New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1908-12-01
ARCHB0LD EXPLAINS
The OIL TRUST IDEA
M4RKETABLE SECURITIES
WERE DESIRED. >
Says Standard Has FaUored by the
State Department in It's
Efforts 1brOad.

ard Oil Company. at the continuation YESTERDAY
Of his direct examination before Franklin Fer
Us the federal referee. on the resumption of the
hearing in the governments case against the
standard Oil Company. gave testimony which
Was regarded as the sum and substance of the
connpany's defence in the suit for dissolution on
The ground that the business OF the trust was
being conducted in restraint OF trade
Ncritz Rosenthal one of the company's coun-
SCI who Is conducting the examination of MI
Archbold, said when the hearing was adjourned
the day before Thanksgiving that he would take
rp the trust agreement Of 1882 yesterday. He
started out al once to show that the agreement
Of 1879 was only feeIer. the real trust idea de
,-elopirg three years later. The trustees under
tbe first agreement. Villas. Keith and Chester,
teld the titles TO the properties acquired by the
Standard Of Ohio. without power Of administra-
,jo1. The 1882 agreement forming the real
,--st had a definite working plan.
II vas made as a sinne and effective form Of
holding the interests which had been heretofore
,o5ui-ed," said Mr Archbold in describing the
rg-poEe. We were advised by counsel that
rsfther the Standard Oil Company Of Ohio nor
,,5eed any other single company could success
.,1r or safely perhaps hold them They were
varied il nature, the property vas widespread
,n many different states. the laws Of which were
n many cases restrictive as TO the rights of
generations and the trusteeship suggested
IS 3 simple method Of bringing together those
-7-ore--7es 50 as 10 provide for an evidence Of
ownership. q t---en OF ownership that would be
marketable. tnat would give the interests
rnsrket value. basis for trading. and that
,.-o.-15 enable an administrative oversight in the
simplest way possible"
Nj Archbold said that before 1882 there was
10 general token or evidence Of ownership. and
that he said. ed 70 the making Of the trust
agreement. Individuals in interest. through
5oint ownership in the Standard Oil Company
o. Ohio. and in the Villas Keith and Chester
holdings. wanted something that would be evil
6erce OF their ownership in the property a
whole and that would be marketable Under
The trust agreement the evidence OF ownership
vas trust certificate showing that the holder
was entitled 10 50 many shares Of ownership IN
the trust properties. Before the 1882 agree
r7ert. ne said the business of the companies
whose owners had placed virtual control in the
Standard was conducted by the individuals
individual owners.
II his testimony Mr.. Archbold apparently
tried 10 bring out the fact of absence Of re-
strsint dwelling upon the peaceful assimilation
without ooercive measures. and the ultimate
cor sbinattou as q means OF simplifying control
and making administration easier Frank B
Kellogg. the government counsel. has put diff
<e-ert CONSTRUCTION On this method of assimila-
Ton. and was busy taking notes as Mr. Archbold
ezpiained the company's unimpeded course Of
growth
TRUST CERTIFICATES EXPLAINED.
The Standard Oil Company's vice-president
explafned more in detail than Mr. Rockefeller
did the distribution Of trust certificates 10 those
turning in the stock Of the Standard The CAPT
tai stock was s.. 3.5e0p0O AS the properties TAX
En- in under the trust agreement were said to
be worth ST00po0e0 twenty trust certificates
were issued for each share Of Standard stock.
As an example, M ArchboId held 800 shares Of
the Standard stock He received 5000 Of the
new certificates. He went over the way the
valuation Of S10OG0000 was made up The
book value Of the properties was S560ooOco
but The inventories value reached the seventy
mark, made up as follows: Pipe line invest
7erts 100000: refinery and manufacturing
interests s17.OO0O00: general merchandise
crude oil and cash, S230oooo0.
Schedules, maps and tables, all prepared under
TIE direction Of Nj. Archbold, were introduced
in evidence, some meeting with objection but all
getting in From these he gave his answers.
among others that there were 123 independent
refneries in this country, full grown competitors
Of tie STANDARD: that there were 400 independent
concerns in all parts of the world in active
opposition 10 the trust, Of which the capitaliza-
tion of IA companies was $274915.1S5. MI
Arch bold said that his company received espe-
c1allv good treatment in Japan and China, and
that the State Department. had given consider
able aid II was at this point that he said. with
e smile and quick look al Mr. Kellogg:
! should say that we were better treated by
the government in reference 70 our foreign busi-
ness than by the government at home"
There was hardly civilized country in the
world which was not on the Standards buying
I.s-. and Mr Archbold said that the effort Of
the Standard from its inception had been the
Development Of the resources Of this country and
The extension Of its commerce throughout the
world. The same plan Of operation in force
here. he said. was being put IN effect in every
country where the company had obtained bust
ness foothoId. The expense Of all this, the wit
ness said was tremendous Of all the business
done by the company in 1906 the foreign rep
resented SO per CEN
Mr. Archbold came in promptly at Il O'Clock
with the Standard counsel. M Ferris was back
from St. Louis, and Alr. Rosenthal had come
from Chicago just before the opening. f. Dana
Durand the government statistican who is
sisting Nr Kellogg had been Al Washington.
He. TOO. was there time. Mr. Archbold was
not the drawing card that Mr.. Rockefeller was
week ago, There was only fringe OF specta-
tors He was as cheerful as if attending an
annual meeting Of the board Of directors Of the
Standard of New Jersey. Mr.. Rosenthal first
look MIN DlTo4Sh tne Iflsi agreements ana llen
had him explain the status Of the signers Of the
first class nGmering thirteen
FORMING THE TRUST.
This first group was wholly united All OF
the interests Of each company were held by the
Standard OF Ohio. for which each individual had
received Standard stock In getting Mr. Arch
bold 20 tab,llate them as they were acquired and
how they were disposed Of Mr- Rosenthal asked
the following stock questions: