Chapter I: The Men and the Monopoly

There has lately arisen at Queen Anne’s Gate, on the site of a fine Victorian mansion demolished to make room for it, a gigantic palace, steel-framed in the up-to-date style, clad in Portland stone, towering seven stories high above the neighbouring buildings, looking down upon Buckingham Palace on the one side of the park, and standing on pretty nearly equal terms with the Government Offices and the Houses of Parliament on the other. I was interested to learn that it has been erected for the accommodation of the Anglo-American Oil Company, which is the English branch of the famous Standard Oil Trust of the United States. There were even people who suggested that in view of the action of the United States Government against the Standard Oil Trust, still pending in the American Courts, and the influence of Mr. Roosevelt with his “trust-busting” aspirations, it may possibly be in contemplation to transfer the headquarters of the petroleum empire from the present offices of the Standard Oil Trust in Broadway, New York, to Queen Anne’s Gate, Westminster. As Constantine transferred the capital of the Cæsars from Rome to Byzantium, so these seers picture Mr. John D. Rockefeller removing his seat of government eastward from New York to London.

Time alone can test the value of this prophecy. Sufficient unto the day is the evil thereof. The new Aladdin’s Palace that has sprung up in Birdcage Walk is an eloquent manifestation of the growing wealth and influence of the Great Oil Octopus in this country. That is a cogent reason why the public throughout the United Kingdom should understand without loss of time what this Trust is, and what reason there is for men to be afraid of it. Echoes reach us of the iniquities charged against Mr. Rockefeller and his colleagues in America, they circulate vaguely about the country but make little impression. On the other hand, strenuous efforts to convey a contrary impression have been made with considerable skill. The Trust includes in its scientific organisation an efficient Press department, and fights with the pen as well as with other weapons. I have therefore made it my business to undertake an exhaustive investigation of the history of the Trust and its operations, not in America alone, but in Europe and Asia. There is no great secret about the subject. But the materials are scattered and difficult of access. A good deal of new light has been thrown upon the history of the concern and its ramifications in the United Kingdom and other countries in the course of the great action of the United States Government against the Trust in the State of Missouri, referred to a moment ago. In the Standard Oil Trust we have exhibited the highest perfection yet achieved by a ring of capitalists in the art of exploiting a great industry. The machinery that has been created for this purpose is a masterpiece of human ingenuity. The methods by which it has been employed seem to express the last word in craft, subtlety, and unscrupulousness, as employed for the purpose of amassing wealth. The Trust is consequently quite a fascinating subject for inquiry and reflection, apart from the direct interest which we every one of us have in its operations.

The indictment against the Standard, put briefly, is that its founder, Mr. John D. Rockefeller, organised in 1870 a combination of American oil refiners, who then controlled less than 10 per cent. of the refining business, and that he secured from the United States railroads secret rebates on the carriage of their oil, and even larger rebates on oil carried for their competitors. The result was that it became the interest of the railroads to discourage the shipments of oil by refiners outside the Trust. Armed with this weapon of the secret rebate, the Standard Oil Trust was able to undersell its competitors and to force them to sell out at heavy loss. In ten years it had obtained by those methods the control of 90 per cent. of the American oil refining business, and being almost the sole buyer, it was able to dictate prices to the oil producers at the wells. It has since maintained its monopoly by elaborate espionage of its competitors’ business, by running ostensibly “independent” oil companies to take advantage of the anti-Trust feeling, and by obtaining up to the present day unfair railway discriminations in place of the secret rebate. It maintains an expensive staff of lobbyists at the Legislative Chambers of many lands, and it has constantly adopted the methods of bribery (direct and indirect) in dealing with politicians and publicists. It has always aimed, not at fair business competition, but at absolute monopoly.

The principal figures in this great combination deserve a passing word of introduction. There is first its founder, its creator, Mr. John D. Rockefeller, who was born on a farm in New York State in 1839. His father, who was of Scottish extraction, moved to Ohio, and in 1855 John Davison Rockefeller went into the town of Cleveland to earn his living as a junior clerk at four dollars a week. He was clever, industrious, steady and frugal, and he went into the produce commission business with a young Englishman named M. B. Clark. In 1862 he met another Englishman, Samuel Andrews, who was a mechanical genius, and had devised improved processes in the infant oil-refining industry. They joined forces; Andrews looked after the refining and Rockefeller attended to the pushing of the business, the buying and selling. The firm grew and extended at first by legitimate, and then by illegitimate, methods, and now Mr. Rockefeller has convinced himself in his retirement that he has been the agent of Providence, and that his business career entitles him to moralise to Sunday schools and Bible classes. “I hope you young men are all careful. I believe it is a religious duty to get all the money you can; get it fairly, religiously, and honestly--and give away all you can.” So spoke Mr. Rockefeller to his son’s Bible class in New York on March 27, 1897, and it gives a complete picture of his life. The combination of Jekyll and Hyde is well brought out in Miss Ida M. Tarbell’s “History of the Standard Oil Company,” the ablest investigation ever made of the American activities of this combination. Miss Tarbell says:--

