When, in 1879, an effort was made to establish a pipe line from the oil regions to the seaboard, nothing was left undone by the trunk lines to thwart the enterprise. The new company finally succeeded in making connection with a railway which had no part in the pool, and there was some hope that under this arrangement competition might at least be maintained at some points. The Standard Company again appealed to the trunk lines to protect it against injury by competition and obtained from them a special rate of 20 cents per barrel, which rate was even reduced to 15 cents per barrel two months later. Against such a rate it was impossible to compete, and after a short struggle the new line found itself compelled to sell its works to the Standard.
To crown its monopoly, the Standard Oil Company finally bought of the New York Central and Erie roads their terminal facilities for the transportation of oil, and thereby made it virtually impossible for them to transport oil for any of its few remaining competitors. Mr. Josiah Lombard, part owner of the New York refinery, stated in 1879 before the investigating committee of the legislature of New York that in 1878 he had requested the Erie Company to transport for him 100 cars of crude oil from Carrollton to New York; that he had called upon Mr. Vilas, the general freight agent of the company, in person, but had never been able to obtain the cars, though the oil had been held in Carrollton three or four months ready to be loaded. This gentleman also testified that he had found it impossible to obtain cars from the New York Central, and that the company's general freight agent had informed him that the road did not own and could not furnish any oil cars.
After the Standard Oil Company had secured control of the various pipe lines of the oil regions, it frequently lowered the price of crude oil to such an extent as to make its production unprofitable. It even refused to buy oil, basing its refusal upon the ground that the railroad companies failed to furnish cars for its transportation. When the well-owners had their tanks filled, they had the choice to let the oil run away or to be at the expense of closing up their wells. In one instance, however, when their ruse threatened to cause a riot, several hundred cars were brought to the wells within a few hours.
The Standard Oil Trust, not satisfied with the monopoly of the wholesale trade, even tried in places to control the retail trade by peddling oil at private houses. This method of destroying competition was chiefly resorted to where independent dealers obtained their supply by a water route.
That many of the deeds of the Standard are dark is evident from the fact that its members, when summoned by the Hepburn committee, declined to testify, lest their testimony be used to convict them of crime. Officials of the trust have bribed or attempted to bribe employes of rival firms, for the purpose of ruining their business. By its peculiar methods the company has been successful in courts of justice and legislative halls, and has enjoyed an impunity for its conspiracy against the public that is without precedent in America. It has accumulated a capital of more than $100,000,000, and it is even claimed that for years its annual dividends have exceeded in amount the capital actually invested. This is not at all strange when it is considered that they have levied upon the producers, consumers and transporters alike. Mr. Cassat testified before the New York investigating committee that in eighteen months the railroads had paid the Standard in rebates no less than $10,000,000. And the very payment of these enormous rebates enabled the Standard to decrease the price of oil to the producer and to increase it to the consumer.
It is claimed by the defenders of the Standard monopoly that under the trust the price of petroleum has been constantly decreased to the consumer. That the price of kerosene is lower now than it was fifteen years ago is undoubtedly true, but the reductions were brought about not by the trust, but in spite of the trust. The price now maintained is an unnatural one. The Standard Oil Company never lowered the price of its oil except when compelled to do so by competition. The largely increased output of crude oil, the improved methods of refining, the greatly lowered cost of transportation would have lowered the price of coal oil without the philanthropy of the Standard Oil Company. Iron, steel, calico, woolen goods and a thousand other commodities have within almost the same period suffered much larger reductions than coal oil. But even if the Standard monopoly had voluntarily lowered the price of its products, the American people could never approve of its methods. They can never be made to believe that the end sanctifies the means, especially when those means are railroad favors, secret combinations, bribery, intimidation and lawless arrogance.
Many other interesting cases might be given. The Southern Pacific Railway Company, for instance, owns nearly all of the railways of California, and enjoys at the present time almost a complete monopoly of the transportation business of that State and much more of the Pacific Coast. Perhaps no set of managers would be more considerate of the people's rights in the absence of legal restraint than those in charge of this company, yet there is not a business man on the Pacific Coast who comes in contact with this company who does not realize and feel the power of its iron hand, unless it be those who for various reasons are recipients of its special favors. It has become notorious that the legislature, Board of Railroad Commissioners and some of the judges of the courts of that State are as servile to the demands of this railway company as are its own employes.
The railway company is a closely organized body of shrewd, active men, while those who furnish business for it are not organized, and they will never be able to properly protect their own interests until they control the machinery of their State government.