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."
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If we turn to the experience of the refiners we find they fared as badly as the producers. The handful of New York refiners who survived the conspiracy against them testify that they had to keep their capacity limited and to do as little as they could. They did not dare to build large refineries, because they would not be able to get oil enough carried to them to keep them going. Mr. Alexander, of Cleveland, tells how he was informed by Rockefeller, of the Standard, that if he would not sell out he should be crushed out. The Standard had a contract with the railroads which made them master. He had to take their terms, and sell for $65,000 a refinery which cost him $150,000, and was making money. Refiner after refiner in Pittsburg, buying his crude oil in the open market, manufacturing it at his works, shipping it to the seaboard, met with a continued succession of losses, and was forced into bankruptcy or a sale of his works to the Standard, who always had a buyer on the spot at the right time.

The great majority of these refineries, when bought by the Standard, were dismantled and the "junk" was hauled to other refineries. The Vesta and Cosmos refineries, which cost about $800,000, were sold at sheriff's sale to the Standard for $80,000, and are now run vigorously by that company. The Germania, which was run to its full capacity as long as the Pennsylvania Railroad gave its proprietor transportation, is now leased to the Standard, but stands idle, as that concern can make more money by limiting the production and maintaining an artificial price than by giving the people cheap light. The Standard became practically the only refiner of oil in Western Pennsylvania, and its rule was bankruptcy to all attempting to lead an independent existence. D. P. Reichardt tells us how the agents of the Standard came to him with the threat that if he did not come into their combination they would drive him to the wall.

The Standard called upon this free man to choose between financial ruin and joining them on these terms: he was to refine only half as much as he had been doing, and was to pay them a tribute of one cent a gallon, a tax of five to twelve per cent. The selling, storing, transporting, and price of his oil he was to leave entirely to the Standard. This testimony with regard to the regulation of prices by the Standard is confirmed by the unwilling evidence of Mr. J. J. Vandergrift, president of the Standard's United Pipe Line, and a stockholder in the Standard, who said that the Standard fixes for the other refiners in the combination how much they shall produce each month, thus "keeping up the price." It is also proved to have manipulated the price of oil on the exchanges by the issue of fictitious pipeline certificates to the amount of hundreds of thousands of dollars.

The Pittsburg Chamber of Commerce reported April 3, 1876, that there were twenty-one oil refineries idle in that city, owing to freight discriminations and combinations. There were $2,000,000 invested in these refineries, and if in operation they would have required the labor directly of 3060 men, besides the much larger number of carpenters, masons, bricklayers, boiler-makers, pump-makers, and other workingmen, who would have employment if the oil refining business were prosperous. A minute prepared in 1878 by the Hon. Lewis Emery, Jr., a member of the Pennsylvania legislature, shows that of the fifty-eight refineries in Pittsburg in 1867 twenty-eight have been crushed out and dismantled, and that of the remaining thirty twenty-nine have been bought up or leased by the great monopoly. A partial list prepared by Mr. Emery of "the petroleum refineries in Pennsylvania bankrupted, squeezed out, bought up, leased, or dismantled" by the Standard contains seventy-six refineries, of which thirty-one were dismantled, twenty-four leased or bought, some to be run, and some to be shut down, and twenty-one were driven out of business.

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