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+ margin: 0; + font-size: 100%; +} + +/* remove italic styling, e.g. on a <cite> */ +.nonitalic { font-style: normal; } + </style> +</head> +<body> +<div style='text-align:center'>*** START OF THE PROJECT GUTENBERG EBOOK 78460 ***</div> + +<div class="transnote"> +<p class="center"><strong>Transcriber’s Note</strong></p> + +<p> +Due to damage to the original book cover, this book contains a restored +cover image created by the transcriber. The new cover art included with +this eBook is granted to the public domain. +</p> +</div> + +<p><span class="pagenum" id="Page_1">[Pg 1]</span></p> + + +<p class="center tp-xl"> +THE GREAT OIL OCTOPUS +</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum"><a id="Page_2"></a><a id="Page_3"></a>[Pg 3]</span></p> + +<h1><span class="tp-s">THE</span><br> +GREAT OIL OCTOPUS</h1> +</div> + +<p class="p2 center tp-s">BY</p> + +<p class="center tp-l">“TRUTH’S” INVESTIGATOR</p> + +<p class="p4 center"><span class="tp-l gesperrt">T. FISHER UNWIN</span><br> +LONDON: ADELPHI TERRACE<br> +LEIPSIC: INSELSTRASSE 20<br> +<span class="tp-s">1911</span> +</p> + +<p><span class="pagenum" id="Page_4">[Pg 4]</span></p> + + +<p class="p2 center tp-s">(<i>All rights reserved.</i>)</p> + + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> + +<p><span class="pagenum" id="Page_5">[Pg 5]</span></p> + + + <h2 class="nobreak" id="PREFACE"> + PREFACE + </h2> +</div> + + +<p class="drop-cap"><span class="smcap uppercase">The</span> appearance in <cite>Truth</cite> of the articles +which form the greater portion of this +volume has been followed by a wish expressed +in many quarters that they might be republished +in a more permanent and convenient form. The +suggestion has been adopted. The articles have +been carefully revised, some additional matter +has been inserted, and it is hoped that they will +form a useful contribution to contemporary +social and commercial history. The late <abbr>Mr.</abbr> +Henry D. Lloyd and Miss Ida M. Tarbell have +each published exhaustive investigations of the +Standard Oil Trust’s proceedings in the United +States, and further information is available in +the records of the Missouri litigation, and—in +regard to the flash-point scandal—in British Blue-books. +Hitherto, however, there has been lacking +a complete conspectus of all the many +branches of this worldwide subject. One or +other tentacle of the Octopus has been described +in detail, but in this volume an attempt is made +<span class="pagenum" id="Page_6">[Pg 6]</span>for the first time briefly to describe them all. +It has been necessary to exclude any reference +to many other commercial enterprises—such as +“Amalgamated Coppers”—in which the heads +of the Oil Trust individually figure in order to +concentrate attention on that combination in +the oil trade which first brought them together, +which set the example to so many imitators in +America and Europe, and exhibits most clearly +their business methods and morals in two +hemispheres.</p> + + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> + +<p><span class="pagenum" id="Page_7">[Pg 7]</span></p> + + + <h2 class="nobreak" id="CONTENTS"> + CONTENTS + </h2> +</div> + +<table class="toc"> + +<tr> +<td class="tdr tp-xs"><abbr title="CHAPTER">CHAP.</abbr></td> +<td class="tdl"></td> +<td class="tdr tp-xs">PAGE</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="1">I.</abbr></td> +<td class="tdl"><a href="#CHAPTER_I">THE MEN AND THE MONOPOLY</a></td> +<td class="tdr tdb">9</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="2">II.</abbr></td> +<td class="tdl"><a href="#CHAPTER_II">THE SECRET REBATE</a></td> +<td class="tdr tdb">25</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="3">III.</abbr></td> +<td class="tdl"><a href="#CHAPTER_III">THE RAILROADS AND THE PIPE LINES</a></td> +<td class="tdr tdb">43</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="4">IV.</abbr></td> +<td class="tdl"><a href="#CHAPTER_IV">THE BIRTH OF THE TRUST</a></td> +<td class="tdr tdb">63</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="5">V.</abbr></td> +<td class="tdl"><a href="#CHAPTER_V">BRIBERY: THE ARCHBOLD LETTERS</a></td> +<td class="tdr tdb">75</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="6">VI.</abbr></td> +<td class="tdl"><a href="#CHAPTER_VI">ARSON AND ESPIONAGE</a></td> +<td class="tdr tdb">89</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="7">VII.</abbr></td> +<td class="tdl"><a href="#CHAPTER_VII">THE “BOGUS INDEPENDENTS”</a></td> +<td class="tdr tdb">105</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="8">VIII.</abbr></td> +<td class="tdl"><a href="#CHAPTER_VIII">THE STANDARD’S “INVENTIONS”</a></td> +<td class="tdr tdb">123</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="9">IX.</abbr></td> +<td class="tdl"><a href="#CHAPTER_IX">THE TRUST IN AMERICA AND ASIA</a></td> +<td class="tdr tdb">137</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="10">X.</abbr></td> +<td class="tdl"><a href="#CHAPTER_X">RUSSIA, GALICIA, AND ROUMANIA</a></td> +<td class="tdr tdb">155</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="11">XI.</abbr></td> +<td class="tdl"><a href="#CHAPTER_XI">THE TRUST IN GERMANY, SWEDEN, AND FRANCE</a></td> +<td class="tdr tdb">171</td> +</tr> + +<tr> +<td class="tdr tdt"><span class="pagenum" id="Page_8">[Pg 8]</span><abbr title="12">XII.</abbr></td> +<td class="tdl"><a href="#CHAPTER_XII">THE TRUST’S “TIED HOUSES” IN ENGLAND</a></td> +<td class="tdr tdb">189</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="13">XIII.</abbr></td> +<td class="tdl"><a href="#CHAPTER_XIII">THE FLASH-POINT SCANDAL</a></td> +<td class="tdr tdb">207</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="14">XIV.</abbr></td> +<td class="tdl"><a href="#CHAPTER_XIV">THE ROCKEFELLERS AND THE HOME OFFICE</a></td> +<td class="tdr tdb">217</td> +</tr> + +<tr> +<td class="tdr tdt"><abbr title="15">XV.</abbr></td> +<td class="tdl"><a href="#CHAPTER_XV">THE LUBRICATING OIL TRADE</a></td> +<td class="tdr tdb">237</td> +</tr> + +<tr> +<td></td> +<td class="tdl"><a href="#Index">INDEX</a></td> +<td class="tdr">251</td> +</tr> + +</table> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum" id="Page_9">[Pg 9]</span></p> + <h2 class="nobreak" id="CHAPTER_I"> + THE MEN AND THE MONOPOLY + </h2> + +<p><span class="pagenum" id="Page_10">[Pg 10]</span></p> +<blockquote class="p2"> +<p>“The oil business belongs to us.”</p> + +<p class="right pad1"> + <span class="smcap">John D. Rockefeller</span> <i>to an independent refiner</i>. +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_11">[Pg 11]</span></p> + +<p class="p2 center tp-xl">THE GREAT OIL OCTOPUS</p> + +<p class="p2 center tp-l">CHAPTER <abbr title="1">I</abbr></p> + +<p class="center">THE MEN AND THE MONOPOLY</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">There</span> has lately arisen at Queen Anne’s +Gate, on the site of a fine Victorian +mansion demolished to make room for it, a +gigantic palace, steel-framed in the up-to-date +style, clad in Portland stone, towering seven +stories high above the neighbouring buildings, +looking down upon Buckingham Palace on the +one side of the park, and standing on pretty +nearly equal terms with the Government Offices +and the Houses of Parliament on the other. +I was interested to learn that it has been +erected for the accommodation of the Anglo-American +Oil Company, which is the English +branch of the famous Standard Oil Trust of the +United States. There were even people who +suggested that in view of the action of the +<span class="pagenum" id="Page_12">[Pg 12]</span>United States Government against the Standard +Oil Trust, still pending in the American Courts, +and the influence of <abbr>Mr.</abbr> Roosevelt with his +“trust-busting” aspirations, it may possibly be +in contemplation to transfer the headquarters +of the petroleum empire from the present offices +of the Standard Oil Trust in Broadway, New +York, to Queen Anne’s Gate, Westminster. As +Constantine transferred the capital of the +Cæsars from Rome to Byzantium, so these seers +picture <abbr>Mr.</abbr> John D. Rockefeller removing his +seat of government eastward from New York +to London.</p> + +<p>Time alone can test the value of this prophecy. +Sufficient unto the day is the evil thereof. The +new Aladdin’s Palace that has sprung up in +Birdcage Walk is an eloquent manifestation +of the growing wealth and influence of the +Great Oil Octopus in this country. That is a +cogent reason why the public throughout the +United Kingdom should understand without +loss of time what this Trust is, and what reason +there is for men to be afraid of it. Echoes +reach us of the iniquities charged against <abbr>Mr.</abbr> +Rockefeller and his colleagues in America, they +circulate vaguely about the country but make +little impression. On the other hand, strenuous +efforts to convey a contrary impression have +been made with considerable skill. The Trust +<span class="pagenum" id="Page_13">[Pg 13]</span>includes in its scientific organisation an efficient +Press department, and fights with the pen as +well as with other weapons. I have therefore +made it my business to undertake an exhaustive +investigation of the history of the Trust and its +operations, not in America alone, but in Europe +and Asia. There is no great secret about the +subject. But the materials are scattered and +difficult of access. A good deal of new light +has been thrown upon the history of the concern +and its ramifications in the United Kingdom +and other countries in the course of the +great action of the United States Government +against the Trust in the State of Missouri, +referred to a moment ago. In the Standard +Oil Trust we have exhibited the highest perfection +yet achieved by a ring of capitalists +in the art of exploiting a great industry. The +machinery that has been created for this purpose +is a masterpiece of human ingenuity. The +methods by which it has been employed seem +to express the last word in craft, subtlety, and +unscrupulousness, as employed for the purpose +of amassing wealth. The Trust is consequently +quite a fascinating subject for inquiry and +reflection, apart from the direct interest +which we every one of us have in its +operations.</p> + +<p>The indictment against the Standard, put +<span class="pagenum" id="Page_14">[Pg 14]</span>briefly, is that its founder, <abbr>Mr.</abbr> John D. Rockefeller, +organised in 1870 a combination of +American oil refiners, who then controlled +less than 10 per <abbr>cent.</abbr> of the refining business, +and that he secured from the United States +railroads secret rebates on the carriage of +their oil, and even larger rebates on oil carried +for their competitors. The result was that it +became the interest of the railroads to discourage +the shipments of oil by refiners outside +the Trust. Armed with this weapon of the +secret rebate, the Standard Oil Trust was able +to undersell its competitors and to force them +to sell out at heavy loss. In ten years it had +obtained by those methods the control of 90 +per <abbr>cent.</abbr> of the American oil refining business, +and being almost the sole buyer, it was able +to dictate prices to the oil producers at the +wells. It has since maintained its monopoly +by elaborate espionage of its competitors’ business, +by running ostensibly “independent” oil +companies to take advantage of the anti-Trust +feeling, and by obtaining up to the present +day unfair railway discriminations in place of +the secret rebate. It maintains an expensive +staff of lobbyists at the Legislative Chambers +of many lands, and it has constantly adopted +the methods of bribery (direct and indirect) +in dealing with politicians and publicists. It +<span class="pagenum" id="Page_15">[Pg 15]</span>has always aimed, not at fair business competition, +but at absolute monopoly.</p> + +<p>The principal figures in this great combination +deserve a passing word of introduction. +There is first its founder, its creator, <abbr>Mr.</abbr> John +D. Rockefeller, who was born on a farm in +New York State in 1839. His father, who was +of Scottish extraction, moved to Ohio, and in +1855 John Davison Rockefeller went into the +town of Cleveland to earn his living as a junior +clerk at four dollars a week. He was clever, +industrious, steady and frugal, and he went +into the produce commission business with a +young Englishman named M. B. Clark. In +1862 he met another Englishman, Samuel +Andrews, who was a mechanical genius, and +had devised improved processes in the infant +oil-refining industry. They joined forces; +Andrews looked after the refining and Rockefeller +attended to the pushing of the business, +the buying and selling. The firm grew and +extended at first by legitimate, and then by +illegitimate, methods, and now <abbr>Mr.</abbr> Rockefeller +has convinced himself in his retirement that +he has been the agent of Providence, and that +his business career entitles him to moralise +to Sunday schools and Bible classes. “I hope +you young men are all careful. I believe it +is a religious duty to get all the money you +<span class="pagenum" id="Page_16">[Pg 16]</span>can; get it fairly, religiously, and honestly—and +give away all you can.” So spoke <abbr>Mr.</abbr> +Rockefeller to his son’s Bible class in New +York on March 27, 1897, and it gives a complete +picture of his life. The combination of +Jekyll and Hyde is well brought out in Miss +Ida M. Tarbell’s “<cite class="nonitalic">History of the Standard Oil +Company</cite>,” the ablest investigation ever made +of the American activities of this combination. +Miss Tarbell says:—</p> + +<blockquote> +<p><abbr>Mr.</abbr> Rockefeller was “good.” There was no more faithful +Baptist in Cleveland than he. Every enterprise of that Church +he had supported liberally from his youth. He gave to its +poor. He visited its sick. He was simple and frugal in his +habits. He never went to the theatre, never drank wine. He +gave much time to the training of his children, seeking to +develop in them his own habits of economy and charity. Yet +he was willing to strain every nerve to obtain for himself +special and unjust privileges from the railroads which were +bound to ruin every man in the oil business not sharing them +with him. Religious emotions and sentiments of charity, +propriety, and self-denial seem to have taken the place in +him of notions of justice and regard for the rights of others.</p> +</blockquote> + +<p class="noindent">In a character sketch of <abbr>Mr.</abbr> Rockefeller which +she contributed to <cite>McClure’s Magazine</cite> in +January, 1905, Miss Tarbell tells this story:—</p> + +<blockquote> +<p>Even in his own Church men say, “He’s a good Baptist, +but look out how you trade with him.” “I have been in +business with John D. Rockefeller for thirty-five years,” one +<span class="pagenum" id="Page_17">[Pg 17]</span>of the ablest and richest and earliest of <abbr>Mr.</abbr> Rockefeller’s +colleagues once told me in a moment of forgetfulness, “and +he would do me out of a dollar to-day; that is,” he added, +with a sudden reversion to the school of cant in which he +had been trained—“that is, if he could do it honestly.”</p> +</blockquote> + +<p class="noindent">In this picture <abbr>Mr.</abbr> <abbr title="William">Wm.</abbr> Rockefeller hardly +counts. The next figure in the gallery of oils +is that of the late <abbr>Mr.</abbr> Henry H. Rogers, who +died a few months ago—the “Iron Man” of +the Standard directorate. Writing in Chapter +<abbr title="3">III.</abbr> of “<cite class="nonitalic">Frenzied Finance</cite>” in <cite>Everybody’s +Magazine</cite> for August, 1904, <abbr>Mr.</abbr> T. W. Lawson, +who knew him well, thus described <abbr>Mr.</abbr> +Rogers:—</p> + +<blockquote> +<p>Whenever the bricks, cabbages, or aged eggs were being presented +to “Standard Oil,” always was Henry H. Rogers’s +towering form and defiant eye in the foreground where they +flew thickest. Whenever Labour howled its anathemas at +“Standard Oil” and the Rockefellers and other stout-hearted +generals and captains of this band of merry moneymakers +would begin to discuss conciliation and retreat, it was always +Henry H. Rogers who fired at his associates his now famous +panacea for all opposition, “We’ll see Standard Oil in hell +before we will allow any body of men on earth to dictate how +we shall conduct our business.”</p> +</blockquote> + +<p>In another passage in “<cite class="nonitalic">Frenzied Finance</cite>” <abbr>Mr.</abbr> +Lawson wrote of him:—</p> + +<blockquote> +<p>Rogers is a marvellously able man, and one of the best +fellows living. He is considerate, kindly, generous, helpful, +<span class="pagenum" id="Page_18">[Pg 18]</span>and everything a man should be to his friends. But when it +comes to business—his kind of business—when he turns away +from his better self and goes aboard his private brig and hoists +the Jolly Roger, God help you!... He is a relentless, +ravenous creature, as pitiless as a shark, knowing no law of +God or man in the execution of his purpose.</p> +</blockquote> + +<p class="noindent">Now that <abbr>Mr.</abbr> Rogers is dead, the active +figure in the Trust is <abbr>Mr.</abbr> John Dustin Archbold, +who was originally a bitter opponent of +the Standard and its rebates. Since he joined +its circle <abbr>Mr.</abbr> Archbold has figured in two sensational +episodes. He was one of the defendants +in the charge of conspiring to blow up a rival +refinery at Buffalo, and escaped through the +judge withdrawing his case from the jury. He +was the writer of the famous letters to politicians +which <abbr>Mr.</abbr> Randolph Hearst disclosed in +the Presidential campaign of 1908.</p> + +<p>Of the rest of these men it is necessary to say +less. They were very diverse in their character. +One of them, Henry M. Flagler, was the pioneer +of the vast hotels which line the Florida coast +and make it a winter resort for rich Americans. +William T. Wardwell, the treasurer of the +Standard Oil Company, was an ardent teetotaler, +and more than once ran as Prohibitionist +candidate for the Presidency before his +connection with Standard Oil was so notorious. +Many of them were Scotch Presbyterians, but +<span class="pagenum" id="Page_19">[Pg 19]</span>the late <abbr>Mr.</abbr> Daniel O’Day, the man who faced +fierce obloquy as the manager of the Standard’s +pipe-line monopoly, was an Irish Catholic, who +died a year or two ago, leaving several millions +behind him. The younger generation is growing +old now, and sons of both John and William +Rockefeller have entered the business, carrying +on the traditions of the greatest combine on +earth.</p> + +<p>We will now proceed to trace the ramifications +of the vast organisation which these men +have built up and control all over the world. +The full list of the subsidiary companies is so +long that it is impossible and unnecessary to +print all the names. But a selection of them +will indicate the vastness and variety of the +Rockefeller interests. They are taken from the +Report of the United States Government Commissioner +of Corporations on the Petroleum +Industry (Part <abbr title="1">I.</abbr>, Table 8, <abbr title="page">p.</abbr> 84), supplemented +by one or two other unimpeachable sources of +information. The central company of this +joint-stock octopus is now the Standard Oil +Company of New Jersey, which holds large +blocks of stock in the other companies. It has +a capital of $100,000,000 of common stock and +$10,000,000 of preferred stock. Among its directors +are John D. Rockefeller, William Rockefeller, +Henry M. Flagler, John Dustin Archbold, +<span class="pagenum" id="Page_20">[Pg 20]</span>Wesley H. Tilford, Frank Q. Barstow, Charles +M. Pratt, Edward T. Bedford, Walter Jennings, +James A. Moffet, C. W. Harkness, John D. +Rockefeller, <abbr title="junior">jun.</abbr>, Oliver H. Payne, and A. C. +Bedford. This Company controls nine companies +which are principally engaged in refining +oils:—</p> + +<table class="autotable"> + +<tr> +<td></td> +<td class="tdc tp-s">Capital.<br><abbr title="Dollars">Dols.</abbr></td> +</tr> + +<tr> +<td class="tdl">Atlantic Refining Company, Pennsylvania</td> +<td class="tdr tdb">5,000,000</td> +</tr> + +<tr> +<td class="tdl">Solar Refining Company, Ohio</td> +<td class="tdr tdb">500,000</td> +</tr> + +<tr> +<td class="tdl">Standard Oil Company of California</td> +<td class="tdr tdb">25,000,000</td> +</tr> + +<tr> +<td class="tdl">Standard Oil Company of Kansas</td> +<td class="tdr tdb">1,000,000</td> +</tr> + +<tr> +<td class="tdl">Standard Oil Company of Indiana</td> +<td class="tdr tdb">1,000,000</td> +</tr> + +<tr> +<td class="tdl">Standard Oil Company of New York</td> +<td class="tdr tdb">15,000,000</td> +</tr> + +<tr> +<td class="tdl">Security Oil Company, Texas</td> +<td class="tdr tdb">3,000,000</td> +</tr> + +<tr> +<td class="tdl">Standard Oil Company of Ohio</td> +<td class="tdr tdb">3,500,000</td> +</tr> + +<tr> +<td class="tdl">Corsicana Refining Company</td> +<td class="tdr tdb">partnership</td> +</tr> + +</table> + +<p class="p2 noindent">Then comes a group of lubricating oil companies:—</p> + +<table class="autotable"> + +<tr> +<td></td> +<td class="tdc tp-s"><abbr title="Dollars">Dols.</abbr></td> +</tr> + +<tr> +<td class="tdl">Vacuum Oil Company, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">2,500,000</td> +</tr> + +<tr> +<td class="tdl">Borne, Scrymser & <abbr title="Company">Co.</abbr>, <abbr title="New Jersey">N.J.</abbr></td> +<td class="tdr tdb">200,000</td> +</tr> + +<tr> +<td class="tdl">Chesebrough Manufacturing Company, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">500,000</td> +</tr> + +<tr> +<td class="tdl">Galena Signal Oil Company, <abbr title="Pennsylvania">Penn.</abbr></td> +<td class="tdr tdb">10,000,000</td> +</tr> + +<tr> +<td class="tdl">Swan and Finch Company, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">1,000,000</td> +</tr> + +</table> + +<p>It will surprise many readers on this side to +find in this list the name of the Chesebrough +Company, which lights the London sky with the +magic word “Vaseline,” but for years that +article has paid its tribute to the Standard Oil +Trust. This story was told by <abbr>Mr.</abbr> John D. +<span class="pagenum" id="Page_21">[Pg 21]</span>Archbold in evidence in the proceedings by the +United States Government against the Trust in +the State of Missouri, where much evidence, to +which we shall hereafter have to refer, was +taken. <abbr>Mr.</abbr> Archbold then stated that the +Standard Oil Trust acquired 2,549 shares in the +Chesebrough Manufacturing Company, which +was a little more than a majority of the stock. +<abbr>Mr.</abbr> Chesebrough and the other minority stockholders +continued to carry on the business in +the old name until the present day. Vaseline, +of course, is a product of petroleum. With +regard to the Galena Signal Oil Company, which +manufactures railway lubricating and signal +oils, it is stated by the United States Commissioner +of Corporations in his Report (Part <abbr title="2">II.</abbr> +<abbr title="page">p.</abbr> <abbr title="10">x.</abbr>) that American Railway officials are compelled +to purchase the Galena products at higher +prices than their competitors ask, because of +the influence of the Standard Oil interests as +large consignors, or their power in financial +circles, exerted on the railway boards. The +Vacuum Oil Company, which also appears in +this list, became a Standard corporation as long +ago as 1879, and it was the company concerned +in the sensational prosecution of several Standard +Oil men at Buffalo for the alleged conspiracy to +blow up a rival refinery. Its speciality is the +compounding of lubricating oils.</p> + +<p><span class="pagenum" id="Page_22">[Pg 22]</span></p> + +<p>The list of companies next includes three +crude oil-producing companies and thirteen +pipe line companies. Next comes the Union +Tank Line Company, of New Jersey, capital +$3,500,000, which owns and operates railway +tank cars. Sixteen natural gas companies +follow, and then six American Marketing companies, +of which the Waters-Pierce Oil Company, +of Missouri, has had, perhaps, the most remarkable +modern history. Next we come to the +following foreign marketing companies, the +first two of which are duly recorded in the files +at Somerset House:—</p> + +<table class="autotable"> + +<tr> +<td></td> +<td class="tdc tp-s">Capital.</td> +</tr> + +<tr> +<td class="tdl">Anglo-American Oil Company (London)</td> +<td class="tdr tdb">£1,000,000</td> +</tr> + +<tr> +<td class="tdl">Vacuum Oil Company, <abbr title="Limited">Ltd.</abbr> (London)</td> +<td class="tdr tdb">£55,000</td> +</tr> + +<tr> +<td class="tdl">American Petroleum Company (Holland)</td> +<td class="tdr tdb"><abbr title="Florin">Fl.</abbr>7,850,000</td> +</tr> + +<tr> +<td class="tdl">Amerikanische Petroleum Company (Germany)</td> +<td class="tdr tdb"><abbr title="Mark">M.</abbr>200,000</td> +</tr> + +<tr> +<td class="tdl">Deutsche-Amerikanische Company (Germany)</td> +<td class="tdr tdb"><abbr title="Mark">M.</abbr>30,000,000</td> +</tr> + +<tr> +<td class="tdl">Danish Petroleum Company</td> +<td class="tdr tdb">Not stated</td> +</tr> + +<tr> +<td class="tdl">Konigsberger-Handels Company (Germany)</td> +<td class="tdr tdb"><abbr title="Mark">M.</abbr>2,300,000</td> +</tr> + +<tr> +<td class="tdl">Mannheim-Bremen Company (Germany)</td> +<td class="tdr tdb"><abbr title="Mark">M.</abbr>3,000,000</td> +</tr> + +<tr> +<td class="tdl">Korff Refinery Company (Bremen)</td> +<td class="tdr tdb"><abbr title="Mark">M.</abbr>1,500,000</td> +</tr> + +<tr> +<td class="tdl">Stettin-Amerikanische Company (Germany)</td> +<td class="tdr tdb">Not stated</td> +</tr> + +<tr> +<td class="tdl">Roumanian-American Petroleum Company</td> +<td class="tdr tdb">Lei.12,500,000</td> +</tr> + +<tr> +<td class="tdl">Société ci-devant H. Reith et Cie. (Belgium)</td> +<td class="tdr tdb"><abbr title="Franc">Fr.</abbr>1,650,000</td> +</tr> + +<tr> +<td class="tdl">Italian American Petroleum Company</td> +<td class="tdr tdb">Not stated</td> +</tr> + +<tr> +<td class="tdl">Vacuum Oil Company (Austria)</td> +<td class="tdr tdb"><abbr title="Krone">Kr.</abbr>10,000,000</td> +</tr> + +<tr> +<td class="tdl">International Oil Company (Japan)</td> +<td class="tdr tdb">Yen.12,000,000</td> +</tr> + +<tr> +<td class="tdl">Imperial Oil Company (Canada)</td> +<td class="tdr tdb">Not stated</td> +</tr> + +<tr> +<td class="tdl">Colonial Oil Company (Africa and Australasia)</td> +<td class="tdr tdb">$250,000</td> +</tr> + +</table> + +<p>But even this long list does not complete the +<span class="pagenum" id="Page_23">[Pg 23]</span>companies in this combination. It does not +include many businesses which have been +bought by the Standard and are now run as +parts of one or other of the companies given. +For example, the Devoe Manufacturing Company, +which manufactures all the tin cases in +which oil and petrol are shipped, is now absorbed +in the Standard Oil Company of New York. +Then there is the Oswego Manufacturing Company, +manufacturers of wood packing-cases and +barrels; the American Wick Manufacturing +Company, which made lamp wicks; and +Thompson, Bedford & <abbr title="Company">Co.</abbr>, who had a large +European trade in lubricating oils before their +absorption. In addition, there should be added +a number of Vacuum Oil companies which have +been established abroad, in Copenhagen, Genoa, +Paris, Hamburg, Moscow, Stockholm, Bombay, +Kobe, and Cape Town.</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum"><a id="Page_24"></a><a id="Page_25"></a>[Pg 25]</span></p> + <h2 class="nobreak" id="CHAPTER_II"> + THE SECRET REBATE + </h2> + +<p><span class="pagenum" id="Page_26">[Pg 26]</span></p> +<blockquote class="p2"> +<p>“<abbr>Mr.</abbr> Rockefeller is the victim of a money-passion which +blinds him to every other consideration in life, which is +stronger than his sense of justice, his humanity, his affections, +his joy in life, which is the one tyrannous insatiable force of +his being.”</p> + +<p class="right pad1"> + <span class="smcap">Ida M. Tarbell</span> <i>in</i> “<cite>McClure’s Magazine</cite>.” +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_27">[Pg 27]</span></p> + +<p class="p2 center tp-l">CHAPTER <abbr title="2">II</abbr></p> + +<p class="center">THE SECRET REBATE</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">How</span> has this vast combination been built +up? There are those who will tell you +that it has been accomplished because John D. +Rockefeller was thrifty; there are others who +are persuaded by the Standard’s Press Bureau +to believe that it is due to the Standard’s +economies in production and improvements in +transport. Neither of these agreeable theories +can explain the mystery, because most of these +improvements were invented and first adopted +by others, and <abbr>Mr.</abbr> Rockefeller’s savings would +not have enabled him to get control of 80 per +<abbr>cent.</abbr> of the American oil refining business in +ten years. The truth is that the secret rebate +trick is the foundation of this great monopoly, +and this it is now proposed to prove from +official sources.</p> + +<p>The introduction of the secret railway rebate +or discrimination may or may not have been +<span class="pagenum" id="Page_28">[Pg 28]</span>due to <abbr>Mr.</abbr> John D. Rockefeller’s inventive +genius—it is not absolutely proved to have +been so—but the Report of the United States +Government Commissioner of Corporations (<abbr>Mr.</abbr> +J. R. Garfield) on the Transport of Petroleum, +dated May 2, 1906, shows that at any rate the +Standard Oil Company made the practice so +much its own that it may fairly be regarded +as its special system. On page 1 of the report +this is made perfectly clear:—</p> + +<blockquote> +<p>The general result of the investigation has been to disclose +the existence of numerous and flagrant discriminations by +the railroads in behalf of the Standard Oil Company and its +affiliated corporations. With comparatively few exceptions, +mainly of other large concerns in California, the Standard has +been the sole beneficiary of such discriminations. In almost +every section of the country that Company has been found to +enjoy some unfair advantages over its competitors, and some of +these discriminations affect enormous areas.</p> + +<p>Not only has this resulted in great direct pecuniary +advantage in transportation cost to the Standard, but it has +had the far more important effect of <em>giving that Company +practically unassailable monopolistic control of the oil +market</em> throughout large sections of the country.</p> +</blockquote> + +<p>Of course, it was just as iniquitous for an +American railroad company, with its Government +charter, to discriminate in favour of a +large customer as it would be for an English +one, or for a Government Department, say the +Post Office, to sell stamps to a favoured few +<span class="pagenum" id="Page_29">[Pg 29]</span>under their face value. The very secrecy with +which the discrimination was invariably surrounded +both by the railroads that granted it +and the consignors who received it proves +clearly that its illegality and injustice were +recognised on both sides. It was only gradually +that the matter of these secret rebates leaked +out, about a couple of years before <abbr>Mr.</abbr> Rockefeller +consolidated all his refining interests +into the Standard Oil Company, of Cleveland, +Ohio, where much of the oil-refining business +was then carried on. This was in June, 1870. +The capital of the new concern was $1,000,000, +the parties interested in it at that date being +John D. Rockefeller, Henry M. Flagler, +Samuel Andrews, Stephen V. Harkness, and +William Rockefeller. Before this time Rockefeller’s +striking success, which was at first +attributed mainly to his extraordinary capacity +for bargaining and borrowing, had not only +attracted the attention of other Cleveland +refiners, but raised their suspicion. They +argued that they bought crude oil pretty nearly +as cheaply as he, refined it as economically, +and sold it at the same price. Yet they could +not make money at anything like the same rate. +There was only one explanation of it; he must +be getting cheaper rates of transport from the +railroads.</p> + +<p><span class="pagenum" id="Page_30">[Pg 30]</span></p> + +<p>The matter was tested, and found to be so. +<abbr>Mr.</abbr> Alexander, of the well-known refining firm +of Alexander, Scofield & <abbr title="Company">Co.</abbr>, Cleveland, stated +on oath before the Committee of Commerce +of the United States House of Representatives +in April, 1872, that in 1868 or 1869 he went +to the Erie Railroad management and said: +“You are giving others better rates than you +are us. We cannot compete if you do that.” +The railroad agent, <abbr>Mr.</abbr> Alexander further testified, +did not attempt to deny the allegation, but +simply agreed to give <abbr>Mr.</abbr> Alexander a rebate +also. This was 15 cents (7½<abbr title="pence">d.</abbr>) a barrel on the +regular published rate of 40 cents (1<abbr title="shilling">s.</abbr> 8<abbr title="pence">d.</abbr>) on all +oil brought to Cleveland from the wells. A +crude oil shipper, W. H. Doane, made a similar +complaint, without mentioning names; and the +complaint was stopped by a 10 cents (5<abbr title="pence">d.</abbr>) reduction +per barrel. The method of granting these +rebates was significant. The full published rate +was paid as usual by the shipper, then at the +end of each month, on forwarding vouchers +for the amount of oil shipped, he received in +cash from the railroad company his 15 cents or +10 cents rebate per barrel, as the case might be. +This, I take it, was a precaution to conceal the +granting of the rebate by keeping documentary +evidence on hand that each shipper had duly +paid the same fixed rate.</p> + +<p><span class="pagenum" id="Page_31">[Pg 31]</span></p> + +<p>Later on, in 1880, General J. H. Devereux, who +had granted secret rebates as vice-president of +the Lake Shore Railroad in 1868, offered a +defence of his conduct by means of an affidavit +which he made in the case of the Standard Oil +Company <i><abbr title="versus" lang="la">v.</abbr></i> William C. Scofield <abbr>et al.</abbr> in the +Court of Common Pleas, Cuyahoga County, +Ohio, November 13, 1880. This affidavit states +that “such rates and arrangements were made +by the Pennsylvania Railroad that it was +publicly proclaimed in the public print in Oil +City, Titusville, and other places, that Cleveland +was to be wiped out as a refining centre as with +a sponge;” that the Cleveland refiners, some +twenty-five in number, expressed their fears to +him that they would have to give up their business +in Cleveland; but that the Standard Oil +Company made him a definite proposal to +guarantee the Lake Shore Railroad a consignment +of sixty carloads a day in return for a +rebate of 10 cents on the 42 cents per barrel +rate; and that, as this proposal “offered to the +railroad company a larger measure of profit +than would or could ensue from any business to +be carried under the old arrangements,” it was +accepted by him. This was a pretty open +confession. One might be permitted to think +that, as the Lake Shore Railroad’s profit and +immunity from competition was thus secured, +<span class="pagenum" id="Page_32">[Pg 32]</span>it would have been in a position to extend the +reduced rate to the other refiners also, and thus +carry out its duty as a “common” carrier. +But it is obvious that it was the essence of its +agreement with the Standard Oil Company to +give that firm an advantage over its competitors. +The cloven hoof is apparent in the +excuse tacked on at the end of the affidavit +that “this arrangement was at all times open +to any and all parties who would secure or +guarantee a like amount of traffic.” It was +certainly not open in the sense of being published; +it was only avowed by the affidavit in +1880, when the unjust discrimination had +worked long enough to set the Standard Oil +Company definitely ahead of all competition.</p> + +<p>It is one of the Standard Oil Company’s most +usual contentions that it has reduced the price +of illuminating oil to the consumer. Any one +who takes the trouble to study the matter from +the beginning will see that the Company’s +primary object, on which it concentrated all +its early efforts, has always been <em>to raise the +price for the consumer</em>. By 1870 the general competition +among oilmen, together with the vast +additional supplies of oil discovered, had brought +prices down enormously since the time oil was +first struck in 1859. Whereas <abbr>Mr.</abbr> Rockefeller +had received on an average 58¾ cents (2<abbr title="shillings">s.</abbr> 5½<abbr title="pence">d.</abbr>) a +<span class="pagenum" id="Page_33">[Pg 33]</span>gallon for the oil he exported in 1865, the year +he went into business, in 1870 he received only +26⅜ cents (1<abbr title="shilling">s.</abbr> 1¼<abbr title="pence">d.</abbr>). It was proved beyond +doubt by competent testimony during the +Missouri suit of the United States <i><abbr title="versus" lang="la">v.</abbr></i> the +Standard Oil Company of New Jersey that a +wholesale price of 1 cent (½<abbr title="pence">d.</abbr>) a gallon allows an +excellent margin of profit for an oil refiner. +But in 1870 everybody in the American oil trade +simply despised an “honest livelihood.” They +were “out for the dollars,” to use <abbr>Mr.</abbr> H. H. +Rogers’s expressive indication of his own intentions +before the Industrial Commission in 1899. +When <abbr>Mr.</abbr> J. J. Vandergrift, one of the +Standard Oil directors, was questioned under +oath as to what they meant to do, he replied, +“Simply to hold up the price of oil—to get all we +can for it.” And <abbr>Mr.</abbr> Rogers declared to the +Industrial Commission in 1875 that “oil to yield +a fair profit should be sold for <em>25 cents</em> per +gallon!”</p> + +<p>Prices being “ruinously low” from the oilman’s +point of view, <abbr>Mr.</abbr> Rockefeller and his +friends came forward with a scheme, in January, +1872, for the purpose of holding them up. They +had originated the idea among themselves of +the industrial “trust,” and the date is consequently +a momentous one in the world’s commercial +history. This, the first of all industrial +<span class="pagenum" id="Page_34">[Pg 34]</span>trusts, was originally floated by taking over +the charter of an existing company, the South +Improvement Company, a name which had no +earthly connection with that company’s object, +but was an excellent one for <abbr>Mr.</abbr> Rockefeller’s +purpose, as his object had to be strictly concealed +in order to be workable. This object, as +may be gathered from the text of the contract +secretly signed by the Company and the railroads +on January 18, 1872, was to destroy the business +of all others than itself who engaged at any +time in the refining trade. The railroads were +to carry the South Improvement Company’s +products for such lower rates than those of +other firms as would inevitably cause the latter +to come a financial cropper. The consideration +held out to the railroads for this service was +an all-round rise in freight rates of about 100 +per <abbr>cent.</abbr> and the abolition of competition among +themselves by fixing the proportion of oil freight +each road was to get, or to be paid for whether +it got it or not. The discrimination in favour +of the South Improvement Company was to be +effected by a secret return to it of from 25 to 50 +per <abbr>cent.</abbr> of <em>all the money paid to the roads for +oil freight either by itself or by any firm or company +in the trade</em>. How this iniquitous idea +could ever have been developed, much less acted +upon, it is difficult to imagine from a bald +<span class="pagenum" id="Page_35">[Pg 35]</span>recital of the facts. But the railroads, I find +from evidence before the Hepburn Committee +in 1879, either believed, or affected to believe, +that the South Improvement Company represented +practically the whole oil trade, <em>was</em> the +oil trade in fact; other firms were, or were to +be regarded as, merely unrecognised, unqualified +practitioners, who carried on their avocation +at their own risk and peril, and whom society +could not take into account in making its +arrangements.</p> + +<p>Whatever the genesis of the idea, there could +be no doubt as to its efficacy in disposing of a +trade rival when reduced to practice. Suppose +a competitor consigns as much freight as yourself, +with a 50 per <abbr>cent.</abbr> rebate to you and a 50 +per <abbr>cent.</abbr> drawback paid to you as an involuntary +bounty by the competitor, you can regard a 100 +per <abbr>cent.</abbr> rise in freight rates with equanimity, +for it leaves your expenditure under this head +exactly what it was before, to say nothing of +the bounty, while your competitor pays exactly +twice as much as he used to do. While in this +position he can be reduced to a state of hopeless +impotence by price-cutting, which can be effected +at relatively small expense. On the supposition +that the competitor’s consignments bulk larger +than yours, the bounty received from them +becomes larger, till a point is arrived at when +<span class="pagenum" id="Page_36">[Pg 36]</span>your own shipments cost you nothing at all, +and you are in the enviable position not only +of carrying on business without working expenses, +but of being paid handsomely by your +rivals for doing so. Something like this <i lang="la">reductio +ad absurdum</i> in trading must have been actually +approached in the case now under consideration, +for as a matter of fact the South Improvement +Company did not control one-tenth of the refining +business of the United States when its +contract was signed by and with the railroads +on January 18, 1872. <abbr>Mr.</abbr> W. G. Warden, of +Philadelphia, secretary of the South Improvement +Company, admitted to the Congressional +Investigating Committee which sat in March +and April following that the aggregate refining +business of the United States amounted to from +45,000 to 50,000 barrels daily capacity, while the +stockholders of the South Improvement Company +when formed owned a combined capacity +of not over 4,600 barrels—less than one-tenth. +This they increased, as we shall see, <em>in three +months time</em>, to a capacity of one-fifth.</p> + +<p>The stockholders in the South Improvement +Company held shares as follows:—</p> + +<blockquote> +<p><abbr title="William">Wm.</abbr> Frew, W. P. Logan, and J. P. Logan, of Philadelphia, +10 shares each; <abbr title="Charles">Chas.</abbr> Lockhart and Richard S. Waring, of +Pittsburg, 10 shares each; W. G. Warden, of Philadelphia, +<span class="pagenum" id="Page_37">[Pg 37]</span>and O. F. Waring, of Pittsburg, 475 shares each; Peter H. +Watson, of Ashtabula, Ohio, 100 shares; H. M. Flagler, O. H. +Payne, John D. Rockefeller and <abbr title="William">Wm.</abbr> Rockefeller, of Cleveland, +and J. A. Bostwick, of New York, 180 shares each; total, 2,000 +shares of $100 dollars each, of which the Standard Oil interests +held 900. The contract was signed on behalf of the Company +by P. H. Watson, president, and on behalf of the railroads as +follows: Pennsylvania, J. Edgar Thompson, president; New +York Central, <abbr title="William">Wm.</abbr> H. Vanderbilt, vice-president; Erie, Jay +Gould, president; Atlantic and Great Western, General <abbr title="George">Geo.</abbr> B. +McClellan.</p> +</blockquote> + +<p>How completely the railroads were got to +play the game of <abbr>Mr.</abbr> Rockefeller and his friends +is made still more evident by two other clauses +of the contract. The first is Section 8 of <abbr title="Article">Art.</abbr> 2, +by which the railroads contracted to send each +day to the South Improvement Company manifests +on waybills of all petroleum shipped over +the roads, which manifests</p> + +<blockquote> +<p class="noindent">shall state the name of the consignor, the place of shipment, +the kind and actual quantity of the article shipped, the name +of the consignee, and the place of destination, with the rate +and gross amount of freight and charges.