Chapter XXI: Section 1: Be it enacted by the Senate and House of Representatives (5)

The succeeding efforts to pass a Free Pipe Law, either general in
its nature or to permit construction of pipe-lines to lines of
railway within the state, or to include Allegheny County in the law
of 1872, have been defeated invariably by the opposition of the
Pennsylvania Railroad, and the law of 1874, known as the Wallace
Act, was so framed and enacted as to leave it doubtful whether it
had not succeeded in withdrawing from the eight counties referred to
all the rights conceded to them by the Act of 1872, a wrong which no
subsequent Legislature has been able to redress.

Under the law of 1872, pipe-lines owned by citizens in the Oil
Region had been organised and were in operation, giving free access
to the railways, but after the passage of the Wallace Act (April 29,
1874), the Standard Combination, which had never really abandoned
the South Improvement scheme, systematically undertook their
destruction by forcing them into insolvency and then absorbing them.
This required railway co-operation, and various means were employed
therein, notably among which is the scheme adopted by the ring and
promulgated by the railroads October 1, 1874. An explanation is
necessary to understand why the railroads should unite: _First_, to
carry oil received by them through pipe-lines that had combined to
maintain a given rate for pipage twenty-two cents per barrel cheaper
than on oil received from pipe-lines not so combining, and _Second_,
to further weaken the refineries remaining in Western Pennsylvania
by depriving them of their geographical advantage of proximity to
the crude product, to the coal used as fuel, and to the exporting
ports by _free transportation_ of crude petroleum to the ring
refineries in other states. Various pipe-lines had already been
forced out of existence, had been bought up and united under the
name of “The United Pipe Lines,” which was owned, one-third by the
Standard Oil Company, one-third by the Lake Shore and New York
Central Railroads, and one-third by individuals who were members of
and directors in the Standard Oil Company. The Pennsylvania Railroad
had as its particular feeder a similar organisation, known as the
“Empire Pipe Line.” This explains the _first_ point referred to
above. The _second_, so far as the Pennsylvania Railroad is
concerned, is inexplicable upon any ordinary hypothesis or under any
known theory in railroad politics. The scheme was a success,
pipe-lines one after another succumbed, and refiner after refiner
was bankrupted and his works absorbed.

This effected, the monopoly, backed by the New York railroads, in
one of which it exercised unlimited power, felt strong enough to
demand of the railroads that it should be given the future sole
conduct of the trade under the old South Improvement plan. Upon this
the Pennsylvania Railroad apparently awoke to its danger, resisted
the demand, and in July, 1877, President Scott announced as the
policy of the Pennsylvania Railroad open and free trade to all
shippers of petroleum. It was then conducting its oil traffic
through its ally, the Empire Transportation Company, which possessed
a system of pipe-lines (before referred to) extending over the Oil
Region, controlling a large portion of the production, with ample
tankage, with a large rolling stock upon the Pennsylvania Railroad,
and owning or controlling a refining capacity nearly equal to
one-half the consumption of the world. In the following month
(August, 1877), immediately after the riots at Pittsburg, which were
in their extent the natural outgrowth of railroad freight
discrimination against that city, the monopolists succeeded in
convincing the officials of the Pennsylvania Railroad that it was to
their or its interests to force the Empire Company, its cars, its
pipe-lines, its tankage and its refineries into their hands. The
people of Western Pennsylvania protested in a communication to the
president and directors of the Pennsylvania Railroad in September,
before the extent of the proposed iniquity had become fully known to
the public, which communication seems never to have reached the
board of directors. The outrage was finally consummated October 17,
1877, and the Pennsylvania Railroad was left without the control of
a foot of pipe-line together, a tank to receive, or a still to
refine a barrel of petroleum and without the ability to secure the
transportation of one except at the will of men who live and whose
interests lie in Ohio and New York.

Into those hands had now passed the last refineries of Pennsylvania,
the last means of transportation from the wells to the railroads,
and the last means of carriage to the markets of this country and of
the world. The South Improvement scheme (less its chartered
organisation as in 1872) was at last an accomplished fact, and in
the successful designing, prosecution, consummation and operation of
which it is impossible not to believe that railroad officials were
personally interested.

CONGRESSIONAL LEGISLATION

As the conspiracy was evidently gaining strength, the people of
Pennsylvania united in an effort to induce Congress to again
interfere as in 1872, and in 1876 it directed an investigation,
which was conducted in a dilatory manner by a committee, a prominent
member of the Standard Oil Company, and not a member of Congress,
presiding behind the seat of the chairman. Vice-President Cassatt,
of the Pennsylvania Railroad, was the only prominent railway
official who appeared in obedience to the subpœnas of the Speaker of
the House of Representatives, and he refused to give the committee
any information as to the matter under investigation, and the
counsel of the Pennsylvania Railroad, ex-Senator Scott, appeared
before the committee in justification of his so doing. The financial
officer of the Standard Oil Company appeared before the committee,
accompanied by a member of Congress—also a member of that Company,
and promptly refused to give the committee any information as to the
organisation, or the names of its members, or its relations with the
railroads. The influence and power of the combination was apparent;
the committee never reported, never complained of the contempt of
its witnesses, and all the evidence and record of its proceedings
effectively disappeared. In 1877–78, a bill was introduced by
Representative Watson, of Western Pennsylvania, seeking to prevent
discrimination in interstate commerce, which has been reported by a
committee, but which can hardly overcome the covert opposition which
it meets.

