CHAPTER IV. THE BIRTH OF THE TRUST.

Maoriland Worker, Volume 2, Issue 2, 8 December 1911, Page 5

CHAPTER IV. THE BIRTH OF THE TRUST.

"The American. Beauty rose can be produced in its splendour and fragrance only by sacrificing the early buds which grow up around it." —J. D. Rockefeller, junr., to the students of JBrown University. . . .. ■•, {.-. . ' The arrangements whiijh have now been 'described were the foundation on wbjch..„ tlie... Standard Oil Trust was built. Some time in tlie.-summer- 0f,,! 1874,- when he had become sure, that the ' so-called , _' . scheme.; would be worked in hisi favour >hy the railroads and leading -pipe lines simultaneously, Mr. Rockefeller ''conferred at Saratoga with two of his old friends of-the'South Improvement Company— W- G. Warden*,.• of Philadelphia, and Charles Lockhart, of-'Pittsburg—both big refiners, aiid agreed with them to form an oil refiners' trust," which was to work with absolute ..secrecy,-- and .1 gradually acquire control of all the re>fineries in America. The instrument by which this large order was to-be put through was,'of course, the secret rebate and the, new "equalisation," or less euphemistically discrimination. Secrecy was to be maintained by each/ firm as it came ill carrying on business ostensibly as. before under, its old style and title; staff and management but its actual business was to be directed solely by the central board of the Trust, presided over by' Mr. Rockefeller, which would control, all operations of buying, transport and selling.' The refineries had to become the absolute property, however, of the Standard Oil Company, their late-proprietors taking stock of that company in exchange. We know, this' frohr ah account of the Saratoga meeting ■'"given, at.a later..,period by .Charles Lbckharti of .Pittsburg' to Miss Ida M.-Tarbell. : '*■-'/-' ■■•"■

In March, 1875, something leaked out'as to the constitution of the Trust, which was then spoken of as the Central Association. ... It ,gradually roped in most of the refining firms in America, the process being- effected, by one sensational collapse ' after another under the. influence of the discrimination' and the rebate. An exception was the huge refinery of Charles Pratt and Co., of New York, of which the famous H. H. Rogers.was one of the most considerable assets. The .firm, sold itself more or less yoluntarily, to the Standard Oil for stock at 265. The absorption of the "Creek" refineries, i.e., those in the Oil Regions, was conducted by the scarcely less 'famous' * J. D. Archbold, who appeared, in Titusville as the representative of a Standard Oil offshoot, since known to fame as the Acme Oil Company. Between 1875 and 1879 Mr. Archbold won his spurs in the Standard-by buying out, dismantling, or shutting , down nearly every refinery on-the "Creek.". The history of this collapse makes pitiful reading, and I need not enter into it beyond giving a specimen or two extracted from contemporary records. How it persuaded Its Rivals. In 18S8 Mr. A. H. Tack, a partner of the Citizens' Oil Refining Company of Pittsburg, after explaining on oath before the HoiTse Committee on Manufactures how his splendidly organised business gradually became non-paying under the Standard Oil influence, added: — . : In 1874 I went to see.Rockefeller if we could make arrangements with him by which we could run a portion of our' works..-'lt-'was a very-brief interview. He said there was no hope for us at all. He remarked this—l cannot give the exact quotation—"There is no hope for