</p> +</blockquote> + +<p>This, of course, gave the South Improvement +Company a full knowledge of everybody else’s +business—just what <abbr>Mr.</abbr> Rockefeller strove after +from beginning to end of his career—and also +ensured the due payment of the drawbacks by +the roads. The other provision I refer to was +<span class="pagenum" id="Page_38">[Pg 38]</span>contained in <abbr title="Article">Art.</abbr> 4, whereby each railroad was +bound to co-operate</p> + +<blockquote> +<p class="noindent"><em>as far as it legally might</em> to maintain the business of the South +Improvement Company against loss or injury by competition, +to the end that it may keep up a remunerative and so a full +and regular business, and to that end shall lower or raise the +gross rates of transportation over its railroads and connections, +as far as it legally may, for such times and to such extent as +may be necessary to overcome such competition, the rebates +and drawbacks to be varied <i lang="la">pari passu</i> with the gross rates.</p> +</blockquote> + +<p>This makes it clear that <abbr title="Article">Art.</abbr> 3, providing that</p> + +<blockquote> +<p class="noindent">rebates hereintofore provided may be made to any other party +who shall furnish an equal amount of transportation and who +shall possess and use works, means, and facilities for carrying +on and promoting the petroleum trade equal to those possessed +and used by the South Improvement Company,</p> +</blockquote> + +<p class="noindent">is a mere blind. The South Improvement Company +was to be maintained at all costs and +against all comers by whatever juggling with +the rates should become necessary for the +purpose.</p> + +<p>It was admitted by members of the South +Improvement Company, who appeared before +the Investigating Committee appointed by Congress +in March, 1872, that the discrimination +would have turned over to the Company fully +$6,000,000 (£1,200,000) annually on the carrying +trade, while the railroads expected to make +<span class="pagenum" id="Page_39">[Pg 39]</span>about $1,500,000 (£300,000) more than on the +previously existing rates. The Company would +thus make four times as good a bargain as the +railroads. It is difficult to see how shrewd +business men like the railroad directors could +be led into a bargain in which they were so +obviously bested. Another point the railroad +directors had to consider in the interest of +their shareholders was this. The avowed object +of the South Improvement Company was to +restrict the output of refined oil in order to +raise its price. The interest of the railroads +was obviously that the prices of oil should be +kept low, so that the refiners would be compelled +to ship the largest possible quantity. The +interests of the shippers and of the railroads +which received the shipments were thus diametrically +opposed. The former wanted smaller +consignments at higher prices, and the latter +larger consignments at no matter what price. +How the railroad officials could be induced to +sign a contract binding them to help in the +diminution of their own freights it is difficult +to see.</p> + +<p><abbr>Mr.</abbr> Frank Rockefeller, brother of John D. +Rockefeller, testified before a Congressional +Committee on July 7, 1876, that it was his +impression at the time that the rebates went +into a pool and were divided up between the +<span class="pagenum" id="Page_40">[Pg 40]</span>Standard Oil Company and the railroad officials. +He mentioned four of the latter by name, and +two of them instantly sent a denial to the Press. +<abbr>Mr.</abbr> Frank Rockefeller’s evidence—omitting the +portion in which he mentions names—is reproduced +in the late <abbr>Mr.</abbr> George Rice’s well-known +pamphlet on the Standard Oil Railway Discriminations +(<abbr title="page">p.</abbr> 25), as follows:—</p> + +<blockquote> +<p>By the Chairman:</p> + +<p><i><abbr title="Question">Q.</abbr></i> What do you mean by the pool—a pool amongst the railroads +or amongst the oil men?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I don’t give this as a positive fact, but as I understand +the arrangement, the New York Central, the Erie, the Atlantic +and Great Western, the Pennsylvania Railroad, the Cleveland, +Columbus and Cincinnati, and the Baltimore and Ohio roads +have a pool—are combined for the purpose of shipping oil, +and oil only—and in this pool the Baltimore and Ohio gets a +certain number of barrels to go over its road, the Lake Shore +so many to go over its road, and the Pennsylvania Company +so many to go over its road, from different points in the +country, and on the oil that is shipped over these roads by the +pool and the Standard Oil Company there is a rebate or a drawback +from the shipment of so much, which is put into this +pool, over whichever road the oil may go, and that rebate is +divided up between the Standard Oil Company and the railroad +officials.</p> + +<p><i><abbr title="Question">Q.</abbr></i> The railroad officials, do you say?</p> + +<p><i><abbr title="Answer">A.</abbr></i> So I understand it. I don’t say that of my own knowledge.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Then it does not go to the railroads themselves?</p> + +<p><i><abbr title="Answer">A.</abbr></i> No, sir.</p> + +<p><i><abbr title="Question">Q.</abbr></i> But to the railroad officials?</p> + +<p><i><abbr title="Answer">A.</abbr></i> To the railroad officials.</p> +</blockquote> + +<p><span class="pagenum" id="Page_41">[Pg 41]</span></p> + +<p>There the matter was left by the Committee +of Congress, and there it must be left perforce. +If the allegation is true, it would explain how +the railroad directors could be induced to sign +such a bad bargain for the railroads, and if false, +it can presumably be refuted by an exhibition of +the railroad accounts.</p> + + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum"><a id="Page_42"></a><a id="Page_43"></a>[Pg 43]</span></p> + <h2 class="nobreak" id="CHAPTER_III"> + THE RAILROADS AND THE PIPE + LINES + </h2> + +<p><span class="pagenum" id="Page_44">[Pg 44]</span></p> +<blockquote class="p2"> +<p>“A dollar in those days (1871) looked as large as a cart +wheel.”</p> + +<p class="right pad1"> + <span class="smcap">John D. Rockefeller</span> <i>in</i> “<cite>Random Reminiscences</cite>.” +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_45">[Pg 45]</span></p> + +<p class="p2 center tp-l">CHAPTER <abbr title="3">III</abbr></p> + +<p class="center">THE RAILROADS AND THE PIPE LINES</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">The</span> contract between the railroads and +the South Improvement Company was +signed, and armed with this deadly weapon, <abbr>Mr.</abbr> +Rockefeller went round to all the rival refineries +in Cleveland and explained to their respective +proprietors, gently but firmly, that they were as +good as dead men in the oil trade, and that the +only way they could avoid utter ruin was to +turn over their refineries to the South Improvement +Company either for stock or cash at the +latter’s valuation. It seems scarcely credible, but +it is an historical fact that no less than twenty +out of these five-and-twenty Cleveland refiners—who, +by the way, were approached one by one +and under pledge of secrecy—as soon as they +learnt that they were thus morally dead, proceeded +at once to order their coffins. That is, +they sold up as requested. The Cleveland refiners +fell at <abbr>Mr.</abbr> Rockefeller’s feet through sheer +<span class="pagenum" id="Page_46">[Pg 46]</span>fright, and thus in less than three months’ time +the Standard Oil group absorbed twenty other +refineries and increased its capacity from 1,500 +barrels a day to 10,000 barrels—from one-tenth +to one-fifth the total capacity of the United +States.</p> + +<p>Of course, the murder was soon out, and the +Oil Regions, which were interested in oil wells +as distinct from refining, which was the +Standard’s business, were aflame with indignation. +A Petroleum Producers’ Union was +formed in opposition. Mass meetings were +held and Congress was petitioned. The Pennsylvania +Legislature repealed the charter of +the South Improvement Company, and on +March <abbr>25th</abbr> the peccant railroads signed a contract +with the Petroleum Producers’ Union, of +which the first and chief clause provided—</p> + +<blockquote> +<p>That all arrangements for the transportation of oil after this +date shall be upon a basis of perfect equality to all shippers, +producers, and refiners, and that no rebates, drawbacks, or other +arrangements of any character shall be made or allowed that +will give any party the slightest difference in rates or discrimination +of any character whatever.</p> +</blockquote> + +<p>On April <abbr>4th</abbr> General McClellan (Atlantic and +Great Western), Horace F. Clark (Lake Shore +and Michigan Southern), Thomas A. Scott (Pennsylvania), +and W. H. Vanderbilt (New York +<span class="pagenum" id="Page_47">[Pg 47]</span>Central) all sent emphatic messages to the +Petroleum Producers’ Union declaring that their +roads had no understanding of any nature in +regard to freights with the <i>Standard Oil Company</i>. +On April <abbr>8th</abbr> John D. Rockefeller +telegraphed to the Petroleum Producers’ Union: +“In answer to your telegram, this Company +holds no contract with the railroad companies +or any of them or with the South Improvement +Company.” Yet we now know from a contract +thoughtlessly exhibited by H. M. Flagler seven +years later to a Commission of the Ohio State +Legislature—a contract between his Company +and the railroads—that a rate had been fixed +“From April <abbr>1st</abbr> until the middle of November, +1872, about seven months, $1.25.” Now the +corresponding rate openly published and recorded +in the contract between the roads and +the Petroleum Producers’ Union just quoted, +which was signed March <abbr>25th</abbr>, was $1.50. A +rebate of 16⅔ per <abbr>cent.</abbr>! <abbr>Mr.</abbr> Rockefeller had it +all the time, in spite of his own assertions and +those of the railroad officials to the contrary.</p> + +<p><abbr>Mr.</abbr> Rockefeller has committed very few indiscretions +in his lifetime, but he did achieve one +at this early date in his career. He talked +under the smart of his rebuff, and so did others +of his colleagues in the late South Improvement +Company. He was reported in the <span class="pagenum" id="Page_48">[Pg 48]</span><cite>Oil +City Derrick</cite> to have said to a prominent man +of Oil City that the South Improvement Company +could work under the charter of the +Standard Oil Company, and to have added that +in less than two months his auditor would be +glad to join him. One of his colleagues simply +said: “The business <em>now</em> will be done by the +Standard Oil Company.... We mean to show +the world that the South Improvement Company +was organised for business, and means +business, in spite of opposition.” This went the +round of the American Press a few days after +the repeal of the charter, and since then to the +present day the indiscreetly uttered threat has +been stealthily fulfilled to the letter. The South +Improvement Company was formally dissolved +in order to calm the popular indignation, but +the same men continued to operate through the +Standard Oil Company of Cleveland, and, as we +have seen, to receive similar rebates, which +enabled them to build up the Standard Oil +Trust. On May 3, 1910—to bring the matter +well down to date by a concrete instance—the +United States Court of Appeal confirmed a +decree of the Circuit Court of the Western +District of New York State fining the Standard +Oil Company $20,000 (£4,000) “for accepting +concessions from the published rate of the +Pennsylvania, New York Central, and Rutland +<span class="pagenum" id="Page_49">[Pg 49]</span>Railroads in violation of Inter-State Commercial +Law.” But the fine, of course, is an +ineffective flea-bite, and is only worth quoting +to show that the iniquitous conspiracy of injustice +and robbery entered into by the railroads +and the Standard Oil Trust in 1872 +still continues to baffle justice in America +and to outrage the moral sense of the civilised +world.</p> + +<p>A noteworthy development of the conspiracy +between the Standard Oil Company and the +railroads was what became known as Standard +control of the railroad “terminal facilities.” +By terminal facilities is understood the unloading, +storing, and handling of oil at the railroad +termini, chiefly in the vicinity of New York +harbour. The railroads handed over the entire +control and management of their oil yards +and wharves to this one favoured oil company, +authorising it to collect the oil-yard charges +from its rivals, and to handle its rivals’ oil +consignments according to its own goodwill +and pleasure. Fancy one of our British railway +companies putting all its railway sidings in +London under the control of a single firm of +Newcastle coal merchants, and allowing this +firm to load or unload, forward or delay the +consignment of rival firms according to its own +convenience or good pleasure! Fancy the +<span class="pagenum" id="Page_50">[Pg 50]</span>outcry that would be raised against this +privileged firm when it became known that +the only check upon its dealing unjustly with +its rivals was that, whatever charges it elected +to make for loading, unloading, and storage +at the railway company’s sidings, such charges +were to be uniform in all cases! This last +proviso was a mere mockery. The only +authority appointed to see that no advantage +was given to one competitor over another +was the arch-competitor—the Standard Oil +Company. The companies entering into this +special conspiracy were the Erie, the New York +Central and Hudson River, the Baltimore and +Ohio, and the Pennsylvania railroads at the +Atlantic seaboard. I have before me as I +write copies of the contracts made by all +these railroads, excepting the Pennsylvania, +with the Standard Oil Company, and they make +astounding reading.</p> + +<p>This matter of the “terminal facilities” very +naturally received attention in the United +States Government prosecution of the Standard +Oil Company of New Jersey, in the State of +Missouri, when the Court found that the +Company was identical with the Standard Oil +Trust, which had previously been ordered by +the Court to be dissolved as an illegal conspiracy +in restraint of trade. The effect of +<span class="pagenum" id="Page_51">[Pg 51]</span>the decision has been suspended by an appeal +to the Supreme Court of the United States, +which would have been decided last spring had +it not been for the death of Judge Brewer, +the presiding judge. The appeal is expected +to be decided under his tardily appointed +successor, Judge Hughes, this spring or early +summer. In the meantime, the finding of the +Missouri Circuit Court, before which the case +was argued, is that of “Guilty.” When <abbr>Mr.</abbr> +Rockefeller had, with the greatest difficulty, +been haled before this court and asked to +explain these contracts on oath, all he could +urge in his favour was that “the Standard +interests were handling very large quantities +of oil, and were the <em>natural parties</em> to have +control of the warehousing, receiving, and +shipping of oil.” Cross-examination could +extract very little from him. He could not +even say when the Standard Oil interests got +possession of the terminals nor how long they +retained them. He admitted that the Standard +levied terminal charges on the oil of independents, +but did not know the amount. He +relapsed, in short, into that painfully afflicting +condition of amnesia which seems to be constitutional +with Standard Oil officials when +subjected to the rude shock of public +examination.</p> + +<p><span class="pagenum" id="Page_52">[Pg 52]</span></p> + +<p>But, luckily, the written letter of the contracts +is now to hand to supplement this +lamentable want of memory. Take, for +instance, that with the Erie Company dated +April 17, 1874, in Section 7 of which the +Standard agrees to pay 5 cents a barrel to +the Erie Railroad for the use of its yards, +and further agrees “to make the charges +uniform to all parties who use the yards or +for whom services are performed therein, and +always as low as any other oil yard, affording +proper facilities for the transfer, storage, +preparation, and shipment of the oil at any +terminus of any railway or other line competing +with the Erie Railway at or adjacent to the +port of New York.” There is something like +humour in the phrase “as low as any other +oil yard.” Every “other oil yard” was similarly +controlled by the Standard. One of its +directors, <abbr>Mr.</abbr> Jabez A. Bostwick, stated on +oath before the Hepburn Committee on +October 16, 1879, that the Standard at that +time controlled the terminals of the Erie and +the New York Central railroads, and that the +New York Central had no other oil terminals +at New York Harbour except those controlled +by the Standard. At the time he was testifying +he had charge of the New York Central +yards, and declined to answer as to his relation +<span class="pagenum" id="Page_53">[Pg 53]</span>with the Standard Oil Company in that +connection. The usual atmosphere of mystery! +It is dissipated, however, at the present date, +for we have now the text of the contract +between the New York Central and the +Standard before us, signed January 1, 1876, +and referring to a previous contract of July 22, +1875.</p> + +<p>One more point and I have done with the +“terminal facilities.” Section 8 of the Erie +contract provides that the Standard Oil Company +shall assume the collection of freights +and charges on all oil received at the yard +and render accounts weekly. “This provision,” +observes the “Brief for the United States,” +given to the Attorney-General in the Missouri +case, “gave the Standard Company the power +to collect the Erie’s freight charges for +transportation of competitors’ oil, thereby +giving the Standard the great advantage of +knowledge of all competitive shipments and +of the rates of freight, and enabling it to +compel those parties to pay the full rate, +while the Standard could obtain any rate it +might arrange for with the railroad companies, +and it will be shown that the Standard had +rebates from all of them.” In the light of all +this, what becomes of the Standard Oil claim +to superior business acumen and cleverness? +<span class="pagenum" id="Page_54">[Pg 54]</span>Under the conditions shown, a mere schoolboy +could outstrip and ruin the most seasoned +merchant in the race for commercial success. +The claim to superior business methods is +an absolutely unfounded one, and might as +well be urged by a burglar who can make +a fortune in a night; but, then, his +avocation is not usually referred to as +“business.”</p> + +<p>By this time the pumping of crude oil from +the wells through pipe lines had commenced, +first for short distances to collecting points on +the railroads, but later for long distances, +largely superseding the railroads. The Standard’s +pipe lines, called the United Pipe Lines, +were under the management of the late <abbr>Mr.</abbr> +Daniel O’Day, the big Irishman mentioned in +the first chapter. At first the railroads and +Standard pipe lines worked together to harass +and delay the “independent” shipper and refiner. +Here is evidence of how the Standard Oil Company’s +secret agreements with the railroads +made it the interest of the latter to decrease +the shipments of independent oil by refusing to +furnish adequate cars and by delaying delivery. +In 1878 <abbr>Mr.</abbr> W. H. Nicholson, the representative +of <abbr>Mr.</abbr> Ohlen, a New York shipper of petroleum, +appeared before an investigation ordered by the +Secretary of Internal Affairs of the State of +<span class="pagenum" id="Page_55">[Pg 55]</span>Pennsylvania and gave evidence upon oath that +he began to have a difficulty in getting cars in +May of that year. One day, he stated, <abbr>Mr.</abbr> +Ohlen telegraphed to the officials of the Erie +road to know if he could get 100 cars to run +east. The reply came back, “Yes.” About +noon <abbr>Mr.</abbr> Nicholson saw <abbr>Mr.</abbr> O’Day, the manager +of the United Pipe Lines (Standard Oil property), +in which his oil was stored, and told him he was +waiting to have his cars loaded. <abbr>Mr.</abbr> O’Day at +once said he could not load the cars. “But I +have an order from the Erie officials giving me +the cars,” <abbr>Mr.</abbr> Nicholson objected. “That makes +no difference,” O’Day replied; “I cannot load +cars except upon an order from Pratt.” Nor +would he do it. The cars were not loaded for +<abbr>Mr.</abbr> Nicholson, though at the time he had 10,000 +barrels of oil in the United Pipe Lines and an +order for 100 cars from the officials of the Erie +in his hand. “Pratt,” of course, was the late +<abbr>Mr.</abbr> Charles Pratt, whose refinery was at +this time merged in the Standard combine, +and whose name is memorialised in this +country by the well-known “Pratt’s motor +spirit.”</p> + +<p>High-handed proceedings of this sort by the +Pennsylvania Railroad gradually created such a +hubbub that the State of Pennsylvania instituted +a suit against it. This is the evidence given by +<span class="pagenum" id="Page_56">[Pg 56]</span><abbr>Mr.</abbr> B. B. Campbell, President of the Producers’ +Union, on the occasion:—</p> + +<blockquote> +<p>“I never heard of a scarcity of cars until the early part of +June, 1878. I came to Parker (a town in Pennsylvania) about +five o’clock in the evening, and found the citizens in a state of +terrible excitement. The Pipe Lines would not run oil unless +it was sold; the only shippers we had in Parker of any account, +<abbr>viz.</abbr>, the agents of the Standard Oil Company, would not buy +oil, stating that they could not get cars; hundreds of wells +were stopped to their great injury; thousands more, whose +owners were afraid to stop them for fear of damage by salt +water, were pumping the oil on the ground.... On Saturday +morning I spoke very plainly to <abbr>Mr.</abbr> Shinn (Vice-President of +the Allegheny Valley Railroad Company, controlled by the +Pennsylvania), telling him that the idea of a scarcity of cars on +daily shipments of less than 30,000 barrels a day was such an +absurd, barefaced pretence that he could not expect men of +ordinary intelligence to accept it, as the preceding fall (<i lang="la">anglice</i>, +autumn), when business required, the railroads could carry day +after day from 50,000 to 60,000 barrels of oil.... I requested +him to be the vehicle of communicating to the Pennsylvania +Railroad officials my views on the subject, telling him that I +was convinced that, unless immediate relief was furnished and +cars afforded, there would be an outbreak in the Oil Regions.... +On the next Monday I returned to Parker. After passing +Redbank, where the low-grade road, the connecting-link +between the Valley Road and the Philadelphia and Erie Road, +meets the Valley Road—between that point and Parker—the +express train was delayed for over half an hour in passing +through <em>hundreds of empty oil cars</em>!”</p> +</blockquote> + +<p>In August, 1872, <abbr>Mr.</abbr> Rockefeller, as the result +of much plotting and planning, succeeded in +persuading about four-fifths of the refining +interest in the United States to go into a +<span class="pagenum" id="Page_57">[Pg 57]</span>National Refiners’ Association, with himself as +president, the object being to checkmate the +Petroleum Producers’ Union, which had just +exposed the South Improvement Company. +This refiners’ association was to operate on +what was known as the “Pittsburg Plan”—so +called from the place where the scheme was +first organised—according to which all the +refineries were subject to a central board. They +were to refine only such an amount as the +board allowed, not to undersell prices fixed by +the board, and to leave their buying of crude +oil and the arrangements for transportation +entirely in the hands of the board. In the +aggregate they would thus form a company, +presided over by one central board; their participation +in this company would be expressed in +terms of stock, and each stockholder would +receive dividends whether his plant operated or +not. It was, in short, the germ of a “Trust,” +with <abbr>Mr.</abbr> Rockefeller as trustee. The refiners +had put their heads into the lion’s mouth with a +vengeance.</p> + +<p>The Petroleum Producers’ Union was up in +arms at once to protect the price of crude, and +made an heroic effort to do so by restricting +output. They also set up a producers’ selling +agency to cut out the Refiners’ Association by +refusing to sell it oil except at their own price. +<span class="pagenum" id="Page_58">[Pg 58]</span>They were no match in generalship, however, +for <abbr>Mr.</abbr> Rockefeller, especially when aided, as +he was, by the hand of Nature. Nature was +unkind enough to send the producers “gushers” +with floods of oil when they wanted it least, and +they found restriction of output practically +impossible. At the same time most of the +producers were badly in want of ready cash, +and the Refiners’ Association had the longer +purse.</p> + +<p>At the psychological moment <abbr>Mr.</abbr> Rockefeller +struck the judicious blow of offering to throw in +his lot with the producers and buy crude only +from the Producers’ Selling Agency (and that +at $4.75 a barrel, a clear dollar over the then +current market price), if the producers on their +part would undertake to maintain the price and +sell to no one outside the Refiners’ Association. +The coup succeeded, and, half tempted, half +constrained by cash necessities, the producers +were ill-advised enough to trust their enemy +and sign what was known as “The Treaty of +Titusville” on the lines proposed. They at once +received an order from <abbr>Mr.</abbr> Rockefeller for +200,000 barrels of crude at $3.25, not quite as +good a price as that first mentioned, but which, +under the circumstances, they were glad to +accept. The “treaty” was signed on December +19, 1872. The producers had shipped about +<span class="pagenum" id="Page_59">[Pg 59]</span>50,000 of the barrels ordered by <abbr>Mr.</abbr> Rockefeller, +when, on January 14, 1873, they were suddenly +electrified to hear that that gentleman <em>refused +to take any more of the contract oil</em>!</p> + +<p>When taken to task <abbr>Mr.</abbr> Rockefeller urged in +his defence the pitiful plea that the producers had +not kept their part of the contract by limiting +the supply of oil. It was true that the Producers’ +Union was pledged by its own internal organisation +to limit the supply of crude, but no such +stipulation appeared in the contract signed by +it with the Refiners’ Association. It was its +own domestic arrangement. Had the matter +been taken to court it is difficult to see how +an alleged verbal understanding could have +prevailed against a written contract. But no +such step was taken. The Producers’ Union +collapsed in utter demoralisation and never +made another united effort for the next five +years. The Refiners’ Association also found +itself unable to keep up the internal discipline +it had imposed upon itself. It dissolved in +June, 1873, and <abbr>Mr.</abbr> Rockefeller was left sole +master of the situation. He had outgeneralled +everybody.</p> + +<p>In 1874 the Erie, Central, and Pennsylvania +Railroads entered into a combination with +certain of the pipe lines, to the effect that +equal rates should be charged by both the +<span class="pagenum" id="Page_60">[Pg 60]</span>railroads and the pipe lines in the combination. +The railroads were to starve out the independent +pipe lines by refusing them the advantages +given to the United Pipe Lines. Both railway +freights and pipage rates were to be raised +simultaneously, and on such a schedule that +henceforth the cost of transport would be +equal to all refiners, on crude and refined, +from all points! This combination was announced +curtly by a private circular sent out +by James H. Rutter, freight agent of the +New York Central, containing the paragraph:</p> + +<blockquote> +<p>You will observe that under this system the rate is even and +fair to all parties, preventing one locality taking advantage of +its neighbour by reason of some alleged or real facility it may +possess. Oil refiners and shippers have asked the roads from +time to time to make all rates even, and they would be satisfied. +This scheme does it, and we trust will work satisfactorily +to all.</p> +</blockquote> + +<p class="noindent">The refiners and shippers referred to as complacently +as if they formed the bulk of the +refining and shipping interest were, of course, +<abbr>Mr.</abbr> Rockefeller and his friends, assumed for +the nonce, as in the case of the South Improvement +Company, to be “the trade.”</p> + +<p>This astounding circular, commonly referred +to in American Trust history as the Rutter +circular, introduces us to the second species of +unjust discrimination enjoyed by <abbr>Mr.</abbr> Rockefeller, +<span class="pagenum" id="Page_61">[Pg 61]</span>and perhaps—of late years, at any rate—with +an even more disastrous effect than that of +the secret rebate—namely, the “discriminatory +rate.” In some cases the discriminatory rate +was secret, in others published. The Rutter +circular projected the idea into a sort of quasi-publicity +as an ostensibly fair one. The brief +for the Government in the pending appeal by +the Standard Oil Company of New Jersey +against the Missouri judgment characterises +these discriminatory rates as follows:—</p> + +<blockquote> +<p>The testimony in this case will show that in the open published +rates, as well as in secret and unfiled rates, there was +radical discrimination against the independent shipping points +and in favour of the Standard shipping points.... It is +impossible that without connivance with the Standard Oil +Company the railroads of this country should have uniformly +made a system of rates whereby with scarcely an exception the +independent shipping points were discriminated against in +favour of the Standard shipping points.... It is a well-known +fact that this group of defendants is the most influential in +financial circles in the United States. This influence has undoubtedly +been used to obtain these preferential rates, because +it could not be possible that it merely happened in the ordinary +course of business that practically every Standard shipping +point would be favoured with advantageous rates as against +competitors.</p> +</blockquote> + +<p>This contention has, of course, been already +sustained by the finding of the Missouri Circuit +Court, as it is sustained by the common sense of +any one who takes the trouble to go through +<span class="pagenum" id="Page_62">[Pg 62]</span>the schedules of rate charges made by the +railroads recently brought to light. The Standard +Oil Company’s main refinery is at Whiting, +in Indiana, a trifle to the south-east of Chicago. +To take a few instances, the rate from Whiting +to Chattanooga, a distance of 849 miles, by the +route actually used on the road, was fixed by the +railroad at 25.9 cents per hundred gallons, while +the rate from Pittsburg—an independent refining +centre—to Chattanooga, a distance of only +651 miles, was as much as 47 cents per hundred. +In other words, the Standard Oil Company paid +21 cents a hundred less for shipping 200 miles +further. This difference amounts to over 1¼ +cents per gallon, which is in itself a large profit +on oil. The discrimination against Cleveland +and Toledo—two other independent shipping +centres—on shipments to Chattanooga was +equally great. Again, take the destination of +Birmingham, in the State of Alabama. The +open rate from Pittsburg, a distance of 794 +miles, was 51.5 cents; from Whiting, a distance +of 820 miles, it was 29.5 cents, a difference of +22 cents. Similarly there was an equal discrimination +against Cleveland and Toledo on +shipments to Birmingham. And so on to the +end of the chapter of conspiracy all over the +States.</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum" id="Page_63">[Pg 63]</span></p> + <h2 class="nobreak" id="CHAPTER_IV"> + THE BIRTH OF THE TRUST + </h2> + +<p><span class="pagenum" id="Page_64">[Pg 64]</span></p> +<blockquote class="p2"> +<p>“The American Beauty rose can be produced in its splendour +and fragrance only by sacrificing the early buds which +grow up around it.”</p> + +<p class="right pad1"> + <span class="smcap">J. D. Rockefeller</span>, <abbr title="Junior">Jun.</abbr>, <i>to the students + of Brown University</i>. +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_65">[Pg 65]</span></p> + +<p class="p2 center tp-l">CHAPTER <abbr title="4">IV</abbr></p> + +<p class="center">THE BIRTH OF THE TRUST</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">The</span> arrangements which have now been +described were the foundation on which +the Standard Oil Trust was built. Some time in +the summer of 1874, when he had become sure +that the so-called “equalisation” scheme would +be worked in his favour by the railroads and +leading pipe lines simultaneously, <abbr>Mr.</abbr> Rockefeller +conferred at Saratoga with two of his +old friends of the South Improvement Company—W. +G. Warden, of Philadelphia, and Charles +Lockhart, of Pittsburg—both big refiners, and +agreed with them to form an oil refiners’ Trust, +which was to work with absolute secrecy, and +gradually acquire control of all the refineries +in America. The instrument by which this large +order was to be put through was, of course, the +secret rebate and the new “equalisation,” or, less +euphemistically, discrimination. Secrecy was to +be maintained by each firm as it came in carrying +<span class="pagenum" id="Page_66">[Pg 66]</span>on business ostensibly as before under its old +style and title, staff, and management, but its +actual business was to be directed solely by the +central board of the Trust, presided over by <abbr>Mr.</abbr> +Rockefeller, which would control all operations +of buying, transport, and selling. The refineries +had to become the absolute property, however, +of the Standard Oil Company, their late +proprietors taking stock of that Company in +exchange. We know this from an account of +the Saratoga meeting given at a later period +by Charles Lockhart, of Pittsburg, to Miss Ida +M. Tarbell.</p> + +<p>In March, 1875, something leaked out as to +the constitution of the Trust, which was then +spoken of as the Central Association. It +gradually roped in most of the refining firms +in America, the process being effected by one +sensational collapse after another under the +influence of the discrimination and the rebate. +An exception was the huge refinery of Charles +Pratt and <abbr title="Company">Co.</abbr>, of New York, of which the +famous H. H. Rogers was one of the most +considerable assets. This firm sold itself more +or less voluntarily to the Standard Oil for +stock at 265. The absorption of the “Creek” +refineries, <i><abbr>i.e.</abbr></i>, those in the Oil Regions, was +conducted by the scarcely less famous J. D. +Archbold, who appeared in Titusville as the +<span class="pagenum" id="Page_67">[Pg 67]</span>representative of a Standard Oil offshoot, since +known to fame as the Acme Oil Company. +Between 1875 and 1879 <abbr>Mr.</abbr> Archbold won his +spurs in the Standard by buying out, dismantling, +or shutting down nearly every +refinery on the “Creek.” The history of this +collapse makes pitiful reading, and I need not +enter into it beyond giving a specimen or two +extracted from contemporary records.</p> + +<p>In 1888 <abbr>Mr.</abbr> A. H. Tack, a partner of the +Citizens’ Oil Refining Company of Pittsburg, +after explaining on oath before the House +Committee on Manufactures how his splendidly +organised business gradually became +non-paying under the Standard Oil influence, +added:—</p> + +<blockquote> +<p>In 1874 I went to see Rockefeller if we could make arrangements +with him by which we could run a portion of our works. +It was a very brief interview. He said there was no hope for +us all. He remarked this—I cannot give the exact quotation—“There +is no hope for us,” and probably he said, “There is no +hope for any of us”; but he says, “The weakest must go +first.” And we went!</p> +</blockquote> + +<p>The case of Scofield, Shurmer and Teagle, a +Cleveland refinery, is evidence of the demoralisation +of the times. At first the firm +showed fight, and in 1876 brought a suit +against the Lake Shore and Michigan Southern +<span class="pagenum" id="Page_68">[Pg 68]</span>and the New York Central and Hudson River +railroads for “unlawful and unjust discrimination, +partialities, and preferences made and +practised ... in favour of the Standard Oil +Company, enabling the said Standard Oil +Company to obtain, to a great extent, the +monopoly of the oil and naphtha trade of +Cleveland.” But <abbr>Mr.</abbr> Rockefeller persuaded +them to drop their suit and obtain bigger +profits than they were making by becoming +his fellow-conspirators. They signed a contract, +consequently, with him for ten years, +the firm putting in a plant worth $73,000 and +its entire time, and <abbr>Mr.</abbr> Rockefeller putting in +$10,000—and his railway discriminations! The +firm was guaranteed $35,000 a year net profit—about +50 per <abbr>cent.</abbr> on capital; profits over +$35,000 went to <abbr>Mr.</abbr> Rockefeller up to $70,000—about +100 per <abbr>cent.</abbr>; any further profits were +to be divided.</p> + +<p>The enormous dimensions of the profits contemplated +in this case—and no doubt afterwards +reaped—would presumably have excited suspicion +very quickly among Scofield, Shurmer and +Teagle’s acquaintances who had seen them in +their struggling days had not <abbr>Mr.</abbr> Rockefeller +been an adept in joining secrecy to fraud as the +basis of his operations. To quote Miss Tarbell +(<abbr title="1">i.</abbr> <abbr title="page">p.</abbr> 66):—</p> + +<p><span class="pagenum" id="Page_69">[Pg 69]</span></p> + +<blockquote> +<p>According to the testimony of one of the firm given a few +years later on the witness-stand in Cleveland the contract was +signed at night at <abbr>Mr.</abbr> Rockefeller’s house on Euclid Avenue +in Cleveland, where he told the gentlemen that they must not +even tell their wives about the new arrangement, that if they +made money they must conceal it—they were not to drive fast +horses, “put on style,” or do anything to let people suspect +there were unusual profits in oil refining. That would invite +competition. They were told that all accounts were to be kept +secret. Fictitious names were to be used in corresponding, and +a special box at the post-office was employed for these fictitious +characters. In fact, smugglers and housebreakers never +surrounded their operations with more mystery.</p> +</blockquote> + +<p>“Smuggling,” “housebreaking,” “burglary” +are all terms that have been used to designate +<abbr>Mr.</abbr> Rockefeller’s methods, though much has +been made of his mild demeanour and gentle +persuasiveness in dealing with his rivals. To +my mind his persuasiveness is on a par with +that of the bold highwayman sung of in the +“Pickwick Papers”:—</p> + +<div class="poetry-container"> + <div class="poetry"> + <div class="stanza"> + <div class="verse indent0">But Dick put a couple of balls in his nob</div> + <div class="verse indent0">And perwailed on him to stop.</div> + </div> + </div> +</div> + +<p>The Standard Oil Trust has been repeatedly +and publicly charged in America with using in +the pursuits of its ends or the defence of its +interests such weapons as perjury, bribery, open +violence, and arson. They concern, of course, +individual members of the combination rather +<span class="pagenum" id="Page_70">[Pg 70]</span>than the whole combination, and we begin with +that part of the case which concerns <abbr>Mr.</abbr> J. D. +Rockefeller personally.</p> + +<p>In 1888 the mystery surrounding the ramifications +of the Standard ring caused the Senate of +New York State to order an “Investigation +Relative to Trusts,” and before the Commission +entrusted with this investigation <abbr>Mr.</abbr> Rockefeller +appeared and was questioned as to the <i>initium +malorum</i>—the South Improvement Company. +I quote from the official report of this investigation:—</p> + +<blockquote> +<p><i><abbr title="Question">Q.</abbr></i> There was such a company?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I have heard of such a company.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Were you not in it?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I was not.</p> +</blockquote> + +<p>As pointed out in my former articles, <abbr>Mr.</abbr> J. D. +Rockefeller was a director with 180 shares in +the concern, and the fact is now absolutely +beyond dispute. The statement above was made +on February <abbr>28th</abbr>, and on April <abbr>30th</abbr> following +<abbr>Mr.</abbr> Rockefeller appeared before a Committee of +the House of Representatives at Washington, +and the following colloquy took place:—</p> + +<blockquote> +<p><i><abbr title="Question">Q.</abbr></i> I want the names particularly of gentlemen who either +now or in the past have been interested with you gentlemen +who were in the South Improvement Company?</p> + +<p><span class="pagenum" id="Page_71">[Pg 71]</span></p> + +<p><i><abbr title="Answer">A.</abbr></i> I think they were O. T. Waring, W. P. Logan, John +Logan, W. G. Warden, O. H. Payne, H. M. Flagler, William +Rockefeller, J. A. Bostwick, and—<em>myself</em>.</p> +</blockquote> + +<p>A direct contradiction of his own words within +the space of two months! Again, questioned +as to railway rates by the New York Senate +Committee, <abbr>Mr.</abbr> Rockefeller was asked if there +had been any arrangements by which the Trust +or the companies controlled by it got transportation +at any cheaper rates than were allowed to +the general public, and his answer was:—</p> + +<blockquote> +<p>No, we have had no better rates than our neighbours. But, +if I may be allowed, we have found repeated instances where +other parties had secured lower rates than we had.</p> +</blockquote> + +<p>The Committee, however, was not satisfied, +and returned to the charge later on in the day, +and <abbr>Mr.</abbr> Rockefeller, after much wriggling and +evasion, practically admitted the contrary:—</p> + +<blockquote> +<p><i><abbr title="Question">Q.</abbr></i> Has not some company or companies embraced within +this Trust enjoyed from railroads more favourable freight rates +than those rates accorded to refineries not in the Trust?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I do not recall anything of that kind.</p> + +<p><i><abbr title="Question">Q.</abbr></i> You have heard of such things?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I have heard much in the papers about it.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Was there not such an allegation as that in the litigation +or controversy recently disposed of by the Interstate Commerce +Commission, <abbr>Mr.</abbr> Rice’s suit; was not there a charge in <abbr>Mr.</abbr> +Rice’s petition that companies embraced within your Trust +enjoyed from railroad companies more favourable freight rates?</p> + +<p><span class="pagenum" id="Page_72">[Pg 72]</span></p> + +<p><i><abbr title="Answer">A.</abbr></i> I think <abbr>Mr.</abbr> Rice made such a claim. Yes, sir.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Did not the Commission find the claim true?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I think the return of the Commission is a matter of record. +I could not give it.</p> + +<p><i><abbr title="Question">Q.</abbr></i> You don’t know it; you haven’t seen that they did so +find?</p> + +<p><i><abbr title="Answer">A.</abbr></i> It is a matter of record.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Haven’t you read that the Interstate Commerce Commission +did find that charge to be true?</p> + +<p><i><abbr title="Answer">A.</abbr></i> No, sir; I don’t think I could say that. I read that they +made a decision, but I am really unable to say what that +decision was.