The History Of Standard Oil, Ch 02 - The Rise Of Standard Oil

Chapter 2 The rise of the Standard Oil Chapter 2 The rise of the Standard Oil Company. Company. Company. The chief refining competitor of Oil The chief refining competitor of Oil The chief refining competitor of Oil Creek in 1872 Creek in 1872 Creek in 1872 was Cleveland, Ohio. was Cleveland, Ohio. was Cleveland, Ohio. Since 1869, that city had done annually Since 1869, that city had done annually Since 1869, that city had done annually more refining than any other place in more refining than any other place in more refining than any other place in the country. the country. the country. Strung along the banks of the Walworth Strung along the banks of the Walworth Strung along the banks of the Walworth and Kingsbury runs, the creeks to which and Kingsbury runs, the creeks to which and Kingsbury runs, the creeks to which the city frequently banishes her heavy the city frequently banishes her heavy the city frequently banishes her heavy and evil-smelling burdens, there had and evil-smelling burdens, there had and evil-smelling burdens, there had been since the early '60s from 20 to 30 been since the early '60s from 20 to 30 been since the early '60s from 20 to 30 oil refineries. Why they were there, oil refineries. Why they were there, oil refineries. Why they were there, more than 200 miles from the spot where more than 200 miles from the spot where more than 200 miles from the spot where the oil was taken from the earth, a the oil was taken from the earth, a the oil was taken from the earth, a glance at a map of the railroads will glance at a map of the railroads will glance at a map of the railroads will show. show. show. By rail and water, Cleveland commanded By rail and water, Cleveland commanded By rail and water, Cleveland commanded the entire western market. the entire western market. the entire western market. It had two trunk lines running to New It had two trunk lines running to New It had two trunk lines running to New York, both eager for oil traffic, and by York, both eager for oil traffic, and by York, both eager for oil traffic, and by Lake Erie and the canal, it had for a Lake Erie and the canal, it had for a Lake Erie and the canal, it had for a large part of the year a splendid cheap large part of the year a splendid cheap large part of the year a splendid cheap waterway. waterway. waterway. Thus, at the opening of the oil Thus, at the opening of the oil Thus, at the opening of the oil business, Cleveland was destined by business, Cleveland was destined by business, Cleveland was destined by geographical position to be a refining geographical position to be a refining geographical position to be a refining center.

center. center. Men saw it and hastened to take Men saw it and hastened to take Men saw it and hastened to take advantage of the opportunity. advantage of the opportunity. advantage of the opportunity. There was grave risk. The oil supply There was grave risk. The oil supply There was grave risk. The oil supply might not hold out. As yet, there was no might not hold out. As yet, there was no might not hold out. As yet, there was no certain market for refined oil. certain market for refined oil. certain market for refined oil. But a sure result was not what drew But a sure result was not what drew But a sure result was not what drew people into the oil business in the people into the oil business in the people into the oil business in the early '60s. Fortune was running early '60s. Fortune was running early '60s. Fortune was running fleet-footed across the country, and at fleet-footed across the country, and at fleet-footed across the country, and at her garment men clutched. her garment men clutched. her garment men clutched. They loved the chase almost as they did They loved the chase almost as they did They loved the chase almost as they did success. And so many a man in Cleveland success. And so many a man in Cleveland success. And so many a man in Cleveland tried his luck in an oil refinery as tried his luck in an oil refinery as tried his luck in an oil refinery as hundreds on Oil Creek were trying it in hundreds on Oil Creek were trying it in hundreds on Oil Creek were trying it in an oil lease. an oil lease. an oil lease. By 1865, By 1865, By 1865, there were 30 refineries in the town there were 30 refineries in the town there were 30 refineries in the town with a capital of about a million and a with a capital of about a million and a with a capital of about a million and a half dollars and a daily capacity of half dollars and a daily capacity of half dollars and a daily capacity of some 2,000 barrels. some 2,000 barrels. some 2,000 barrels. The works multiplied rapidly. The works multiplied rapidly. The works multiplied rapidly. The report of the Cleveland Board of The report of the Cleveland Board of The report of the Cleveland Board of Trade for 1866 Trade for 1866 Trade for 1866 gives the number of plants at the end of gives the number of plants at the end of gives the number of plants at the end of that year as 50. that year as 50. that year as 50. And it dilates eloquently on the And it dilates eloquently on the And it dilates eloquently on the advantages of Cleveland as a refining advantages of Cleveland as a refining advantages of Cleveland as a refining point over even Pittsburgh to that time, point over even Pittsburgh to that time, point over even Pittsburgh to that time, supposed to be the natural center for supposed to be the natural center for supposed to be the natural center for the business.

the business. the business. If the railroad and lake transportation If the railroad and lake transportation If the railroad and lake transportation men would but adopt as liberal a policy men would but adopt as liberal a policy men would but adopt as liberal a policy toward the oil freights of Cleveland as toward the oil freights of Cleveland as toward the oil freights of Cleveland as the Pennsylvania Railroad was adopting the Pennsylvania Railroad was adopting the Pennsylvania Railroad was adopting toward Pittsburgh, aided by her natural toward Pittsburgh, aided by her natural toward Pittsburgh, aided by her natural advantages, the town was bound to become advantages, the town was bound to become advantages, the town was bound to become the greatest oil refining center in the the greatest oil refining center in the the greatest oil refining center in the United States. United States. United States. By 1868, By 1868, By 1868, the Board of Trade reported joyfully the Board of Trade reported joyfully the Board of Trade reported joyfully that Cleveland was receiving within that Cleveland was receiving within that Cleveland was receiving within 300,000 barrels as much oil as 300,000 barrels as much oil as 300,000 barrels as much oil as Pittsburgh. Pittsburgh. Pittsburgh. In 1869, she surpassed all competitors. In 1869, she surpassed all competitors. In 1869, she surpassed all competitors. Cleveland now claims the leading Cleveland now claims the leading Cleveland now claims the leading position among the manufacturers of position among the manufacturers of position among the manufacturers of petroleum with a very reasonable petroleum with a very reasonable petroleum with a very reasonable prospect of holding that rank for some prospect of holding that rank for some prospect of holding that rank for some time to come, commented the Board of time to come, commented the Board of time to come, commented the Board of Trade report. Trade report. Trade report. Each year has seen greater consolidation Each year has seen greater consolidation Each year has seen greater consolidation of capital, greater energy and success of capital, greater energy and success of capital, greater energy and success in prosecuting the business, and in prosecuting the business, and in prosecuting the business, and notwithstanding some disastrous fires, a notwithstanding some disastrous fires, a notwithstanding some disastrous fires, a stronger determination to establish an stronger determination to establish an stronger determination to establish an immovable reputation for the quantity immovable reputation for the quantity immovable reputation for the quantity and quality of this most important and quality of this most important and quality of this most important product.

product. product. The total capital invested in this The total capital invested in this The total capital invested in this business is not less than 4 millions of business is not less than 4 millions of business is not less than 4 millions of dollars, and the total product of the dollars, and the total product of the dollars, and the total product of the year would not fall short of 15 year would not fall short of 15 year would not fall short of 15 millions. millions. millions. Among the many young men of Cleveland Among the many young men of Cleveland Among the many young men of Cleveland who, from the start, had an eye on the who, from the start, had an eye on the who, from the start, had an eye on the oil refining business and had begun to oil refining business and had begun to oil refining business and had begun to take an active part in its development take an active part in its development take an active part in its development as soon as it was demonstrated that as soon as it was demonstrated that as soon as it was demonstrated that there was a reasonable hope of its being there was a reasonable hope of its being there was a reasonable hope of its being permanent, was a young firm of produce permanent, was a young firm of produce permanent, was a young firm of produce commission merchants. Both members of commission merchants. Both members of commission merchants. Both members of this firm were keen businessmen, and one this firm were keen businessmen, and one this firm were keen businessmen, and one of them had remarkable commercial of them had remarkable commercial of them had remarkable commercial vision, a genius for seeing the vision, a genius for seeing the vision, a genius for seeing the possibilities in material things. possibilities in material things. possibilities in material things. This man's name was Rockefeller, John D. This man's name was Rockefeller, John D. This man's name was Rockefeller, John D. Rockefeller. Rockefeller. Rockefeller. He was but 23 years old when he first He was but 23 years old when he first He was but 23 years old when he first went into the oil business, but he had went into the oil business, but he had went into the oil business, but he had already got his feet firmly on the already got his feet firmly on the already got his feet firmly on the business ladder and had got them there business ladder and had got them there business ladder and had got them there by his own efforts. by his own efforts. by his own efforts. The habit of driving good bargains and The habit of driving good bargains and The habit of driving good bargains and of saving money had started him. of saving money had started him. of saving money had started him. He himself once told how he learned He himself once told how he learned He himself once told how he learned these lessons so useful in money making these lessons so useful in money making these lessons so useful in money making in one of his frequent Sunday school in one of his frequent Sunday school in one of his frequent Sunday school talks to young men on success in talks to young men on success in talks to young men on success in business.

business. business. The value of a good bargain he learned The value of a good bargain he learned The value of a good bargain he learned in buying cordwood for his father. in buying cordwood for his father. in buying cordwood for his father. I knew what a cord of good solid beech I knew what a cord of good solid beech I knew what a cord of good solid beech and maple wood was. My father told me to and maple wood was. My father told me to and maple wood was. My father told me to select only the solid wood and the select only the solid wood and the select only the solid wood and the straight wood and not to put any limbs straight wood and not to put any limbs straight wood and not to put any limbs in it or any punky wood. in it or any punky wood. in it or any punky wood. That was a good training for me. That was a good training for me. That was a good training for me. I did not need any father to tell me or I did not need any father to tell me or I did not need any father to tell me or anybody else how many feet it took to anybody else how many feet it took to anybody else how many feet it took to make a cord of wood. And here is how he make a cord of wood. And here is how he make a cord of wood. And here is how he learned the value of investing money. learned the value of investing money. learned the value of investing money. Among the early experiences that were Among the early experiences that were Among the early experiences that were helpful to me that I recollect with helpful to me that I recollect with helpful to me that I recollect with pleasure was one in working a few days pleasure was one in working a few days pleasure was one in working a few days for a neighbor in digging potatoes, a for a neighbor in digging potatoes, a for a neighbor in digging potatoes, a very enterprising thrifty farmer who very enterprising thrifty farmer who very enterprising thrifty farmer who could dig a great many potatoes. could dig a great many potatoes. could dig a great many potatoes. I was a boy of perhaps 13 or 14 years of I was a boy of perhaps 13 or 14 years of I was a boy of perhaps 13 or 14 years of age, and it kept me very busy from age, and it kept me very busy from age, and it kept me very busy from morning until night. morning until night. morning until night. It was a 10-hour day. It was a 10-hour day. It was a 10-hour day. And as I was saving these little sums, I And as I was saving these little sums, I And as I was saving these little sums, I soon learned that I could get as much soon learned that I could get as much soon learned that I could get as much interest for $50 loaned at 7% the legal interest for $50 loaned at 7% the legal interest for $50 loaned at 7% the legal rate in the state of New York at that rate in the state of New York at that rate in the state of New York at that time for a year as I could earn by time for a year as I could earn by time for a year as I could earn by digging potatoes for 100 days.

digging potatoes for 100 days. digging potatoes for 100 days. The impression was gaining ground with The impression was gaining ground with The impression was gaining ground with me that it was a good thing to let the me that it was a good thing to let the me that it was a good thing to let the money be my slave and not make myself a money be my slave and not make myself a money be my slave and not make myself a slave to money. slave to money. slave to money. Here we have the foundation principles Here we have the foundation principles Here we have the foundation principles of a great financial career. of a great financial career. of a great financial career. When young Rockefeller was 13 years old, When young Rockefeller was 13 years old, When young Rockefeller was 13 years old, his father moved from the farm in his father moved from the farm in his father moved from the farm in central New York, where the boy had been central New York, where the boy had been central New York, where the boy had been born, July 8th, 1839, born, July 8th, 1839, born, July 8th, 1839, to a farm near Cleveland, Ohio. to a farm near Cleveland, Ohio. to a farm near Cleveland, Ohio. He went to school in Cleveland for 3 He went to school in Cleveland for 3 He went to school in Cleveland for 3 years. In 1855, years. In 1855, years. In 1855, it became necessary for him to earn his it became necessary for him to earn his it became necessary for him to earn his own living. own living. own living. It was a hard year in the West, and the It was a hard year in the West, and the It was a hard year in the West, and the boy walked the streets for days looking boy walked the streets for days looking boy walked the streets for days looking for work. for work. for work. He was about to give it up and go to the He was about to give it up and go to the He was about to give it up and go to the country when, to quote the story as Mr. country when, to quote the story as Mr. country when, to quote the story as Mr. Rockefeller once told it to his Rockefeller once told it to his Rockefeller once told it to his Cleveland Sunday school, "As good Cleveland Sunday school, "As good Cleveland Sunday school, "As good fortune would have it, I went down to fortune would have it, I went down to fortune would have it, I went down to the dock and made one more application, the dock and made one more application, the dock and made one more application, and I was told that if I would come in and I was told that if I would come in and I was told that if I would come in after dinner, our noonday meal was after dinner, our noonday meal was after dinner, our noonday meal was dinner in those days, they would see if dinner in those days, they would see if dinner in those days, they would see if I could come to work for them.

I could come to work for them. I could come to work for them. I went down after dinner, and I got the I went down after dinner, and I got the I went down after dinner, and I got the position, and I was permitted to remain position, and I was permitted to remain position, and I was permitted to remain in the city." in the city." in the city." The position, that of a clerk and The position, that of a clerk and The position, that of a clerk and bookkeeper, was not lucrative. bookkeeper, was not lucrative. bookkeeper, was not lucrative. According to a small ledger which has According to a small ledger which has According to a small ledger which has figured frequently in Mr. Rockefeller's figured frequently in Mr. Rockefeller's figured frequently in Mr. Rockefeller's religious instructions, he earned from religious instructions, he earned from religious instructions, he earned from September 26th, 1855, September 26th, 1855, September 26th, 1855, to January 1856, to January 1856, to January 1856, $50. $50. $50. "Out of that," Mr. Rockefeller told the "Out of that," Mr. Rockefeller told the "Out of that," Mr. Rockefeller told the young men of his Sunday school class, "I young men of his Sunday school class, "I young men of his Sunday school class, "I paid my washerwoman and the lady I paid my washerwoman and the lady I paid my washerwoman and the lady I boarded with, and I saved a little money boarded with, and I saved a little money boarded with, and I saved a little money to put away." to put away." to put away." He proved an admirable accountant, one He proved an admirable accountant, one He proved an admirable accountant, one of the early and late sort, who saw of the early and late sort, who saw of the early and late sort, who saw everything, forgot nothing, and never everything, forgot nothing, and never everything, forgot nothing, and never talked. talked. talked. In 1856, his salary was raised to $25 a In 1856, his salary was raised to $25 a In 1856, his salary was raised to $25 a month, and he went on always saving a month, and he went on always saving a month, and he went on always saving a little money to put away. little money to put away. little money to put away. In 1858, came a chance to invest his In 1858, came a chance to invest his In 1858, came a chance to invest his savings. Among his acquaintances was a savings. Among his acquaintances was a savings. Among his acquaintances was a young Englishman, M. B. Clark.

young Englishman, M. B. Clark. young Englishman, M. B. Clark. Older by 12 years than Rockefeller, he Older by 12 years than Rockefeller, he Older by 12 years than Rockefeller, he had left the hard life in England when had left the hard life in England when had left the hard life in England when he was 20 to seek fortune in America. he was 20 to seek fortune in America. he was 20 to seek fortune in America. He had landed in Boston in 1847 He had landed in Boston in 1847 He had landed in Boston in 1847 without a penny or a friend, and it had without a penny or a friend, and it had without a penny or a friend, and it had taken 3 months for him to earn money to taken 3 months for him to earn money to taken 3 months for him to earn money to get to Ohio. get to Ohio. get to Ohio. Here he had taken the first job at hand Here he had taken the first job at hand Here he had taken the first job at hand as man of all work, wood chopper, as man of all work, wood chopper, as man of all work, wood chopper, teamster. teamster. teamster. He had found his way to Cleveland, had He had found his way to Cleveland, had He had found his way to Cleveland, had become a valuable man in the houses become a valuable man in the houses become a valuable man in the houses where he was employed, had gone to where he was employed, had gone to where he was employed, had gone to school at nights, had saved money. school at nights, had saved money. school at nights, had saved money. They were two of a kind, Clark and They were two of a kind, Clark and They were two of a kind, Clark and Rockefeller, and in 1858, Rockefeller, and in 1858, Rockefeller, and in 1858, they pooled their earnings and started a they pooled their earnings and started a they pooled their earnings and started a produce commission business on the produce commission business on the produce commission business on the Cleveland docks. Cleveland docks. Cleveland docks. The venture succeeded. The venture succeeded. The venture succeeded. Local historians credit Clark and Local historians credit Clark and Local historians credit Clark and Rockefeller with doing a business of Rockefeller with doing a business of Rockefeller with doing a business of $450,000 $450,000 $450,000 the first year. the first year. the first year. The war came on, and as neither partner The war came on, and as neither partner The war came on, and as neither partner went to the front, they had full chance went to the front, they had full chance went to the front, they had full chance to take advantage of the opportunity for to take advantage of the opportunity for to take advantage of the opportunity for produce business a great army gives.

