The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1892-03-13
WILL STANDARD OIL COLLAPSE

The dispatch from the East to the effect
that the stockholders of the Standard Oil
Company are TO meet on tomorrow week
TO vote on the question whether the trust
should not dissolve will startle those who
are interested in the modern combinations
OF capital known as trusts; for the Stand
ard Oil is the oldest, wealthiest and most
successful Of those organizations II was
originally formed some fifteen years ago by
owners Of oil-wells In Ohio. who sought 10
prevent competition between oil-prOducers.
Its original capital was not large, but, by
+ careful manag cement and the gradual alb
sorption of flowing wells, it has managed
to swell its capital to S95, 100000, the stock
has been drawing II per cent yearly, and Is
quoted at S169 for 500 shares. 1t is pri-
vately understood that the cash dividends
have been periodically REINFORCED by scrip
Enthusiastically declared and distrib-
uted-so that every original holder who
kept his stock has become rich-some of
them enormously rich. 1t obtained long
ago a monopoly Of the oil trade, and be-
came so powerful that it was able to crush
out competition in all the Eastern cities.
and to dictate freight rates to such railroad
companies as the Pennsylvania and the
New York Central.
All this time ii has been odious to the
public, not so much in consequence of the
price it exacted for its product as because it
has been viewed as the type and eXemplar
Of the modern trust system, which tends TO
place consumers at the mercy of aggrega-
tions Of capital. The feeling has led to
constant assaults upon the trust in the
courts; the last Of these has just eliminated
in a judgment of the Supreme Court Of
Ohio declaring that in chat State the trust
is Illegal. 1t is this decision which has in
duced he managers to submit to their stock
holders the question whether. under the
rcumstanceS, it is worth while TO continue
the struggle.
The modus operandi of Standard OIL was
TO secure from a ma joriiy OF stockholders in
oil companies deposit of their certificates
OF stock with the Standard Oh Directors in
trust. the trust to carry with il the full yot-
ing rOwer Of the shares as absolutely as a
complete transfer would have done. The
original companies remained In existence,
but their control of their own property
passed 70 the Standard Oil. The Ohio court
holds that this transfer Of control defeats
the purpose for which the laws Of that State
authorized the original interpretations, and is
therefore Illegal. Unless tie Standard Oil
stockholders resolve TO prOtTact the contest
they will now have 10 return the shares to
the companies from which they were re-
ceived and to declare the trust dissolved. In
other words. the production of kerosene oil.
which has heretofore been a close nonop-
oily, Will be once more free to all who choose
TO engage in it. 1t is evident from the price
CT trust certificates that the 2eO0 stock
holders in Standard Oil do not apprehend
that the retransfer of the shares will dlmin-
ish the value of their property.
The chances are that when the stock
holders meet on tomorrow week they will
decide to 20 on with the fight. They have
got good thing as it is. and they will nat
urally be opposed to new experiments.
There is always hope for corporations in
the United States Supreme Court. But the
fact that the Trustees have raised the ques-
ton of dissolution may brighten promoters
of and stockholders in trusts
1t is possible. however, that the oil trust
may remove lis headquarters to some State
where the laws are less stringent than in
Ohio.