</p> + +<p><i><abbr title="Question">Q.</abbr></i> You did not feel interested enough in the litigation to see +what the decision was?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I felt an interest in the litigation. I don’t mean to say I +did not feel an interest in it.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Do you mean to say that you don’t know what the +decision was?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I don’t say that. I know that <span id="TN1">the Interstate Commerce +Commission</span> had made a decision. The decision is quite a comprehensive +one, but it is questionable whether it could be said +that that decision in all its features results as I understand you +to claim.</p> + +<p><i><abbr title="Question">Q.</abbr></i> You don’t so understand it? Will you say, as a matter +of fact, that it is not so?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I stated in my testimony this morning that I had known +of instances where companies altogether outside of the Trust +had enjoyed more favourable freights than companies in this +Trust, and I am not able to state that there may not have been +arrangements for freight on the part of companies within this +Trust as favourable as, or more favourable than, other freight +arrangements; but, in reply to that, nothing peculiar in respect +to the companies in this association. I suppose they make the +best freight arrangements they can.</p> +</blockquote> + +<p>A commission, known, from the name of its +chairman, as the Hepburn Commission, was +<span class="pagenum" id="Page_73">[Pg 73]</span>appointed by Congress in 1879 to investigate +the New York railroads, and a number of +Standard Oil officials, notably <abbr title="Misters">Messrs.</abbr> H. H. +Rogers, J. D. Archbold, Jabez A. Bostwick, +and W. T. Sheide, were summoned before it. +Though not so sweeping in their denials as +<abbr>Mr.</abbr> Rockefeller, all of them avoided the truth. +Their testimony, in fact, was so evasive that +the Hepburn Commission, in making its report, +characterised the Company as “a mysterious organisation +whose business and transactions are +of such a character that its members decline +giving a history or description of it lest this +testimony be used to convict them of a crime.” +The reason that the witnesses themselves gave +for their evasion was—as might be expected—a +different one from that assigned by the Commission. +They stated that the investigations were +an interference with their rights as private citizens, +and that the Government had no business +to inquire into their methods. This is a very +interesting plea, for it throws a light on the +general spirit of insubordination to all law and +order consistently evinced by the Standard Oil +Trust throughout its whole career whenever law +and order were found to be in opposition to its +progress. This constant opposition to the public +authority, whether manifested by open contempt +of Court when under examination, or by secret +<span class="pagenum" id="Page_74">[Pg 74]</span>bribery to avert or compass legislation, or by +secret acts known to be contrary to law, has +been such as to merit for the Standard Oil conspirators +the appellation of the anarchists of +commercial life. Opposition to the law, denial +of the law, refusal to be subject to the law, and +attempted corruption of the officers of the law, +indelibly marks their business policy.</p> + +<p>Direct lying, however, was employed on occasion +when Standard witnesses were under the +necessity of answering questions categorically. +Henry M. Flagler, for instance, swore in 1880 in +the Court of Common Pleas (Standard Oil Company +<i><abbr title="versus" lang="la">v.</abbr></i> W. C. Scofield <i><abbr>et al.</abbr></i>) that the Standard +Oil Company neither owned, operated, nor controlled +refineries elsewhere than at Cleveland, +Ohio, and Bayonne, <abbr title="New Jersey">N.J.</abbr>, whereas before the +Investigation Relative to Trusts, New York +Senate, 1888, he testified that in 1874 the Standard +Oil Company <em>purchased</em> the refineries of +Lockhart, Frew & <abbr title="Company">Co.</abbr>, of Pittsburg; Warden, +Frew & <abbr title="Company">Co.</abbr>, of Philadelphia; and <abbr title="Charles">Chas.</abbr> Pratt +& <abbr title="Company">Co.</abbr>, of New York. <abbr>Mr.</abbr> Rockefeller also swore +falsely in the Scofield case in 1880, in the same +sense as <abbr>Mr.</abbr> Henry M. Flagler. The purchase +and consequent control of the Pittsburg, Philadelphia, +and New York refineries mentioned +was absolutely secret at the time, and seemingly +not likely to be found out.</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum" id="Page_75">[Pg 75]</span></p> + <h2 class="nobreak" id="CHAPTER_V"> + BRIBERY: THE ARCHBOLD LETTERS + </h2> + +<p><span class="pagenum" id="Page_76">[Pg 76]</span></p> +<blockquote class="p2"> +<p>“Solid as a prison, towering as a steeple, its cold and forbidding +façade seems to rebuke the heedless levity of the +passing crowd, and frown on the frivolity of the stray sunbeams +which in the late afternoon play around its impassive +cornices. The building is <abbr title="Number">No.</abbr> 26, Broadway, New York City, +home of the Standard Oil.”</p> + +<p class="right pad1"> + <span class="smcap">T. W. Lawson</span> <i>in</i> “<cite>Frenzied Finance</cite>.” +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_77">[Pg 77]</span></p> + +<p class="p2 center tp-l">CHAPTER <abbr title="5">V</abbr></p> + +<p class="center">BRIBERY: THE ARCHBOLD LETTERS</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">The</span> Standard Oil people have undoubtedly +practised bribery throughout a long series +of years and on the most comprehensive scale, +and that not merely to avert a temporary +danger or get themselves out of an unexpected +scrape, but as a matter of ordinary +business routine. They bribed high and low, +in season and out of season. How real the +evil is was revealed in a dramatic manner in +the famous Standard Oil letters which <abbr>Mr.</abbr> +Randolph Hearst read during the American +Presidential campaign of 1908. The genuineness +of these letters was never questioned, +although the persons implicated made some +feeble attempts to put a less invidious explanation +upon them. It was stated that one of the +Standard Oil Company’s letter-books had been +stolen, and the <cite>Times</cite> editorially remarked that +there had been “nothing approaching the disclosures +<span class="pagenum" id="Page_78">[Pg 78]</span>in sensational rapidity of action in the +history of the American Presidential elections.” +The principal figure in these epistles of corruption +is <abbr>Mr.</abbr> J. D. Archbold. The first letter was +addressed to <abbr>Mr.</abbr> J. B. Foraker, Senator for +Ohio, and one of the leading members of the +Republican party. It was as follows:—</p> + +<blockquote> +<p class="right pad1"> +<span class="pad2">26, <span class="smcap">Broadway, New York</span>,</span><br> +<i>March 9, 1900</i>. +</p> + +<p><span class="smcap">My dear Senator</span>,—I have your favour of last night with +inclosure, which latter, with letter from <abbr>Mr.</abbr> Elliott commenting +on same, I beg to send you herewith. Perhaps it would +be better to make a demonstration against the whole Bill, but +certainly the ninth clause, to which <abbr>Mr.</abbr> Elliott refers, should +be stricken out, and the same is true of House Bill <abbr title="Number">No.</abbr> 500, +also introduced by <abbr>Mr.</abbr> Price, in relation to foreign corporations, +in which the same objectionable clause occurs. Am +glad to hear that you think that the situation is fairly well +in hand.</p> + +<p class="right pad1"> +<span class="pad3">Very truly yours,</span><br> +<span class="smcap"><abbr title="John">Jno.</abbr> D. Archbold</span>. +</p> + +<p><abbr title="Honorable">Hon.</abbr> J. B. Foraker, Washington, <abbr class="spell">D.C.</abbr></p> + +<p>[The <abbr>Mr.</abbr> Elliott referred to was M. F. Elliott, general counsel +for the Standard Oil Company.]</p> +</blockquote> + +<p class="p2">Here are some more letters of this series:—</p> + +<blockquote class="p2"> +<p class="right pad1"> +<span class="pad2">26, <span class="smcap">Broadway, New York</span>,</span><br> +<i>March 26, 1900</i>. +</p> + +<p class="noindent"><abbr title="Honorable">Hon.</abbr> J. B. Foraker, 1500, Sixteenth Street, Washington, <abbr class="spell">D.C.</abbr></p> + +<p><span class="smcap">Dear Senator</span>,—In accordance with our understanding, now +beg to enclose you certificate of deposit to your favour for +$15,000. Kindly acknowledge receipt and oblige.</p> + +<p class="right pad1"> +<span class="pad3">Yours very truly,</span><br> +<span class="smcap"><abbr title="John">Jno.</abbr> D. Archbold</span>. +</p> +</blockquote> + +<hr class="r5"> + +<blockquote> +<p class="right pad1"><span class="pagenum" id="Page_79">[Pg 79]</span> +<span class="pad2">26, <span class="smcap">Broadway, New York</span>,</span><br> +<i>April 17, 1900</i>. +</p> + +<p><span class="smcap">My dear Senator</span>,—I enclose you certificate of deposit to +your favour of $14,500. We are really at a loss in the matter, +but I send this, and will be glad to have a very frank talk with +you when opportunity offers, if you so desire. I need scarcely +again express our great gratification over the favourable outcome +of affairs.</p> + +<p class="right pad1"> +<span class="pad3">Very truly yours,</span><br> +<span class="smcap"><abbr title="John">Jno.</abbr> D. Archbold</span>. +</p> + +<p><abbr title="Honorable">Hon.</abbr> J. B. Foraker, 1500, Sixteenth Street, Washington, <abbr class="spell">D.C.</abbr></p> +</blockquote> + +<hr class="r5"> + +<blockquote> +<p class="right pad1"> +<i>January 27, 1902.</i> +</p> + +<p><span class="smcap">My dear Senator</span>,—Responding to your favour of the <abbr>25th</abbr>, +it gives me pleasure to hand you herewith certificate of deposit +for $50,000 in accordance with our understanding. Your letter +states the conditions correctly, and I trust the transaction will +be successfully consummated.</p> + +<p class="right pad1"> +<span class="pad3">Very truly yours,</span><br> +<span class="smcap">John D. Archbold</span>. +</p> + +<p><abbr title="Honorable">Hon.</abbr> J. B. Foraker, Washington, <abbr class="spell">D.C.</abbr></p> +</blockquote> + +<hr class="r5"> + +<blockquote> +<p class="right pad1"> +<span class="pad3">26, <span class="smcap">Broadway</span>,</span><br> +<i>February 25, 1902</i>. +</p> + +<p><span class="smcap">My dear Senator</span>,—I venture to write you a word regarding +the Bill introduced by Senator Jones, of Arkansas, known as +“S. 649,” intended to amend the Act to protect trade and +commerce against unlawful restraints and monopolies, introduced +by him December <abbr>4th.</abbr> It really seems as though this +Bill was very unnecessarily severe and even vicious.</p> + +<p>Is it not much better to test the application of the Sherman +Act before resorting to a measure of this kind? I hope you +will feel so about it, and I will be greatly pleased to have a +word from you on the subject. The Bill, I believe, is still +in committee.</p> + +<p class="right pad1"> +<span class="pad3">With kind regards, I am, very truly yours,</span><br> +<span class="smcap">John D. Archbold</span>. +</p> + +<p><abbr title="Honorable">Hon.</abbr> J. B. Foraker, Washington, <abbr class="spell">D.C.</abbr></p> +</blockquote> + +<p><span class="pagenum" id="Page_80">[Pg 80]</span></p> + +<p class="p2">Senator Foraker, when these letters were published, +explained that the 50,000 dollars was sent +to him in order to carry out the purchase of an +Ohio newspaper, and that when the deal fell +through he returned the money. The American +public received this explanation coldly, and the +Republican party managers forced <abbr>Mr.</abbr> Foraker +to retire from the campaign in order to try and +get rid of so embarrassing an association. It +will be noted that while these large sums were +being sent to the Senator he was being asked +to oppose anti-trust legislation in the interests +of the Standard.</p> + +<p>But even the Bench itself was not secure from +the influence of <abbr>Mr.</abbr> Archbold. “Th’ Supreem +Court is full of Standard Ile,” says <abbr>Mr.</abbr> Dooley, +the American humorist, and two other letters +addressed by <abbr>Mr.</abbr> Archbold to Senator Foraker +show how that consummation has been +reached:—</p> + +<blockquote> +<p class="right pad1"> +<span class="pad3">26, <span class="smcap">Broadway</span>,</span><br> +<i>December 18, 1902</i>. +</p> + +<p><span class="smcap">My dear Senator</span>,—You, of course, know of Judge Burket’s +candidacy for re-election to the Supreme Court Bench of Ohio. +We understand that his re-election to the position would be in +the line of usage as followed in such cases in Ohio, and we feel +very strongly that his eminent qualifications and great integrity +entitle him to this further recognition.</p> + +<p>We most earnestly hope that you agree with this view, and +will favour and aid his re-election. <abbr>Mr.</abbr> Rogers joins me most +heartily in this expression to you.</p> + +<p class="right pad1"> +<span class="pad3">With kind regards, I am, very sincerely yours,</span><br> +<span class="smcap">John D. Archbold</span>. +</p> +</blockquote> + +<hr class="r5"> + +<blockquote> +<p class="right pad1"><span class="pagenum" id="Page_81">[Pg 81]</span> +<span class="pad3">26, <span class="smcap">Broadway</span>,</span><br> +<i>March 20, 1903</i>. +</p> + +<p><span class="smcap">My dear Senator</span>,—We are surprised beyond measure to +learn that Smith W. Bennett, brother-in-law of F. S. Monnett, +recently Attorney-General of Ohio, is in the race for the +Attorney-Generalship of Ohio on the Republican ticket.</p> + +<p>Bennett was associated with Monnett in the case against us +in Ohio, and I would like to tell you something of our experiences +and impressions of the man gained in that case. If +you know him at all, I am sure you will agree that his candidacy +ought not to be seriously considered from any point of +view.</p> + +<p>I would esteem it a favour to have a line from you on the +subject.</p> + +<p class="right pad1"> +<span class="smcap"><abbr title="John">Jno.</abbr> D. Archbold.</span> +</p> +</blockquote> + +<p><abbr>Mr.</abbr> F. S. Monnett, whose brother-in-law is +attacked here, was one of the public officials +whom the Standard Oil Trust failed to bribe—a +most inconvenient record in <abbr>Mr.</abbr> Archbold’s eyes. +He was Attorney-General for the State of Ohio, +and his activity in enforcing the anti-Trust law +of that State against the Standard earned him +this denunciation. <abbr>Mr.</abbr> Monnett described his +personal experiences in the matter to a representative +of the Press in July, 1899, when on a +visit to London:—</p> + +<blockquote> +<p>It happened in this way: <abbr>Mr.</abbr> <abbr title="Charles">Chas.</abbr> B. Squires is a well-known +business man in Cleveland, president of the Manhattan +Insurance Company, and in no way connected with the +Standard. Owing to my fighting the Insurance Trust in Ohio +I saw a good deal of him. One day a man called on Squires, +<span class="pagenum" id="Page_82">[Pg 82]</span>saying that he represented Frank Rockefeller (brother of J. D.) +and Charles V. Haskell, both Standard Oil men. This man +asked Squires whether the Attorney-General could be +“reached.” Squires replied (according to his story to me) +that if anybody could “reach” him he could. This representative +mentioned the Trust names, and showed Squires a +telegram stating that he had authority to “reach” the +Attorney-General, and that there would be a liberal reward for +him if things were dickered. The man offered Squires $100,000. +Squires said that would amount to nothing at all; that he +would not attempt such a job for less than $500,000. Finally +he was authorised to offer $400,000 (£80,000) to the Attorney-General +if he would let the case stand adjourned over his term +of office [this was the prosecution of the Standard by the State +of Ohio as an illegal Trust], and $100,000 was for Squires and +the go-between. I was at Washington, and got a telegram +from Squires, “Do nothing till I see you.” When I did see +him he made this proposition.... This is not the first case of +the kind during this litigation, for one of my predecessors, <abbr>Mr.</abbr> +Watson, was offered $100,000 in much the same way. It is, +moreover, quite in accordance with the general policy of the +Trust.</p> +</blockquote> + +<p>In fact, in that year—1899—the Annual Report +of <abbr>Mr.</abbr> Monnett to the Governor of the State of +Ohio contains detailed charges of <em>six</em> deliberate +attempts to bribe <abbr>Mr.</abbr> David K. Watson, his +predecessor in office, to withdraw suits entered +against the Standard Oil Company of Ohio. +<abbr>Mr.</abbr> Watson, however, was not to be bribed; +neither was he to be intimidated, though +Senator Marcus A. Hanna, the personal friend +and financier of President McKinley, and +one of the most influential Republican politicians +<span class="pagenum" id="Page_83">[Pg 83]</span>in America, wrote to him stating that +he had always considered him “in the line +of political promotion,” and then went on to +intimate that unless the suit against the +Standard was withdrawn Watson would be the +object of vengeance by the Corporation and its +friends for ever after. As if to clinch his threat +and argument, Hanna wrote, “<em>You have been in +politics long enough to know that no man in +public office owes the public anything.</em>” This last +phrase remained a potent weapon in the hands +of <abbr>Mr.</abbr> Hanna’s enemies till the day of his +death.</p> + +<p>But the Hearst letters show that Judge Burket +was not the only judicial candidate <abbr>Mr.</abbr> Archbold +favoured. The following letters were written +by him to the <abbr title="Honorable">Hon.</abbr> W. A. Stone, Governor of +Pennsylvania:—</p> + +<blockquote> +<p class="right pad1"> +<span class="pad3">26, <span class="smcap">Broadway</span>,</span><br> +<i>December 5, 1902</i>. +</p> + +<p><span class="smcap">My dear Governor</span>,—I am sure you will pardon any seeming +presumption on my part in writing you on a subject in +which, both personally and on behalf of my Company, I am +greatly interested. It is to urge the appointment, if at all +consistent, of Judge Morrison, of McKeen, to the Supreme +Court Bench, vice Mitchell, deceased. Judge Morrison’s +character for ability and integrity needs no word at my hands, +but aside from these great considerations his familiarity with +all that pertains to the great industries of oil and gas in the +important relation they bear to the interests of the Western +part of the State make him especially desirable as a member +of the Court from that section.</p> + +<p><span class="pagenum" id="Page_84">[Pg 84]</span></p> + +<p>Hoping that it may prove possible for you to favourably +consider Judge Morrison’s appointment.</p> + +<p class="right pad1"> +<span class="pad3">I am, with very high regard, sincerely yours,</span><br> +<span class="smcap"><abbr title="John">Jno.</abbr> D. Archbold</span>. +</p> + +<p><abbr title="Honorable">Hon.</abbr> <abbr title="William">Wm.</abbr> A. Stone, Harrisburg, <abbr title="Pennsylvania">Pa.</abbr></p> +</blockquote> + +<hr class="r5"> + +<blockquote> +<p class="right pad1"> + <span class="pad3">26, <span class="smcap">Broadway</span>,</span><br> + <i>September 5, 1900</i>. +</p> + +<p class="noindent"><abbr title="Honorable">Hon.</abbr> <abbr title="William">Wm.</abbr> A. Stone, Harrisburg, <abbr title="Pennsylvania">Pa.</abbr></p> + +<p><span class="smcap">My dear Governor</span>,—Will you permit me to say that if it +seems consistent for you to appoint Judge John Henderson, of +Meadville, <abbr title="Pennsylvania">Pa.</abbr>, to the vacancy on the Supreme Bench caused +by the death of Judge Green, it will be a matter of intense +personal satisfaction to me. I am sure I need not occupy your +time with any argument as to Judge Henderson’s fitness, either +as to character or legal qualification.</p> + +<p class="right pad1"> + <span class="pad3">With high regard, I am, very truly yours,</span><br> + <span class="smcap"><abbr title="John">Jno.</abbr> D. Archbold</span>. +</p> +</blockquote> + +<p class="p2">Both Judge Morrison and Judge Henderson +were appointed to the Supreme Court of Pennsylvania, +and the former’s familiarity with “oil +and gas” no doubt proved acceptable to <abbr>Mr.</abbr> +Archbold. We shall see hereafter that <abbr>Mr.</abbr> +Archbold himself and other Standard Oil magnates +had good reason to appreciate in the +famous Buffalo refinery prosecution the advantage +of having on the Bench a judge who was +familiar with “oil and gas.”</p> + +<p>These strange letters did not disdain other +rising members of the Bar. Here is a telegram +and three letters addressed to the <abbr title="Honorable">Hon.</abbr> J. P. +Elkin, Attorney-General of Pennsylvania—the +<span class="pagenum" id="Page_85">[Pg 85]</span>officer whose duty it is to act as public prosecutor +in his State in enforcing anti-Trust legislation. +<abbr>Mr.</abbr> Elkin’s merits have since raised him +also to the Bench of the Supreme Court of +Pennsylvania:—</p> + +<blockquote> +<p class="center"> +Telegram. +</p> + +<p class="right pad1"> + <i>March 15, 1900.</i> +</p> + +<p class="noindent"><abbr title="Honorable">Hon.</abbr> John P. Elkin, Indiana, <abbr title="Pennsylvania">Pa.</abbr></p> + +<p>Telegram received. Will do as requested.</p> + +<p class="right pad1"> + <span class="smcap"><abbr title="John">Jno.</abbr> D. Archbold</span>. +</p> +</blockquote> + +<hr class="r5"> + +<blockquote> +<p class="right pad1"> + <span class="pad3">26, <span class="smcap">Broadway</span>,</span><br> + <i>March 15, 1900</i>. +</p> + +<p class="noindent"><abbr title="Honorable">Hon.</abbr> John P. Elkin, Indiana, <abbr title="Pennsylvania">Pa.</abbr></p> + +<p class="noindent">Personal.</p> + +<p><span class="smcap">My dear General</span>,—In accordance with your telegraphic +request of to-day, I beg to enclose you certificate of deposit to +your favour for $5,000, in fulfilment of our understandings.</p> + +<p class="right pad1"> + <span class="pad3">Very truly yours,</span><br> + <span class="smcap"><abbr title="John">Jno.</abbr> D. Archbold</span>. +</p> +</blockquote> + +<hr class="r5"> + +<blockquote> +<p class="right pad1"> + <span class="pad3">26, <span class="smcap">Broadway</span>,</span><br> + <i>February 5, 1900</i>. +</p> + +<p><span class="smcap">My dear General</span>,—In accordance with the request in your +telegram of to-day, I now beg to enclose you certificate of +deposit to your favour for $10,000, kind acknowledgment of +which will oblige.</p> + +<p class="right pad1"> + <span class="pad3">Yours very truly,</span><br> + <span class="smcap"><abbr title="John">Jno.</abbr> D. Archbold</span>. +</p> + +<p>To <abbr title="Honorable">Hon.</abbr> John P. Elkin, Indiana, <abbr title="Pennsylvania">Pa.</abbr></p> +</blockquote> + +<hr class="r5"> + +<blockquote> +<p class="right pad1"> + <span class="pad3">26, <span class="smcap">Broadway</span>,</span><br> + <i>May 9, 1901</i>. +</p> + +<p><span class="smcap">My dear General</span>,—I enclose copy of a measure pending—I +am not sure whether in the House or Senate—being an Act +<span class="pagenum" id="Page_86">[Pg 86]</span>to amend an existing Statute, as stated. For reasons which +seem to us potent, we would greatly like to have this proposed +amendment killed. Won’t you kindly tell me about it and +advise me what you think the chances are?</p> + +<p class="right pad1"> + <span class="pad3">Very truly yours,</span><br> + <span class="smcap"><abbr title="John">Jno.</abbr> D. Archbold</span>. +</p> + +<p>To the <abbr title="Honorable">Hon.</abbr> John P. Elkin, Attorney-General, +Harrisburg, <abbr title="Pennsylvania">Pa.</abbr></p> +</blockquote> + +<p class="p2">This is the sort of campaign the Standard Oil +Trust has been carrying on in American Legislatures. +How would the British people like it +to be extended to the House of Commons?</p> + +<p>Of course, in such a campaign of corruption +the Press is not overlooked. Here are three +interesting letters which show how public +opinion may be manufactured by that process:—</p> + +<blockquote> +<p class="right pad1"> + <span class="pad3">26, <span class="smcap">Broadway</span>,</span><br> + <i>October 10, 1902</i>. +</p> + +<p class="noindent"><abbr>Mr.</abbr> H. H. Edmonds, Baltimore, <abbr title="Maryland">Md.</abbr></p> + +<p><span class="smcap">Dear Sir</span>,—Responding to your favour of the <abbr>9th</abbr>, it gives +me pleasure to enclose you herewith certificate of deposit to +your favour for $3,000, covering a year’s subscription to the +<cite>Manufacturers’ Record</cite>.—Truly yours,</p> + +<p class="right pad1"> + <span class="smcap"><abbr title="John">Jno.</abbr> D. Archbold.</span> +</p> +</blockquote> + +<hr class="r5"> + +<blockquote> +<p class="right pad1"> + <span class="pad3">26, <span class="smcap">Broadway</span>,</span><br> + <i>January 17, 1899</i>. +</p> + +<p class="noindent"><abbr title="Honorable">Hon.</abbr> W. A. Magee, <cite>Pittsburg Times</cite>, Pittsburg, <abbr title="Pennsylvania">Pa.</abbr></p> + +<p><span class="smcap">Dear Sir</span>,—As per understanding, herewith enclosed find +certificate of deposit to your order for $1,250, the receipt of +which kindly acknowledge.—Truly yours,</p> + +<p class="right pad1"> + <span class="smcap"><abbr title="John">Jno.</abbr> D. Archbold.</span> +</p> +</blockquote> + +<hr class="r5"> + +<blockquote> +<p class="right pad1"><span class="pagenum" id="Page_87">[Pg 87]</span> + <span class="pad3">26, <span class="smcap">Broadway</span>,</span><br> + <i>December 18, 1901</i>. +</p> + +<p class="noindent"><abbr>Mr.</abbr> Thomas P. Grasty, care of Buck & Pratt, Room 1,203, +27, William Street, City.</p> + +<p><span class="smcap">Dear <abbr>Mr.</abbr> Grasty</span>,—I have your favour of yesterday, and +beg to return you herewith the telegram from <abbr>Mr.</abbr> Edmonds to +you. We are willing to continue the subscription of $5,000 to +the <cite>Southern Farm Magazine</cite> for another year, payments to be +made the same as they have been this year. We do not doubt +but that the influence of your publications throughout the +South is of the most helpful character.</p> + +<p>With good wishes, I am, very truly yours,</p> + +<p class="right pad1"> + <span class="smcap"><abbr title="John">Jno.</abbr> D. Archbold.</span> +</p> +</blockquote> + +<p class="p2">These sums are called “subscriptions,” but +their real character appears from the case of +the <cite>Southern Farm Magazine</cite>, the price of which +is 50 cents a year. <abbr>Mr.</abbr> Archbold was therefore +“subscribing” for 10,000 years! We have only +to remember that the anti-Trust feeling is very +strong in Texas and the other Southern States +to realise why the Standard Oil Trust was +extending its patronage to the remote posterity +of <abbr>Mr.</abbr> Thomas P. Grasty, that publicist of such +a “helpful” character.</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum"><a id="Page_88"></a><a id="Page_89"></a>[Pg 89]</span></p> + <h2 class="nobreak" id="CHAPTER_VI"> + ARSON AND ESPIONAGE + </h2> + +<p><span class="pagenum" id="Page_90">[Pg 90]</span></p> +<blockquote class="p2"> +<p>“The Oil Trust is evangelical at one end and explosive at +the other.”</p> + +<p class="right pad1"> + <span class="smcap">Henry D. Lloyd</span> <i>in</i> “<cite>Wealth against Commonwealth</cite>.” +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_91">[Pg 91]</span></p> + +<p class="p2 center tp-l">CHAPTER <abbr title="6">VI</abbr></p> + +<p class="center">ARSON AND ESPIONAGE</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">It</span> will be necessary to return to the subject +of bribery when we come to the marketing +business of the Trust. We will now pass to a +few examples of the resort to open violence for +the attainment of the Trust’s ends. The Tidewater +Pipe Line was started by Lombard, Ayres +& <abbr title="Company">Co.</abbr>, New York refiners, and others, on the +publication of the Rutter circular; and <abbr>Mr.</abbr> +Rockefeller offered at first to buy them out—pipes, +refineries, and all—but refused finally +to give the price of $15,000,000 they asked. +The Standard’s next move was the purchase +of a certain minority of the shares in the Tidewater +Company. On January 17, 1883, the +Standard stockholders held a hugger-mugger +meeting at the Tidewater office in Titusville, +without notifying the stockholders generally, +voted the turning over of the control to +Standard Oil interests, and took possession of +<span class="pagenum" id="Page_92">[Pg 92]</span>the office in the name of that Company. The +president of the Tidewater, however, who had +been absent in New York, met this attempt by +another equally determined. He carried the +office by surprise, barricaded it, and kept forcible +possession till a suit could be brought to declare +the meeting void, which was legally accomplished. +Previously to this all sorts of material +obstacles had been put in the way of the Tidewater +pipe getting to the sea; the railroads +constantly opposed the Company’s obtaining a +right of way, and mysterious individuals—obviously +representing Standard interests—constantly +cropped up along the proposed +route, acquiring exclusive rights over strips +of land running at right angles to the proposed +right of way, some of these tiny ribbons +of land being forty miles long. Finally, the +Tidewater Pipe Line became a Standard Oil +tentacle.</p> + +<p>In the case of the United States Pipe Line—organised +by the independent oil producers and +not to be confused with the United Pipe Lines, +which were always a Rockefeller organisation—it +has been clearly shown that the Standard +Oil Company’s representatives have resorted to +similar means of obstruction. Physical force +was used on several occasions, a notable instance +being that of the crossing of the Delaware River +<span class="pagenum" id="Page_93">[Pg 93]</span>at Hancock under the Erie Railroad bridge in +1893. Erie interests as such were in no wise +affected by the crossing, and the president of the +Erie road, after a conference with <abbr>Mr.</abbr> Emery, +manager of the United States Pipe Line, had +informed him that there would be no objection +to going under the bridge, and even sent his own +engineer to Hancock to make arrangements for +the exact location of the pipe. When the connection +from both sides of the river was about +to be made, however, the railroad company ran +up two engines and “wrecking cars,” with about +seventy-five men, and placed inflammable material +over the ends of the pipe lines, so that on +any attempt to connect they would be so heated +that connection would become impossible. The +spot was beleaguered by the hostile forces of the +railroad and the pipe line company for three +months, when the latter abandoned the route +and set its pipes seventy miles back to a place +called Athens, <abbr title="Pennsylvania">Pa.</abbr> The case for the United +States Government in the Missouri prosecution +says:—</p> + +<blockquote> +<p>The obstruction came in part directly from the agents of the +Standard Oil Company and partly from the railroads, but there +is every reason to believe that the railroads were acting in the +interests of the Standard Oil Company, as their own interests +would scarcely be injured by the pipe line, and as they had (so +far as the evidence shows) never opposed the construction of +pipe lines by the Standard Oil Company.</p> +</blockquote> + +<p><span class="pagenum" id="Page_94">[Pg 94]</span></p> + +<p>I select another case from the year 1895, when +the United States Pipe Line was getting in +through the State of New Jersey to New York +harbour. The account of it may be best given +in the words of the United States Attorney-General’s +brief in the Missouri case:—</p> + +<blockquote> +<p>When the Delaware, Lackawanna, and Western Railroad was +reached at Washington, <abbr title="New Jersey">N.J.</abbr>, serious opposition was again +encountered. The pipe line company bought the fee simple +title to land at a point where there was a culvert in the railroad +and placed a pipe through this culvert, and put a force of men +in charge. The next day two locomotives, a wrecker, and 150 +men attempted by force to eject the employees of the pipe line +from their position and to tear up the pipes. A hand-to-hand +fight ensued, and finally an agreement was reached by which +the matter was taken into Court. <abbr>Mr.</abbr> Emery testifies that +some of the same men who opposed the passage of the pipe +under the tracks of the Erie Railroad at Hancock, <abbr title="New York">N.Y.</abbr>, some +two years before, were also among the representatives of the +Delaware, Lackawanna, and Western Railroad in the trouble +at Washington, <abbr title="New Jersey">N.J.</abbr> After a delay of six months the lower +Court decided in favour of the right of the pipe line to cross +the tracks.</p> +</blockquote> + +<p>In 1879 the owners of the Vacuum Oil Works, +of Rochester, <abbr title="New York">N.Y.</abbr>, <abbr title="Misters">Messrs.</abbr> H. B. and C. M. +Everest, father and son, made over a three-fourths +interest in their concern, which manufactured +a patent lubricating oil, to the Standard +Oil Company, the Everests remaining managers +on a salary, and also being co-directors along +with <abbr title="Misters">Messrs.</abbr> H. H. Rogers, J. D. Archbold, and +<span class="pagenum" id="Page_95">[Pg 95]</span>Ambrose McGregor, of the Standard Oil Trust, +of which the Vacuum Oil Company was now run +as a subsidiary. The following year three of +the employees, Wilson, Matthews, and Miller, +having got some money together, thought that +they would like to start refining on their own +account, and did so, setting up the Buffalo +Lubricating Oil Company in the town of +Buffalo. C. M. Everest warned them he would +do all in his power to injure their concern. He +tried especially, by an offer of $20,000, to get +Miller, who was the most practical refiner of +the three, to break his contract with his two +new partners, and on June 7, 1881, H. B. Everest +took Miller to the office of his lawyer, <abbr>Mr.</abbr> +<abbr title="George">Geo.</abbr> Truesdale, in order to come to an arrangement +with him. <abbr>Mr.</abbr> Truesdale afterwards +testified as follows in regard to this interview +(Proceedings in Relation to Trusts, House of +Representatives, 1888, Report <abbr title="Number">No.</abbr> 3,112, +<abbr title="page">p.</abbr> 864):—</p> + +<blockquote> +<p>I told him (Miller) that I did not know the exact terms of +his contract, but if he had entered into a contract and violated +it I presumed there would be a liability for damages as well as +a liability for the debts of the Buffalo party. <abbr>Mr.</abbr> Miller and +Everest both talked on the subject, and <abbr>Mr.</abbr> Everest says, “I +think there are other ways for Miller to get out of it.” I told +him I saw no way except either to back out or to sell out; no +other honourable way. <abbr>Mr.</abbr> Everest says, substantially, I +think, in these words: “Suppose he should arrange the +<span class="pagenum" id="Page_96">[Pg 96]</span>machinery so it would bust up, or smash up, what would +the consequences be?”—something to that effect. “Well,” +I says, “in my opinion, if it is negligently, carelessly done, not +purposely done, he would be only civilly liable for damages +caused by his negligence; but if it was wilfully done, there +would be a further criminal liability for malicious injury to +the property of the parties—the company.” <abbr>Mr.</abbr> Everest said +he thought there wouldn’t be anything only civil liability, and +said that would—he referred to the fact that I had been police +justice, had some experience in criminal law—and he said that +he would like to have me look up the law carefully on that +point, and that they would see me again.</p> +</blockquote> + +<p>Shortly afterwards Miller blew up a still in the +Buffalo works twice over by overheating, but +did no further damage beyond spoiling the 175 +barrels of oil contained in the still. He absconded, +was kept in idleness, or semi-idleness, +by the Vacuum Company at a salary of $1,500 +a year, and the latter company proceeded to +harass the Buffalo Lubricating Oil Company +out of existence by taking one vexatious action +after another against it on the ground of infringement +of patents. These were all decided +in favour of the Buffalo Company by the Courts +except in one case, for a purely technical infringement +it was condemned to pay 6 cents +(3<abbr title="pence">d.</abbr>) damages. Finally, the Buffalo Company +turned on its adversary and took an action +against the Vacuum Oil Company directors, +H. H. Rogers, J. D. Archbold, A. McGregor, and +the two Everests for criminal conspiracy, instituting +<span class="pagenum" id="Page_97">[Pg 97]</span>at the same time civil suits for damages. +The trial, at which <abbr>Mr.</abbr> J. D. Rockefeller and all +the forces of the Standard Oil were mustered, +aided by the most eminent counsel in the States, +came off at Buffalo on May 2, 1886, and <abbr title="Misters">Messrs.</abbr> +Rogers, Archbold, and McGregor escaped owing +to the judge withdrawing the case from the +jury, because, although they were directors of +the Vacuum Oil Company, it could not be +proved that they had advised Miller to cause +an explosion. The two Everests were condemned. +By various means the Standard contrived +to stay execution of the sentence until +May, 1888, two years later; the statute provided +a penalty of one year’s imprisonment or $250 +fine, or both. Great efforts were made to obtain +a mitigation of the sentence. A petition signed +by forty “leading citizens” of Rochester was +handed in to the judge, praying him, on account +of the “untarnished fidelity and integrity” of +the convicted men, to make the penalty as light +as the Court was authorised by law to fix. In +the result the two Everests were each fined $250 +for the criminal offence, and the Vacuum Oil +Company settled the civil suits for $85,000 +(£17,000). This is the case on which the late +<abbr>Mr.</abbr> Henry D. Lloyd (whose work, “<cite class="nonitalic">Wealth +against Commonwealth</cite>,” was the first to expose +the Standard’s misdeeds), based the caustic comment: +<span class="pagenum" id="Page_98">[Pg 98]</span>“The Standard Oil Trust is evangelical +at one end and explosive at the other.”</p> + +<p>It was remarked in a previous chapter that the +unfair advantages conceded to <abbr>Mr.</abbr> Rockefeller +by the conspiring railroads afford a sufficient +answer to the Standard Oil Trust’s contention +that the secret of its success lies in its superior +business ability. But there is no need to deny +a high level of business ability to <abbr>Mr.</abbr> Rockefeller +and his associates. The Standard Oil people +have always enjoyed this legitimate advantage +of knowing exactly what they intend doing. +Granting, however, that the Standard people +are the keenest of business men, it is equally +certain that they have pushed their keenness to +the point where it has become mere unscrupulous +cunning and chicanery. This is conspicuously +shown in the history of the Trust in its +character of salesmen.</p> + +<p>Every local agent for the sale of Standard oil +is required to furnish reports to the statistical +department of the Standard Oil Trust at 26, +Broadway, New York, of all the transactions +entered into by every dealer in his district. His +business, in short, is to know everybody else’s +business and to report it. This is done by filling +up printed forms showing in parallel columns +against every retailer’s name in the district, be +he shopkeeper or pedlar, the description and +<span class="pagenum" id="Page_99">[Pg 99]</span>brand of goods he buys and sells, how the goods +have been transported, their price, and the +name and address of the wholesale dealer who +supplied them. The agent is stimulated in every +way by reproof and reward to obtain the most +intimate and apparently trifling details bearing +upon the above points, and, as is well known in +the United States, is generally converted by the +system into a mere spy, who will not stick at +bribery or any other dirty trick so long as he +can give his chiefs the desired information. +The United States Government agents found +that the Standard’s “statistical department” +was presided over by a man named Christian +Dredger—a name which, allied to the occupation, +certainly reminds one of “the man with +the muck-rake.” The knowledge that a local +grocer or pedlar is buying elsewhere than from +the Standard is no sooner received by mail +or telegraph at the statistical department than +a Standard agent is told off to swoop down +upon the “irregular trader,” and either by +threats of underselling and ruining his business +in case he persists to offer the “independent” +oil, or by promising him a secret rebate on published +prices, secures his submission. If the +agent can persuade the retailer to countermand +his order from the independent, so much the +better.</p> + +<p><span class="pagenum" id="Page_100">[Pg 100]</span></p> + +<p>These accusations are proved beyond question +by extant collections of hundreds of letters and +numerous telegrams received by independent +retailers, and by a superabundance of sworn +testimony from all parts of the States. Just to +show how the thing works, here is a typical +letter received by a retailer who has been +caught ordering oil from an independent, and +has been “persuaded” to countermand the +order:—</p> + +<blockquote> +<p class="right pad1"> + <span class="pad3"><span class="smcap">Des Moines, Iowa</span>,</span><br> + <i>January 14, 1891</i>. +</p> + +<p class="noindent">John Fowler, Hampton, Iowa.</p> + +<p><span class="smcap">Dear Sir</span>,—Our Marshallstown manager, <abbr>Mr.</abbr> Ruth, has +explained the circumstances regarding the purchase and subsequent +countermand of a car of oil from our competitors. He +desires to have us express to you our promise that we will +stand all expense, provided there should be any trouble growing +out of the countermand of this car. We cheerfully promise +to do this; we have the best legal advice which can be obtained +in Iowa bearing on the points in this case. An order can be +countermanded either before or after the goods have been +shipped, and, in fact, can be countermanded even if the goods +have already arrived and are at the <span lang="fr">depôt</span> [<i lang="la">anglice</i>, railway +station]. A firm is absolutely obliged to accept a countermand. +The fact that the order has been signed does not make +any difference. We want you to absolutely refuse under any +circumstances to accept the car of oil. We are standing +back of you in this matter, and will protect you in every +way, and would kindly ask you to keep this letter strictly +confidential.</p> + +<p class="right pad1"> + <span class="pad3">Yours truly,</span><br> + <span class="smcap">E. P. Pratt</span>. +</p> +</blockquote> + +<p><span class="pagenum" id="Page_101">[Pg 101]</span></p> + +<p class="p2">Another typical example of Standard methods +is revealed in the following letter addressed to +the Independent Oil Company, of Mansfield, +Ohio, by one of its customers:—</p> + +<blockquote> +<p class="right pad1"> + <span class="pad3"><span class="smcap">Tiffin, Ohio</span>,</span><br> + <i>January 24, 1898</i>. +</p> + +<p><span class="smcap">Dear Sirs</span>,—I am sorry to say that a Standard Oil man from +your city followed that oil car and oil to my place, and told me +that he would not let me make a dollar on that oil, and was +dogging me around for two days to buy that oil, and made all +kinds of threats, and talked to my people of the house while I +was out, and persuaded me to sell, and I was in a stew what +I should do, but I yielded, and I have been very sorry for it +since. I thought I would hate to see the bottom knocked out +of the prices, but that is why I did it—the only reason. The +oil was all right. I now see the mistake, and that is of getting +a carload. Two carloads coming in here inside of a week is +more than the other company will stand....