The History of the Standard Oil Company

by Ida M. Tarbell

Second Impression

Copyright, 1902, 1903, 1904, by The S. S. McClure Co.

CONTENTS

CHAPTER NINE
THE FIGHT FOR THE SEABOARD PIPE-LINE
PROJECT FOR SEABOARD PIPE-LINE PUSHED BY INDEPENDENTS—TIDEWATER PIPE COMPANY FORMED—OIL PUMPED OVER MOUNTAINS FOR THE FIRST TIME—INDEPENDENT REFINERS READY TO UNITE WITH TIDEWATER BECAUSE IT PROMISES TO FREE THEM FROM RAILROADS—THE STANDARD FACE TO FACE WITH A NEW PROBLEM—DAY OF THE RAILROADS OVER AS LONG-DISTANCE TRANSPORTERS OF OIL—NATIONAL TRANSIT COMPANY FORMED—WAR ON THE TIDEWATER BEGUN—PLAN TO WRECK ITS CREDIT AND BUY IT IN—ROCKEFELLER BUYS A THIRD OF THE TIDEWATER’S STOCK—THE STANDARD AND TIDEWATER BECOME ALLIES—NATIONAL TRANSIT COMPANY NOW CONTROLS ALL PIPE-LINES—AGREEMENT ENTERED INTO WITH PENNSYLVANIA RAILROAD TO DIVIDE THE BUSINESS OF TRANSPORTING OIL	Pages [2003]–2030
CHAPTER TEN
CUTTING TO KILL
ROCKEFELLER NOW PLANS TO ORGANISE OIL MARKETING AS HE HAD ALREADY ORGANISED OIL TRANSPORTING AND REFINING—WONDERFULLY EFFICIENT AND ECONOMICAL SYSTEM INSTALLED—CURIOUS PRACTICES INTRODUCED—REPORTS OF COMPETITORS’ BUSINESS SECURED FROM RAILWAY AGENTS—COMPETITORS’ CLERKS SOMETIMES SECURED AS ALLIES—IN MANY INSTANCES FULL RECORDS OF ALL OIL SHIPPED ARE GIVEN STANDARD BY RAILWAY AND STEAMSHIP COMPANIES—THIS INFORMATION IS USED BY STANDARD TO FIGHT COMPETITORS—COMPETITORS DRIVEN OUT BY UNDERSELLING—EVIDENCE FROM ALL OVER THE COUNTRY—PRETENDED INDEPENDENT OIL COMPANIES STARTED BY THE STANDARD—STANDARD’S EXPLANATION OF THESE PRACTICES IS NOT SATISFACTORY—PUBLIC DERIVES NO BENEFIT FROM TEMPORARY LOWERING OF PRICES—PRICES MADE ABNORMALLY HIGH WHEN COMPETITION IS DESTROYED	Pages [2031]–2062
CHAPTER ELEVEN
THE WAR ON THE REBATE
ROCKEFELLER’S SILENCE—BELIEF IN THE OIL REGIONS THAT COMBINED OPPOSITION TO HIM WAS USELESS—INDIVIDUAL OPPOSITION STILL CONSPICUOUS—THE STANDARD’S SUIT AGAINST SCOFIELD, SHURMER AND TEAGLE—SEEKS TO ENFORCE AN AGREEMENT WITH THAT FIRM TO LIMIT OUTPUT OF REFINED OIL—SCOFIELD, SHURMER AND TEAGLE ATTEMPT TO DO BUSINESS INDEPENDENTLY OF THE STANDARD AND ITS REBATES—FIND THEIR LOT HARD—THEY SUE THE LAKE SHORE AND MICHIGAN SOUTHERN RAILWAY FOR DISCRIMINATING AGAINST THEM—A FAMOUS CASE AND ONE THE RAILWAY LOSES—ANOTHER CASE IN THIS WAR OF INDIVIDUALS ON THE REBATE SHOWS THE STANDARD STILL TO BE TAKING DRAWBACKS—THE CASE OF GEORGE RICE AGAINST THE RECEIVER OF THE CINCINNATI AND MARIETTA RAILROAD	Pages [2063]–2087
CHAPTER TWELVE
THE BUFFALO CASE
