THE STRIPES MAY GO ON YET, IF YOU DON’T WATCH OUT.
Their report was such as to justify legal action on the part of the Department of Justice, and after the information had been carefully examined by the President and the Cabinet, the bill in equity was filed. The recital of alleged facts in this petition, is virtually a history of the Standard Oil Company from its infancy to the present time. It sets forth that the Standard Oil Company, of New Jersey, with its seventy allied corporations and limited partnerships, produces, transports and sells about 90 per cent of the refined oil products used in this country and about the same proportion of the refined oil exported from the United States; that this practical monopoly has been procured by a course of action which, beginning in 1870, has continued, in the main, under the same persons down to the present time; that these persons now surviving are John D. Rockefeller. William Rockefeller, Henry H. Rogers, Henry M. Flagler, John A. Archbold, Oliver H. Payne and Chas. M. Pratt; that their design throughout has been the suppression of competition in the production, transportation and sale of refined oil and to obtain a monopoly therein; that between 1870 and 1882 the purpose was effected by agreements between many persons and corporations engaged in this business; that in the latter year the business was made certain by vesting in nine trustees, including five of the persons named above, sufficient stock in the thirty-nine corporations then concerned to suppress competition among themselves; that this plan was acted upon until it was declared illegal by the Supreme Court of Ohio, in an action against the Standard Oil Company of Ohio, one of said corporations, in 1892; that during the seven years following, the same individual defendants, as a majority of the liquidating trustees, were pretending to liquidate the trust, but as a matter of fact were managing all the corporations in the same old way and were exercising the same control over them; that in 1899 the individual defendants increased the capital stock of the Standard Oil Company, of New Jersey, from $10,000,000 to $110,000,000; that the company was then a producing and selling corporation, and that they added to its functions the power of purchasing stock in other companies, and practically all the powers exercised by the trustees under the unlawful agreement of 1882; that the Standard Oil Company, of New Jersey, then taking the place of the trustees, acquired all the stock of the corporations theretofore held and controlled by the trusts, paying therefor by the issue of its own shares in exchange; that the President of the Board of Trustees became the president of the Standard Oil Company, of New Jersey, that the trust assumed the direction of the business of the Standard Oil Company, of New Jersey, and has continued it ever since.
After this summary of Standard Oil history, the petition goes on to say that the purpose and effect of the corporation as a holding company was precisely the same as the purpose and effect of the appointment of the trustees previously referred to, namely: to suppress competition between the corporations and limited partnerships, whose stock was first held by the trusts and then by the Standard Oil Company, of New Jersey; that by the foregoing methods, and by securing railroad rates which discriminated in favor of the corporations whose stock was held by the holding company, the latter was enabled to secure a monopoly in large sections of the country, with the result that prices to consumers are much higher in those sections than in sections where competition, to some extent, prevails.
The bill further sets forth that from 1882 to 1895 the Standard paid dividends amounting to $512,000,000 on a professed valuation of a trifle less than $70,000,000, besides accumulating a surplus “of unknown magnitude,” and that for the last nine years the dividends have run from 33 to 48 per cent.
Almost on the very day that this bill was filed the Standard declared a quarterly dividend which aggregated $10,000,000.
In filing this bill Attorney General Moody said that the question of criminal prosecution would be left “for future consideration.”
Criminal Prosecution.
Whatever may be the disposition of the Attorney General of the United States in regard to the criminal prosecution of Standard Oil officers and directors, there seems to be no doubt as to the attitude of Prosecutor David, of the state of Ohio. The grand jury of Hancock county has returned an indictment against the Standard Oil Company, of Ohio, and against John D. Rockefeller, president of the Standard Oil Company, of New Jersey, as well as three directors of the subsidiary corporation in the Buckeye state. Previous proceedings against the same defendants, taken on an information brought before the Probate Court of that state, are now being held up, pending the decision of the higher court as to the jurisdiction of the court below. The present indictments by the grand jury are based on the evidence adduced in the previous trial. Conviction would subject the defendant company to a maximum fine of five thousand dollars, which, however, it is believed, may be imposed for ever day covered in the indictments. Mr. Rockefeller and the directors of the subsidiary company would be subject to the same fine and to imprisonment for a period of from six months to one year. More recently Prosecutor David is quoted as expressing the belief that he has sufficient evidence to bring not only Mr. Rockefeller, but all the highest officials of the controlling company before the Ohio courts.
In the meantime he has taken steps to secure an alternative writ of mandamus against the Buckeye Pipe Line Company, said to be owned by the Standard Oil Company and operated in such a manner as to stifle competition, requiring that the defendant provide for the public equal and just facilities and demanding that they fix a schedule of rates.