RECENT STATE LEGISLATION

All efforts to obtain a Free Pipe Law in this state having through a
series of years proved unavailing, although New York, in its efforts
to control the trade in Pennsylvania petroleum, had enacted such a
law, a bill was prepared enforcing in this state the Third and
Seventh Sections of the Seventeenth Article of its Constitution.
This bill, known as

THE ANTI-DISCRIMINATION ACT,

provided that shippers of property by car-load from any point on a
railroad within the state to any other point within the state,
should be charged equal rates and given equal facilities. Copies of
the proposed law were sent to the prominent railroad officials in
the state, but its provisions were so fair and protective to every
citizen of the state, and to every legitimate railroad interest,
that neither before the Judiciary Committee of the Senate, which
reported it favourably by an unanimous vote, nor in the Senate,
which passed it with but one dissenting voice, nor before the
Judiciary Committee of the House, which reported it unanimously, did
any railroad stockholder, official, or legislative agent appear to
offer an objection to its becoming a law. Yet it was killed in the
House by the familiar means employed by legislative agents in
disposing of measures objectionable, but not debatable. Had the bill
become a law, it would have rebuilt the refineries of the state,
with Philadelphia (whose petroleum trade under the monopoly has
gradually dwindled to a fraction of its former magnitude) as the
exporting point, with the Pennsylvania Railroad as the transporter
thereto, and the people of Western Pennsylvania might have arisen
from a community of miners, working for the benefit, and under the
rule, of a foreign corporation, to their former conditions as
citizens of a prosperous mining and manufacturing section of the
state.

RESULTS AND EFFECT OF THE SUCCESS OF THE CONSPIRACY

Upon or with the New York railroads no appeal or representation of
the people of this section would have any weight or influence. Their
managers reside in Cleveland and New York, and are subject to the
daily manipulations of the monopoly managers, while in our own
state, to all efforts for emancipation or toward the restoration of
trade to its natural channels the Pennsylvania Railroad and its
power is as a Chinese wall. Its president and vice-president admit
the preferences in rates given to the monopoly, and boldly announce
their intent to continue in so doing; they claim the legal right to
so do, and challenge resistance; they obstruct all efforts of
producers, shippers and refiners by delaying or restricting
facilities; by threatening other railroads with severance of
connections and deprivation of general traffic if they transport
petroleum for parties outside the monopoly; they refer applicants
for rates and facilities over the Pennsylvania Railroad to the
Standard Oil Company, and offering their personal service as
negotiators for such rates and facilities, assure all that there is
no hope of success in the trade unless by a coalition with the
Standard.

We have thus far given not more than an outlined sketch of this
enormous monopoly, its plan, its growth, and its results. We have
not burdened your Excellency with details of individual oppression
and outrage, but we should fail to discharge our duties to ourselves
and as citizens if we neglect to recite some of the means by which
the most deplorable results are produced to our state and section.
Wrong is constantly perpetuated and right driven from us. True it is
that in many things the monopoly has been unwittingly aided in its
schemes by unwary concessions as to the management of its business,
by producers of petroleum themselves, but they had a right, as men
pursuing an honest calling, to believe that they were dealing with
honest men, and not with a gang of public plunderers, leagued
together by no better tie than the sordid desire of gain, to be
acquired by methods of corruption and lawlessness.

By the theory of the law, corporations derive their powers from the
people of the Commonwealth in General Assembly convened; they have
no powers not delegated to them by the people; they take nothing by
implication; they are public servants, invested for the public
benefit with extraordinary privileges, and their charters may be
taken from them when they cease to properly perform the duties of
their creation. The railroad and pipe-line companies are common
carriers of freight for all persons, are bound to receive it when
offered at convenient and usual places, and to transport it for all,
for reasonable compensation, without unreasonable discrimination in
favour of any. These are but simple statements of well established
legal principles, never doubted in any court, but affirmed by every
tribunal that has ever considered them. Yet the people who granted
these special privileges are now upon the defensive, their rights
denied by these corporations, and they are challenged to enter the
courts to establish them, while in the meantime they are inoperative
to the irreparable injury of their business. They have yielded to
the railways that they have created a part of their sovereignty, and
given them the right to take private property for public use, but
restricting such taking, strictly to such use. Yet where the narrow
strip of land used as a railway roadbed runs through valuable oil
lands, this combination is strong enough to demand from the railways
its transfer to them, that they may and do thereon sink their own
oil wells, and thereby drain the oil from the adjoining lands whose
owners gave the strip for public use by a railroad.

The owners of lands along the line of the Allegheny Valley Railroad,
producing petroleum from those lands, with their own pipe-line
running to their own shipping racks by the side tracks of that
railroad, are unable to obtain cars in which to load their product
for transportation, at any rate of freight, while their tanks
overflow. Shippers of petroleum are refused cars, or are promised
them, only to find the promises broken, and their contracts rendered
impossible of fulfillment, while the monopoly demands and is given
all the cars belonging to the railroads, it permitting its own
private cars to meantime stand idle, so that the railroads may
assert its inability to accommodate all.

Owners of tanks connected with the monopoly pipe-lines, with ample
storage therein for their own product, are refused transportation
from their own wells upon the ground that “their tanks are full,” a
barefaced and daily demonstrated falsehood. Other producers of
petroleum are refused transportation by the pipe-lines, on the plea
of want of capacity to carry, and at the same time are informed that
their oil will be carried if they will sell it to the ring,
“immediate shipment.”

If the applicant’s tanks are overflowing, or if he needs money and
complies with their terms, he is offered a price from two and a half
to twenty-five cents below the market value. If he accepts and sells
a fixed amount of his oil, the pipe-line removes all but five or ten
barrels, delays for days and weeks to take the remainder, and
refuses to pay for any until all is taken. This is known as the
“immediate shipment swindle.”

By their use of the petroleum of others stored in their tanks and
lines; by the overissue of Pipe Line Certificates; by refusal to
perform their public duties; by open defiance of the law and
impudent evasions of its provisions, the pipe-line and railroad
companies leave to the people, whose creatures they are, but two
remedies—an appeal for protection, first to the law of the land,
next to the higher law of nature!

These corporations have made themselves the interested tools of a
monopoly that has become the buyer, the carrier, the manufacturer,
and the seller of this product of immense value. It needs no
argument or illustration to convince that in such a position this
foreign corporation is in direct antagonism to the producer, the
labourer and the consumer.

The South Improvement conspiracy embraced in its scheme the
ownership of the oil-producing territory, wells and machinery. If
the present course of its successor cannot be stayed, it is merely a
question of time when the ownership of the entire oil production
will fall into its hands through the impoverishment of thousands of
our citizens and their inability to contend longer.

