The cause of the trouble was that the managers of the Pennsylvania Railroad had begun to reach out for the control of the oil trade. They had joined in the agreement in 1872 to give it to the oil combination, but now they wanted it for themselves. Through a mistletoe corporation—the Empire Transportation Company—they set to work building up a great business in oil cars, pipe lines, refineries.
"We like competition; we like our competitors; we are neighbors and friends, and have been all these years," the president of the oil trust testified to the New York Legislature,[133] but he served notice upon this competitor to abandon the field.[134] He and his associates determined to do more than compel the great railroad to cease its competition. They determined to possess themselves of its entire oil outfit, though it was the greatest corporation then in America. This, the boldest stroke yet attempted, could be done only with the help of the other trunk lines, and that was got.
The ruling officials of the New York Central, the Erie, the Baltimore and Ohio, the Lehigh Valley, the Reading, the Atlantic and Great Western, the Lake Shore railroads, and their connections, were made to believe, or pretended to believe, that it was their duty to make an attack upon the Pennsylvania Railroad to force it to surrender.[135] "A demand," says the New York Legislative Committee of 1879, "which they"—the railroads—"joined hands with the Standard Oil Company and proceeded to enforce by a war of rates, which terminated successfully in October of that year" (1877).[136]
The war was very bitter. Oil was carried at eight cents a barrel less than nothing by the Pennsylvania.[137] How low the rates were made by the railroads on the other side is not known. The Pennsylvania was the first to sue for peace. Twice its vice-president "went to Canossa," which was Cleveland. It got peace and absolution only by selling its refineries and pipe lines and mortgaging its oil cars to the oil combination. It "was left without the control of a foot of pipe line to gather, a tank to receive, or a still to refine a barrel of petroleum, and without the ability to secure the transportation of one, except at the will of men who live and whose interests lie in Ohio and New York."[138]
It was only seven years since the buyers had organized with a capital of $1,000,000. Now they were able to give their check for over $3,000,000 for this one purchase. "I was surprised," said Mr. Vanderbilt to the New York Legislative Committee of 1878, speaking of this transaction, "at the amount of ready cash they were able to provide." They secured, in addition to the valuable pipe lines, oil cars, and refineries in New York and Pennsylvania, the more valuable pledge given by the Pennsylvania Railroad that it would never again enter the field of competition in refining, and also a contract giving the oil combination one-tenth of all the oil freights received by the Pennsylvania Railroad, whether from the combination or its competitors—an arrangement it succeeded in making as well with the New York Central, Lake Shore, and other railroads.[139]
One of the earliest members of the oil combination was present at the meeting to consummate this purchase. Something over $3,000,000 of his and his associates' cash changed hands. The meeting was important enough to command the presence of a brigade of lawyers for the great corporations, and of the president, vice-president, and several directors of the Pennsylvania Railroad, and, representing the Poor Man's Light, the vice-president, the secretary, and five of the leading members of the combination, besides himself.[140]
But when asked in court about it he could not remember any such meeting. Finally, he recalled "being at a meeting," but he could not remember when it was, or who was there, or what it was for, or whether any money was paid.[141]
Three years later this transaction having been quoted against the combination in a way likely to affect the decision of a case in court,[142] the treasurer denied it likewise. "It is not true as stated ... directly or indirectly...."[143]
Eight years later, when the exigencies of this suit of 1880, in Cleveland, had passed away, and a new exigency demanded a "revised version," the secretary of the combination told Congress that it was true.[144]
"The pleasures of memory" are evidently for poets, not for such millionaires. That appears to be the only indulgence they cannot afford.