</p> + +<p class="right pad1"> + <span class="pad3">Yours truly,</span><br> + <span class="smcap">H. A. Eirick</span>. +</p> +</blockquote> + +<p class="p2">Chess, Carley & <abbr title="Company">Co.</abbr>, the Standard marketing +agents at Louisville, Kentucky, are big offenders +in this respect. The late <abbr>Mr.</abbr> George Rice, +of Marietta, Ohio, a well-known independent, +offered a grocer named Armstrong, in Clarksville, +Tennessee, his oil at a lower price than +Chess, Carley & <abbr title="Company">Co.</abbr> would sell to him at. +Armstrong mentioned the offer to the latter, +and “was scared almost out of his boots,” wrote +Rice’s agent.</p> + +<p><span class="pagenum" id="Page_102">[Pg 102]</span></p> + +<blockquote> +<p>Carley told him, continues the agent, “he would break him +up if he bought oil of any one else; that the Standard Company +had authorised him to spend $10,000 to break up any concern +that bought oil from any one else; that he (Carley) would put +all his drummers in the field to hunt up Armstrong’s customers, +and sell his customers groceries at 5 per <abbr>cent.</abbr> below Armstrong’s +prices, and turn all Armstrong’s trade over to Moore, +Bremaker & <abbr title="Company">Co.</abbr>, and settle with Moore, Bremaker & <abbr title="Company">Co.</abbr> +for their losses in helping to break Armstrong up, every thirty +days.”</p> +</blockquote> + +<p>The Waters-Pierce Oil Company, the Standard’s +Texas and Mexico branch, are equally +bad, and their methods are denounced by their +customers in similar language to that already +quoted. The retailers speak of their threats, +their “cutting to kill”; they complain that the +Standard agents “nose” about their premises, +ask impudent questions, and generally make +trade disgusting and humiliating.</p> + +<p>The system naturally results in bribing employees, +not only of the railroads, but of the +independents themselves in order to gain information. +The bribes seem to have been +generally small in amount, but to have yielded +wonderful results. For instance, in 1893, a +negro boy who was induced by the Atlantic +Refining Company of Philadelphia (Standard Oil +subsidiary), to supply regular details of the +business of the Lewis Emery Oil Company, his +employers, was only paid $90 (£18) for supplying +<span class="pagenum" id="Page_103">[Pg 103]</span>information as to the firm’s daily shipments +for about six months and also for +smuggling his company’s price-book to the +Standard managers to be copied out! Most of +the old legends about a man “selling his soul +to the devil” make Mephistopheles do something +very substantial as his part of the bargain. +But the Standard Oil Trust is capable of giving +his Satanic Majesty many wrinkles in “labour-saving” +methods, and breaks down the moral +sense of the rising generation on much more +economic principles. E. M. Wilhoit, Standard +agent at Topeka, Kansas, from 1891 to 1898, +testified in the Missouri trial that his agency +was allowed $8 (£1 12<abbr title="shillings">s.</abbr> 6<abbr title="pence">d.</abbr>) a month for paying +railroad employees for information of competitive +shipments, <abbr>Mr.</abbr> E. P. Pratt, the manager +of the Kansas City branch of the Consolidated +Tank Line Company, forwarding this $8 from +Kansas City by his personal cheque. <abbr>Mr.</abbr> G. +W. Mayer, who succeeded Pratt, reduced this +amount to $6 (25<abbr title="shillings">s.</abbr>) a month. The cheques +came in blank envelopes without any letter, and +the instructions as to what should be done with +the money were given verbally. The clerks of +five different railways were called upon once +a week for this information, which was generally +written on a small slip of paper and handed +to the drayman who took oil to the railroad. +<span class="pagenum" id="Page_104">[Pg 104]</span>I select this case almost at random as a typical +one from an ocean of similar evidence. From +the tempter’s point of view it certainly seems +a very cheap line of damnation.</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum" id="Page_105">[Pg 105]</span></p> + <h2 class="nobreak" id="CHAPTER_VII"> + THE “BOGUS INDEPENDENTS” + </h2> + +<p><span class="pagenum" id="Page_106">[Pg 106]</span></p> +<blockquote class="p2"> +<p>“The very rich are just like all the rest of us; and if +they get pleasure from the possession of money it comes from +their ability to do things which give satisfaction to some one +besides themselves.”</p> + +<p class="right pad1"> + <span class="smcap">John D. Rockefeller</span> <i>in</i> “<cite>Random Reminiscences</cite>.” +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_107">[Pg 107]</span></p> + +<p class="p2 center tp-l">CHAPTER <abbr title="7">VII</abbr></p> + +<p class="center">THE “BOGUS INDEPENDENTS.”</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">The</span> constant policy of the Standard throughout +its whole career has been superabundantly +proved to be to cut prices where there +is competition, and where there is none to raise +them to the utmost point that customers will +go to. The Standard has found that this practice +has always caused a deal of talk whenever +it has been recognised, and the Standard hates +talk. It has made a good try to keep the talk +down by spreading the idea about that it is the +Standard’s competitors who always begin the +price-cutting, and, on finding it difficult to get +this idea to go down with the public, it one fine +day hit upon the expedient of putting “bogus +independent” companies and pedlars in the +field as stalking-horses to bear the odium of the +price-cutting. Occasionally, especially in the +case of the pedlars, who do a big business in +America, it has involved a deal of stagey +<span class="pagenum" id="Page_108">[Pg 108]</span>“business” of all sorts to keep this deception +up, a fact that makes the perusal of the evidence +on this matter very entertaining and at times +even amusing reading. But a very serious purpose +and a very serious effect ran through the +whole proceedings for years, which was, in +general, to throw dust in the eyes of the public +as to the game consistently played by the Standard, +namely, to kill competition and extract the +highest possible amount out of the pockets of +its customers. There are two British companies +which were alleged by the United States Government +counsel in the Missouri litigation to be Standard +Oil tentacles. Their whole history is so +characteristic of Standard Oil tactics that it +merits close and immediate attention. They are +the General Industrials Development Syndicate, +Limited, registered at Somerset House in 1899, +and the London Commercial Trading and Investment +Company, Limited, registered in 1903. As +these were two companies which <abbr>Mr.</abbr> J. D. Archbold, +in the Missouri proceedings, swore he had +never heard of, their history throws a valuable +light on how the Standard does its business. +Taking the General Industrials first, we are +brought back to an American company, the Manhattan +Oil Company, of Ohio, which was organised +by Commodore E. C. Benedict and <abbr>Mr.</abbr> A. N. +Brady, of New York, in 1890. They laid a pipe +<span class="pagenum" id="Page_109">[Pg 109]</span>line from the Lima oil-fields to Chicago in order to +supply crude oil to the People’s Gas Light and +Coke Company of that city, in which they were +interested, at a more reasonable rate than the +Standard would supply it. The Manhattan Company +also had a large number of tank cars +and a refinery in Galatea, Ohio. Evidence was +given before the Inter-State Commerce Commission +that independent Cleveland refiners +were met in the Lima oil field by this Manhattan +Oil Company, which cut off their supplies by +paying “premiums” to oil well-owners in certain +districts to send it their oil. The Manhattan +Company professed to be independent, but +its proceedings induced the really independent +refiner to suspect that it had become a Standard +auxiliary.</p> + +<p>When the United States Government started +the proceedings in the Missouri courts a part of +the truth came to light. Evidence was then given +by <abbr>Mr.</abbr> A. N. Brady that in 1899 he sold the +entire stock of the Manhattan Oil Company +for $615,000 to an English company, this +General Industrials Development Syndicate, +Limited, which also took over a mortgage of +$800,000. But <abbr>Mr.</abbr> Brady wanted to ensure that +his gas plants in Chicago should have a supply +of gas-oil, and he testified that part of the terms +of his contract for the sale of the Manhattan +<span class="pagenum" id="Page_110">[Pg 110]</span>stock to the English company was that the +Standard Oil Company of Indiana (one of the +branches of the Trust) should supply him with +gas-oil.</p> + +<p>It was sufficiently remarkable that this unknown +English company should be able to secure +a favourable contract for Brady’s gas-oil from +the Standard, but still more remarkable incidents +followed. Immediately after the purchase of +the stock of the Manhattan that company’s +refinery at Galatea, Ohio, was bought by the +Solar Refining Company of Ohio (admittedly a +Standard company); the Union Tank Line +Company (another Standard company) bought +all the Manhattan’s tank cars, and the Ohio Oil +Company (a Standard tentacle which is in the +oil-well business) bought the Manhattan Company’s +wells. After this division of its property +the Manhattan Oil Company continued as a +pipe-line company, posing as an independent oil +company and offering these “premiums.” Then +came the delicate question as to who owned it! +Here is an extract from <abbr>Mr.</abbr> Archbold’s cross-examination:—</p> + +<blockquote> +<p><i><abbr title="Question">Q.</abbr></i> Do you know the General Industrials Development Syndicate, +Limited, of London?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I do not.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Of London, England?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I do not.</p> + +<p><span class="pagenum" id="Page_111">[Pg 111]</span></p> + +<p><i><abbr title="Question">Q.</abbr></i> You know nothing about it?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I do not.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Is it owned or controlled, directly or indirectly, by any +company of the Standard Oil combination?</p> + +<p><i><abbr title="Answer">A.</abbr></i> Not to my knowledge.</p> + +<p><i><abbr title="Question">Q.</abbr></i> You would be apt to know it, wouldn’t you, if it was?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I think I would.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Do you know the firm of Budd, Johnson and Jecks, London, +solicitors?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I don’t know them.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Did you ever hear of them?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I may have heard of them in connection with this inquiry.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Do you know <abbr>Mr.</abbr> Maxwell?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I do not.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Connected with the firm. <abbr>Mr.</abbr> Maxwell or <abbr>Mr.</abbr> Herbert +Johnson?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I do not know either of them.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Did you ever hear of them?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I may, in connection with this firm. I don’t even recall +the names now.</p> +</blockquote> + +<p><abbr>Mr.</abbr> Kellogg, counsel for the United States +Government, pointed out that the New York +books of the Anglo-American Oil Company +<abbr title="Limited">Ltd.</abbr>, of London, showed that the Company +between 1899 and 1906 loaned over £540,000 +to <abbr>Mr.</abbr> James McDonald, who was then +its managing director, and he suggested +that it was to provide the money to enable the +General Industrials Development Syndicate to +buy the Manhattan and yet conceal that the +Standard were the purchasers. <abbr>Mr.</abbr> Archbold +was in his best <i lang="it">non mi ricordo</i> vein. Although +<span class="pagenum" id="Page_112">[Pg 112]</span>he was a director of the Anglo-American Oil +Company up to 1907 he could not tell for what +purpose that large sum of money was lent to +<abbr>Mr.</abbr> McDonald by the Company. Neither the +auditor nor the comptroller of the Standard +Oil Company in New York could tell why their +London branch did this, and <abbr>Mr.</abbr> Archbold did +not even know whether the loan had been +repaid! He was still more pointedly questioned +about the matter:—</p> + +<blockquote> +<p><i><abbr title="Question">Q.</abbr></i> Isn’t it a fact, <abbr>Mr.</abbr> Archbold, that the Standard Oil Company, +or some of its companies, indirectly owns the Industrials +Development Syndicate, Limited, and organised it?</p> + +<p><i><abbr title="Answer">A.</abbr></i> Not to my knowledge.</p> + +<p><i><abbr title="Question">Q.</abbr></i> You keep <span id="TN2">pretty close track of companies</span> starting business +in competition with you in this country, don’t you?</p> + +<p><i><abbr title="Answer">A.</abbr></i> We do.</p> + +<p><i><abbr title="Question">Q.</abbr></i> You seem to be able to produce a list here of every +concern engaged in the oil business in the country, didn’t +you?</p> + +<p><i><abbr title="Answer">A.</abbr></i> As nearly as we can keep track of it; yes.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Is this General Industrials Development Syndicate, +Limited, engaged in the oil business anywhere else?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I do not know.</p> + +<p><i><abbr title="Question">Q.</abbr></i> You never investigated it?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I never heard of their being in any place else. They may. +I never have heard of it.</p> + +<p><i><abbr title="Question">Q.</abbr></i> And yet it bought the Manhattan Company and then +caused the Manhattan to sell you the refineries, the producing +wells, the cars, and continued doing business with you, and you +never looked into the Development Company.... You never +investigated to find out who the English company was?</p> + +<p><i><abbr title="Answer">A.</abbr></i> No, not beyond that.</p> +</blockquote> + +<p><span class="pagenum" id="Page_113">[Pg 113]</span></p> + +<p>The last question of counsel is a sufficient commentary +in itself on <abbr>Mr.</abbr> Archbold’s pretended +ignorance of the General Industrials Development +Syndicate, but further light will be thrown +presently upon the relations of this London company +with the Standard group. In the meantime, +it will be convenient to consider, at the +same time, the second of these English companies, +the London Commercial Trading and Investment +Company. Evidence was given in the Missouri +prosecution by <abbr>Mr.</abbr> H. Bayne, the son of a well-known +New York banker, that all the stock of +the Security Oil Company of Texas, another professedly +independent concern, had been acquired +by this London company. Texas has a +very rigid anti-Trust law, and therefore there +was an additional reason for caution in allowing +the real purchasers to become known. <abbr>Mr.</abbr> +Archbold was as discreet as ever. <abbr>Mr.</abbr> Kellogg +put it to him that cheques drawn by the Anglo-American +Oil Company to the order of the +National Provincial Bank of England in London +were by that bank turned over to the Bank of +England, and that cheques were then drawn on +that bank to solicitors to pay for the Security +Oil Company’s stock. Now, although <abbr>Mr.</abbr> Archbold +had been for many years a director of the +Anglo-American Oil Company, he could neither +confirm nor deny this remarkable story. He +<span class="pagenum" id="Page_114">[Pg 114]</span>had never heard of such a transaction, and +when asked whether the Standard directly or +indirectly owned or controlled the London +Commercial Trading Company he could only +reply, “Not to my knowledge.”</p> + +<p>It is time, in considering this painful case +of “loss of memory,” to turn to the records of +these two companies in the Registry of Joint +Stock Companies at Somerset House. They +present singular features of resemblance; in +fact, save for the disparity in age, they might +be twins. Both companies have as solicitors +and large original shareholders the members +of the firm of Budd, Johnson and Jecks, of +24, Austin Friars, <abbr class="spell">E.C.</abbr>, whose names <abbr>Mr.</abbr> +Archbold was unable to recall. Both companies +have the same offices—27, Walbrook; +the same secretary—<abbr>Mr.</abbr> J. Morgan Richards +Francis; and the same auditor. Both companies +have adopted the idea of issuing share +warrants to bearer for the whole of their +capital, by which device they avoid returning +any subsequent list of shareholders to Somerset +House. Both companies hit upon the idea +of having but one director, and both were +fortunate enough to select for that onerous +task the same gentleman—<abbr>Mr.</abbr> Horace Maxwell +Johnson, barrister-at-law, of Hickwells, Chailey, +Sussex. But these strange coincidences do not +<span class="pagenum" id="Page_115">[Pg 115]</span>end here. The first list of shareholders in each +case contains some remarkable resemblances. +In the case of the General Industrials Development +Syndicate it was as follows:—</p> + +<table class="autotable"> + +<tr> +<td colspan="3"></td> +<td class="tdr">Shares.</td> +</tr> + +<tr> +<td class="tdl" colspan="3">Henry Hassall, 32, Dartmouth Park Road</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl" colspan="3">E. G. Flower, Elm Villa, Elm Road, Sidcup</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl" colspan="3">Robert Cave, 26, Beversbrook Road, Tufnell Park</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl" colspan="3">Sydney Lowenthal, 59, Sidney Street, South Kensington</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl" colspan="3">Francis Glover Sharpe, 16, Foyle Road, Westcombe Park</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl" colspan="3">Ernest Luff Smith, 73, Ramsden Road, Balham</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl" colspan="3">Horace Maxwell Johnson, 1, <abbr>Dr.</abbr> Johnson’s Buildings, barrister</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl">John Wreford Budd,</td> +<td class="tdl" rowspan="4"> +<img class="lr-brace" alt="right curly bracket" src="images/right-brace.png"> +</td> +<td class="tdl" rowspan="4">all of 24, Austin Friars, solicitors, jointly</td> +<td class="tdr" rowspan="4">399,993</td> +</tr> + +<tr> +<td class="tdl">Murray Johnson,</td> +</tr> + +<tr> +<td class="tdl">Herbert Walter Johnson</td> +</tr> + +<tr> +<td class="tdl">Arthur Statham Jecks</td> +</tr> + +<tr> +<td colspan="3"></td> +<td class="tdr bt">400,000</td> +</tr> + +</table> + +<p>Turning to the London Commercial Trading +Company, we find the following names:—</p> + +<table class="autotable"> + +<tr> +<td colspan="3"></td> +<td class="tdr">Shares.</td> +</tr> + +<tr> +<td class="tdl" colspan="3">Henry Hassall, 5, Florence Road, Finsbury Park</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl" colspan="3">E. G. Flower, 279, High Road, Lee</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl" colspan="3">Robert Cave, 26, Beversbrook Park, Tufnell Park</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl" colspan="3">F. G. Sharpe, 27, Walbrook</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl" colspan="3">E. Luff Smith, 73, Ramsden Road, Balham</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl" colspan="3">John Rayner, 8, Woodside Villas, Ewell Road, Surbiton</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl" colspan="3">G. Dudley Colclough, 47, Inverness Terrace</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl">John Wreford Budd,</td> +<td class="tdl" rowspan="4"> +<img class="lr-brace" alt="right curly bracket" src="images/right-brace.png"> +</td> +<td class="tdl" rowspan="4">of 24, Austin Friars, jointly,</td> +<td class="tdr" rowspan="4">722,502</td> +</tr> + +<tr> +<td class="tdl">Murray Johnson,</td> +</tr> + +<tr> +<td class="tdl">Herbert Walter Johnson</td> +</tr> + +<tr> +<td class="tdl">Arthur Statham Jecks</td> +</tr> + +<tr> +<td colspan="3"></td> +<td class="tdr bt"><span id="TN3">722,509</span></td> +</tr> + +</table> + +<p><span class="pagenum" id="Page_116">[Pg 116]</span></p> + +<blockquote> +<p>(On February 23, 1904, 2,493 more shares were allotted to +<abbr title="Misters">Messrs.</abbr> Budd, Johnson and Jecks, making up the total capital +of £725,000.)</p> +</blockquote> + +<p class="p2">It must be understood, of course, that the +appearance of the names of English lawyers +in these lists neither conveys any reflection of +any kind upon them nor identifies them in +any way with the operations of the Standard +Oil Trust in the United States or elsewhere. +<abbr title="Misters">Messrs.</abbr> Budd, Johnson and Jecks are a well-known +and highly respected firm; and it must +be assumed that they only appear in these +transactions between the companies in their +professional capacity.</p> + +<p>We find, therefore, that out of the original +shareholders in the General Industrials, nine +appeared in the list of the London Commercial +four years afterwards. A tenth, <abbr>Mr.</abbr> Horace +Maxwell Johnson, the managing director, +appeared on October 2, 1903 (<abbr>Mr.</abbr> E. G. Flower’s +share was transferred to him). In both cases +almost the entire assets of the Company are +represented in the balance-sheet by shares of +foreign companies. In the case of the General +Industrials, out of its £100,526 assets £94,613 +represented such shares, while in the case of +the London Commercial this item represents +£718,685 out of total assets of £734,979.</p> + +<p>There is only one difference in the history +<span class="pagenum" id="Page_117">[Pg 117]</span>of these companies. While the London Commercial +has increased its original capital of +£110,000 to £725,000, the General Industrials +has reduced its capital. It consisted at first +of 400,000 £1 shares, but in June, 1901, the +capital was reduced to £230,000 by the repayment +of 8<abbr title="shillings">s.</abbr> 6<abbr title="pence">d.</abbr> on each share. On +December 13, 1905, the capital was further +reduced to £120,000 by the repayment of a +further 5<abbr title="shillings">s.</abbr> 6<abbr title="pence">d.</abbr> on each share, and on August +10, 1906, this was further reduced to £100,000 +by refunding a further 1<abbr title="shilling">s.</abbr> per share. This world +is full of strange coincidences, but it is distinctly +worth noting that the capital of the +Manhattan Oil Company showed a synchronous +tendency to fall. From an exhibit put in by <abbr>Mr.</abbr> +Kellogg in the Missouri case it appeared that +the capital of the Manhattan Oil Company was +reduced from $2,000,000 (£400,000) to $500,000 +(£100,000) on May 23, 1902, and to $150,000 +(£30,000) on October 23, 1905.</p> + +<p><abbr>Mr.</abbr> Brady testified that when <abbr>Mr.</abbr> Herbert +Johnson, of London, came to him in New York +he said the General Industrials were “in the +oil business, but wished to purchase a going +company, with wells, and land, and cars, and +pipe lines.”</p> + +<blockquote> +<p><i><abbr title="Question">Q.</abbr></i> And refineries?</p> + +<p><i><abbr title="Answer">A.</abbr></i> Refineries.</p> + +<p><span class="pagenum" id="Page_118">[Pg 118]</span></p> + +<p><i><abbr title="Question">Q.</abbr></i> Now if he wished to purchase a going business, why did +they sell their wells and tank cars and refineries?</p> + +<p><abbr>Mr.</abbr> Milburn (Standard Oil counsel): Does <abbr>Mr.</abbr> Brady know +that?</p> + +<p><i><abbr title="Question">Q.</abbr></i> Do you know?</p> + +<p><i><abbr title="Answer">A.</abbr></i> No, I do not know that they did.</p> +</blockquote> + +<p>One other remarkable feature about this +General Industrials Company may be mentioned. +<abbr>Mr.</abbr> Brady produced at this trial the +following cable that he received:—</p> + +<blockquote> +<p>August 31, 1899, London. To A. N. Brady, 54, Wall Street, +<abbr title="New York">N.Y.</abbr>—Syndicate accepts options. John H. Cuthbert, its +agent, will call on you to arrange details and payment. He +has full authority.—<span class="smcap">Johnson.</span></p> +</blockquote> + +<p class="noindent">This was signed by <abbr>Mr.</abbr> Herbert W. Johnson, +the London solicitor, who, with the assistance +of several other solicitors, a barrister, and an +accountant, was going into the oil business +on this large scale. But, to use a once-famous +American political phrase, <abbr>Mr.</abbr> John H. Cuthbert +was “the nigger in the wood-pile.” It +is his presence that finally “gives away” the +carefully hidden origin of the General Industrials. +When <abbr>Mr.</abbr> J. D. Archbold was first +questioned about <abbr>Mr.</abbr> Cuthbert he was as forgetful +as ever:—</p> + +<blockquote> +<p><i><abbr title="Question">Q.</abbr></i> Who was <abbr>Mr.</abbr> Cuthbert? Do you know him?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I knew a <abbr>Mr.</abbr> Cuthbert.</p> + +<p><span class="pagenum" id="Page_119">[Pg 119]</span></p> + +<p><i><abbr title="Question">Q.</abbr></i> In 1899 he was in the employ of the Standard Oil Company, +wasn’t he—John H. Cuthbert?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I do not recall that he was.</p> + +<p><i><abbr title="Question">Q.</abbr></i> He had been in your employ, hadn’t he, in some of your +companies?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I do not recall that he had been.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Do you know him?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I did know him.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Where was his place of business?</p> + +<p><i><abbr title="Answer">A.</abbr></i> My recollection would be that he was employed with +the Tide Water Oil Company.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Didn’t he use to be employed by one of the Standard +Oil companies?</p> + +<p><i><abbr title="Answer">A.</abbr></i> He may have been earlier, away back. I do not remember +distinctly. I am inclined to think that he was—in the +earlier years—employed by one of our companies.</p> +</blockquote> + +<p class="noindent">After the luncheon adjournment on the same +day, however, <abbr>Mr.</abbr> Archbold’s memory somewhat +improved:—</p> + +<blockquote> +<p><i><abbr title="Question">Q.</abbr></i> Isn’t it a fact that <abbr>Mr.</abbr> John H. Cuthbert was the +Standard’s representative in the Tide Water Company as +director?</p> + +<p><i><abbr title="Answer">A.</abbr></i> He went there not specially as our representative, but +left our employ and went to them, because I imagine they +offered him greater inducement in the way of salary. I know +of no other reason.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Is it not a matter of fact that he solely represented +the Standard Oil Company as a director in the Tide Water +Company?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I think he was there as a servant of the business.</p> +</blockquote> + +<p class="noindent">The truth about <abbr>Mr.</abbr> John H. Cuthbert’s position +<span class="pagenum" id="Page_120">[Pg 120]</span>in relation to the Standard Oil Trust is clearly +shown by the following extract from the Report +of the United States Commissioner of Corporations +on the Petroleum Industry (Part <abbr title="1">I.</abbr> +page 54):—</p> + +<blockquote> +<p>About the same time (1881) Standard interests succeeded in +acquiring a minority interest in the Tide Water Company’s +stock. This move, coupled with the continual hostility of +the railroads, led to a virtual surrender of the Tide Water +interests, and an agreement was reached in 1883 by which +they substantially became, and have since remained, <em>a part +of the Standard Oil system</em>.</p> +</blockquote> + +<p>To sum up the history of this General Industrials +Development Syndicate, we have an +American oil company sold to a London company +with no list of shareholders, with a +managing director who is a barrister, after +an examination and valuation of the property +by a Standard Oil employee. We find as one +of the terms of the deal that the Standard Oil +Company—who, according to <abbr>Mr.</abbr> Archbold, +had no interest in this transaction—should +guarantee a supply of crude oil at a low rate +for ten years to the vendors’ Chicago gas +company. Then we find all the assets of the +Manhattan Company transferred to various +Standard Oil companies, except the pipe lines, +and these pipe lines used for the purpose of +<span class="pagenum" id="Page_121">[Pg 121]</span>collecting oil for Standard companies, and +paying premiums to producers to prevent them +supplying oil to independent refineries which +the Standard desires to kill. All this, taken +with the evasive and obviously untruthful +answers of <abbr>Mr.</abbr> Archbold, can lead to but one +conclusion as to the real origin of the General +Industrials. When the facts are considered +with regard to the parallel case of the London +Commercial Trading Company, that conclusion +is strengthened still more.</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum"><a id="Page_122"></a><a id="Page_123"></a>[Pg 123]</span></p> + <h2 class="nobreak" id="CHAPTER_VIII"> + THE STANDARD’S “INVENTIONS” + </h2> + +<p><span class="pagenum" id="Page_124">[Pg 124]</span></p> +<blockquote class="p2"> +<p>“From controlling the production and sale of oils, it was +but a natural progression to rise to the control of legislatures, +judges, and the executives of the State and Federal Governments. +Members, or servants, of this modern industrial +<i lang="it">Camorra</i> have been Cabinet ministers of the Supreme Administration +in Washington. They have had Presidents of +the Republic at their beck and call.”</p> + +<p class="right pad1"> + <cite>Investors’ Review</cite>, 1897. +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_125">[Pg 125]</span></p> + +<p class="p2 center tp-l">CHAPTER <abbr title="8">VIII</abbr></p> + +<p class="center">THE STANDARD’S “INVENTIONS”</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">The</span> Standard achieved other ends by its +system of creating bogus competitors, +besides avoiding public odium. It was enabled +by their operation to carry on a competitive +warfare cheaply. The “bogus independents” +bought oil from the genuine independents, +and proceeded to retail it at the <em>wholesale</em> +price. As the genuine independents then came +down a peg or two in their retail price to meet +this competition, and lowered their wholesale +price correspondingly, the bogus concerns +bought more at the new wholesale level, and +then retailed it at that, and so <i lang="la">ad infinitum</i>—or, +rather, <i lang="la">ad infimum</i>—till the bottom was +reached, without their losing a cent in the +process. Meantime the Standard virtuously +kept its prices up to its own customers in +that particular district, and protested against +the ruin that was being brought upon the +<span class="pagenum" id="Page_126">[Pg 126]</span>trade by underselling. Thus the function of +the “bogus independent,” whether company or +pedlar, was not to make money for the +Standard, but to kill off its competitors. It +was an instrument of assassination pure and +simple. And just as a particularly diabolical +murderer arranges the time and manner of his +victim’s death, so that it shall seem to be self-inflicted, +so the Standard arranged by the +working of these bogus concerns that the +genuinely independent firms outside its own +charmed circle should seem to the public to +be perishing as the result of their own “cut-throat +competition.” It was a subtle game, +and played with devilish cunning and persistency +for many years before it was definitely +shown up in its true light. And it was helped +by the fact that many of the bogus concerns +worked in this way had once been genuinely +independent concerns which the Standard had +secretly bought up.</p> + +<p>Charles E. Farrell testified as a Government +witness at the Missouri trial—and no attempt +was made to rebut his evidence—that he had +been a tank-wagon driver for the Standard Oil +Company until events took place as follows: +About March, 1899, he was approached at his +home at night by the Standard’s agent at Troy, +<abbr title="New York">N.Y.</abbr>, who told him that McMillan, the +<span class="pagenum" id="Page_127">[Pg 127]</span>Standard’s manager at Albany, had some important +work for him to do which must be +kept entirely secret even from Farrell’s own +family. At his instance Farrell met McMillan +and Mason, the Standard manager at Binghamton, +<abbr title="New York">N.Y.</abbr>, who told him that the Standard +had competition at Oneonta, <abbr title="New York">N.Y.</abbr>, from the +Tiona Oil Company, which had got the bulk +of the trade, and that they wanted to get it +back, and for that purpose to set the storekeepers +fighting with one another. He was +directed to go to the Tiona Oil Company at +Binghamton, <abbr title="New York">N.Y.</abbr>, and buy twenty-five barrels +of oil, and have it shipped to Worcester, +as the Tiona would not sell him oil to +sell at Oneonta, where it was already doing +business. He was then to reship it from Worcester +to Oneonta, where he was to peddle it +about, putting the sign “Tiona Oil” on his +wagon, at 8 cents (4<abbr title="pence">d.</abbr>) a gallon, the same price +he had to pay the Tiona for it at Binghamton. +Strict secrecy was enjoined as to whom he was +working for. Farrell carried out the manœuvre +till the merchants cut against one another down +to 2 cents a gallon retail, and one even put out +a sign: “Free oil; come and get your cans +filled.” Later Farrell could not succeed in +getting any more Tiona oil; then the Standard +supplied him with its own oil, cautioning him +<span class="pagenum" id="Page_128">[Pg 128]</span>not to sell too much of it, but only to bell the +low price about. Farrell was suspected at last +by the Tiona people of being sent by the +Standard, but, acting on instructions, denied it +through thick and thin.</p> + +<p>This nefarious game went on for six months, +during which time Farrell carried on his +correspondence with Mason at Binghamton +by addressing the letters to a man named +George Craven at a certain post-office box in +Albany, and Craven forwarded them to Mason. +Most of the letters sent by Mason in reply were +on plain paper and unsigned, but not all. In +one which is signed, and which was exhibited in +court, Mason says:—</p> + +<blockquote> +<p>I have your various letters.... Our salesman who visits +Oneonta knows nothing whatever of who you are, nor does +any one except those you saw in our office, and under no +circumstances whatever do we want any one to get the +slightest hint that we are in any way concerned in this matter. +The Tiona people are denying that they have anything to do +with it, and claiming that we started you there. Of course, +we are denying this, and you must be very cautious, and not +allow any one to try to pump you.... You are doing first-rate +and carrying out the plan excellently, and very much to +my satisfaction.... As soon as you have read this, set a +match to it and burn it up.... Don’t tear it up, for some +person might get hold of the pieces of paper and put them +together, but if you burn it with a match, then it is out +of the way wholly....</p> +</blockquote> + +<p>A further advance in Farrell’s commercial +<span class="pagenum" id="Page_129">[Pg 129]</span>education and moral edification took place six +months after the Oneonta episode. The poor +fellow, selected no doubt for his blind fidelity, +was told by his employer at Albany, McMillan, +that a man called Starks at Troy, who had +formerly been buying oil from the Standard, +was then buying from Dauchy, an independent +wholesale dealer, and that he must buy oil from +Dauchy too, and <span id="TN4">cart it round after Starks’s +wagon</span> and sell it at the wholesale price of 8 +cents. In this way Farrell got about half of +Starks’s trade away from him, when the latter +repented of his ways and recommenced buying +from the Standard. On the prodigal’s return +Farrell was called off. I select a peddling case +of this sort to justify my assertion that no low +trick is too dirty or mean for the Standard’s +agents; to use a Transatlantic expression, they +would take its candy from a two-year-old kid.</p> + +<p>The idea of the “bogus independent” worked +as a system is a most ingenious one, and could +hardly have been invented by minds of any +ordinary calibre. Here, however, the inventive +genius of the Trust seems to end. It has been +argued on behalf of the Trust that its commercial +success has been in part due to the +various new technical processes and other improvements +which it has introduced—to the +benefit alike of the trade and the consumer. +<span class="pagenum" id="Page_130">[Pg 130]</span>For this theory there is no visible foundation, +though it constitutes the staple material of the +ordinary Standard Oil apologist. Long articles +have appeared in American and English magazines, +illustrated by pictures of the Standard’s +wonderful processes, and filled with majestic +figures of the pipe lines, and tank steamers, and +tank cars that it owns. The impression is +adroitly left that the Rockefellers found a +world of crude oil and made their millions by +showing ignorant and backward competitors +how to turn it into kerosene, lubricants, vaseline, +and petroleum wax. The truth about this +imaginative literature is gradually leaking out.</p> + +<p>Pipe lines for oil transport are described as +if they were a Standard invention. As a fact, as +early as 1862 a company was incorporated in +Pennsylvania for carrying oil in pipes or tubes +from any point on Oil Creek to its mouth or +to any station on the Philadelphia and Erie +Railroad—the first record we have of the idea, +which thus suggested itself within a reasonably +short time after oil was first struck—namely, +in 1859. Now, as we have seen, <abbr>Mr.</abbr> Rockefeller +only went into the oil trade as his sole business +in 1865, though he put money into it as early +as 1862. Three short pipe lines were working +in 1863 (Tarbell, <abbr title="volume">vol.</abbr> <abbr title="1">i.</abbr> <abbr title="page">p.</abbr> 17), and they were +first made an undoubted success by a man +<span class="pagenum" id="Page_131">[Pg 131]</span>named Samuel van Syckel, who completely +revolutionised the oil business in 1864, the year +before <abbr>Mr.</abbr> Rockefeller definitely took to it, by +first pumping oil from the wells to the railroad +through a 2-inch pipe at the rate of eighty +barrels an hour.</p> + +<p>The tank car has also been claimed as a +Standard invention. Wooden oil tanks were +first built (Tarbell, <abbr title="volume">vol.</abbr> <abbr title="1">i.</abbr> <abbr title="page">p.</abbr> 12) by a young +Iowa school teacher almost immediately after +oil was first struck, and they continued to be built +by him for about ten years, when, finding that +iron tanks were bound to supersede him, he +retired from that business. Wooden and iron +tanks, whether stationary or set on cars, were +consequently a very natural development to +meet the necessities of the oil-carrying trade, +and, as far as I can make out, were probably +running in 1869. Tank ships were an English +invention, and their adoption for the Suez +Canal was strongly opposed by the Standard +in 1891.</p> + +<p>Lubricating oil, also claimed as a Standard +invention, is due to <abbr>Mr.</abbr> Joshua Merrill, a +chemist, of the Downer Works. In 1869 he +discovered a process for deodorising petroleum, +and thus rendering it fit for lubricating purposes. +He patented his process, and by it +increased the sale of the Downer Works’ lubricating +<span class="pagenum" id="Page_132">[Pg 132]</span>oil by several hundred per <abbr>cent.</abbr> in a +single year (Tarbell, <abbr title="volume">vol.</abbr> <abbr title="1">i.</abbr> <abbr title="page">p.</abbr> 22).</p> + +<p>A whole batch of these shadowy claims was +disposed of once and for all by <abbr>Mr.</abbr> J. D. +Archbold’s admissions under cross-examination +in the Missouri case. Here is the official record +of evidence on these points:—</p> + +<blockquote> +<p><i><abbr title="Question">Q.</abbr></i> The Standard Oil Company did not discover the process +at all, did it?</p> + +<p><i><abbr title="Answer">A.</abbr></i> Oh, no.</p> + +<p><i><abbr title="Question">Q.</abbr></i> The process of making paraffin wax was in existence as +early as thirty years ago, wasn’t it?</p> + +<p><i><abbr title="Answer">A.</abbr></i> Oh, it has been in existence a long time from the coal +shales.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Now, in the matter of a great many of these by-products, +the independent refineries, so called, have done the same as +you have, haven’t they?</p> + +<p><i><abbr title="Answer">A.</abbr></i> Oh, they have, undoubtedly.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Take many of those that you testified to the other +day—for instance, cylinder oil. The earliest manufacturers +of cylinder oil were at Binghamton, <abbr title="New York">N. Y.</abbr>, were they not—a +<abbr>Mr.</abbr> Brill?</p> + +<p><i><abbr title="Answer">A.</abbr></i> There was a very early concern there—a small concern.</p> + +<p><i><abbr title="Question">Q.</abbr></i> And he is still in business, isn’t he, in Philadelphia?</p> + +<p><i><abbr title="Answer">A.</abbr></i> I don’t know.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Leonard and Ellis were very early manufacturers of +cylinder oil; isn’t that true?</p> + +<p><i><abbr title="Answer">A.</abbr></i> They were—yes.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Then lubricating oil—it was made from the petroleum +stock before 1870, wasn’t it?</p> + +<p><i><abbr title="Answer">A.</abbr></i> It was to an extent—yes.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Spindle oil, I think, is one thing you testified about the +other day. Wasn’t that first introduced by the Downer Manufacturing +Company, of Boston?</p> + +<p><span class="pagenum" id="Page_133">[Pg 133]</span></p> + +<p><i><abbr title="Answer">A.</abbr></i> I think it likely. I do not know definitely. It probably +was.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Wool oil—wasn’t that sold or manufactured by Paine, +Ablett & <abbr title="Company">Co.</abbr>, long before the Standard Oil Company combination +or interests got hold of it?</p> + +<p><i><abbr title="Answer">A.</abbr></i> It may have been. I could not say.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Was not vaseline made as early as 1860 by chemists in +Cincinnati, Ohio, from petroleum products?</p> + +<p><i><abbr title="Answer">A.</abbr></i> If it was I never heard of it. I did not know of it.</p> +</blockquote> + +<p>Such being the Standard Oil people’s methods +of dealing with their neighbours, how have +their neighbours dealt with them? The plain +answer to this is that their neighbours have +simply “howled for their blood” for the past +thirty-nine years, since the time, in fact, when +the beginnings of the great conspiracy came to +light in the detection of the South Improvement +Company scheme in 1872. Since then the Standard +Oil concern has had to face one public +prosecution after another and to witness a long +series of hostile demonstrations on the part +of the public and of public inquiries directed by +the Legislature that would have shamed any +concern capable of ordinary decent feeling out +of existence long ago. In 1879 the Standard Oil +Trust was indicted for fraudulent conspiracy +in Pennsylvania at the suit of the Petroleum +Producers’ Union, who were thick-headed and +weak-kneed enough to accept a settlement out +of court. In 1887 the Standard Oil Company of +<span class="pagenum" id="Page_134">[Pg 134]</span>Ohio was prosecuted by the State Attorney-General—<abbr>Mr.