Wealth against commonwealth

by Henry Demarest Lloyd

The fright among the people was proportionate to the work they had done and the value of what they were losing. Since the first well was sunk the wilderness had become a busy region, teeming with activity and endowed with wealth. In ten years the business had sprung up from nothing to a net product of 6,000,000 barrels of oil a year, using a capital of $200,000,000 and supporting a population of 60,000 people. The people were drilling one hundred new wells per month, at an average cost of $6000 each. They had devised the forms, and provided the financial institutions needed in a new business. They invented many new and ingenious mechanical contrivances. They had built up towns and cities, with schools, churches, lyceums, theatres, libraries, boards of trade. There were nine daily and eighteen weekly newspapers published in the region and supported by it. All this had been created in ten years, at a cost of untold millions in experiments and failures, and the more precious cost of sacrifice, suffering, toil, and life.

The ripe fruit of all this wonderful development the men of the oil country saw being snatched away from them.[47]

More than once during these lean years, as more than once later, the public alarm went to the verge of violent outbreak. This ruinous prosperity brought stolid Pennsylvania within sight of civil war in 1872, which was the principal subject before the Pennsylvania Legislature of that year, and forced Congress to make an official investigation.

The New York Legislature followed Congress and the Pennsylvania Legislature with an investigation in 1873.

"There was great popular excitement.... It raged like a violent fever," was the description it heard of the state of things in Pennsylvania.[48]

There were panics in oil speculation, bank failures, defalcations. Many committed suicide. Hundreds were driven into bankruptcy and insane asylums.

Where every one else failed, out of this havoc and social disorder one little group of half a dozen men were rising to the power and wealth which have become the marvel of the world. The first of them came tardily into the field about 1862. He started a little refinery in Cleveland, hundreds of miles from the oil wells. The sixty and more manufacturers who had been able to plant themselves before 1860, when they had to distil coal into petroleum before they could refine petroleum into kerosene, had been multiplied into hundreds by the arrival of petroleum ready made from below. Some of the richest and most successful business men of the country had preceded him and were flourishing.[49] He had been a book-keeper, and then a partner, in a very small country-produce store in Cleveland. As described by his counsel some years later, he was a "man of brains and energy without money." With him were his brother and an English mechanic. The mechanic was bought out later, as all the expert skill needed could be got for wages, which were cheaper than dividends.[50] Two or three years later another partner was added, who began life as "a clerk in a country store,"[51] and had been in salt and lumber in the West. A young man, who had been in the oil region only eleven years, and for two of the eleven had been errand-boy and book-keeper in a mixed oil and merchandise business,[52] a lawyer, a railroad man, a cotton broker, a farm laborer who had become refiner, were admitted at various times into the ruling coterie.

The revolution which revolved all the freemen of this industry down a vortex had no sooner begun than the public began to show its agitation through every organ. The spectacle of a few men at the centre of things, in offices rich with plate glass and velvet plush, singing a siren song which drew all their competitors to bankruptcy or insanity or other forms of "co-operation," did not progress, as it might have done a hundred years ago, unnoticed save by those who were the immediate sufferers. The new democracy began questioning the new wealth. Town meetings, organizations of trades and special interests, grand juries, committees of State legislatures and of the United States Senate and House of Representatives, the civil and criminal courts, have been in almost constant action and inquiry since and because.

It was before the Committee of Commerce of the National House of Representatives in 1872 that the first authentic evidence was obtained of the cause of the singular ruin which was overwhelming so fair a field. This investigation in 1872 was suppressed after it had gone a little way. Congress said, Investigate. Another power said, Don't investigate. But it was not stopped until the people had found out that they and the production, refining, and transportation of their oil—the whole oil industry, not alone of the valleys where the petroleum was found, but of the districts where it was manufactured, and the markets where it was bought and sold, and the ports from which it was shipped abroad—had been made the subject of a secret "contract"[53] between certain citizens. The high contracting parties to this treaty for the disposal of an industrial province were, on one side, all the great railroad companies, without whose services the oil, crude or refined, could not be moved to refineries, markets, or ports of shipment on river, lake, or ocean. On the other side was a body of thirteen men, "not one of whom lived in the oil regions, or was an owner of oil wells or oil lands," who had associated themselves for the control of the oil business under the winning name of the South Improvement Company.[54]