Chapter XXXVIII: Appendix (2)

The said plaintiff, the Standard Oil Company, now comes and says
that on the twentieth day of July, A.D. 1876, it was and still is a
corporation organised and existing under and by virtue of the laws
of the state of Ohio, and that at the same time the said defendants,
William C. Scofield, Charles W. Scofield, Daniel Shurmer and John
Teagle, were and still are partners doing business in the firm name
of Scofield, Shurmer and Teagle, and the said plaintiff complains of
the said defendants, and says: That on the said twentieth day of
July, A.D. 1876, the said plaintiff and the said defendants as such
partners were each separately engaged in the business of refining
and dealing in crude petroleum and its products, said plaintiff
having a number of refining establishments at Cleveland, Ohio, and
the said defendants owning and operating one refinery only, also
located at Cleveland, Ohio, on the line of the Atlantic and Great
Western Railroad, and while so engaged and on the said twentieth day
of July, A.D. 1876, the said plaintiff and the said defendants as
such partners entered into a joint arrangement in writing in and by
which it was, amongst other things, agreed between the said
plaintiff and the said defendants individually and as such partners
that the said defendants would continue their then business in the
firm name of Scofield, Shurmer and Teagle of buying, refining and
selling crude petroleum and its products as theretofore carried on
by them, for a period of ten years from July 20, A.D. 1876, and
furnish for the conducting of said business their refinery aforesaid
with all tanks, fixtures, buildings, erections, tools, and all
mechanical appliances then or theretofore used by them in their said
business, together with the land on which the same are situated, and
also within five days from the date of said agreement furnish for
the use of said joint business adventure the sum of ten thousand
dollars in cash to be used continuously in said business until July
20, A.D. 1886. That the said William C. Scofield, Charles W.
Scofield, Daniel Shurmer and John Teagle, in and by said agreement
for conducting said joint adventure, further covenanted and agreed
with the plaintiff to devote all their time and personal attention
necessary to conduct the said business for the period aforesaid, and
that during the existence of said adventure they would not nor would
either of them as a firm or as individuals directly or indirectly
engage or be concerned in any business connected with petroleum or
any of its products in Cuyahoga County or elsewhere, except in
connection with the parties of the first part under this agreement,
nor would they or either of them enter into any new business which
would interfere with the time necessary to be devoted to the full
and faithful conduct of the business of said adventure.

That the said William C. Scofield, Charles W. Scofield, Daniel
Shurmer and John Teagle, in and by said agreement for conducting
said joint adventure, further covenanted and agreed with said
plaintiff that the amount of crude petroleum to be distilled by them
in the business of said adventure should not exceed annually
eighty-five thousand barrels of forty-two gallons each in any year,
but the same should be distributed as nearly as practicable in equal
quantities of 42,500 barrels of forty-two gallons each, each and
every six months from the twentieth day of July, A.D. 1876, but the
said 42,500 barrels might be run in a less period than six months.

That in and by said agreement for conducting the business of said
joint adventure it was stipulated and agreed by both parties,
amongst other things, that from the net profits of the business of
said joint adventure the said defendants should first be entitled to
retain and be paid the sum of $35,000 per annum while the said
agreement was in force and operation, and in the case the net
profits should not amount to $35,000 for any year that said
agreement for conducting said joint adventure was in force and
operation, then at the expiration of any such year the plaintiff
should on demand pay to the said defendants a sum of money
sufficient to make that amount, viz., $35,000 for any year that said
agreement should be in force and operation. That all net profits
over the amount of $35,000 so stipulated to belong to said
defendants annually should belong and be paid to said plaintiff
until the plaintiff should receive therefrom as much as said
defendants had received from the net profits under the provisions of
said agreement, and all net profits in excess of $70,000 annually
should be divided equally between the parties thereto.

That in consideration thereof and in and by said agreement for
conducting said joint adventure, the said plaintiff stipulated and
agreed with the said defendants, amongst other things, that on or
before the twenty-fifth day of July, A.D. 1876, it would furnish to
the said defendants for them to use in the business of said joint
adventure the sum of $10,000 in cash, which sum was so paid in as
agreed and still remains in the business.

That the said plaintiff would receive, dock, and sell in the city of
New York all oil and the products of petroleum consigned to it for
sale at New York by said firm of Scofield, Shurmer and Teagle at
actual cost of brokerage and handling without commissions.

That the said plaintiff would and did in said agreement guarantee to
the said defendants that their share of the net profits arising from
the business of said joint adventure should for ten years from July
20, A.D. 1876, to July 20, A.D. 1886, amount to the sum of $35,000
annually, during the operation of this contract, as hereinbefore
stated. The plaintiff further says that between July 20, 1876, and
the present time, the said defendants have repeatedly violated their
said agreement in this, to wit: that every year since the making of
said agreement the said defendants have distilled over 85,000
barrels of crude petroleum; that during the year from July 20, 1876,
to July 20, 1877, they distilled 89,983.34–42 barrels; that during
the year from July 20, 1877, to July 20, 1878, they distilled
87,754.4–42 barrels; that during the year from July 20, 1878, to
July 20, 1879, they distilled 100,246.25–42 barrels, and from July
20, 1879, to July 20, 1880, they distilled 90,082.34–42 barrels.