</abbr> +David K. Watson—for belonging +to the Standard Oil Trust, an illegal combination +in restraint of trade, and in 1892 judgment was +rendered prohibiting it from being a party to +any such Trust agreement. Ostensibly the liquidation +of the Standard Oil Trust followed; in +reality it pursued the even tenor of its way. In +1898 the Standard Oil Company of Ohio was again +prosecuted by the State Attorney-General, this +time <abbr>Mr.</abbr> Frank S. Monnett, for failing to obey +the 1892 judgment, and the suit, or series of suits, +was prolonged by every device on the part of +the Standard till his term of office came to an +end in January, 1900. His successor, John M. +Sheets, suppressed the suits, but matters had +been made so hot for the Standard Oil Trust +that it took advantage of the lax company law +existing in the State of New Jersey to change its +style and title (including all its subsidiaries) into +that of the Standard Oil Company of New +Jersey. As such it carries on its old conspiracy +against public law and the common weal just as +before. In 1907 it was again prosecuted in the +person of one of its subsidiaries, the Standard +Oil Company of Indiana, for the same old +charges of unjust and illegal railway discriminations, +and condemned on August 3, 1907, to +pay a fine of $29,240,000 (£5,848,000). This fine +<span class="pagenum" id="Page_135">[Pg 135]</span>was set aside on appeal on the ground that it +had been assessed on the capital of the Standard +Oil Company of New Jersey instead of on that +of the Standard Oil Company of Indiana. On +November 15, 1906, the prosecution, already +more than once referred to, of the Standard Oil +Company of New Jersey by the United States +Government was commenced in the Eastern +Judicial District of Missouri Circuit Court. +The Company was convicted of conspiracy; it +appealed, and the appeal was fixed for hearing +in the Supreme Court of the United States +during the October term of 1909. It was further +postponed, however by the death of Judge +Brewer, of the Supreme Court, and is now +expected to be decided in a few weeks.</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum"><a id="Page_136"></a><a id="Page_137"></a>[Pg 137]</span></p> + <h2 class="nobreak" id="CHAPTER_IX"> + THE TRUST IN AMERICA AND ASIA + </h2> + +<p><span class="pagenum" id="Page_138">[Pg 138]</span></p> +<blockquote class="p2"> +<p>“I know of nothing more despicable and pathetic than a +man who devotes all the waking hours of the day to making +money for money’s sake.”</p> + +<p class="right pad1"> + <span class="smcap">John D. Rockefeller</span> <i>in</i> “<cite>Random Reminiscences</cite>.” +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_139">[Pg 139]</span></p> + +<p class="p2 center tp-l">CHAPTER <abbr title="9">IX</abbr></p> + +<p class="center">THE TRUST IN AMERICA AND ASIA</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">Hitherto</span> we have been dealing with the +history of the Standard Oil Trust on its +native heath, the United States of America. It +is now time to pass in brief review some of +its operations in foreign countries. It appears +in many lands, this Protean conspirator, and +always in some new guise. Here it is the +pioneer and prophet of native oil; there it is +the importer of vast floods of foreign oil. +Itself protected by a heavy tariff in the United +States, it poses in other lands as the chief of +the apostles of free trade. It demands alike +freedom to enter foreign oil-fields as a prospector +and foreign oil markets as a retailer. In one +country it is the advocate of high prices; in +another it is the ruthless undercutter of its +competitors. Always preferring secrecy to +daylight, its underground agitations embrace +the Press, the politicians, and the public. It +<span class="pagenum" id="Page_140">[Pg 140]</span>is not always easy at first to discover who is +behind a Standard oil agitation, but I shall +give a few clues which may assist the student +of oleaginous origins.</p> + +<p>Turning first to Mexico, we find that the +Standard’s operations there have been conducted +under the name of the Waters-Pierce +Oil Company of Missouri, which is now after +many years of falsehood admitted to be a +tentacle of the Trust. The history of the re-entry +of the Waters-Pierce Company to the +State of Texas is a good example of the +Standard’s methods. There sits in the United +States Senate one Joseph Bailey, a Democrat +of the deepest dye. A lawyer, an orator, one +of those pure-souled patriots who denounce in +public the trusts and monopolies, Senator Bailey +was exactly the man the Standard wanted. +The full facts are given by Miss Ida M. Tarbell +in an article in the <cite>American Magazine</cite> for +January, 1908. The Texas Legislature passed +a sweeping anti-Trust law; under it the Waters-Pierce +Company was prosecuted from court to +court until finally in March, 1900, the United +States Supreme Court sustained the decisions +of the Texas courts, and the Company was +ordered to close up its business and get out. +At this point Senator (then Congressman) +Bailey appeared, and for a fee of $3,300 (charged +<span class="pagenum" id="Page_141">[Pg 141]</span>on the Company’s books to “profit and loss”) +succeeded in obtaining from the Democratic +Attorney-General of Texas two months’ grace. +The Waters-Pierce Company finally transferred +itself to a new Company of the same name, +which took over the entire business of the +original company, and <abbr>Mr.</abbr> Henry Clay Pierce, +the manager, applied for a charter for the new +one. He swore that it was in no way connected +with the Standard Oil Trust, and that he owned +3,996 out of 4,000 shares. Largely through the +influence of Congressman Bailey the new charter +was granted. Four weeks later Bailey, who +was always regarded as a poor man, was able +to buy the splendid Grape Vine Ranch at Dallas, +Texas, of 6,000 acres—a singular coincidence, +to say the least.</p> + +<p>The new Waters-Pierce Oil Company went on +trading until in the Missouri proceedings in +1906 Mr. Henry Clay Pierce, the managing +director, was at last forced on to the witness-stand. +He there admitted that he only owned +1,250 shares of the new Waters-Pierce Company, +and that the Standard owned 2,750. He +admitted quite frankly that in order to evade +the anti-Trust law of the State of Texas the +Standard’s 2,750 shares stood on the books in +his name from May, 1900, to September, 1904. +During this period the dividends were sent to +<span class="pagenum" id="Page_142">[Pg 142]</span><abbr>Mr.</abbr> Bayne, of the Seaboard National Bank of +New York—a gentleman whose name my +readers will recall as appearing in connection +with the Standard’s carefully concealed ownership +of the Security Oil Company of Texas. +In June, 1904, <abbr>Mr.</abbr> H. C. Pierce was asked to +transfer these 2,750 shares to <abbr>Mr.</abbr> Van Buren, +who happens, oddly enough, to be the son-in-law +of <abbr>Mr.</abbr> J. D. Archbold, whose name has appeared +so often in previous chapters.</p> + +<p>During all this time that the Waters-Pierce +Oil Company was posing as an “independent” +business it was carrying on a very large and +profitable trade in the adjoining Republic of +Mexico. Although there are large natural +deposits of petroleum in Mexico, the Waters-Pierce +Company preferred to import crude oil +from Texas and Oklahoma, refine it in Mexico, +and sell it at a price which returned a profit +of 600 per <abbr>cent.</abbr> on the invested capital. But +the Mexican Government desired to develop +the natural resources of the Republic, and as +they were quite tired of the high prices of the +Standard, which had a monopoly, they +granted large oil concessions to the Pearson +interests, which are headed by Lord Cowdray. +The Pearson firm had executed large railway, +waterworks, and harbour contracts for the +Mexican Government, and they developed the +<span class="pagenum" id="Page_143">[Pg 143]</span>petroleum resources of Mexico so rapidly that +the Standard, which was hampered by a duty +of $4½ a barrel on all the crude oil they imported, +soon began to feel the pinch.</p> + +<p>Then ensued the rate-war which lasted so +many months in Mexico, but which is reported +to be now compromised. The Waters-Pierce +Company built a refinery in Mexico, and spent +large sums in buying Mexican oil lands. They +cut prices so heavily that they sold oil under +cost, but the natural advantages of the Pearson +interests were so great as to render them +impregnable, and the Eagle Oil Company was +successfully launched on the London market +by Lord Cowdray’s firm to carry out extensive +developments on the oil-bearing lands they +own. During the bitter contest there was +plenty of evidence of the existence of the +Standard’s Press bureau, the head of which +gets the liberal salary of $12,500 a year. +Articles appeared in London financial newspapers +predicting the imminent ruin of the +Pearson interests, and obviously intended to +stop the English investor from backing their +flotations. According to a statement recently +published in the United States, a more subtle +campaign seems to have been carried out +against President Diaz, who favours the +Pearson interests. Many officials of the Government, +<span class="pagenum" id="Page_144">[Pg 144]</span>including a son of President Diaz, have +become shareholders of the Pearson local oil +company, being naturally desirous of developing +their national resources and of <span id="TN5">fighting this +American monopoly</span>. Now under the title of +“Barbarous Mexico,” an ostensibly humanitarian +campaign was opened in newspapers +and magazines of the United States of America +against the alleged harsh treatment of the +Yaqui Indians by the Mexican Government. In +the <cite>Cosmopolitan Magazine</cite> of March, 1910, it +was categorically asserted by <abbr>Mr.</abbr> Alfred H. +Lewis, one of the foremost American magazine +writers, that this campaign had been inspired +by the Oil Trust. They were determined to +be revenged on President Diaz, and therefore +they induced a number of well-meaning +Americans—who haven’t time to put down +the public lynching of negroes in the United +States—to plead the cause of the unfortunate +semi-enslaved Yaqui Indians. I cannot prove +this charge, but <abbr>Mr.</abbr> Lewis says it is believed +by Americans resident in Texas and Mexico. +From the nature of the case this allegation +is difficult to substantiate, but for the present +purpose it is a sufficiently significant fact that +a writer of <abbr>Mr.</abbr> Lewis’s reputation should +believe that such a Machiavellian scheme is +possible. That the Standard will stick at +<span class="pagenum" id="Page_145">[Pg 145]</span>nothing appears from the fact that when +Lord Cowdray visited New York in June, 1910, +he was shadowed by their detectives. The +Standard Oil Trust issued a formal denial of +this charge, but Lord Cowdray repeated it and +reaffirmed it in the <cite>Daily Mail</cite>.</p> + +<p>Turning next to Canada, we find that the +British flag has been no protection against the +Standard’s invasion. Here, too, railway discrimination +was the principal weapon employed, +and this was aided by the legislation which +the Standard obtained at Ottawa permitting +them to ship their oil along the international +waterways and the Canadian canals in bulk +steamers to Canadian ports, where it was easy +to transfer it to tank cars. In 1898 the late +<abbr>Mr.</abbr> Henry D. Lloyd, author of “<cite class="nonitalic">Wealth Against +Commonwealth</cite>,” wrote as follows to the present +writer with regard to these discriminations:—</p> + +<blockquote> +<p>My information came direct from the attorney of one of the +principal Canadian refiners. This refiner carried on his business +with my book at his elbow, and he told his attorney that +precisely the things that I had exposed in that book were +there and then being done to him. The discrimination was +managed by some manipulation of the rates with regard to +shipments in barrels. The Oil Trust had barrelling works of +its own at certain points, from which it received rates at discriminations +that killed the profits of the home refiners who +did not have these central stations. The refiner I speak of was +prosperous, liked the business, and would have continued in it +<span class="pagenum" id="Page_146">[Pg 146]</span>but for this railroad discrimination. He made every possible +effort by appeals to the railroad people in Canada to remedy the +wrong, but found them as determined to favour the American +Trust as railroads in the United States.</p> +</blockquote> + +<p>Finally the Standard clinched the matter by +purchasing a Canadian refinery, which it runs +as the Imperial Oil Company, a nice patriotic +sort of name which no doubt appeals to the +Canadian public. With this refinery and the +railroad discriminations they are as powerful +in Canada as they are in the United States.</p> + +<p>When one turns to the Far East it is +surprising to discover that the Standard has +not had things all its own way. It does a +huge business in China and Manchuria in case-oil, +but it has there had to fight, first, Russian +oil shipped in bulk, and, when that fell off, +the competition of the Dutch East Indies. +Several of these islands are very rich in +petroleum, and, in my opinion, its failure to +secure a footing there was the Standard’s +first great defeat. The story is told with +commendable bluntness and candour by <abbr>Mr.</abbr> +Robinson, British Consul at Amsterdam, in his +annual report for the year 1897 (Foreign Office +Consular Reports, <abbr title="Number">No.</abbr> 2,054). He says:—</p> + +<blockquote> +<p>At present a very important question has been raised by +the attempt of the well-known American monopolist undertaking, +<span class="pagenum" id="Page_147">[Pg 147]</span>the Standard Oil Company, to acquire a footing in +the Dutch East Indies by the purchase of the shares of the +Moeara Enim Company, an important concession in Sumatra. +An extraordinary general meeting of the latter company was +to have been held in the last days of February for the purpose +of ratifying the agreement with the Standard Oil Company, +but the Dutch Government has interfered by the categorical +declaration that no concession will be granted to a company +under the control of the American monster monopoly, and +the meeting has naturally been postponed. It remains to be +seen whether the financial power of the Standard Oil Company +can be effectively resisted by such steps, but the Government +seems quite determined to use all possible means to this end, +and the course which it has adopted will certainly be a popular +one, threatened as Netherland India is by an “<span lang="la">imperium in +imperio</span>” of this description. The agitation against the +Standard Oil Company’s monopoly, in so far as this inflicts +on this country all the dangers and disasters caused by an +exclusive supply of low-flashing oil, is a constantly increasing +one.</p> +</blockquote> + +<p>The result was that the Moeara Enim Company +were unable to sell, and the Standard +has never been able to get into the Dutch +Indies. Worse still, the Moeara Enim and +two other Dutch petroleum companies were +absorbed by the Royal Dutch Petroleum Company, +and this in its turn became in 1907 +allied with the Shell Transport and Trading +Company of London, of which Sir Marcus +Samuel is the head.</p> + +<p>Briefly, the present position is that two new +companies have been created, in which the +<span class="pagenum" id="Page_148">[Pg 148]</span>Royal Dutch and the Shell Company hold all +the shares. The Bataafsche Petroleum Maatschappij +is a Dutch company with a capital +of 80,000,000 florins, which carries on all the +pumping and refining operations of the combine +in the Far East, while a new English company, +the Anglo-Saxon Petroleum Company, with a +capital of £4,000,000, owns all the petroleum +fields in which they operate, and also the +very large fleet of tank steamers formerly +owned by the Shell Company, in which their +products are carried. They send into London +alone 80,000 tons of petroleum spirit annually +through the Asiatic Petroleum Company, their +marketing agents. Last year the same combination +sent 10,000,000 gallons of this motor +spirit into the United States, supplying firms +who were competitors of the Standard Oil Trust. +In 1909 the Royal Dutch-Shell combine took +over the business of many of their agents. +For this purpose the Shell Company provided +additional capital amounting to £440,000, +the Royal Dutch put up £660,000, and the +Asiatic Petroleum Company £200,000, making +an additional outlay of £1,300,000 for one +branch of their business. A large Roumanian +oil company, the Astra, has been secured, and +the Shanghai-Langkat Company, which operates +refineries in Borneo, has also been bought +<span class="pagenum" id="Page_149">[Pg 149]</span>out since the amalgamation of 1907. That +amalgamation has apparently been profitable +to those engaged in it, for the Shell Company’s +dividend, which had been only 5 per <abbr>cent.</abbr> +per annum between 1903 and 1906, rose to +15 per <abbr>cent.</abbr> in 1907, 20 per <abbr>cent.</abbr> in 1908, and +22½ per <abbr>cent.</abbr> in 1909.</p> + +<p>Now the awkward part of this chain of events +so far as the Standard is concerned is that the +whole petroleum world has been turned upside +down by the motor engine. In 1897 <abbr>Mr.</abbr> Paul +Babcock, director of the Standard, told the +Select Committee on Petroleum that they had +in New York tanks full of naphtha which they +could not sell. <abbr>Mr.</abbr> Bergheim, a well-known +Galician oil producer, told a City meeting the +other day that he could recall the day when +his firm gave the naphtha to any one who +would take it away. Then the Standard with +its control of the tank installations and the +selling agencies for reaching the consumer of +illuminating oil (or kerosene) was the master +of the world. Now the consumption of kerosene +is threatened by electricity among the +rich and slot-gas meters among the poor, and +it is the despised naphtha (or benzine) which +is in demand. Motor-cars, motor-cycles, motor-omnibuses, +motor-lorries, aeroplanes, all these +engines are demanding petrol, and it is the +<span class="pagenum" id="Page_150">[Pg 150]</span>good fortune of the Shell combine that its +crude oil provides a larger percentage of benzine +than the Standard’s American. While +huge quantities of benzine, for which there is +an increasing demand, are being sent to Europe +by the Shell combine, the Standard is left with +its monopoly of kerosene, for which the demand +is decreasing. At the same time, the Sumatra +and Borneo crude produces a very profitable +percentage of petroleum wax, for which there +is also an increasing demand, and there is a +big market for the residue all over the Far +East as fuel oil. This is the real secret of the +recent “oil war,” which has broken out chiefly +because the Standard finds its supremacy +challenged by wealthy and vigorous competitors, +and is trying to use its vast accumulated +profits in a “rate-cutting” war. The +latest news in this connection was the intelligence +that the Standard is attempting to repair +its initial failure of thirteen years ago by obtaining +petroliferous areas in Java and Sumatra. +It proposes to do this through the medium of +the Holland-American Petroleum Company of +Amsterdam, which being nominally a Dutch +company can legally acquire this property. +Whether the Dutch Government which took +so strong a stand against the Standard’s invasion +in 1897 will consent to be fooled by such +<span class="pagenum" id="Page_151">[Pg 151]</span>an obvious device as this remains to be seen. +But the fact that the scheme has been initiated +indicates the desperate straits to which the +Standard is reduced for benzine.</p> + +<p>This is not the first time the Standard has +come into collision with the Shell. In September, +1904, the <cite>New York Herald</cite> published +an interview with <abbr>Mr.</abbr> W. H. Libby, the foreign +marketing agent of the Standard in New York. +This was a long “puff” of the Standard, and +contained the allegations that in the “rate-cutting” +which had then been going on the +Shell Company had been reduced to serious +financial straits, and were selling oil falsely +branded. As these allegations were entirely +false, the Shell Company brought an action +against the <cite>New York Herald</cite> in the English +Courts for libel, which ended in 1905 in a +complete victory for the victims of Standard +Oil calumny. <abbr>Mr.</abbr> J. Eldon Bankes, <abbr class="spell">K.C.</abbr> (now +<abbr>Mr.</abbr> Justice Bankes) stated on behalf of the +defendants that they had made inquiries into +the matter and found that the statements +could not be substantiated, and therefore +withdrew, apologised, and paid the plaintiff’s +costs as between solicitor and client. As we +proceed we shall find other points at which +the Standard and the Shell have collided, but +the vital factor in the present oil situation is +<span class="pagenum" id="Page_152">[Pg 152]</span>the Sumatran benzine, which the Rockefellers +failed to secure in 1897.</p> + +<p>Passing to India, the Standard had to fight +for years with the Russian oil exported in bulk +through the Suez Canal, and is now pressed +hard by the Burma Oil Company, an undertaking +mainly under Scotch control, which has +until recently had a monopoly of the Burma +oil output. As there is a tariff on American +oil in India from which Burmese oil is exempt, +it was obviously to the interest of the Standard—which +thoroughly believes in tariffs at home—to +get behind that obstacle by being able to +refine Burma oil and vend it in India. There +is another reason, and that is the large percentage +of petroleum wax which the Burma +crude contains. There is a large and increasing +demand all over the world for wax, which is +used for candles, chewing-gum, the water-proofing +of fabrics without rubber, and for +many other commercial purposes. In its desire +to get a footing in this promising field the +Standard Oil Trust applied to the Indian +Government for an oil-prospecting licence in +Burma, and was much grieved when the Indian +Government refused it. We come across that +same <abbr>Mr.</abbr> W. H. Libby flitting about India. +In November, 1902, the Calcutta correspondent +of the <cite>Financial News</cite> reports that this gentleman +<span class="pagenum" id="Page_153">[Pg 153]</span>was trying to induce the Bengal Chamber +of Commerce to support his little scheme +against the Indian Government. The correspondent +gives us a pretty picture of <abbr>Mr.</abbr> +Libby’s virtuous protestations:—</p> + +<blockquote> +<p>The representative of the Standard Oil Company seems to +wish the Bengal Chamber of Commerce to believe that the +motives of his Company were not wholly mercenary—that, on +the other hand, they were philanthropic, inasmuch as he says +that “it was the intention of the Standard Oil Company to encourage +as many Burmese natives as possible to enter the producing +business, by aiding them in the employment of modern +machinery and modern methods, by providing them with an +immediate cash market for their crude oil, and by loans, if +necessary, at very moderate rates of interest, to the end that +production might be stimulated and an important industry +created. The Standard hoped to derive its own profits by +economies in refining, by materially improving the quality and +value of the manufactured products, and by distributing the +said products in India and other Oriental markets, where +aggressive efforts might largely increase existing consumption.”</p> +</blockquote> + +<p>We know, of course, that the Standard has +always been willing to encourage other people +to undertake the risks of oil-well sinking, but +the idea of stimulating this speculative business +for the benefit of the natives of a semi-barbarous +country is novel as well as captivating. +When <abbr>Mr.</abbr> Libby’s campaign failed in India +he came to London, and his claims were pressed +on the India Office by the United States Ambassador +<span class="pagenum" id="Page_154">[Pg 154]</span>in London, the <abbr title="Honorable">Hon.</abbr> Joseph Choate. +As the Ambassador had often appeared for +the Standard when at the American Bar, and +as he had himself once stated that he was a +shareholder in the Trust, we may be sure that +his advocacy of the Standard’s schemes in +Burma did not lack either zeal or ability. But +it failed, and the Trust cannot get into Burma. +The imports of all classes of oils from Burma +into Madras Presidency during 1909–10 +amounted to £317,868, as compared with +£212,982 in 1908–9. In the same period the +imports of American oils decreased from +£241,128 to £189,362.</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum" id="Page_155">[Pg 155]</span></p> + <h2 class="nobreak" id="CHAPTER_X"> + RUSSIA, GALICIA, AND ROUMANIA + </h2> + +<p><span class="pagenum" id="Page_156">[Pg 156]</span></p> +<blockquote class="p2"> +<p>“One of our greatest helpers has been the State Department +in Washington. Our ambassadors and ministers and consuls +have aided to push our way into new markets to the utmost +corners of the world.”</p> + +<p class="right pad1"> + <span class="smcap">John D. Rockefeller</span> <i>in</i> “<cite>Random Reminiscences</cite>.” +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_157">[Pg 157]</span></p> + +<p class="p2 center tp-l">CHAPTER <abbr title="10">X</abbr></p> + +<p class="center">RUSSIA, GALICIA, AND ROUMANIA</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">Passing</span> next to Russia, there is no doubt +that in the past this was a far more +dangerous competitor of the Standard than it +now is. The Baku output was at first so +tremendous that it seriously disarranged the +Standard’s calculations, and when first Russian +shipowners and afterwards Sir Marcus Samuel +proposed in 1891 to ship Russian oil in bulk in +tank steamers to the Far East, a perfect panic +seized the Standard. Immediately one of those +bogus agitations, in which it excels, broke out +with great virulence. Not only was the shipping +community thrilled by the supposed +dangers to other vessels of conveying oil in bulk +through the Suez Canal, but the British nation +was once more warned of the dark and malevolent +designs of Russia against “our highway +to India.” Nothing could be more amusing +than this waving of the Union Jack over the +<span class="pagenum" id="Page_158">[Pg 158]</span>designs of the Standard Oil Trust, but we shall +see the same “patriotic” imposture reappear +in the flash-point agitation a few years later. +The Standard was at this time supplying its +Far Eastern markets with “case-oil,” packed +in tin cans, which was, of course, a more expensive +method of transit than the large tanks +of the bulk-oil steamers, and the agitation +against the new scheme was carried to the +Foreign Office. The story is told (without +unduly emphasising the Standard’s share in it) +in <abbr>Mr.</abbr> J. D. Henry’s well-known work, “<cite class="nonitalic">Thirty-five +Years of Oil Transport</cite>” (Chaps <abbr title="5">V.</abbr> and <abbr title="6">VI.</abbr>). +<abbr title="Misters">Messrs.</abbr> Russell and Arnholz, solicitors, wrote +to the Foreign Office, urging the Government +to use their influence through the British +directors of the Suez Canal Company to prevent +the transit of bulk oil. Lord Salisbury asked +them for whom they were acting, and received +this very significant reply:—</p> + +<blockquote> +<p>In view of the opposing commercial interests engaged, and +the fact that the true promoters of bulk transit have not yet +declared themselves, we respectfully submit that without +pleading the privilege of our profession it would be imprudent +on our part to permit our clients to disclose their names.</p> +</blockquote> + +<p>In the reply which the British directors of +the Suez Canal Company forwarded to Lord +<span class="pagenum" id="Page_159">[Pg 159]</span>Salisbury, this coyness on the part of the +Standard was thus commented on:—</p> + +<blockquote> +<p>They decline to give your lordship any clue for the present +as to the names of their clients, but an expression in their +letter of November <abbr>10th</abbr>, which describes the passage of petroleum +in bulk as a disturbance of the regular and safe case +trade, leads to the inference that they are pleading the cause +of parties engaged in sending petroleum through the canal +packed in cases, and whose interests they appear to think may +be damaged by facilities being given for the more economical +conveyance of petroleum by these tank ships.</p> +</blockquote> + +<p>The Foreign Office then informed <abbr title="Misters">Messrs.</abbr> +Russell and Arnholz that Her Majesty’s Government +could not take action in the direction they +desired without full information as to what +British interest they represented in the matter. +As the Foreign Office thus declined to become +a Rockefeller catspaw, somebody organised a +memorial by merchants and tinplate manufacturers +in Wales, where the Standard still +buys most of the material for its cans, and +another by shipowners who at that time were +being chartered to carry case-oil to the East +for the Standard. Finally, Sir Frederick Abel +and <abbr>Mr.</abbr> (now Sir) Boverton Redwood prepared +a report for those British shipowners who were +hostile to the bulk carriage of oil through the +Canal. Sir Frederick Abel was a chemist who +<span class="pagenum" id="Page_160">[Pg 160]</span>constantly gave evidence on behalf of the +Standard Oil Trust when it needed an expert, +and <abbr>Mr.</abbr> Boverton Redwood had been from 1870 +till just before this period (1889) the salaried +chemist of the Petroleum Association, a trade +body whose members vended the Rockefeller +oils. <abbr>Mr.</abbr> Redwood was subsequently for a +considerable period regularly employed to test +oil cargoes on behalf of the Anglo-American +Oil Company, and he gave evidence against +raising the flash-point of lamp oil before the +Petroleum Committee of 1896. His presence on +the scene is sufficient to satisfy anybody in the +oil trade as to what was the real origin of this +benevolent agitation against tank steamers. +While this gentleman was still in Egypt Sir +Marcus Samuel artfully published in the <cite>Times</cite> +an extract from a paper <abbr>Mr.</abbr> Redwood read to +the Institution of Civil Engineers, in which he +said:—</p> + +<blockquote> +<p>The tank storage of kerosene oil has undoubtedly a great +advantage over barrel or case storage in the event of fire.</p> +</blockquote> + +<p><abbr>Mr.</abbr> Redwood was thus rather neatly cornered, +for he had to admit in his report that this +statement was still true. So he had to lay +the chief stress on the danger of burning oil +escaping on to the water—which the experience +<span class="pagenum" id="Page_161">[Pg 161]</span>of nearly twenty years has proved to be a very +trifling risk. The directors of the Suez Canal +Company took a very accurate measure of this +report when they replied:—</p> + +<blockquote> +<p>Without entering into the question whether the work of Sir +F. Abel and <abbr>Mr.</abbr> Boverton Redwood is not merely a criticism +of our regulations <em>bearing too exclusively the impression of +the anxiety of parties interested in the present mode of transporting +petroleum to the East</em>, we, <abbr title="etc.">&c.</abbr></p> +</blockquote> + +<p>After this the agitation fizzled out, and the +transport of oil in bulk still continues. The +subject was referred to at the Institution of +Civil Engineers in February, 1894, when <abbr>Mr.</abbr> +(now Sir) Fortescue Flannery invited <abbr>Mr.</abbr> +Boverton Redwood to state how his prophecies +on the carriage of bulk oil through the Canal +had been fulfilled. <abbr>Mr.</abbr> Redwood replied thus +(<cite><abbr title="Proceedings of the Institution of Civil Engineers">Proceedings Inst. C.E.</abbr></cite>, <abbr title="volume">vol.</abbr> <abbr title="116">cxvi.</abbr> <abbr title="page">p.</abbr> 250):—</p> + +<blockquote> +<p>He could only say that if, <em>as appeared to be the case</em>, the +transport of petroleum through the canal had been going on +with entire absence of anything approaching to an accident, he +was very glad to hear it. He did not know, however, that +that was to be taken as absolute proof that no risk existed. +Time alone, and a longer time than had as yet elapsed, would +demonstrate that.</p> +</blockquote> + +<p>Nearly twenty years have now elapsed; the +Standard Oil Trust itself has tank steamers +<span class="pagenum" id="Page_162">[Pg 162]</span>which convey oil through the Canal, and <abbr>Mr.</abbr> +Henry in his work shows that between 1892 +and 1906 2,000,000 tons of oil were thus transported.</p> + +<hr class="tb"> + +<p>With the collapse of its artfully engineered +agitation on this subject the Standard next +turned its energies to diplomacy. It devoted +great arts to Ludwig and Manuel Nobel, the +millionaires who had grown rich out of the +“gushers” of Baku, and cherished dreams of +becoming the Rockefellers of Russia. The +Standard’s emissaries played on their vanity +and induced the Nobels to form the Russian +Refiners’ Union, which 80 per <abbr>cent.</abbr> of the trade +had entered in 1894. The idea was that the +Russian export output should be limited to an +amount agreed with the Standard, and that +Nobel Brothers were to be the sole agents in +Europe. Each refiner was to send out a certain +quantity of oil according to the capacity of his +refinery. At the same time there were certain +distributing firms in Europe which had been +dealing chiefly in Russian oils, and as Nobel +Brothers did not require them, the good, kind +Standard agreed to buy them up. It is in this +way that the Italian Petroleum Company, the +Bremen-American Company, and Reith & <abbr title="Company">Co.</abbr> +of Antwerp (all mentioned in my list of +<span class="pagenum" id="Page_163">[Pg 163]</span>foreign marketing companies) came under the +control of the Standard. At the same time +they acquired the Kerosene Company, which +had a great storage installation close to the +Anglo-American plant at Purfleet. The Trust +continued to run these businesses in their old +names, and it was some time before the truth +began to leak out. Production in Baku was at +that time so tremendous that before the three +years during which the union was to last had +expired, the Russian refiners were quite tired +of it. Then the pleasing result was realised +that, with the exception of Nobels, none of them +had any selling organisation in Europe, and +that the Standard had so perfected its control +of the kerosene trade that people who wanted +Russian oil could only get American. The first +firm to take action were the Paris Rothschilds, +who are the owners of the Caspian and Black +Sea Company at Baku, and next to the Nobels +the largest refiners in Russia. They established +in 1898 in this country at vast expense a new +selling organisation called the Anglo-Caucasian +Oil Company, afterwards merged in the Consolidated +Petroleum Company, and a vigorous +contest took place for their share of the English +kerosene trade.</p> + +<p>The Russian oil trade has always been a +commercial switchback. At the time just +<span class="pagenum" id="Page_164">[Pg 164]</span>mentioned the Rothschilds and Nobels were +exporting largely to Europe, and the Mantascheffs +were sending large quantities of +Russian oil to the Far East. Then came the +Baku riots of 1905, when murder and +incendiarism stalked through the oil-fields and +the production fell off tremendously. It was +a stroke of luck for the Standard, for it crippled +their (at that time) strongest rival. Since +that day the exports of petroleum from Baku +have not been large, most of the reduced output +being consumed in Russia, where oil fuel is +used far more extensively than it is here. Then +early last year came the Maikop “boom,” a vast +number of French and English companies being +floated to work oil on the borders of the Black +Sea. The majority of them will never produce +a barrel of oil, but the good properties will +soon be pumping oil, and their product is +bound to have its effect on the European +market. Hence no doubt the Standard’s second +reason for embarking on the recent oil war—the +desire to stifle these infant companies at +their birth, when they are still subject to the +diseases of inexperience, experimental work, and +bad management.</p> + +<p>Passing next to Austria, we find the Standard +operating in the Galician oil-field, the production +of which has risen from 214,800 tons in 1895 +<span class="pagenum" id="Page_165">[Pg 165]</span>to 1,734,235 tons in 1908. The story is told in +the Foreign Office Report on Austria-Hungary +for 1908 (<abbr title="Number">No.</abbr> 4,355 Consular Reports). There +was an enormous production in 1908, but the +State railways could not use the raw oil in +its locomotives until the benzine was extracted. +This is our Consul’s narrative (<abbr title="page">p.</abbr> 15):—</p> + +<blockquote> +<p>The Producers’ Association, however, had not the capital to +build the necessary works for this process or the new reservoirs +required, and at this stage the Standard Oil Company of +America saw an opportunity to extend its influence in Austria. +The American company entered into negotiations with the +association and offered to erect the factory for extracting the +benzine, and further to build the new reservoirs and lease them +to the producers, who would, in return, have to supply raw oil +to the Standard Oil Company’s representatives in Austria at a +special price. An arrangement on these lines, which would have +given the American Combine a predominating influence in the +Austrian oil industry, was on the point of being signed when +the Austrian Government intervened in June, 1909, to prevent +it by undertaking to carry out the necessary works itself on +much easier terms for the producers....</p> + +<p>By this arrangement the Standard Oil Company has been +entirely excluded from the business of supplying the State railways +with oil; but the Austrian Government has gone further +in its desire to protect the Austrian oil industry from the competition +of the American Trust, which is represented here by +an affiliated company [<i><abbr>i.e.</abbr></i>, the Vacuum Oil Company, of +Austria, a branch of <span id="TN6">the Vacuum Oil Company, of Rochester</span>, +<abbr title="New York">N.Y.</abbr>], and has introduced a Bill in the Reichsrat containing +various provisions aimed directly at the Standard Oil Company. +Thus a concession will in future be necessary for carrying on +the business of storing, handling, and refining raw oil, and the +provincial authorities are able to refuse this at their discretion. +<span class="pagenum" id="Page_166">[Pg 166]</span>Further, the distribution of petroleum by means of tank carts +is only to be allowed by permission of the Ministry of Commerce. +The tank carts were recently introduced into Austria +by the representatives of the American Trust, but met with +great opposition on the part of the trade because they rendered +the middleman superfluous, and there is little doubt that the +Ministry will not give the permission required.</p> +</blockquote> + +<p>The <cite>Times</cite> Vienna correspondent on September +14, 1910, reported further developments +of this war against the Standard. It appears +that there is also operating in Galicia a certain +Limanova Petroleum Company, which, though +registered as an Austrian company, has about +£500,000 of French capital invested in it. It +has been working “in some sort of unconfessed +relationship with the Vacuum Oil Company,” +and the <cite>Times</cite> correspondent tells us how the +Rockefellers have been forced to swallow their +favourite medicine. He writes:—</p> + +<blockquote> +<p>The object of the Standard Oil and its affiliated companies in +Austria (as in other countries) is to obtain control of the +Galician oil-fields, which are worked chiefly by a large number +of Austrian producers and refiners organised in a loose ring or +trust. The tactics of selling oil at or below cost price currently +employed by the Standard Oil Company to kill its +competitors or to bring them to their knees appear to have +been employed both by the Vacuum and the Limanova Companies.</p> + +<p>Some months ago the Austrian Government intervened to +protect the Austrian producers and refiners, and applied to +the Limanova Company in particular methods of administrative +<span class="pagenum" id="Page_167">[Pg 167]</span>chicanery and railway discrimination strikingly similar +to those which made the name of the Standard Oil Company a +byword in the United States. The tactics of the Austrian +authorities are as indefensible, or as defensible, as are those of +the Standard Oil Company.</p> +</blockquote> + +<p>The Standard did not enjoy railroad discriminations +applied to itself, and it not only made +unavailing representations to the Austrian +Government through the United States Minister +at Vienna, but, acting through the French +shareholders in the Limanova Company, they +induced the French Minister to remonstrate +with Austria.</p> + +<blockquote> +<p>These representations having produced little effect, the +French Government is now stated to be about to adopt +measures of retaliation, and to impose a prohibitive tariff +upon Austrian petroleum imported into France.</p> +</blockquote> + +<p>In order to help the Standard Oil Trust to +crush out the Galician oil industry, the French +consumer was to pay more for the petroleum +products, ozokerit, <abbr title="etc.">&c.</abbr>, that he buys from +Austria. But this scheme has failed, for on +November 9, 1910, it was announced in the +<cite>Neue Freie Press</cite> (quoted here by the <cite>Financial +Times</cite>) that the Limanova Company had surrendered. +It has agreed to give up all business +transactions with the Vacuum Company, not +to sell directly or indirectly to them either crude +<span class="pagenum" id="Page_168">[Pg 168]</span>oil or the products of petroleum, and not to +make use of the selling agency of the Vacuum +Oil Company for the sale of its own products. +It has further agreed not to undersell the other +Galician refiners, and the Austrian Government +has therefore cancelled the discriminations +referred to which it employed against the +Limanova Company. Deserted thus by its +French ally, the Vacuum Company has to +rely on itself, and it is announced that the +United States Government has sent a special +envoy to Vienna to discuss with the American +Ambassador, among other things, the differences +between the Austrian Government and +the Vacuum Oil Company. It looks as though +the Austrian Government is going to win in its +struggle with this unscrupulous monopoly, and +that the Vacuum Oil Company will have to +climb down.</p> + +<p>In the neighbouring country of Roumania the +Standard has waged a bitter war for the control +of the oil industry. The output of oil in +Roumania has been increasing very largely—it +trebled in quantity between 1895 and 1900 +and as it has a high flash-point the Standard +wanted to get control of the field in order to +supply its Italian and Mediterranean market. +When its agents appeared first on the scene, +Roumania had one large refining company—the +<span class="pagenum" id="Page_169">[Pg 169]</span>Steana Romana—which dealt with about two-thirds +of the native crude oil. The wells were +all, or nearly all, in the hands of small proprietors +who were unable to sink them deep +enough, and whose ability to market their oil +was hampered by the high railway rates and +deficiency of tank cars. The Standard came +forward with a proposal to build a pipe line +from the fields to its proposed refinery, but +fortunately for Roumania its statesmen had +heard of the Standard’s American record, and +they refused to allow it to thus obtain entire +control of the national output. It was allowed +to build a refinery, and it bought certain oil-wells +from the owners, but the pipe-line project was +decisively ruled out. Strange conversions went +on at Bucharest when the Standard’s lobbyists +put in their fine work. Politicians and newspapers +which had opposed the Standard were +converted from the error of their ways in the +manner with which <abbr>Mr.