Mr. Rockefeller was “good.” There was no more faithful Baptist in
Cleveland than he. Every enterprise of that Church he had supported
liberally from his youth. He gave to its poor. He visited its sick.
He was simple and frugal in his habits. He never went to the theatre,
never drank wine. He gave much time to the training of his children,
seeking to develop in them his own habits of economy and charity. Yet
he was willing to strain every nerve to obtain for himself special
and unjust privileges from the railroads which were bound to ruin
every man in the oil business not sharing them with him. Religious
emotions and sentiments of charity, propriety, and self-denial seem
to have taken the place in him of notions of justice and regard for
the rights of others.

In a character sketch of Mr. Rockefeller which she contributed to _McClure’s Magazine_ in January, 1905, Miss Tarbell tells this story:--

Even in his own Church men say, “He’s a good Baptist, but look out
how you trade with him.” “I have been in business with John D.
Rockefeller for thirty-five years,” one of the ablest and richest
and earliest of Mr. Rockefeller’s colleagues once told me in a moment
of forgetfulness, “and he would do me out of a dollar to-day; that
is,” he added, with a sudden reversion to the school of cant in which
he had been trained--“that is, if he could do it honestly.”

In this picture Mr. Wm. Rockefeller hardly counts. The next figure in the gallery of oils is that of the late Mr. Henry H. Rogers, who died a few months ago--the “Iron Man” of the Standard directorate. Writing in Chapter III. of “Frenzied Finance” in _Everybody’s Magazine_ for August, 1904, Mr. T. W. Lawson, who knew him well, thus described Mr. Rogers:--

Whenever the bricks, cabbages, or aged eggs were being presented
to “Standard Oil,” always was Henry H. Rogers’s towering form and
defiant eye in the foreground where they flew thickest. Whenever
Labour howled its anathemas at “Standard Oil” and the Rockefellers
and other stout-hearted generals and captains of this band of merry
moneymakers would begin to discuss conciliation and retreat, it was
always Henry H. Rogers who fired at his associates his now famous
panacea for all opposition, “We’ll see Standard Oil in hell before we
will allow any body of men on earth to dictate how we shall conduct
our business.”

In another passage in “Frenzied Finance” Mr. Lawson wrote of him:--

Rogers is a marvellously able man, and one of the best fellows
living. He is considerate, kindly, generous, helpful, and everything
a man should be to his friends. But when it comes to business--his
kind of business--when he turns away from his better self and goes
aboard his private brig and hoists the Jolly Roger, God help you!...
He is a relentless, ravenous creature, as pitiless as a shark,
knowing no law of God or man in the execution of his purpose.

Now that Mr. Rogers is dead, the active figure in the Trust is Mr. John Dustin Archbold, who was originally a bitter opponent of the Standard and its rebates. Since he joined its circle Mr. Archbold has figured in two sensational episodes. He was one of the defendants in the charge of conspiring to blow up a rival refinery at Buffalo, and escaped through the judge withdrawing his case from the jury. He was the writer of the famous letters to politicians which Mr. Randolph Hearst disclosed in the Presidential campaign of 1908.

Of the rest of these men it is necessary to say less. They were very diverse in their character. One of them, Henry M. Flagler, was the pioneer of the vast hotels which line the Florida coast and make it a winter resort for rich Americans. William T. Wardwell, the treasurer of the Standard Oil Company, was an ardent teetotaler, and more than once ran as Prohibitionist candidate for the Presidency before his connection with Standard Oil was so notorious. Many of them were Scotch Presbyterians, but the late Mr. Daniel O’Day, the man who faced fierce obloquy as the manager of the Standard’s pipe-line monopoly, was an Irish Catholic, who died a year or two ago, leaving several millions behind him. The younger generation is growing old now, and sons of both John and William Rockefeller have entered the business, carrying on the traditions of the greatest combine on earth.

We will now proceed to trace the ramifications of the vast organisation which these men have built up and control all over the world. The full list of the subsidiary companies is so long that it is impossible and unnecessary to print all the names. But a selection of them will indicate the vastness and variety of the Rockefeller interests. They are taken from the Report of the United States Government Commissioner of Corporations on the Petroleum Industry (Part I., Table 8, p. 84), supplemented by one or two other unimpeachable sources of information. The central company of this joint-stock octopus is now the Standard Oil Company of New Jersey, which holds large blocks of stock in the other companies. It has a capital of $100,000,000 of common stock and $10,000,000 of preferred stock. Among its directors are John D. Rockefeller, William Rockefeller, Henry M. Flagler, John Dustin Archbold, Wesley H. Tilford, Frank Q. Barstow, Charles M. Pratt, Edward T. Bedford, Walter Jennings, James A. Moffet, C. W. Harkness, John D. Rockefeller, jun., Oliver H. Payne, and A. C. Bedford. This Company controls nine companies which are principally engaged in refining oils:--

