Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1881-02-25
STANDARD OIL.
Fl. d. LLOYDS "STORY OF Il CIR EAT
MONOPOLY"
A Remarkably Interesting Resume Of the
Greatest Monopoly of Modern Times
How States are Bought and Sold and Held
in SubjectiOn-The Enormous Profits of
the Cleveland Gang.
[Atlantic Monthly for March,
CuApTEp TT

the Cleveland Gang.
atlantic Monthly for March,
CHAPTER II.
Mr.. Roger Sherman, of counsel for the COM
plainants in the suit brought by the State of
Pennsylvania, hunted through the officers of
the Pennsylvania railroad to find some one
who knew what rebates the Standard was get
ting. Most of the officers knew as little as
Mr.. Vanderbilt. Finally, Mr.. Cassatt was put
on the stand. He testified as to the rebate of
twenty-five and half cents, already referred
to, and similar rebates of thirty-five cents a
barrel from the New York Central, and twenty
to thirty cents barrel from the Erie. He
showed that, while the open rate to the public
was 100 to New York for carrying barrel
of refiued oil, the Standard had the work done
for 81. 10 and $1.20 barrel less, and that out
of the seventy and eighty cents the Pennsyl-
vania received it paid ten cents for storage
and six cents for lighterage for the Standard
The public rate for transporting crude oil
was $1.40 barrel, but the Standard paid
only eighty eight and half cents,
and finally but ten cents. While the Pennsyl-
vania was giving all these special allowances,
carrying oil at one time, according to Vice
President Cassatt's sworn declaration, for less
than nothing, it charged shippers like George
W.Cachaan, who were not in with the officers of
the road, the extreme rate of So barrel. The
effect of these determinations were well ex-
pressed by Mr.. B. B. Campbell, witness for
the State of Pennsylvania, who, when asked
what profit there was in refining, replied, s'To
any one paying the open rate of freight there
would be heavy loss, but with S1.10 rebate
The New York Central, the Pennsylvania, and
the Erie railroads and their connections lost
between January and October, 1879, about $751;
GOO, 900 of freight earnings they would have
had but for their ali lnce with the Standard.
The latest annual report of the Reading COM
pany gives great deal Of space to these heavy
losses. The president of the Baltimore q
Ohio railroad called the attention of the other
trunk line presidents to it's statements. They
could not he said, fail to embarrass the rail
roads before Congress, and to do them "most
serious damage" before the bar of public opin-
ion. He appealed to the trunk line presidents
at their meeting on January 81, 1880, TO reform
"the wasteful and absurd rates on OIL which
virtually for the Standard amounted to free
transportation. His appeal was without effect.
The presidents decided at that meeting not to
alter their rates. The rebates given the Stand
ard extended to nearly every State in the Union.
These rebates are about equal to the average
value of the oil at the wells. The railroads Of
the United States virtually give the Standard
it's raw material free. The Western railroads
favor the Standard in the same way that East
ern ones do. They refused competing shippers,
in the days before these had been killed of,
equal rates with the Standard, unless they did
an equal business. The railroads create the
monopoly, and then make the monopoly their
excuse. When the Lake Shore charged nom-
inslly so cents barrel and 80 cents 100 pounds
to carry the oil from Cleveland to Chicago; it
did the business for the Standard at 70 cents a
barrel and % cents 100.
1t seems incredible that Americans should
have been willing to do what the Standard, by
means of these special privileges from the rail
roads, did to it's competitors. The refineries
at New York had often to lie idle while the oil
was running on the ground at the wells, be-
cause they could not get transportation. The
monopoly of the pipe lines which the railroads
gave it made the Standard the master of the
exits of oil from the producing districts Pro-
ducing themselves but One-fiftieth of the oil
yield they stood between the producers of the
other forty-nine fiftieths and the world. There
was apparently no trick the Standard would
not play. 1t delivered its competitors inferior
oils when they had ordered the high priced
article, out of which alone they could manu-
facture the fancy brands their customers called
for. The Standard received as common car
ton through its United States Pipe Line, but,
when he sold 1t to New York dealer outside
the Standard combination, refused to deliver
it, at the same time shipping oil to one of this
Dealers competitors in New York The
Standard controlled the pipes by which alone
Mr.. Coddington and all other producers could
get to market. When The flow from his wells
had filled his tanks, and he had to have them
emptied, his application to the Standards
United Pipe Line, q commoa carrier, was met
by refusal to move his oil unless he sold it to
the Standard. The following extract from the
stenographic report tells the story plainly
enough.
Q.-Upon what conditions would they run
A.-Upon condition that it was sold to GER
tain parties,-J. A. Bostwick q Co., members
of the Standard.
Q.-At what price compared with the mar
ket price?
A.-Below the market price
Q.-Always below the market price?
A.-Always below it.
H. L. Taylor & Co., of Petrolia, had wells
producing 1000 barrels of oil day. Their
tanks at the wells were full. They owned
other tanks, to which they could only get
their oil through the pipes which the Standard
owned and operated as a common carrier.
They applied to it for transportation, and were
refused. The wells could not be shut tdOwn
for fear OF water, and so thousands OF barrels
of oil ran into the ground. The Standard car
ried its point, for after that the firm sold all
their oil to it, always twenty-five to twenty
five cents barrel below The market price. 81.
Caldwell was another producer who has flow
ing wells and empty tanks, which the Stand
ard refused to connect, and who had to sell
his oil to it at prices ranging from twelve and
one fourth to eighteen and one half cents a
barrel below the lowest market rate. Lewis |
Emery, Jr., producer of oil, was an owner |
in six different companies, all of which were |
denied transportation by the Standard, and |
forced to sell to it at its price. He said, awe |
go down to the office, and stand in a line, |
sometimes half day; people in line, reach.
ing out into the street, sixty and seventy of |
us. When our turn comes, we go in and ask
them to buy, and they graciously will take
it," This is known in the trade as the elm
mediate shipment swindle." Sometimes the
Standard, after buying the oil this way, would
take away a small part of it, and refuse to pay
for the rest till it was shipped, months later.
As an immediate result of these manip-
ulations, the price of oil began 6. steady de-
cline from $50 to so cents barrel, in the
face of an increased demand unequaled in the
history of the trade. In 1878 oil went down
to 78A cents barrel at the very time the ship
ments from the wells were 81, coo barrels a
lay, the largest ever made till that time. All
his, as one of the largest producers testified,
was because 1--WE take our commodity to one
buyer and accept the price he-chooses to give
1s yithout radrasS with no riCht of anneol ,, |