That monopolies are dangerous to free institutions is a political
maxim so old as to have lost its force by irrelevant repetition, but
if anything were needed to awaken the public sense to its truth, the
immediate effect of this giant combination is before us. Throughout
the Oil Region, as wherever it does business, it now has its own
acid works, glue factories, hardware stores and barrel works. We
have seen that it is master of the railroads, and owns and controls
all the refineries, all the pipe-lines. All these enumerated
industries controlled by them employ large numbers of labourers
dependent for the support of themselves and their families upon the
daily labour given or withheld by this powerful conspirator. At the
flash of the telegraphic message from Cleveland, Ohio, hundreds of
men have been thrown out of employment on a few hours’ notice and
kept for weeks in a state of semi-starvation and justifiable
discontent, deceived meanwhile with delusive promises of work, until
the autocrat of a foreign corporation, maintained and upheld by the
chief among Pennsylvania corporations, gives leave from within the
borders of a foreign state for the Pennsylvania labourer to earn his
bread.

Along the valley of Oil Creek and the Allegheny Valley, where a few
years since the smoke of busy refineries and their attendant
industries darkened the air, piles of rusted iron and heaps of
demolished brick work mark the results of the conspiracy; where a
few years since busy men crowded to and fro in the pursuit of lawful
trade in a great staple, there is now silence and emptiness. The
producer, once surrounded with competitive buyers of his product,
now goes with crowds of his fellow victims to wait his turn for
leave to sell it at a dictated price to a single agent of a single
purchaser.

To permit to stand unattacked the foul principles of such an
organisation, to permit them to be fastened as lawful or right upon
the policy of the Commonwealth or the nation, is to lay the
foundation for the exile of capital, endless injury to the public
interests, endless oppression of the labourer, riots, tumults, and
the decay of the state.

So far as this public wrong is within the scope of Executive
interference, we ask that immediate steps be taken to enforce by
legislative enactment the wise provisions of our State Constitution,
and by such legal processes as are necessary, compel obedience to
law and the performance by chartered companies of their public
duties.

B. B. CAMPBELL, of Pittsburg,
E. W. CODINGTON, of Bradford, McKean County,
LEWIS EMERY, JR., of Bradford, McKean County,
GEORGE H. GRAHAM, of Petrolia, Butler County,
J. A. VERA, of St. Petersburg, Clarion County,
H. O. ROBBINS, of Turkey City, Clarion County,
L. H. SMITH, Petrolia,
R. B. BROWN, Clarion,
D. S. CRISWELL, Oil City,
A. J. SALISBURY, Karns City,
A. N. PERRIN, Titusville, Crawford County,
W. B. BENEDICT, Enterprise, Warren County,
H. W. BUMPUS, Monroe, Clarion County,
SAMUEL Q. BROWN, Pleasantville, Venango County.

NUMBER 33 (See page 1233)
STATEMENT OF CRUDE OIL SHIPMENTS BY GREEN LINE DURING THE MONTHS OF
FEBRUARY AND MARCH, 1878, TO NEW YORK, PHILADELPHIA, AND BALTIMORE;
SHOWING DRAWBACKS ALLOWED TO AMERICAN TRANSFER COMPANY

[Commonwealth of Pennsylvania vs. Pennsylvania Railroad Company,
United Pipe Lines, etc. Testimony. Appendix, page 737.]

SHIPPER. CONSIGNEE. DESTINATION. TOTAL.
NO. OF BARRELS. BARRELS.
Feb. March.

H. C. Ohlen H. H. Ohlen Com’paw 18,320 11,556 29,876 W. H. Nicholson 〃 〃 16,983 31,169½ 48,152½ E. N. Hallock 〃 〃 1,160½ 1,160½ S. Craig 〃 〃 2,384½ 2,384½ H. L. Taylor & 〃 〃 Co. 1,439½ 1,439½ Ayres, Lombard 〃 〃 & Co. 2,688½ 2,688½ J. Rousseaux J. Rousseaux 〃 6,377½ 6,932½ 13,310 W. L. Fox 〃 〃 3,150½ 3,150½ W. H. Nicholson Ayres, Lombard 〃 & Co. 979½ 979½ J. A. Bostwick J. A. Bostwick 〃 & Co. & Co. 43,074 45,915½ 88,989½ D. Grimm Jno. Ellis & 〃 Co. 722½ 1,185½ 1,908 ———————— ———————— ———————— 87,617 106,422 194,039

J. Bushnell Warden, Frew & Phila. Co. 1,725½ 22,105½ 23,831 J. A. Bostwick 〃 〃 & Co. 12,994 12,994 J. Bushnell care Atlantic 〃 Ref. Co. 10,137 31,917 42,054 J. Bushnell W. L. Elkins & 〃 Co. 14,684 7,793 22,477 G. M. Robinson 〃 〃 761½ 1,382 2,143½ E. N. Hallock Greenwich 〃 Refining Co. 3,413½ 3,414½ Mary R. Fox 〃 〃 1,308 1,308 S. Craig 〃 〃 1,241½ 1,241½ Fox & Fink 〃 〃 2,541 2,541 Fox Estate 〃 〃 501 501 M. Lloyd M. Lloyd 〃 3,803 2,690 6,493 S. Craig 〃 〃 2,426 2,426 W. L. Fox 〃 〃 1,960½ 1,960½ G. M. Robinson F. Farnsworth 〃 362½ 80 442½ W. G. Laird, W. G. Laird, 〃 agent agent 302 302 Paine, Abbott & Paine, Abbott & 〃 Co. Co. 403 403 J. S. Davis J. S. Davis 〃 501 501 A. & G. W. R. R A. & B. Cooley 〃 & Co. 25 25 ———————— ———————— ———————— 51,135½ 73,922 125,057½

J. Bushnell Balto. United Balto.
Oil Co. 7,435 16,692½ 24,127½
G. M. Robinson 〃 〃 261½ 261½
E. J. Waring & E. J. Waring & 〃
Co. Co., care of
S. E.
Poultney 282 282
———————— ———————— ————————
7,717 16,954 24,671
======== ======== ========
Grand Total 146,469½ 197,298 343,767½

Total, 343,767½ barrels at 20 cents per barrel, $68,753.50.