That up to the present time the defendants have distilled more than
by the terms of their said agreement they have a right to distil up
to January 20, 1881, and have purchased large quantities of crude
petroleum and are distilling portions thereof, and threaten to
distil the balance without regarding their said contract. That the
crude petroleum so as aforesaid distilled by the defendants has not
by them been distributed as nearly as practicable in equal
quantities of 42,500 barrels of forty-two gallons each, each and
every six months as they agreed to do, but in violation of their
said agreement they distilled from July 20, 1876, to January, 1,
1877, 43,509.36–42 barrels; from January 1, 1877, to July 20, 1877,
46,473.40–42 barrels; from July 20, 1877, to January 1, 1878,
50,416.12–42 barrels; from January 1, 1878, to July 20, 1878,
37,337.34–42 barrels; from July 20, 1878, to January 1, 1879,
56,974.15–42 barrels; from January 1, 1879, to July 20, 1879,
43,272.10–42 barrels; from July 20, 1879, to January 1, 1880,
57,499.35–42 barrels; that on or about the twentieth day of July,
1879, the plaintiff having discovered that the said defendants had
in violation of said agreement distilled about 22,984 barrels of oil
more than they were entitled to by the terms of said agreement, the
plaintiff objected and complained to the defendants in regard
thereto, and thereupon the defendants admitted the violation of the
contract in that respect, and it was agreed between the parties that
the defendants would and should during the then coming year diminish
their manufacture sufficiently to bring the entire amount of
manufacture under said contract within the terms of said agreement.

That during the then coming year from July 20, 1879, to July 20,
1880, the said defendants did not diminish their distillation below
the 85,000 barrels as they had agreed to do, but from July 20, 1879,
to January 1, 1880, they distilled 57,499.35–42 barrels, and from
January 1, 1880, to July 20, 1880, they distilled 32,582.41–42
barrels, making a total of 90,082.34–42 barrels for the year, thus
increasing their distillation over the 85,000 barrels 5,082 barrels,
instead of diminishing it as they had agreed to do.

That the defendants threaten to and have informed the plaintiff that
they will hereafter wholly disregard said contract and continue to
distil crude petroleum without regard to quantity.

The plaintiff further says that since the making of said agreement
and within the past year the said Daniel Shurmer and John Teagle
have in violation of their said contract engaged and been connected
in constructing a refinery at Buffalo, New York, for the purpose of
distilling crude petroleum with others than the plaintiff under said
agreement and are now so engaged.

That within the past year the said Daniel Shurmer and John Teagle
and each of them have invested money to the amount of $10,000, and
are now engaged and connected in constructing refineries for the
purpose of distilling crude petroleum and its products with others
in no way connected with the plaintiff or under said agreement, but
intending thereby to establish and prosecute with others the same
business as that contemplated and conducted under said agreement,
and thereby establishing and conducting a rival business to the
business of said adventure and tending to involve the plaintiff in
loss by reason of its guarantee that the profits of said adventure
should amount to the sum of $35,000 annually to defendants, and have
during the past year been at said Buffalo and other places giving
the said business their time and personal attention, and have done
so at times when their time and personal attention was needed and
was requisite to properly conduct the business of said adventure
under said agreement at Cleveland.

The plaintiff further says that because of the said failures and
refusals of the defendants to carry out their said agreement it has
already sustained great damage and will sustain further damage if
the said defendants are permitted to continue their said violation
of said agreement. That the said plaintiff has no adequate remedy
therefor at law for the reason that the damages arising therefrom
are so remote and difficult of ascertainment, and constantly
recurring would necessitate a multiplicity of suits and would
involve the plaintiff in the increased hazards of losses arising
from such increased manufacture and deprive it of all the benefits
of said contract.

The plaintiff therefore prays that the said William C. Scofield,
Charles W. Scofield, Daniel Shurmer and John Teagle may by proper
process be made defendants herein and compelled to answer this
petition; that a preliminary injunction and restraining order be
granted restraining the said William C. Scofield, Charles W.
Scofield, Daniel Shurmer and John Teagle, and each of them
individually and as partners in the name of Scofield, Shurmer and
Teagle, until the further order of the court, from distilling at
their said works at Cleveland, Ohio, more than 85,000 barrels of
crude petroleum of forty-two gallons each in every year, and also
from distilling more than 42,500 barrels of crude petroleum of
forty-two gallons each, each and every six months, and also from
distilling any more crude petroleum until the expiration of six
months from and after July 20, 1880, and also from directly or
indirectly engaging in or being concerned in any business connected
with petroleum or any of its products, except in connection with the
plaintiff under their said agreement, and that on the final hearing
of this case the said defendants may in like manner be restrained
and enjoined from doing any of said acts until the expiration of
said agreement, and for such other and further relief in the
premises as equity can give.

M. R. KEITH,
R. P. RANNEY,

_Attorneys for Plaintiff_.