Capital.
Dols.
Atlantic Refining Company, Pennsylvania 5,000,000
Solar Refining Company, Ohio 500,000
Standard Oil Company of California 25,000,000
Standard Oil Company of Kansas 1,000,000
Standard Oil Company of Indiana 1,000,000
Standard Oil Company of New York 15,000,000
Security Oil Company, Texas 3,000,000
Standard Oil Company of Ohio 3,500,000
Corsicana Refining Company partnership

Then comes a group of lubricating oil companies:--

Dols.
Vacuum Oil Company, N.Y. 2,500,000
Borne, Scrymser & Co., N.J. 200,000
Chesebrough Manufacturing Company, N.Y. 500,000
Galena Signal Oil Company, Penn. 10,000,000
Swan and Finch Company, N.Y. 1,000,000

It will surprise many readers on this side to find in this list the name of the Chesebrough Company, which lights the London sky with the magic word “Vaseline,” but for years that article has paid its tribute to the Standard Oil Trust. This story was told by Mr. John D. Archbold in evidence in the proceedings by the United States Government against the Trust in the State of Missouri, where much evidence, to which we shall hereafter have to refer, was taken. Mr. Archbold then stated that the Standard Oil Trust acquired 2,549 shares in the Chesebrough Manufacturing Company, which was a little more than a majority of the stock. Mr. Chesebrough and the other minority stockholders continued to carry on the business in the old name until the present day. Vaseline, of course, is a product of petroleum. With regard to the Galena Signal Oil Company, which manufactures railway lubricating and signal oils, it is stated by the United States Commissioner of Corporations in his Report (Part II. p. x.) that American Railway officials are compelled to purchase the Galena products at higher prices than their competitors ask, because of the influence of the Standard Oil interests as large consignors, or their power in financial circles, exerted on the railway boards. The Vacuum Oil Company, which also appears in this list, became a Standard corporation as long ago as 1879, and it was the company concerned in the sensational prosecution of several Standard Oil men at Buffalo for the alleged conspiracy to blow up a rival refinery. Its speciality is the compounding of lubricating oils.

The list of companies next includes three crude oil-producing companies and thirteen pipe line companies. Next comes the Union Tank Line Company, of New Jersey, capital $3,500,000, which owns and operates railway tank cars. Sixteen natural gas companies follow, and then six American Marketing companies, of which the Waters-Pierce Oil Company, of Missouri, has had, perhaps, the most remarkable modern history. Next we come to the following foreign marketing companies, the first two of which are duly recorded in the files at Somerset House:--

Capital.
Anglo-American Oil Company (London) £1,000,000
Vacuum Oil Company, Ltd. (London) £55,000
American Petroleum Company (Holland) Fl.7,850,000
Amerikanische Petroleum Company (Germany) M.200,000
Deutsche-Amerikanische Company (Germany) M.30,000,000
Danish Petroleum Company Not stated
Konigsberger-Handels Company (Germany) M.2,300,000
Mannheim-Bremen Company (Germany) M.3,000,000
Korff Refinery Company (Bremen) M.1,500,000
Stettin-Amerikanische Company (Germany) Not stated
Roumanian-American Petroleum Company Lei.12,500,000
Société ci-devant H. Reith et Cie. (Belgium) Fr.1,650,000
Italian American Petroleum Company Not stated
Vacuum Oil Company (Austria) Kr.10,000,000
International Oil Company (Japan) Yen.12,000,000
Imperial Oil Company (Canada) Not stated
Colonial Oil Company (Africa and Australasia) $250,000

But even this long list does not complete the companies in this combination. It does not include many businesses which have been bought by the Standard and are now run as parts of one or other of the companies given. For example, the Devoe Manufacturing Company, which manufactures all the tin cases in which oil and petrol are shipped, is now absorbed in the Standard Oil Company of New York. Then there is the Oswego Manufacturing Company, manufacturers of wood packing-cases and barrels; the American Wick Manufacturing Company, which made lamp wicks; and Thompson, Bedford & Co., who had a large European trade in lubricating oils before their absorption. In addition, there should be added a number of Vacuum Oil companies which have been established abroad, in Copenhagen, Genoa, Paris, Hamburg, Moscow, Stockholm, Bombay, Kobe, and Cape Town.

THE SECRET REBATE

“Mr. Rockefeller is the victim of a money-passion which blinds him to
every other consideration in life, which is stronger than his sense
of justice, his humanity, his affections, his joy in life, which is
the one tyrannous insatiable force of his being.”

IDA M. TARBELL _in_ “_McClure’s Magazine_.”