This amount, $68,753.50 to be paid to American Transfer Company, per Daniel O’Day, general manager.

Audited May 29, 1878.
G. H. D.

Approved,
A. J. CASSATT,
_Third Vice-President_.

NUMBER 34 (See page 1239)
BILL OF PARTICULARS OF EVIDENCE TO BE OFFERED BY THE COMMONWEALTH

[In the case of Commonwealth of Pennsylvania _vs._ John D.
Rockefeller, William Rockefeller, Jabez A. Bostwick, Daniel O’Day,
William G. Warden, Charles Lockhart, Henry M. Flagler, Jacob J.
Vandergrift, Charles Pratt and George W. Girty, in the Court of
Quarter Sessions of the Peace for the County of Clarion,
Pennsylvania, 1879.]

FIRST COUNT. _First._—That each one of the defendants is associated
with each and all others, in business, by means of stock, issued to
each, of several corporations, to-wit: The Standard Oil Company of
Cleveland, Ohio. The Standard Oil Company of Pittsburg,
Pennsylvania. The Acme Oil Company of Titusville, Pennsylvania. The
Imperial Refining Company of Oil City, Pennsylvania. The Camden
Consolidated Oil Company of West Virginia. The Devoe Manufacturing
Company of New York.

_Second._—That Charles Pratt is associated in business with others,
under the name of Charles Pratt and Company; that William G. Warden
and Charles Lockhart are associated in business with others under
the firm name of Lockhart and Frew, and Warden, Frew and Company;
that J. A. Bostwick is associated with others in business under the
name of J. A. Bostwick and Company.

_Third._—That the several defendants and others now unknown are
associated together by means of the corporate and co-partnership
organisations stated in paragraphs one and two for the purpose of
carrying on the business of refining crude petroleum and selling the
refined product. That each of the said defendants is interested in
each of the several corporations and firms in refining and selling
refined petroleum, and, in refining and selling, the said
defendants, each and all, act in concert and harmony with each
other, and as against all other persons not associated with them,
and share in the profits of the business.

_Fourth._—That the said several defendants, and all of them, and the
said several firms and corporations of which they and each of them
are members, by stock ownership or otherwise, are engaged in the
business of buying crude petroleum, in the county of Clarion, in the
state of Pennsylvania, and also in the counties of Armstrong,
Butler, Crawford, Forest, McKean, Venango, and Warren, in the state
of Pennsylvania, also in the counties of Allegheny and Philadelphia
in said state, and in the counties of Cattaraugus and New York, in
the state of New York, also in the city of Cleveland in the state of
Ohio, and in counties in the state of West Virginia.

_Fifth._—That in the said several states and counties, and in divers
localities in said several states and counties, to-wit: at
Pittsburg, Philadelphia, Butler, Carbon Centre, Millerstown,
Petrolia, Parker’s Landing, Foxburg, Turkey City, Edenburg,
Shippensville, Pickwick, Elk City, Monterey, Emlenton, Bullion,
Scrubgrass, Forster’s Station, Oil City, Franklin, Reno, Rouseville,
Titusville, Warren, Tidioute, Hickory, Bradford, Degolia, Derrick
City, Gilmore, Forster Brook, and Tarport, in the State of
Pennsylvania; Knap Creek, Rock City, Four Mile, Two Mile, Olean,
Carrollton, Salamanca, and in the city of New York, in the state of
New York, the said defendants, and the several firms and
corporations with which they are associated and in which they were
interested, carried on the business of buying crude petroleum from
producers and owners thereof, and the business of refining said
crude petroleum, and selling the refined product, and in so doing
acted in concert.

_Sixth._—That the said business thereinbefore referred to was so
carried on at the several counties, cities, localities, and in the
several states aforesaid, by the said defendants in concert, in
person, and through agents acting under the instructions of the said
defendants, and pursuant to their directions.

_Seventh._—That the said defendants were engaged, and are engaged,
in the business of transporting crude petroleum through iron pipes,
in the counties of Allegheny, Armstrong, Butler, Clarion, Crawford,
Forest, McKean, Warren, and Venango, in the state of Pennsylvania;
and the county of Cattaraugus, in the state of New York. That they
are so engaged by being associated together in the ownership of
several pipe-lines, such association being accomplished by the said
defendants being owners of shares of stock in incorporated
companies, to-wit: the United Pipe Line and American Transfer
Company, and interest in capital in limited partnerships, to-wit:
the Tidioute and Titusville Pipe Companies, Limited, and others,
which said companies, the said defendants, at the time of the
conspiracy and combination charged in the indictment, controlled,
and thereby controlled the transportation of crude petroleum from
wells and points of storage in said several counties and at the said
several localities.

_Eighth._—That the said defendants, and each of them, and the said
several corporations, firms, and limited partnerships, were and are
engaged by means of the ownership and control of said several firms,
limited partnerships, and corporations, and by means of ownership of
stock and interests therein, were and are engaged in the business of
storing crude petroleum in the said several localities, cities,
counties and states, by means of storage tanks, and said business
was carried on in said counties, each and all of them, by
themselves, personally, and also through agents acting by their
directions.

_Ninth._—That each one of the said defendants and all of them in
concert were engaged in the several kinds of business hereinbefore
referred to, by themselves and their agents in the county of
Clarion, and in the other places mentioned hereinbefore, during the
whole period of two years prior to the day upon which the indictment
was found against them in this case, and during that time by
themselves and their agents acting under their directions in the
said county of Clarion, combined, confederated and conspired
together to cheat and defraud numerous citizens of the county of
Clarion, to-wit: J. A. Vera, William L. Fox, and M. L. Lockwood, and
divers others, and to cheat and defraud the public by securing to
themselves a monopoly of the business and occupation of buying and
selling crude petroleum in the county of Clarion, and to prevent all
other persons engaged in said business, from making, receiving and
obtaining the fair value, profit, price and return from such
business, by fraudulent devices, practices and secret contrivances,
and among others the following:

_A._—Falsely pretending during the times aforesaid and at all times
that the storage tanks owned and controlled by them, and of which
they had the possession, measurement and accounts, were full of
crude petroleum to the extent of the capacity of said tanks, and
that the said defendants could not receive and store crude petroleum
from and for citizens of Clarion County and the other counties and
localities named, when in truth such representations and statements
were false, and thereby divers citizens lost oil and were compelled
to sell petroleum at less than the value thereof.