NUMBER 43 (See page 2070)
ANSWER OF WILLIAM C. SCOFIELD _ET AL._

[In the case of the Standard Oil Company _vs._ William C. Scofield
_et al._, in the Court of Common Pleas, Cuyahoga County, Ohio,
1880.]

That the so-called agreement is and at all times has been utterly
void and of no effect, as being by its terms in restraint of trade
and against public policy.

These defendants further say that they deny that through any action
of theirs said plaintiff has sustained or will sustain any damage
whatever, but these defendants say that their business of distilling
oil has been carried on at a large profit, and that the same is now
attended with large profits, and the price of refined oil is now so
high, and there is such a large margin between the price of crude
oil and refined, that the manufacture and sale of refined oil is
attended with large profit; that it is impossible to supply the
demand of the public for oil if the business and refineries of both
plaintiff and defendant are carried on and run to their full
capacity, and if the business of defendants were stopped as prayed
for by plaintiff it would result in a still higher price for refined
oil and the establishment of more perfect monopoly in the
manufacture and sale of the same by plaintiff.

These defendants further say that said plaintiff has constantly and
persistently violated the terms of said so-called written agreement
in that it has intentionally failed to give and has withheld from
the defendants the benefits of the advantages therein agreed to be
given, and that it has not given to defendants the benefits of its
contracts relating to freight on crude and refined oil, but these
defendants have been constantly required to pay more and larger
freights than said plaintiff, and that said plaintiff has not
allowed to defendants the same rebate that it has received with
different carriers; and, further, that said plaintiff has recently
constructed a pipe-line to the Oil Regions of Pennsylvania through
which its oil has been pumped to Cleveland at an expense of about
twelve cents a barrel, but has charged defendants for pumping their
oil through the same pipe twenty cents per barrel.

The defendants further say that at the time when said writing was
signed said plaintiff was endeavouring by contracts with divers
persons to establish a monopoly in the manufacture of refined oil in
the state of Ohio and in the United States, and that, for the
purpose of monopolising the trade in refined oil and enhancing the
price thereof, and maintaining an unnaturally high price, said
plaintiff entered into said so-called agreement under the form of a
joint arrangement or adventure, and for no other purpose, and
contributed to the capital of said so-called adventure the sum of
$10,000, whereas those defendants contributed thereto the sum of
$73,000 and their time and attention, and their refinery had the
capacity for refining 180,000 barrels of crude oil per year, as
plaintiff well knew, and said plaintiff thereby, and by said other
contracts made with the same design, succeeded in creating a
substantial monopoly and averting competition and maintaining an
unnaturally high price for refined oil, and that said so-called
agreement is therefore in restraint of trade and against public
policy, and void.

These defendants further say that defendants have from time to time
paid to plaintiff their full share of the profits of said so-called
adventure, and at no time has plaintiff been required to pay any sum
whatever to defendants, but has realised large profits from said
business, and on the fourth day of March, 1880, with full knowledge
of how much oil in excess of 85,000 barrels per year had been
manufactured by defendants, demanded of said defendants that they
should pay to plaintiff the entire profits upon said excess, and
claimed that its monopoly was so perfect that it would have sold
said excess if defendants had not, and defendants did pay to
plaintiff the one-half of the profits on said excess.

NUMBER 44 (See page 2071)
AFFIDAVIT OF JOHN D. ROCKEFELLER

[In the case of the Standard Oil Company _vs._ William C. Scofield
_et al._, in the Court of Common Pleas, Cuyahoga County, Ohio,
1880.]

John D. Rockefeller being duly sworn, says that for about eighteen
years past he has been engaged in the business of refining crude
petroleum; that from about the year 1863 to 1870 he was engaged as a
member of firms in such refining, and from January, 1870, he has
been and still is engaged in such refining business as president of
said plaintiff, the Standard Oil Company; that during said time he
has given the business personal attention and has thereby become
familiar with the general business of refining crude petroleum, with
the amount of crude petroleum produced, with the amount of crude
petroleum refined, so far as the same can be ascertained, and
especially with the business of the Standard Oil Company.

Affiant says the said Standard Oil Company owns and operates its
refineries at Cleveland, Ohio, and its refinery at Bayonne, New
Jersey; that it has no other refineries nor any interest in any
other refineries, nor does the Standard Oil Company operate or
control in the United States any other refineries of crude
petroleum; that there are in Ohio, West Virginia, Pennsylvania, New
York, and New Jersey a large number of refineries of crude petroleum
that are not owned or controlled by said Standard Oil Company, and
in which the said Standard Oil Company has no interest whatever,
directly or indirectly, which are now and for years past have been
refining crude petroleum and selling it in the open market; that the
amount of crude petroleum refined by the said Standard Oil Company
does not exceed thirty-three per cent. of the total amount refined
in the United States.

Affiant further says that the capacity of all the refineries in the
United States is more than sufficient to supply the markets of the
world, and in the judgment of affiant if all the refineries were run
to their full capacity they would refine at least twice as much oil
as the markets of the world require; that this difference between
the capacity of refineries and the demands of the market has existed
for at least seven years past, and during that period the refineries
of the Standard Oil Company have not been run to their full
capacity, and in the judgment of affiant not to exceed one-half of
their capacity.

