Mr. Rockefeller handled his critics with a skill bordering on genius. He ignored them. To see them, to answer them, called attention to them. He was too busy to answer them. “We do not talk much—we saw wood.” This attitude of serene indifference is supremely wise. It belittles the critic and it gives the outsider who watches the game a feeling that a serenity so high must come from an impregnable position. There is no question but many a mouth opened to testify against the Standard Oil Company has been closed by Mr. Rockefeller’s policy of silence. Only the few irreconcilables withstood his sphinx-like attitude, and yearly, from the compromising of 1880, these warnings and accusations were louder and more fierce. Probably the greatest trial Mr. Rockefeller has ever had has come from the persistency with which the few malcontents kept him before the public. They interfered with two of his great principles—“hide the profits” and “say nothing.” It was they who had ruined the South Improvement Company; it was they who had indicted him for conspiracy and compelled him to compromise in 1880. It was they who now, after the splendid pipe-line organisation was completed and his market machinery was in order, kept up their agitation and their cursing. Their work began to tell. The feeling grew that the Standard Oil Company, or Trust, as it was by this time generally called, must be looked into. Even those who, dazzled by Mr. Rockefeller’s achievement, were inclined to overlook its ethical side and to refuse to consider to what aggregation of power and abuse it might lead, began to feel that it would be quite as well to have the matter thrashed out, to have it settled once for all, whether the thing had been so bad in its making and was so dangerous in its tendencies as the “oil-shriekers” pretended. In the House of Representatives, when the question of ordering an investigation of trusts by the Committee on Manufactures was up in 1887, the liveliest concern was shown as to whether the Standard Oil Company, “the most important case” of all, would escape. More than one member asked to be assured before consenting to the investigation that the Standard would be put on the rack. The same interest was shown in the Senate of New York State, where an investigation was ordered for February, 1888. It was certain indeed now that Mr. Rockefeller would not be allowed much longer to work in the dark. He was to be dragged into the open, much as he might deplore it, to explain what his trust really was, to prove to a suspicious and hostile public that he had a right to exist.
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.
There was no characteristic of Mr. Rockefeller and his great corporation which from the beginning had been more exasperating to the oil world than the secrecy with which operations were conducted. The plan of the South Improvement Company had only been revealed to those who signed an agreement to keep secret all transactions they might have with it. The purchase in 1874 and 1875 by the Standard Oil Company of Lockhart, Frew and Company of Pittsburg, of Warden, Frew and Company of Philadelphia, and of Charles Pratt and Company of New York was so thoroughly concealed that Mr. Rockefeller, five years after it occurred, dared make an affidavit that it had never occurred![[120]] Men who entered into running arrangements with Mr. Rockefeller were cautioned “not to tell their wives,” and correspondence between them and the Standard Oil Company was carried on under assumed names! Whenever the subject of the relations between the various companies came up in a lawsuit or an investigation, a candid and straightforward answer was always avoided by both Mr. Rockefeller and the men known to be associated with him in some way. For instance, in 1879, when H. H. Rogers was before the Hepburn Committee, an effort was made to find out what relation the firm of Charles Pratt and Company, of which he was a member, sustained to the Standard Oil Company. Mr. Rogers’s testimony was a masterpiece of good-natured evasion,[[121]] and all that the examiners could get, though they returned again and again to the inquiry, was that Charles Pratt and Company worked in “harmony” with the Standard Oil Company.
When ex-Governor Nash of Ohio was investigating the relations of the Cleveland and Marietta Railroad and the National Transit Company, try his best he could not find out anything definite. In his report Mr. Nash said: “I have purposely referred to the parties who entered into this arrangement with Receiver Pease and his freight agent, J. E. Terry, as the parties represented by O’Day and Scheide, for the reason that I have not been able to ascertain who or what the parties are.” That they were officers of the National Transit Company he had evidence, but what relation had the National Transit Company to the Standard Oil Company? Was it a part of it? Mr. Nash was unable to find from Mr. O’Day, closely as he might question him.[[122]]
In the Buffalo case, when John D. Rockefeller was on the stand, he was put through a questioning in regard to the relations of the persons concerned in the suit to the Standard Oil Trust, whose existence he admitted. Mr. Rockefeller answered all the questions his lawyers would allow, but at the end the plaintiffs had gained little or nothing, and there was a strong impression, from the attitude of his lawyers rather than from that of Mr. Rockefeller, that an effort was making to conceal the nature of the agreement or charter or whatever it was under which the companies involved were working. Naturally enough this attitude inspired resentment and aggravated the feeling that this secrecy meant evil-doing. When the epidemic of trust investigation broke out in 1888, and the Standard Oil Trust was brought up for examination, there was a general public demand to have the matter cleared up. The first investigation of importance took place in February, 1888, in New York City, and by the direction of the Senate of New York State. A list of more than a score of trusts was in the hands of the committee, and, with the limited time at their disposal, it was certain that they could not look into more than half a dozen. There seems to have been no hesitation about including the Standard Oil Trust. “This is the original trust,” wrote the committee. “Its success has been the incentive to the formation of all other trusts or combinations. It is the type of a system which has spread like a disease through the commercial system of this country.”
There were several things the committee wanted to know about the Standard Oil Trust, and its president was summoned for examination. (1) What was it? Was it an organisation recognised by any law of the land? Long ago men had decided that partnerships, corporations, companies, in which men united to do business, must be regulated by law and subjected to a certain amount of publicity, if the public good was to be protected. Was the Standard Oil Trust within or without the law? (2) By the testimony of its own members, in other years the Standard Combination controlled from eighty to ninety per cent. of the oil business of the country. Was this supremacy due in any measure to special privileges, such as discrimination in railroad rates? (3) Was its power used to manipulate production and prices, and to prevent men outside entering the oil business?
It was to learn these things that the commission summoned Mr. Rockefeller. Flanked by Joseph H. Choate, present Ambassador to the Court of King Edward and the most eminent lawyer of the day, and S. C. T. Dodd, a no less able if a less well-known lawyer, Mr. Rockefeller submitted himself to his questioners. In no case where he has appeared on the stand can his skill as a witness be studied to better advantage. With a wealth of polite phrases—“You are very good,” “I beg with all respect”—Mr. Rockefeller bowed himself to the will of the committee. With an air of eager frankness he told them nothing he did not wish them to know. The committee had a desire to begin at the beginning. It evidently had heard that a short-lived organisation, called the South Improvement Company, had given Mr. Rockefeller his whip-hand in the oil business as far back as 1872, enabling him in three months’ time to raise his daily capacity as a refiner from 1,500 to 10,000 barrels, and so they asked Mr. Rockefeller:
Q. There was such a company?
A. I have heard of such a company.
Q. Were you not in it?
A. I was not.[[123]]
It is a perfectly well-known fact that Mr. Rockefeller owned 180 shares in the South Improvement Company, of which he was a director; that, when a public uprising caused the destruction of the company, he was one of the two men who tried to save it; also that the Standard Oil Company of Ohio was the only concern which profited by the short-lived conspiracy.