_B._—By representing to divers citizens of the county of Clarion
engaged in the business of producing, buying and selling petroleum,
and to divers other persons engaged in said business in the other
counties and localities named, that the said defendants were enabled
to receive and transport for said well owners, citizens and
producers of such petroleum, by reason of lack of capacity and
transportation facilities, when in fact said representations were
false, and thereby divers producers dealers and well owners were
compelled to sell petroleum at less than the value thereof.

_C._—That said defendants by themselves and their agents within the
county of Clarion, in the state of Pennsylvania, and at the other
counties, cities and localities, hereinbefore named, had the control
of the entire transportation of crude petroleum from the producing
wells and districts, and the control of storing of crude petroleum
produced, that they and the several firms and corporations of which
they were members, and their agents and the agents of said firms and
corporations acting under the direction of the said defendants
corruptly and oppressively used the power and control they so as
aforesaid held, to compel producers and owners of petroleum to sell
the same to them, the said defendants, their agents and the several
firms and corporations aforesaid and their agents, and to sell the
said crude petroleum at less than its value, and less than the
market price thereof.

_D._—That the said defendants and each of them, through the several
firms and corporations of which they were members, and by their
agents acting under their directions and the agents of the said
firms and corporations, corruptly and oppressively used the power so
acquired by them to enable them to become the sole buyers and
refiners of crude petroleum.

_E._—That among the means used to obtain control of the business of
transporting crude petroleum were the following:

_First._—The said defendants and the several firms and corporations
of which they were members laid iron pipes in the county of Clarion,
and the other counties and states named, under charters and
pretended charters from the state of Pennsylvania, pretending that
they so did for the purpose of transporting for the public petroleum
from the oil wells and producing districts, to the railroads, for
shipment to the seaboard, when in fact the said pipe-lines were not
laid for that purpose, but for the purpose of transporting oil for
the said defendants, and the said several firms and corporations of
which they were the members, and not for the public, and to enable
the said defendants and the said firms and corporations to dictate
the rate of freight to be charged to them by the railroad companies
engaged in the business of carrying petroleum as common carriers,
and to force the said railroad companies to charge a greater and
unreasonably high rate of freight to all others, and that this was
for the purpose of preventing citizens of Clarion County and the
public from engaging in the business of buying, selling and shipping
crude petroleum.

_Second._—The said defendants, and their agents acting under their
directions, and the several firms and corporations of which they
were members also so acting, pretended and represented to the
several railroad companies engaged in the transportation of
petroleum, and to the agents and officers of said companies, that
they, the said defendants and the several firms and corporations of
which they were members, and in which they were interested,
controlled the shipments of said crude and refined petroleum, by
deliveries thereof to the said railroad companies, and that the said
defendants were enabled to withhold, and drive said traffic and
business from them.

Said representations were false, but by means thereof, they, the
said defendants, procured and obtained from said several railroad
companies enormous and unjust rebates, commissions and deductions
from the rates of freight charged to citizens of Clarion County and
the public. The Citizens of Clarion County and the public were
thereby prevented from engaging in the business of producing and
shipping crude petroleum.

_Third._—That on or about the thirtieth day of August, 1877, and
again on or about the seventeenth day of October, 1877, the said
defendants met together in the city of Philadelphia and then and
there agreed together that they would represent to the officers of
the Pennsylvania Railroad Company that they, the said defendants,
and the several firms and corporations of which they were members,
could and would control and guarantee to the said railroad company a
certain proportion of the carrying traffic of crude petroleum over
said railroad.

And on or about the same dates the said defendants further agreed
together and did represent to the officers of the New York, Lake
Erie and Western Railroad Company, and to the officers of the Erie
Railroad Company, and to Mr. Jewett, receiver of the Erie Railroad
Company, and to the officers of the New York Central and Hudson
River Railroad Company, and to the officers of the Atlantic and
Great Western Railroad Company, and to V. H. Devereux, receiver
thereof, and to the officers of the Michigan Southern and Lake Shore
Railroad Company, and to the officers of the Baltimore and Ohio
Railroad Company, that they the said defendants and the several
firms and corporations of which they were members, could and would
control and guarantee to each of them a certain proportion of the
carrying traffic of the crude petroleum over said railroads
respectively. But by reason thereof the said Pennsylvania Railroad
Company and the Empire Transportation Company were induced to, and
did sell, transfer, mortgage and dispose of, to said defendants and
to the several corporations and firms of which they were members,
all of the pipe-lines, crude oil cars and transportation equipment
of which they had control or ownership in the Oil Regions of
Pennsylvania, including the county of Clarion, and all the
refineries, for refining crude petroleum, of which they had
ownership or control.

_Fourth._—The objects and purposes of said representations and said
transfer were to enable the said defendants to control the business
of buying and selling crude and refined petroleum, and the
transportation and storage thereof.

_Fifth._—That, as stated in the foregoing paragraphs, during the
greater part of the year of 1877, and for some time previously, the
Pennsylvania Railroad Company owned or controlled through its
shipping agents, the Empire Line, a full and complete system of
pipe-lines throughout the counties of Clarion, Armstrong and Butler,
known as the Empire Line, numerous and well appointed tank oil cars,
the shortest and best route to the seaboard over its own lines and
the Allegheny Valley Railroad, and other connecting lines, also
controlled large and complete refineries, situated in Pittsburg,
Philadelphia and New York, and was by these means a competitor with
the defendants and the several corporations owned by them, in the
business of piping, transporting, buying and refining crude oil,
enabling producers, citizens of Clarion County and elsewhere,
without difficulty, to have their oil piped and transported, and to
sell the same at enhanced prices, owing to competition. That the
defendants, combining and conspiring to monopolise the entire and
sole business of buying, selling and refining oil in Clarion County
and elsewhere, did demand of the Empire Line and the Pennsylvania
Railroad Company that they and each of them should abandon and
desist from the said business of buying, selling and refining oil,
and that the said railroad company and Empire Line should grant to
them exclusively large rebates and low or cheap rates of
transportation of oil, and by means of withdrawing and procuring
others to withdraw the transportation of crude and refined oil over
and along said Pennsylvania Railroad, and by means of the procuring
from other railroads exclusive rebates and low rates of freight for
transportation below a fair and just compensation for such
transportation did compel the said Pennsylvania Railroad Company and
the Empire Line to sell to said defendants, or to some of the
corporations controlled and owned by them, said pipe-line, tank cars
and refineries, to the injury of the producers of oil of Clarion
County and elsewhere, by depriving them of the benefit of
competition in buying, piping, storing or refining this crude oil.

