Wealth against commonwealth

by Henry Demarest Lloyd

The disturbance fell heaviest, as always, on the working-men. "Reduction in wages is now being effected," writes the managing director of the oldest and largest of the Scotch companies in the Economist. "Another 10 per cent. reduction in miners' wages has been resolved upon," the Economist announces in its issue of October 8, 1892.

One of the causes that contributed to the downfall of the Scotch refiners was the fact that the British government reduced the test required for illuminating oil. This new regulation opened the British markets to a flood of cheap oil from America.[638] The Scotch oil is better made and more expensive. "We cannot tell," said a correspondent of the Glasgow Herald, "what powerful interest the American oil combination did not bring to bear on our government. The public had then no champion, and as a rule never have on these occasions."

The unkindest cut of all is that it was from the Scotch manufacturers themselves that their American rival and ruler learned the secrets of the industry it is now absorbing on the instalment plan. In one of its publications it has told how its "experts visited the great shale works in Scotland, and studied their methods," and how "the consequence was that extensive works were erected."[639]

The economic development of Germany is not so much behind that of Great Britain and America as to seem uninviting to the unhasting but unresting American. Some years ago enterprising German importers invested a large amount of capital in tank-steamers, because they thought these solved the problem of the transportation of petroleum. When the Americans refused to supply them any longer with oil for their steamers to carry, they saw that there was more in this problem than they had guessed. Importers who had no steamers found one day that American enterprise had secured practically all of them, and had very decided notions as to whom cargoes should be taken. The heads of two or three of the largest houses boarded a steamer for New York, and came back stockholders in a German-American company which controls most of the German business, as the Anglo-American company controls that of Great Britain. "If the great company with unlimited capital cares to lose money, it can drive us from the field," was the explanation of the head of one of the largest German concerns, as quoted in the Weser Zeitung.

At the beginning of the next year some Holland firms were invited into the same shelter, and became the "fittest"; and then followed the Belgian and the Scandinavian countries. The Berlin Vossische Zeitung of June 18, 1891, described the line of march: "One group of business men after another is thus made superfluous and pushed aside. First the wells, pumps, and refineries in America, then the American export trade, then the private freight vessels adapted for transportation of petroleum, then the European import trade, then the export trade from European ports, and, finally, this over-powerful company threatens to seize the entire retail trade in petroleum. It is a world monopoly." Hundreds of boatmen engaged in a flourishing river trade in Germany were driven out by tank-boats. If they had changed to tanks, they would have been dependent on their opponent for the oil to fill them. Importers in barrels were cut off by a change which the German government made in the tariff on barrels. The Americans were also helped by an increase in the German tariff on Russian oil of 50 per cent., which made it so much the more difficult for it to compete with American oil. As one way to kill competition where it still existed, all statistics were suddenly withheld by the German-American member of the trust. Neither exports nor imports were known except to the ruling company; all others were kept in the dark.

This success in Germany has not been due to favoritism on the highways. The extraordinary discrimination on railroads in America would be impossible in Germany. With hardly an exception the railroads are under the supervision of the State, and are very carefully controlled. Even the private roads would not dare to give any but the open rates. In Austria-Hungary, formerly, secret rates were in full swing, but the system is now said to be destroyed.

Prices have declined in Germany, and the people at large make few complaints except about the quality of the American oil. It has become more sooty than formerly. In the beginning it burns well, but it ends with giving a very poor light. This has been conjectured to be due to a mixture of the inferior Ohio oil with that of Pennsylvania; but "it cannot be proved," the German chronicler reports.[640] "The working people," says one of the Berlin papers, "will have to foot the bill, and the working people only. The well-to-do and rich of to-day can have other fuel and light, but to the oppressed working-man petroleum is as great a necessity as his potatoes." The German papers, in casting about for means of checkmating the increase of prices which they believe will result from the consummation of this monopoly, advocate the use of water-power and also wind-power to create electricity.

The attention that has been attracted to the growth of this power does not come from the public at large, but from those directly interested and the sympathy and interest of the German "national economists." The latter point out that the present cheap prices are "war prices." They predict that as soon as the world monopoly is established and all territory is under complete control a rise of prices will take place. They are advocates of State monopoly as better than private monopoly. If State monopolies prevent free competition, at least they are able, they say, to give some compensation to those who are hurt. In the tobacco monopoly hundreds of millions were set aside by the German government for this purpose, but even that was not considered sufficient. But this monopoly is a private affair. It swallows the profits of all those whom it destroys. Numerous industries have been ruined—importers, ship-owners, brokers, local dealers, exporters, retailers, river boatmen, and numerous other trades—but no one receives indemnity. The public opinion of the government, the Reichstag, the national economists, the philanthropists, is active in support of the middle class, but in spite of all this a whole department of industry has been torn away from it.

There are one or two "independents" in Germany whom, like the independents in America, the trust has not yet been able to crush, though it is turning the markets topsy-turvy for that purpose. The Pall Mall Gazette of June 18, 1894, notes that the trust is selling refined oil in Europe at prices lower than those at which crude oil can be delivered from America.

The Austrian journals have been chronicling the absorption of the principal refineries of Austria and Hungary by a combination, of which the Rothschilds are the most important members, as they are of that in Russia. This combination, which first appears in 1892, has by 1894 accumulated a reserve of 3,000,000 gulden on a capital of 1,000,000 gulden, and its profits for 1894 are expected to be 100 per cent. The Prager Lloyd of April 26, 1894, giving these and other facts, adds that "the government of Austria as well as of Hungary takes the ground that if a petroleum monopoly is to be formed it should be in the hands of the State, not of a corporation, certainly not of a foreign corporation, least of all an American one."