Palestine daily herald. [volume] (Palestine, Tex.) 1902-1949, 1903-12-12
ROCKEFELLER'S
REBATE SYSTEM
Miss Tarbell Says 1t Made the
Standard Oil Trust.
RELATION WITH RAILWAYS SHOWN

self From the Railronds.
The following is an extract from
Miss Tarbell's History of the Stand.
nrd Oil Company in McClure's for
December:
General Butler knew something OF
the oil business. Four years before he
1 had been employed by the Pennsylva-
MIA Transportation company TO take
care of the legal side of their great I'M
dertaking-a seaboard pipe line-and
! he had had convincing experience
| of the Standards power. He reviewed
the history of the oil business, making
! a few minor mistakes in his historical
( facts. but never missing the big facts
opinion of the Standard Oil company.
I He presented the committee with u
pretty full collection of embarrassing
testimony, calling particular attention
| 10 Mr.. Cassatt's revelations in 1877,
and demanded an investigation. He
had no backing in the oil regions, how
ever, and his appeal was the last made
TO congress from the oil regions.
The situation was saved at this crit
ical time by individuals scattered
through the oil world who were re-
solved 10 test the validity Of Mr.. Rookie
feller's claim that the coal oil business
belonged TO him. I'VE have right TO
do an independent business" they said.
land we propose 10 do it." They began
this effort 10y IN attack OIL the weak
spot in Mr.. Rockefeller's armor
The ten years just passed had
taught them that the realization Of
Mr.. Rockefeller's great purpose had
been made possible by his remarkable
manipulation of the railroads. Ii was
the rebate which had made the Stand
ard Oil trust, the rebate. amplified,
systema fixed, glorited into power
never equalcd before or since by any
business of the country. The rebate
had made the trust. and the rebate. In
spite of ten years of combination, pc
troleum associations. producers I'M
ions, resolutions, suits in equity. suits
in quo warranto, appeals 10 congress.
legislative investigations-the rebate
bill was Mr.. Rockefeller's most eff
fective weapon. If they could wrest
it from his hand they could do bust
ness. They had learned something
else in this period-that the railroads
feared exposure OF discrimination and
could be made 10 settle rather than
have their practices made public. This
much the hated compromise of 1880
had demonstrated. Therefore, said
these individuals. we propose TO sue
for rebates and collect charges until
we make it so barassing and danger
Gus for the railroads that they will
shut down on Mr. Rockefeller.
The case of Scofeld. Shurmer and
Teagle, which was before the public
constantly during the six or seven
years following the breaking up OF the
Producers union. in which the oil re-
gions presented no united front TO Mr..
Rockefeller, served no keep public atten-
ton on the rniDous effect of the rebate
and TO strengthen the feeling that dras-
tic legislation must be taken if Mr.
Rockefeller's exploit was TO be pre-
vented in other industries.
Another ease came out In this war of
individuals on the rebate system. which
heightened the popular Indignation
against the Standard. 1t was a case
showing that the Standard Oil com:
pany had not yet abandoned that |
unique feature of its railroad contracts |
by which portion of the money which |
other people paid for their freight was |
handed over 10 them. This peculiar de. |
velopment of the rebate system seems |
TO have belonged exclusively to Mr. |
Rockefeller. Indeed careful search OF |
all the tremendous mass of materials
which the various investigations of
railroads have produced shows no other
case. so far rs the writer knows. OF this
practice. 1t was the clause OF the South
Improvement contracts which provoked
the greatest cutlery. II was the feature
of Mr.. Cassatt's revelations in 1877
which dumfounded the public and
which no one would believe until they
saw the actual agreements Mr.. Cassatt
presented.
ue VII TeSlOuS as WuOIe ulu moi |
hesitate TO say that they believed this
practice was still in operation. but nat
urally proof was most difficult TO SO.
cure. The demonstration came in 1885
through one of the most aggressive and
violent independents which the war in
oil has produced. Mr.. George Rice of
Marietta, y. Mr. Rice. an oil producer.
had built a refinery at Marietta in
1873. lie sold his oil in the state. the
west and south. Six years later his
business was practically stopped by
sudden rise in rates on the Ohio roads.
m advance OF fully 100 per cent being
made OIL freights from Marietta. where
there We're several independent refiner.
los, although no similar advance was
made from Wheeling and Cleveland.
where the Standard refncrics were 10.
Gated. These determinations were fully
shown in an investigation by the Ohio
state legislature in 1873. From that
time on Mr.. Rice was In constant diff
guilty about rates.
In 1888 Mr. Rice began TO draw the
crude supply for his refinery from his
NUN ntn1urfion In tho gotI l