_Sixth._—That the defendants and others combined and confederated
with them did conspire to monopolise the entire and exclusive
business of refining crude petroleum in Clarion County and elsewhere
by means of throwing quantities of refined oil on the market and
selling the same at less price than the fair market value of the
same in the vicinity of independent refiners in Clarion County and
elsewhere, and by means of such sales did compel such refineries to
sell out to companies with which defendants were connected, or to
abandon or quit the business of refining.

_Seventh._—That the said defendants did with others conspire
together to purchase all the pipe-lines for the transportation of
oil within the producing oil region and all the refineries for the
refining of oil, for the purpose of controlling the price of oil and
compelling the oil producers of Clarion County and elsewhere to sell
their oil to the said defendants at ruinous low rates far below the
value thereof and the price that could have been obtained for the
same in a competitive market.

_Eighth._—Although the said representations were false, the said
defendants and the several firms and corporations of which they were
members procured the control of the business of producing, buying
and selling crude petroleum, and of about ninety per cent. thereof
by following acts done in furtherance of the agreements aforesaid:

_A._—To buy only petroleum for immediate shipment from the wells of
producers. And when so bought they refused to remove it. It was so
bought at less than its value and market price, and the producers of
petroleum were compelled to sell the same by reason of the false
representations as to capacity, storage and transportation
hereinbefore fully set forth.

_B._—By giving themselves and procuring for themselves exorbitant
and unreasonable rebates, commissions and allowances from the
railroads and pipe-lines owned and controlled by them, which
rebates, commissions and allowance could not be procured by any
other than the said defendants and the several firms and
corporations of which they were members.

_C._—By impeding transportation by railroads, procuring them to
refuse and delay cars for shipment of petroleum, procuring the
breaking connections with connecting railroad lines, refusing and
procuring the refusal of railroad companies and pipe-lines to
receive and transport petroleum, by refusals and procuring refusals
to store petroleum, by refusing and procuring the refusal of
railroad companies to furnish side tracks, cars and transportation
facilities to pipe-line companies other than those of the defendants
and to individuals, by selling refined petroleum at less than the
cost of manufacture, by carrying and storing oil at less than the
cost of transportation and storage, by thereby forcing competing
lines to sell to them at a loss, by issuing certificates or accepted
orders of pipe-line companies in violation of law not representing
the petroleum in the custody of said corporations of the said
defendants, and placing such certificates upon the market, thereby
causing an apparent increase in the quantity of oil in the market
for sale and depressing the price of crude petroleum by making false
and fictitious reports of stock of petroleum in the custody of the
United Pipe Lines, a corporation of which the defendants are the
owners and which they control, by violating the laws relative to
making reports of business of the said pipe-line company; by
neglecting and refusing to make the required oath thereto, by
destroying refineries purchased by them at less than their value, of
those they had compelled to sell to them by the fraudulent acts
aforesaid, by hiring and paying salaries to men to remain out of
business for a term of years, and to act as spies for the said
defendants and the corporations and firms of which they are members;
by selling crude and refined petroleum at less than its cost to
them; by increasing the production by entering into agreements
relative to the price the said defendants and the corporations and
firms of which they were members; by threatening common carriers
with destruction of the business of carrying oil, if they carried
for others than themselves, and those associated with them, or
permitted other pipe-line companies to deliver petroleum to them, or
railroads to carry to them; by means of said threats to prevent the
building or operation of competing lines of pipe or railroad for
transportation of petroleum; by refusing to store petroleum in tanks
owned by individuals for them, and by filling such tanks with their
own oil, thereby causing a waste and loss both of petroleum and in
the price obtained; by refusals to the citizens of Clarion County
and elsewhere, at the several localities named, to transport or
store crude petroleum.

SECOND COUNT. All of the evidence hereinbefore offered in support of
the first count.

THIRD COUNT. All of the evidence hereinbefore stated to be offered
in support of the first and second counts, and, in addition thereto,
evidence of purchase of refineries under false representations; that
refiners were forced to sell by reasons of enormous rebates,
fraudulently obtained from railroad companies, as hereinbefore
stated, the business being thereby, and not otherwise, rendered
unprofitable to such refineries as could not obtain said rebates,
commissions and allowances, they being all in the said business,
except the said defendants, and the firms and corporations of which
they were members.

FOURTH COUNT. All the evidence hereinbefore stated to be offered in
support of the first, second and the third counts, and, in addition
thereto, that the said defendants and their agents diverted traffic
from the Allegheny Valley Railroad Company by threatening the said
company and those who were delivering petroleum to it for
transportation, with loss and injury to their business, and by
shipping themselves over other railroads, unless the said Allegheny
Valley Railroad Company would allow them exorbitant rebates,
commissions and allowances upon petroleum carried, that other
dealers and shippers could not obtain.

FIFTH COUNT. All the evidence hereinbefore stated to be offered in
support of the first, second, third and fourth counts, and, in
addition thereto, that the traffic was diverted from the
Pennsylvania Railroad Company, a common carrier, by the same means,
devices and threats as hereinbefore stated.

SIXTH, SEVENTH AND EIGHTH COUNTS. All the evidence hereinbefore
stated to be offered as the first, second, third, fourth and fifth
counts.