</abbr> Archbold has made us +familiar, but the Standard was unable to secure +any special privileges. By this time the Deutsche +Bank, which controls the Steana Romana, +had taken an active interest in the matter, and +formed some sort of alliance through the European +Petroleum Union with the Shell-Royal-Dutch +combine, and the Rothschilds, the +Mantascheffs, and Gukasoffs of Baku. The +<span class="pagenum" id="Page_170">[Pg 170]</span>terms of this alliance are unknown, but very +keen rivalry has been going on in the +Roumanian oil-field, and only last year the +Shell-Royal-Dutch party purchased a large +Roumanian oil company, the Astra, which is +now valued at £1,200,000. In the spring of 1907 +the Standard came to a “selling arrangement” +with the European Petroleum Union, and this +was followed by a similar arrangement with the +Asiatic Petroleum Company, whose capital is +equally held by the Shell Company, the Royal +Dutch, and the Paris Rothschilds. Just how far +the European Petroleum Union is involved in +the “rate-war” which has broken out between +its twin the Asiatic and the Standard is +unknown, but as the Deutsche Bank is largely +interested in Galician oil-fields where such a +bitter fight has been going on with the Standard +for some months, it is probable that the +whole combination must ultimately be involved +if the “oil war” lasts much longer. Sir M. +Samuel has stated that the Bataafsche Petroleum +Maatschappij and the Anglo-Saxon Petroleum +Company, <abbr title="Limited">Ltd.</abbr>, distributed in dividends +in 1909 £1,500,000, and that the profits for 1910 +will not be lower, so that apparently that +contest has not seriously affected the Shell-Royal-Dutch +combine.</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum" id="Page_171">[Pg 171]</span></p> + <h2 class="nobreak" id="CHAPTER_XI"> + THE TRUST IN GERMANY, SWEDEN, AND FRANCE + </h2> + +<p><span class="pagenum" id="Page_172">[Pg 172]</span></p> +<blockquote class="p2"> +<p>“We are always short of men to do the things we want to +do—young men who are honest and therefore loyal, men +to whom work is a pleasure; above all, men who have no +price but our price. To such men we can afford to give the +only things they have not got—power and money.”</p> + +<p class="right pad1"> + <span class="smcap">H. H. Rogers</span> <i>to T. W. Lawson in</i> “<cite>Frenzied Finance</cite>.” +</p> +</blockquote> +</div> + +<div class="chapter"> +<p class="p2 center tp-l"><span class="pagenum" id="Page_173">[Pg 173]</span>CHAPTER <abbr title="11">XI</abbr></p> + +<p class="center">THE TRUST IN GERMANY, SWEDEN, AND FRANCE</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">In</span> Germany the Standard was artful enough +to strengthen its position by acquiring +existing oil companies and retaining certain +prominent German oil merchants as shareholders, +thus breaking to some extent the +force of the natural outcry against itself as +an alien corporation. In the case of its English +companies, very few shares are held by anybody +resident in England, and even these are +mostly Americans, but in Germany they are +more cautious. There has been a great controversy +as to the adoption of tank railway +wagons and tank installations on the Prussian +State railways. It is obvious that these methods +will cheapen the transit of oil, but it is also +obvious that they will play into the hands of +the Standard, which with its vast capital is +able to establish extensive installations of this +<span class="pagenum" id="Page_174">[Pg 174]</span>kind, and to prevent its smaller competitors +from reaching the market.</p> + +<p>Public opinion is the more suspicious of these +gentlemen because of the remarkable revelations +made last year with reference to their +branch—not included in the list given in +Chapter <abbr title="1">I.</abbr>—which is called the German Vacuum +Oil Company. The disclosure in question is +so thoroughly in keeping with what is already +known of the doings of the Standard in other +parts of the world that it fully bears out the +opinion already expressed, that the great +octopus is always one and the same in its +methods irrespective of time and country. It +goes all the lengths it is permitted to go. It +has gone, as will be seen, pretty far in +Germany, though the State railway system +renders rebates impossible there, and as Germany +is so close to our own doors the lesson +is one we may well take home to ourselves.</p> + +<p>In the early autumn of 1909 <abbr>Mr.</abbr> F. Hildebrandt, +the editor of the <cite>Hamburger Fremdenblatt</cite>, +whose attention had been called to the +doings of the German Vacuum Oil Company, +and who had been led to investigate the matter, +published a vigorous attack on that Company +in his columns. We of course know that +the Vacuum Oil Company, <abbr title="Limited">Ltd.</abbr>, is in England +merely a tentacle fixed on the body of John +<span class="pagenum" id="Page_175">[Pg 175]</span>Bull through which suction is applied from +26, Broadway, New York. But the Hamburg +Chamber of Commerce were in blissful ignorance +until quite recently that the German +Vacuum Oil Company was only the particular +limb of the monster that had settled down on +Germany. It reported not so long ago to the +Friedrichsort Torpedo Works at Kiel that the +Vacuum was a German company, though it +might have learnt differently if it had taken +the trouble to look into the Handelregister, +or German public registry of commercial companies. +There it would have found among the +names of the chief shareholders <abbr title="Misters">Messrs.</abbr> J. +D. Archbold, C. M. Pratt, and C. M. Everest, +the well-known Standard men who were registered +as the original directors of the Vacuum +Oil Company of Rochester, N.Y, the Company +whose connection with the Buffalo arson prosecution +has been explained in Chapter <abbr title="6">VI.</abbr> +Their connection with the Vacuum Oil Company, +<abbr title="Limited">Ltd.</abbr>, of London will be explained in a +later chapter. Two other shareholders of the +German Vacuum Oil Company, J. C. Moffet +and C. E. Bedford, also belong to the Standard.</p> + +<p>The main allegation put forward in the +<cite>Fremdenblatt</cite> by <abbr>Mr.</abbr> Hildebrandt was that +the German Vacuum Oil Company was selling +precisely the same quality of lubricating oil +<span class="pagenum" id="Page_176">[Pg 176]</span>under various fancy names and at different +prices, according to differently imagined utilities +to its German customers, and securing +preference being given to its goods by bribing +engineers and foremen right and left to advise +their employers in their favour. The simple +change of a label seemed to have such a marvellous +effect on the intrinsic quality of the +Vacuum lubricator that in some cases it justified +a rise of 25 per <abbr>cent.</abbr> in price, and even +higher. The “Etna” brand of lubricating oil, +for instance, was a poor thing that sold at 41 +marks per 100 kilos for ordinary smearings, +but when an important firm gave an order for +a superior article such as the “Gas Engine E” +or “Viscolite” oil they received the same old +“Etna” oil duly labelled “Gas Engine E” or +“Viscolite” at the correspondingly superior price +of 56 marks and 62 marks respectively. Acting +on this denunciation, the Public Prosecutor intervened, +ordered an inquiry, and summoned +<abbr>Mr.</abbr> Hildebrandt to produce his evidence, but +not before <abbr>Dr.</abbr> Oscar Ruperti, a director of the +Vacuum in Hamburg, had taken a personal +action for libel against <abbr>Mr.</abbr> Hildebrandt, who +in his turn had taken an action against <abbr>Mr.</abbr> +E. L. Quarles, the American manager of the +Vacuum in Hamburg, and <abbr>Dr.</abbr> Pölchau, who +was both legal counsel and brother-in-law to +<span class="pagenum" id="Page_177">[Pg 177]</span><abbr>Dr.</abbr> Ruperti. These personal actions appear to +be still pending, but the action instituted by the +Public Prosecutor was carried as far as a judgment, +of which the following is a translation:—</p> + +<blockquote> +<p>Record Number: F. <abbr title="4">IV.</abbr>, 360/10.</p> + + +<p class="center"><span class="smcap">Judgment.</span></p> + +<p>On the motion of the Public Prosecutor, the accused, +Edward Louis Quarles, is discharged with reference to the +accusation of fraudulent practice, on the ground of insufficient +proof. The costs of the action are charged to the State.</p> + + +<p class="center"><span class="smcap">Grounds.</span></p> + +<p>The preliminary inquiry was opened against the accused +on his appearing suspect at Hamburg and elsewhere—</p> + +<div class="blockquote2"> +<p>1. Of having in the years 1906–08, in conspiracy with the +merchant E. O. Wader, now absent, defrauded the State +Electrical Works at Kiel of 2,826 marks 5 pfennigs by +delivering to the works, instead of the brand “Vacuoline,” +which was ordered, at the price of 75 marks per 100 kilos, +the description “Fusoline,” which only cost 44 marks per +100 kilos, under the brand of “Vacuoline.”</p> + +<p>2. Of having, since the year 1905, defrauded numerous +customers of the German Vacuum Oil Company by representing +in the Company’s price-list that the descriptions of +oil “Gas Engine E and F” and “Gas Engine I and Heavy” +are a more valuable article than the descriptions “Etna” +and “Fusoline,” quoted in the price-list at 44 marks per 100 +kilos, whereas the two latter descriptions are identical with +the two former respectively.</p> +</div> + +<p>As to the charge of fraudulent conspiracy to the detriment of +the Kiel Electrical Works, it has not been proved that the +accused Quarles bears the responsibility of changing the +cheaper brand “Fusoline” into the dearer brand “Vacuoline.” +The order to effect this change in the branding was given at a +time when the accused Quarles had not as yet a seat upon the +<span class="pagenum" id="Page_178">[Pg 178]</span>board of the German Vacuum Oil Company, and had nothing to +do with the Hamburg branch. At the end of 1906 or the beginning +of 1907 the accused had, of course, learnt of the changes being +made in the brandings from the then manager of the Hamburg +branch, Earnshaw. But at that time also the accused had +nothing to do with the Hamburg branch office, and was not +called upon to prevent what was in his view an incorrect +rebranding. Also, he had nothing to do himself with the +changing of the brand. It has not been proved that after the +accused had taken a seat upon the board of the German +Vacuum Oil Company that the rebranding of “Fusoline” as +“Vacuoline” was still carried out with the knowledge and +consent of the accused.</p> + +<p>As to the rebranding of the cheaper descriptions of oil +“Etna” and “Fusoline” as “Gas Engine E and F” and +<span id="TN7">“Gas Engine I and Heavy” respectively</span>, the preliminary +inquiry has tended to show that “Gas Engine I and Heavy” +consist of different components to the other brands, and are +consequently not identical with them.</p> + +<p>The brands “Etna” and “Gas Engine E” are, of course, +identical, as is “Fusoline” and “Gas Engine F.” But a +fraudulent method of trading could only be found to exist in +the different branding if it were established that these like +descriptions were delivered under different brandings and +different prices to one and the same customer. It has not +been possible to establish that. The accused also cannot rebut +the allegation that he gave it as his opinion that the differentiation +in prices was justified by the different way in which the +two oils were used, the higher running expenses for “Gas +Engine E and F,” and greater risk encountered by the users +of these two brands.</p> + +<p>Hamburg, May 30, 1910.</p> + +<p class="right pad1"><span class="pad2">The Landgericht, Second Criminal Chamber,</span><br> +(<i>Signed</i>) <span class="smcap">Goslich</span>, <span class="smcap">Lohmeyer</span>, <span class="smcap">Sick</span>. +</p> + +<p>For the correctness of the copy:</p> + +<p style="padding-left:2em;">Hamburg, July 9, 1910.</p> + +<p class="right pad1"><span class="pad2">The Chancery of Public Prosecution,</span><br> +(<i>Signed</i>) Voss, Chancery Clerk. +</p> +</blockquote> + +<p><span class="pagenum" id="Page_179">[Pg 179]</span></p> + +<p class="p2">It will be seen at once that the judgment +exculpates <abbr>Mr.</abbr> Quarles personally, but obviously +inculpates the German Vacuum Oil Company, +by assuming that the practices alleged had +taken place, though there was not evidence to +connect <abbr>Mr.</abbr> Quarles with them.</p> + +<p><abbr>Mr.</abbr> Hildebrandt makes great capital, in a +pamphlet he has published, out of the regular +Standard Oil practice of bribery, with which +the German public seems to have been quite +unfamiliar, but in which their education must +now have been pretty well completed, to judge +from the mass of evidence adduced in the +Hildebrandt book. Some of it is entertaining +enough and edifying enough for British consumption, +particularly as it relates to a cousin-German +of one of our own Standard Oil subsidiaries. +Here is the text of an affidavit made +by <abbr>Mr.</abbr> Hans Schnell, who had formerly been +a representative of the German Vacuum Oil +Company:—</p> + +<blockquote> +<p>I, the undersigned, hereby declare and am ready to testify +on oath that from September 15, 1906, to March 31, 1908, I +was in the employ of the German Vacuum Oil Company of +Hamburg, as representative for the Dresden branch, and later +for Lower Silesia, on a fixed salary of 200 marks a month and +also confidential expenditure and commission. This commission +I had for the most part to pay over to machine-men, +partly in cash, partly in goods, in order to bring off new +business, and in some cases to maintain business relations +<span class="pagenum" id="Page_180">[Pg 180]</span>heretofore existing. I was told by <abbr>Mr.</abbr> Naerger, the correspondent +for Breslau, in the branch office in that city of the +German Vacuum Oil Company of Hamburg, the names of +the firms whose machine-men were to receive bribes from me. +Also <abbr>Mr.</abbr> A. S. Mié, of Dresden, director of the Vacuum Oil +Company, told me in a way that could not be misunderstood +that I was to expend these commissions in this way, and that +if I had paid over no bribes in money or goods to the machine-men +of the firms I had to call on I would have had scarcely +any new orders, and would have lost the old business connection.</p> + +<p>Dresden, November 4, 1909.</p> + +<p class="right pad1"> + (<i>Signed</i>) <span class="smcap">Hans Schnell</span>. +</p> + +<p>The above signature of <abbr>Mr.</abbr> Hans Schnell, Wilhelmruh, near +Berlin, merchant, was done in my presence, and I hereby +officially certify that it is genuine.</p> + +<p>Dresden, November 5, 1909.</p> + +<p class="right pad1"> +<span class="pad2">(<i>Signed</i>) <span class="smcap">Horst von Mueller-Berneck</span>,</span><br> +Royal Saxon Notary, Dresden. +</p> +</blockquote> + +<p class="p2">In further illustration of <abbr>Mr.</abbr> Mié’s efforts, +Herr F. Hildebrandt publishes a photographed +bill of expenses incurred by that gentleman in +establishing and keeping up the German Vacuum +Oil Company’s business connections, and no doubt +incidentally of establishing a reputation for himself +among engineers and machine-men generally +of being a thoroughly jolly fellow. This +document will, perhaps, help us to understand +why so many working engineers select the +Vacuum oils, when no chemical test known to +science will indicate any superiority. Its translation +is as follows:—</p> + +<p><span class="pagenum" id="Page_181">[Pg 181]</span></p> + +<table class="autotable"> + +<tr> +<td></td> +<td class="tdr"><abbr title="Mark">M.</abbr></td> +</tr> + +<tr> +<td class="tdl">Evening with <abbr>Mr.</abbr> Pampel and Obersteiger Hohner</td> +<td class="tdr tdb">42</td> +</tr> + +<tr> +<td class="tdl">Evening with <abbr>Mr.</abbr> Mié</td> +<td class="tdr tdb">28</td> +</tr> + +<tr> +<td class="tdl td-hangindent"> +<p>[<span class="smcap">Note.</span>—We had invited these gentlemen, and threw +about a good deal of money in order to +accomplish something. Besides the <abbr title="Mark">M.</abbr> 28 +entered here I added <abbr title="Mark">M.</abbr> 48 out of my own +pocket, which I have had entered in my +own account.—(<i>Signed</i>) <span class="smcap">Mié</span>.]</p> +</td> +<td></td> +</tr> + +<tr> +<td class="tdl">Cash, <abbr>Mr.</abbr> Müller, foreman</td> +<td class="tdr tdb">100</td> +</tr> + +<tr> +<td class="tdl">Cash, <abbr>Mr.</abbr> Plaintz, engineer, of Gustav Toelle</td> +<td class="tdr tdb">50</td> +</tr> + +<tr> +<td class="tdl">Foreman of S. Wolle</td> +<td class="tdr tdb">5</td> +</tr> + +<tr> +<td class="tdl">Cigars for foreman Müller</td> +<td class="tdr tdb">12.50</td> +</tr> + +<tr> +<td class="tdl">Cigars for foreman Hortenbach</td> +<td class="tdr tdb">6.25</td> +</tr> + +<tr> +<td class="tdl">Carriage and beer—call on Hortenbach</td> +<td class="tdr tdb">10.30</td> +</tr> + +<tr> +<td class="tdl">Wine, dinner, cigars, <abbr title="etc.">&c.</abbr>, with Hortenbach</td> +<td class="tdr tdb">35.20</td> +</tr> + +<tr> +<td class="tdl">Cash, <abbr>Mr.</abbr> Hortenbach</td> +<td class="tdr tdb">20.00</td> +</tr> + +<tr> +<td class="tdc">Total</td> +<td class="tdr bt"><abbr title="Mark">M.</abbr> 309.25</td> +</tr> + +</table> + +<p><abbr>Mr.</abbr> Hortenbach seems to have taken a good +deal of lubricating. Apparently his machinery +remained immovable under the influence of +wine, dinner, and cigars, and it became necessary +to put twenty marks in the slot in order +to make him work.</p> + +<p>How <abbr>Mr.</abbr> Hildebrandt got hold of this bill, +or petty-cash ticket, he does not say, but he +evidently takes a sinister view of the junketing +disclosed, and regards the money spent upon +it as so much “<span lang="de">Schmiergeld</span>,” to use the appropriate +word employed by <abbr>Mr.</abbr> Schnell in his +affidavit. The only English translation for +<span class="pagenum" id="Page_182">[Pg 182]</span>“<span lang="de">Schmiergeld</span>” is “bribe”—no doubt a very +frigid and colourless word. “Smearing-money” +would be more descriptive and picturesque as +well as literal, though for absolute neatness of +expression joined to pregnancy of meaning the +Italian circumlocution for the ugly word “bribe” +of “<span lang="it">oglio di palma</span>,” or palm-oil, beats the +German. “Lubricating oil” seems an apt English +equivalent.</p> + +<hr class="tb"> + +<p><abbr>Mr.</abbr> Hildebrandt also publishes a letter on +this subject from one of the Vacuum Oil Company +representatives, which seems to have +attracted some attention in Kiel:—</p> + +<blockquote class="p2"> +<p class="right pad1"> + <span class="smcap">Kiel</span>, <i>November 12, 1903</i>. +</p> + +<p class="noindent">The German Vacuum Oil Company, Hamburg.</p> + +<p>I beg to acknowledge receipt of yours of the <abbr>10th</abbr> of this +month, the contents of which I note. With reference to my +expenditure as your representative, I gave the Flensburg Shipbuilding +Company last month alone some 190 marks for gratuities +and introductions to the three foremen. Then I gave +50 marks to the head man at the Kiel Electrical Works. As +to the smaller expenses incurred as your representative, I +cannot remember them now, but they will be found in my +memoranda of extra expenses.</p> + +<p class="right pad1"> + <span class="pad3">Yours truly,</span><br> + <span class="smcap">Hugo Cohr</span>. +</p> +</blockquote> + +<p class="p2">The Vacuum Oil people have always liked +to be on good terms with the engineer, +<span class="pagenum" id="Page_183">[Pg 183]</span>the actual mechanic who has to see to the +application of the lubricating oils to the +machinery, and whose opinion on their merits +is naturally deferred to by his employers. +<abbr>Mr.</abbr> Heinrich Gremmler, a director of the German +Vacuum Oil Company, and manager of +the Berlin branch, wrote, under date June 20, +1908, by way of instruction to one of his +agents, in one of the letters photographed +by <abbr>Mr.</abbr> Hildebrandt: “Try and get at what +you want through the foremen—that is, by +indirect means. There is no need at all for +me to tell you on what spot you may put +your hand upon success.” <abbr>Mr.</abbr> Hildebrandt +took all this up in a very unkind spirit towards +the German Vacuum Oil Company, and +spoke of it as bribery, whereupon <abbr>Mr.</abbr> Gremmler +called upon him, he says, and denied indignantly +that the Company practised bribery. +In fact, the Company published a document in +its defence against this charge signed by <abbr>Dr.</abbr> +Ruperti, one of its directors, in which, while it +did not go so far as to state that it never practised +bribery, it declared, at any rate, that “it +was incorrect to say that the German Vacuum +Oil Company had introduced the gross practice +of bribery into German trade as a system, +and that it had succeeded by means of bribes +in obtaining permanently higher prices for +<span class="pagenum" id="Page_184">[Pg 184]</span>its oils.” The studious moderation of this +defence strikes me as remarkable. The Company, +however, also took occasion to state +that it never put any employee into its selling +business except on a contract containing this +passage:—</p> + +<blockquote> +<p>You pledge yourself in dealing with the employees of our +customers most carefully to abstain from any transaction that +has even the appearance of corrupt influence. Any action contrary +to this regulation is a special reason for instant dismissal.</p> +</blockquote> + +<p class="noindent">But <abbr>Mr.</abbr> Hildebrandt unkindly suggests that this +is only another way of saying “Don’t nail his +ears to the pump.” He also says that after +the publication of the Hugo Cohr letter in +Kiel, the Vacuum Oil Company was struck +from the list of those invited to tender for +the supply of oils to the municipality. The +British public and the proprietors of British +engineering works must form their own +judgment in the matter, but they will at +any rate see that, for one reason or another, +the Vacuum Oil people have conceived a deep +affection for the German working man.</p> + +<p>These revelations are the more interesting +because there are similar stories from other +countries where the Vacuum methods have +been introduced. The <cite>Morgenblad</cite>, of Stockholm +(quoted in the English shipping organ +<span class="pagenum" id="Page_185">[Pg 185]</span><cite>Fairplay</cite> of July 22, 1909), gives an account +of the methods of the Vacuum Oil Company, +of Sweden, another of the Everest group. +The Stockholm newspaper states that the Civil +Commission appointed to inquire into the +buying of naval stores has in its possession +several letters from the Vacuum Oil +Company of Sweden to engineers in the +Swedish Navy. These letters contain advice +to enable the engineers to prove to their +superior officers, who possess less knowledge +of the subject, that other lubricating oils are +inferior to those vended by the Vacuum +Company. One letter runs: “It is very easy +to do this by only tightening the nuts a little, +and the bearings will soon become hot.”</p> + +<p>The sensation created by the publication of +these letters caused the Chancery of Justice, the +highest judicial authority in Sweden, to order +the Chief of the Criminal Police in Stockholm +(<abbr>Mr.</abbr> Lars Stendahl), who is also an officer of the +Municipal Treasury, to hold a general inquiry +with plenipotentiary authority as to the summoning +of witnesses. This was on May 18, 1909, +and on June <abbr>5th</abbr> following the King of Sweden +confirmed this Commission, and added two other +Commissioners, <abbr title="Misters">Messrs.</abbr> J. <abbr>Th.</abbr> Akerström and +<abbr>Fr.</abbr> S. Eriksson. In the beginning of September, +1909, <abbr>Mr.</abbr> Stendahl’s report was issued, which +<span class="pagenum" id="Page_186">[Pg 186]</span>proves by an abundance of sensational and at +times amusing evidence that the so-called +Swedish Vacuum Oil Company is identical with +that of Rochester, <abbr title="United States of America">U.S.A.</abbr>, that it has evaded +Swedish taxation, fraudulently rebranded +cheaper as dearer oils, and by a very curiously +concealed system of bribery induced engineers +of the Royal Navy to diminish the effectiveness +of their service.</p> + +<p>In the result the Company lost all its Government +contracts, but escaped further proceedings, +as Swedish commercial law in its previous +innocence of the “real smart” methods now +introduced to backward old Europe by the +Standard Oil apostles, had utterly failed to provide +penalties to meet the case. From Norway, +in September, came the news that the last +independent refinery had been acquired by the +Standard, that much public indignation had +been aroused among the hardy Norsemen, and +that steps were being taken with the support +of the Government to build at once an independent +refinery.</p> + +<p>In France, where there is a heavy duty +on refined petroleum, the Standard has established +a refinery, which has given it a +monopoly of the benzine trade. The latest +news last September was that the French +Government has been induced to reduce the +<span class="pagenum" id="Page_187">[Pg 187]</span>import duty on Dutch East Indian benzine +from £1 to 10<abbr title="shillings">s.</abbr>, and this has enabled the +Royal Dutch combine to start a refinery in +France for the purpose of competing with +the Standard. As I have explained, the +Sumatran and Borneo crude provides a higher +percentage of benzine than the Standard’s +American crude, and there is no doubt this +move will prove a very awkward one for the +latter.</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum"><a id="Page_188"></a><a id="Page_189"></a>[Pg 189]</span></p> + <h2 class="nobreak" id="CHAPTER_XII"> + THE TRUST’S “TIED HOUSES” IN ENGLAND + </h2> + +<p><span class="pagenum" id="Page_190">[Pg 190]</span></p> +<blockquote class="p2"> +<p>“According as you put something into the Church or the +Sunday-school work the greater will be your dividends of salvation.”</p> + +<p class="right pad1"> + <span class="smcap">John D. Rockefeller</span> <i>in a Sunday-school address</i>. +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_191">[Pg 191]</span></p> + +<p class="p2 center tp-l">CHAPTER <abbr title="12">XII</abbr></p> + +<p class="center">THE TRUST’S “TIED HOUSES” IN ENGLAND</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">I have</span> reserved until the end of my survey +the examination of the Standard Oil Trust’s +operations in Great Britain, because, as they +have not been investigated so closely here as +they have been by various Legislative Committees +in the United States, there is less official +testimony to proceed upon. Many of the Trust’s +intrigues and agitations here can only be understood +by remembering what has been proved +by direct testimony to have taken place in +similar circumstances in the United States. In +this way our preceding examination of the +secret rebate, the bribery, the underselling, +and all the other machinery of the Trust in +its native home, will help us to understand a +few things which are still obscure here.</p> + +<p>During the time when the Trust was growing +up in America, the British consumer and the +British oil-dealer were alike blissfully unconscious +<span class="pagenum" id="Page_192">[Pg 192]</span>of what was in store for them. For the +first English news of the Trust we must turn +to the evidence provided by <abbr>Mr.</abbr> (now Sir) +Boverton Redwood, the distinguished chemist, +whose subsequent appearances at so many +public inquiries as a Standard Oil witness have +been fitly rewarded by his selection as Petroleum +Adviser to the Home Office!</p> + +<p>This takes us back to the years 1877–8, when +<abbr>Mr.</abbr> Boverton Redwood was the Secretary of +the Petroleum Association, and visited America +at their request to induce the American refiners +to adopt the Abel (closed) tester in standardising +their oil, and also to complain of certain impurities +which were appearing in their consignments. +With regard to the first, <abbr>Mr.</abbr> Redwood’s +report to his association shows that he conducted +experiments with the Petroleum Committee +of the New York Produce Exchange +which satisfied them with the Abel tester, and +we read that <abbr>Mr.</abbr> Paul Babcock took great +interest in these experiments. <abbr>Mr.</abbr> Babcock +was then a director of the Devoe Manufacturing +Company, about this time bought by the Trust, +and twenty years later he and <abbr>Mr.</abbr> Boverton +Redwood met in London, both giving evidence +before the Commons’ Petroleum Committee +against raising the flash-point of kerosene. +<abbr>Mr.</abbr> Redwood met in 1877 a number of other +<span class="pagenum" id="Page_193">[Pg 193]</span>persons whose names will be familiar to readers +of my narrative. He, for example, visited the +refinery of <abbr title="Misters">Messrs.</abbr> Charles Pratt & <abbr title="Company">Co.</abbr>, +through the kindness of <abbr>Mr.</abbr> H. H. Rogers, +and when he left New York he carried letters +of introduction from <abbr>Mr.</abbr> <abbr title="William">Wm.</abbr> Rockefeller, +Vice-President of the Standard Oil Company, +to Colonel Payne, its Treasurer, in Cleveland, +Ohio. Indeed, <abbr>Mr.</abbr> Redwood’s tour seems to have +been in the main a Standard Oil excursion, for in +Philadelphia he visited <abbr title="Misters">Messrs.</abbr> Warden and +Frew (who were in the Trust), at Pittsburg +he saw <abbr>Mr.</abbr> Charles Lockhart, of Lockhart and +Frew (another Trust firm), and then at Cleveland +he was taken over the Standard Oil works by +<abbr>Mr.</abbr> Samuel Andrews (John D. Rockefeller’s first +partner). When he returned <abbr>Mr.</abbr> Redwood was +the bearer of a letter from <abbr>Mr.</abbr> <abbr title="William">Wm.</abbr> Rockefeller, +dated December 19, 1877, couched in the best +Standard Oil vein:—</p> + +<blockquote> +<p>It is our desire to furnish at all times refined oil that will be +acceptable to the trade of all countries. It is our wish and intention +that our products shall always reach the highest excellence.</p> +</blockquote> + +<p class="noindent">Whatever their wish might be, the prospect +of making more money proved too strong for +these philanthropists, and complaints continued +from the English traders as to the bad quality +<span class="pagenum" id="Page_194">[Pg 194]</span>of the oil sent here. In 1879 and again in +1884 <abbr>Mr.</abbr> F. W. Lockwood, a saponaceous +Standard Oil expert, was sent here to gammon +the Petroleum Association with some cock-and-bull +story. The second visit is referred to by +<abbr>Mr.</abbr> Boverton Redwood in a report to the +Petroleum Association, published in the <cite>Grocer</cite> +of May 3, 1884. In it he explained that <abbr>Mr.</abbr> +Lockwood attributed the complaints about the +oil to the use of damp-clogged or hard lamp-wicks. +This great discovery was too much even +for <abbr>Mr.</abbr> Redwood, who has never been a harsh +critic of the Standard Oil Trust methods. He +thus reported:—</p> + +<blockquote> +<p>In conclusion, I desire to record as strongly as possible +my individual opinion that in their own interest the American +refiners should forthwith institute such arrangements as will +ensure the future maintenance of a satisfactory standard of +quality. Considerable injury to the petroleum trade results +from the distribution of such oil as is the subject of this report, +consumers in many cases relinquishing the use of petroleum +oil in favour of some other sort of light. Moreover, the +American refiners should bear in mind that even now they +have not a monopoly of the supply of mineral burning oil in +this country, and they will find it necessary to pay much +greater attention than heretofore to the quality of the oil +they manufacture.</p> +</blockquote> + +<p>As an impartial testimony to the then quality +of the Standard’s illuminating oils and the +<span class="pagenum" id="Page_195">[Pg 195]</span>wonderful processes of manufacture which their +Press Bureau now tells us they invented, I +should give that document a high place. But +to do them justice, the American refiners were +not above taking a hint from other manufacturers. +A gentleman with long experience in +the oil trade once told me how <abbr>Mr.</abbr> H. H. Rogers +about this time came to England. Up in the +North there was a manufacturer of lubricating +oils who had by his own ingenuity and skill +developed some excellent ideas. He used to +blend American oils, and <abbr>Mr.</abbr> Rogers asked +one of the importers who dealt in their goods to +introduce him. They went over the works +together, and the proud owner showed them +all his special processes and his little inventions +and blends. Rogers was a practical refiner, he +kept his eyes open, and after he returned to +America the Standard’s first lubricating oil +branch, the Thompson and Bedford Company, +of New York, began to export here some of +the specialities which the North countryman +had made. As brain-pickers the Standard men +have no equal.</p> + +<p>The first appearance of the Standard in this +country was rather sudden. There came here +an American gentleman named Frank E. Bliss, +who had been connected with the business of +Charles Pratt & <abbr title="Company">Co.</abbr> Nobody knew what +<span class="pagenum" id="Page_196">[Pg 196]</span>his London business was, but one day there +appeared in the <cite>Financial News</cite> the brief record +of the registration at Somerset House on April +27, 1888, of the Anglo-American Oil Company, +Limited. It had a capital of £500,000 in £20 +shares. The first list of signatories contained +several clerks and agents, but it also bore +the name of Frank E. Bliss, and that told +those who were in the trade what was coming. +The first list of directors subsequently filed at +Somerset House included such sound, reliable +Standard Oil names as H. H. Rogers, J. D. +Archbold, W. H. Libby, J. G. Gregory, and +Wesley H. Tilford, all of 26, Broadway, New +York, and Frank E. Bliss, of London. The +precise significance of the word “Anglo” in +its title becomes clearer when it is stated that +the articles of association provided that the +directors’ meetings should be held in London, +but that if a majority of the directors so +decided they might be held in New York or +any other part of the United States of America. +As there was only one director resident in +England, it is not hard to guess where most +of the directors’ meetings took place. This +also helps us to appreciate the amount of +truth in <abbr>Mr.</abbr> J. D. Archbold’s Missouri evidence +that he did not know why the Anglo-American +Oil Company made loans amounting to £500,000 +<span class="pagenum" id="Page_197">[Pg 197]</span>to its managing director, <abbr>Mr.</abbr> James A. Macdonald. +<abbr>Mr.</abbr> Archbold was a director of the +“Anglo” from the outset until somewhere +between July, 1907, and July, 1908. In 1893 +its capital was increased to £520,000, and at +this time <abbr>Mr.</abbr> John D. Rockefeller’s name first +appears on the share list as the owner of +6,867 shares out of a total of 26,000. In July, +1899, the share list of the Anglo-American Oil +Company contained the names set out below. +As will be seen, many of them have appeared +in the course of my story, and the list contains +a great deal of “American” and very +little “Anglo.” Where no address is given +below, the return at Somerset House has “26, +Broadway, New York,” which is the central +address of the Standard:—</p> + +<table class="autotable p2"> + +<tr> +<td colspan="2" class="tdc"><span class="smcap">American Shareholders.</span></td> +</tr> + +<tr> +<td></td> +<td class="tdr">Shares.</td> +</tr> + +<tr> +<td class="tdl">H. M. Flagler and J. D. Archbold</td> +<td class="tdr tdb">10,239</td> +</tr> + +<tr> +<td class="tdl">John D. Rockefeller</td> +<td class="tdr tdb">6,867</td> +</tr> + +<tr> +<td class="tdl">C. W. Harkness, 611, Fifth Avenue, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">1,542</td> +</tr> + +<tr> +<td class="tdl"><abbr>Mrs.</abbr> Mary Pratt, <abbr title="Charles">Chas.</abbr> M. Pratt, and Fred B. Pratt</td> +<td class="tdr tdb">1,336</td> +</tr> + +<tr> +<td class="tdl">Oliver H. Payne, 2, West Fifty-seventh Street, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">1,068</td> +</tr> + +<tr> +<td class="tdl">H. M. Flagler (separately)</td> +<td class="tdr tdb">748</td> +</tr> + +<tr> +<td class="tdl">H. H. Rogers</td> +<td class="tdr tdb">503</td> +</tr> + +<tr> +<td class="tdl">Laman V. Harkness, Greenwich, <abbr title="Connecticut">Conn.</abbr></td> +<td class="tdr tdb">349</td> +</tr> + +<tr> +<td class="tdl">W. L. Harkness, 10, West Forty-third Street, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">347</td> +</tr> + +<tr> +<td class="tdl"><abbr title="William">Wm.</abbr> Rockefeller</td> +<td class="tdr tdb">347</td> +</tr> + +<tr> +<td class="tdl"><abbr title="Charles">Chas.</abbr> Lockhart, Pittsburg</td> +<td class="tdr tdb">320</td> +</tr> + +<tr> +<td class="tdl">John D. Archbold</td> +<td class="tdr tdb">213</td> +</tr> + +<tr> +<td class="tdl"><span class="pagenum" id="Page_198">[Pg 198]</span>W. Everitt Macy</td> +<td class="tdr tdb">199</td> +</tr> + +<tr> +<td class="tdl"><abbr>Mrs.</abbr> Esther Jennings, 48, Park Avenue, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">146</td> +</tr> + +<tr> +<td class="tdl">Miss A. B. Jennings, 48, Park Avenue, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">63</td> +</tr> + +<tr> +<td class="tdl">Oliver Jennings</td> +<td class="tdr tdb">63</td> +</tr> + +<tr> +<td class="tdl">Walter Jennings</td> +<td class="tdr tdb">64</td> +</tr> + +<tr> +<td class="tdl"><abbr>Mrs.</abbr> Mary B. Jennings, Fairfield, <abbr title="Connecticut">Conn.</abbr></td> +<td class="tdr tdb">53</td> +</tr> + +<tr> +<td class="tdl"><abbr>Mrs.</abbr> Elmira D. Brewster</td> +<td class="tdr tdb">53</td> +</tr> + +<tr> +<td class="tdl">George S. Brewster</td> +<td class="tdr tdb">53</td> +</tr> + +<tr> +<td class="tdl">F. F. Brewster, Newhaven, <abbr title="Connecticut">Conn.</abbr></td> +<td class="tdr tdb">53</td> +</tr> + +<tr> +<td class="tdl">R. Stanton Brewster</td> +<td class="tdr tdb">53</td> +</tr> + +<tr> +<td class="tdl">J. M. Constable, draper</td> +<td class="tdr tdb">82</td> +</tr> + +<tr> +<td class="tdl">H. Melville Hanna, Cleveland, Ohio</td> +<td class="tdr tdb">80</td> +</tr> + +<tr> +<td class="tdl">Wesley H. Tilford</td> +<td class="tdr tdb">80</td> +</tr> + +<tr> +<td class="tdl">C. F. Heye</td> +<td class="tdr tdb">98</td> +</tr> + +<tr> +<td class="tdl">J. S. Kennedy</td> +<td class="tdr tdb">80</td> +</tr> + +<tr> +<td class="tdl"><abbr title="Edward">Ed.</abbr> T. Bedford</td> +<td class="tdr tdb">66</td> +</tr> + +<tr> +<td class="tdl">Ambrose M. McGregor</td> +<td class="tdr tdb">53</td> +</tr> + +<tr> +<td class="tdl">Louis H. Severance</td> +<td class="tdr tdb">142</td> +</tr> + +<tr> +<td class="tdl">C. M. Chapin</td> +<td class="tdr tdb">26</td> +</tr> + +<tr> +<td class="tdl">H. C. Folger, <abbr title="junior">jun.</abbr></td> +<td class="tdr tdb">26</td> +</tr> + +<tr> +<td class="tdl">W. H. Macy, <abbr title="junior">jun.</abbr></td> +<td class="tdr tdb">13</td> +</tr> + +<tr> +<td class="tdl">W. T. Wardwell (treasurer of the Standard Oil Trust)</td> +<td class="tdr tdb">21</td> +</tr> + +<tr> +<td class="tdl">Daniel O’Day, banker, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">47</td> +</tr> + +<tr> +<td class="tdl">Hugh J. Jewett, Morristown, New Jersey</td> +<td class="tdr tdb">32</td> +</tr> + +<tr> +<td class="tdl">J. H. Alexander, Elizabeth, New Jersey</td> +<td class="tdr tdb">18</td> +</tr> + +<tr> +<td class="tdl"><abbr>Mrs.</abbr> Emma B. Auchinloss, 17, West Forty-ninth Street, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">63</td> +</tr> + +<tr> +<td class="tdl">L. S. Thompson, Redbank, New Jersey</td> +<td class="tdr tdb">29</td> +</tr> + +<tr> +<td class="tdl">W. P. Thompson, Redbank, New Jersey</td> +<td class="tdr tdb">34</td> +</tr> + +<tr> +<td class="tdl"><abbr>Mrs.</abbr> Mary E. Thompson</td> +<td class="tdr tdb">37</td> +</tr> + +<tr> +<td class="tdl"><abbr>Mrs.</abbr> <abbr title="Elizabeth">Eliz.</abbr> T. Preston, 1,228, Wood Avenue, Colorado Springs</td> +<td class="tdr tdb">26</td> +</tr> + +<tr> +<td class="tdl"><abbr>Mrs.</abbr> Helen James</td> +<td class="tdr tdb">63</td> +</tr> + +<tr> +<td class="tdl"><abbr>Mrs.</abbr> Salome Jones, Boston, <abbr title="Massachusetts">Mass.</abbr></td> +<td class="tdr tdb">29</td> +</tr> + +<tr> +<td class="tdl">Joseph Seep, banker, Oil City, <abbr title="Pennsylvania">Penn.</abbr></td> +<td class="tdr tdb">26</td> +</tr> + +<tr> +<td class="tdl">C. F. Akerman</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl"><span class="pagenum" id="Page_199">[Pg 199]</span>A. J. Pouch</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl">T. C. Bushnell</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl">Livingston Roe</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdc" colspan="2"><span class="smcap">London Shareholders.</span></td> +</tr> + +<tr> +<td class="tdl">Frank E. Bliss</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl">James Macdonald</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl">J. H. Usmar</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl">W. A. Hawkins</td> +<td class="tdr tdb">1</td> +</tr> + +</table> + +<p>There have been various changes in the share +list, and on June 30, 1910, the following were +the principal shareholders:—</p> + +<table class="autotable"> + +<tr> +<td></td> +<td class="tdr">Shares.</td> +</tr> + +<tr> +<td class="tdl">Standard Oil Company of New Jersey</td> +<td class="tdr tdb">49,993</td> +</tr> + +<tr> +<td class="tdl">Trustees Standard Oil Trust</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl">Frederick D. Asche</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl">J. H. Usmar, 22, Billiter Street, <abbr class="spell">E.C.</abbr>, merchant</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl">Francis Edward Powell, 22, Billiter Street, merchant</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl">Thomas H. Hawkins, secretary, 22, Billiter Street</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl">James Hamilton, 22, Billiter Street, merchant</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td class="tdl">William E. Bemis, 26, Broadway, New York</td> +<td class="tdr tdb">1</td> +</tr> + +<tr> +<td></td> +<td class="tdr bt">50,000</td> +</tr> + +</table> + +<p class="noindent">The capital of the Company was at that date +£1,000,000 in £20 shares. It is worthy of +notice that in 1907–8, at a period when <abbr>Mr.</abbr> +Roosevelt and his party were out after the +Trusts, <abbr>Mr.</abbr> Archbold, <abbr>Mr.</abbr> Rogers, and nearly +all the American directors of the Anglo-American +resigned. In June last the directors +were <abbr>Mr.</abbr> J. H. Usmar, <abbr>Mr.</abbr> Thomas H. Hawkins, +<abbr>Mr.</abbr> F. E. Powell, <abbr>Mr.</abbr> William P. McKendrick, +<span class="pagenum" id="Page_200">[Pg 200]</span>of 22, Billiter Street, <abbr class="spell">E.C.</abbr> (the London address +of the Anglo-American Oil Company, until it +moved last autumn to <abbr title="Saint">St.</abbr> James’s Park), and +<abbr>Mr.</abbr> F. D. Asche, of 26, Broadway, New York. +<abbr>Mr.</abbr> Fred D. Asche is a clerk in the export +department of the Standard in New York. +Thus, while in 1889 there were five directors +resident in New York and one in London, +in 1910 there were four directors resident in +London and one in New York—a somewhat +significant reversal of the ratio. <abbr>Mr.