The Story of a Great Monopoly

"America has the proud satisfaction of having furnished the world with the greatest, wisest, and meanest monopoly known to history."

Their great business capacity would have insured the managers of the Standard success, but the means by which they achieved monopoly was by conspiracy with the railroads. Mr. Simon Sterne, counsel for the merchants of New York in the New York investigation, declared that the relations of the railroads to the Standard exhibited "the most shameless perversion of the duties of a common carrier to private ends that has taken place in the history of the world." The Standard killed its rivals, in brief, by getting the great trunk lines to refuse to give them transportation. Commodore Vanderbilt is reported to have said that there was but one man—Rockefeller—who could dictate to him. Whether or not Vanderbilt said it, Rockefeller did it. The Standard has done everything with the Pennsylvania legislature, except refine it. In 1876 its organization was brought before Congress, and referred to a committee. A prominent member of the Standard, not a member of Congress, conducted the farce of inquiry from behind the seat of the chairman. Another member of the company, who was a member of Congress, came with the financial officer of the company before the committee, and sustained him in his refusal to testify about the organization, its members or its relations with the railroads. The committee has never reported. The facts they suppressed must be hunted out through newspaper articles, memorials from the oil producers and refiners, records of lawsuits, reports of chambers of commerce and of legislative investigating committees, and other miscellaneous sources of information.

The contract is in print by which the Pennsylvania Railroad agreed with the Standard, under the name of the South Improvement Company, to double the freights on oil to everybody, but to repay the Standard one dollar for every barrel of oil it shipped, and one dollar for every barrel any of its competitors shipped. This contract was produced in Congress, and was stigmatized by Representative Conger as "the most damnable and startling evidence yet produced of the possibility of railroad monopoly." Ostensibly this contract was given up, in deference to the whirlwind of indignation it excited. But Rockefeller, the manager of the Standard, was a man who could learn from defeat. He made no more tell-tale contracts that could be printed. He effected secret arrangements with the Pennsylvania, the New York Central, the Erie, and the Atlantic and Great Western.

What influences he used to make the railroad managers pliable may probably be guessed from the fact that one quarter of the stock of the Acme Oil Company, a partner in the Standard combination on which heavy monthly dividends are paid, is owned by persons whose names Rockefeller would never reveal, which Mr. Archbold, the president of the company, said under oath he had not been told, and which the supreme court of Pennsylvania has not yet been able to find out. The Standard succeeded in getting from Mr. Vanderbilt free transportation for its crude oil from the wells in Pennsylvania, one hundred and fifty miles, to the refineries at Cleveland, and back. This stamped out competing refineries at Pittsburg, and created much of the raw material of the riots of July, 1877. Vanderbilt signed an agreement, March 25, 1872, that "all agreements for the transportation of oil after this date shall be upon a basis of perfect equality," and ever since has given the Standard special rates and privileges. He has paid it back in rebates millions of dollars, which have enabled it to crush out all competitors, although many of them, like the Octave Oil company and the Titusville refiners, had done all their business over his road till they went into bankruptcy, broken by his contracts with the Standard. He united with the Erie in a war on the Pennsylvania Railroad, to force it to sell to the standard all its refineries, and the great pipe lines by which the oil, like Croton water in the mains, was carried from the wells to the railroads. He then joined with the Erie and the Pennsylvania in a similar attack on the Baltimore and Ohio, which had to sell out to the Standard.

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