produce business a great army gives. produce business a great army gives. A greater chance than furnishing army A greater chance than furnishing army A greater chance than furnishing army supplies, lucrative as most people found supplies, lucrative as most people found supplies, lucrative as most people found that, was in the oil business, so Clark that, was in the oil business, so Clark that, was in the oil business, so Clark and Rockefeller began to think. And in and Rockefeller began to think. And in and Rockefeller began to think. And in 1862, 1862, 1862, when an Englishman of ability and when an Englishman of ability and when an Englishman of ability and energy, one Samuel Andrews, asked them energy, one Samuel Andrews, asked them energy, one Samuel Andrews, asked them to back him in starting a refinery, to back him in starting a refinery, to back him in starting a refinery, they put in $4,000 and promised to give they put in $4,000 and promised to give they put in $4,000 and promised to give more if necessary. more if necessary. more if necessary. Now, Andrews was a mechanical genius. He Now, Andrews was a mechanical genius. He Now, Andrews was a mechanical genius. He devised new processes, made a better and devised new processes, made a better and devised new processes, made a better and better quality of oil, got larger and better quality of oil, got larger and better quality of oil, got larger and larger percentages of refined from his larger percentages of refined from his larger percentages of refined from his crude. crude. crude. The little refinery grew big, and Clark The little refinery grew big, and Clark The little refinery grew big, and Clark and Rockefeller soon had $100,000 or and Rockefeller soon had $100,000 or and Rockefeller soon had $100,000 or more in it. more in it. more in it. In the meantime, Cleveland was growing In the meantime, Cleveland was growing In the meantime, Cleveland was growing as a refining center. as a refining center. as a refining center. The business which in 1860 had been a The business which in 1860 had been a The business which in 1860 had been a gamble was by 1865 gamble was by 1865 gamble was by 1865 one of the the promising industries of one of the the promising industries of one of the the promising industries of the town. the town. the town. It was but the beginning, so Mr. It was but the beginning, so Mr. It was but the beginning, so Mr. Rockefeller thought. And in that year he Rockefeller thought. And in that year he Rockefeller thought. And in that year he sold out his share of the commission sold out his share of the commission sold out his share of the commission business and put his money into the oil business and put his money into the oil business and put his money into the oil firm of Rockefeller and Andrews.

firm of Rockefeller and Andrews. firm of Rockefeller and Andrews. In the new firm Andrews attended to the In the new firm Andrews attended to the In the new firm Andrews attended to the manufacturing. manufacturing. manufacturing. The pushing of the business, the buying The pushing of the business, the buying The pushing of the business, the buying and the selling fell to Rockefeller. and the selling fell to Rockefeller. and the selling fell to Rockefeller. From the start his effect was From the start his effect was From the start his effect was tremendous. He had the frugal man's tremendous. He had the frugal man's tremendous. He had the frugal man's hatred of waste and disorder, of hatred of waste and disorder, of hatred of waste and disorder, of middlemen and unnecessary manipulation, middlemen and unnecessary manipulation, middlemen and unnecessary manipulation, and he began a vigorous elimination of and he began a vigorous elimination of and he began a vigorous elimination of these from his business. these from his business. these from his business. The residuum that other refineries let The residuum that other refineries let The residuum that other refineries let run into the ground, he sold. run into the ground, he sold. run into the ground, he sold. Old iron found its way to the junk shop. Old iron found its way to the junk shop. Old iron found its way to the junk shop. He bought his oil directly from the He bought his oil directly from the He bought his oil directly from the wells. He made his own barrels. He wells. He made his own barrels. He wells. He made his own barrels. He watched and saved and contrived. watched and saved and contrived. watched and saved and contrived. The ability with which he made the The ability with which he made the The ability with which he made the smallest bargain furnishes topics to smallest bargain furnishes topics to smallest bargain furnishes topics to Cleveland storytellers today. Cleveland storytellers today. Cleveland storytellers today. Low-voiced, soft-footed, humble, knowing Low-voiced, soft-footed, humble, knowing Low-voiced, soft-footed, humble, knowing every point in every man's business, he every point in every man's business, he every point in every man's business, he never tired until he got his wares at never tired until he got his wares at never tired until he got his wares at the lowest possible figure. the lowest possible figure. the lowest possible figure. "John always got the best of the "John always got the best of the "John always got the best of the bargain," old men tell you in Cleveland bargain," old men tell you in Cleveland bargain," old men tell you in Cleveland today, and they wince though they laugh today, and they wince though they laugh today, and they wince though they laugh in telling it. "Smooth, a savvy fellow," in telling it. "Smooth, a savvy fellow," in telling it. "Smooth, a savvy fellow," is their description of him.

is their description of him. is their description of him. To drive a good bargain was the joy of To drive a good bargain was the joy of To drive a good bargain was the joy of his life. "The only time I ever saw John his life. "The only time I ever saw John his life. "The only time I ever saw John Rockefeller enthusiastic," Rockefeller enthusiastic," Rockefeller enthusiastic," a man told the writer once, "was when a a man told the writer once, "was when a a man told the writer once, "was when a report came in from the creek that his report came in from the creek that his report came in from the creek that his fire had secured a cargo of oil at a fire had secured a cargo of oil at a fire had secured a cargo of oil at a figure much below the market price. figure much below the market price. figure much below the market price. He bounded from his chair with a shout He bounded from his chair with a shout He bounded from his chair with a shout of joy, danced up and down, hugged me, of joy, danced up and down, hugged me, of joy, danced up and down, hugged me, threw up his hat, acted so like a madman threw up his hat, acted so like a madman threw up his hat, acted so like a madman that I have never forgotten it. He could that I have never forgotten it. He could that I have never forgotten it. He could borrow as well as bargain. borrow as well as bargain. borrow as well as bargain. The firm's capital was limited. Growing The firm's capital was limited. Growing The firm's capital was limited. Growing as they were, they often needed money as they were, they often needed money as they were, they often needed money and had none. and had none. and had none. Borrow they must. Borrow they must. Borrow they must. Rarely, if ever, did Mr. Rockefeller Rarely, if ever, did Mr. Rockefeller Rarely, if ever, did Mr. Rockefeller fail. fail. fail. There was a story handed down in There was a story handed down in There was a story handed down in Cleveland from the days of Clark and Cleveland from the days of Clark and Cleveland from the days of Clark and Rockefeller produce merchants, which is Rockefeller produce merchants, which is Rockefeller produce merchants, which is illustrative of his methods. illustrative of his methods. illustrative of his methods. One day a well-known and rich One day a well-known and rich One day a well-known and rich businessman stepped into the office and businessman stepped into the office and businessman stepped into the office and asked for Mr. Rockefeller. asked for Mr. Rockefeller. asked for Mr. Rockefeller. He was out and Clark met the visitor. He was out and Clark met the visitor. He was out and Clark met the visitor. "Mr. Clark," he said, "you may tell Mr.

"Mr. Clark," he said, "you may tell Mr. "Mr. Clark," he said, "you may tell Mr. Rockefeller when he comes in that I Rockefeller when he comes in that I Rockefeller when he comes in that I think I can use the $10,000 he wants to think I can use the $10,000 he wants to think I can use the $10,000 he wants to invest with me for your firm. I have invest with me for your firm. I have invest with me for your firm. I have thought it all over." thought it all over." thought it all over." "Good God!" cried Clark. "We don't want "Good God!" cried Clark. "We don't want "Good God!" cried Clark. "We don't want to invest $10,000. to invest $10,000. to invest $10,000. John is out right now trying to borrow John is out right now trying to borrow John is out right now trying to borrow $5,000 for us." $5,000 for us." $5,000 for us." It turned out that to prepare him for a It turned out that to prepare him for a It turned out that to prepare him for a proposition to borrow $5,000, proposition to borrow $5,000, proposition to borrow $5,000, Mr. Rockefeller had told the gentleman Mr. Rockefeller had told the gentleman Mr. Rockefeller had told the gentleman that he and Clark wanted to invest that he and Clark wanted to invest that he and Clark wanted to invest $10,000. $10,000. $10,000. "And the joke of it is," said Clark, who "And the joke of it is," said Clark, who "And the joke of it is," said Clark, who used to tell the story, "John got the used to tell the story, "John got the used to tell the story, "John got the $5,000 $5,000 $5,000 even after I had let the cat out of the even after I had let the cat out of the even after I had let the cat out of the bag." bag." bag." Oh, he was the greatest borrower you Oh, he was the greatest borrower you Oh, he was the greatest borrower you ever saw. These qualities told. ever saw. These qualities told. ever saw. These qualities told. The firm grew as rapidly as the oil The firm grew as rapidly as the oil The firm grew as rapidly as the oil business of the town and started a business of the town and started a business of the town and started a second refinery, William A. Rockefeller second refinery, William A. Rockefeller second refinery, William A. Rockefeller and Company. and Company. and Company. They took in a partner, H. M. Flagler, They took in a partner, H. M. Flagler, They took in a partner, H. M. Flagler, and opened a house in New York for and opened a house in New York for and opened a house in New York for selling oil. selling oil. selling oil. Of all these concerns, John D.

Of all these concerns, John D. Of all these concerns, John D. Rockefeller was the head. Rockefeller was the head. Rockefeller was the head. Finally, in June 1870, 5 years after he Finally, in June 1870, 5 years after he Finally, in June 1870, 5 years after he became an active partner in the refining became an active partner in the refining became an active partner in the refining business, Mr. Rockefeller combined all business, Mr. Rockefeller combined all business, Mr. Rockefeller combined all his companies into one, his companies into one, his companies into one, the Standard Oil Company. the Standard Oil Company. the Standard Oil Company. The capital of the new concern was $1 The capital of the new concern was $1 The capital of the new concern was $1 million. The parties interested in million. The parties interested in million. The parties interested in The parties interested in it were John The parties interested in it were John The parties interested in it were John D. Rockefeller, Henry M. Flagler, Samuel D. Rockefeller, Henry M. Flagler, Samuel D. Rockefeller, Henry M. Flagler, Samuel Andrews, Stephen V. Harkness, and Andrews, Stephen V. Harkness, and Andrews, Stephen V. Harkness, and William Rockefeller. William Rockefeller. William Rockefeller. The strides the firm of Rockefeller and The strides the firm of Rockefeller and The strides the firm of Rockefeller and Andrews made after the former went into Andrews made after the former went into Andrews made after the former went into it were attributed for three or four it were attributed for three or four it were attributed for three or four years mainly to his extraordinary years mainly to his extraordinary years mainly to his extraordinary capacity for bargaining and borrowing. capacity for bargaining and borrowing. capacity for bargaining and borrowing. Then its chief competitors began to Then its chief competitors began to Then its chief competitors began to suspect something. suspect something. suspect something. John Rockefeller might get his oil John Rockefeller might get his oil John Rockefeller might get his oil cheaper now and then, they said, but he cheaper now and then, they said, but he cheaper now and then, they said, but he could not do it often. could not do it often. could not do it often. He might make close contracts for which He might make close contracts for which He might make close contracts for which they had neither the patience nor the they had neither the patience nor the they had neither the patience nor the stomach. stomach. stomach. He might have an unusual mechanical and He might have an unusual mechanical and He might have an unusual mechanical and practical genius in his partner, practical genius in his partner, practical genius in his partner, but these things could not explain all.

but these things could not explain all. but these things could not explain all. They believed they bought on the whole They believed they bought on the whole They believed they bought on the whole almost as cheaply as he, and they knew almost as cheaply as he, and they knew almost as cheaply as he, and they knew they made as good oil and with as great they made as good oil and with as great they made as good oil and with as great or nearly as great economy. or nearly as great economy. or nearly as great economy. He could sell at no better price than He could sell at no better price than He could sell at no better price than they. they. they. Where was his advantage? Where was his advantage? Where was his advantage? There was but one place where it could There was but one place where it could There was but one place where it could be, and that was in transportation. be, and that was in transportation. be, and that was in transportation. He must be getting better rates from the He must be getting better rates from the He must be getting better rates from the railroads than they were. railroads than they were. railroads than they were. In 1868 or 1869, In 1868 or 1869, In 1868 or 1869, a member of a rival firm long in the a member of a rival firm long in the a member of a rival firm long in the business, which had been prosperous from business, which had been prosperous from business, which had been prosperous from the start, and which prided itself on the start, and which prided itself on the start, and which prided itself on its methods, its economy, and its its methods, its economy, and its its methods, its economy, and its energy, Alexander Scofield and company, energy, Alexander Scofield and company, energy, Alexander Scofield and company, went to the Atlantic and Great Western went to the Atlantic and Great Western went to the Atlantic and Great Western Road, then under the Erie management, Road, then under the Erie management, Road, then under the Erie management, and complained, and complained, and complained, "You are giving others better rates than "You are giving others better rates than "You are giving others better rates than you are us," said Mr. Alex- ander, the you are us," said Mr. Alex- ander, the you are us," said Mr. Alex- ander, the representative of the firm. "We cannot representative of the firm. "We cannot representative of the firm. "We cannot compete if you do that." compete if you do that." compete if you do that." The railroad agent did not attempt to The railroad agent did not attempt to The railroad agent did not attempt to deny it. He simply agreed to give Mr. deny it. He simply agreed to give Mr. deny it. He simply agreed to give Mr. Alexander a rebate also.

Alexander a rebate also. Alexander a rebate also. The arrangement was interesting. Mr. The arrangement was interesting. Mr. The arrangement was interesting. Mr. Alexander was to pay the open or regular Alexander was to pay the open or regular Alexander was to pay the open or regular rate on oil from the oil regions to rate on oil from the oil regions to rate on oil from the oil regions to Cleveland, which was then 40 cents a Cleveland, which was then 40 cents a Cleveland, which was then 40 cents a barrel. barrel. barrel. At the end of each month, he was to send At the end of each month, he was to send At the end of each month, he was to send to the railroad vouchers for the amount to the railroad vouchers for the amount to the railroad vouchers for the amount of oil shipped and paid for at 40 cents of oil shipped and paid for at 40 cents of oil shipped and paid for at 40 cents and was to get back from the railroad in and was to get back from the railroad in and was to get back from the railroad in money 15 cents on each barrel. money 15 cents on each barrel. money 15 cents on each barrel. This concession applied only to oil This concession applied only to oil This concession applied only to oil brought from the wells. He was never brought from the wells. He was never brought from the wells. He was never able to get a rebate on oil shipped able to get a rebate on oil shipped able to get a rebate on oil shipped eastward. eastward. eastward. According to Mr. Alexander, the Atlantic According to Mr. Alexander, the Atlantic According to Mr. Alexander, the Atlantic and Great Western gave the rebates on and Great Western gave the rebates on and Great Western gave the rebates on oil from the oil regions to Cleveland up oil from the oil regions to Cleveland up oil from the oil regions to Cleveland up to 1871 to 1871 to 1871 and the system was then discontinued. and the system was then discontinued. and the system was then discontinued. Late in 1871, however, the firm for the Late in 1871, however, the firm for the Late in 1871, however, the firm for the first time got a rebate on the Lake first time got a rebate on the Lake first time got a rebate on the Lake Shore Road on oil brought from the Shore Road on oil brought from the Shore Road on oil brought from the field. field. field. Another Cleveland man, W. H. Doane, Another Cleveland man, W. H. Doane, Another Cleveland man, W. H. Doane, engaged in shipping crude oil began to engaged in shipping crude oil began to engaged in shipping crude oil began to suspect about the same time as Mr.