Affiant further says that during all the period of time that he has
been engaged in the business of refining oil he has been familiar
with the price of crude oil and with the price of refined oil and
with the profits to be derived therefrom, and from such experience
he states that the average price of refined oil and the average
profits to the manufacturer per gallon on same since 1876 have been
much less than the average profit for several years previous to
1876; that said Standard Oil Company has no means now and never has
had any of influencing the price of refined oil, save by the sale of
its product in the open market.

Affiant further says that the Standard Oil Company has not nor did
it ever have any interest in any oil property or any control over
the production of crude petroleum; that it does not own any oil
wells or land producing oil, and never did; nor has it any control
over the price of crude petroleum, but relies upon obtaining its
supplies, as all others do, by purchase in the open market and at
the prices paid by others at the same time; that the said Standard
Oil Company is not now nor has it ever been a stockholder in any
railroad, pipe-line, or other common carrier for the transportation
of oil, but within the year past it has for its own convenience
constructed, and owns and is now operating, a pipe-line from
Cleveland to the western line of the state of Pennsylvania for the
purpose of bringing oil to its refineries at Cleveland; that said
pipe-line is now insufficient to supply the demands of the Standard
Oil Company for crude oil for its own refineries, and for that
reason it has been and is now compelled to bring crude oil to
Cleveland in cars to supply its wants.

That from the deponent’s experience in business he knows it to be
true that a large manufacturer always has an advantage in cheapness
of manufacture over a small manufacturer; that all the advantages
derived by the Standard Oil Company are legitimate business
advantages, due to the very large volume of supplies which it
purchases, its long continuance in the business, the experience it
has thereby acquired, the knowledge of all the avenues of trade, the
skill of experienced employees, the possession and use of all the
latest and most valuable mechanical improvements, appliances and
processes for the distillation of crude oil, and in the manufacture
of its own barrels, glue, etc., etc., by reason of which it is
enabled to put the oil on the market at a cost of manufacture much
less than by others not having equal advantages. These advantages,
by reason of which the Standard Oil Company is enabled to refine oil
cheaper than smaller manufacturers, are not exclusive to the
Standard Oil Company, but are open to every person doing business
under similar circumstances. That this state of facts has been
detrimental to smaller refineries and has prevented them from making
as much profit as they desired, and in some cases compelled them to
suspend refining, and this constitutes the only foundation for the
oft-repeated expressions “crushed out,” “squeezed out,” and
“bulldozing.”

Affiant says he has examined the answer of the defendants, Shurmer
and Teagle, and his attention has been called to various statements
contained in it. In regard to the statement made therein that “if
the business of the defendants were stopped as prayed for by
plaintiff, it would result in a still higher price for refined oil
and the establishment of a more perfect monopoly in the manufacture
and sale of the same by plaintiff.” The same is untrue, as there is
not, never has been, and never can be a monopoly in the manufacture
of refined oil, nor has the limitation in said agreement as to
quantity to be manufactured affected, nor will the stoppage by the
defendants of their manufacture, as prayed for in plaintiff’s
petition, in the least affect the price of refined oil, for the
reason that leaving out the entire capacity of the refinery of
defendants there would still remain a large excess of capacity for
supplying all the demands of the public, and hence there would be no
opportunity for advancing the price, nor would it tend to create a
monopoly of the business by the plaintiff.

Affiant further says that it is not true that the said plaintiff has
at any time or in any manner violated the terms of said agreement as
alleged in said answer or in any other manner. That it is not true
that plaintiff has intentionally or otherwise withheld from the
defendants the benefit of the advantages agreed upon in said
contract to be given them, nor is it true that the plaintiff has not
given to defendants the benefit of its contracts relating to freight
on crude and refined oil, but the plaintiff has given to the
defendants privileges not required by the agreement. That it is not
true that the defendants have ever been required to pay larger rates
of freight than were paid by the plaintiff when the defendants made
any shipments of oil in accordance with the terms of the contract;
nor is it true that the plaintiff has not allowed to defendants the
same rebates that it has received from different carriers upon any
shipments of oil made in accordance with the terms of the contract.

That it is true that the plaintiff has recently constructed a
pipe-line from Cleveland to the western line of the state of
Pennsylvania, through which its oil has been pumped to Cleveland
since the spring of 1880, but it is not true that it is the owner of
the said pipe-line from the western line of the state of
Pennsylvania to the Oil Regions. That it is true that to promote the
interest of the defendants, the plaintiff has furnished to
defendants crude oil through said pipe-line and charged them twenty
cents per barrel for the transportation of same; but it is not true
that said pipe-line was constructed for the purpose of transporting
oil for others than the plaintiff, nor is it true that under the
terms of said agreement the defendants are entitled to the
transportation of oil through said pipe-line, nor is it true that
the charge of twenty cents per barrel is an unreasonable price for
transporting oil through said pipe-line from the Oil Regions to
Cleveland; but affiant avers it to be true that during the time it
so furnished the oil through the pipe-line at twenty cents per
barrel, of forty-two gallons each, the railroads were charging
freight at the rate of from thirty-five to fifty cents per barrel,
of forty-five gallons each.

