the Legislature had refused to do. By lowering the inspection duty and changing custom-house conditions he made a considerable reduction in the tax. The agitation to reduce the tariff was not relaxed, and was finally successful in 1894, when Parliament lowered the duties on oil, and to that extent surrendered the Canada producers and refiners to their American competitors.

The Scotch refiners, some of whom have been in business forty years, have become as loyal subjects of an American ruler as of their own queen. They make only as much as he allows, and sell at the price he fixes. He has demanded year by year a greater proportion of their business.[635] In 1892 they were notified that they must reduce their output by 10 per cent.[636] The Scotch, anxious for the accelerating future, begged that the "arrangement" might be made for three years instead of one. But this was denied them. The agent from America who brought them their orders would promise no more than "to place the matter in a favorable light before his colleagues in America."[637] By October of that year the capital of the Scotch companies, held mainly by small investors, had shrunk $5,000,000 in value. But to this item the London Economist adds the consolation that "that powerful organization"—the American—"has for years professed the kindliest feelings for the Scotch producers." Dr. Johnson said that much may be made of a Scotchman if caught young. The American caught him old.