</abbr> <abbr title="James">Jas.</abbr> A. +Macdonald, the gentleman already mentioned, +ceased to be managing director in 1906, when +his one share was transferred to the Standard +Oil Company of New Jersey.</p> + +<p>The advent of the Anglo-American Oil Company +was the beginning of troubled times in +the English petroleum trade. <abbr>Mr.</abbr> Rockefeller’s +motto, “Pay nobody a profit,” was put into +force, and the Trust began to buy out or to +starve out <span id="TN8">the various groups of middlemen</span> +who had hitherto been vending their oils to +the English consumer. Some evidence on that +point was given to the Select Committee on +Petroleum in 1897 by <abbr>Mr.</abbr> W. J. Leonard, of +Carless, Capel and Leonard, Pharos Oil Works, +Hackney Wick. <abbr>Mr.</abbr> Leonard stated that +London was then the only “free market” +for other oil than Standard, since, although +<span class="pagenum" id="Page_201">[Pg 201]</span>there were independent dealers in Liverpool, +they had for several years a “selling agreement” +with the Anglo-American Oil Company. +Then came these answers:—</p> + +<blockquote> +<p>The Chairman: I want to know what there is to prevent +you importing oil into Liverpool in competition with the +Anglo-American Oil Company?</p> + +<p><i><abbr title="Answer">A.</abbr></i> If we did this of course the Anglo-American Oil Company +would at once put down their price, <em>so that we should have to +sell at a ruinous loss, and we cannot afford to compete with +them; I mean, we are all afraid of them</em>. If we sent oil to +Liverpool the Anglo-American price, instead of being nearly +¾<abbr title="pence">d.</abbr> a gallon more than the price in London, would probably +be something like ¾<abbr title="pence">d.</abbr> a gallon less than the price in London. +That would be the immediate effect.</p> + +<p><i><abbr title="Question">Q.</abbr></i> Yes, but is there not a regular importation, and an +increasing importation, of Russian oil?</p> + +<p><i><abbr title="Answer">A.</abbr></i> No, it is not an increasing importation; it is not, +certainly. Of course the Anglo-American Company are +getting the whole business practically (Report and Evidence, +1897, Q. 4,834).</p> +</blockquote> + +<p>This is how an “independent” oil merchant +talked of the colossal power of the Standard +Oil Trust at that date, and their influence +extended even to the smallest transactions. +When a great proportion of oil was still imported +in barrels, at least one London firm +did a very good business buying up the empty +oil barrels from the hawkers and small dealers, +who used to collect them at the consumer’s +<span class="pagenum" id="Page_202">[Pg 202]</span>premises. The barrels were well made, and +the Standard gladly bought the empties to +use again. But it found somebody else was +making a living. This would never do. At +once the Standard began to offer small inducements +to the hawkers, and the barrels went +to them direct, so that the small factor’s business +was killed.</p> + +<p>Very interesting evidence was given by <abbr>Mr.</abbr> +W. T. Rigby, Secretary of the Liverpool Oil +Dealers’ Association, who was called in support +of the Standard’s opposition to the raising +of the flash-point. He said the members of +his association objected to the Anglo-American +Company supplying so small a quantity as five +gallons to small shops which had formerly been +supplied by the small wholesaler. He went +on:—</p> + +<blockquote> +<p>In the first instance, when the Anglo-American put their +tanks on the ground they gave us their word that no less a +quantity than twenty gallons would be delivered, but when +they found that the retail dealers of Liverpool would not +embrace the new system of tank-wagon delivery, but preferred +to take it in the old style of barrels, they, in the words +of their Liverpool manager, were forced to administer a stab +in our backs—this is, go really behind us and secure that trade +which legitimately belonged to the Liverpool chandler doing +a small wholesale business, and that is why they [his association] +are objecting to the delivery of anything less than ten +gallons of oil (Report and Evidence, 1897, Q. 6,052).</p> +</blockquote> + +<p><span class="pagenum" id="Page_203">[Pg 203]</span></p> + +<p>But some of the wholesalers, especially where +in the provinces they had built up a good +business which it would be difficult for the +Standard to capture, were allowed to remain +as “tied houses” in the trade. Some evidence +was with difficulty extracted by the Lord +Advocate and <abbr>Mr.</abbr> M‘Killop, <abbr class="spell">M.P.</abbr>, at the same +committee from <abbr>Mr.</abbr> <abbr title="George">Geo.</abbr> Base, a large “independent” +oil dealer of Norwich, who had come +up to give evidence in support of the Standard’s +views against raising the flash-point:—</p> + +<blockquote> +<p><abbr>Mr.</abbr> M‘Killop, <abbr class="spell">M.P.</abbr>: Have you any freedom to use any +class of oil you like?—We prefer American oil. In fact, we +have dealt in nothing else.</p> + +<p>Have you a general freedom to use Russian oil, for example, +if you choose?—We don’t like Russian oil.</p> + +<p>Are you bound to any particular dealer? Are you bound +to use American oil?—<em>Yes, that is so.</em> That is largely because +of choice.</p> + +<p>You are under contract?—Yes.</p> + +<p>You are not allowed to sell any other?—Yes, that is so.</p> + +<p><abbr>Mr.</abbr> Ure, <abbr class="spell">M.P.</abbr>: What do you mean by contract?—I mean +I have an arrangement at present in distributing American +oil.</p> + +<p>Do you mean that you have a binding agreement with the +Standard Oil Company to sell nothing but their oil for a +specified period?—No, not for a specified period.</p> + +<p>For an indefinite period?—There is no period specified +whatever.</p> + +<p>Do you mean that you have a signed agreement to this +effect, “signed, sealed, and delivered”?—If it is a binding +agreement, it does not matter whether it is signed or not.</p> + +<p><span class="pagenum" id="Page_204">[Pg 204]</span></p> + +<p>Is that a common type of agreement with the American +Company and its customers?—I don’t know.</p> + +<p>Does it specify any price?—No.</p> + +<p>Does it preclude you from dealing in the oil of any other +company?—<em>Well, yes, it does to a certain extent.</em></p> + +<p>What happens supposing you have oil from any other company?—That +I can hardly say, but I am perfectly at liberty +to determine the agreement at any time I choose.</p> + +<p>Do you mean that breach of the agreement would not entail +a claim for damages?—No.</p> + +<p>Then what “consideration” do you get for entering into such +agreement?—The consideration is the larger volume of business.</p> + +<p>But you can without an agreement deal in it?—Yes.</p> + +<p>Why? You go into this agreement, and can give me no +reasons for it. Is it in writing?—In print.</p> + +<p>So that a great number of people enter into the same kind +of agreement, apparently?—No, I think not. Of course, I +have no personal knowledge (Report and Evidence, 1897, Q. +3,475 <i><abbr>et seq.</abbr></i>).</p> +</blockquote> + +<p>We have only to read the evidence of <abbr>Mr.</abbr> +Leonard and <abbr>Mr.</abbr> Rigby, and the American +evidence already given, to understand why these +“tied houses” exist.</p> + +<p>In one portion of the United Kingdom the +Standard has never been able to obtain complete +control. Scotland is the earliest home of +the mineral oil industry, and patriotism and +caution alike induced the Scottish users of +burning oils to prefer the high-flash oil which +the Scottish oil companies refine to the dangerous +low-flash petroleum imported by the Standard. +<span class="pagenum" id="Page_205">[Pg 205]</span>Although the cheapness of the latter’s +product has made considerable inroads on the +former’s trade in kerosene the Standard has never +been able to kill it, and it has of late made various +proposals to the Scottish companies to take over +their whole output of kerosene and to distribute +it by the tank system. The Scottish oil companies +(who do a barrel-oil trade) are unwilling +to supply the Standard with all their output, +for they know that the Standard would by the +tank distribution system kill the middlemen. +Then when it had made itself the sole channel +by which kerosene could reach the scattered +Scotch consumers, it might decline to buy any +more Scotch oil and simply force its own oil +on the purchaser. The Standard people are +now attempting to push their own oils by the +tank distribution system on Scotland, but are +meeting with strong opposition.</p> + +<p>But the strength of the Scottish companies is +not patriotic so much as economic. They refine +their oil from the shale, a soft, greasy, slate-like +stone. Now so long as kerosene was the only +thing the refiner troubled about, the Americans +had the advantage because Nature had done +half the work of distillation for them in her +own laboratory, and instead of mining a stone, +they got petroleum as a liquid. But the bottom +is falling out of the kerosene trade, as I have +<span class="pagenum" id="Page_206">[Pg 206]</span>already explained, and the Scottish companies +are recouping themselves on their by-products. +At the time of writing burning oils (kerosene) +and lubricants are lower than they have ever +been, and it is certain that no profit is being +made out of them in Scotland. But the Scotch +shale in distillation yields sulphate of ammonia, +which is in good demand as a fertiliser, and is +not obtainable from either American or Russian +crude. Naphtha is also selling at a fairly good +price owing to the development of the motor +industry—in fact, the Standard has been buying +large quantities of it from certain Scotch companies. +In the past the Scotch refiners have +been greatly assisted by the considerable percentage +of paraffin wax which their crude +yields, but in the last three or four years they +have lost some of this advantage owing to the +increased output of paraffin wax in Galicia. +The Boryslav and Tustanovitch fields in that +country produce an oil which yields from 1 to 7 +per <abbr>cent.</abbr> of paraffin wax, and the production +of paraffin wax has shot up very suddenly—which +is no doubt one reason why the Standard +has been fighting so hard in Galicia. The net +result is that the Scotch companies have a hard +struggle to maintain themselves against the +Standard monopolist tactics, but that on the +whole they hold their own.</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum" id="Page_207">[Pg 207]</span></p> + <h2 class="nobreak" id="CHAPTER_XIII"> + THE FLASH-POINT SCANDAL + </h2> + +<p><span class="pagenum" id="Page_208">[Pg 208]</span></p> +<blockquote class="p2"> +<p>“The flash-point of 73 <abbr title="degrees">deg.</abbr> was badly founded, because it +is the flash-point of a substance which is being burned at +temperatures commonly above 73 <abbr title="degrees">deg.</abbr>, and, therefore, you +are dealing in every lamp so used with an oil beneath your +flame which is in a condition of danger.”</p> + +<p class="right pad1"> + <span class="smcap">Professor Attfield, <abbr class="spell">F.R.S.</abbr></span>, <cite>Select Committee on Petroleum, 1896 Report</cite>. +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_209">[Pg 209]</span></p> + +<p class="p2 center tp-l">CHAPTER <abbr title="13">XIII</abbr></p> + +<p class="center">THE FLASH-POINT SCANDAL</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">It</span> is now time to devote a little attention to +one of the Standard’s great triumphs in +this country—the staving off until this present +day of the legislative raising of the flash-point +of petroleum. I desire to make this explanation +short and simple. The flash-point is the +temperature at which an oil will give off vapour, +which, mixed with air, is explosive. In other +words, it is the point at which a flame brought +close to its surface will cause it to explode—the +explosion being, of course, small in a 2-<abbr title="inch">in.</abbr> +deep test-cup, but serious when a lamp or a +barrel is in question. The test depends on the +presence of vapour. It is obvious, therefore, +that any test-cup which allows the vapour to +escape before the flame can be applied is useless. +The advocates of safe oil have always demanded +a test-cup which would retain the vapour, and +<span class="pagenum" id="Page_210">[Pg 210]</span>the petroleum traders in Europe and America +have always pushed some kind of cup which +would allow as much as possible of the vapour +to escape.</p> + +<p>The story of the juggle with the flash-point +begins in 1868, before the Standard Oil Trust was +born, and for its initial stage it is only fair to +admit that it can have no responsibility. The +Fire Protection Committee of 1867 recommended +that the flash-point should be 110 <abbr title="degrees">deg.</abbr> <abbr title="Fahrenheit">Fahr.</abbr> +The Petroleum Association—which was then +an independent body of importers of American +oil—asked for a flash-point of 100 <abbr title="degrees">deg.</abbr>, and +the Home Secretary called in the “three +chemists”—<abbr>Dr.</abbr> Lethaby, Professor Attfield, and +Professor (afterwards Sir Frederick) Abel—to +advise as to the flash-point and the method of +determining it.</p> + +<p>The three chemists recommended that 100 +<abbr title="degrees">deg.</abbr> should be conceded provided it was ascertained +by a test-cup which they recommended. +That tester, called “the three chemists’ cup,” +gave results which it is now admitted were +identical, within 3 <abbr title="degrees">deg.</abbr> of those shown by the +present Abel tester. What followed is succinctly +narrated by <abbr>Mr.</abbr> Ure, <abbr class="spell">K.C.</abbr>, <abbr class="spell">M.P.</abbr> (now +the Lord Advocate), in his draft report presented +to the Petroleum Committee (1898 +Report, <abbr title="page">p.</abbr> <abbr title="36">xxxvi</abbr>):—</p> + +<p><span class="pagenum" id="Page_211">[Pg 211]</span></p> + +<blockquote> +<p>The Report [of the three chemists] was accepted by the +Home Office and the standard and test were embodied in +the Notices of Motion and Orders of the Day for the <abbr>8th</abbr> of +June, 1868. A week later it will be found from the Notices +of Motion and Orders of the Day that the test prescribed by +the three chemists, and accepted by the Government on the +<abbr>8th</abbr> of June, had undergone a very material change. In the +interval the Petroleum Association approached the Government +and requested that the three chemists’ test be modified. +The Government remitted to Sir Frederick Abel to consider +the question thus raised. He was comparatively new to the +subject of flash-point investigation. <abbr>Dr.</abbr> Lethaby and <abbr>Dr.</abbr> +Attfield had for years devoted special attention to it. Both +were in London at the time, and available for consultation. +Neither was consulted or even apprised of the proposed +change.</p> + +<p>Sir Frederick Abel was enjoined by the Government not +to give way on any point affecting the efficiency of the test. +He did give way; and in the result a test was prescribed +which he himself subsequently described as “untrustworthy,” +“open to manipulation,” and “not of such a nature as uniformly +to ensure reliable and satisfactory results.” <em>Why <abbr>Dr.</abbr> +Lethaby and <abbr>Dr.</abbr> Attfield were not consulted has not been +explained to your Committee.</em> It is certain that if they had +been consulted, the change could never have been made. +Whenever it came to his knowledge <abbr>Dr.</abbr> Attfield at once +informed the Government that the test was far less stringent +than that prescribed by the three chemists, that it would be +a fertile source of disputes, and that the public would not be +protected.</p> +</blockquote> + +<p>That 100 <abbr title="degree">deg.</abbr> flash-point, with the inaccurate +tester of the Petroleum Association, went into +the Act of 1868, and the mischief was done. But +the most extraordinary and audacious chapter +in this strange story took place ten years later +<span class="pagenum" id="Page_212">[Pg 212]</span>when the disputes and blunders which <abbr>Dr.</abbr> Attfield +had foretold had occurred. Sir Frederick +Abel then devised the Abel (close) tester, which +is an efficient one; but he showed that an oil +flashed in that tester at a point 27 <abbr title="degrees">deg.</abbr> lower +than that at which it flashed in the Petroleum +Association cup legalised in 1867.</p> + +<p>In 1879 the new Act legalised Sir Frederick +Abel’s tester and then fixed the flash-point at +what was called the “equivalent” of the old +100 <abbr title="degrees">deg.</abbr>—in other words, it reduced the +flash-point by 27 <abbr title="degrees">deg.</abbr>, the amount of the inaccuracy +of the old tester. The effect, of course, +was to perpetuate the blunder of the 1867 Act +in another way. It is as though a man, finding +that his watch lost 27 minutes in a day, bought +a new and accurate timekeeper and then purposely +put it back 27 minutes.</p> + +<p>The history of this bureaucratic juggle was +effectively summarised by <abbr>Mr.</abbr> Ure in the House +of Commons, March 15, 1899:—</p> + +<blockquote> +<p>In 1862 there was a correct flash-point (100 <abbr title="degrees">deg.</abbr>) fixed, and +no tester for ascertaining it.</p> + +<p>In 1868 there was a correct flash-point (100 <abbr title="degrees">deg.</abbr>) and an incorrect +tester for ascertaining it.</p> + +<p>In 1879 there was a correct means (the Abel tester) of finding +out an incorrect flash-point (73 <abbr title="degrees">deg.</abbr>).</p> + +<p>Now we demand a correct flash-point (100 <abbr title="degrees">deg.</abbr>) and a correct +means of finding it out.</p> +</blockquote> + +<p><span class="pagenum" id="Page_213">[Pg 213]</span></p> + +<p>To this day all petroleum which flashes at +73 <abbr title="degrees">deg.</abbr> <abbr title="Fahrenheit">Fahr.</abbr> in the Abel tester is subject to no +restrictions of any kind, and lamp accidents +and oil fires have carried off hundreds of lives +since 1879. Lord Kelvin, surely a high authority, +said to the Select Committee in 1906:—</p> + +<blockquote> +<p>It seems to me that the logical outcome of Sir Frederick +Abel’s work ought to have been to declare that the 100 <abbr title="degree">deg.</abbr> +test in force in the 1871 Act must be fulfilled by a proper close +test. I cannot think how Sir Frederick Abel dropped from +100 <abbr title="degrees">deg.</abbr> to 73 <abbr title="degrees">deg.</abbr></p> +</blockquote> + +<p>Professor Silvanus P. Thompson, in his “<cite class="nonitalic">Life +of Lord Kelvin</cite>” (<abbr title="volume">vol.</abbr> <abbr title="2">ii.</abbr> <abbr title="page">p.</abbr> 962), tells us:—</p> + +<blockquote> +<p>Lord Kelvin felt strongly on this question. In 1868 an +open test-cup was legalised which in practice proved to be +erroneous to an average extent of 27 degrees. In other +words, oil which was actually giving off explosive vapour at +73 <abbr title="Fahrenheit">Fahr.</abbr> did not flash in this open cup until it reached 100 +<abbr title="degrees">deg.</abbr> The number of fires due to paraffin lamps increased +owing to the introduction of cheap low-flash oils. In spite of +this, in 1879, when a new and more efficient test was adopted, +the flash-point was by a scandalous manœuvre reduced to +73 <abbr title="degrees">deg.</abbr></p> +</blockquote> + +<p>It is interesting to recall that in the experiments +which Sir Frederick Abel made during the +period when the Abel tester and the difference +between its results and those of the 1868 tester +were under investigation, he was assisted by <abbr>Mr.</abbr> +<span class="pagenum" id="Page_214">[Pg 214]</span>Boverton Redwood, the chemist of the Petroleum +Association. But the delicate operation of substituting +a lower flash-point when the tester was +made more accurate seems to have been carried +out mainly by the assistance of the then Chief +Inspector of Explosives, the late Colonel V. +Majendie, a soldier and a gentleman, who was +no match for the adroit and suave agents of the +petroleum trade. It was perhaps not unfitting +that the administration of the laws relating to +<abbr>Mr.</abbr> Rockefeller’s low-flash petroleum should have +been placed under the Explosives Department +of the Home Office, but it had this disadvantage, +that Colonel Majendie, well acquainted with +military explosives, knew nothing about petroleum. +He once declared at the Imperial Institute +in my hearing that he had learned all he +knew about petroleum from <abbr>Mr.</abbr> Redwood. How +completely he was guided by his mentor in this +matter appears from a memorandum of July 18, +1878, in which he gives his reasons for supporting +the reduction of the flash-point from 100 <abbr title="degrees">deg.</abbr> to +73 <abbr title="degrees">deg.</abbr> In it he wrote:—</p> + +<blockquote> +<p>The figure is one to which the Petroleum Association, <em>the +body really interested</em>, are prepared to assent, and although +the Scottish Mineral Oil Association desire a higher flashing-point, +it is really a matter in which they have very little +concern, except in so far as the adoption of a higher flashing-point +will tend to injure their trade rivals (the Petroleum +<span class="pagenum" id="Page_215">[Pg 215]</span>Association). I think, therefore, that as the matter cannot be +usefully carried further, the Abel test of 73 <abbr title="degrees">deg.</abbr> <abbr title="Fahrenheit">Fahr.</abbr> flashing-point +should be accepted.</p> +</blockquote> + +<p><abbr>Mr.</abbr> Redwood was at this period the paid +secretary of the Petroleum Association, and had +returned only six months before from his +American trip. Sir Vivian Majendie seems never +to have been able to consider the public; in his +view it was all a trade squabble between the +rival oil traders. I ought to explain here, by the +way, that the Scottish refiners have always kept +their oil up to a flash-point of 100 (Abel), their +reason being that they desired to maintain a +perfectly safe standard. They have always +complained of the invasion of this 73 <abbr title="degree">deg.</abbr> +American petroleum, not on ordinary commercial +grounds, but because they held that its +dangerous and explosive character was prejudicing +the public mind against all classes of +burning oils, and neutralising their own efforts +to give the public confidence in them.</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum"><a id="Page_216"></a><a id="Page_217"></a>[Pg 217]</span></p> + <h2 class="nobreak" id="CHAPTER_XIV"> + THE ROCKEFELLERS AND THE HOME OFFICE + </h2> + +<p><span class="pagenum" id="Page_218">[Pg 218]</span></p> +<blockquote class="p2"> +<p>“You have been in politics long enough to know that no man +in public office owes the public anything.”</p> + +<p class="right pad1"> + <span class="smcap">Senator Mark Hanna</span> <i>to the Ohio Attorney-General</i>. +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_219">[Pg 219]</span></p> + +<p class="p2 center tp-l">CHAPTER <abbr title="14">XIV</abbr></p> + +<p class="center">THE ROCKEFELLERS AND THE HOME OFFICE</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">Naturally</span> the juggle by which the low +flash-point was thus stereotyped in the +Act of 1879 had its effects. The number of +petroleum accidents began to increase, and so +Sir. V. Majendie was sent to visit 242 places +in England and the Continent and then to +America. In both these series of visits he was +accompanied by <abbr>Mr.</abbr> Boverton Redwood, Secretary +of the Petroleum Association, “who was +good enough to accompany me and render me +great assistance,” as Sir Vivian put it. I have +no means of knowing whether <abbr>Mr.</abbr> Redwood +was able to obtain the same letters of introduction +from <abbr>Mr.</abbr> <abbr title="William">Wm.</abbr> Rockefeller which he had +secured in 1877, but I do know that there was +one subject the pair did <em>not</em> inquire into. It +appears in Colonel Majendie’s examination +before the Select Committee on Petroleum by +<span class="pagenum" id="Page_220">[Pg 220]</span>Captain Hope (Report and Evidence, 1894, Q. +206–212):—</p> + +<blockquote> +<p><i><abbr title="Question">Q.</abbr></i> Are you aware that in Scotland, where Scotch oil has been +mostly in use, there have hitherto been very few fires or lamp +accidents?</p> + +<p><i><abbr title="Answer">A.</abbr></i> No, I have no statistics of lamp accidents. I have only +a general knowledge derived from newspapers and from those +who have given to the subject a larger study.</p> + +<p><i><abbr title="Question">Q.</abbr></i> When you were making your inquiries in America did you +go into the question of the frequency of lamp accidents?</p> + +<p><i><abbr title="Answer">A.</abbr></i> <em>Not lamp accidents, I think, at all.</em></p> +</blockquote> + +<p>While this surprising omission was occurring +lamp accidents continued to go up. In London +they rose from 45 in 1873 to 271 in 1890. In +that year the twin brethren, Sir. F. Abel and +<abbr>Mr.</abbr> Redwood, were directed by the Home Office +to make an inquiry into the subject, and they +discovered that it was all due to bad lamps. +This ingenious theory set every one—Press, +coroners, County Council, Home Office—in full +cry after a lovely red-herring, and diverted +attention for several years from the Standard’s +explosive oil. When <abbr>Mr.</abbr> Lockwood came over +in 1877 it was the bad wicks; now, in 1890, +it was the bad lamps. The objections to +attempting to secure immunity from petroleum +lamp accidents by any lamp law are these:—</p> + +<blockquote> +<p>1. Nobody has yet guaranteed any absolutely safe lamp.</p> + +<p>2. Nobody can guarantee that a safe lamp will remain safe in +<span class="pagenum" id="Page_221">[Pg 221]</span>wear, or can compel its owners to buy a new one when it is in +bad repair.</p> + +<p>3. In both Scotland and America, where petroleum is produced +and refined, the remedy has been sought, not in a lamp +law, but in raising the flash-point.</p> +</blockquote> + +<p>While the British officials were chasing the +lamp-law will o’ th’ wisp <abbr>Mr.</abbr> Rockefeller was +sending over here petroleum oil which could +not be sold in most of the States of the Union, +and the number of lamp accidents here was +still rising. In London they rose from 271 in +1890 to 473 in 1895. By this time an inquiry +could not be avoided; the Select Committee to +which I have referred began to sit, and between +1894 and 1898 to take evidence and report.</p> + +<p>The evidence before that Committee in +support of the Standard Oil Trust’s contention +was extensive and peculiar. There was +Sir Frederick Abel, who admitted to the Committee +that as chemist to the War Office he +had recommended the adoption of 100 <abbr title="degree">deg.</abbr> or +105 <abbr title="degree">deg.</abbr> oil for use in barrack-rooms. Yet he +was prepared to maintain that 73 <abbr title="degrees">deg.</abbr> was +sufficiently high for a lamp in a crowded tenement +house, where obviously the chances of +accident are far greater than in the strictly +regulated and disciplined barrack-room. Then +there was <abbr>Mr.</abbr> Boverton Redwood, and he too +declared that the flash-point of 73 <abbr title="degrees">deg.</abbr> was +<span class="pagenum" id="Page_222">[Pg 222]</span>sufficiently high for public safety. The most +remarkable thing about his evidence was the +damaging admissions he was compelled to make, +which gave away his whole case. Here are +two:—</p> + +<blockquote> +<p>In my opinion a considerable proportion of the lamp accidents +which occur would not happen if only oil of 120 <abbr title="degrees">deg.</abbr> or +even 100 <abbr title="degrees">deg.</abbr> Abel test were used (Q. 1,824, 1896 Blue Book).</p> + +<p>Undoubtedly in a sense the higher the flashing-point the +safer the oil, and from that point of view oil of 100 <abbr title="degrees">deg.</abbr> +flashing-point must be safer than oil of 73 <abbr title="degrees">deg.</abbr> flashing-point +(Q. 1,893).</p> +</blockquote> + +<p>Another very entertaining Standard Oil +witness was Professor C. F. Chandler, of New +York, who explained that he had been coming +to Europe for a holiday, and was asked by the +Standard Oil Trust to give evidence against +raising the flash-point. He gave that evidence, +and was confronted with this passage in a +report he made to the New York State Board +of Health in 1871:—</p> + +<blockquote> +<p>There is a strong inducement to turn the heavier portions of +the naphtha into the kerosene tank so as to get for it the price of +kerosene. It is therefore the cupidity of the refiner that leads +him to run as much benzine as possible into the kerosene, +regardless of the frightful consequences of the frequent +explosions.</p> +</blockquote> + +<p>As this was exactly what the Standard was +<span class="pagenum" id="Page_223">[Pg 223]</span>doing, this was rather awkward for the Professor, +but he cynically explained that it was +“a reckless statement” made when he was +a “reformer.” He admitted that he had never +withdrawn it publicly until that very date in +1896, but he went on to swallow it whole.</p> + +<p>But the prize witness on that side was <abbr>Mr.</abbr> +Paul Babcock, whom we saw in 1877, and who +as one of the American directors of the Trust +came to tell the Select Committee that the 73 +<abbr title="degree">deg.</abbr> oil—the brands known to the trade as “Tea +Rose” and “Royal Daylight”—were as safe as +the 105 <abbr title="degree">deg.</abbr> oil—the brand known as “White +Rose.” Thereupon <abbr>Mr.</abbr> Ure, <abbr class="spell">M.P.</abbr>, produced a +little folding card just then issued by the +Anglo-American Oil Company, Limited, a copy +of which lies before me as I write. On the front +page of this little Rockefeller tract—which, I +grieve to say, is not now in circulation, so that +mine has become a “rare edition”—there are +two big orange-coloured barrels, and the words +“White Rose American Lamp Oil.” Inside there +is an artless panegyric on “White Rose,” of +which we are told:—</p> + +<blockquote> +<p>Its fire test is so high as to make it the safest petroleum +lamp oil in the world. Explosion is guarded against and +families can burn White Rose Oil with the same assurance of +safety as they can gas ... a really safe and reliable illuminant, +<abbr title="etc.">&c.</abbr></p> +</blockquote> + +<p><span class="pagenum" id="Page_224">[Pg 224]</span></p> + +<p>Of course, all this clearly proved that the +Anglo-American Oil Company, whatever it +might say at Westminster, did not believe in +Billiter Street that 73 <abbr title="degree">deg.</abbr> oil was as safe as +“White Rose.” But <abbr>Mr.</abbr> Paul Babcock was a cool +hand. He turned the card over carefully, and +then remarked that it was <span id="TN9">“merely advertising +bunkum,”</span> and that it was issued by the Anglo-American +Oil Company, “<em>who no doubt bought +the oil of us</em>.” This was fairly cool in view of +the fact that the Standard owns all the shares +in the Anglo-American, but it is even cooler +when we examine the orange-coloured barrel +in the picture. The barrel bears at its head a +label, “Kings County Oil Works, Sone and +Fleming <abbr title="Manufacturing">Mfg.</abbr> <abbr title="Company">Co.</abbr>, Limited, New York.” Now +<abbr>Mr.</abbr> Paul Babcock was himself general manager +to that very Sone and Fleming Company, in +addition to being a director of the Standard, +which, since 1877, had controlled it. That +incident is a fair specimen of the Standard’s +evidence at this inquiry.</p> + +<p>On the other side evidence was given by Lord +Kelvin (the greatest scientific man of his day), +Sir Henry Roscoe, Professor Ramsay, Professor +Attfield, <abbr>Dr.</abbr> Stevenson Macadam, Professor D. +Mendeleef (who represented the Russian Government +and the Russian petroleum industry), and +<abbr>Dr.</abbr> Hermann Kast (of Karlsruhe), all denouncing +<span class="pagenum" id="Page_225">[Pg 225]</span>the 73 <abbr title="degree">deg.</abbr> flash-point and advocating its being +raised. Sir Henry Roscoe said:—</p> + +<blockquote> +<p>I think that Americans send over so much mixed oil of the +character of this “Tea Rose” oil <em>only because our flash-point +is so low</em>.</p> +</blockquote> + +<p>Lord Kelvin told the Select Committee:—</p> + +<blockquote> +<p>I am clearly of opinion that in order to avoid accidents the +flash-point must be raised, and that no construction of lamp +will meet the difficulty.</p> +</blockquote> + +<p>The Select Committee at last reported in +favour of raising the flash-point, and an +agitation started by the <cite>Star</cite> newspaper in +support of this course received the adhesion +of a large number of newspapers, coroners, +and of the London County Council. At the +same time the Standard Oil Trust started its +own characteristic agitations. Petition forms +were sent to every oil retailer with requests +to obtain signatures in opposition to raising +the flash-point. And according to the statement +of <abbr>Mr.</abbr> Jasper Tully, <abbr class="spell">M.P.</abbr>, in the House, +some of these men in Ireland were threatened +that they would get no more oil if this was not +done. The result was that <abbr class="spell">M.P.</abbr>s were bombarded +with petitions from their constituencies, +<span class="pagenum" id="Page_226">[Pg 226]</span>and Standard Oil agents filled the lobbies. A +well-known Standard Oil “expert” contributed +anonymously a long article to the <cite>Times</cite>, in +which it was represented that the safe-oil +agitation was due to a desire to secure “protection” +for the Scottish trade. It is amusing +to recall that one of the strongest supporters +of this theory was the Right <abbr title="Honorable">Hon.</abbr> Jesse Collings, +who in four short years was to become an +ardent convert to the theory of “Protection,” +not only for Scotch oil, but for everything +else.</p> + +<p>While the Standard was playing up to free-trade +opinion in this way, it was working the +“patriotic” dodge in a very nicely got-up anonymous +pamphlet sent to every <abbr class="spell">M.P.</abbr> In this it +was shown that the effect of raising the flash-point +would be to stop our cousins across the +Atlantic from sending us oil, and to play into +the hands of Russia, which had always been +hostile to us. The old Russian bogey was still +alive in the days before the Russo-Japanese War, +and this waving of the Union Jack no doubt +affected some soft-headed <abbr class="spell">M.P.</abbr>s.</p> + +<p>There is a characteristic story which relates +that somebody, on hearing that the site had +been acquired for the new palace now completed +in Queen Anne’s Gate, rang up one of +the heads of the “Anglo” on the telephone. +<span class="pagenum" id="Page_227">[Pg 227]</span>“You are making a mistake,” said he; “you +ought to be near the City.” “Oh! the City +doesn’t matter,” replied the Standard voice on +the telephone; “what we want to be near is the +House of Commons.” There the policy of the +Standard Oil Trust is crystallised in a sentence. +The Trust is the most gigantic lobbyist in the +world. No other association of private capitalists +maintains such an espionage system; no +other body of that kind has its lobbyists at so +many centres of government. In most of the +American State Legislatures the Standard Oil +lobbyist is as well known as the Speaker. +At Washington, at Ottawa, in the House of +Commons, in Berlin, in Bucharest, to name but +a few capitals, you will find the representatives +of the Rockefellers. Their proceedings and those +of the rivals who sought to checkmate them +elicited a severe rebuke from that cautious +journal the <cite>Spectator</cite> on the occasion of the +debate upon the Flash-point Bill. Writing on +March 25, 1899, my contemporary observed:—</p> + +<blockquote> +<p>The decision as to the proper flash-point for mineral oils +really involved a possible monopoly of the supply of safe oils, +a monopoly worth many millions, and the signs of excited +personal and pecuniary interest in the lobbies were noticed by +many observant members of Parliament.</p> +</blockquote> + +<p>It declared that the practice of “lobbying” +<span class="pagenum" id="Page_228">[Pg 228]</span>tended to “grow into a peculiarly subtle and +dangerous form of corruption”:—</p> + +<blockquote> +<p>It has so grown both in America and France, and it may +grow here. What with the tendency to create monopolies, the +incessant variations of the tariff in some great States, and the +masses of capital at the disposal of individuals or companies, +the profits and losses consequent on a new law may amount +to millions, and among the owners or expectants of those +millions there may be some of the most unscrupulous of +mankind. They have paid secret commissions all their lives, +especially for “information,” and they do not see why they +should not pay them to induce hostile legislators not to vote +against them.</p> +</blockquote> + +<p>The end of this combined attack was that when +the Flash-point Bill came up for second reading +in March, 1899, it was rejected, on the pledge of +<abbr>Mr.</abbr> Collings, then representing the Home Office, +that the Government would deal with the whole +subject of the storage of petroleum and of +lamp accidents. Since that date nothing has +been done, and although all the members of the +Liberal Cabinet who were in the House of +Commons in 1899 voted for the Flash-point +Bill, they have never found time or courage +to tackle the Standard Oil monopoly in explosive +oil. As Lord Kelvin’s biographer, Professor +Silvanus P. Thompson, says in the chapter +already quoted: “The scandal of the free sale +of dangerous low-flash oil continues.”</p> + +<p><span class="pagenum" id="Page_229">[Pg 229]</span></p> + +<p>No doubt Ministers have been hampered by +the obstruction of the Home Office bureaucracy. +Before even the Select Committee had reported, +the late <abbr>Dr.</abbr> Dupre, chemical adviser to the Home +Office, said at Sutton (in November, 1897):—</p> + +<blockquote> +<p>If people thought they would get legislation on the subject to +raise the flash-point they would be very much mistaken, for +legislation would not so upset the trade. What was wanted was +education and better lamps.</p> +</blockquote> + +<p>We have seen how Colonel Majendie was +constantly sitting at the feet of <abbr>Mr.</abbr> Boverton +Redwood on this question, and his influence was +steadily against the flash-point being raised. +His successor, the late Captain Thomson, followed +the same tradition, and actually published +with <abbr>Mr.</abbr> Redwood a “Handbook on Petroleum.” +This volume, which is ostensibly a guide to local +petroleum inspectors in carrying out their duties, +branches off into a defence of the 73 <abbr title="degree">deg.</abbr> flash-point, +and contains all the old Standard Oil +tags. One of its points is that more people are +killed by falling downstairs than by lamp accidents—I +only cite that absurdity to show the +boldness which the Home Office staff have +shown in their determination to obstruct the +recommendation of the Petroleum Committee. +The final climax has been the appointment of +Sir Boverton Redwood as Home Office Adviser +<span class="pagenum" id="Page_230">[Pg 230]</span>on Petroleum. Nobody questions for an instant +the great scientific abilities of Sir Boverton +Redwood, or his thorough acquaintance with +the petroleum industry, but he has taken too +long and too active a part in opposing the +raising of the flash-point for his advice to be a +safe guide on the question. It would be exactly +like appointing <abbr>Mr.</abbr> Pretyman to advise the +Inland Revenue on the drafting and circulating +of Form <abbr title="4">IV.</abbr></p> + +<p>The Home Office has made another attempt +to divert public attention from the flash-point +of kerosene by appointing a departmental committee +to consider the storage and transit of +petroleum spirit, which body has just published +its report and evidence. The fact is, of course, +that this is a difficult and complicated subject, +affecting large numbers of small oil and spirit +dealers, on which it will be almost impossible +to come to an agreement. The raising of the +flash-point of kerosene is a simple, clear issue, +which can be done by a Bill of one clause, +and the only people who will really be affected +by it will be the Standard Oil Trust. At the +same time the Oil Trust, with its vast capital, +does not greatly object to restrictions on the +storage and transit of either oil or spirit, +because these mean capital expenditure which +it can easily defray, and they will at the same +<span class="pagenum" id="Page_231">[Pg 231]</span>time hamper all its smaller competitors. Now +in a time of congestion of Parliamentary business, +when it is admittedly difficult to drive even +a wheelbarrow through the House, the Home +Office bureaucracy deliberately selects the long +and complicated subject for its activity, and +ignores the simple one. Why?</p> + +<p>It is instructive to note that during the years +that have elapsed since the Flash-point Bill was +rejected in 1899, half the Standard’s argument +against raising the flash-point has been killed +by itself. It asserted that it could not take +out that proportion of naphtha which made +its 73 <abbr title="degree">deg.</abbr> oil so explosive and dangerous +without adding to the cost to the consumer. +Since then there has arisen the demand for +benzine or petrol for the motor industry, and +the Standard finds that it <em>can</em> take out that +naphtha. Accordingly a friend of mine who +has studied this subject as a chemist tells me +that whereas the “Tea Rose” oil used to have +a flash-point nearly down to the legal minimum +of 73 <abbr title="degrees">deg.</abbr>, samples recently tested have a flash-point +of 78 <abbr title="degrees">deg.</abbr> or 79 <abbr title="degrees">deg.</abbr> The Trust have made +their oil to that extent safer to suit themselves, +and it is notable that side by side with this the +number of petroleum lamp accidents has been +falling. What is now wanted is that they shall +be forced by Parliament to make it safer still. +<span class="pagenum" id="Page_232">[Pg 232]</span>As Lord Kelvin said to the Select Committee +in 1896:—</p> + +<blockquote> +<p>The principle of safety is that oil should never in a lamp +reach the temperature of the close test flash-point. I advise +the Committee to fix a flash-point which shall be higher than +oil is likely to reach under ordinary conditions of ordinary +use.</p> +</blockquote> + +<p>One of the achievements of the Home Office +during the controversy was the cooking of a list +of legal flash-points in American States by which +it was sought to discredit the statement that +this country is a dumping-ground for American +low-flash oils that the Rockefellers cannot sell +at home. Although <abbr>Mr.</abbr> Jesse Collings has +denied that statement in the House of Commons +it is perfectly true. A conclusive proof of its +truth is furnished by that interview with <abbr>Mr.</abbr> +W. H. Libby, the Standard’s foreign marketing +agent (to which I referred in a former chapter) +appearing in the <cite>New York Herald</cite> of September +3, 1905. After describing in <abbr>Mr.</abbr> Libby’s +words their struggles with Russia for the +European oil market, the interviewer goes on +thus:—</p> + +<blockquote> +<p>It is an open secret among people familiar with the oil +business that the great and important reason for the Standard’s +activity in Europe is largely due to the fact that the European +<span class="pagenum" id="Page_233">[Pg 233]</span>tests on oil are not as stringent as they are in the United +States. In this country (<abbr title="United States of America">U.S.A.</abbr>) the first run of oil, or what is +known as the flash-test at a high rate, <em>is the only oil that is +allowed to be marketed</em>. The second run of oil contains much +more inflammable ingredients, and when tested with the flash will +explode at a much lower temperature. <em>It is this oil that finds +a market abroad, and the laws there do not demand the higher +test of the product.