suspect about the same time as Mr. suspect about the same time as Mr. Alexander that the Standard was Alexander that the Standard was Alexander that the Standard was receiving rebates. receiving rebates. receiving rebates. Now, Mr. Doane had always been opposed Now, Mr. Doane had always been opposed Now, Mr. Doane had always been opposed to the drawback business, but it was to the drawback business, but it was to the drawback business, but it was impossible for him to supply his impossible for him to supply his impossible for him to supply his customers with crude oil at as lower customers with crude oil at as lower customers with crude oil at as lower rate as the Standard paid if it received rate as the Standard paid if it received rate as the Standard paid if it received a rebate and he did not. And when it was a rebate and he did not. And when it was a rebate and he did not. And when it was first generally rumored in Cleveland first generally rumored in Cleveland first generally rumored in Cleveland that the railroads were favoring Mr. that the railroads were favoring Mr. that the railroads were favoring Mr. Rockefeller, he went to see the agent of Rockefeller, he went to see the agent of Rockefeller, he went to see the agent of the road. the road. the road. I told him I did not want any drawback I told him I did not want any drawback I told him I did not want any drawback unless others were getting it. I wanted unless others were getting it. I wanted unless others were getting it. I wanted it if they were getting it and he gave it if they were getting it and he gave it if they were getting it and he gave me at that time 10 cents drawback. me at that time 10 cents drawback. me at that time 10 cents drawback. This arrangement, Mr. Doane said, had This arrangement, Mr. Doane said, had This arrangement, Mr. Doane said, had lasted but a short time. lasted but a short time. lasted but a short time. At the date he was speaking, the spring At the date he was speaking, the spring At the date he was speaking, the spring of 1872, of 1872, of 1872, he had had no drawback for 2 years. he had had no drawback for 2 years. he had had no drawback for 2 years. A still more important bit of testimony A still more important bit of testimony A still more important bit of testimony as to the time when rebates first began as to the time when rebates first began as to the time when rebates first began to be given to the Cleveland refiners to be given to the Cleveland refiners to be given to the Cleveland refiners and as to who first got them and why is and as to who first got them and why is and as to who first got them and why is contained in an affidavit made in 1880 contained in an affidavit made in 1880 contained in an affidavit made in 1880 by the very man who made the by the very man who made the by the very man who made the discrimination.

discrimination. discrimination. This man was General J. H. Devereux who This man was General J. H. Devereux who This man was General J. H. Devereux who in 1868 succeeded Amasa Stone as vice in 1868 succeeded Amasa Stone as vice in 1868 succeeded Amasa Stone as vice president of the Lake Shore Railroad. president of the Lake Shore Railroad. president of the Lake Shore Railroad. General Devereux said that his General Devereux said that his General Devereux said that his experience with the oil traffic had experience with the oil traffic had experience with the oil traffic had begun with his connection with the Lake begun with his connection with the Lake begun with his connection with the Lake Shore. That the only written memoranda Shore. That the only written memoranda Shore. That the only written memoranda concerning oil which he found in his concerning oil which he found in his concerning oil which he found in his office on entering his new position was office on entering his new position was office on entering his new position was a book in which it was stated that the a book in which it was stated that the a book in which it was stated that the representatives of the 25 oil refining representatives of the 25 oil refining representatives of the 25 oil refining firms in Cleveland had agreed to pay a firms in Cleveland had agreed to pay a firms in Cleveland had agreed to pay a cent a gallon on crude oil removed from cent a gallon on crude oil removed from cent a gallon on crude oil removed from the oil regions. the oil regions. the oil regions. General Devereux says that he soon found General Devereux says that he soon found General Devereux says that he soon found there was a deal of trouble in store for there was a deal of trouble in store for there was a deal of trouble in store for him over oil freight. him over oil freight. him over oil freight. The competition between the 25 firms was The competition between the 25 firms was The competition between the 25 firms was close. The Pennsylvania was claiming a close. The Pennsylvania was claiming a close. The Pennsylvania was claiming a patent right on the transportation of patent right on the transportation of patent right on the transportation of oil and was putting forth every effort oil and was putting forth every effort oil and was putting forth every effort to make Pittsburgh and Philadelphia the to make Pittsburgh and Philadelphia the to make Pittsburgh and Philadelphia the chief refining centers. chief refining centers. chief refining centers. Oil Creek was boasting that it was going Oil Creek was boasting that it was going Oil Creek was boasting that it was going to be the future refining point of the to be the future refining point of the to be the future refining point of the world. world. world. All of this looked bad for what General All of this looked bad for what General All of this looked bad for what General Devereux speaks of as the then very Devereux speaks of as the then very Devereux speaks of as the then very limited refining capacity of Cleveland.

limited refining capacity of Cleveland. limited refining capacity of Cleveland. This remark shows how new he was to the This remark shows how new he was to the This remark shows how new he was to the business, for as we have already seen, business, for as we have already seen, business, for as we have already seen, Cleveland in 1868 Cleveland in 1868 Cleveland in 1868 had anything but a limited refining had anything but a limited refining had anything but a limited refining capacity. capacity. capacity. Between three and four million dollars Between three and four million dollars Between three and four million dollars were invested in oil refineries and the were invested in oil refineries and the were invested in oil refineries and the town was receiving within 35,000 barrels town was receiving within 35,000 barrels town was receiving within 35,000 barrels of as much oil as New York City and of as much oil as New York City and of as much oil as New York City and within 300,000 as much as Pittsburgh. within 300,000 as much as Pittsburgh. within 300,000 as much as Pittsburgh. And it was boasting that the next year And it was boasting that the next year And it was boasting that the next year it would outstrip these competitors, it would outstrip these competitors, it would outstrip these competitors, which as a matter of fact it did. which as a matter of fact it did. which as a matter of fact it did. The natural point for General Devereux The natural point for General Devereux The natural point for General Devereux to consider, of course, was whether he to consider, of course, was whether he to consider, of course, was whether he could meet the rates the Pennsylvania could meet the rates the Pennsylvania could meet the rates the Pennsylvania were giving and increase the oil freight were giving and increase the oil freight were giving and increase the oil freight for the Lake Shore. for the Lake Shore. for the Lake Shore. The road had a branch running to The road had a branch running to The road had a branch running to Franklin, Pennsylvania within a few Franklin, Pennsylvania within a few Franklin, Pennsylvania within a few miles of Oil City. miles of Oil City. miles of Oil City. This he completed and then, as he says This he completed and then, as he says This he completed and then, as he says in his affidavit, a sharper contest than in his affidavit, a sharper contest than in his affidavit, a sharper contest than ever was produced growing out of the ever was produced growing out of the ever was produced growing out of the opposition of the Pennsylvania Railroad opposition of the Pennsylvania Railroad opposition of the Pennsylvania Railroad in competition. in competition. in competition. Such rates and arrangements were made by Such rates and arrangements were made by Such rates and arrangements were made by the Pennsylvania Railroad that it was the Pennsylvania Railroad that it was the Pennsylvania Railroad that it was publicly proclaimed in the public print publicly proclaimed in the public print publicly proclaimed in the public print in Oil City, Titusville, and other in Oil City, Titusville, and other in Oil City, Titusville, and other places that Cleveland was to be wiped places that Cleveland was to be wiped places that Cleveland was to be wiped out as a refining center as with a out as a refining center as with a out as a refining center as with a sponge.

sponge. sponge. General Devereux goes on to say that all General Devereux goes on to say that all General Devereux goes on to say that all the refiners of the town, without the refiners of the town, without the refiners of the town, without exception, came to him in alarm and exception, came to him in alarm and exception, came to him in alarm and expressed their fears that they would expressed their fears that they would expressed their fears that they would have either to abandon their business have either to abandon their business have either to abandon their business there or move to Titusville or other there or move to Titusville or other there or move to Titusville or other points in the oil regions. That the only points in the oil regions. That the only points in the oil regions. That the only exception to this decision was that exception to this decision was that exception to this decision was that offered by Rockefeller, Andrews, and offered by Rockefeller, Andrews, and offered by Rockefeller, Andrews, and Flagler, who, on his assurance that the Flagler, who, on his assurance that the Flagler, who, on his assurance that the Lake Shore Railroad could and would Lake Shore Railroad could and would Lake Shore Railroad could and would handle oil as cheaply as the handle oil as cheaply as the handle oil as cheaply as the Pennsylvania company, proposed to stand Pennsylvania company, proposed to stand Pennsylvania company, proposed to stand their ground at Cleveland and fight it their ground at Cleveland and fight it their ground at Cleveland and fight it out on that line. out on that line. out on that line. And so, General Devereux gave the And so, General Devereux gave the And so, General Devereux gave the Standard the rebate on the rate which Standard the rebate on the rate which Standard the rebate on the rate which Amasa Stone had made with all the Amasa Stone had made with all the Amasa Stone had made with all the refineries. refineries. refineries. Why he should have not quieted the fears Why he should have not quieted the fears Why he should have not quieted the fears of the 24 or 25 other refiners by of the 24 or 25 other refiners by of the 24 or 25 other refiners by lowering their rate, too, does not lowering their rate, too, does not lowering their rate, too, does not appear in the affidavit. appear in the affidavit. appear in the affidavit. At all events, the rebate had come, and, At all events, the rebate had come, and, At all events, the rebate had come, and, as we have seen, it soon was suspected as we have seen, it soon was suspected as we have seen, it soon was suspected and others went after it and, in some and others went after it and, in some and others went after it and, in some cases, got it. cases, got it. cases, got it. But the rebate seems to have been But the rebate seems to have been But the rebate seems to have been granted generally only on oil brought granted generally only on oil brought granted generally only on oil brought from the oil regions. Mr. Alexander from the oil regions. Mr. Alexander from the oil regions. Mr. Alexander claims he was never able to get his rate claims he was never able to get his rate claims he was never able to get his rate lowered on his eastern shipments. The lowered on his eastern shipments. The lowered on his eastern shipments. The railroad took the position with him that railroad took the position with him that railroad took the position with him that if he could ship as much oil as the if he could ship as much oil as the if he could ship as much oil as the Standard, he could have as low a rate, Standard, he could have as low a rate, Standard, he could have as low a rate, but not otherwise.

but not otherwise. but not otherwise. Now, in 1870, the Standard Oil Company Now, in 1870, the Standard Oil Company Now, in 1870, the Standard Oil Company had a daily capacity of about 1,500 had a daily capacity of about 1,500 had a daily capacity of about 1,500 barrels of crude. barrels of crude. barrels of crude. The refinery was the largest in town, The refinery was the largest in town, The refinery was the largest in town, though it had some close competitors. though it had some close competitors. though it had some close competitors. Nevertheless, on the strength of its Nevertheless, on the strength of its Nevertheless, on the strength of its large capacity, it received the special large capacity, it received the special large capacity, it received the special favor. favor. favor. It was a plausible way to get around the It was a plausible way to get around the It was a plausible way to get around the theory generally held then as now, theory generally held then as now, theory generally held then as now, though not so definitely crystallized though not so definitely crystallized though not so definitely crystallized into law, that the railroad, being a into law, that the railroad, being a into law, that the railroad, being a common carrier, had no right to common carrier, had no right to common carrier, had no right to discriminate between its patrons. discriminate between its patrons. discriminate between its patrons. It remained to be seen whether the It remained to be seen whether the It remained to be seen whether the practice would be accepted by Mr. practice would be accepted by Mr. practice would be accepted by Mr. Rockefeller's competitors without a Rockefeller's competitors without a Rockefeller's competitors without a contest or if contested, would be contest or if contested, would be contest or if contested, would be supported by the law. supported by the law. supported by the law. What the Standard's rebate on Eastern What the Standard's rebate on Eastern What the Standard's rebate on Eastern shipments was in 1870, it is impossible shipments was in 1870, it is impossible shipments was in 1870, it is impossible to say. to say. to say. Mr. Alexander says he was never able to Mr. Alexander says he was never able to Mr. Alexander says he was never able to get a rate lower than a $1.33 a barrel get a rate lower than a $1.33 a barrel get a rate lower than a $1.33 a barrel by rail, and that it was commonly by rail, and that it was commonly by rail, and that it was commonly believed in Cleveland that the Standard believed in Cleveland that the Standard believed in Cleveland that the Standard had a rate of 90 cents.

had a rate of 90 cents. had a rate of 90 cents. Mr. Flagler, however, the only member of Mr. Flagler, however, the only member of Mr. Flagler, however, the only member of the firm who had been examined under the firm who had been examined under the firm who had been examined under oath on that point, showed by presenting oath on that point, showed by presenting oath on that point, showed by presenting the contract of the Standard Oil Company the contract of the Standard Oil Company the contract of the Standard Oil Company with the Lake Shore Road in 1870 that with the Lake Shore Road in 1870 that with the Lake Shore Road in 1870 that the rates varied during the year from the rates varied during the year from the rates varied during the year from $1.40 to $1.20 and $1.60 according to $1.40 to $1.20 and $1.60 according to $1.40 to $1.20 and $1.60 according to the season. the season. the season. When Mr. Flagler was asked if there was When Mr. Flagler was asked if there was When Mr. Flagler was asked if there was no drawback or rebate on this rate, he no drawback or rebate on this rate, he no drawback or rebate on this rate, he answered, "None whatever." answered, "None whatever." answered, "None whatever." It would seem from the above as if the It would seem from the above as if the It would seem from the above as if the one man in the Cleveland oil trade in one man in the Cleveland oil trade in one man in the Cleveland oil trade in 1870 who ought to have been satisfied 1870 who ought to have been satisfied 1870 who ought to have been satisfied was Mr. Rockefeller. was Mr. Rockefeller. was Mr. Rockefeller. His was the largest firm in the largest His was the largest firm in the largest His was the largest firm in the largest refining center of the country. That is, refining center of the country. That is, refining center of the country. That is, of a 10,000 to 12,000 daily capacity of a 10,000 to 12,000 daily capacity of a 10,000 to 12,000 daily capacity divided among the 25 or 26 refiners of divided among the 25 or 26 refiners of divided among the 25 or 26 refiners of Cleveland, he controlled 1,500 barrels. Cleveland, he controlled 1,500 barrels. Cleveland, he controlled 1,500 barrels. Not only was Cleveland the largest Not only was Cleveland the largest Not only was Cleveland the largest refining center in the country, it was refining center in the country, it was refining center in the country, it was gaining rapidly, for where in 1868 it gaining rapidly, for where in 1868 it gaining rapidly, for where in 1868 it shipped 776,356 barrels of refined oil. In 1869, it barrels of refined oil. In 1869, it shipped 923,933.

And in 1871, And in 1871, 1,640,499. Not only did Mr. Rockefeller control the Not only did Mr. Rockefeller control the largest firm in this most prosperous largest firm in this most prosperous largest firm in this most prosperous center of a prosperous business, he center of a prosperous business, he center of a prosperous business, he controlled one of amazing efficiency. controlled one of amazing efficiency. controlled one of amazing efficiency. The combination in 1870 of the various The combination in 1870 of the various The combination in 1870 of the various companies with which he was connected companies with which he was connected companies with which he was connected had brought together a group of had brought together a group of had brought together a group of remarkable men. remarkable men. remarkable men. Samuel Andrews, by all accounts, was the Samuel Andrews, by all accounts, was the Samuel Andrews, by all accounts, was the ablest mechanical superintendent in ablest mechanical superintendent in ablest mechanical superintendent in Cleveland. Cleveland. Cleveland. William Rockefeller, the brother of John William Rockefeller, the brother of John William Rockefeller, the brother of John D. Rockefeller, was not only an D. Rockefeller, was not only an D. Rockefeller, was not only an energetic and intelligent businessman, energetic and intelligent businessman, energetic and intelligent businessman, he was a man whom people liked. He was he was a man whom people liked. He was he was a man whom people liked. He was open-hearted and jolly, a good open-hearted and jolly, a good open-hearted and jolly, a good storyteller, a man who knew and liked a storyteller, a man who knew and liked a storyteller, a man who knew and liked a good horse, not too pious, as some of good horse, not too pious, as some of good horse, not too pious, as some of John's business associates thought him, John's business associates thought him, John's business associates thought him, not a man to suspect or fear, as many a not a man to suspect or fear, as many a not a man to suspect or fear, as many a man did John. man did John. man did John. Old oil men will tell you on the creek Old oil men will tell you on the creek Old oil men will tell you on the creek today how much they liked him in the today how much they liked him in the today how much they liked him in the days when he used to come to Oil City days when he used to come to Oil City days when he used to come to Oil City buying oil for the Cleveland firm.