THE STANDARD BUYS THREE-FOURTHS OF THE VACUUM OIL WORKS OF ROCHESTER—TWO VACUUM EMPLOYEES ESTABLISH BUFFALO LUBRICATING OIL COMPANY AND TAKE WITH THEM AN EXPERIENCED STILLMAN FROM THE VACUUM—THE BUFFALO LUBRICATING OIL COMPANY HAS AN EXPLOSION AND THE STILLMAN SUDDENLY LEAVES—THE BUFFALO LUBRICATING OIL COMPANY IS SUED BY VACUUM FOR INFRINGEMENT OF PATENTS—MATTHEWS SUES THE EVERESTS OF THE VACUUM FOR DELIBERATELY TRYING TO RUIN HIS BUSINESS—MATTHEWS WINS HIS FIRST CIVIL SUIT—HE FILES A SECOND SUIT FOR DAMAGES, AND SECURES THE INDICTMENT OF SEVERAL STANDARD OFFICIALS FOR CRIMINAL CONSPIRACY—ROGERS, ARCHBOLD AND McGREGOR ACQUITTED—THE EVERESTS FINED	Pages [2088]–2110
CHAPTER THIRTEEN
THE STANDARD OIL COMPANY AND POLITICS
OIL MEN CHARGE STANDARD WITH INTRENCHING ITSELF IN STATE AND NATIONAL POLITICS—ELECTION OF PAYNE TO SENATE IN OHIO IN 1884 CLAIMED TO ESTABLISH CHARGE OF BRIBERY—FULL INVESTIGATION OF PAYNE’S ELECTION DENIED BY UNITED STATES SENATE COMMITTEE ON ELECTIONS—PAYNE HIMSELF DOES NOT DEMAND INVESTIGATION—POPULAR FEELING AGAINST STANDARD IS AGGRAVATED—THE BILLINGSLEY BILL IN THE PENNSYLVANIA LEGISLATURE—A FORCE BILL DIRECTED AGAINST THE STANDARD—OIL MEN FIGHT HARD FOR IT—THE BILL IS DEFEATED—STANDARD CHARGED WITH USING MONEY AGAINST IT—A GROWING DEMAND FOR FULL KNOWLEDGE OF THE STANDARD A RESULT OF THESE SPECIFIC CASES	Pages [2111]–2128
CHAPTER FOURTEEN
THE BREAKING UP OF THE TRUST
EPIDEMIC OF TRUST INVESTIGATION IN 1888—STANDARD INVESTIGATED BY NEW YORK STATE SENATE—ROCKEFELLER’S REMARKABLE TESTIMONY—INQUIRY INTO THE NATURE OF THE MYSTERIOUS STANDARD OIL TRUST—ORIGINAL STANDARD OIL TRUST AGREEMENT REVEALED—INVESTIGATION OF THE STANDARD BY CONGRESS IN 1888—AS A RESULT OF THE UNCOVERING OF THE STANDARD OIL TRUST AGREEMENT ATTORNEY-GENERAL WATSON OF OHIO BEGINS AN ACTION IN QUO WARRANTO AGAINST THE TRUST—MARCUS A. HANNA AND OTHERS TRY TO PERSUADE WATSON NOT TO PRESS THE SUIT—WATSON PERSISTS—COURT FINALLY DECIDES AGAINST STANDARD AND TRUST IS FORCED TO MAKE AN APPARENT DISSOLUTION	Pages [2129]–2155
CHAPTER FIFTEEN
A MODERN WAR FOR INDEPENDENCE
PRODUCERS’ PROTECTIVE ASSOCIATION FORMED—A SECRET INDEPENDENT ORGANIZATION INTENDED TO HANDLE ITS OWN OIL—AGREEMENT MADE WITH STANDARD TO CUT DOWN PRODUCTION—RESULTS OF AGREEMENT NOT AS BENEFICIAL TO PRODUCERS AS EXPECTED—PRODUCERS PROCEED TO ORGANISE PRODUCERS’ OIL COMPANY, LIMITED—INDEPENDENT REFINERS AGREE TO SUPPORT MOVEMENT—PRODUCERS AND REFINERS’ COMPANY FORMED—LEWIS EMERY, JR.’S, FIGHT FOR SEABOARD PIPE-LINE—THE UNITED STATES PIPE LINE—STANDARD’S DESPERATE OPPOSITION—INDEPENDENT REFINERS ALMOST WORN OUT—THEY ARE RELIEVED BY FORMATION OF PURE OIL COMPANY—PURE OIL COMPANY FINALLY BECOMES HEAD OF INDEPENDENT CONSOLIDATION—INDEPENDENCE POSSIBLE, BUT COMPETITION NOT RESTORED	Pages [2156]–2191