Plaintiff continued to deliver defendants through the pipe-line, and
at twenty cents per barrel, until they had received all they were
entitled to manufacture under the contract dated July 20, 1876.

Affiant says that it is not true that “at the time when said
agreement was signed, said plaintiff was endeavouring by contracts
with divers persons to establish a monopoly in the manufacture of
refined oil in the state of Ohio and in the United States.” Affiant
avers that it has made but one other contract with other persons
like the one made with defendants, and that was a contract made at
the same date, viz., July 20, 1876, with the Pioneer Oil Company of
the City of Cleveland, of which the defendants had full knowledge.
Affiant further says that he was present and participated in the
negotiations which resulted in the formation of the contract with
these defendants, and that it is not true that said contract was
entered into for the purpose of monopolising the trade in refined
oil or for the purpose of enhancing the price thereof and
maintaining an unnaturally high price for the same; and affiant says
that it is not true that plaintiff by said contract, and by the said
other contract made with the same design, succeeded in creating a
substantial monopoly and averting competition, and maintaining an
unnaturally high price for refined oil; but said contract was made,
as is therein stated, for the purpose of equalising the business of
manufacturing oil and giving to each of said contracting parties
their due proportion thereof, and that the amount of 85,000 barrels
per annum to which the distillation of defendants is by said
contract limited is, as agreed, a relative proportion to their full
capacity, as is the amount distilled by plaintiff per annum since
said contract was entered into to its total capacity for refining
oil; and it is not true that said agreement is in restraint of trade
and against public policy, as alleged in the said answer of
defendants, Shurmer and Teagle. Affiant says that on or about the
first day of October, 1879, it came to his knowledge that the
defendants had, in violation of said agreement, distilled about
22,984 barrels of oil more than they were entitled to by the terms
of said agreement, and thereupon he had an interview with
defendants, W. C. Scofield and John Teagle, who admitted the
defendants had distilled in excess of the quantity stipulated in the
contract, and agreed to reduce the quantity distilled during the
year following, July 20, 1879, by the amount they had already
distilled in excess up to that date, but requested they might be
allowed to distribute said reduction equally over each six months of
the year instead of wholly in either the first or last six months of
the year following July 20, 1879, to which request affiant assented.

Affiant says that it is not true that “the plaintiff, on the fourth
day of March, 1880, with full knowledge of how much oil in excess of
85,000 barrels per year had been manufactured by defendants and
plaintiff, demanded of said defendants that they should pay to
plaintiff the entire profits upon said excess,” other than as is
hereinafter stated; and it is not true that plaintiff, at the time
it demanded said profits, claimed that it had any monopoly, or that
its monopoly was so perfect that it would have sold said excess if
defendants had not, or that it was entitled to said profits in
consequence of any monopoly; but affiant says that it did claim the
profits upon the oil sold in excess of said 85,000 barrels, because
defendants had broken their agreement with said plaintiff, and the
profits on such excess the plaintiff at that time was willing to
accept as compensation for such breach of said contract.

Affiant says that he does not know what contracts for the sale of
oil defendants may have made, or what contracts for the manufacture
or for the construction of barrels they may have entered into, or
what obligations they may be under to their customers; but he says
that for a long time past the defendants have had notice that
plaintiff would insist upon the performance by them of their
obligations under their said contract, and that if they have entered
into contracts for the sale of oil as alleged by them and entered
into other obligations, they have done so with the full knowledge
that they were thereby violating and continuing the violation of
said agreement of July 20, 1876.

I have read the affidavit of H. L. Taylor, filed in this case
October 18, 1880, in which he says “that he has been for some six or
eight years last past acquainted with Mr. Rockefeller, Mr. Flagler,
Mr. Payne, and others; that he has had conversations with some of
these parties with regard to the control by the Standard Oil Company
of the distilling and refining business in the state of Ohio and in
the United States, and that he has heard them say in substance that
the Standard Oil Company intended to wipe out all the refineries in
the country except theirs, and to control the entire refining
business in the United States.” Affiant says that he has been
acquainted with H. L. Taylor for several years past, that all the
foregoing statements so far as they relate to him are false, and
that he never made to said Taylor or to any person in his hearing
any such statement, nor statements in substance to that effect.
Affiant further says that he never in company with said Taylor
visited any of the cities or places mentioned in his affidavit for
the purpose of inspecting or examining refineries, though he may
have met said Taylor incidentally at various places, but that he
never showed him refineries that were formerly under the control of
others and running independently and stated that the same had passed
under the control of the Standard Oil Company, nor did anybody else
make such statements to Taylor in his hearing.

Affiant says that it has not come to pass, as sworn to by said
Taylor, that said Standard Oil Company has “wiped out” the refining
business of the United States or that it to-day controls it, but
affiant believes that at the time said Taylor made his affidavit he
knew there were very many refineries running independently of and in
no way connected with the Standard Oil Company, and that said Taylor
was himself then interested in the profits of a large refining
business represented by a number of refiners who were large
competitors of the Standard Oil Company.