buying oil for the Cleveland firm. buying oil for the Cleveland firm. The personal quality of William The personal quality of William The personal quality of William Rockefeller was and always has been a Rockefeller was and always has been a Rockefeller was and always has been a strong asset of the Standard Oil strong asset of the Standard Oil strong asset of the Standard Oil Company. Company. Company. Perhaps the strongest man in the firm Perhaps the strongest man in the firm Perhaps the strongest man in the firm after John D. Rockefeller was Henry M. after John D. Rockefeller was Henry M. after John D. Rockefeller was Henry M. Flagler. Flagler. Flagler. He was, like the others, a young man, He was, like the others, a young man, He was, like the others, a young man, and one who, like the head of the firm, and one who, like the head of the firm, and one who, like the head of the firm, had the passion for money, and in a hard had the passion for money, and in a hard had the passion for money, and in a hard self-supporting experience begun when self-supporting experience begun when self-supporting experience begun when but a boy, had learned as well as his but a boy, had learned as well as his but a boy, had learned as well as his chief some of the principles of making chief some of the principles of making chief some of the principles of making it. it. it. He was untiring in his efforts to He was untiring in his efforts to He was untiring in his efforts to increase the business, quick to see an increase the business, quick to see an increase the business, quick to see an advantage, as quick to take it. advantage, as quick to take it. advantage, as quick to take it. He had no scruples to make him hesitate He had no scruples to make him hesitate He had no scruples to make him hesitate over the ethical quality of a contract over the ethical quality of a contract over the ethical quality of a contract which was advantageous. which was advantageous. which was advantageous. Success, that is, making money, was its Success, that is, making money, was its Success, that is, making money, was its own justification. own justification. own justification. He was not a secretive man like John D. He was not a secretive man like John D. He was not a secretive man like John D. Rockefeller, not a dreamer, but he could Rockefeller, not a dreamer, but he could Rockefeller, not a dreamer, but he could keep his mouth shut when necessary, and keep his mouth shut when necessary, and keep his mouth shut when necessary, and he knew the worth of a financial dream he knew the worth of a financial dream he knew the worth of a financial dream when it was laid before him.

when it was laid before him. when it was laid before him. It must have been evident to every It must have been evident to every It must have been evident to every businessman who came in contact with the businessman who came in contact with the businessman who came in contact with the young Standard Oil Company that it would young Standard Oil Company that it would young Standard Oil Company that it would go far. The firm itself must have known go far. The firm itself must have known go far. The firm itself must have known it would go far. Indeed, nothing could it would go far. Indeed, nothing could it would go far. Indeed, nothing could have stopped the Standard Oil Company in have stopped the Standard Oil Company in have stopped the Standard Oil Company in 1870, the oil business being what it 1870, the oil business being what it 1870, the oil business being what it was, but an entire change in the nature was, but an entire change in the nature was, but an entire change in the nature of the members of the firm. And they of the members of the firm. And they of the members of the firm. And they were not the kind of material which were not the kind of material which were not the kind of material which changes. With such a set of associates, changes. With such a set of associates, changes. With such a set of associates, with his organization complete from his with his organization complete from his with his organization complete from his buyers on the creek to his exporting buyers on the creek to his exporting buyers on the creek to his exporting agent in New York, with the agent in New York, with the agent in New York, with the transportation advantages which none of transportation advantages which none of transportation advantages which none of his competitors had had the daring or his competitors had had the daring or his competitors had had the daring or the persuasive power to get, certainly the persuasive power to get, certainly the persuasive power to get, certainly Mr. Rockefeller should have been Mr. Rockefeller should have been Mr. Rockefeller should have been satisfied in 1870. satisfied in 1870. satisfied in 1870. But Mr. Rockefeller was far from But Mr. Rockefeller was far from But Mr. Rockefeller was far from satisfied. satisfied. satisfied. He was a brooding, cautious, secretive He was a brooding, cautious, secretive He was a brooding, cautious, secretive man, seeing all the possible dangers as man, seeing all the possible dangers as man, seeing all the possible dangers as well as all the possible opportunities well as all the possible opportunities well as all the possible opportunities in things, and he studied as a player at in things, and he studied as a player at in things, and he studied as a player at chess all the possible combinations chess all the possible combinations chess all the possible combinations which might imperil his supremacy.

which might imperil his supremacy. which might imperil his supremacy. These 25 Cleveland rivals of his, how These 25 Cleveland rivals of his, how These 25 Cleveland rivals of his, how could he at once and forever put them could he at once and forever put them could he at once and forever put them out of the game? out of the game? out of the game? He and his partners had somehow He and his partners had somehow He and his partners had somehow conceived a great idea, the advantages conceived a great idea, the advantages conceived a great idea, the advantages of combination. of combination. of combination. What might they not do if they could buy What might they not do if they could buy What might they not do if they could buy out and absorb the big refineries now out and absorb the big refineries now out and absorb the big refineries now competing with them in Cleveland? competing with them in Cleveland? competing with them in Cleveland? The possibilities of the idea grew as The possibilities of the idea grew as The possibilities of the idea grew as they discussed it. they discussed it. they discussed it. Finally, they began tentatively to sound Finally, they began tentatively to sound Finally, they began tentatively to sound some of their rivals. some of their rivals. some of their rivals. But, there were other rivals than these But, there were other rivals than these But, there were other rivals than these at home. There were the Creek refiners. at home. There were the Creek refiners. at home. There were the Creek refiners. They were there at the mouth of the They were there at the mouth of the They were there at the mouth of the wells. What might not this geographical wells. What might not this geographical wells. What might not this geographical advantage do in time? advantage do in time? advantage do in time? Refining was going on there on an Refining was going on there on an Refining was going on there on an increasing scale. The capacity of the increasing scale. The capacity of the increasing scale. The capacity of the oil regions had indeed risen to nearly oil regions had indeed risen to nearly oil regions had indeed risen to nearly 10,000 barrels a day, equal to that of 10,000 barrels a day, equal to that of 10,000 barrels a day, equal to that of New York, exceeding that of Pittsburgh New York, exceeding that of Pittsburgh New York, exceeding that of Pittsburgh by nearly 4,000 barrels, and almost by nearly 4,000 barrels, and almost by nearly 4,000 barrels, and almost equaling that of Cleveland. equaling that of Cleveland. equaling that of Cleveland. The men of the oil country loudly The men of the oil country loudly The men of the oil country loudly declared that they meant to refine for declared that they meant to refine for declared that they meant to refine for the world. They boasted of an oil the world. They boasted of an oil the world. They boasted of an oil kingdom which eventually should handle kingdom which eventually should handle kingdom which eventually should handle the entire business and compel Cleveland the entire business and compel Cleveland the entire business and compel Cleveland and Pittsburgh either to abandon their and Pittsburgh either to abandon their and Pittsburgh either to abandon their works or bring them to the oil country.

works or bring them to the oil country. works or bring them to the oil country. In this boastful ambition, they were In this boastful ambition, they were In this boastful ambition, they were encouraged particularly by the encouraged particularly by the encouraged particularly by the Pennsylvania Railroad, which naturally Pennsylvania Railroad, which naturally Pennsylvania Railroad, which naturally handled the largest percentage of the handled the largest percentage of the handled the largest percentage of the oil. oil. oil. How long could the Standard Oil Company How long could the Standard Oil Company How long could the Standard Oil Company stand against this competition? stand against this competition? stand against this competition? There was another interest as deeply There was another interest as deeply There was another interest as deeply concerned as Mr. Rockefeller in concerned as Mr. Rockefeller in concerned as Mr. Rockefeller in preserving Cleveland's supremacy as a preserving Cleveland's supremacy as a preserving Cleveland's supremacy as a refining center, and this was the Lake refining center, and this was the Lake refining center, and this was the Lake Shore and New York Central Railroads. Shore and New York Central Railroads. Shore and New York Central Railroads. Let the bulk of refining be done in the Let the bulk of refining be done in the Let the bulk of refining be done in the oil regions, and these roads were in oil regions, and these roads were in oil regions, and these roads were in danger of losing a profitable branch of danger of losing a profitable branch of danger of losing a profitable branch of business. business. business. This situation in regard to the oil This situation in regard to the oil This situation in regard to the oil traffic was really more serious now than traffic was really more serious now than traffic was really more serious now than in 1868, in 1868, in 1868, when General Devereux had first given when General Devereux had first given when General Devereux had first given the Standard a rebate. the Standard a rebate. the Standard a rebate. Then it was that the Pennsylvania, Then it was that the Pennsylvania, Then it was that the Pennsylvania, through its lusty ally the Empire through its lusty ally the Empire through its lusty ally the Empire Transportation Company, was making the Transportation Company, was making the Transportation Company, was making the chief fight to secure a patent right on chief fight to secure a patent right on chief fight to secure a patent right on oil transportation. oil transportation. oil transportation. The Erie was now becoming as aggressive The Erie was now becoming as aggressive The Erie was now becoming as aggressive a competitor. a competitor. a competitor. Gould and Fisk had gone into the fight Gould and Fisk had gone into the fight Gould and Fisk had gone into the fight with the bigger and the utter with the bigger and the utter with the bigger and the utter unscrupulousness which characterized all unscrupulousness which characterized all unscrupulousness which characterized all their dealings.

their dealings. their dealings. They were allying themselves with the They were allying themselves with the They were allying themselves with the Pennsylvania Transportation Company, the Pennsylvania Transportation Company, the Pennsylvania Transportation Company, the only large rival pipeline system which only large rival pipeline system which only large rival pipeline system which the Empire had. the Empire had. the Empire had. They were putting up a refinery near They were putting up a refinery near They were putting up a refinery near Jersey City, and they were taking Jersey City, and they were taking Jersey City, and they were taking advantage shrewdly of all the advantage shrewdly of all the advantage shrewdly of all the speculative features of the new speculative features of the new speculative features of the new business. business. business. As competition grew between the roads, As competition grew between the roads, As competition grew between the roads, they grew more reckless in granting they grew more reckless in granting they grew more reckless in granting rebates, the refiners more insistent in rebates, the refiners more insistent in rebates, the refiners more insistent in demanding them. demanding them. demanding them. In 1871, In 1871, In 1871, things had come to such a pass in the things had come to such a pass in the things had come to such a pass in the business that every refiner suspected business that every refiner suspected business that every refiner suspected his neighbor to be getting better rates his neighbor to be getting better rates his neighbor to be getting better rates than he. than he. than he. The result was that the freight agents The result was that the freight agents The result was that the freight agents were constantly beset for rebates, and were constantly beset for rebates, and were constantly beset for rebates, and that the large shippers were generally that the large shippers were generally that the large shippers were generally getting them on the ground of the getting them on the ground of the getting them on the ground of the quantity of oil they controlled. quantity of oil they controlled. quantity of oil they controlled. Indeed, it was evident that the rebate Indeed, it was evident that the rebate Indeed, it was evident that the rebate being admitted, the only way in which it being admitted, the only way in which it being admitted, the only way in which it could be adjusted with a show of could be adjusted with a show of could be adjusted with a show of fairness, was to grade it according to fairness, was to grade it according to fairness, was to grade it according to the size of the shipment. the size of the shipment. the size of the shipment. Under these conditions of competition, Under these conditions of competition, Under these conditions of competition, it was certain that the New York Central it was certain that the New York Central it was certain that the New York Central system must work if it was to keep its system must work if it was to keep its system must work if it was to keep its great oil freight, and the general great oil freight, and the general great oil freight, and the general freight agent of the Lake Shore Road freight agent of the Lake Shore Road freight agent of the Lake Shore Road began to give the question special began to give the question special began to give the question special attention.

attention. attention. This man was Peter H. Watson. This man was Peter H. Watson. This man was Peter H. Watson. Mr. Watson was an able patent lawyer who Mr. Watson was an able patent lawyer who Mr. Watson was an able patent lawyer who served under the strenuous Stanton as served under the strenuous Stanton as served under the strenuous Stanton as Assistant Secretary of War, and served Assistant Secretary of War, and served Assistant Secretary of War, and served well. well. well. After the war, he had been made general After the war, he had been made general After the war, he had been made general freight agent of the Lake Shore and freight agent of the Lake Shore and freight agent of the Lake Shore and Michigan Southern Railroad, and later Michigan Southern Railroad, and later Michigan Southern Railroad, and later president of the branch of that road president of the branch of that road president of the branch of that road which ran into the oil regions. He had which ran into the oil regions. He had which ran into the oil regions. He had oil interests principally at Franklin, oil interests principally at Franklin, oil interests principally at Franklin, Pennsylvania, and was well known to all Pennsylvania, and was well known to all Pennsylvania, and was well known to all oil men. oil men. oil men. He was a business intimate of Mr. He was a business intimate of Mr. He was a business intimate of Mr. Rockefeller, and a warm friend of Horace Rockefeller, and a warm friend of Horace Rockefeller, and a warm friend of Horace F. Clark, the son-in-law of W. H. F. Clark, the son-in-law of W. H. F. Clark, the son-in-law of W. H. Vanderbilt, at that time president of Vanderbilt, at that time president of Vanderbilt, at that time president of the Lake Shore and Michigan Southern the Lake Shore and Michigan Southern the Lake Shore and Michigan Southern Railroad. Railroad. Railroad. As the Standard Oil Company was the As the Standard Oil Company was the As the Standard Oil Company was the largest shipper in Cleveland, and had largest shipper in Cleveland, and had largest shipper in Cleveland, and had already received a special favor from already received a special favor from already received a special favor from the Lake Shore, which General Devereux the Lake Shore, which General Devereux the Lake Shore, which General Devereux describes. It was natural that Mr. describes. It was natural that Mr. describes. It was natural that Mr. Watson should consult frequently with Watson should consult frequently with Watson should consult frequently with Mr. Rockefeller on the question of Mr. Rockefeller on the question of Mr. Rockefeller on the question of holding and increasing his oil freight. holding and increasing his oil freight. holding and increasing his oil freight. It was equally natural, too, that Mr.

It was equally natural, too, that Mr. It was equally natural, too, that Mr. Rockefeller should use his influence Rockefeller should use his influence Rockefeller should use his influence with Mr. Watson to strengthen the theory with Mr. Watson to strengthen the theory with Mr. Watson to strengthen the theory so important to his rapid growth. so important to his rapid growth. so important to his rapid growth. The theory that the biggest shipper The theory that the biggest shipper The theory that the biggest shipper should have the best rate. should have the best rate. should have the best rate. Two other towns shared Cleveland's fear Two other towns shared Cleveland's fear Two other towns shared Cleveland's fear of the rise of the oil regions as a of the rise of the oil regions as a of the rise of the oil regions as a refining center, and they were refining center, and they were refining center, and they were Pittsburgh and Philadelphia. And Mr. Pittsburgh and Philadelphia. And Mr. Pittsburgh and Philadelphia. And Mr. Rockefeller and Mr. Watson found in Rockefeller and Mr. Watson found in Rockefeller and Mr. Watson found in certain refiners of these places a certain refiners of these places a certain refiners of these places a strong sympathy with any plan which strong sympathy with any plan which strong sympathy with any plan which looked to holding the region in check. looked to holding the region in check. looked to holding the region in check. But while the menace in their But while the menace in their But while the menace in their geographical positions was the first geographical positions was the first geographical positions was the first ground of sympathy between these ground of sympathy between these ground of sympathy between these gentlemen, something more than local gentlemen, something more than local gentlemen, something more than local troubles occupied them. troubles occupied them. troubles occupied them. This was the condition of the refining This was the condition of the refining This was the condition of the refining business as a whole. business as a whole. business as a whole. It was unsatisfactory in many It was unsatisfactory in many It was unsatisfactory in many particulars. particulars. particulars. First, it was overdone. First, it was overdone. First, it was overdone. The great profits on refined oil and the The great profits on refined oil and the The great profits on refined oil and the growing demand for it had naturally growing demand for it had naturally growing demand for it had naturally caused a great number to rush into its caused a great number to rush into its caused a great number to rush into its manufacture. manufacture. manufacture. There was at this time a refining There was at this time a refining There was at this time a refining capacity of three barrels to every one capacity of three barrels to every one capacity of three barrels to every one produced.

produced. produced. To be sure, few of any of these plants To be sure, few of any of these plants To be sure, few of any of these plants expected to run the year around. expected to run the year around. expected to run the year around. Then, as today, there were nearly always Then, as today, there were nearly always Then, as today, there were nearly always some stills in even the most prosperous some stills in even the most prosperous some stills in even the most prosperous works shut down. works shut down. works shut down. But after making a fair allowance for But after making a fair allowance for But after making a fair allowance for this fact, there was still a much larger this fact, there was still a much larger this fact, there was still a much larger amount of refining actually done than amount of refining actually done than amount of refining actually done than the market demanded. the market demanded. the market demanded. The result was that the price of refined The result was that the price of refined The result was that the price of refined oil was steadily falling. oil was steadily falling. oil was steadily falling. When Mr. Rockefeller had received on an When Mr. Rockefeller had received on an When Mr. Rockefeller had received on an average 58 and 3/4 cents a gallon for average 58 and 3/4 cents a gallon for average 58 and 3/4 cents a gallon for the oil he exported in 1865, the oil he exported in 1865, the oil he exported in 1865, the year he went into business, in 1870, the year he went into business, in 1870, the year he went into business, in 1870, he received but 26 and 3/8 cents. he received but 26 and 3/8 cents. he received but 26 and 3/8 cents. In 1865, In 1865, In 1865, he had a margin of 43 cents out of which he had a margin of 43 cents out of which he had a margin of 43 cents out of which to pay for transportation, to pay for transportation, to pay for transportation, manufacturing, barreling, and marketing, manufacturing, barreling, and marketing, manufacturing, barreling, and marketing, and to make his profits. and to make his profits. and to make his profits. In 1870, he had but 17 and an 8 cents In 1870, he had but 17 and an 8 cents In 1870, he had but 17 and an 8 cents with which to do all this. with which to do all this. with which to do all this. To be sure, his expenses had fallen To be sure, his expenses had fallen To be sure, his expenses had fallen enormously between 1865 and 1870, enormously between 1865 and 1870, enormously between 1865 and 1870, but so had his profits.