CHAPTER SIXTEEN
THE PRICE OF OIL
EARLIEST DESIGNS FOR CONSOLIDATION INCLUDE PLANS TO HOLD UP THE PRICE OF OIL—SOUTH IMPROVEMENT COMPANY SO INTENDS—COMBINATION OF 1872–1873 MAKES OIL DEAR—SCHEME FAILS AND PRICES DROP—THE STANDARD’S GREAT PROFITS IN 1876–1877 THROUGH ITS SECOND SUCCESSFUL CONSOLIDATION—RETURN OF COMPETITION AND LOWER PRICES—STANDARD’S FUTILE ATTEMPT IN 1880 TO REPEAT RAID OF 1876–1877—STANDARD IS CONVINCED THAT MAKING OIL TOO DEAR WEAKENS MARKETS AND STIMULATES COMPETITION—GREAT PROFITS OF 1879–1889—LOWERING OF THE MARGIN ON EXPORT SINCE 1889 BY REASON OF COMPETITION—MANIPULATION OF DOMESTIC PRICES EVEN MORE MARKED—HOME CONSUMERS PAY COST OF STANDARD’S FIGHTS IN FOREIGN LANDS—STANDARD’S VARIOUS PRICES FOR THE SAME GOODS AT HOME—HIGH PRICES WHERE THERE IS NO COMPETITION AND LOW PRICES WHERE THERE IS COMPETITION	Pages [2192]–2230
CHAPTER SEVENTEEN
THE LEGITIMATE GREATNESS OF THE STANDARD OIL COMPANY
CENTRALISATION OF AUTHORITY—ROCKEFELLER AND EIGHT OTHER TRUSTEES MANAGING THINGS LIKE PARTNERS IN A BUSINESS—NEWS-GATHERING ORGANIZATION FOR COLLECTING ALL INFORMATION OF VALUE TO THE TRUSTEES—ROCKEFELLER GETS PICKED MEN FOR EVERY POST AND CONTRIVES TO MAKE THEM COMPETE WITH EACH OTHER—PLANTS WISELY LOCATED—THE SMALLEST DETAILS IN EXPENSE LOOKED OUT FOR—QUICK ADAPTABILITY TO NEW CONDITIONS AS THEY ARISE—ECONOMY INTRODUCED BY THE MANUFACTURE OF SUPPLIES—A PROFIT PAID TO NOBODY—PROFITABLE EXTENSION OF PRODUCTS AND BY-PRODUCTS—A GENERAL CAPACITY FOR SEEING BIG THINGS AND ENOUGH DARING TO LAY HOLD OF THEM	Pages [2231]–2255
CHAPTER EIGHTEEN
CONCLUSION
CONTEMPT PROCEEDINGS BEGUN AGAINST THE STANDARD IN OHIO IN 1897 FOR NOT OBEYING THE COURT’S ORDER OF 1892 TO DISSOLVE THE TRUST—SUITS BEGUN TO OUST FOUR OF THE STANDARD’S CONSTITUENT COMPANIES FOR VIOLATION OF OHIO ANTI-TRUST LAWS—ALL SUITS DROPPED BECAUSE OF EXPIRATION OF ATTORNEY-GENERAL MONNETT’S TERM—STANDARD PERSUADED THAT ITS ONLY CORPORATE REFUGE IS NEW JERSEY—CAPITAL OF THE STANDARD OIL COMPANY OF NEW JERSEY INCREASED, AND ALL STANDARD OIL BUSINESS TAKEN INTO NEW ORGANISATION—RESTRICTION OF NEW JERSEY LAW SMALL—PROFITS ARE GREAT AND STANDARD’S CONTROL OF OIL BUSINESS IS ALMOST ABSOLUTE—STANDARD OIL COMPANY ESSENTIALLY A REALISATION OF THE SOUTH IMPROVEMENT COMPANY’S PLANS—THE CRUCIAL QUESTION NOW, AS ALWAYS, IS A TRANSPORTATION QUESTION—THE TRUST QUESTION WILL GO UNSOLVED SO LONG AS THE TRANSPORTATION QUESTION GOES UNSOLVED—THE ETHICAL QUESTIONS INVOLVED	Pages [2256]–2292
APPENDIX	Pages [2293]–2396
INDEX	Pages [2397]–2409