NUMBER 35 (See page 1253)
CONTRACT OF PETROLEUM PRODUCERS’ UNION WITH STANDARD COMBINATION

[From “A History of the Organisation, Purposes and Transactions of
the General Council of the Petroleum Producers’ Unions, and of the
Suits and Prosecutions instituted by it from 1878 to 1880,” pages
41–44.]

Articles of agreement made the 29th day of January, 1880, by and
between the Standard Oil Company, a corporation of the state of
Ohio; the Standard Oil Company of Pittsburg, a corporation of the
state of Pennsylvania; the Imperial Refining Company (limited) of
Oil City, Pennsylvania; the Acme Oil Company of New York and
Pennsylvania; the Atlantic Refining Company of Philadelphia; the
American Transfer Company; the United Pipe Lines, a corporation of
Pennsylvania; the Devoe Manufacturing Company of New York; the
Eclipse Lubricating Oil Company (limited) of Franklin, Pennsylvania;
J. D. Rockefeller, William Rockefeller, H. M. Flagler, William G.
Warden, Charles Lockhart, William Frew, Charles Pratt, Henry H.
Rogers, Jabez A. Bostwick, Jacob J. Vandergrift, O. H. Payne, John
D. Archbold, respectively, buyers, refiners and carriers of
petroleum, parties of the first part, each, however, contracting
severally for himself, themselves or itself, and not one for the
others, and Benjamin B. Campbell, for himself and as president of
the General Council of Petroleum Producers’ Union, and for the
members thereof as shall signify their assent hereto by signing this
agreement within sixty days from the date thereof, the parties of
the second part, each contracting severally and in the manner
aforesaid, Witnesseth,

_Whereas_, The several parties above named have been and are now
engaged in some one or all of the branches of business connected
with the petroleum trade, in buying, selling, shipping, storing,
refining, transporting and producing petroleum, and controversies
have arisen between the said parties of the first and second part
hereinbefore named, out of which have grown certain suits
hereinafter named, and it is desirable to amicably adjust said
controversies and settle said suits and proceedings, therefore, it
is hereby agreed between the said parties of the first and second
parts:

I. That the said parties of the first part shall and will make no
opposition to an entire abrogation of the system of rebates,
drawbacks and secret rates of freight in the transportation of
petroleum on the railroads.

II. That said parties of the first part further agree that the
railroad companies may make known to the other shippers of petroleum
on their several roads all the rates of freight, and that said
parties of the first part or any of them will not receive any rebate
or drawback that the railroad companies are not at liberty to give
to other shippers of petroleum.

III. The said parties of the first part further agree that so far as
the said pipe-lines are concerned there shall be no discrimination
used or permitted by the said pipe-line companies between or against
their patrons; that the rates of pipage and storage shall be
reasonable, uniform, and equal to all parties, and shall not be
advanced except on thirty days’ notice; that to the extent of their
influence the United Pipe Lines and the other companies parties
hereto do agree that there shall be no difference in the price of
crude oil between one district and another, excepting such as may be
based upon a difference in quality, to be determined by tests; that
the said pipe-lines will make every reasonable effort to receive,
transport, store and deliver all oil tendered them, and will
receive, transport, store and deliver all oil so tendered so long as
the production does not exceed an average of sixty-five thousand
barrels per day during fifteen (15) consecutive days, unforeseen
emergencies and unavoidable accidents excepted, and if the
production shall exceed the amount stated, and also the storage
capacity of the pipe-lines, the parties of the first part, buyers of
oil, agree that they will not purchase any so-called immediate
shipment oil, at a lower price than the price of certificate oil,
provided that the owners of immediate shipment oil in the Oil Region
do not sell to any other party or parties at a lower price.

IV. And all the parties of the first part further agree that until
the production of oil reaches the daily maximum of sixty-five
thousand barrels as aforesaid, certificates or other vouchers will
be given for all oil taken into the custody of the pipe-lines and
the transfer of such certificates or other vouchers in the usual
manner shall be considered as a delivery of the oil mentioned
therein as between the pipe-lines and the seller, subject to the
provisions of such certificate or other vouchers.

In consideration of the agreement hereinbefore set forth, and of the
execution thereof by the first parties, the said second parties do
hereby agree as follows:

That the Governor and Attorney-General of the Commonwealth of
Pennsylvania shall be requested by them within ten days of the
execution hereof, to enter a motion to dismiss the bill filed by the
Commonwealth of Pennsylvania against the United Pipe Lines and
others at Number 309, October and November term, 1878, in the
Supreme Court of Pennsylvania, and the proceedings by _quo warranto_
Number 12, November term, 1878, in Venango County, and will do all
that may be lawfully done to have the same dismissed of record. That
upon written motion and agreement the Supreme Court of Pennsylvania
may make of record by consent of both parties, an order discharging
the rules to show cause in the case of the Commonwealth _vs._
Rockefeller _et al._, granted by E. M. Paxson on the 11th day of
December, 1879, and made returnable January 5, 1880, and annulling
the order staying proceedings made by the Supreme Court on the 8th
day of January, 1880.

It is further agreed that this agreement shall, upon execution
thereof by the parties, be a full release and satisfaction between
the parties of all causes of action of any and every kind
whatsoever, arising out of the past transactions involved in the
said several suits, controversies, or prosecutions, or incident
thereto, so far as the parties hereto or any of them are in any
manner interested or have any cause or rights of action for or
against each other. And it is hereby further agreed that the Court
of Quarter Sessions of Clarion County be, and they are hereby
respectfully requested to give their consent to the entering of a
_nolle prosequi_ in the case of the Commonwealth of Pennsylvania
_vs._ John D. Rockefeller _et al._, of April sessions, 1879, Number
25, in which the defendants named in said case are charged with
conspiracy, and the district-attorney of said county is hereby
requested, on receiving the consent of the said court, to enter in
said case a _nolle prosequi_, and the same to be entered of record
in said court, with the intent that the same be a judgment of said
court disposing of and ending all proceedings under indictment
hereinbefore referred to, forever.

_In Witness Whereof_ the aforesaid parties to these presents have
hereunto set their hands and seals, the said corporations having
caused their seals to be affixed this fifth day of February, A.D.
1880.