but so had his profits. but so had his profits. The multiplication of refiners with the The multiplication of refiners with the The multiplication of refiners with the intense competition threatened to cut intense competition threatened to cut intense competition threatened to cut them down still lower. them down still lower. them down still lower. Naturally, Mr. Rockefeller and his Naturally, Mr. Rockefeller and his Naturally, Mr. Rockefeller and his friends looked with dismay on this friends looked with dismay on this friends looked with dismay on this lowering of profits through gaining lowering of profits through gaining lowering of profits through gaining competition. competition. competition. Another anxiety of the American refiners Another anxiety of the American refiners Another anxiety of the American refiners was the condition of the export trade. was the condition of the export trade. was the condition of the export trade. Oil had risen to fourth place in the Oil had risen to fourth place in the Oil had risen to fourth place in the exports of the United States in the 12 exports of the United States in the 12 exports of the United States in the 12 years since its discovery, years since its discovery, years since its discovery, and every year larger quantities were and every year larger quantities were and every year larger quantities were consumed abroad, but it was crude oil, consumed abroad, but it was crude oil, consumed abroad, but it was crude oil, not refined, which the foreigners were not refined, which the foreigners were not refined, which the foreigners were beginning to demand. beginning to demand. beginning to demand. That is, they had found they could That is, they had found they could That is, they had found they could import crude, refine it at home, and import crude, refine it at home, and import crude, refine it at home, and sell it cheaper than they could buy sell it cheaper than they could buy sell it cheaper than they could buy American refined. American refined. American refined. France, to encourage her home France, to encourage her home France, to encourage her home refineries, had even put a tax on refineries, had even put a tax on refineries, had even put a tax on American refined. American refined. American refined. In the fall of 1871, In the fall of 1871, In the fall of 1871, while Mr. Rockefeller and his friends while Mr. Rockefeller and his friends while Mr. Rockefeller and his friends were occupied with all these questions, were occupied with all these questions, were occupied with all these questions, certain Pennsylvania refiners, it is not certain Pennsylvania refiners, it is not certain Pennsylvania refiners, it is not too certain who, brought to them a too certain who, brought to them a too certain who, brought to them a remarkable scheme, the gist of which was remarkable scheme, the gist of which was remarkable scheme, the gist of which was to bring together secretly a large to bring together secretly a large to bring together secretly a large enough body of refiners and shippers to enough body of refiners and shippers to enough body of refiners and shippers to persuade all the railroads handling oil persuade all the railroads handling oil persuade all the railroads handling oil to give to the company formed special to give to the company formed special to give to the company formed special rebates on its oil and drawbacks on that rebates on its oil and drawbacks on that rebates on its oil and drawbacks on that of other people.

of other people. of other people. If they could get such rates, it was If they could get such rates, it was If they could get such rates, it was evident that those outside of their evident that those outside of their evident that those outside of their combination could not compete with them combination could not compete with them combination could not compete with them long, and that they would become long, and that they would become long, and that they would become eventually the only refiners. eventually the only refiners. eventually the only refiners. They could then limit their output to They could then limit their output to They could then limit their output to actual demand and so keep up prices. actual demand and so keep up prices. actual demand and so keep up prices. This done, they could easily persuade This done, they could easily persuade This done, they could easily persuade the railroads to transport no crude for the railroads to transport no crude for the railroads to transport no crude for exportation, so that the farmers would exportation, so that the farmers would exportation, so that the farmers would be forced to buy American refined. be forced to buy American refined. be forced to buy American refined. They believed that the price of oil thus They believed that the price of oil thus They believed that the price of oil thus exported could easily be advanced 50%. exported could easily be advanced 50%. exported could easily be advanced 50%. The control of the refining interest The control of the refining interest The control of the refining interest would also enable them to fix their own would also enable them to fix their own would also enable them to fix their own price on crude. price on crude. price on crude. As they would be the only buyers and As they would be the only buyers and As they would be the only buyers and sellers, the speculative character of sellers, the speculative character of sellers, the speculative character of the business would be done away with. the business would be done away with. the business would be done away with. In short, the scheme they worked out put In short, the scheme they worked out put In short, the scheme they worked out put the entire oil business in their hands. the entire oil business in their hands. the entire oil business in their hands. It looked as simple to put into It looked as simple to put into It looked as simple to put into operation as it was dazzling in its operation as it was dazzling in its operation as it was dazzling in its results. results. results. Mr. Flagler had sworn that neither he Mr. Flagler had sworn that neither he Mr. Flagler had sworn that neither he nor Mr. Rockefeller believed in this nor Mr. Rockefeller believed in this nor Mr. Rockefeller believed in this scheme.

scheme. scheme. But when they found that their friend But when they found that their friend But when they found that their friend Peter H. Watson and various Pittsburgh Peter H. Watson and various Pittsburgh Peter H. Watson and various Pittsburgh and Philadelphia parties who felt as and Philadelphia parties who felt as and Philadelphia parties who felt as they did about the oil business believed they did about the oil business believed they did about the oil business believed in it, they went in and began at once to in it, they went in and began at once to in it, they went in and began at once to work up a company secretly. work up a company secretly. work up a company secretly. It was evident that a scheme which aimed It was evident that a scheme which aimed It was evident that a scheme which aimed at concentrating in the hands of one at concentrating in the hands of one at concentrating in the hands of one company the business now operated by company the business now operated by company the business now operated by scores, and which proposed to affect scores, and which proposed to affect scores, and which proposed to affect this consolidation through a practice of this consolidation through a practice of this consolidation through a practice of the railroads which was contrary to the the railroads which was contrary to the the railroads which was contrary to the spirit of their charters, although spirit of their charters, although spirit of their charters, although freely indulged in, must be worked with freely indulged in, must be worked with freely indulged in, must be worked with fine discretion if it ever were to be fine discretion if it ever were to be fine discretion if it ever were to be affected. affected. affected. The first thing was to get a charter The first thing was to get a charter The first thing was to get a charter quietly. quietly. quietly. At a meeting held in Philadelphia late At a meeting held in Philadelphia late At a meeting held in Philadelphia late in the fall of 1871, in the fall of 1871, in the fall of 1871, a friend of one of the gentlemen a friend of one of the gentlemen a friend of one of the gentlemen interested mentioned to him that a interested mentioned to him that a interested mentioned to him that a certain estate then in liquidation had a certain estate then in liquidation had a certain estate then in liquidation had a charter for sale which gave its owners charter for sale which gave its owners charter for sale which gave its owners the right to carry on any kind of the right to carry on any kind of the right to carry on any kind of business in any country and in any way. business in any country and in any way. business in any country and in any way. That it could be bought for what it That it could be bought for what it That it could be bought for what it would cost to get a charter under the would cost to get a charter under the would cost to get a charter under the general laws of the state, and that it general laws of the state, and that it general laws of the state, and that it would be a favor to the heirs to buy it.

would be a favor to the heirs to buy it. would be a favor to the heirs to buy it. The opportunity was promptly taken. The opportunity was promptly taken. The opportunity was promptly taken. The name of the charter bought was the The name of the charter bought was the The name of the charter bought was the South, often written Southern, South, often written Southern, South, often written Southern, Improvement Company. Improvement Company. Improvement Company. For a beginning, it was as good a name For a beginning, it was as good a name For a beginning, it was as good a name as another, since it said nothing. as another, since it said nothing. as another, since it said nothing. With this charter in hand, Mr. With this charter in hand, Mr. With this charter in hand, Mr. Rockefeller and Mr. Watson and their Rockefeller and Mr. Watson and their Rockefeller and Mr. Watson and their associates began to seek converts. associates began to seek converts. associates began to seek converts. In order that their great scheme might In order that their great scheme might In order that their great scheme might not be injured by premature public not be injured by premature public not be injured by premature public discussion, they asked of each person discussion, they asked of each person discussion, they asked of each person whom they approached a pledge of whom they approached a pledge of whom they approached a pledge of secrecy. secrecy. secrecy. Two forms of the pledges required before Two forms of the pledges required before Two forms of the pledges required before anything was revealed were published anything was revealed were published anything was revealed were published later. later. later. The first of these, which appeared in The first of these, which appeared in The first of these, which appeared in the New York Tribune, read as follows: the New York Tribune, read as follows: the New York Tribune, read as follows: "I, A. B., do faithfully promise upon my "I, A. B., do faithfully promise upon my "I, A. B., do faithfully promise upon my honor and faith as a gentleman, that I honor and faith as a gentleman, that I honor and faith as a gentleman, that I will keep secret all transactions which will keep secret all transactions which will keep secret all transactions which I may have with the corporation known as I may have with the corporation known as I may have with the corporation known as the South Improvement Company. That the South Improvement Company. That the South Improvement Company. That should I fail to complete any bargains should I fail to complete any bargains should I fail to complete any bargains with the said company, all the with the said company, all the with the said company, all the preliminary conversations shall be kept preliminary conversations shall be kept preliminary conversations shall be kept strictly private. And finally, that I strictly private. And finally, that I strictly private. And finally, that I will not disclose the price for which I will not disclose the price for which I will not disclose the price for which I dispose of my product, or any other dispose of my product, or any other dispose of my product, or any other facts which may in any way bring to facts which may in any way bring to facts which may in any way bring to light the internal workings or light the internal workings or light the internal workings or organization of the company.

organization of the company. organization of the company. All this I do freely promise. All this I do freely promise. All this I do freely promise. Signed and witnessed." Signed and witnessed." Signed and witnessed." A second, published in a history of the A second, published in a history of the A second, published in a history of the Southern Improvement Company, ran: Southern Improvement Company, ran: Southern Improvement Company, ran: "The undersigned pledge their solemn "The undersigned pledge their solemn "The undersigned pledge their solemn words of honor that they will not words of honor that they will not words of honor that they will not communicate to anyone without permission communicate to anyone without permission communicate to anyone without permission of Z, name of director of Southern of Z, name of director of Southern of Z, name of director of Southern Improvement Company, any information Improvement Company, any information Improvement Company, any information that he may convey to them or any of that he may convey to them or any of that he may convey to them or any of them in relation to the Southern them in relation to the Southern them in relation to the Southern Improvement Company. Improvement Company. Improvement Company. Signed and witnessed." Signed and witnessed." Signed and witnessed." That the promoters met with That the promoters met with That the promoters met with encouragement is evident from the fact encouragement is evident from the fact encouragement is evident from the fact that when the corporators came together that when the corporators came together that when the corporators came together on January 2, 1872, in Philadelphia, for on January 2, 1872, in Philadelphia, for on January 2, 1872, in Philadelphia, for the first time under their charter and the first time under their charter and the first time under their charter and transferred the company to the transferred the company to the transferred the company to the stockholders. They claimed to represent stockholders. They claimed to represent stockholders. They claimed to represent in one way or another a large part of in one way or another a large part of in one way or another a large part of the refining interest of the country. the refining interest of the country. the refining interest of the country. At this meeting, 1,100 shares of the At this meeting, 1,100 shares of the At this meeting, 1,100 shares of the stock of the company, which was divided stock of the company, which was divided stock of the company, which was divided into 2,100 dollar shares, were into 2,100 dollar shares, were into 2,100 dollar shares, were subscribed for and 20% of their value subscribed for and 20% of their value subscribed for and 20% of their value was paid in.

was paid in. was paid in. Just who took stock at this meeting, the Just who took stock at this meeting, the Just who took stock at this meeting, the writer has not been able to discover. At writer has not been able to discover. At writer has not been able to discover. At the same time, a discussion came up as the same time, a discussion came up as the same time, a discussion came up as to what refiners were to be allowed to to what refiners were to be allowed to to what refiners were to be allowed to go into the new company. go into the new company. go into the new company. Each of the men represented had friends Each of the men represented had friends Each of the men represented had friends whom he wanted taken care of, and after whom he wanted taken care of, and after whom he wanted taken care of, and after considerable discussion, it was decided considerable discussion, it was decided considerable discussion, it was decided to take in every refinery they could get to take in every refinery they could get to take in every refinery they could get hold of. hold of. hold of. This decision was largely due to the This decision was largely due to the This decision was largely due to the railroad men. railroad men. railroad men. Mr. Watson had seen them as soon as the Mr. Watson had seen them as soon as the Mr. Watson had seen them as soon as the plans for the company were formed, and plans for the company were formed, and plans for the company were formed, and they had all agreed that if they gave they had all agreed that if they gave they had all agreed that if they gave the bates and drawbacks, all refineries the bates and drawbacks, all refineries the bates and drawbacks, all refineries then existing must be taken in upon the then existing must be taken in upon the then existing must be taken in upon the same level. same level. same level. That is, while the incorporators had That is, while the incorporators had That is, while the incorporators had intended to kill off all but themselves intended to kill off all but themselves intended to kill off all but themselves and their friends, the railroads refused and their friends, the railroads refused and their friends, the railroads refused to go into a scheme which was going to to go into a scheme which was going to to go into a scheme which was going to put anybody out of business. The plan, put anybody out of business. The plan, put anybody out of business. The plan, if they went into it, must cover the if they went into it, must cover the if they went into it, must cover the refining trade as it stood. refining trade as it stood. refining trade as it stood. It was enough that it could prevent It was enough that it could prevent It was enough that it could prevent anyone in the future going into the anyone in the future going into the anyone in the future going into the business.

business. business. Very soon after this meeting of January Very soon after this meeting of January Very soon after this meeting of January 2nd, the rest of the stock of the 2nd, the rest of the stock of the 2nd, the rest of the stock of the Southern Improvement Company was taken. Southern Improvement Company was taken. Southern Improvement Company was taken. The complete list of stockholders with The complete list of stockholders with The complete list of stockholders with their holdings was as follows: their holdings was as follows: their holdings was as follows: William Frew, Philadelphia, 10 shares. William Frew, Philadelphia, 10 shares. William Frew, Philadelphia, 10 shares. W. P. Logan, Philadelphia, 10 shares. W. P. Logan, Philadelphia, 10 shares. W. P. Logan, Philadelphia, 10 shares. John P. Logan, Philadelphia, 10 shares. John P. Logan, Philadelphia, 10 shares. John P. Logan, Philadelphia, 10 shares. Charles Lockhart, Pittsburgh, 10 shares. Charles Lockhart, Pittsburgh, 10 shares. Charles Lockhart, Pittsburgh, 10 shares. Richard S. Waring, Pittsburgh, 10 Richard S. Waring, Pittsburgh, 10 Richard S. Waring, Pittsburgh, 10 shares. shares. shares. W. G. Warden, Philadelphia, 475 W. G. Warden, Philadelphia, 475 W. G. Warden, Philadelphia, 475 shares. O.F. Waring, Pittsburgh, 475 shares. O.F. Waring, Pittsburgh, 475 shares. O.F. Waring, Pittsburgh, 475 shares. P.H. Watson, Ashtabula, Ohio, shares. P.H. Watson, Ashtabula, Ohio, shares. P.H. Watson, Ashtabula, Ohio, 100 shares. H.M. Flagler, Cleveland, 180 100 shares. H.M. Flagler, Cleveland, 180 100 shares. H.M. Flagler, Cleveland, 180 shares. O.H. Payne, Cleveland, 180 shares. O.H. Payne, Cleveland, 180 shares. O.H. Payne, Cleveland, 180 shares. William D. Rockefeller, shares. William D. Rockefeller, shares. William D. Rockefeller, Cleveland, 180 shares. J.A. Bostwick, Cleveland, 180 shares. J.A. Bostwick, Cleveland, 180 shares. J.A. Bostwick, New York, 180 shares. John D.

