Wealth against commonwealth

by Henry Demarest Lloyd

This remedy of a State monopoly as an alternative to private monopoly, as suggested in Austria and Germany, has as yet had few advocates in America. Our public opinion, so far as there is any public opinion, restricts itself to favoring recourse to anti-trust laws and to boycotting the monopoly and buying the oil of its competitors. But there are too few of these to go around, and they are shut out of most of the markets. The shrewd monopoly is itself the most diligent caterer to such American demand as there is for the "anti-monopoly" product. It does business under hundreds of assumed names, and employs salesmen at large salaries to push the sale of "opposition oil" in our disaffected provinces.

With the news from Germany came the announcement that similar control had been obtained of the business of the firm at Venice which did most of the oil business of Italy, and a new company had been formed, of which the American "trustees" own a majority. In a letter sent to Minister Phelps, at Berlin, a resident representative of the American oil combination says, as quoted in the New York Tribune, October 5, 1891: "For the furtherance of our programme and as participators in the large European investment which this programme involves, we have sought and been fortunate enough to secure the co-operation of a coterie of well-known merchants, who have been long and prominently identified with the petroleum commerce of the Continent." The Società Italo-Americana del Petrolio (the Italian-American Oil Company) is in Italy what the concerns just described are in the countries to the north of it. The head of the oil combination was quoted by the New York Tribune of July 1, 1891, as saying: "The cable despatches are substantially correct as regards our interest in the German and Italian companies."

The French government a year ago lowered the tariff on petroleum one-half. This was followed, the French press reports, by the erection of a refinery by the American trust at Rouen, and the purchase by it of land in Marseilles, Cette, Bordeaux, and Havre for other refineries. The machinery needed was shipped from America. Large offices were opened at Paris by the American combination for the administration of the industry in France, which was to be concentrated into its hands like that of the rest of Europe. The sequel, if the Frankfurter Zeitung, a prominent German commercial paper, is correctly informed, is that the French refiners, as the Scotch did before them, have come to terms with the American trust. It has agreed not to start up its refineries in France, not to sell any refined oil in America for shipments to France, and not to allow any American outsiders to compete with the French refiners.

There was a report in June, 1892, that a Dutch company had succeeded in refining petroleum in Sumatra, one of the possessions of the Netherlands' East India colonies, and selling it in India. The solicitor of the trust, asked about it by the New York Times, June 5, 1892, said, "It cannot be true." The oil combination, he continued, "has agents in the Netherlands' East India colonies and at Sumatra, and it would certainly have heard of this corporation and its competition if there was anything worth hearing."

There are great oil-fields in Peru. Since the close of the war with Chili there has been an active development of them, and the commercial reports of San Francisco say that fuel oil is now being supplied from this source to our Pacific States. This has not been done by the Peruvians. It was an American who organized the oil industry of Peru. The principal company was formed by the same expert who went years ago from Pennsylvania to Russia to Americanize the oil interests of the Caucasus. After he had succeeded in that task he went to Peru. He died in the spring of 1894. At about the time of his death the newspapers, by a coincidence that arrests attention, chronicled the departure from New York of a well-known man who was going to Peru, as he stated in an interview, to look after the interests of the members of the oil trust. But there is no official information that they have any ownership or control there.

When one of the officers of the combination was before Congress, in 1888, he was asked if there had been any negotiations by his associates with the Russian oil men.

"We have never had any serious negotiations,"[641] he replied.

The word "serious" was a slip. He withdrew it. "We have never had any" was his revision. Three years later the same official, in a speech to persuade the Pennsylvania Legislature that the pipe-line interests of the oil country did not need the regulation by the State then under debate, but were abundantly safeguarded by him and his associates, said: "It may not be amiss for me to say that we have had, at different times during the last several years, most flattering propositions from people who are identified with the Russian petroleum industry, to come there and join them in the development and introduction of that industry. We have declined these offers, gentlemen, always and to this day, and have held loyal to our relations to the American petroleum."[642]

There had been negotiations, after all!