Standard Oil Company, by
(Seal) JOHN D. ROCKEFELLER, _President_, [L.S.]
Attest: H. M. FLAGLER, [L.S.]
JOHN D. ROCKEFELLER, [L.S.]
O. H. PAYNE. [L.S.]

United Pipe Lines, by
(Seal) J. J. VANDERGRIFT, _President_, [L.S.]
Attest: H. M. HUGHES, _Secretary_, [L.S.]
HENRY M. FLAGLER, [L.S.]
J. J. VANDERGRIFT, [L.S.]
WILLIAM ROCKEFELLER. [L.S.]

Imperial Refining Company, Limited, by
(Seal) J. J. VANDERGRIFT, _Chairman_, [L.S.]
Attest: D. MCINTOSH, _Secretary_. [L.S.]

Eclipse Lubricating Oil Company, Limited, by
THOMAS BROWN, _Chairman_, [L.S.]
F. Q. BARSTOW, _Secretary_. [L.S.]

Standard Oil Company, by
(Seal) CHARLES LOCKHART, _President_, [L.S.]
A. F. BROOKS, _Secretary_, [L.S.]
W. G. WARDEN, [L.S.]
CHARLES LOCKHART. [L.S.]

The Atlantic Refining Company, by
CHARLES LOCKHART, _President_, [L.S.]
CHARLES PRATT, [L.S.]
HENRY H. ROGERS. [L.S.]

Acme Oil Company, by
JOHN D. ARCHBOLD, _President_, [L.S.]
Attest: GEORGE F. CHESTER, _Secretary_, [L.S.]
JOHN D. ARCHBOLD. [L.S.]

American Transfer Company, by
GEORGE H. VILAS, _President_, [L.S.]
Attest: GEORGE F. CHESTER, _Secretary_, [L.S.]
J. A. BOSTWICK, [L.S.]
B. B. CAMPBELL. [L.S.]
Witness, JOHN V. KEEF.
Witness as to signature of B. B. Campbell,
W. BAKEWELL.

NUMBER 36 (See page 1254)
AGREEMENT BETWEEN B. B. CAMPBELL AND THE PENNSYLVANIA RAILROAD COMPANY

[From “A History of the Organisation, Purposes and Transactions of
the General Council of the Petroleum Producers’ Unions, and of the
Suits and Prosecutions instituted by it from 1878 to 1880,” pages
45–46.]

This agreement, made on the twenty-seventh day of April, A.D. 1880,
between B. B. Campbell and the Pennsylvania Railroad Company.

_Whereas_, It having been alleged by persons engaged in the
production and shipping of petroleum and the products of petroleum,
that discrimination had been practised in the rates of freight and
in the distribution of cars by the Pennsylvania Railroad Company, in
such manner as to be injurious to the business of such producers,
and bills in equity having been filed in the name of the
Commonwealth in the Western District of the Supreme Court of the
state of Pennsylvania, for the purpose of restraining such
discrimination; and

_Whereas_, In pursuance of an agreement signed on the twelfth of
February, 1880, by the said B. B. Campbell, representing the oil
producers, at whose instance such bills were filed, and Thomas A.
Scott as president of the Pennsylvania Railroad Company, the said
bills were withdrawn; and

_Whereas_, In said agreement the Pennsylvania Railroad Company
agreed, upon the withdrawal of said bills, that it would enter into
written contracts with the said B. B. Campbell, representing said
producers, and all such producers as should within sixty days after
the date of said agreement signify their assent to said agreement by
signature to the same or duplicate thereof, which contracts should
stipulate as therein mentioned, and as hereinafter provided; and

_Whereas_, On the twenty-fifth of February, 1880, the board of
directors of the Pennsylvania Railroad Company approved the action
of the president in signing said agreement, and authorised the
president or one of the vice-presidents to execute such further and
formal agreements as might be deemed necessary to carry out the
terms of said agreement,

_Now therefore_, this agreement witnesseth, That in consideration of
the premises, and other good and valuable considerations to them
thereunto moving, it is covenanted and agreed between the parties
hereto as follows, to wit:

_First_, That the Pennsylvania Railroad Company shall and will make
known to all shippers of petroleum and its products all the rates of
freight intended to be charged to all shippers upon such petroleum
and its products.

_Second_, That the said Pennsylvania Railroad Company shall not and
will not pay or allow any shipper of petroleum or its products any
rebate, drawback or commission upon the shipments of such petroleum
or products different from or greater than that which shall be paid
to any other person shipping or offering to ship like quantity; and
that any discrimination that may be made in favour of shippers of
the large quantities shall be reasonable, and shall, upon demand
made, be communicated to all persons shipping, or who are now or may
be hereafter engaged in the business and desire to ship petroleum
and its products.

_Third_, That the said Pennsylvania Railroad Company further agrees
that upon its own road, and upon any other road or roads upon which
it shall furnish cars and engage in the business of a common carrier
of petroleum and its products, it will not practise any
discrimination in the distribution of its cars, but will make fair
apportionment in such distribution among all applicants for cars
having actually in their custody and ready for shipment at the time
of their application the petroleum or products for the shipment of
which they ask facilities.

_In Witness Whereof_, the individuals parties hereto have hereunto
set their hands and seals, and the said Pennsylvania Railroad
Company has caused its corporate seal to be hereunto affixed, duly
attested, the day and year first above written.

The Pennsylvania Railroad Company, by

THOMAS A. SCOTT,
_President_.

Attest JOHN C. SIMS,
_Assistant Secretary_.

B. B. CAMPBELL.

(Seal)

THE HISTORY OF

THE STANDARD OIL COMPANY

JOHN D. ROCKEFELLER

A sketch from life by George Varian, made in Cleveland, October, 1903
]

THE HISTORY OF
THE STANDARD OIL COMPANY

BY

IDA M. TARBELL

AUTHOR OF THE LIFE OF ABRAHAM LINCOLN, THE LIFE OF NAPOLEON BONAPARTE,
AND MADAME ROLAND: A BIOGRAPHICAL STUDY

ILLUSTRATED WITH PORTRAITS PICTURES AND DIAGRAMS

VOLUME TWO