New York, 180 shares. John D. New York, 180 shares. John D. Rockefeller, Cleveland, 180 shares. Rockefeller, Cleveland, 180 shares. Rockefeller, Cleveland, 180 shares. Total shares, 2,000. Total shares, 2,000. Total shares, 2,000. Mr. Watson was elected president and Mr. Watson was elected president and Mr. Watson was elected president and W.G. Warden, of Philadelphia, secretary W.G. Warden, of Philadelphia, secretary W.G. Warden, of Philadelphia, secretary of the new association. of the new association. of the new association. It will be noticed that the largest It will be noticed that the largest It will be noticed that the largest individual holdings in the company were individual holdings in the company were individual holdings in the company were those of W.G. Warden and O.F. Waring, those of W.G. Warden and O.F. Waring, those of W.G. Warden and O.F. Waring, each of whom had 475 shares. The company each of whom had 475 shares. The company each of whom had 475 shares. The company most heavily interested in the South most heavily interested in the South most heavily interested in the South Improvement Company was the Standard Oil Improvement Company was the Standard Oil Improvement Company was the Standard Oil of Cleveland. John D. Rockefeller, of Cleveland. John D. Rockefeller, of Cleveland. John D. Rockefeller, William Rockefeller, and H.M. Flagler, William Rockefeller, and H.M. Flagler, William Rockefeller, and H.M. Flagler, all stockholders of that company, each all stockholders of that company, each all stockholders of that company, each having 180 shares, 540 in the company. having 180 shares, 540 in the company. having 180 shares, 540 in the company. O.H. Payne and J.A. Bostwick, who soon O.H. Payne and J.A. Bostwick, who soon O.H. Payne and J.A. Bostwick, who soon after became stockholders in the after became stockholders in the after became stockholders in the Standard Oil Company, also had each 180 Standard Oil Company, also had each 180 Standard Oil Company, also had each 180 shares, giving Mr. Rockefeller and his shares, giving Mr. Rockefeller and his shares, giving Mr. Rockefeller and his associates 900 shares in all. associates 900 shares in all. associates 900 shares in all. It has frequently been stated that the It has frequently been stated that the It has frequently been stated that the South Improvement Company represented South Improvement Company represented South Improvement Company represented the bulk of the oil refining interest in the bulk of the oil refining interest in the bulk of the oil refining interest in the country.

the country. the country. The incorporators of the company, in The incorporators of the company, in The incorporators of the company, in approaching the railroads, assured them approaching the railroads, assured them approaching the railroads, assured them that this was so. that this was so. that this was so. As a matter of fact, however, the 13 As a matter of fact, however, the 13 As a matter of fact, however, the 13 gentlemen above named, who were the only gentlemen above named, who were the only gentlemen above named, who were the only ones ever holding stock in the concern, ones ever holding stock in the concern, ones ever holding stock in the concern, did not control over 1/10 of the did not control over 1/10 of the did not control over 1/10 of the refining business of the United States refining business of the United States refining business of the United States in 1872. in 1872. in 1872. That business in the aggregate amounted That business in the aggregate amounted That business in the aggregate amounted to a daily capacity of about 45,000 to a daily capacity of about 45,000 to a daily capacity of about 45,000 barrels, from 45,000 to 50,000, Mr. barrels, from 45,000 to 50,000, Mr. barrels, from 45,000 to 50,000, Mr. Warden put it. And the stockholders of Warden put it. And the stockholders of Warden put it. And the stockholders of the South Improvement Company owned a the South Improvement Company owned a the South Improvement Company owned a combined capacity of not over 4,600 combined capacity of not over 4,600 combined capacity of not over 4,600 barrels. barrels. barrels. In assuring the railroads that they In assuring the railroads that they In assuring the railroads that they controlled the business, they were controlled the business, they were controlled the business, they were dealing with their hopes rather than dealing with their hopes rather than dealing with their hopes rather than with facts. with facts. with facts. End of chapter two, part one. Recording End of chapter two, part one. Recording End of chapter two, part one. Recording by Tom Weiss, tomsaudiobooks.com.

Chapter two, part two of The History of Chapter two, part two of The History of the Standard Oil Company by Ida M. the Standard Oil Company by Ida M. the Standard Oil Company by Ida M. Tarbell. Tarbell. Tarbell. This LibriVox recording is in the public This LibriVox recording is in the public This LibriVox recording is in the public domain. domain. domain. Recording by Tom Weiss. Recording by Tom Weiss. Recording by Tom Weiss. Chapter two, part two, The Rise of the Chapter two, part two, The Rise of the Chapter two, part two, The Rise of the Standard Oil Company. Standard Oil Company. Standard Oil Company. The organization complete, there The organization complete, there The organization complete, there remained contracts to be made with the remained contracts to be made with the remained contracts to be made with the railroads. railroads. railroads. Three systems were to be interested. The Three systems were to be interested. The Three systems were to be interested. The Central, which by its connection with Central, which by its connection with Central, which by its connection with the Lake Shore and Michigan Southern, the Lake Shore and Michigan Southern, the Lake Shore and Michigan Southern, ran directly into the oil regions. ran directly into the oil regions. ran directly into the oil regions. The Erie, allied with the Atlantic and The Erie, allied with the Atlantic and The Erie, allied with the Atlantic and Great Western, with a short line Great Western, with a short line Great Western, with a short line likewise tapping the heart of the likewise tapping the heart of the likewise tapping the heart of the region. And the Pennsylvania, with the region. And the Pennsylvania, with the region. And the Pennsylvania, with the connections known as the Allegheny connections known as the Allegheny connections known as the Allegheny Valley and Oil Creek Railroad. Valley and Oil Creek Railroad. Valley and Oil Creek Railroad. The persons to be won over were W. H. The persons to be won over were W. H. The persons to be won over were W. H. Vanderbilt of the Central, H. F. Clark, Vanderbilt of the Central, H. F. Clark, Vanderbilt of the Central, H. F. Clark, president of the Lake Shore and Michigan president of the Lake Shore and Michigan president of the Lake Shore and Michigan Southern, Jay Gould of the Erie, General Southern, Jay Gould of the Erie, General Southern, Jay Gould of the Erie, General G. B. McClellan, president of the G. B. McClellan, president of the G. B. McClellan, president of the Atlantic and Great Western, Atlantic and Great Western, Atlantic and Great Western, and Tom Scott of the Pennsylvania.

and Tom Scott of the Pennsylvania. and Tom Scott of the Pennsylvania. There seems to have been little There seems to have been little There seems to have been little difficulty in persuading any of these difficulty in persuading any of these difficulty in persuading any of these persons to go into the scheme after they persons to go into the scheme after they persons to go into the scheme after they had had assured by the leaders that all had had assured by the leaders that all had had assured by the leaders that all of the refiners were to be taken in. of the refiners were to be taken in. of the refiners were to be taken in. This was a verbal condition, however, This was a verbal condition, however, This was a verbal condition, however, not found in the contracts they signed. not found in the contracts they signed. not found in the contracts they signed. This important fact, Mr. Warden himself This important fact, Mr. Warden himself This important fact, Mr. Warden himself made clear when, 3 months later, he was made clear when, 3 months later, he was made clear when, 3 months later, he was on the witness stand before a committee on the witness stand before a committee on the witness stand before a committee of Congress appointed to look into the of Congress appointed to look into the of Congress appointed to look into the great scheme. great scheme. great scheme. "We had considerable discussion with the "We had considerable discussion with the "We had considerable discussion with the railroads," Mr. Warden said, "in regard railroads," Mr. Warden said, "in regard railroads," Mr. Warden said, "in regard to the matter of rebate on their charges to the matter of rebate on their charges to the matter of rebate on their charges for freight. for freight. for freight. They did not want to give us a rebate They did not want to give us a rebate They did not want to give us a rebate unless it was with the understanding unless it was with the understanding unless it was with the understanding that all the refineries should be that all the refineries should be that all the refineries should be brought into the arrangement and placed brought into the arrangement and placed brought into the arrangement and placed upon the same level." upon the same level." upon the same level." Question. You say you made propositions Question. You say you made propositions Question. You say you made propositions to railroad companies which they agreed to railroad companies which they agreed to railroad companies which they agreed to accept upon the condition that you to accept upon the condition that you to accept upon the condition that you could include all the refineries? could include all the refineries? could include all the refineries? Answer. Answer. Answer. No, sir. I did not say that. No, sir. I did not say that. No, sir. I did not say that. I said that was the understanding when I said that was the understanding when I said that was the understanding when we discussed this matter with them.

we discussed this matter with them. we discussed this matter with them. It was no proposition on our part. They It was no proposition on our part. They It was no proposition on our part. They discussed it not in the form of a discussed it not in the form of a discussed it not in the form of a proposition that the refineries should proposition that the refineries should proposition that the refineries should all be taken in, all be taken in, all be taken in, but it was the intention and resolution but it was the intention and resolution but it was the intention and resolution of the company from the first that that of the company from the first that that of the company from the first that that should be the result. We never had any should be the result. We never had any should be the result. We never had any other purpose in the matter. other purpose in the matter. other purpose in the matter. Question. Question. Question. In case you could take the refineries In case you could take the refineries In case you could take the refineries all in, the railroads proposed to give all in, the railroads proposed to give all in, the railroads proposed to give you a rebate upon their freight charges? you a rebate upon their freight charges? you a rebate upon their freight charges? Answer. Answer. Answer. No, sir. It was not put in that form. We No, sir. It was not put in that form. We No, sir. It was not put in that form. We were to put the refineries all in upon were to put the refineries all in upon were to put the refineries all in upon the same terms. It was the understanding the same terms. It was the understanding the same terms. It was the understanding with the railroad companies that we were with the railroad companies that we were with the railroad companies that we were to have a rebate. There was no rebate to have a rebate. There was no rebate to have a rebate. There was no rebate given in consideration of our putting given in consideration of our putting given in consideration of our putting the companies all in, but we told them the companies all in, but we told them the companies all in, but we told them we would do it. The contract with the we would do it. The contract with the we would do it. The contract with the railroad companies was with us. railroad companies was with us. railroad companies was with us. Question. Question. Question. But if you did form a company composed But if you did form a company composed But if you did form a company composed of the proprietors of all these of the proprietors of all these of the proprietors of all these refineries, you were to have a rebate refineries, you were to have a rebate refineries, you were to have a rebate upon your freight charges? upon your freight charges? upon your freight charges? Answer. Answer. Answer. No, we were to have a rebate anyhow. but No, we were to have a rebate anyhow. but No, we were to have a rebate anyhow. but we're to give all the refineries the we're to give all the refineries the we're to give all the refineries the privilege of coming in.

privilege of coming in. privilege of coming in. Question. You were to have the rebate Question. You were to have the rebate Question. You were to have the rebate whether they came in or not? whether they came in or not? whether they came in or not? Answer. Yes, sir. Answer. Yes, sir. Answer. Yes, sir. What effect were these arrangements to What effect were these arrangements to What effect were these arrangements to have upon those who did not come into have upon those who did not come into have upon those who did not come into the combination? Asked the chairman. the combination? Asked the chairman. the combination? Asked the chairman. I don't think we ever took that question I don't think we ever took that question I don't think we ever took that question up. up. up. Answered Mr. Warden. Answered Mr. Warden. Answered Mr. Warden. A second objection to making a contract A second objection to making a contract A second objection to making a contract with the company came from Mr. Scott of with the company came from Mr. Scott of with the company came from Mr. Scott of the Pennsylvania Road and Mr. Potts of the Pennsylvania Road and Mr. Potts of the Pennsylvania Road and Mr. Potts of the Empire Transportation Company. the Empire Transportation Company. the Empire Transportation Company. The substance of this objection was that The substance of this objection was that The substance of this objection was that the plan took no account of the oil the plan took no account of the oil the plan took no account of the oil producer. The man to whom the world owed producer. The man to whom the world owed producer. The man to whom the world owed the business. the business. the business. Mr. Scott was strong in his assertion Mr. Scott was strong in his assertion Mr. Scott was strong in his assertion that they could never succeed unless that they could never succeed unless that they could never succeed unless they took care of the producers. they took care of the producers. they took care of the producers. Mr. Warden objected strongly to forming Mr. Warden objected strongly to forming Mr. Warden objected strongly to forming a combination with them. a combination with them. a combination with them. The interests of the producers were in The interests of the producers were in The interests of the producers were in one sense antagonistic to ours. One is one sense antagonistic to ours. One is one sense antagonistic to ours. One is the seller and the other is the buyer. the seller and the other is the buyer. the seller and the other is the buyer. We held in the argument that the We held in the argument that the We held in the argument that the producers were abundantly able to take producers were abundantly able to take producers were abundantly able to take care of their own branch of the business care of their own branch of the business care of their own branch of the business if they took care of the quantity if they took care of the quantity if they took care of the quantity produced.

produced. produced. So strongly did Mr. Scott argue, So strongly did Mr. Scott argue, So strongly did Mr. Scott argue, however, that finally the members of the however, that finally the members of the however, that finally the members of the South Improvement Company yielded and a South Improvement Company yielded and a South Improvement Company yielded and a draft of an agreement to be proposed to draft of an agreement to be proposed to draft of an agreement to be proposed to the producers was drawn up in lead the producers was drawn up in lead the producers was drawn up in lead pencil. pencil. pencil. It was never presented. It seems to have It was never presented. It seems to have It was never presented. It seems to have been used principally to quiet Mr. been used principally to quiet Mr. been used principally to quiet Mr. Scott. Scott. Scott. The work of persuasion went on swiftly. The work of persuasion went on swiftly. The work of persuasion went on swiftly. By the 18th of January, the president of By the 18th of January, the president of By the 18th of January, the president of the Pennsylvania Road, J. Edgar Thomson the Pennsylvania Road, J. Edgar Thomson the Pennsylvania Road, J. Edgar Thomson had put his signature to the contract had put his signature to the contract had put his signature to the contract and soon after Mr. Vanderbilt and Mr. and soon after Mr. Vanderbilt and Mr. and soon after Mr. Vanderbilt and Mr. Clark signed for the Central System and Clark signed for the Central System and Clark signed for the Central System and Jay Gould and General McClellan for the Jay Gould and General McClellan for the Jay Gould and General McClellan for the Erie. Erie. Erie. The contracts through which these The contracts through which these The contracts through which these gentlemen put their names fixed gross gentlemen put their names fixed gross gentlemen put their names fixed gross rates of freight from all common points rates of freight from all common points rates of freight from all common points as the leading shipping points within as the leading shipping points within as the leading shipping points within the regions were called to all the great the regions were called to all the great the regions were called to all the great refining and shipping centers, New York, refining and shipping centers, New York, refining and shipping centers, New York, Philadelphia, Baltimore, Pittsburgh, and Philadelphia, Baltimore, Pittsburgh, and Philadelphia, Baltimore, Pittsburgh, and Cleveland. Cleveland. Cleveland. For example, the open rate on crude to For example, the open rate on crude to For example, the open rate on crude to New York was put at $2.56.

New York was put at $2.56. New York was put at $2.56. On this price, the South Improvement On this price, the South Improvement On this price, the South Improvement Company was allowed a rebate of $1.06 Company was allowed a rebate of $1.06 Company was allowed a rebate of $1.06 for its shipments. But, it got not only for its shipments. But, it got not only for its shipments. But, it got not only this rebate, it was given in cash a like this rebate, it was given in cash a like this rebate, it was given in cash a like amount on each barrel of crude shipped amount on each barrel of crude shipped amount on each barrel of crude shipped by parties outside the combination. by parties outside the combination. by parties outside the combination. The open rate from Cleveland to New York The open rate from Cleveland to New York The open rate from Cleveland to New York was $2, and 50 cents of this was turned was $2, and 50 cents of this was turned was $2, and 50 cents of this was turned over to the South Improvement Company, over to the South Improvement Company, over to the South Improvement Company, which at the same time received a rebate which at the same time received a rebate which at the same time received a rebate enabling it to ship for $1.50. enabling it to ship for $1.50. enabling it to ship for $1.50. Again, an independent refiner in Again, an independent refiner in Again, an independent refiner in Cleveland paid 80 cents a barrel to get Cleveland paid 80 cents a barrel to get Cleveland paid 80 cents a barrel to get his crude from the oil regions to his his crude from the oil regions to his his crude from the oil regions to his works, and the railroad sent 40 cents of works, and the railroad sent 40 cents of works, and the railroad sent 40 cents of this money to the South Improvement this money to the South Improvement this money to the South Improvement Company. Company. Company. At the same time, it cost the Cleveland At the same time, it cost the Cleveland At the same time, it cost the Cleveland refiner in the combination but 40 cents refiner in the combination but 40 cents refiner in the combination but 40 cents to get his crude oil. to get his crude oil. to get his crude oil. Like drawbacks and rebates were given Like drawbacks and rebates were given Like drawbacks and rebates were given for all points, Pittsburgh, for all points, Pittsburgh, for all points, Pittsburgh, Philadelphia, Boston, and Baltimore. Philadelphia, Boston, and Baltimore. Philadelphia, Boston, and Baltimore. An interesting provision in the An interesting provision in the An interesting provision in the contracts was that full waybills of all contracts was that full waybills of all contracts was that full waybills of all petroleum shipped over the roads should petroleum shipped over the roads should petroleum shipped over the roads should each day be sent to the South each day be sent to the South each day be sent to the South Improvement Company.