us," and probably he said "There is nohope for any of us" ; but he says, "The weakest must go first." And we went-fr-. t The case of Schofield, Shurmex ajid ~; Teagle, a Cleveland refinery, is crisp "" dence of the demoralisation of th.fl ; times. At first tho firm showed fig.httjT and in 1876 brought a suit against tliaj -. Lake Shore and Michigan Southern audi" -*." the New York Central and Hudson!. ; River railroads for "unlawful and- tin--' just discrimination, partialities,- and)"' preferences made and practised . . .«'. . in favour of tlie Standard Oil Company y,'"©habling the said Standard Oil Confer pany to obtain, to a great extent, .the;; ' monopoly of the "oil and naptha trad&'V, of Cleveland." But Mr .Rockefeller.';' persuaded them to drop their suit. aad.-. obtain bigger'profits than theymaking by hecoming his ators. They signed a contract, quently, with him for ten years, _the firm putting in a plant' worth- 73,000 dollars and. its entire time, and Mr. Rockefeller putting in '10,000 dollars —■ and his railway discriminations!- Tho firm was guaranteed 35,000- dollars a "year net profit—about 50 per cent, on capital* profits over 35,000 dollars.went to Mr. Rockefeller'up to 70,000 dollar* —about 100 per cent. * any further pro- "■ fits wore to be divided. ' *■ ', The enormous dimensions of the "profits contemplated in this case —and no' doubt afterwards reaped—would presumably have excited suspicion very"', quickly among Schofield, Shurmor aiid Teagle's acquaintances who had seea them in their struggling days had not Mr. Rockefeller been an adept in join* ing secrecy to fraud as the basis of hia operations. To quote Miss Tar bell (i. t * P- 66):— According to the testimony of one of the firm, given a few years later on-the,, witness stand in. Cleveland, the tract was signed at night at Mr. Rocke-""----feller's house on Euclid Avenue -ia Cleveland, where he told the gentlemen that they must not even tell their wives _ about' the new arrangement,: that> if ' they made money they must conceal it —-they were not to drive fast horses, ;style,'? or do anything to lot people "siispect"there' were unusual profits hi oil refining. That would invito competition. They were told that all accounts'were to be kept secret. Ficti? tious names, were to be used in corresponding, and a special box at the ix>st office was employed for these fictitious characters. In fact, smugglers and housebreakers never surrounded their operations with more mystery. " It was the Bold Turpin! " "Smuggling," "housebreaking," "burglary," are all terms that have been used to designate- Mr. Rockefel- ' ler's methods, though much has Loea made of* his mild.demeanour and _entl3 persuasiveness in dealing with his rivals. To my mind his persuasiveness is on a par with that of tbe bold highwayman sung of in "Pickwick Papers"': But Dick put a couple of balls in hia nob, . And perwailed on him to stop. The Standard Oil' Trust has been repeatedly and publicly charged in America with using in the pursuits of its ends or the defence of its interests such weapons as perjury, bribery, open-vio-lence and arson. They concern, of, . course, individual members of'the combination rather than the whole combination, and !we- begin <witlv that part of the .case,,whiph concerns Mr J. D. >s Rockefeller personally. - ;In; 1888 the mystery suiTOunding lite ramifications of the Standard r.ng caused the Senate of New York Sea to to order an "Investigation Relative to rusts,''. aiid before the Commission entrusted with this, investigation, Mr. Rockefeller appeared and was questioned as ,tp the initium malorum" — the South Improvement Company. I quote from the official report of this investigation:— Q.: There was such a company?' A.: I have heard of such a company. Q.: Were you in.it? A.: I was not. . . ... As pointed out in my former articles, Mr. J. D- Rockefeller was a director with 180. shares in the concern, and the fact is now absolutely beyond dispute. The statement above was made on Febr ruary 28, and on April 30 following Mr. Rockefeller appeared before a Committee, of the House of Representatives" at Washington, and the following collo- , guy took place j — Q.: I want the names particularly of gentlemen who either now or in the past have been interested with you gentlemen avlio were in the South Improvement Company. A.: I think'they were 0. T. Waring, W. P. Logan, John Logan, •W. ?.?-. Warden, O. H. Payne, li. M. Fla&iVr, William Rockefeller, J. A. Bost*-vick, and—myself. . A direct contradiction of his o»va words within ; the space of two mo nt lis I Again, questioned as to railway rates by" the New" York. Senate Committee, Mr. Rockefeller was asked if there had been any arrangements by which the Trust or the companies controlled by it goi transportation' at any cheaper rates than were allowed to the general public, and his answer was:— l No wo" have- had no better rates than our neighbours. But, if I may be &1-