LIST OF ILLUSTRATIONS

SKETCH OF JOHN D. ROCKEFELLER		[Frontispiece 2]
	A sketch from life by George Varian, made in Cleveland, October, 1903.
		FACING PAGE
PORTRAIT OF ALANSON A. SUMNER		[2004]
	Prominent supporter of the Tidewater Pipe Company, still active in its counsels.
PORTRAIT OF HENRY HARLEY		[2004]
	President of the Pennsylvania Transportation Company. Projector of the first seaboard pipe line.
PORTRAIT OF SAMUEL VAN SYCKEL		[2004]
	The first successful pipe line for gathering and transporting oil was completed by Mr. Van Syckel in 1865.
PORTRAIT OF GENERAL HERMAN HAUPT		[2004]
	Civil Engineer for the first and second pipe lines projected to the seaboard.
PORTRAIT OF BYRON D. BENSON		[2012]
	The first president of the Tidewater Pipe Company.
PORTRAIT OF DAVID K. McKELVY		[2012]
	The successor of Mr. Benson as president of the Tidewater.
PORTRAIT OF MAJOR ROBERT E. HOPKINS		[2012]
	Treasurer of the Tidewater from its organization until his death in 1901.
PORTRAIT OF SAMUEL Q. BROWN		[2012]
	The present president of the Tidewater, successor to Mr. McKelvy.
PORTRAIT OF JOHN D. ROCKEFELLER IN 1880		[2032]
	From a photograph by Sarony.
PORTRAIT OF WILLIAM C. SCOFIELD		[2068]
	Senior member of the firm of Scofield, Schurmer and Teagle, of Cleveland. Plaintiff in important suits against Lake Shore Railroad for freight discriminations.
PORTRAIT OF DANIEL SCHURMER		[2068]
	Associate of Mr. Scofield and Mr. Teagle in the war on railroad rebates which the firm waged for nearly twenty years.
PORTRAIT OF JOHN TEAGLE		[2068]
	Independent refiner of Cleveland, Ohio, prominent in struggle against freight discriminations by the railroads.
PORTRAIT OF CHARLES B. MATTHEWS		[2068]
	Independent refiner of Buffalo. Plaintiff in “Buffalo case,” where members of the Standard Oil Company were indicted for conspiracy.
BURST IN A PIPE LINE		[2076]
BLEACHING TANK		[2092]
CONSTRUCTING AN IRON TANK FOR STORING OIL		[2092]
OIL AGITATORS		[2092]
FIVE-BARREL STILL USED IN THE FIFTIES IN DISTILLING CRUDE OIL AS A LUMINANT		[2092]
PORTRAIT OF JOHN D. ROCKEFELLER		[2120]
	By Eastman Johnson.
PORTRAIT OF DAVID K. WATSON		[2142]
	Attorney-General of Ohio from 1887 to 1891. Mr. Watson brought suit against the Standard Oil Company in May, 1890, in the Supreme Court of Ohio.
PORTRAIT OF FRANK S. MONNETT		[2142]
	Attorney-General of Ohio from 1895 to 1899. Mr. Monnett brought suit against the Standard Oil Company in 1897 in the Supreme Court of Ohio.
PORTRAIT OF LEWIS EMERY, JR.		[2142]