With respect to the assertion of said Taylor that “in many instances
to his knowledge the Standard Oil Company has bought refineries and
taken them down,” affiant says that several years ago when the
business was very much scattered, in several instances and for
greater economy in manufacturing, the Standard Oil Company
dismantled refineries unfavourably located and utilised the
construction, machinery, and appliances of the same to increase its
manufactory at Cleveland.

It is true that in many cases persons who had been unsuccessfully
engaged in refining, but had experience, were to some extent
employed by the Standard Oil Company in its business of refining,
but that with respect to the averment in said Taylor’s affidavit
that “in other cases said company employed men who had refineries,
at large salaries and at the same time gave them no absolute
employment,” the same is untrue. But it is true that it has
restricted its employees from entering the business of refining and
distilling oil except under said company’s direction.

But none of these things were done by the plaintiff for the purpose
of creating and maintaining a monopoly of the business of refining,
but were done for the purpose of conducting its business more
efficiently.

And affiant says that it is not true, as sworn to by said Taylor,
that the Standard Oil Company during a large portion of the time
that he refers to, to wit, six or eight years past, or for any
length of time, has substantially controlled the transportation of
oil; that it is not true that said Standard Oil Company ever had, or
that it now has, any contract with any lines of transportation in
which it was stipulated that it should have a lower rate of freight
than other shippers undertaking the same obligations and furnishing
equal terminal facilities; that in all the contracts ever had with
the railroads, the railroad companies have reserved the right to
charge others the same rate of freight as that paid by the Standard
Oil Company; and affiant further says that even those contracts with
the railroad companies which gave the Standard Oil Company a
commission for facilities furnished have long been abrogated and
abandoned.

Affiant says that with respect to the statement in said Taylor’s
affidavit that “other language has been used to him—said Taylor—by
the officers of said Standard Oil Company to the effect that the
said company intended to have all the refineries and aimed at having
entire control of the oil market,” the same, so far as it related to
him, is wholly untrue.

Affiant says that it is not true that the plaintiff got control of
the refineries of the firm of Logan Brothers of Philadelphia, Octave
Oil Company, Easterly and Davis, and Bennett, Warner and Company of
Titusville, Pennsylvania; R. S. Waring and Citizens’ Oil Works of
Pittsburg, or of either of them. The statement of H. L. Taylor that
“the principal way by which these independent refineries came under
the control of the Standard Oil Company was from the fact that said
company had such rates of transportation that the small companies
could not compete with it, and when said company had such in its
power it would make such arrangements with parties engaged in these
refineries as would prevent them from thereafter competing with the
Standard Oil Company,” is false in its facts and its inferences.
Affiant has already correctly stated the facts as to the purchase of
refineries by the Standard Oil Company of Cleveland, what led to
such purchases, and that persons engaged in such refineries were in
some cases employed by said company; and any statement or inference
to the effect that by illegal means or unfair influences the
plaintiff “squeezed out” or “crushed out” small refiners and
prevented them from again entering into the business of refining, is
untrue.

Affiant further responding to the affidavit of said Taylor, says
that with reference to the statement therein contained that “the
effect of the control of the refining business by the Standard Oil
Company upon the oil market is to largely increase the price to
consumers beyond what they ought to pay,” the same is untrue, and he
avers again that since the date of the contract with defendants the
average price to consumers of refined oil has been lower than for
years previous.

As to the allegation of said Taylor that “if the business was
distributed among the independent refineries it would furnish
employment to a much larger number of persons than at present, and
the interests of the country would be decidedly promoted by having
the refining business in the hands of competent parties,” in so far
as the same implies that there are not independent competing
refineries outside of the works of said plaintiff, the same is
untrue, and that it is a fact that a larger number of persons are
now employed in connection with the business of refining oil than
ever before.

Affiant says that with reference to the language used by the said
Heisel in his affidavit that he, Heisel, was not afraid, to which
Mr. Rockefeller replied, “You may not be afraid to have your head
cut off, but your body will suffer,” “and that this was said by
affiant prior to the time that he sold his interest in the refining
business to Bishop and was said for the purpose of inducing affiant
to sell out to the Standard Oil Company,” that affiant has no
recollection of ever using any such language to said Heisel, and so
far as said statement implies threats or inducements held out to
said Heisel to procure the control of the works of Bishop and Heisel
by the Standard Oil Company, the same is wholly false in spirit and
effect.

Affiant says respecting the statement in said Heisel’s affidavit,
that “the effect resulting from the control by this one company—the
Standard Oil Company—of the entire refining business in Cleveland
has been to largely increase the price of refined oil to consumers,
to lessen its production, to reduce the number of hands employed in
the refining business, and to reduce the price paid labourers for
their work, and thereby to largely injure the public,” the same, so
far as it alleges that there is a control by the Standard Oil
Company of the entire refining business, is false; and that so far
as it undertakes to state consequences of said alleged control by
the Standard Oil Company, it is also false.

I have read the affidavit of Mrs. B. filed in this case on October
18, 1880. Said affidavit is incorrect, erroneous and in many
respects false.

