New-York tribune., 1906-12-23

John D. and William Rockefeller and Samuel
Andrews had started small oil refinery in
Cleveland on the side of hill. When the second
refinery was built, in 1861 Stephen HarkneSs,
who was was rel related to me by marriage backed me
feller and his associates Other little retnerles
sprang up and bought them. Our business
was developed rapidly, and in 1870 we closed
our partnership and organized the Standard Oil
Company. We worked night and day. making
good oil cheaply as possible and selling 1t for
all we could get"
What was the capitalization Of the Stand
ard Oil Company
out Lockhart, Frew & Co. of Pittsburg: War
den. Frew & Co. of Philadelphia and Charles
Standard shares at $3.50 each. we increased our
capital to S3.5O00O0"
John D. Rockefeller said recently that good
many able business men were doubtful of the
success of the Standard"
THAT is true. Some of the men whose re-
fineries we bought wanted cash instead Of
Standard stock. number of those who took
money not particularly friendly to later
on. You see we limited our annual dividend to
and were eventually justified in raising our cap
ital from $3,500O0O 10 $10OO0O00.'
''And the men who sold their refineries for
cash afterward said they had been frozen out
of the oil business?" l asked.
Let me tell you about one of our freeze
outs, " Mr. Flagler replied. ignoring my ques-
tion. when I was selling flour and grain in
Cleveland. had a certain German for a
toner He owned a bakery in the suburbs and
1 often trusted him for barrel of flour when
collections were slow and money scarce
One day met him on the street and he sur
prised me by saying that he had sold his bakery
and was running a little oil refinery Usually
Mr.. Rockefeller and I walked downtown i'm the
morning to talk over private matters. Next day
| told him about the little German baker who
had gone into the oil business without my
knowledge. We bought the refinery for 5000
The German owed 5000 AT my suggestion he
took S2.TOO in money. with which he paCified
his creditors for the time being. and S2l00 in
STANDARD stock We made him superintendent
q 6pDdrtm0Ot sci II n q
woods. where he arose TO a salary Of 5000
year. I was pleased later 10 ask him for his
$500 In stock and to issue in its stead SjOO0O
Of stock IN the larger corporation. Still later
he received $4,000 more in a stock dividend
That was a cheerful killing of competitor
But what have YOU to say about rebates from
railroads."
THE FIRST REBATE.
n lot of rubbish has been printed on that
subject too Mr. Rockefeller is charged with
inventng the plan by which the Standard Sc
Cretly got advantages over its competitors in
the matter of freights Now the truth is that
I. and not Mr.. Rockefeller was in charge oF
the transportation department OF our business
l remember when the Standard received its first
rebate went home in great delight Had won
fine victory. l thought A year later dis
/ covered that other rennerS received similar
favorS Thomas \. Scott. president of the Penn
sNlvania Railroad, introduced the practice of
/ giving rebates, and was successful first in
making every refiner believe that he alone en-
iOyed the privilege of shipping his oil AT a lower
price than his competitors. ] had business re-
lations with all the leading railroad officials in
those days, and | want 10 say that Jay Gould
! was one of the squarest men have ever known.
4 His word was good under all circumstances and
/ every day in the year.
! Recently l had some correspondence with a
/ Baptist preacher the subject of railroad re-
! bates" Mr.. FIager continued. He had written
/ a letter To a newspaper in this city defending
] Mr. Rockefeller generally. but adding line of
! criticism in respect 10 the charge that the
( Standard enjoyed advantages in the fatter of
/ freight rates. | wrote 10 the preacher and told
him l had been acquainted with Mr. Rocke-
! fener for forty years, and that if ne would
! spend the remainder Of his life in praising Mr..
/ Rockefeller he could not say any too much nor
more than actually deserved. Mr.. Rookie
! feIler and / laid emphasis the statement.
! fully realized his responsibilities as a rich man.
Then l took up the accusation about railroad
rates | asked him what class in the country
! got so many favors from railroads as do preach
! ers who either ride passes or on half-fare
| tickets Furthermore I said this preferential
! treatment even extends to stores and shops.
| nav 81 for book which any clergyman can
! buy for SO cents. The preacher wrote me a
| humorous reply and acknowledged that had
the facts
can poor men get fortunes as easily and
| quickly as they could when you started in life?"
! inquired
II think young men have more opportunities