	Independent oil operator and refiner. Leader in movement for free pipe-line bill and anti-discrimination laws. Founder of the United States Pipe Line.
PORTRAIT OF GEORGE RICE		[2142]
	Plaintiff in numerous cases brought against the Standard Oil Company. Prominent independent witness in various State and congressional investigations.
GROUP OF CLEVELAND CITIZENS		[2146]
	Who called on John D. Rockefeller at his residence, “Forest Hill,” on July 25, 1896, to thank him for his gift of park lands to the city. Mr. Rockefeller is in the centre of the group, the late Senator Marcus A. Hanna in the right lower corner, and Governor Myron T. Herrick in the centre of the top row.
MICHAEL MURPHY		[2164]
	The present President of the Pure Oil Company.
DAVID KIRK		[2164]
	The first President of the Pure Oil Company.
JAMES W. LEE		[2164]
	The chief counsel of the Pure Oil Company. President of the company from 1897 to 1901.
THOMAS W. PHILLIPS		[2164]
	A leader in the independent movement, which resulted in the Pure Oil Company.
LAYING A SIX-INCH PIPE LINE, CAIRO, WEST VIRGINIA		[2182]
A TYPICAL OIL FARM OF THE EARLY DAYS		[2216]
PORTRAIT OF S. C. T. DODD		[2232]
	Chief counsel of the Standard Oil Company. Framer of the Trust agreement of 1882.
PORTRAIT OF JABEZ A. BOSTWICK		[2232]
	From 1872 to 1892 the chief oil buyer of the Standard Oil Company.
PORTRAIT OF JOSEPH SEEP		[2232]
	Head of the “Seep Agency,” through which all oil transported by the Standard Oil Company goes.
PORTRAIT OF DANIEL O’DAY IN 1872		[2232]
	Vice-president of the National Transit Company, the pipe-line company owned by the Standard Oil Company.
PORTRAIT OF JOHN D. ROCKEFELLER		[2256]
	From a photograph by Allen Ayrault Green, taken about 1892.
A 25,000–BARREL TANK OF OIL IN FLAMES		[2280]

THE HISTORY OF

THE STANDARD OIL COMPANY

CHAPTER NINE
THE FIGHT FOR THE SEABOARD PIPE-LINE

PROJECT FOR SEABOARD PIPE-LINE PUSHED BY INDEPENDENTS—TIDEWATER PIPE COMPANY FORMED—OIL PUMPED OVER MOUNTAINS FOR THE FIRST TIME—INDEPENDENT REFINERS READY TO UNITE WITH TIDEWATER BECAUSE IT PROMISES TO FREE THEM FROM RAILROADS—THE STANDARD FACE TO FACE WITH A NEW PROBLEM—DAY OF THE RAILROADS OVER AS LONG DISTANCE TRANSPORTERS OF OIL—NATIONAL TRANSIT COMPANY FORMED—WAR ON THE TIDEWATER BEGUN—PLAN TO WRECK ITS CREDIT AND BUY IT IN—ROCKEFELLER BUYS A THIRD OF THE TIDEWATER’S STOCK—THE STANDARD AND TIDEWATER BECOME ALLIES—NATIONAL TRANSIT COMPANY NOW CONTROLS ALL PIPE-LINES—AGREEMENT ENTERED INTO WITH PENNSYLVANIA RAILROAD TO DIVIDE THE BUSINESS OF TRANSPORTING OIL.