The first interview that I ever had with Mrs. B. was at her house,
when she sent for Mr. Flagler and myself to consult with her in
reference to selling out her establishment to one of her employees.
This occurred during the year 1876. She stated to us the terms of an
offer that she had received from the said employee, and expressed an
earnest desire to dispose of the business and to be free from its
perplexities and annoyances, and evinced a disposition to accept the
offer, and we advised her to accept providing the payments were made
secure. I did not see her again until the fall of 1878, more than
two years later. Then at her urgent request I met her at her house,
at which time she made reference to the conversation she had had
with Mr. Jennings, and desired me to pursue negotiations with her
with reference to the sale of her property, which I positively
declined, stating to her that I knew nothing about her business or
the mechanical appliances used in the same, and that I could not
pursue any negotiations with her with reference to the same, but
that if, after reflection, she yet desired to do so, some of our
people familiar with the lubricating oil business would take up the
question with her. She was very desirous to begin negotiations, but
I declined to negotiate and advised her not to take any hasty
action, as from her own statements there was no such change in the
condition of the business as to discourage the expectation that she
could do as well in the future as she had in the past. When she
responded expressing her fears about the future of the business,
stating that she could not get cars to transport sufficient oil, and
other similar remarks, I stated to her that though we were using our
cars and required them in our own business, yet we would loan her
any number she required or do anything else in reason to assist her,
and I saw no reason why she could not prosecute her business just as
successfully in the future as in the past. This is the last
interview I had with her.

Affiant thinks it is true that Mrs. B. stated in the course of the
conversation in substance that “the B. Oil Company was entirely in
the power of the Standard Oil Company, and that all she could do
would be to appeal to affiant’s honour as a gentleman and to his
sympathy to do with her the best that he could do.” To the statement
that she was in the power of the Standard Oil Company, affiant made
a positive denial, and stated to her there was no foundation for the
fears she expressed, and in this connection made the offer to her to
furnish her with cars. He cannot remember what was said by Mrs. B.
at this interview in relation to an agreement upon the part of the
Standard Oil Company not to touch the lubricating branch of the
trade. It is true that the Standard Oil Company had a contract with
the B. Oil Company, made early in 1873, terminable on sixty days’
notice by either party, in reference to carbon oil only—which
contract had been voluntarily assumed by the B. Oil Company—and it
was entirely optional with the said B. Oil Company to discontinue
said contract upon a notice of sixty days and thereby relieve itself
from its obligations if it so desired; but said contract was
continued in full force and effect up to the time of the sale by
Mrs. B. of her interest in said B. Oil Company; but the Standard Oil
Company had no contract with B. Oil Company by which it “agreed not
to touch the lubricating branch of the trade,” nor did it have any
contract with the said B. Oil Company having reference in any
particular to the lubricating oil business, nor did affiant have any
such contract. While affiant declined to enter into a negotiation
with the said Mrs. B., it may be true that during the interview
alluded to he said to her that in case a sale were made she could
retain whatever stock in the B. Oil Company she desired. As a result
of the negotiations, in which affiant took no part, the construction
and good-will of the B. Oil Company was purchased for sixty thousand
dollars, which was at least twenty thousand dollars in excess of its
value, and largely in excess of the value placed upon it by Mrs. B.
in the interview above referred to between Mr. Flagler and affiant
with her in 1876. In addition to the construction and good-will
which was purchased for the sum of sixty thousand dollars, there was
purchased of the B. Oil Company its entire stock of oils on hand at
the full market value, and the sum paid for same amounted to
$19,144.49, making an aggregate of $79,144.49, and did not include
any other assets of the company, such as cash, accounts receivable
and accrued dividends.

With respect to the allegation in said affidavit that “Mrs. B.,
seeing that the property had to go, asked that she might, according
to the understanding with the president of the company, retain
fifteen thousand dollars of her stock,” so far as said statement
implies that she was parting with her property under any duress,
restraint, or undue influence, or was forced thereto by any acts of
the Standard Oil Company, the same is absolutely false; and it is
also false that she ever had any understanding with the president of
the Standard Oil Company that she should retain fifteen thousand
dollars of the stock of the B. Oil Company, nor was there any
reference to that subject save as is hereinbefore stated; and if the
said Mrs. B. refers to this affiant in that connection wherein she
says that “to this request the reply was, ‘No outsider can have any
interest in this concern’ and ‘that said Standard Oil Company had
dallied as long as it would over this matter, that it must be
settled up that day or go, and insisted upon her signing the bond
above referred to,’” the same is also false; nor has he any
knowledge that during said negotiation any such language was ever
used, or that the negotiations were ever carried on or closed in any
such spirit.

Affiant says that it is not true that he made any promises that he
did not keep in the letter and spirit; and it is not true that he
was instrumental to any degree in her being obliged to sell the
property much below its true value; and he avers that she was not
obliged to sell out, and that such sale was a voluntary one upon her
part and for a sum far in excess of its value, and that the
construction which was purchased of her could be replaced for a sum
not exceeding twenty thousand dollars.

On Saturday, the ninth day of November, 1878, the negotiations were
closed and payments made to Mrs. B. Affiant had no knowledge of
dissatisfaction upon her part until the receipt of a letter dated
Monday, November 11, which reached him on the 12th, and on November
13 the reply thereto was made, copy of which is as follows:

November 13, 1878.

