Wealth against commonwealth

by Henry Demarest Lloyd

Several other refiners, seeing the advantages of Marietta, had settled there. They who elected themselves to be trustees of the light of the world, thus having the advantages of the place pointed out to them by practical men, determined that Marietta must be theirs. They bought up some of the refiners. Then they stopped buying. Their representative there, afterwards a member of the trust, "told me distinctly that he had bought certain refineries in Marietta, but that he would not buy any more.... He had another way," he said, "of getting rid of them."[359] Of these "other ways" the independents were now to have a full exposition. In January, 1879, freight rates on oil were suddenly and without previous notice raised by the railroads leading out of Marietta, and by their connections. Some of the rates were doubled. The increase was only on oil. It was—in Ohio—only on oil shipped from Marietta; it was exacted only from the few refiners who had not been bought, because there were "other ways of getting rid of them."[360]

This freight-tariff attack on the independent refiners was arranged by their powerful rival and the railroad managers at a secret conference, as the latter admitted.

"Did you have any consultation or invite consultation with other manufacturers of oil at Marietta?"

"No, sir."[361]

When the representatives of the combination in this market were taxed by a dealer with getting the benefit of this manipulation of freight, "they laughed." All the railroads took part in the surprise. Curiously enough, the minds of the managers of a dozen roads acted simultaneously and identically, over thousands of miles of country—some, as they admitted, with suggestion, and some, as they testified, without suggestion—upon so precise a detail of their business as the rates on oil at one little point. "I did it at my own instance," said the freight agent of the Baltimore and Ohio. Freight officials of railways as far apart east, west, and south, and in interest, as the Baltimore and Ohio, and the Pennsylvania, and the Lake Shore, which had no direct connection with Marietta, and reached it only over other lines, stopped their "wars" to play their part in the move by raising the rate on oil only, and, most remarkable of all, to a figure at which neither they, nor the railroad connecting them with Marietta, nor (and this was the game they were gunning for) the independent refiners could do any business. From other points than Marietta, as Cleveland, Parkersburg, Pittsburg, and Wheeling, where the combination had refineries, but the Marietta independents had none, the railroads left the former rates unchanged.[362]

Rice was "got rid of" at Columbus just as effectually as if Ruskin's "Money-bag Baron," successor of "the Crag Baron," stood across the road with a blunderbuss. His successful rival had but to let its Marietta refineries lie idle, and transfer to its refineries at Wheeling its Marietta business—and Rice's too. By the pooling of the earnings and of the control of all its refineries—the essential features of the combination—its business could be transferred from one point to another without loss. One locality or another could be subjected to ruinous conditions for the extermination of competitors, and the combination, no matter how large its works there, would prosper without check. It gets the same profit as before, but the competitor by its side is ruined. All its refineries along a given railroad can be closed by high rates made to "overcome competition," but profits do not cease. Their business is done elsewhere by its other refineries, and all the profits go into a pool for the common benefit.

From Rice's point of view, Marietta was the storm-centre; but the evidence before the Ohio Legislative Investigation of 1879, before the Legislative Committee of New York of 1879, before Master in Chancery Sweitzer in Pennsylvania, and in the suit against the Lake Shore Railroad, showed that the low barometer there was part of a disturbance covering a wide area. The demonstration against the independent refiners of Marietta was only part of a wider web-spinning, in which those at all points—New York, Boston, Philadelphia, Pittsburg, Oil City, Titusville, Buffalo, Rochester,[363] and Cleveland—were to be forced to "come in" as dependents, or sell out, as most of them did.

That rates were not raised from points controlled by the combination is only part of the truth. At such places rates were lowered. This, like the increase of rates, was done at a secret conference with the oil combination and at its instance.[364] Where it had refineries the rates were to be low; the high rates were for points where it had competitors to be got rid of without the expense of buying them up. The independents knew nothing of the increase of freights prepared for them by the railroad managers and their great competitor until after, some time after, it had gone into effect.

The railroad company gave notice to their rivals what the rates were to be, but withheld that information from them.[365] That was not all. Before the new rates were given all the old rates were cancelled. "For a few days," said an independent, "we could not obtain any rates at all. We had orders from our customers, but could not obtain any rates of freight."

As to many places, the withholding of rates continued. "There's many places we can't obtain any rates to. They just say we sha'n't ship to these other places at any price."[366]