</em> To get rid of its second run the Standard +naturally has to look to other markets than the domestic, and +that is why it is so anxious to extend its operations in Europe +and Asia, as otherwise the oil would be a drug on its hands.</p> +</blockquote> + +<p>The case against the Standard and its liquid +death could not be more concisely put than in +the foregoing passage, and so far as they are +concerned I leave the case there. But with +regard to the British officials, it should here +be mentioned that the length to which they +have gone in defence of the 73 <abbr title="degree">deg.</abbr> flash-point +was most conspicuously demonstrated in India. +When the flash-point of 73 <abbr title="degrees">deg.</abbr> was legalised +there difficulties arose with Burma petroleum +which, owing to its large proportion of petroleum +wax, became solid or viscid at 60 <abbr title="degrees">deg.</abbr> +The Indian authorities wrote home for advice +in this awkward situation, and Sir Frederick +Abel was invited to solve the riddle. Sir +Frederick Abel actually recommended the Indian +Government to melt the samples, then refrigerate +them down below 73 <abbr title="degrees">deg.</abbr>, and then +gradually heat them up again to 73 <abbr title="degrees">deg.</abbr> to +<span class="pagenum" id="Page_234">[Pg 234]</span>test them! Here is the exact language of his +letter:—</p> + +<blockquote> +<p>For the above reasons the application of the legal flashing +test as prescribed by the Act to the examination of petroleum +samples which are solid or viscid at a temperature about 60 +<abbr title="degrees">deg.</abbr> <abbr title="Fahrenheit">Fahr.</abbr> <em>must give entirely fallacious results</em>.</p> +</blockquote> + +<p>Then he goes on to suggest a “modification” +of the system of testing, of which the material +portion is as follows:—</p> + +<blockquote> +<p>The oil-cup is then to be placed in a refrigerator, or plunged +up to the projecting collar in water maintained at a sufficiently +low temperature until both thermometers indicate the temperature +at which the testing of petroleum is directed in the +Act to be commenced. The oil-cup is then to be removed, +wiped dry, placed in the water-bath, and the testing effected in +the manner prescribed in the Act (Select Committee’s Report, +1896, Appendix, <abbr title="page">p.</abbr> 747).</p> +</blockquote> + +<p>Of course, to the mind of any one but an +official, it would be clear that when oil in a +barrel or a tank was itself normally at a temperature +of between 80 <abbr title="degrees">deg.</abbr> or 90 <abbr title="degrees">deg.</abbr>, it was +a farce to allow it to enter the country on the +theory that it would not give off explosive +vapour below 73 <abbr title="degrees">deg.</abbr> <abbr title="Fahrenheit">Fahr.</abbr> But to admit that +would have been too awkward for the whole +flash-point camarilla, and Sir Frederick Abel, +in the <cite>Journal of the Society of Chemical Industry</cite>, +a few years before the safe-oil agitation +<span class="pagenum" id="Page_235">[Pg 235]</span>started, stated that oil which in New York was +exported as 73 <abbr title="degree">deg.</abbr> oil was found in India to +have a flash-point of 66 <abbr title="degrees">deg.</abbr>, and advised that +in order to take the flash-point in India it +should be cooled down to 56 <abbr title="degrees">deg.</abbr> <abbr title="Fahrenheit">Fahr.</abbr>, before +the testing was started. Yet the Standard Oil +agents in India successfully opposed any raising +of the flash-point, and Sir Frederick Abel, in +the letter quoted in the 1896 Blue Book, stated +that public safety did not require it.</p> + +<p>Another Standard Oil agitation which was +run here by the Anglo-American was in February, +1900, when the railway companies issued +an amended consignment note for benzine, +petrol, and all varieties of motor spirit, by +which the consignor was required to indemnify +the railway company against all claims for +injury to person or property arising out of the +“inflammable character” of the goods. The +Anglo-American Oil Company first threatened +that it would abandon the importation of +petroleum spirit altogether, but as that “bluff” +did not succeed it issued a circular to owners +of motor-cars and users of petroleum spirit +signed by <abbr>Mr.</abbr> Frank E. Bliss, director. It contained +this instructive passage:—</p> + +<blockquote> +<p>There is more likelihood of our protest being heeded if it be +supported by similar protests from all users of petroleum +spirit. We ask, therefore, your co-operation in our endeavour +<span class="pagenum" id="Page_236">[Pg 236]</span>to induce the railway companies to revert to their old form of +consignment note, and we shall be glad if you will address a +letter of protest to your local goods agent of the railway-company +over whose line you have been accustomed to receive +your traffic.</p> +</blockquote> + +<p class="noindent">That is the way these spontaneous agitations +are got up.</p> + +<p>Of late years the Anglo-American’s public +activities have been chiefly concerned with its +attempt to get the Thames Conservancy, and +then the Port of London Authority, to sanction +the bringing of petroleum spirit up the river +in tank barges instead of landing it at Purfleet. +The Thames Conservancy, whose meetings are +open to the Press, steadily refused, but the Port +of London Authority sits in secret, and it would +not be surprising if one day the Standard’s +constant efforts succeeded in this most dangerous +project. “Petroleum spirit,” legally, consists +of petroleum which flashes below 73 <abbr title="degrees">deg.</abbr> +<abbr title="Fahrenheit">Fahr.</abbr> In fact, some of its products will flash +at zero, but all of it is far more dangerous than +the petroleum lamp-oil, which flashes at 73 <abbr title="degrees">deg.</abbr> +or above.</p> + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> +<p><span class="pagenum" id="Page_237">[Pg 237]</span></p> + <h2 class="nobreak" id="CHAPTER_XV"> + THE LUBRICATING OIL TRADE + </h2> + +<p><span class="pagenum" id="Page_238">[Pg 238]</span></p> +<blockquote class="p2"> +<p>“Does <abbr>Mr.</abbr> Rockefeller know that modesty, benevolence, and +piety are the tricks which deceive the most people the longest +time?”</p> + +<p class="right pad1"> + <span class="smcap">Ida M. Tarbell</span> <i>in</i> “<cite>McClure’s Magazine</cite>.” +</p> +</blockquote> +</div> + +<div class="chapter"> +<p><span class="pagenum" id="Page_239">[Pg 239]</span></p> + +<p class="p2 center tp-l">CHAPTER <abbr title="15">XV</abbr></p> + +<p class="center">THE LUBRICATING OIL TRADE</p> +</div> + +<p class="drop-cap p2"><span class="smcap uppercase">It</span> is time now to turn to the Standard’s other +English branch, the Vacuum Oil Company, +Limited, which posed at first as an American +company entirely independent and unconnected +with the Standard. It was registered at Somerset +House as a limited liability company, with +a capital of £55,000, on May 13, 1901. Its object +was to take over the business of its parent, the +Vacuum Oil Company of Rochester, <abbr title="New York">N.Y.</abbr>, +<abbr title="United States of America">U.S.A.</abbr>, and it purchased all the assets of that +company in the United Kingdom for £29,947. +Up to October, 1905, its five directors were as +follows—</p> + +<table class="autotable"> +<tr> +<td class="tdl">John Dustin Archbold, 26, Broadway, <abbr title="New York">N.Y.</abbr></td> +</tr> +<tr> +<td class="tdl">Charles Millard Pratt, 26, Broadway, <abbr title="New York">N.Y.</abbr></td> +</tr> +<tr> +<td class="tdl">Charles Marvin Everest, Rochester, <abbr title="New York">N.Y.</abbr></td> +</tr> +<tr> +<td class="tdl">Howard B. Case, Norfolk Street, Strand.</td> +</tr> +<tr> +<td class="tdl">Henry Forster Grierson, Farnborough, Hants.</td> +</tr> +</table> + +<p><span class="pagenum" id="Page_240">[Pg 240]</span></p> + +<p>Charles M. Pratt is a son of the late <abbr>Mr.</abbr> +Charles Pratt, who founded the refinery already +referred to in connection with <abbr>Mr.</abbr> H. H. +Rogers. C. M. Everest has been mentioned in +the Buffalo explosion prosecution, in which he +was convicted. In 1908 the Company adopted +new articles providing that the number of +shareholders must never exceed fifty, and binding +the directors to refuse to register any +transfer of shares which will have the effect +of increasing the shareholders beyond that +number. The directors are also empowered to +refuse to register any transfer of shares without +giving their reasons. The following were +the shareholders on November, 30, 1909:—</p> + +<table class="autotable"> + +<tr> +<td></td> +<td class="tdr">Shares.</td> +</tr> + +<tr> +<td class="tdl">Vacuum Oil Company of Rochester, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">50,000</td> +</tr> + +<tr> +<td class="tdl">Charles Marvin Everest, Rochester, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">2,000</td> +</tr> + +<tr> +<td class="tdl">Howard B. Case, managing director</td> +<td class="tdr tdb">50</td> +</tr> + +<tr> +<td class="tdl">Henry Forster Grierson, Farnborough</td> +<td class="tdr tdb">10</td> +</tr> + +<tr> +<td class="tdl">Louis <abbr title="Charles">Chas.</abbr> Panizzardi, Paris, merchant</td> +<td class="tdr tdb">50</td> +</tr> + +<tr> +<td class="tdl">Edward Prizer, 29, Broadway, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">2,790</td> +</tr> + +<tr> +<td class="tdl">Ernest Michaelson, Copenhagen, merchant</td> +<td class="tdr tdb">50</td> +</tr> + +<tr> +<td class="tdl">Everett Oscar Wader, 29, Broadway, <abbr title="New York">N.Y.</abbr></td> +<td class="tdr tdb">50</td> +</tr> + +<tr> +<td class="tdr">Total<span style="padding-right:2em"></span></td> +<td class="tdr bt">55,000</td> +</tr> + +</table> + +<p><abbr>Mr.</abbr> Archbold and <abbr>Mr.</abbr> Pratt have left the +board of directors, which included in November, +1909, <abbr title="Misters">Messrs.</abbr> Everest, Case, Grierson, Prizer, +<span class="pagenum" id="Page_241">[Pg 241]</span>Panizzardi, Michaelson, and <abbr>Mr.</abbr> George Percy +Whaley, of 29, Broadway, New York. (Probably +29, Broadway is a copyist’s blunder for +26, the Standard’s home.)</p> + +<p>One complaint which the English trade +makes against the Vacuum Oil Company is +this: through the Anglo-American Oil Company +the Standard sells large quantities of refined +oils to British manufacturers, compounders, or +blenders of lubricants. At the same time, +through the Vacuum Oil Company, it goes to +the customers of these firms and offers to +undersell them, saying that it can supply the +oils direct. A great deal of correspondence +appeared in the <cite>Oil and Colourman’s Journal</cite> +on this subject in 1905. For example, one +correspondent told this story of his experience +with the Standard. He was dealing in illuminating +oil, getting all his supplies from the +Anglo-American Oil Company. In 1898 his +trade was 60,000 gallons per annum, then the +“Anglo” sent tank wagons to his customers, +and in 1905 it was less than 15,000 gallons. +He was persuaded then to devote his attention +to motor-car spirit. After he had spent a considerable +sum on bricks, concrete, iron doors, +<abbr title="etc.">&c.</abbr>, for storage purposes, the Anglo-American +began delivering broadcast motor spirit to +cycle agents. This merchant, when he saw his +<span class="pagenum" id="Page_242">[Pg 242]</span>kerosene trade vanishing, put up plant for +blending, filtering, and refining for the lubricating +oil trade. Then he found the Vacuum Oil +Company underselling him with his own customers. +Of course, it was quite obvious that if +the Vacuum Oil Company could by these tactics +secure the whole trade of the British lubricating +oil blenders, the price of lubricants would +go up as suddenly as the price of kerosene +always did when the Standard had killed +competition. This fact was pointed out in the +trade Press, and I understand that the Vacuum’s +great campaign in 1905 has not destroyed the +British makers of lubricants.</p> + +<p>A gentleman connected with the lubricating +trade wrote me the other day of the latest +methods of these people. The Standard ships +large quantities of oils for lubricating to the +Anglo-American by the ordinary steamship +lines. In a very attractive little booklet which +I have before me, entitled “The Light that +Fails Not,” issued by the Anglo-American Oil +Company in 1902, it is stated that their import +of lubricating oil in a year was 462,000 barrels. +This is now larger, and is a valuable freight, +and so the Vacuum people go to the principal +steamship lines, and say, “We give you this +freight; you must let us lubricate your boats +in return.” The result is that the freight which +<span class="pagenum" id="Page_243">[Pg 243]</span>the English maker of lubricants pays on what +he buys from the “Anglo” is used to secure +business for his trade rivals, who are undercutting +him with owners of engines. This +may be the American idea of “business,” +but it will take a great deal of acclimatising +here, and the Vacuum is not growing in +popularity.</p> + +<p>But the Vacuum does not always undersell. +Complaint is made that in some of the large +tramway undertakings, especially municipal +ones, no other lubricant but the Vacuum oils can +get accepted, although other oils of equally +good lubricating quality can be and are produced +by British firms at lower prices than the +Vacuum obtains. The reason for this phenomenon +is simply that the engineers in charge +of the plants refuse to use any other than +Vacuum oils. Of course they must be able to +supply a plausible reason for this to their +superiors, and such an explanation is provided +in the “Official Circular” of the Tramways +and Light Railways Association for April +and May, 1905. This “Circular” reports a +paper read at a meeting of the Association +on April 28, 1905, by <abbr>Mr.</abbr> William E. +Parish, <abbr title="junior">jun.</abbr>, chief technical expert of the +Vacuum Oil Company, on “Friction as +Affected by Lubrication.” The keynote of <abbr>Mr.</abbr> +<span class="pagenum" id="Page_244">[Pg 244]</span>Parish’s paper may probably be found in these +lines:—</p> + +<blockquote> +<p>It is possible to exactly duplicate a fine lubricating oil on +the basis of chemical tests with an improperly manufactured +article. The results from the use of both oils, <em>while the +chemical readings show they are exactly the same</em>, are widely +different when applied to actual work.</p> +</blockquote> + +<p>Translated into plain English this means that +the lubricants supplied by the Vacuum’s competitors +(manufactured out of the Standard +Oil Trust’s own oils) are by every recognised +chemical test as good as theirs, but yet that +it is right and proper that the engineer who +actually uses the lubricants on the machinery +should prefer the Vacuum oils—a very satisfactory +doctrine for both the Vacuum Company +and the engineer!</p> + +<p>Further on in his paper <abbr>Mr.</abbr> Parish was +good enough to give various tables and experiments +relating to what he called</p> + +<blockquote> +<p class="noindent">A full efficiency test of a textile mill where an effort is being +made to reduce the total horse-power by means of applying +lubricants more suited to the work than the oils in use.</p> +</blockquote> + +<p>That means, in plain English, by applying +Vacuum oils, whose chemical readings are +exactly the same as those of their competitors, +and whose virtues can only be discovered by +<span class="pagenum" id="Page_245">[Pg 245]</span>the engineer. In the debate on the paper I +notice that <abbr>Mr.</abbr> W. Scott Taggart, while congratulating +<abbr>Mr.</abbr> Parish on his paper, let fall this +very valuable observation:—</p> + +<blockquote> +<p>I must say there is only one thing that spoils these tests for +a society like this or any other society of a scientific character, +and it is that these tests are all made by a person or an +engineer responsible to the oil company making them. I +think they would be of much greater value if carried out by +some unprejudiced engineer.</p> +</blockquote> + +<p>In replying afterwards on this important +point, <abbr>Mr.</abbr> Parish urged that comparative +testing was very difficult, and that</p> + +<blockquote> +<p class="noindent">Engineers for work of this kind absolutely cannot exist outside +the large oil companies, where they have practically all +the world to operate in, and the unpublished knowledge of +many experienced men in this particular line of work to draw +upon.</p> +</blockquote> + +<p>Whether this reply is scientifically sufficient +I do not know, but it is obvious that it is not +likely to satisfy the competitors of the Vacuum +Oil Company, who regard all these novel +scientific merits, which cannot be distinguished +by any recognised chemical tests, as so much +clever “advertising bunkum”—to use <abbr>Mr.</abbr> Paul +Babcock’s language about the Anglo-American +Oil Company’s orange-barrel advertisement. +<span class="pagenum" id="Page_246">[Pg 246]</span>But it can hardly be doubted that tramway +and other engineers find such papers as that +read by <abbr>Mr.</abbr> Parish, <abbr title="junior">jun.</abbr>, before their technical +association a very useful argument in justifying +their exclusive use of Vacuum lubricants.</p> + +<p>Before I leave this subject I may note that +<cite>Fairplay</cite>, the well-known shipping journal, has +drawn attention to another aspect of this +question, and that is how the Inland Revenue +collects income-tax from this combination. As +the Vacuum Company is a branch of the +Standard it can buy its oils at a high price and +sell them at cost, so that its books would show +no profit assessable to income-tax. That profit, +of course, would have really vanished into the +balance-sheet of the Standard Oil Company of +New Jersey. The same applies to the Anglo-American +Oil Company, which, according to the +evidence in the Missouri case, sells oil here on +commission. The lower the commission the +“Anglo” accepts from the Standard Oil Company +of New Jersey, the lower its profits on its +balance-sheet, and the less income-tax. But I advise +<abbr>Mr.</abbr> Lloyd George to look after the “richest +Baptist on earth.” I fear that he is not paying +his proper share towards the expenses of the +country where he makes so many millions.</p> + +<p>Such, then, is the evidence, summarised of +course, which has accumulated in all parts of +<span class="pagenum" id="Page_247">[Pg 247]</span>the world against the Standard Oil Trust. In +the examination of this evidence, which has +now been completed, I claim to have established +the following propositions:—</p> + +<p>1. That the Standard Oil group have always +aimed, not at fair competition, but at absolute +monopoly.</p> + +<p>2. That they secretly obtained from the +United States railroads rebates on the carriage +of their own oil, and even larger rebates on +all the oil carried for their competitors—thus +rendering it to the interest of the railroads to +decrease the shipments of “independent” oil, +by refusing to furnish adequate cars, and by +delaying delivery.</p> + +<p>3. That by means of these rebates they were +able to undersell their competitors, and either +to ruin them or force them to sell out at +heavy loss.</p> + +<p>4. That, whereas in 1870 they controlled nearly +10 per <abbr>cent.</abbr> of the American oil refining business, +by means of these rebates they had +secured in 1880 control of 90 per <abbr>cent.</abbr></p> + +<p>5. That when the petroleum well owners +constructed pipe lines to pump their oil to the +seaboard refineries, the Standard used vexatious +litigation, and even open violence, to obstruct +the work, and when it was completed bought +up a majority of the stock.</p> + +<p><span class="pagenum" id="Page_248">[Pg 248]</span></p> + +<p>6. That although they were legally “common +carriers,” the Standard constantly refused to +pipe oil for other refiners, and thus forced the +well owners to sell their crude oil to them at +their own price, as in practice the Standard had +become the only buyer.</p> + +<p>7. That an elaborate system of espionage +has been established by which information is +corruptly obtained from employees as to shipment +of independent refiners’ oil; and that the +oil dealer who receives such oil is then undersold +by Standard agents.</p> + +<p>8. That in districts where the feeling against +the malpractices of the Trust is strong, the +Trust runs “bogus independent” oil companies +and “anti-Trust” oil shops, and uses them to +undersell the oil dealers who really attempt to +sell non-Trust oil.</p> + +<p>9. That although the rebates are not paid on +all the railroads now, there existed as late +as 1907—and probably still exist—widespread +railroad discriminations giving the Standard +advantages over other refiners.</p> + +<p>10. That although the Standard constantly +claims credit for improving the processes of +manufacture and transport, most of the important +inventions of the industry were +invented by others. The main thing the Trust +invented was the secret rebate.</p> + +<p><span class="pagenum" id="Page_249">[Pg 249]</span></p> + +<p>11. That in regard to the Standard’s claim +to have reduced the price of illuminating oil +to the consumer, the Hepburn Congressional +Committee found that it had only done so when +fresh supplies of petroleum had come on the +world’s markets, or in order to kill competition.</p> + +<p>12. That <abbr>Mr.</abbr> Rockefeller and his associates +have frequently made on oath before Congressional +Committees and in judicial proceedings +false statements about the Trust.</p> + +<p>13. That the Standard Oil group has systematically +adopted the methods of bribery (direct +and indirect) in dealing with politicians and +newspapers.</p> + +<p>14. That in Great Britain it has successfully +obtained official support for the maintenance +of a dangerously low flash-point of illuminating +oil, which enables it to dump here “export +oil” that it is not allowed to sell in the majority +of the American States.</p> + +<p>15. That the Trust has been successfully +prosecuted in the courts of its native land, +and that in every country that it enters it +is the enemy of legitimate commerce. It either +ruins the dealers in its commodities, or reduces +them to the position of “tied houses.”</p> + +<p>In fine, the Standard Oil Trust is the most +unscrupulous, as well as the most ambitious +and successful, combination of capitalists that +<span class="pagenum" id="Page_250">[Pg 250]</span>the world has yet seen. The men it has ruined, +the businesses it has wrecked, the little +children it has roasted in its oil-fires—all +these constitute a hideous record of death +and destruction which not all the long prayers +and the huge alms of John D. Rockefeller +should ever induce the world to forget.</p> + + +<hr class="chap x-ebookmaker-drop"> +<div class="chapter"> + +<p><span class="pagenum" id="Page_251">[Pg 251]</span></p> + + + <h2 class="nobreak" id="Index"> + Index + </h2> +</div> + + +<ul class="index"> + <li class="ifrst">Abel, Sir F., <a href="#Page_159">159</a>, <a href="#Page_210">210</a>, <a href="#Page_220">220</a>, <a href="#Page_233">233</a></li> + + <li class="indx">Acme Oil Company, <a href="#Page_67">67</a></li> + + <li class="indx">American Wick Company, <a href="#Page_23">23</a></li> + + <li class="indx">Ammonia in Scotch shales, <a href="#Page_206">206</a></li> + + <li class="indx">Andrews, Samuel, <a href="#Page_15">15</a>, <a href="#Page_29">29</a>, <a href="#Page_193">193</a></li> + + <li class="indx">Anglo-American Oil Company, <abbr title="Limited">Ltd.</abbr>, <a href="#Page_11">11</a>, <a href="#Page_22">22</a>, <a href="#Page_111">111</a>, <a href="#Page_196">196</a>, <a href="#Page_241">241</a></li> + + <li class="indx dquote"><abbr title="Anglo" class="dquote1">”</abbr> Caucasian Oil Company, <abbr title="Limited">Ltd.</abbr>, <a href="#Page_163">163</a></li> + + <li class="indx dquote"><abbr title="Anglo" class="dquote1">”</abbr> Saxon Petroleum Company, <a href="#Page_148">148</a>, <a href="#Page_170">170</a></li> + + <li class="indx">Archbold, John D., <a href="#Page_18">18</a>, <a href="#Page_19">19</a>, <a href="#Page_67">67</a>, <a href="#Page_78">78</a>, <a href="#Page_94">94</a>, <a href="#Page_97">97</a>, + <a href="#Page_110">110</a>, <a href="#Page_175">175</a>, <a href="#Page_196">196</a>, <a href="#Page_239">239</a></li> + + <li class="indx">Asiatic Petroleum Company, <a href="#Page_148">148</a>, <a href="#Page_170">170</a></li> + + <li class="indx">Atlantic Refining Company (Standard), <a href="#Page_102">102</a></li> + + <li class="indx">Attfield, Professor, <a href="#Page_208">208</a>, <a href="#Page_210">210</a>, <a href="#Page_224">224</a></li> + + + <li class="ifrst">Babcock, Paul, <a href="#Page_149">149</a>, <a href="#Page_192">192</a>, <a href="#Page_223">223</a></li> + + <li class="indx">Bailey, Senator, and the Trust in Texas, <a href="#Page_140">140</a></li> + + <li class="indx">Baku Refiners’ Union, <a href="#Page_163">163</a></li> + + <li class="indx">“Barbarous Mexico” (its inspiration), <a href="#Page_144">144</a></li> + + <li class="indx">Base, <abbr title="George">Geo.</abbr> (on Standard agreements), <a href="#Page_203">203</a></li> + + <li class="indx">Bataafsche Petroleum Maatschappij, <a href="#Page_148">148</a>, <a href="#Page_170">170</a></li> + + <li class="indx">Bayne, H. (and Security Oil Company), <a href="#Page_113">113</a></li> + + <li class="indx">Benzine, its influence on “the oil war,” <a href="#Page_149">149</a></li> + + <li class="indx">Bliss, Frank E., <a href="#Page_195">195</a></li> + + <li class="indx">Bostwick, J. A., <a href="#Page_37">37</a>, <a href="#Page_52">52</a></li> + + <li class="indx">Brady, A. N. (Manhattan Oil Company), <a href="#Page_109">109</a></li> + + <li class="indx">Bribery charges, <a href="#Page_77">77</a>, <a href="#Page_181">181</a></li> + + <li class="indx">Buffalo Refinery explosion, <a href="#Page_97">97</a></li> + + <li class="indx">Burma petroleum, <a href="#Page_152">152</a>, <a href="#Page_233">233</a></li> + + + <li class="ifrst">Chandler, Professor C. F. (of New York), <a href="#Page_222">222</a></li> + + <li class="indx">Chesebrough Manufacturing Company (Vaseline), <a href="#Page_21">21</a></li> + + <li class="indx">Choate, <abbr title="Honorable">Hon.</abbr> Joseph, <a href="#Page_154">154</a></li> + + <li class="indx">Collings, Right <abbr title="Honorable">Hon.</abbr> Jesse, <a href="#Page_226">226</a>, <a href="#Page_228">228</a>, <a href="#Page_232">232</a></li> + + <li class="indx"><span class="pagenum" id="Page_252">[Pg 252]</span>Consolidated Petroleum Company, <abbr title="Limited">Ltd.</abbr>, <a href="#Page_163">163</a></li> + + <li class="indx">Cowdray, Lord (shadowed in New York), <a href="#Page_145">145</a></li> + + <li class="indx">Cuthbert, John H. (alleged Standard Oil agent), <a href="#Page_118">118</a></li> + + + <li class="ifrst">Devereux, General J. H., on rebates, <a href="#Page_31">31</a></li> + + <li class="indx">Devoe Manufacturing Company, <a href="#Page_23">23</a>, <a href="#Page_192">192</a></li> + + <li class="indx">Diaz, President of Mexico, and the Trust, <a href="#Page_144">144</a></li> + + <li class="indx">Dupre, <abbr>Dr.</abbr> (the late), <a href="#Page_229">229</a></li> + + <li class="indx">Dutch Government excludes the Standard, <a href="#Page_147">147</a></li> + + + <li class="ifrst">Eagle Oil Company (of Mexico), <a href="#Page_14">14</a></li> + + <li class="indx">Elkin, P. J. (Attorney-General of Pennsylvania), and the Archbold letters, <a href="#Page_84">84</a></li> + + <li class="indx">Erie Railroad rebates, <abbr title="etc.">&c.</abbr>, <a href="#Page_37">37</a>, <a href="#Page_40">40</a>, <a href="#Page_50">50</a>, <a href="#Page_53">53</a>, <a href="#Page_55">55</a>, + <a href="#Page_59">59</a></li> + + <li class="indx">Everest, C. M., <a href="#Page_94">94</a>, <a href="#Page_97">97</a>, <a href="#Page_175">175</a>, <a href="#Page_239">239</a></li> + + + <li class="ifrst">Flagler, Henry M., <a href="#Page_18">18</a>, <a href="#Page_29">29</a>, <a href="#Page_74">74</a>, <a href="#Page_197">197</a></li> + + <li class="indx">Flash-point scandal in Great Britain, <a href="#Page_209">209</a></li> + + <li class="indx dquote"><abbr title="Flash-point scandal" class="dquote2">”</abbr> in India, <a href="#Page_233">233</a></li> + + <li class="indx">Foraker, Senator, J. B., <a href="#Page_78">78</a></li> + + + <li class="ifrst">Galena-Signal Oil Company and American railways, <a href="#Page_21">21</a></li> + + <li class="indx">Galicia, discriminations against the Standard, <a href="#Page_166">166</a></li> + + <li class="indx">Garfield, J. R. (United States Commissioner of Corporations), <a href="#Page_28">28</a></li> + + <li class="indx">General Industrials Development Syndicate (of London), <a href="#Page_108">108</a> <i><abbr>et seq.</abbr></i></li> + + <li class="indx">German Vacuum Oil Company, <a href="#Page_170">170</a> <i><abbr>et seq.</abbr></i></li> + + <li class="indx">Gould, Jay (the late), <a href="#Page_37">37</a></li> + + + <li class="ifrst">Hamburg Court’s decision on “re-branding,” <a href="#Page_177">177</a></li> + + <li class="indx">Hanna, Senator M. (the late), <a href="#Page_83">83</a></li> + + <li class="indx">Hearst, W. R., and the Archbold letters, <a href="#Page_18">18</a>, <a href="#Page_77">77</a></li> + + <li class="indx">Hepburn Committee (<abbr title="United States of America">U.S.A.</abbr>), <a href="#Page_35">35</a>, <a href="#Page_56">56</a>, <a href="#Page_72">72</a></li> + + <li class="indx">Home Office and the flash-point, <a href="#Page_229">229</a></li> + + + <li class="ifrst">Inventions, the Standard’s claims to them, <a href="#Page_129">129</a></li> + + + <li class="ifrst">Kelvin, Lord (the late), <a href="#Page_213">213</a></li> + + + <li class="ifrst">Lake Shore Railroad, <a href="#Page_31">31</a>, <a href="#Page_46">46</a></li> + + <li class="indx">Lawson, T. W., on H. H. Rogers, <a href="#Page_17">17</a></li> + + <li class="indx">Leonard, W. J. (Standard tactics in England), <a href="#Page_200">200</a></li> + + <li class="indx">Lethaby, <abbr>Dr.</abbr> (the late), <a href="#Page_210">210</a></li> + + <li class="indx">Libby, W. H. (Standard lobbyist), <a href="#Page_151">151</a>, <a href="#Page_152">152</a>, <a href="#Page_232">232</a></li> + + <li class="indx">Limanova Petroleum Company, <a href="#Page_166">166</a></li> + + <li class="indx"><span class="pagenum" id="Page_253">[Pg 253]</span>Lloyd, Henry D. (the late), <a href="#Page_5">5</a>, <a href="#Page_97">97</a></li> + + <li class="indx">Lockhart, Charles, <a href="#Page_65">65</a>, <a href="#Page_193">193</a></li> + + <li class="indx">Lockwood, F. W. (Standard Oil agent), on wicks, <a href="#Page_194">194</a></li> + + <li class="indx">London Commercial Trading and Investment Company, <abbr title="Limited">Ltd.</abbr>, <a href="#Page_113">113</a> <i><abbr>et seq.</abbr></i></li> + + + <li class="ifrst">Macdonald, <abbr title="James">Jas.</abbr> H., <a href="#Page_111">111</a>, <a href="#Page_199">199</a></li> + + <li class="indx">Maikop field, the new, <a href="#Page_164">164</a></li> + + <li class="indx">Majendie, Sir V. (the late), <a href="#Page_214">214</a>, <a href="#Page_219">219</a></li> + + <li class="indx">Manhattan Oil Company, <a href="#Page_108">108</a> <i><abbr>et seq.</abbr></i></li> + + <li class="indx">Mantascheffs of Baku, the, <a href="#Page_164">164</a>, <a href="#Page_169">169</a></li> + + <li class="indx">Mendeleef, the late Professor, <a href="#Page_224">224</a></li> + + <li class="indx">Merrill, Joshua (lubricating oil pioneer), <a href="#Page_131">131</a></li> + + <li class="indx">Missouri, proceedings against the Trust, <a href="#Page_135">135</a></li> + + <li class="indx">Moeara Enim Company and the Dutch Government, <a href="#Page_147">147</a></li> + + <li class="indx">Monnett, F. S. (Attorney-General of Ohio), <a href="#Page_81">81</a>, <a href="#Page_134">134</a></li> + + + <li class="ifrst">Newspapers, Trust subscriptions to, <a href="#Page_86">86</a></li> + + <li class="indx">New York Central Railroad, <a href="#Page_37">37</a>, <a href="#Page_40">40</a>, <a href="#Page_48">48</a>, <a href="#Page_52">52</a>, <a href="#Page_60">60</a></li> + + <li class="indx">Nobels of Baku, the, <a href="#Page_162">162</a></li> + + + <li class="ifrst">O’Day, Daniel, <a href="#Page_19">19</a>, <a href="#Page_54">54</a>, <a href="#Page_198">198</a></li> + + <li class="indx">“Oil War,” the, <a href="#Page_147">147</a></li> + + <li class="indx">“Orange Barrel,” the, <a href="#Page_223">223</a></li> + + <li class="indx">Oswego Manufacturing Company, <a href="#Page_23">23</a></li> + + + <li class="ifrst">Parish, W. E. (of the Vacuum Oil Company, <abbr title="Limited">Ltd.</abbr>), <a href="#Page_243">243</a></li> + + <li class="indx">Payne, Oliver H., <a href="#Page_20">20</a>, <a href="#Page_193">193</a></li> + + <li class="indx">Pearson firm (Mexico), <a href="#Page_142">142</a></li> + + <li class="indx">Pennsylvania Railroad and rebates, <a href="#Page_31">31</a>, <a href="#Page_37">37</a>, <a href="#Page_56">56</a>, <a href="#Page_59">59</a></li> + + <li class="indx">Petroleum Association (of London), <a href="#Page_160">160</a>, <a href="#Page_210">210</a>, <a href="#Page_214">214</a></li> + + <li class="indx dquote"><abbr title="Petroleum" class="dquote3">”</abbr> Committee (recommendation on flash-point), <a href="#Page_225">225</a></li> + + <li class="indx dquote"><abbr title="Petroleum" class="dquote3">”</abbr> Producers’ Union, the, <a href="#Page_46">46</a>, <a href="#Page_133">133</a></li> + + <li class="indx dquote"><abbr title="Petroleum" class="dquote3">”</abbr> wax, <a href="#Page_152">152</a>, <a href="#Page_206">206</a></li> + + <li class="indx">Pierce, Henry Clay, <a href="#Page_141">141</a></li> + + <li class="indx">“Pittsburg Plan,” the, <a href="#Page_57">57</a></li> + + <li class="indx">Port of London Authority and Standard intrigues, <a href="#Page_236">236</a></li> + + <li class="indx">Pratt, Charles, <a href="#Page_66">66</a></li> + + <li class="indx dquote"><abbr title="Pratt" class="dquote4">”</abbr> Charles M., <a href="#Page_20">20</a>, <a href="#Page_175">175</a>, <a href="#Page_239">239</a></li> + + <li class="indx">“Protection,” the cry of, <a href="#Page_226">226</a></li> + + + <li class="ifrst">Railways, English, and petrol agitation, <a href="#Page_235">235</a></li> + + <li class="indx">“Re-branding” lubricants in Germany, <a href="#Page_176">176</a></li> + + <li class="indx">Redwood, Sir Boverton, <a href="#Page_160">160</a>, <a href="#Page_192">192</a>, <a href="#Page_220">220</a>, <a href="#Page_221">221</a>, <a href="#Page_229">229</a></li> + + <li class="indx">Refiners’ Association, the, <a href="#Page_57">57</a>, <a href="#Page_59">59</a></li> + + <li class="indx">Rice, George, <a href="#Page_71">71</a></li> + + <li class="indx">Rigby, W. T. (Liverpool retailer’s experience), <a href="#Page_202">202</a></li> + + <li class="indx"><span class="pagenum" id="Page_254">[Pg 254]</span>Rockefeller, Frank, <a href="#Page_39">39</a></li> + + <li class="indx dquote"><abbr title="Rockefeller" class="dquote5">”</abbr> John D., <a href="#Page_15">15</a>, <a href="#Page_29">29</a>, <a href="#Page_33">33</a>, <a href="#Page_47">47</a>, <a href="#Page_51">51</a>, <a href="#Page_58">58</a>, + <a href="#Page_67">67</a>, <a href="#Page_71">71</a>, <a href="#Page_197">197</a></li> + + <li class="indx dquote"><abbr title="Rockefeller" class="dquote5">”</abbr> John D., <abbr title="junior">jun.</abbr>, <a href="#Page_20">20</a></li> + + <li class="indx dquote"><abbr title="Rockefeller" class="dquote5">”</abbr> William, <a href="#Page_19">19</a>, <a href="#Page_29">29</a>, <a href="#Page_37">37</a>, <a href="#Page_193">193</a></li> + + <li class="indx">Rogers, H. H., <a href="#Page_17">17</a>, <a href="#Page_33">33</a>, <a href="#Page_94">94</a>, <a href="#Page_97">97</a>, <a href="#Page_172">172</a>, + <a href="#Page_195">195</a></li> + + <li class="indx">Romano-American Petroleum Company, <a href="#Page_22">22</a>, <a href="#Page_169">169</a></li> + + <li class="indx">Roscoe, Sir Henry, <a href="#Page_225">225</a></li> + + <li class="indx">Rothschilds, the Paris, <a href="#Page_163">163</a>, <a href="#Page_170">170</a></li> + + <li class="indx">Royal Dutch Petroleum Combine, <a href="#Page_147">147</a>, <a href="#Page_170">170</a></li> + + <li class="indx">“Rutter circular,” <a href="#Page_60">60</a></li> + + + <li class="ifrst">Samuel, Sir Marcus, <a href="#Page_147">147</a>, <a href="#Page_157">157</a>, <a href="#Page_170">170</a></li> + + <li class="indx">Scottish oil refiners and the flash-point, <a href="#Page_215">215</a></li> + + <li class="indx">Security Oil Company of Texas, <a href="#Page_20">20</a>, <a href="#Page_113">113</a></li> + + <li class="indx">Shell Transport and Trading Company, <a href="#Page_147">147</a>, <a href="#Page_151">151</a>, <a href="#Page_170">170</a></li> + + <li class="indx">Solar Refining Company (Ohio), <a href="#Page_20">20</a>, <a href="#Page_110">110</a></li> + + <li class="indx">Sone & Fleming Company, New York, <a href="#Page_224">224</a></li> + + <li class="indx">South Improvement Company, <a href="#Page_34">34</a>, <a href="#Page_36">36</a>, <a href="#Page_46">46</a>, <a href="#Page_48">48</a></li> + + <li class="indx"><cite>Spectator</cite>, the, on “lobbying,” <a href="#Page_227">227</a></li> + + <li class="indx">Standard Oil Company, of New Jersey, <a href="#Page_19">19</a>, <a href="#Page_50">50</a>, <a href="#Page_135">135</a>, <a href="#Page_199">199</a></li> + + <li class="indx dquote"><abbr title="Standard Oil" class="dquote6">”</abbr> <abbr title="Company" class="dquote7">”</abbr> of New York, <a href="#Page_48">48</a></li> + + <li class="indx dquote"><abbr title="Standard Oil" class="dquote6">”</abbr> <abbr title="Company" class="dquote7">”</abbr> of Indiana, <a href="#Page_134">134</a></li> + + <li class="indx dquote"><abbr title="Standard Oil" class="dquote6">”</abbr> <abbr title="Company" class="dquote7">”</abbr> of Ohio, <a href="#Page_20">20</a>, <a href="#Page_29">29</a>, <a href="#Page_134">134</a></li> + + <li class="indx"><cite>Star</cite> newspaper and the flash-point, <a href="#Page_225">225</a></li> + + <li class="indx">Steana Romana, the, <a href="#Page_169">169</a></li> + + <li class="indx">Stone, <abbr title="Honorable">Hon.</abbr> W. A. (Governor of Pennsylvania), <a href="#Page_83">83</a></li> + + <li class="indx">Suez Canal Company and the bulk oil agitation, <a href="#Page_158">158</a></li> + + <li class="indx">Swedish naval engineers and Trust lubricants, <a href="#Page_185">185</a></li> + + + <li class="ifrst">Tank steamers and the Suez Canal, <a href="#Page_158">158</a></li> + + <li class="indx dquote"><abbr title="Tank" class="dquote8">”</abbr> wagons and retailers, <a href="#Page_127">127</a>, <a href="#Page_166">166</a>, <a href="#Page_202">202</a>, <a href="#Page_205">205</a></li> + + <li class="indx">Tarbell, Miss Ida M., <a href="#Page_5">5</a>, <a href="#Page_16">16</a></li> + + <li class="indx">Thompson, Professor Silvanus P. (and Lord Kelvin), <a href="#Page_213">213</a></li> + + <li class="indx">Thomson, Captain J. H. (the late), <a href="#Page_229">229</a></li> + + <li class="indx">“Three chemists’ cup,” the, <a href="#Page_210">210</a></li> + + <li class="indx">Tidewater pipe lines, <a href="#Page_91">91</a>, <a href="#Page_120">120</a></li> + + <li class="indx">Tramway engineers and Standard lubricants, <a href="#Page_248">248</a></li> + + + <li class="ifrst">Union Tank Line Company, New Jersey, <a href="#Page_22">22</a>, <a href="#Page_110">110</a></li> + + <li class="indx">United Pipe lines, <a href="#Page_54">54</a>, <a href="#Page_60">60</a></li> + + <li class="indx dquote"><abbr title="United" class="dquote9">”</abbr> States Pipe Line, <a href="#Page_92">92</a></li> + + <li class="indx"><span class="pagenum" id="Page_255">[Pg 255]</span>Ure, Alexander, <abbr class="spell">K.C.</abbr>, <abbr class="spell">M.P.</abbr>, <a href="#Page_210">210</a>, <a href="#Page_212">212</a></li> + + + <li class="ifrst">Vacuum Oil Company, of Rochester, <a href="#Page_20">20</a>, <a href="#Page_21">21</a>, <a href="#Page_94">94</a></li> + + <li class="indx dquote"><abbr title="Vacuum Oil" class="dquote10">”</abbr> <abbr title="Company" class="dquote11">”</abbr> <abbr title="Limited">Ltd.</abbr>, <a href="#Page_239">239</a> <i><abbr>et seq.</abbr></i></li> + + <li class="indx dquote"><abbr title="Vacuum Oil" class="dquote10">”</abbr> <abbr title="Company" class="dquote11">”</abbr> of Vienna, <a href="#Page_165">165</a></li> + + <li class="indx">Van Buren (<abbr>Mr.</abbr> Archbold’s son-in-law), <a href="#Page_142">142</a></li> + + <li class="indx">Vanderbilt, William H., <a href="#Page_37">37</a>, <a href="#Page_46">46</a></li> + + <li class="indx">Vandergrift, J. J., <a href="#Page_33">33</a></li> + + <li class="indx">Van Syckel, Samuel (pipe line pioneer), <a href="#Page_131">131</a></li> + + + <li class="ifrst">Warden, W. G. (South Improvement Company), <a href="#Page_36">36</a>, <a href="#Page_65">65</a></li> + + <li class="indx dquote"><abbr title="Warden" class="dquote12">”</abbr> Frew & <abbr title="Company">Co.</abbr>, <a href="#Page_74">74</a>, <a href="#Page_193">193</a></li> + + <li class="indx">Wardwell, William T. (the late), <a href="#Page_18">18</a>, <a href="#Page_198">198</a></li> + + <li class="indx">Waters-Pierce Oil Company (Mexico), <a href="#Page_140">140</a></li> + + <li class="indx">Watson, D. K., Attorney-General of Ohio, <a href="#Page_82">82</a>, <a href="#Page_134">134</a></li> + + <li class="indx dquote"><abbr title="Watson" class="dquote13">”</abbr> P. H., President South Improvement Company, <a href="#Page_37">37</a></li> +</ul> + +<p><span class="pagenum" id="Page_256">[Pg 256]</span></p> + +<div class="chapter"> +<p class="center p4">The Gresham Press,<br> +UNWIN BROTHERS, LIMITED,<br> +WOKING AND LONDON.</p> +</div> + +<div class="transnote"> +<h2 class="nobreak">Transcriber’s Note</h2> + +<p> +Some inconsistencies in spelling, hyphenation, and punctuation have been +retained. +</p> + +<ul> +<li><abbr title="page">p.</abbr> 7: changed location of quotation marks for Chapters VII, VIII entries in <a href="#CONTENTS">Table of Contents</a> to match the chapter titles.</li> + +<li><abbr title="page">p.</abbr> 72: changed “Insterstate” to “Interstate” (<a href="#TN1">the Interstate Commerce Commission</a>)</li> + +<li><abbr title="page">p.</abbr> 112: changed “o” to “of” (<a href="#TN2">pretty close track of companies</a>)</li> + +<li><abbr title="page">p.</abbr> 115: changed shares total from “722,507” to “<a href="#TN3">722,509</a>”, correcting a math error.</li> + +<li><abbr title="page">p.</abbr> 129: changed “Stark’s” to “Starks’s” for consistency (<a href="#TN4">cart it round after Starks’s wagon</a>)</li> + +<li><abbr title="page">p.</abbr> 144: changed “monoply” to “monopoly” (<a href="#TN5">fighting this American monopoly</a>)</li> + +<li><abbr title="page">p.</abbr> 165: changed “Campany” to “Company” (<a href="#TN6">the Vacuum Oil Company, of Rochester</a>)</li> + +<li><abbr title="page">p.</abbr> 178: changed “Engine F” to “Engine I” (<a href="#TN7">“Gas Engine I and Heavy” respectively</a>)</li> + +<li><abbr title="page">p.</abbr> 200: changed “varies” to “various” (<a href="#TN8">the various groups of middlemen</a>)</li> + +<li><abbr title="page">p.</abbr> 224: changed “bankum” to “bunkum” (<a href="#TN9">“merely advertising bunkum,”</a>)</li> +</ul> +</div> + +<div style='text-align:center'>*** END OF THE PROJECT GUTENBERG EBOOK 78460 ***</div> +</body> +</html> diff --git a/78460-h/images/cover.jpg b/78460-h/images/cover.jpg Binary files differnew file mode 100644 index 0000000..59c8447 --- /dev/null +++ b/78460-h/images/cover.jpg diff --git a/78460-h/images/right-brace.png b/78460-h/images/right-brace.png Binary files differnew file mode 100644 index 0000000..31faac4 --- /dev/null +++ b/78460-h/images/right-brace.png |