lawed, wo have found repeated- rhstanets where other parties had -secured wer rates than we had. Hard Swearing. The Committee, however, was gtot satisfied, and! returned to the Charge later in the day* and Mr, Bockefeller, after much wriggling and evasion, practically admitted the contrary:— Q ; : Has not some oompany or companies embraced within this Trust enB>yed from railroads more favourable frieght rates than those rates accorded to Refineries not in the Trust? A.: I do not recall anything of that bind. Q.: You have heard of such things ? ( A.: I have heard much in the papers about it. Q.: W T as there not such an allegation 1 SW that in the litigation or controversy \ recently disposed of by the Interstate f Commerce Commission, Mr. Rice's' suit; was not there a charge in, Mr. Rice's petition that companies embraced with- ' m your Trust enjoyed from 1 railroad' 1 companies more favourable freight | ! rates? ( A.: I think Mr. Rice made such a f Sflaim. Yes, sir. [ Q.: Did not the Commission find the r claim true? I A.:' I think the return of the Com- | mission is a matter of record. I could \ soot give it. f Q.: You don't know it; you haven't jSSeen that they did so find'? [ A.: It is a matter of record. I Q.: Haven't you read that the Inter|*tate Commerce Commission did' find f that charge to be true? i A. : No, sir ■ I don't think I could 1 say ( ihat. I read that they made a deci[fcion, but I am really unable to say I what that decision was. f Q.: You did not feel interested' ent wugh in the litigation to see what the I flecision was? A.: I felt an interest &_■ the litiga--l tion. I don't mean to- say I did not feel f< ■tax interest in it. { Q.: Do you mean to say that you /'Won't know what the decision' was? [ A.: I don't say that. I know that I the Interstate Commerce; Commission ifoad made a decision. Tlie decision is i quite a comprehensive one, but it is I questionable whether it could be said' f that decision in all its features re- * ffttlta as I understand 1 you to claim. f Q.: You don't understand'it? Will ' you say, as a matter of fact,,that it is *" not so? A.: I stated in my testimony this i swrnimg that I had known of instances where companies altogether outside of | the Trust had enjoyed more favourable I freights than companies in this Truest, « and I am not able to state that there f toay not have been arrangements _<_T I freight on the part of compares with- - m this Trust as favourable *as, or more favourable than, Oeher'freight arrangements; but 4 im reply to that, nothing I Peculiar fn respect to the companies in ' Jaiß association. I suppose they make £"*' the best freight arrangements they » San. Refusal of Evidence. • A commission, known, from the name f «f its chairman, as the Hepburn Com- / mission, was appointed by Congress in ! 1879 to investigate the New York rail- • roads, and a number of Standard Oil officials, notably Messrs-H. H. Rogers, 'J*. D. Archbold, Jabez A. Bostwick, and W. T. Sheide, were summoned fjefore it. Though not so sweeping in their denials as Mr. Rockefeller, all of k ihem avoided the truth.'' Their testiXnony, in fact, was so evasive that the Hepburn Commission, in making its areport, characterised the company as "a mysterious organisation whose business and transactions are of such a character that its members decline giving a history or description- of it lest this testimony be used to convict them of a Ssrime." The reaison that the witnesses themselves gave for their evasion was— as might be expected—a different one from that assigned by the Commission. [They stated that the investigations were an interference with their rights «s private citizens, and that the Goviernment had no business to inquire into their methods. This is a very interesting plea, for .it throws a light on the general spirit of insubordination to all law and order consistently evinced by the Standard Oil Trust throughout its career whenever law and order were found to be in oposition to its progress. This constant opposition to the public authority, whether manifested by open contempt of court when under examination or 1 by secret acts known to be contrary to law, ihas been such as to merit for the Standard Oil conspirators the appellation of the anarchists of commercial life. Opposition to the law, denial of the law, refusal to be subject to the law, and attempted corruption of the officers of the law, indelibly mark their business policy. Direct lying, however, was employed On occasion when Standard witnesses were under the necessity of answering questions categorically. Henry M. Flagler, for instance, swore in 1880 in the Court of Common' Pleas (Standard Oil Company v. W. C. Schofield, et al.) that the Standard Oil Company neither owned, operated, nor controlled refineries elsewhere than at Cleveland, Ohio, and Bayonno, N.J., whereas before the Investigation Relative to Trusts. New

York Senate, 1888, he testified that in 1874 the Standard Oil Company purchased the refineries of Lockhart, Frew and Co., of fittsbnrg; Warden, Frew, and Co., of Philadelphia j and Chas. Pratt and Co., of New York. Mr. Rockefeller also swore falsely in the Schofield case in 1880 in the same sense as Mr. Henry M. Flagler. The purchase and consequent control 6f: the Pittsburg "Philadelphia, and New York refineries, mentioned was absolutely secret at the •time, and seemingly hot likely to be found out, (To be continued.)