Improvement Company. Improvement Company. This, of course, gave them knowledge of This, of course, gave them knowledge of This, of course, gave them knowledge of just who was doing business outside of just who was doing business outside of just who was doing business outside of their company, of how much business he their company, of how much business he their company, of how much business he was doing, and with whom he was doing was doing, and with whom he was doing was doing, and with whom he was doing it. it. it. Not only were they to have full Not only were they to have full Not only were they to have full knowledge of the business of all knowledge of the business of all knowledge of the business of all shippers, they were to have access to shippers, they were to have access to shippers, they were to have access to all books of the railroads. all books of the railroads. all books of the railroads. The parties to the contracts agreed that The parties to the contracts agreed that The parties to the contracts agreed that if anybody appeared in the business if anybody appeared in the business if anybody appeared in the business offering an equal amount of offering an equal amount of offering an equal amount of transportation and having equal transportation and having equal transportation and having equal facilities for doing business with the facilities for doing business with the facilities for doing business with the South Improvement Company, the railroads South Improvement Company, the railroads South Improvement Company, the railroads might give them equal advantages and might give them equal advantages and might give them equal advantages and drawbacks and rebates, but to make such drawbacks and rebates, but to make such drawbacks and rebates, but to make such a miscarriage of the scheme doubly a miscarriage of the scheme doubly a miscarriage of the scheme doubly improbable, each railroad was bound to improbable, each railroad was bound to improbable, each railroad was bound to cooperate as far as it legally might to cooperate as far as it legally might to cooperate as far as it legally might to maintain the business of the South maintain the business of the South maintain the business of the South Improvement Company against injury by Improvement Company against injury by Improvement Company against injury by competition, and lower or raise the competition, and lower or raise the competition, and lower or raise the gross rates of transportation for such gross rates of transportation for such gross rates of transportation for such times and to such extent as might be times and to such extent as might be times and to such extent as might be necessary to overcome the competition. necessary to overcome the competition. necessary to overcome the competition. The rebates and drawbacks to be varied The rebates and drawbacks to be varied The rebates and drawbacks to be varied pari passu with the gross rates. pari passu with the gross rates. pari passu with the gross rates. The reason given by the railroads in the The reason given by the railroads in the The reason given by the railroads in the contract for granting these contract for granting these contract for granting these extraordinary privileges was that the extraordinary privileges was that the extraordinary privileges was that the magnitude and extent of the business and magnitude and extent of the business and magnitude and extent of the business and operations proposed to be carried on by operations proposed to be carried on by operations proposed to be carried on by the South Improvement Company would the South Improvement Company would the South Improvement Company would greatly promote the interests of the greatly promote the interests of the greatly promote the interests of the railroads and make it desirable for them railroads and make it desirable for them railroads and make it desirable for them to encourage their undertaking.

to encourage their undertaking. to encourage their undertaking. The evident advantages received by the The evident advantages received by the The evident advantages received by the railroad were a regular amount of railroad were a regular amount of railroad were a regular amount of freight. The Pennsylvania was to have freight. The Pennsylvania was to have freight. The Pennsylvania was to have 45% of the eastbound shipments, the Erie 45% of the eastbound shipments, the Erie 45% of the eastbound shipments, the Erie and Central each 27 and 1/2%, while and Central each 27 and 1/2%, while and Central each 27 and 1/2%, while westbound freight was to be divided westbound freight was to be divided westbound freight was to be divided equally between them. equally between them. equally between them. Fixed rates and freedom from the system Fixed rates and freedom from the system Fixed rates and freedom from the system of cutting, which they had all found so of cutting, which they had all found so of cutting, which they had all found so harassing and disastrous. harassing and disastrous. harassing and disastrous. That is, the South Improvement Company, That is, the South Improvement Company, That is, the South Improvement Company, which was to include the entire refining which was to include the entire refining which was to include the entire refining capacity of the company, was to act as capacity of the company, was to act as capacity of the company, was to act as the evener of the oil business. the evener of the oil business. the evener of the oil business. It was on the 2nd of January, 1872, It was on the 2nd of January, 1872, It was on the 2nd of January, 1872, that the organization of the South that the organization of the South that the organization of the South Improvement Company was completed. Improvement Company was completed. Improvement Company was completed. The day before the Standard Oil Company The day before the Standard Oil Company The day before the Standard Oil Company of Cleveland increased its capital from of Cleveland increased its capital from of Cleveland increased its capital from $1 million to $2,500,000, $1 million to $2,500,000, $1 million to $2,500,000, all the stockholders of the company all the stockholders of the company all the stockholders of the company being present and voting therefore. being present and voting therefore. being present and voting therefore. The stockholders were greater by five The stockholders were greater by five The stockholders were greater by five than in 1870. than in 1870. than in 1870. The names of O. B. Jennings, Benjamin The names of O. B. Jennings, Benjamin The names of O. B. Jennings, Benjamin Brewster, Truman B. Handy, Amasa Stone, Brewster, Truman B. Handy, Amasa Stone, Brewster, Truman B. Handy, Amasa Stone, and Stillman Witt having been added.

and Stillman Witt having been added. and Stillman Witt having been added. The last three were officers and The last three were officers and The last three were officers and stockholders in one or more of the stockholders in one or more of the stockholders in one or more of the railroads centering in Cleveland. railroads centering in Cleveland. railroads centering in Cleveland. Three weeks after this increase of Three weeks after this increase of Three weeks after this increase of capital, Mr. Rockefeller had the charter capital, Mr. Rockefeller had the charter capital, Mr. Rockefeller had the charter and contracts of the South Improvement and contracts of the South Improvement and contracts of the South Improvement Company in hand and was ready to see Company in hand and was ready to see Company in hand and was ready to see what they would do in helping him carry what they would do in helping him carry what they would do in helping him carry out his idea of wholesale combination in out his idea of wholesale combination in out his idea of wholesale combination in Cleveland. There were at that time some Cleveland. There were at that time some Cleveland. There were at that time some 26 refineries in the town, some of them 26 refineries in the town, some of them 26 refineries in the town, some of them very large plants. very large plants. very large plants. All of them were feeling more or less All of them were feeling more or less All of them were feeling more or less the discouraging effects of the last the discouraging effects of the last the discouraging effects of the last three or four years of railroad three or four years of railroad three or four years of railroad discrimination in favor of the Standard discrimination in favor of the Standard discrimination in favor of the Standard Oil Company. Oil Company. Oil Company. To the owners of these refineries, Mr. To the owners of these refineries, Mr. To the owners of these refineries, Mr. Rockefeller now went one by one and Rockefeller now went one by one and Rockefeller now went one by one and explained the South Improvement Company. explained the South Improvement Company. explained the South Improvement Company. "You see," he told them, "this scheme is "You see," he told them, "this scheme is "You see," he told them, "this scheme is bound to work. bound to work. bound to work. It means an absolute control by us of It means an absolute control by us of It means an absolute control by us of the oil business. There is no chance for the oil business. There is no chance for the oil business. There is no chance for anyone outside, anyone outside, anyone outside, but we are going to give everybody a but we are going to give everybody a but we are going to give everybody a chance to come in.

chance to come in. chance to come in. You are to turn over your refinery to my You are to turn over your refinery to my You are to turn over your refinery to my appraisers and I will give you Standard appraisers and I will give you Standard appraisers and I will give you Standard Oil Company stock or cash, as you Oil Company stock or cash, as you Oil Company stock or cash, as you prefer, for the value we put upon it. prefer, for the value we put upon it. prefer, for the value we put upon it. I advise you to take the stock. It will I advise you to take the stock. It will I advise you to take the stock. It will be for your good." be for your good." be for your good." Certain refiners objected. They did not Certain refiners objected. They did not Certain refiners objected. They did not want to sell. want to sell. want to sell. They did want to keep and manage their They did want to keep and manage their They did want to keep and manage their business. business. business. Mr. Rockefeller was regretful but firm. Mr. Rockefeller was regretful but firm. Mr. Rockefeller was regretful but firm. "It was useless to resist," he told the "It was useless to resist," he told the "It was useless to resist," he told the hesitating. "They would certainly be hesitating. "They would certainly be hesitating. "They would certainly be crushed if they did not accept his crushed if they did not accept his crushed if they did not accept his offer." And he pointed out in detail and offer." And he pointed out in detail and offer." And he pointed out in detail and with gentleness how beneficent this with gentleness how beneficent this with gentleness how beneficent this scheme really was, preventing the Creek scheme really was, preventing the Creek scheme really was, preventing the Creek refiners from destroying Cleveland, refiners from destroying Cleveland, refiners from destroying Cleveland, ending competition, keeping up the price ending competition, keeping up the price ending competition, keeping up the price of refined oil, and eliminating of refined oil, and eliminating of refined oil, and eliminating speculation. speculation. speculation. Really a wonderful contrivance for the Really a wonderful contrivance for the Really a wonderful contrivance for the good of the oil business. good of the oil business. good of the oil business. That such was Mr. Rockefeller's argument That such was Mr. Rockefeller's argument That such was Mr. Rockefeller's argument is proved by abundant testimony from is proved by abundant testimony from is proved by abundant testimony from different individuals who succumbed to different individuals who succumbed to different individuals who succumbed to the pressure. the pressure. the pressure. Mr. Rockefeller's own brother, Frank Mr. Rockefeller's own brother, Frank Mr. Rockefeller's own brother, Frank Rockefeller, gave most definite evidence Rockefeller, gave most definite evidence Rockefeller, gave most definite evidence on this point in 1876 on this point in 1876 on this point in 1876 when he and others were trying to when he and others were trying to when he and others were trying to interest Congress in a law regulating interest Congress in a law regulating interest Congress in a law regulating interstate commerce.

interstate commerce. interstate commerce. We had in Cleveland at one time about 30 We had in Cleveland at one time about 30 We had in Cleveland at one time about 30 establishments, but the South establishments, but the South establishments, but the South Improvement Company was formed and the Improvement Company was formed and the Improvement Company was formed and the Cleveland companies were told that if Cleveland companies were told that if Cleveland companies were told that if they didn't sell their property to them, they didn't sell their property to them, they didn't sell their property to them, it would be valueless, that there was a it would be valueless, that there was a it would be valueless, that there was a combination of railroad and oil men, combination of railroad and oil men, combination of railroad and oil men, that they would buy all they could, and that they would buy all they could, and that they would buy all they could, and that all they didn't buy would be that all they didn't buy would be that all they didn't buy would be totally valueless because they would be totally valueless because they would be totally valueless because they would be unable to compete with the South unable to compete with the South unable to compete with the South Improvement Company, and the result was Improvement Company, and the result was Improvement Company, and the result was that out of the 30, there were only four that out of the 30, there were only four that out of the 30, there were only four or five that didn't sell. or five that didn't sell. or five that didn't sell. "From whom was that information "From whom was that information "From whom was that information received?" asked the examiner. received?" asked the examiner. received?" asked the examiner. "From the officers of the Standard Oil "From the officers of the Standard Oil "From the officers of the Standard Oil Company. They made no bones about it at Company. They made no bones about it at Company. They made no bones about it at all. all. all. They said, 'If you don't sell your They said, 'If you don't sell your They said, 'If you don't sell your property to us, it will be valueless property to us, it will be valueless property to us, it will be valueless because we have got advantages with the because we have got advantages with the because we have got advantages with the railroads.'" railroads.'" railroads.'" "Have you heard these gentlemen say what "Have you heard these gentlemen say what "Have you heard these gentlemen say what you have stated?" Frank Rockefeller was you have stated?" Frank Rockefeller was you have stated?" Frank Rockefeller was asked. asked. asked. "I have heard Rockefeller and Flagler "I have heard Rockefeller and Flagler "I have heard Rockefeller and Flagler say so." he answered. say so." he answered. say so." he answered. W. H. Doane, whose evidence on the first W. H. Doane, whose evidence on the first W. H. Doane, whose evidence on the first rebates granted to the Cleveland trade rebates granted to the Cleveland trade rebates granted to the Cleveland trade we have already quoted, told the we have already quoted, told the we have already quoted, told the congressional committee which a few congressional committee which a few congressional committee which a few months after Mr. Rockefeller's great months after Mr. Rockefeller's great months after Mr. Rockefeller's great coup tried to find out what had happened coup tried to find out what had happened coup tried to find out what had happened in Cleveland.

in Cleveland. in Cleveland. "The refineries are all bought up by the "The refineries are all bought up by the "The refineries are all bought up by the Standard Oil Works. They were forced to Standard Oil Works. They were forced to Standard Oil Works. They were forced to sell. The railroads had put up the rates sell. The railroads had put up the rates sell. The railroads had put up the rates and it scared them. and it scared them. and it scared them. Men came to me and told me they could Men came to me and told me they could Men came to me and told me they could not continue their business. They became not continue their business. They became not continue their business. They became frightened and disposed of their frightened and disposed of their frightened and disposed of their property." property." property." Mr. Doane's own business, that of a Mr. Doane's own business, that of a Mr. Doane's own business, that of a crude oil shipper, was entirely ruined, crude oil shipper, was entirely ruined, crude oil shipper, was entirely ruined, all of his customers but one having all of his customers but one having all of his customers but one having sold. sold. sold. To this same committee, Mr. Alexander of To this same committee, Mr. Alexander of To this same committee, Mr. Alexander of Alexander, Scofield and Company gave his Alexander, Scofield and Company gave his Alexander, Scofield and Company gave his reason for selling. "There was a reason for selling. "There was a reason for selling. "There was a pressure brought to bear upon my mind pressure brought to bear upon my mind pressure brought to bear upon my mind and upon almost all citizens of and upon almost all citizens of and upon almost all citizens of Cleveland engaged in the oil business Cleveland engaged in the oil business Cleveland engaged in the oil business to the effect that unless we went into to the effect that unless we went into to the effect that unless we went into the South Improvement Company, we were the South Improvement Company, we were the South Improvement Company, we were virtually killed as refiners. virtually killed as refiners. virtually killed as refiners. That if we did not sell out, we should That if we did not sell out, we should That if we did not sell out, we should be crushed out. be crushed out. be crushed out. My partner, Mr. Hewart, had some My partner, Mr. Hewart, had some My partner, Mr. Hewart, had some negotiations with parties connected with negotiations with parties connected with negotiations with parties connected with the South Improvement Company the South Improvement Company the South Improvement Company and they gave us to understand, at least and they gave us to understand, at least and they gave us to understand, at least my partner so represented to me, that we my partner so represented to me, that we my partner so represented to me, that we should be crushed out if we did not go should be crushed out if we did not go should be crushed out if we did not go into that arrangement.

into that arrangement. into that arrangement. He wanted me to see the parties myself, He wanted me to see the parties myself, He wanted me to see the parties myself, but I said to him that I would not have but I said to him that I would not have but I said to him that I would not have any dealings with certain parties who any dealings with certain parties who any dealings with certain parties who were in that company for any purpose were in that company for any purpose were in that company for any purpose and I never did. and I never did. and I never did. We sold at a sacrifice and we were We sold at a sacrifice and we were We sold at a sacrifice and we were obliged to. obliged to. obliged to. There was only one buyer in the market There was only one buyer in the market There was only one buyer in the market and we had to sell on their terms or be and we had to sell on their terms or be and we had to sell on their terms or be crushed out as it was represented to us. crushed out as it was represented to us. crushed out as it was represented to us. It was stated that they had a contract It was stated that they had a contract It was stated that they had a contract with railroads by which they could run with railroads by which they could run with railroads by which they could run us into the ground if they pleased. us into the ground if they pleased. us into the ground if they pleased. After learning what the arrangements After learning what the arrangements After learning what the arrangements were, I felt as if rather than fight were, I felt as if rather than fight were, I felt as if rather than fight such a monopoly, I would withdraw from such a monopoly, I would withdraw from such a monopoly, I would withdraw from the business even at a sacrifice. the business even at a sacrifice. the business even at a sacrifice. I think we received about 40 or 45 cents I think we received about 40 or 45 cents I think we received about 40 or 45 cents in the dollar on the valuation which we in the dollar on the valuation which we in the dollar on the valuation which we placed upon our refinery. placed upon our refinery. placed upon our refinery. We spent over $50,000 on our works We spent over $50,000 on our works We spent over $50,000 on our works during the past year, which was nearly during the past year, which was nearly during the past year, which was nearly all that we received. We paid out 60 or all that we received. We paid out 60 or all that we received. We paid out 60 or 70 thousand dollars before that. We 70 thousand dollars before that. We 70 thousand dollars before that. We considered our works at their cash value considered our works at their cash value considered our works at their cash value worth 75% of their cost.