_Dear Madam_: I have held your note of 11th inst., received
yesterday, until to-day, as I wished to thoroughly review every
point connected with the negotiation for the purchase of the
stock of the B. Oil Company, to satisfy myself as to whether I
had unwittingly done anything whereby you would have any right
to feel injured. It is true that in the interview I had with you
I suggested that if you desired to do so you could retain an
interest in the business of the B. Oil Company by keeping some
number of its shares, and I then understood you to say that if
you sold out you wished to go entirely out of the business. That
being my understanding, our arrangements were made in case you
concluded to make the sale, that precluded any other interests
being represented, and therefore when you did make the inquiry
as to your taking some of the stock our answer was given in
accordance with the facts noted above, but not at all in the
spirit in which you refer to the refusal in your note. In regard
to the reference that you make as to my permitting the business
of the B. Oil Company to _be taken_ from you, I say that in
this, as in all else that you have written in your letter of
11th inst., you do me most grievous wrong. It was of but little
moment to the interests represented by me whether the business
of the B. Oil Company was purchased or not. I believe that it
was for your interest to make the sale, and am entirely candid
in this statement, and beg to call your attention to the time,
some two years ago, when you consulted Mr. Flagler and myself as
to selling out your interests to Mr. Rose, at which time you
were desirous of selling at _considerably less price_, and upon
time, than you have now received in cash, and which sale you
would have been glad to have closed if you could have obtained
satisfactory security for the deferred payments. As to the price
paid for the property, it is certainly three times greater than
the cost at which we could now construct equal or better
facilities; but wishing to take a liberal view of it, I urged
the proposal of paying the sixty thousand dollars, which was
thought much too high by some of our parties. I believe that if
you would reconsider what you have written in your letter, to
which this is a reply, you must admit having done me great
injustice, and I am satisfied to await upon your innate sense of
right for such admission. However, in view of what seems your
present feelings, I now offer to restore to you the purchase
made by us, you simply returning the amount of money which we
have invested and leaving us as though no purchase had been
made. Should you not desire to accept this proposal, I offer to
you one hundred, two hundred, or three hundred shares of the
stock at the same price that we paid for the same with, this
addition that if we keep the property we are under engagement to
pay into the treasury of the B. Oil Company an amount which,
added to the amount already paid, would make a total of
$100,000, and thereby make the shares one hundred dollars each.

That you may not be compelled to hastily come to conclusion, I
will leave open for three days these propositions for your
acceptance or declination, and in the meantime, believe me,

Yours very truly,
JOHN D. ROCKEFELLER.

To which letter no reply was ever received, and since which time
affiant has had no communication with Mrs. B. upon any subject.

Affiant says that he has had his attention called to the affidavit
of Daniel Shurmer, filed in this case October 18, 1880, and to the
language as follows: “That the Standard Oil Company had already
squeezed out one refining concern with which he was connected,
whereby he had lost over twenty thousand dollars.” Affiant says that
the same is false, as nothing of the kind ever occurred.

Affiant says that he conducted most of the negotiations which led to
the making of the contract with defendants, and that at no time
previous or during the same were any threats made by him or any
officer of the Standard Oil Company or agent to his knowledge to the
effect that the firm of Scofield, Shurmer and Teagle would be ruined
if they did not make such a contract, and no promises were made by
him nor anybody else in behalf of said Standard Oil Company to said
Shurmer or any of the defendants, that if said contract was signed
the Standard Oil Company and defendants would control and monopolise
the whole refining business in Cleveland; nor is it true, as alleged
by said Shurmer, that he was reluctant to enter into said agreement,
but, so far as affiant knows, the said Shurmer was anxious to make
the arrangement, believing it to be a profitable one for the
defendants. That some time in the year 1872, when the refining
business of the City of Cleveland was in the hands of a number of
small refineries and was unproductive of profit, it was deemed
advisable by many of the persons engaged therein, for the sake of
economy, to concentrate the business and associate their joint
capital therein. The state of the business was such at that time
that it could not be retained profitably at the City of Cleveland by
reason of the fact that points nearer the Oil Regions were enjoying
privileges not shared by refiners at Cleveland, and could produce
refined oil at a much less rate than could be made at this point.
That it was a well-understood fact at that time among refiners that
some arrangement would have to be made to economise and concentrate
the business or ruinous losses would not only occur to the refiners
themselves, but ultimately Cleveland as a point of refining oil
would have to be abandoned. At that time those most prominently
engaged in the business here consulted together, and as a result
thereof several of the refiners conveyed to the plaintiff their
refineries and had the option in pay therefor to take stock in the
Standard Oil Company at par or to take cash. That at this time the
Standard Oil Company, by reason of its facilities and large cash
capital, was agreed upon as the one best adapted to concentrate the
business, and for no other reason whatsoever. That said Standard Oil
Company had no agency in creating this state of things which made
that change in the refining business necessary at that time, but the
same was the natural result of the trade; nor did it in the
negotiations which followed use any undue or unfair means, but in
all cases, to the general satisfaction of those whose refineries
were acquired, the full value thereof either in stock or cash was
paid, as the parties preferred.