worth 75% of their cost. worth 75% of their cost. According to our valuation, our According to our valuation, our According to our valuation, our establishment was worth $150,000 establishment was worth $150,000 establishment was worth $150,000 and we sold it for about $65,000, and we sold it for about $65,000, and we sold it for about $65,000, which was about 40 or 45% of its value. which was about 40 or 45% of its value. which was about 40 or 45% of its value. We sold to one of the members, as I We sold to one of the members, as I We sold to one of the members, as I suppose, of the Southern Improvement suppose, of the Southern Improvement suppose, of the Southern Improvement Company, Mr. Rockefeller. He is a Company, Mr. Rockefeller. He is a Company, Mr. Rockefeller. He is a director in that company. director in that company. director in that company. It was sold in name to the Standard Oil It was sold in name to the Standard Oil It was sold in name to the Standard Oil Company of Cleveland, but the Company of Cleveland, but the Company of Cleveland, but the arrangements were, as I understand it, arrangements were, as I understand it, arrangements were, as I understand it, that they were put into the South that they were put into the South that they were put into the South Improvement Company. Improvement Company. Improvement Company. I am stating what my partner told me. He I am stating what my partner told me. He I am stating what my partner told me. He did all the business. did all the business. did all the business. His statement was that all these works His statement was that all these works His statement was that all these works were to be merged into the South were to be merged into the South were to be merged into the South Improvement Company. Improvement Company. Improvement Company. I never talked with any members of the I never talked with any members of the I never talked with any members of the South Improvement Company myself on the South Improvement Company myself on the South Improvement Company myself on the subject. I have declined to have subject. I have declined to have subject. I have declined to have anything to do with them. Mr. Hewitt, anything to do with them. Mr. Hewitt, anything to do with them. Mr. Hewitt, the partner who Mr. Alexander says the partner who Mr. Alexander says the partner who Mr. Alexander says carried on the negotiations for the sale carried on the negotiations for the sale carried on the negotiations for the sale of the business, appeared before an of the business, appeared before an of the business, appeared before an investigating committee of the New York investigating committee of the New York investigating committee of the New York State Senate in 1879, State Senate in 1879, State Senate in 1879, and gave his recollections of what and gave his recollections of what and gave his recollections of what happened.

happened. happened. According to his story, the entire oil According to his story, the entire oil According to his story, the entire oil trade in Cleveland became paralyzed when trade in Cleveland became paralyzed when trade in Cleveland became paralyzed when it became known that the Southern it became known that the Southern it became known that the Southern Improvement Company had grappled the Improvement Company had grappled the Improvement Company had grappled the entire transportation of oil from the entire transportation of oil from the entire transportation of oil from the West to the Seaboard. West to the Seaboard. West to the Seaboard. Mr. Hewitt went to see the freight Mr. Hewitt went to see the freight Mr. Hewitt went to see the freight agents of the various roads. He called agents of the various roads. He called agents of the various roads. He called on W. H. Vanderbilt, but from no one did on W. H. Vanderbilt, but from no one did on W. H. Vanderbilt, but from no one did he get any encouragement. Then he saw he get any encouragement. Then he saw he get any encouragement. Then he saw Peter H. Watson of the Lake Shore Peter H. Watson of the Lake Shore Peter H. Watson of the Lake Shore Railroad, the president of the company Railroad, the president of the company Railroad, the president of the company who was frightening the trade. who was frightening the trade. who was frightening the trade. "Watson was noncommittal," said Mr. "Watson was noncommittal," said Mr. "Watson was noncommittal," said Mr. Hewitt. "I got no satisfaction except Hewitt. "I got no satisfaction except Hewitt. "I got no satisfaction except you'd better sell, you'd better get you'd better sell, you'd better get you'd better sell, you'd better get clear, better sell out, no help for it." clear, better sell out, no help for it." clear, better sell out, no help for it." After a little time, Mr. Hewitt After a little time, Mr. Hewitt After a little time, Mr. Hewitt concluded with his partners that there concluded with his partners that there concluded with his partners that there was indeed no help for it. was indeed no help for it. was indeed no help for it. And he went to see Mr. Rockefeller, who And he went to see Mr. Rockefeller, who And he went to see Mr. Rockefeller, who offered him 50 cents on the dollar on offered him 50 cents on the dollar on offered him 50 cents on the dollar on the constructive account. the constructive account. the constructive account. The offer was accepted. The offer was accepted. The offer was accepted. "There was nothing else to do," the firm "There was nothing else to do," the firm "There was nothing else to do," the firm seems to have concluded. seems to have concluded. seems to have concluded. When they came to transfer the property, When they came to transfer the property, When they came to transfer the property, Mr. Rockefeller urged Mr. Hewitt to take Mr. Rockefeller urged Mr. Hewitt to take Mr. Rockefeller urged Mr. Hewitt to take stock in the new concern.

stock in the new concern. stock in the new concern. "He told me," said Mr. Hewitt, "that it "He told me," said Mr. Hewitt, "that it "He told me," said Mr. Hewitt, "that it would be sufficient to take care of my would be sufficient to take care of my would be sufficient to take care of my family for all time what I represented family for all time what I represented family for all time what I represented there, and asking for a reason, he made there, and asking for a reason, he made there, and asking for a reason, he made this expression, I remember, this expression, I remember, this expression, I remember, I have ways of making money that you I have ways of making money that you I have ways of making money that you know nothing of. know nothing of. know nothing of. A few of the refiners contested before A few of the refiners contested before A few of the refiners contested before surrendering. surrendering. surrendering. Among these was Robert Hanna, an uncle Among these was Robert Hanna, an uncle Among these was Robert Hanna, an uncle of Mark Hanna of the firm of Hanna, of Mark Hanna of the firm of Hanna, of Mark Hanna of the firm of Hanna, Baslington and Company. Baslington and Company. Baslington and Company. Mr. Hanna had been refining since July Mr. Hanna had been refining since July Mr. Hanna had been refining since July 1869. 1869. 1869. According to his own sworn statement, he According to his own sworn statement, he According to his own sworn statement, he had made money fully 60% on his had made money fully 60% on his had made money fully 60% on his investment the first year, and after investment the first year, and after investment the first year, and after that, 30%. that, 30%. that, 30%. Sometime in February 1872, Sometime in February 1872, Sometime in February 1872, the Standard Oil Company asked an the Standard Oil Company asked an the Standard Oil Company asked an interview with him and his associates. interview with him and his associates. interview with him and his associates. They wanted to buy his works, they said. They wanted to buy his works, they said. They wanted to buy his works, they said. "But we don't want to sell," objected "But we don't want to sell," objected "But we don't want to sell," objected Mr. Hanna. Mr. Hanna. Mr. Hanna. "You can never make any more money in my "You can never make any more money in my "You can never make any more money in my judgment," said Mr. Rockefeller. "You judgment," said Mr. Rockefeller. "You judgment," said Mr. Rockefeller. "You can't compete with the Standard. We have can't compete with the Standard. We have can't compete with the Standard. We have all the large refineries now. If you all the large refineries now. If you all the large refineries now. If you refuse to sell, it will end in your refuse to sell, it will end in your refuse to sell, it will end in your being crushed."

being crushed." being crushed." Hanna and Baslington were not satisfied. Hanna and Baslington were not satisfied. Hanna and Baslington were not satisfied. They went to see Mr. Watson, president They went to see Mr. Watson, president They went to see Mr. Watson, president of the South Improvement Company and an of the South Improvement Company and an of the South Improvement Company and an officer of the Lake Shore, and General officer of the Lake Shore, and General officer of the Lake Shore, and General Devereux, manager of the Lake Shore Devereux, manager of the Lake Shore Devereux, manager of the Lake Shore Road. Road. Road. They were told that the Standard had They were told that the Standard had They were told that the Standard had special rates, that it was useless to special rates, that it was useless to special rates, that it was useless to try to compete with them. try to compete with them. try to compete with them. General Devereux explained to the General Devereux explained to the General Devereux explained to the gentlemen that the privileges granted gentlemen that the privileges granted gentlemen that the privileges granted the Standard were the legitimate and the Standard were the legitimate and the Standard were the legitimate and necessary advantage of the larger necessary advantage of the larger necessary advantage of the larger shipper over the smaller, and that if shipper over the smaller, and that if shipper over the smaller, and that if Hanna, Baslington and Company could give Hanna, Baslington and Company could give Hanna, Baslington and Company could give the road as large quantity of oil as the the road as large quantity of oil as the the road as large quantity of oil as the Standard did with the same regularity, Standard did with the same regularity, Standard did with the same regularity, they could have the same rate. they could have the same rate. they could have the same rate. General Devereux says they recognized General Devereux says they recognized General Devereux says they recognized the propriety of his excuse. the propriety of his excuse. the propriety of his excuse. They certainly recognized its authority. They certainly recognized its authority. They certainly recognized its authority. They say that they were satisfied they They say that they were satisfied they They say that they were satisfied they could no longer get rates to and from could no longer get rates to and from could no longer get rates to and from Cleveland which would enable them to Cleveland which would enable them to Cleveland which would enable them to live, and reluctantly sold out. live, and reluctantly sold out. live, and reluctantly sold out. It must have been reluctantly, for they It must have been reluctantly, for they It must have been reluctantly, for they had paid $75,000 for their works and had had paid $75,000 for their works and had had paid $75,000 for their works and had made 30% a year on an average on their made 30% a year on an average on their made 30% a year on an average on their investment and the Standard Oil Company investment and the Standard Oil Company investment and the Standard Oil Company allowed them $45,000.

allowed them $45,000. allowed them $45,000. Truly and really less than one half of Truly and really less than one half of Truly and really less than one half of what they were absolutely worth with a what they were absolutely worth with a what they were absolutely worth with a fair and honest competition in the lines fair and honest competition in the lines fair and honest competition in the lines of transportation, said Mr. Hanna eight of transportation, said Mr. Hanna eight of transportation, said Mr. Hanna eight years later in an affidavit. years later in an affidavit. years later in an affidavit. Under the combined threat and persuasion Under the combined threat and persuasion Under the combined threat and persuasion of the Standard armed with the South of the Standard armed with the South of the Standard armed with the South Improvement Company scheme, almost the Improvement Company scheme, almost the Improvement Company scheme, almost the entire independent oil interest of entire independent oil interest of entire independent oil interest of Cleveland collapsed in three months Cleveland collapsed in three months Cleveland collapsed in three months time. time. time. Of the 26 refineries, at least 21 sold Of the 26 refineries, at least 21 sold Of the 26 refineries, at least 21 sold out. out. out. From a capacity of probably not over From a capacity of probably not over From a capacity of probably not over 1,500 barrels of crude a day, the 1,500 barrels of crude a day, the 1,500 barrels of crude a day, the Standard rose in three months time to Standard rose in three months time to Standard rose in three months time to one of 10,000 barrels. one of 10,000 barrels. one of 10,000 barrels. By this maneuver, it became master of By this maneuver, it became master of By this maneuver, it became master of over 1/5 of the refining capacity of the over 1/5 of the refining capacity of the over 1/5 of the refining capacity of the United States. United States. United States. Its next individual competitor was Sone Its next individual competitor was Sone Its next individual competitor was Sone and Fleming of New York, whose capacity and Fleming of New York, whose capacity and Fleming of New York, whose capacity was 1,700 barrels. was 1,700 barrels. was 1,700 barrels. The Standard had a greater capacity than The Standard had a greater capacity than The Standard had a greater capacity than the entire Oil Creek regions, greater the entire Oil Creek regions, greater the entire Oil Creek regions, greater than the combined New York refiners.

than the combined New York refiners. than the combined New York refiners. The transaction by which it acquired The transaction by which it acquired The transaction by which it acquired this power was so stealthy that not even this power was so stealthy that not even this power was so stealthy that not even the best informed newspaper men of the best informed newspaper men of the best informed newspaper men of Cleveland knew what went on. Cleveland knew what went on. Cleveland knew what went on. It had all been accomplished in It had all been accomplished in It had all been accomplished in accordance with one of Mr. Rockefeller's accordance with one of Mr. Rockefeller's accordance with one of Mr. Rockefeller's chief business principles. chief business principles. chief business principles. Silence is golden. Silence is golden. Silence is golden. While Mr. Rockefeller was working out While Mr. Rockefeller was working out While Mr. Rockefeller was working out the good of the oil business in the good of the oil business in the good of the oil business in Cleveland, his associates were busy at Cleveland, his associates were busy at Cleveland, his associates were busy at other points. other points. other points. Charles Lockhart in Pittsburgh and W. G. Charles Lockhart in Pittsburgh and W. G. Charles Lockhart in Pittsburgh and W. G. Warden in Philadelphia were particularly Warden in Philadelphia were particularly Warden in Philadelphia were particularly active. Though neither of them active. Though neither of them active. Though neither of them accomplished any such sweeping accomplished any such sweeping accomplished any such sweeping benefaction as Mr. Rockefeller had. benefaction as Mr. Rockefeller had. benefaction as Mr. Rockefeller had. It was now evident what the stockholders It was now evident what the stockholders It was now evident what the stockholders of the South Improvement Company meant of the South Improvement Company meant of the South Improvement Company meant when they assured the railroads that all when they assured the railroads that all when they assured the railroads that all the refiners were to go into the scheme the refiners were to go into the scheme the refiners were to go into the scheme that as Mr. Warden said, they never had that as Mr. Warden said, they never had that as Mr. Warden said, they never had any other purpose in the matter. any other purpose in the matter. any other purpose in the matter. A little more time and the great scheme A little more time and the great scheme A little more time and the great scheme would be an accomplished fact. And then would be an accomplished fact. And then would be an accomplished fact. And then there fell in its path two of those there fell in its path two of those there fell in its path two of those never to be foreseen human elements never to be foreseen human elements never to be foreseen human elements which so often block great maneuvers.

which so often block great maneuvers. which so often block great maneuvers. The first was born of a man's anger. The first was born of a man's anger. The first was born of a man's anger. The man had learned of the scheme. He The man had learned of the scheme. He The man had learned of the scheme. He had wanted to go into it, but the had wanted to go into it, but the had wanted to go into it, but the directors were suspicious of him. directors were suspicious of him. directors were suspicious of him. He had been concerned in speculative He had been concerned in speculative He had been concerned in speculative enterprises and in dealings with the enterprises and in dealings with the enterprises and in dealings with the Erie road which had injured these Erie road which had injured these Erie road which had injured these directors in other ways. directors in other ways. directors in other ways. They didn't want him to have any of the They didn't want him to have any of the They didn't want him to have any of the advantages of their great enterprise. advantages of their great enterprise. advantages of their great enterprise. When convinced that he could not share When convinced that he could not share When convinced that he could not share in the deal, he took his revenge by in the deal, he took his revenge by in the deal, he took his revenge by telling people in the oil regions what telling people in the oil regions what telling people in the oil regions what was going on. was going on. was going on. At first the oil regions refused to At first the oil regions refused to At first the oil regions refused to believe, but in a few days another slip believe, but in a few days another slip believe, but in a few days another slip born of human weakness came in to prove born of human weakness came in to prove born of human weakness came in to prove the rumor true. the rumor true. the rumor true. The schedule of rates agreed upon by the The schedule of rates agreed upon by the The schedule of rates agreed upon by the South Improvement Company and the South Improvement Company and the South Improvement Company and the railroads roads had been sent to the railroads roads had been sent to the railroads roads had been sent to the freight agent of the Lake Shore freight agent of the Lake Shore freight agent of the Lake Shore Railroad, but no order had been given to Railroad, but no order had been given to Railroad, but no order had been given to put them in force. put them in force. put them in force. The freight agent had a son on his The freight agent had a son on his The freight agent had a son on his deathbed. deathbed. deathbed. Distracted by his sorrow, he left his Distracted by his sorrow, he left his Distracted by his sorrow, he left his office in charge of subordinates, but office in charge of subordinates, but office in charge of subordinates, but neglected to tell them that the new neglected to tell them that the new neglected to tell them that the new schedules on his desk were a secret schedules on his desk were a secret schedules on his desk were a secret compact whose effectiveness depended compact whose effectiveness depended compact whose effectiveness depended upon their being held until all was upon their being held until all was upon their being held until all was complete.

complete. complete. On February 26th, the subordinates, On February 26th, the subordinates, On February 26th, the subordinates, ignorant of the nature of the rates, put ignorant of the nature of the rates, put ignorant of the nature of the rates, put them into effect. them into effect. them into effect. The independent oil men heard with The independent oil men heard with The independent oil men heard with amazement that freight rates had been amazement that freight rates had been amazement that freight rates had been put up nearly 100%. put up nearly 100%. put up nearly 100%. They needed no other proof of the truth They needed no other proof of the truth They needed no other proof of the truth of the rumors of conspiracy which were of the rumors of conspiracy which were of the rumors of conspiracy which were circulating. circulating. circulating. It now remained to be seen whether the It now remained to be seen whether the It now remained to be seen whether the oil regions would submit to the South oil regions would submit to the South oil regions would submit to the South Improvement Company as Cleveland had to Improvement Company as Cleveland had to Improvement Company as Cleveland had to the Standard Oil Company. End of chapter the Standard Oil Company. End of chapter the Standard Oil Company. End of chapter two. Recording by Tom Weiss. two. Recording by Tom Weiss. two. Recording by Tom Weiss. tomsaudiobooks.com